before the maharashtra electricity regulatory ......case no.325 of 2019 merc multi-year tariff order...

Case No.325 of 2019 MERC Multi-Year Tariff Order for AEML-D for FY 2020-21 to FY 2024-25

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Before the

MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400 005

Tel. No. 022 22163964/65/69 – Fax 022 22163976

E-mail: [email protected]

Website: www.merc.gov.in

Case No. 325 of 2019

Case of Adani Electricity Mumbai Limited (Distribution Business) for Approval of

Truing-up of FY 2017-18 and FY 2018-19, Provisional Truing-up for FY 2019-20

and Aggregate Revenue Requirement (ARR) and Multi-Year Tariff (MYT) for 4th

Control Period from FY 2020-21 to FY 2024-25

Coram

Shri I.M. Bohari, Member

Shri Mukesh Khullar, Member

Date: 30 March 2020

ORDER

In accordance with Regulation 5 of the Maharashtra Electricity Regulatory Commission

(Multi Year Tariff) Regulations, 2019 (‘MYT Regulations’), Adani Electricity Mumbai

Limited (Distribution Business) (AEML-D), has submitted its Petition for approval of

truing up of FY 2017-18 and FY 2018-19, provisional truing up of 2019-20 and Aggregate

Revenue Requirement (ARR) and Tariff for the 4th MYT Control Period from FY 2020-21

to 2024-25. The original Petition was filed on 30 November 2019 and AEML-D submitted

the revised Petition on 07 January 2020.

The Commission, in exercise of the powers vested in under Section 61,62 and 86 of

Elecricity Act (EA) 2003 and all other powers enabling it in this behalf and after taking into

consideration the submissions made by AEML-D and the suggestions and comments

received through the Public Consultation Process and after considering all other relevant

material, has approved the Truing -up of Annual Revenue Requirement (ARR) for FY

2017-18 and FY-2018-19, Provisional Truing -up of ARR for FY 2019-20 and ARR and

Tariff for the Fourth Control Period from 2020-21to 2024-25.

mailto:[email protected]

http://www.merc.gov.in/


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TABLE OF CONTENTS

1 BACKGROUND AND BRIEF HISTORY ....................................................................................... 27

1.1 BACKGROUND ............................................................................................................................. 27

1.2 MYT ORDER FOR 3RD CONTROL PERIOD FROM FY 2016-17 TO 2019-20 ............................. 27

1.3 MID-TERM REVIEW ORDER FOR 3RD CONTROL PERIOD ..................................................... 27

1.4 MYT REGULATIONS, 2019 .......................................................................................................... 28

1.5 PETITION FOR APPROVAL OF MULTI YEAR TARIFF, ADMISSION OF THE PETITION

AND PUBLIC PROCESS ......................................................................................................................... 28

1.6 ORGANISATION OF THE ORDER............................................................................................... 30

2 SUGGESTIONS/OBJECTIONS, AEML-D’S RESPONSES AND COMMISSION’S RULING31

2.1 POWER PURCHASE COST ........................................................................................................... 31

2.2 CATEGORISATION AND TARIFF DETERMINATION ............................................................. 35

2.3 WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE (CSS) .................................... 38

2.4 FIXED/DEMAND CHARGES ........................................................................................................ 39

2.5 VARIABLE CHARGES .................................................................................................................. 40

2.6 CONSUMER SECURITY DEPOSIT .............................................................................................. 41

2.7 FINANCIAL MANAGEMENT AND CONTROL ......................................................................... 42

2.8 BILLING ......................................................................................................................................... 44

2.9 FUEL ADJUSTMENT CHARGES (FAC) ...................................................................................... 44

2.10 TRANSMISSION AND DISTRIBUTION LOSS....................................................................... 46

2.11 CAPITAL EXPENDITURE ....................................................................................................... 48

2.12 CHANGE IN O&M WIRES COST ............................................................................................ 49

2.13 TIME OF DAY METERING ...................................................................................................... 49

2.14 CUMULATIVE FULFILMENT OF NON-SOLAR RPO........................................................... 50

2.15 DSM PROGRAM ....................................................................................................................... 50

2.16 5 STAR RATED PRODUCT ...................................................................................................... 51

2.17 ALTERNATE ENERGY SOURCES ......................................................................................... 51

2.18 CUSTOMER RELATIONSHIP RELATED ............................................................................... 52

2.19 RETENTION OF DATA ............................................................................................................ 53

2.20 MISUSE OF STANDBY SUPPORT .......................................................................................... 53

2.21 GRID SUPPORT CHARGES ..................................................................................................... 55

2.22 TAX ON SALE OF ELECTRICITY (TOSE) ............................................................................. 56

2.23 UNIFORM TARIFF CHANGES OVER MYT PERIOD ............................................................ 56

2.24 CIRCULATION OF PUBLIC NOTICE WITH THE BILLS ...................................................... 57

2.25 INCREASE IN RETURN ON EQUITY AND CAPITAL EXPENDITURE .............................. 57

2.26 OTHERS ..................................................................................................................................... 58

3 TRUING UP FOR FY 2017-18 AND FY 2018-19 ............................................................................ 59

3.1 SALES FOR FY 2017-18 AND FY 2018-19 ..................................................................................... 59

3.2 OPEN ACCESS CONSUMPTION ................................................................................................. 63

3.3 DEMAND-SIDE MANAGEMENT (DSM) MEASURES .............................................................. 64

3.4 DISTRIBUTION LOSSES AND ENERGY BALANCE ................................................................ 64

3.5 POWER PROCUREMENT ............................................................................................................. 68

3.6 OPERATION AND MAINTENANCE (O&M) EXPENSES .......................................................... 93

3.7 CAPITAL EXPENDITURE AND CAPITALISATION ................................................................ 108


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3.8 OPENING GROSS BLOCK FOR FY 2017-18 ............................................................................. 120

3.9 DEPRECIATION .......................................................................................................................... 121

3.10 FINANCING PLAN AND INTEREST EXPENSES ................................................................ 125

3.11 RETURN ON EQUITY (ROE) ................................................................................................. 140

3.12 INTEREST ON WORKING CAPITAL (IOWC)...................................................................... 143

3.13 INTEREST ON CONSUMERS’ SECURITY DEPOSIT ......................................................... 146

3.14 PROVISION FOR BAD AND DOUBTFUL DEBTS ............................................................... 147

3.15 CONTRIBUTION TO CONTINGENCY RESERVE ............................................................... 149

3.16 INCOME TAX .......................................................................................................................... 150

3.17 NON-TARIFF INCOME .......................................................................................................... 156

3.18 INCOME FROM OTHER BUSINESS ..................................................................................... 162

3.19 EFFICIENCY GAIN/ (LOSS) FOR FY 2017-18 AND FY 2018-19 .......................................... 163

3.20 SUMMARY OF AGGREGATE REVENUE REQUIREMENT .............................................. 170

3.21 REVENUE ................................................................................................................................ 178

3.22 REVENUE FROM WHEELING CHARGES FROM CHANGE-OVER AND OPEN ACCESS

CONSUMERS ........................................................................................................................................ 179

3.23 REVENUE FROM CROSS-SUBSIDY SURCHARGE FROM OA CONSUMERS ................ 181

3.24 REVENUE GAP ....................................................................................................................... 182

3.25 REGULATORY ASSETS RECOVERY IN FY 2017-18 AND FY 2018-19 ............................ 187

4 PROVISIONAL TRUING-UP FOR FY 2019-20........................................................................... 189

4.1 SALES ........................................................................................................................................... 189

4.2 DISTRIBUTION LOSSES AND ENERGY BALANCE .............................................................. 199

4.3 POWER PROCUREMENT ........................................................................................................... 201

4.4 OPERATION AND MAINTENANCE EXPENSES ..................................................................... 218

4.5 CAPITAL EXPENDITURE AND CAPITALISATION ............................................................... 221

4.6 DEPRECIATION .......................................................................................................................... 224

4.7 FINANCING PLAN AND INTEREST EXPENSES ..................................................................... 226

4.8 RETURN ON EQUITY ................................................................................................................. 228

4.9 INTEREST ON WORKING CAPITAL ........................................................................................ 230

4.10 INTEREST ON CONSUMER’S SECURITY DEPOSIT ......................................................... 232



4.13 DSM EXPENSES ..................................................................................................................... 235

4.14 INCOME TAX .......................................................................................................................... 236


4.16 INCOME FROM OTHER BUSINESS ..................................................................................... 240

4.17 SUMMARY OF AGGREGATE REVENUE REQUIREMENT .............................................. 241

4.18 REVENUE ................................................................................................................................ 246

4.19 REVENUE GAP/SURPLUS FOR FY 2019-20 FOR THE WIRES BUSINESS AND SUPPLY

BUSINESS .............................................................................................................................................. 248

4.20 REGULATORY ASSET RECOVERY IN FY 2019-20 ........................................................... 251

5 AGGREGATE REVENUE REQUIREMENT FOR FY 2020-21 TO FY 2024-25 ..................... 252

5.1 SALES ........................................................................................................................................... 252

5.2 DISTRIBUTION LOSSES AND ENERGY BALANCE .............................................................. 259

5.3 POWER PURCHASE QUANTUM AND COST .......................................................................... 262


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5.4 OPERATION AND MAINTENANCE EXPENSES ..................................................................... 279

5.5 CAPITAL EXPENDITURE AND CAPITALISATION ............................................................... 286

5.6 DEPRECIATION .......................................................................................................................... 289

5.7 INTEREST ON LONG-TERM LOAN .......................................................................................... 291

5.8 INTEREST ON WORKING CAPITAL ........................................................................................ 294

5.9 INTEREST ON CONSUMER SECURITY DEPOSIT .................................................................. 296

5.10 RETURN ON EQUITY ............................................................................................................ 296




5.14 DEMAND SIDE MANAGEMENT EXPENSES ..................................................................... 304

5.15 INCOME FROM OTHER BUSINESS .................................................................................... 305

5.16 PAYMENT OF TPC-G FOR STANDBY ................................................................................ 306

5.17 GAP/(SURPLUS) OF AEML-G AFTER TRUING-UP OF FY 2017-18 AND FY 2018-19 AND

APR OF FY 2019-20 ............................................................................................................................... 306

5.18 AGGREGATE REVENUE REQUIREMENT FOR 4TH CONTROL PERIOD ........................ 306

6 CUMULATIVE REVENUE GAP, TARIFF PHILOSOPHY AND CATEGORY-WISE

TARIFFS FOR 4TH CONTROL PERIOD FROM FY 2020-21 TO FY 2024-25 .................................. 312

6.1 INCREMENTAL REVENUE GAP/SURPLUS FOR FY 2017-18 ................................................ 312

6.2 REVENUE GAP / SURPLUS FOR FY 2018-19 ........................................................................... 313

6.3 PROVISIONAL REVENUE GAP/ SURPLUS FOR FY 2019-20 ................................................. 313

6.4 CARRYING/(HOLDING) COST TILL FY 2019-20 ON REVENUE GAP/(SURPLUS) OF FY

2017-18 AND FY 2018-19 ...................................................................................................................... 314

6.5 RECOVERY OF REGULATORY ASSET ................................................................................... 319

6.6 RECOVERY OF AMOUNTS PERTAINING TO RINFRA ......................................................... 323

6.7 PROVISIONAL RECOVERY OF NEAR CERTAIN FUTURE COST ........................................ 327

6.8 CUMULATIVE REVENUE GAP / SURPLUS TILL FY 2019-20 ............................................... 329

6.9 APPROACH FOR RECOVERY OF PAST GAP / (SURPLUS) ................................................... 331

6.10 WHEELING CHARGES .......................................................................................................... 335

6.11 CROSS SUBSIDY SURCHARGE (CSS) ................................................................................. 338

6.12 TARIFF DESIGN CONSIDERATION .................................................................................... 342

6.13 COMMISSION’S TARIFF PHILOSOPHY.............................................................................. 370

6.14 REVISED TARIFF FOR THE CONTROL PERIOD ............................................................... 380

6.15 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2020 (FY 2020-21) ................................ 380





6.20 GRID SUPPORT CHARGES ................................................................................................... 388

7 SCHEDULE OF CHARGES ........................................................................................................... 393

8 APPLICABILITY ............................................................................................................................ 397

8.1 APPLICABILITY OF REVISED TARIFF .................................................................................... 397

8.2 APPLICABILITY OF ORDER ..................................................................................................... 397


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ANNEXURE – 1(A): REVENUE WITH REVISED TARIFFS FOR FY 2020-21 ............................... 399

ANNEXURE – 1(B): REVENUE WITH REVISED TARIFFS FOR FY 2021-22 ............................... 400

ANNEXURE – 1(C): REVENUE WITH REVISED TARIFFS FOR FY 2022-23 ............................... 401

ANNEXURE – 1(D): REVENUE WITH REVISED TARIFFS FOR FY 2023-24 ............................... 402

ANNEXURE – 1(E): REVENUE WITH REVISED TARIFFS FOR FY 2024-25 ............................... 403

ANNEXURE – 2: APPROVED TARIFF SCHEDULE FOR MYT CONTROL PERIOD ................. 404

APPENDIX – 1: LIST OF PERSONS WHO ATTENDED THE TECHNICAL VALIDATION

SESSION (TVS) HELD ON 24 DECEMBER, 2019 ............................................................................... 445

APPENDIX – 2: LIST OF PERSONS WHO ATTENDED PUBLIC HEARING DATED 04

FEBRUARY, 2020 ..................................................................................................................................... 445


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List of Tables

Table 3-1 : Own sales and Change-over sales for FY 2017-18 as submitted by AEML-D

(MU) ................................................................................................................................... 60

Table 3-2 : Own sales and Change-over sales for FY 2018-19 as submitted by AEML-D

(MU) ................................................................................................................................... 61

Table 3-3: Own Sales and Change-over Sales for FY 2017-18 as approved by the

Commission (MU) .............................................................................................................. 62


Commission (MU) .............................................................................................................. 63

Table 3-5: OA Consumption for FY 2017-18 and FY 2018-19 as submitted by AEML-

D(MU) ................................................................................................................................ 63

Table 3-6: Open Access Consumption for FY 2017-18 in AEML-D licence area as approved

by the Commission (MU) ................................................................................................... 63

Table 3-7: Open Access Consumption for FY 2018-19 in AEML-D licence area as approved

by the Commission (MU) ................................................................................................... 63

Table 3-8: Energy Saving due to DSM Programmes as submitted by AEML-D (MU) .... 64

Table 3-9: Distribution Loss for FY 2017-18 as submitted by AEML-D .......................... 64

Table 3-10: Distribution Loss for FY 2018-19 as submitted by AEML-D ........................ 65

Table 3-11: Energy Balance approved by the Commission for FY 2017-18 ..................... 66

Table 3-12: Energy Balance approved by the Commission for FY 2018-19 ..................... 67

Table 3-13: Energy Requirement approved by the Commission for FY 2017-18 ............. 67

Table 3-14: Energy Requirement approved by the Commission for FY 2018-19 ............. 68

Table 3-15: Power Purchase Cost from ADTPS for FY 2017-18 as submitted by AEML-D

............................................................................................................................................ 69

Table 3-16: Power Purchase Cost from ADTPS for FY 2018-19 as submitted by AEML-D

............................................................................................................................................ 69

Table 3-17: Power Purchase from ADTPS approved by Commission after truing up for FY

2017-18 and FY 2018-19 ................................................................................................... 70

Table 3-18: Power Purchase Cost from VIPL-G for FY 2017-18 as submitted by AEML-D

............................................................................................................................................ 71

Table 3-19: Power Purchase Cost from VIPL-G for FY 2018-19 as submitted by AEML-D

............................................................................................................................................ 71

Table 3-20: Power Purchase from VIPL-G for FY 2017-18 and FY 2018-19 approved by

Commission ........................................................................................................................ 72

Table 3-21: Cost of Solar Power Purchase in FY 2017-18 and FY 2018-19, as submitted by

AEML-D ............................................................................................................................ 73

Table 3-22: Cumulative Shortfall in Solar RPO Target till FY 2017-18 as Approved in

Order in Case No. 39 of 2019 ............................................................................................ 73

Table 3-23: Revised Cumulative Shortfall in Solar RPO Target till FY 2017-18 ............. 74


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Table 3-24: Solar RPO Procurement Cost for FY 2017-18 and FY 2018-19 as approved by

the Commission .................................................................................................................. 75

Table 3-25: Cumulative Shortfall in Solar RPO for FY 2017-18 as approved by Commission

............................................................................................................................................ 75

Table 3-26: Cumulative Shortfall in Solar RPO for FY 2018-19 as approved by ............. 76

Table 3-27: Power Purchase Cost from Non-Solar Sources for FY 2017-18 and FY 2018-

19 as submitted by AEML-D ............................................................................................. 76

Table 3-28: Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 as approved in

Order in Case No. 39 of 2019 ............................................................................................ 77

Table 3-29: Revised Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 ..... 77

Table 3-30: Non-Solar RE Purchase for FY 2017-18 as approved by the Commission .... 78

Table 3-31: Non-Solar RE Purchase for FY 2018-19 as approved by the Commission .... 78

Table 3-32: Cumulative Shortfall in Non-Solar RPO for FY 2017-18 as approved by

Commission ........................................................................................................................ 79


Commission ........................................................................................................................ 79

Table 3-34: Power Purchase from Short Term Sources for FY 2017-18 and FY 2018-19 as

submitted by AEML-D ....................................................................................................... 82

Table 3-35: Short Term Power Purchase for FY 2017-18 as approved by the Commission

............................................................................................................................................ 83

Table 3-36: Short-Term Power Purchase for FY 2018-19 as approved by the Commission

............................................................................................................................................ 83

Table 3-37: Revenue from Surplus Sale for FY 2017-18 and FY 2018-19 as submitted by

AEML-D ............................................................................................................................ 85

Table 3-38: Sale of Surplus Power in FY 2017-18 and FY 2018-19 as approved by

Commission ........................................................................................................................ 86

Table 3-39 : Transmission Charges for FY 2017-18 and FY 2018-19 as submitted by

AEML-D (Rs Crore) .......................................................................................................... 88

Table 3-40: Transmission Charges for FY 2017-18 and FY 2018-19 as approved by the

Commission (Rs. Crore) ..................................................................................................... 88

Table 3-41 : MSLDC Charges for FY 2017-18 and FY 2018-19 as submitted by AEML-D

(Rs. Crore) .......................................................................................................................... 89

Table 3-42: MSLDC Charges for FY 2017-18 and FY 2018-19 as approved by Commission

(Rs. Crore) .......................................................................................................................... 89

Table 3-43 : Stand-by Charges for FY 2017-18 and FY 2018-19 as submitted by AEML-D

(Rs. Crore) .......................................................................................................................... 90

Table 3-44: Standby Charges approved by the Commission for FY 2017-18 and FY 2018-

19 (Rs. Crore) ..................................................................................................................... 90


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Table 3-45 : Power Purchase Quantum and Cost for FY 2017-18 as submitted by AEML-

D ......................................................................................................................................... 91

Table 3-46 : Power Purchase Quantum and Cost for FY 2018-19 as submitted by AEML-

D ......................................................................................................................................... 91

Table 3-47: Power Purchase approved by the Commission for FY 2017-18 ..................... 92

Table 3-48: Power Purchase approved by the Commission for FY 2018-19 ..................... 93

Table 3-49: O&M Expenses approved in MTR Order for FY 2017-18 and FY 2018-19 (Rs.

Crore) ................................................................................................................................. 93

Table 3-50: Inflation Factor for Truing-up of O&M Expenses for FY 2017-18 ............... 94

Table 3-51: Permissible and Actual O&M Expenses for FY 2017-18 (Rs. Crore) ........... 95

Table 3-52: Inflation Factor for Truing-up of O&M Expenses for FY 2018-19 ............... 95

Table 3-53: Permissible and Actual O&M Expense for FY 2018-19 (Rs. Crore) ............. 96

Table 3-54 : O&M Expenses claimed in Truing up of FY 2017-18 (Rs Crore) ................ 99

Table 3-55 : O&M Expenses claimed in Truing up of FY 2018-19 (Rs Crore) ................ 99

Table 3-56: Inflation Factor approved for FY 2017-18 ................................................... 101

Table 3-57: Inflation Factor approved for FY 2018-19 ................................................... 102

Table 3-58: Other Allowances approved for FY 2017-18 ............................................... 104

Table 3-59: Corporate Expense Allocation for FY 2017-18 and FY 2018-19 of AEML 104

Table 3-60: Corporate Expense Allocation approved by the Commission for FY 2018-19

.......................................................................................................................................... 106

Table 3-61: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for AEML-D (Rs.

Crore) ............................................................................................................................... 106

Table 3-62: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for Wires & Supply

(Rs. Crore) ........................................................................................................................ 107

Table 3-63: O&M Expenses allowed by the Commission after truing up for FY 2017-18

and FY 2018-19 for Wires Business (Rs. Crore) ............................................................. 107

Table 3-64: O&M Expenses allowed by the Commission after truing up for FY 2017-18

and FY 2018-19 for Supply Business (Rs. Crore) ........................................................... 108

Table 3-65: Capital Expenditure and Capitalisation for Wires Business and Supply Business

as submitted by AEML-D for FY 2017-18 (Rs. Crore) ................................................... 109

Table 3-66: Capital Expenditure and Capitalisation for Wires Business and Supply Business

as submitted by AEML-D for FY 2018-19 (Rs. Crore) ................................................... 109

Table 3-67: Capitalisation approved by the Commission after truing up for FY 2017-18 (Rs.

Crore) ............................................................................................................................... 119

Table 3-68: Capitalisation approved by the Commission after truing up for FY 2018-19 (Rs.

Crore) ............................................................................................................................... 119

Table 3-69 : Opening GFA for Wires and Supply Business for FY 2017-18 as submitted by

AEML-D (Rs Crore) ........................................................................................................ 121


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Table 3-70 : Opening GFA for Wires and Supply Business for FY 2017-18 as approved by

Commission (Rs Crore) .................................................................................................... 121

Table 3-71 : Depreciation Rates for calculating Depreciation submitted by AEML-D ... 121

Table 3-72 : Depreciation for Wires Business for FY 2017-18 as submitted by AEML-D

(Rs. Crore) ........................................................................................................................ 122

Table 3-73 : Depreciation for Wires Business for FY 2018-19 as submitted by AEML-D

(Rs. Crore) ........................................................................................................................ 122

Table 3-74 : Depreciation for Supply Business for FY 2017-18 and FY 2018-19 as

submitted by AEML-D (Rs. Crore).................................................................................. 123

Table 3-75: Depreciation for Wires Business for FY 2017-18 as approved by the

Commission (Rs. Crore) ................................................................................................... 124

Table 3-76: Depreciation for Supply Business for FY 2017-18 as approved by the






Table 3-79: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore) ... 125



Table 3-82: Total outstanding debt of AEML raised by AEML post transaction ............ 129

Table 3-83: Segregation of Refinancing Charges among ADTPS, AEML-T and AEML-D

.......................................................................................................................................... 129

Table 3-84: PV of Interest cost saving in FY 2018-19 .................................................... 130

Table 3-85: Interest Expenses for FY 2017-18 as approved by Commission (Rs. crore) 131

Table 3-86: Interest Expenses for FY 2018-19 as approved by Commission (Rs. crore) 132

Table 3-87: Payment to SBI Capital Markets Limited by AEML ................................... 135

Table 3-88: Computation of eligible Refinancing Cost for Regulatory Loan of AEML-D

(Rs. Crore) ........................................................................................................................ 137

Table 3-89: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the Wires

Business, as approved by the Commission (Rs. Crore) ................................................... 140

Table 3-90: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the Supply

Business, as approved by the Commission (Rs. Crore) ................................................... 140

Table 3-91 : Return on Regulatory Equity for Wires Business for FY 2017-18 and FY 2018-

19 as submitted by AEML-D (Rs Crore) ......................................................................... 141

Table 3-92 : Return on Regulatory Equity for Supply Business for FY 2017-18 and FY

2018-19 as submitted by AEML-D ( Rs Crore) ............................................................... 141

Table 3-93: Return on Equity for FY 2017-18 for Wires and Supply Business as approved

by the Commission (Rs. Crore) ........................................................................................ 142


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Table 3-94: Return on Equity for FY 2018-19 for Wires and Supply Business as approved


Table 3-95 : Interest on Working Capital for Wires Business for FY 2017-18 and FY 2018-

19 as submitted by AEML-D (Rs. Crore) ........................................................................ 144

Table 3-96 : Interest on Working Capital for Supply Business for FY 2017-18 as submitted

by AEML-D (Rs. Crore) .................................................................................................. 144

Table 3-97: Interest on Working Capital for Wires Business for FY 2017-18 approved by

the Commission (Rs. Crore) ............................................................................................. 145



Table 3-99: Interest on Working Capital for Supply Business for FY 2017-18 approved by

the Commission ................................................................................................................ 145


the Commission ................................................................................................................ 146

Table 3-101: Interest on Consumer Security Deposit for FY 2017-18 and FY 2018-19 as


Table 3-102: Interest on Consumer Security Deposit for FY 2017-18 as approved by

Commission (Rs. crore) .................................................................................................... 147


Commission (Rs. crore) .................................................................................................... 147

Table 3-104 : Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19 as


Table 3-105: Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19

approved by the Commission (Rs. Crore) ........................................................................ 148

Table 3-106 : Contribution to Contingency Reserve for Wires Business & Supply Business

for FY 2017-18 as submitted by AEML-D (Rs. Crore) ................................................... 149

Table 3-107 : Contribution to Contingency Reserve for Wires Business & Supply Business

for FY 2018-19 as submitted by AEML-D (Rs. Crore) ................................................... 149

Table 3-108:Contribution to Contingency Reserves for FY 2017-18 for Wires and Supply

Business approved by the Commission (Rs. Crore) ......................................................... 150

Table 3-109:Contribution to Contingency Reserves for FY 2018-19 for Wires and Supply

Business approved by the Commission (Rs. Crore) ......................................................... 150

Table 3-110 : Income Tax Computation for FY 2017-18 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 150

Table 3-111 : Income Tax for Wires Business and Supply Business for FY 2017-18 as


Table 3-112 : Income Tax Computation for FY 2018-19 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 152


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Table 3-114: Income Tax for FY 2017-18 as approved by Commission (Rs. crore) ...... 154

Table 3-115: Income Tax for FY 2018-19 as approved by Commission (Rs. crore) ...... 155

Table 3-116: Non-Tariff Income for Wires Business for FY 2017-18 and FY 2018-19 as


Table 3-117: Non-Tariff Income for Supply Business for FY 2017-18 and FY 2018-19, as


Table 3-118: Non-Tariff Income for FY 2017-18 and FY 2018-19 as approved by the


Table 3-119: Income from Other Business for FY 2017-18 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 162


Crore) ............................................................................................................................... 163

Table 3-121: Income from Other Business for FY 2017-18 as approved by the Commission

(Rs. Crore) ........................................................................................................................ 163

Table 3-122: Income from Other Business for FY 2018-19 as approved by the Commission

(Rs. Crore) ........................................................................................................................ 163

Table 3-123: Efficiency Gains due to Overachievement in Distribution Losses for FY 2017-

18 as submitted by AEML-D ........................................................................................... 164

Table 3-124: Efficiency Gains due to Overachievement in Distribution Losses for FY 2018-

19 as submitted by AEML-D ........................................................................................... 164

Table 3-125: Sharing of Efficiency Gain on account of lower than target Distribution Loss

for FY 2017-18, as approved by Commission ................................................................. 165

Table 3-126: Sharing of Efficiency Gain on account of lower than target Distribution Loss

for FY 2018-19, as approved by Commission ................................................................. 166

Table 3-127: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for FY

2017-18 as submitted by AEML-D (Rs. Crore) ............................................................... 167


2018-19 as submitted by AEML-D (Rs. Crore) ............................................................... 167


2017-18, as approved by the Commission (Rs. Crore) .................................................... 167


2018-19, as approved by Commission (Rs. Crore) .......................................................... 168

Table 3-131: Sharing of Gain/Loss on Interest on Working Capital for FY 2017-18 as





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Table 3-135: ARR of Wires Business for FY 2017-18 as submitted by AEML-D (Rs. Crore)

.......................................................................................................................................... 170

Table 3-136: ARR of Wires Business for FY 2018-19 as submitted by AEML-D (Rs. Crore)

.......................................................................................................................................... 170

Table 3-137: ARR for Supply Business in FY 2017-18 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 171


Crore) ............................................................................................................................... 172

Table 3-139: Combined ARR for Wires Business and Supply Business in FY 2017-18 as




Table 3-141: ARR for Wires Business for FY 2017-18 as approved by Commission (Rs.

Crore) ............................................................................................................................... 174

Table 3-142: ARR for Wires Business for FY 2018-19 as approved by Commission (Rs.

Crore) ............................................................................................................................... 175

Table 3-143: ARR for Supply Business for FY 2017-18 as approved by Commission (Rs.

Crore) ............................................................................................................................... 175

Table 3-144: ARR for Supply Business for FY 2018-19 as approved by Commission (Rs.

Crore) ............................................................................................................................... 176

Table 3-145: Combined ARR for Wires and Supply Business for FY 2017-18 as approved


Table 3-146: Combined ARR for Wires and Supply Business for FY 2018-19 as approved

by Commission (Rs. Crore) .............................................................................................. 177

Table 3-147: Revenue from Sales (excluding RA) submitted by AEML-D for FY 2017-18

.......................................................................................................................................... 178

Table 3-148: Revenue from Sales (excluding RA) submitted by AEML-D for FY 2018-19

.......................................................................................................................................... 178

Table 3-149: Revenue and Average Billing Rate for FY 2017-18 as approved by




Table 3-151: Wheeling Revenue from Change-over and OA Consumers in FY 2017-18 as



of 445




approved by Commission (Rs. Crore) .............................................................................. 180


approved by Commission (Rs. Crore) .............................................................................. 180

Table 3-155: Revenue from CSS in FY 2017-18 as submitted by AEML-D (Rs. Crore) 181

Table 3-156: Revenue from CSS in FY 2018-19 as submitted by AEML-D (Rs. Crore) 181

Table 3-157: Revenue from CSS in FY 2017-18 as approved by Commission (Rs. Crore)

.......................................................................................................................................... 181

Table 3-158: Revenue from CSS in FY 2018-19 as approved by Commission (Rs. Crore)

.......................................................................................................................................... 181

Table 3-159: Revenue Gap for Wires Business for FY 2017-18 as submitted by AEML-D

(Rs Crore) ......................................................................................................................... 182

Table 3-160: Revenue Gap/(Surplus) for Supply Business in FY 2017-18 as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 182

Table 3-161: Combined Revenue Gap for Wires Business and Supply Business in FY 2017-


Table 3-162: Revenue Gap for Wires Business for FY 2018-19 as submitted by AEML-D

(Rs Crore) ......................................................................................................................... 183


AEML-D (Rs. Crore) ....................................................................................................... 184



Table 3-165: Revenue Gap/(Surplus) for Wires Business for FY 2017-18 as approved by


Table 3-166: Revenue Gap/(Surplus) for Supply Business for FY 2017-18 as approved by




Table 3-168: Revenue Gap/(Surplus) for Wires Business for FY 2018-19 as approved by


Table 3-169: Revenue Gap/(Surplus) for Supply Business for FY 2018-19 as approved by



19 as approved by the Commission (Rs. Crore) ............................................................... 186

Table 3-171: Actual Regulatory Assets Recovery in FY 2017-18 as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 187


of 445

Table 3-172: Actual Regulatory Assets Recovery in FY 2018-19 as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 187

Table 3-173: Regulatory Asset Over/Under Recovery in FY 2017-18 as approved by the


Table 3-174: Actual Regulatory Assets Recovery in FY 2018-19 as approved by the


Table 4-1: Estimated OA Consumption in H1 of FY 2019-20 as submitted by AEML-D

(MU) ................................................................................................................................. 189

Table 4-2: Own Sales of Actual H1 and estimated H2 for FY 2019-20 as submitted by

AEML-D (MU) ................................................................................................................ 191

Table 4-3: Estimated Changeover Sales of H1 and H2 of FY 2019-20 as submitted by

AEML-D (MU) ................................................................................................................ 192

Table 4-4: Estimated OA consumption of FY 2019-20 as submitted by AEML-D (MU)

.......................................................................................................................................... 194

Table 4-5: Category-wise CAGR considered for projection of Energy Sales ................. 196

Table 4-6: Category-Wise Own Sales for FY 2019-20 as approved by Commission (MU)

.......................................................................................................................................... 197

Table 4-7: Category-Wise Change-over Sales of FY 2019-20 as approved by Commission

(MU) ................................................................................................................................. 198

Table 4-8: OA Consumption for FY 2019-20 as approved by the Commission (MU) ... 199

Table 4-9: Energy Balance for FY 2019-20 as submitted by AEML-D .......................... 199

Table 4-10: Energy Requirement for FY 2019-20 as submitted by AEML-D (MU) ...... 200

Table 4-11: Energy Balance for FY 2019-20 as approved by the Commission .............. 201

Table 4-12: Energy Requirement of AEML-D for FY 2019-20 as approved by the

Commission ...................................................................................................................... 201

Table 4-13: Power Procurement from ADTPS in FY 2019-20 as submitted by AEML-D

.......................................................................................................................................... 202

Table 4-14: Quantum & Cost of Power Purchase from AEML-G for FY 2019-20 as

approved by Commission ................................................................................................. 202

Table 4-15: Power Purchase Quantum and Cost from VIPL-G in FY 2019-20 as submitted

by AEML-D ..................................................................................................................... 203

Table 4-16: Power Purchase from VIPL-G for FY 2019-20 as approved by the Commission

.......................................................................................................................................... 204

Table 4-17: Power Purchase from DSPPL in FY 2019-20 as submitted by AEML-D .... 204

Table 4-18: Solar RPO Target till FY 2019-20 as submitted by AEML-D ..................... 205

Table 4-19: Power Purchase from DSPPL in FY 2019-20 as approved by the Commission

(MU) ................................................................................................................................. 205

Table 4-20: Cumulative shortfall of Solar RPO Target till FY 2019-20 as approved by the

Commission (MU) ............................................................................................................ 206


of 445

Table 4-21: Estimated Non-Solar RE Purchase in FY 2019-20 as submitted by AEML-D

.......................................................................................................................................... 207

Table 4-22: Non-Solar RPO target for FY 2019-20 as submitted by AEML-D .............. 207

Table 4-23: Non-Solar RE power purchase for FY 2019-20 as approved by Commission

.......................................................................................................................................... 208

Table 4-24: Cumulative shortfall of Non-Solar RPO Target till FY 2019-20 as approved by

the Commission (MU) ...................................................................................................... 208

Table 4-25: Power Purchase from Short-Term sources for FY 2019-20 as submitted by

AEML-D .......................................................................................................................... 210

Table 4-26: Short Term Power Purchase for FY 2019-20 as provisionally approved by the

Commission ...................................................................................................................... 212

Table 4-27: Sale of Surplus Power in FY 2019-20 as submitted by AEML-D ............... 213

Table 4-28: Transmission Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore)

.......................................................................................................................................... 215

Table 4-29: Transmission Charges for FY 2019-20 approved by Commission (Rs. Crore)

.......................................................................................................................................... 215

Table 4-30: MSLDC Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore) ... 216

Table 4-31: MSLDC Charges for FY 2019-20 approved by Commission (Rs. Crore) ... 216

Table 4-32: Stand-by Charges for FY 2019-20 as submitted by AEML-D (Rs Crore) ... 216

Table 4-33: Stand-by Charges for FY 2019-20 as approved by Commission (Rs. Crore)

.......................................................................................................................................... 217

Table 4-34: Power Purchase for FY 2019-20 as submitted by AEML-D ........................ 217

Table 4-35: Power Purchase for FY 2019-20 approved by the Commission (MU) ........ 218

Table 4-36: Summary of O&M Expenses for FY 2019-20 for Wires Business as submitted

by AEML-D (Rs Crore) ................................................................................................... 219

Table 4-37: Summary of O&M Expenses for FY 2019-20 for Retail Supply Business as

submitted by AEML-D (Rs Crore)................................................................................... 219

Table 4-38: Summary of O&M Expenses for FY 2019-20 for Wires and Retail Supply

Business as submitted by AEML-D (Rs Crore) ............................................................... 219

Table 4-39: O&M Expenses for FY 2019-20 for Wires Business as approved by the


Table 4-40: O&M Expenses for FY 2019-20 for Retail Supply Business as approved by the


Table 4-41: O&M Expenses for FY 2019-20 for Wires and Retail Supply Business as


Table 4-42: Capital Expenditure and Capitalization for Wires Business for FY 2019-20

.......................................................................................................................................... 222

Table 4-43: Capital Expenditure and Capitalization for Retail Supply Business for FY 2019-

20 ...................................................................................................................................... 222


of 445

Table 4-44: Capitalization approved by the Commission for FY 2019-20 ...................... 224

Table 4-45: Depreciation in FY 2019-20 for Wires Business as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 224

Table 4-46: Depreciation in FY 2019-20 for Supply Business as submitted by AEML-D

(Rs. Crore) ........................................................................................................................ 225






Table 4-50: Applicable Rate of Interest for FY 2019-20 (Rs. Crore) .............................. 227

Table 4-51: Interest Expenses for FY 2019-20 as approved by the Commission (Rs. Crore)

.......................................................................................................................................... 228

Table 4-52: Return on Equity for FY 2019-20 for Wires Business as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 228

Table 4-53: Return on Equity for FY 2019-20 for Supply Business as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 229

Table 4-54: Return on Equity for Wires Business and Supply Business for FY 2019-20 as


Table 4-55:Interest on Working Capital for FY 2019-20 for Wires Business as submitted

by AEML-D (Rs. Crore) .................................................................................................. 231

Table 4-56:Interest on Working Capital for FY 2019-20 for Supply Business as submitted

by AEML-D (Rs. Crore) .................................................................................................. 231





Table 4-59: Interest on Consumer’s Security Deposit in FY 2019-20 as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 233

Table 4-60: Provision for Bad and Doubtful Debts for FY 2019-20 as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 233

Table 4-61: Provision for Bad and Doubtful Debts for FY 2019-20 approved by the


Table 4-62: Contribution to Contingency Reserves in FY 2019-20 for Wires Business as


Table 4-63: Contribution to Contingency Reserves in FY 2019-20 for Supply Business as


Table 4-64: Contribution to Contingency Reserves for FY 2019-20 approved by the



of 445

Table 4-65: DSM Expenses for FY 2019-20 as submitted by AEML-D (Rs. Crore) ...... 235

Table 4-66: Income Tax for FY 2019-20 as submitted by AEML-D (Rs. Crore) ........... 236

Table 4-67: Income Tax for FY 2019-20 approved by the Commission (Rs. Crore) ...... 236

Table 4-68: Non-Tariff Income in FY 2019-20 for Wires Business as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 238

Table 4-69: Non-Tariff Income in FY 2019-20 for Retail Supply Business as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 239

Table 4-70: Non-Tariff Income for FY 2019-20 approved by Commission (Rs. Crore) . 239


Crore) ............................................................................................................................... 241

Table 4-72: Income from Other Business for FY 2019-20 approved by the Commission (Rs.

Crore) ............................................................................................................................... 241

Table 4-73: ARR for Wires Business for FY 2019-20 as submitted by AEML-D (Rs. Crore)

.......................................................................................................................................... 242

Table 4-74: ARR for Supply Business in FY 2019-20 as submitted by AEML-D (Rs. Crore)

.......................................................................................................................................... 242



Table 4-76: ARR for Wires Business for FY 2019-20 approved by the Commission (Rs.

Crore) ............................................................................................................................... 243

Table 4-77: ARR for Supply Business for FY 2019-20 approved by the Commission (Rs.

Crore ................................................................................................................................. 244

Table 4-78: Combined ARR for Wires Business and Supply Business for FY 2019-20




Table 4-80: Wheeling Revenue from Change-over & Open Access Consumers in FY 2019-

20 approved by the Commission (Rs. Crore) ................................................................... 246

Table 4-81: Estimated Revenue from CSS in FY 2019-20 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 247

Table 4-82: Revenue from CSS in FY 2019-20 approved by the Commission (Rs. Crore)

.......................................................................................................................................... 247

Table 4-83: Estimated Revenue from sale of power in FY 2019-20 as submitted by AEML-

D ....................................................................................................................................... 248

Table 4-84: Total Revenue in FY 2019-20 approved by Commission (Rs. Crore) ......... 248

Table 4-85: Revenue Gap/(Surplus) for Wires Business in FY 2019-20 as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 248


AEML-D (Rs. Crore) ....................................................................................................... 249


of 445

Table 4-87: Revenue Gap for Wires & Supply Business in FY 2019-20 as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 249

Table 4-88: Provisional Revenue Gap/(Surplus) for the Wires Business for FY 2019-20 as


Table 4-89: Provisional Revenue Gap/(Surplus) for the Supply Business for FY 2019-20 as


Table 4-90: Total Revenue Gap/Surplus for FY 2019-20 as approved by the Commission

(Rs. Crore) ........................................................................................................................ 250

Table 4-91: Regulatory Assets Recovery in FY 2019-20 as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 251

Table 4-92: Regulatory Asset Over/Under-recovery in FY 2019-20 approved by


Table 5-1: Projected Sales for 4th Control Period as submitted by AEML-D (MU) ....... 253

Table 5-2: Projected OA consumption for 4th Control Period as submitted by AEML-D

(MU) ................................................................................................................................. 253

Table 5-3: Category-wise Direct Sales approved for 4th Control Period (MU) ............... 255

Table 5-4: Category-wise Change-over Sales approved for 4th Control Period (MU) .... 257

Table 5-5: Category-wise OA Consumption approved for 4th Control Period (MU) ..... 259

Table 5-6: Distribution Loss for 4th Control Period submitted by AEML-D .................. 259

Table 5-7: Energy Balance for 4th Control Period as submitted by AEML-D (MU) ...... 260

Table 5-8: Power Purchase Requirement for 4th Control Period as submitted by AEML-D

(MU) ................................................................................................................................. 260

Table 5-9: Distribution Loss approved for 4th Control Period ........................................ 261

Table 5-10: HT and LT losses approved for 4th Control Period ..................................... 262

Table 5-11: Energy Input requirement approved for 4th Control Period (MU) ............... 262

Table 5-12: Energy Availability from ADTPS from FY 2020-21 to FY 2024-25 .......... 263

Table 5-13: Power Purchase from ADTPS from FY 2020-21 to FY 2024-25 ................ 263

Table 5-14: Power Purchase from ADTPS approved by the Commission from FY 2020-21

to FY 2024-25 .................................................................................................................. 264

Table 5-15: Power Purchase from DSPPL for FY 2020-21 to FY 2024-25 .................... 265

Table 5-16: Power Purchase from DSPPL approved by the Commission for FY 2020-21 to

FY 2024-25 ...................................................................................................................... 265

Table 5-17: Energy Availability from Non-Solar for FY 2020-21 to FY 2024-25 (MU) 266

Table 5-18: Power Purchase Cost from Non-Solar for FY 2020-21 to FY 2024-25 (Rs.

Crore) ............................................................................................................................... 266

Table 5-19: Power Purchase from Non-solar Re Purchase approved by the Commission for

FY 2020-21 to FY 2024-25 .............................................................................................. 267

Table 5-20: Power Purchase Cost from new Hybrid RE Sources for FY 2020-21 to FY

2024-25 ............................................................................................................................. 268


of 445

Table 5-21: Power Purchase Cost from new Hybrid RE Source approved by the

Commission for FY 2020-21 to FY 2024-25 ................................................................... 268

Table 5-22: Solar RPO Shortfall till FY 2020-21 ............................................................ 268

Table 5-23: Non-Solar RPO Shortfall till FY 2020-21 .................................................... 269

Table 5-24: Standalone Solar RPO target and projected solar achievement from FY 2021-

22 to FY 2024-25 ............................................................................................................. 269

Table 5-25: Standalone Non-Solar RPO target and projected Non-Solar achievement from

FY 21-22 to FY 24-25 ...................................................................................................... 269

Table 5-26: Cumulative Solar RPO Shortfall approved by the Commission till FY 2024-25

(MU) ................................................................................................................................. 270

Table 5-27: Cumulative Non-Solar RPO Shortfall approved by the Commission till FY

2024-25 ............................................................................................................................. 270

Table 5-28: Short Term Power Purchase Cost for FY 2020-21 to FY 2024-25 .............. 271

Table 5-29: Short Term Power Purchase Cost approved by the Commission for FY 2020-

21 to FY 2024-25 ............................................................................................................. 272

Table 5-30: Revenue from Surplus Power for FY 2020-21 to FY 2024-25 .................... 272

Table 5-31: Transmission Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ............. 274

Table 5-32: Transmission Charges approved by the Commission for FY 2020-21 to FY

2024-25 (Rs. Crore) .......................................................................................................... 274

Table 5-33: SLDC Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ........................ 275

Table 5-34: SLDC Charges approved by the Commission for FY 2020-21 to FY 2024-25

(Rs. Crore) ........................................................................................................................ 275

Table 5-35: Standby Charges for FY 2020-21 to FY 2024-25 (Rs. Crore) ..................... 275

Table 5-36: Standby Charges approved by the Commission for FY 2020-21 to FY 2024-25

(Rs. Crore) ........................................................................................................................ 276

Table 5-37: Power Purchase Cost Projected by AEML-D for 4th Control Period .......... 277

Table 5-38 Power Purchase Cost approved by the Commission for 4th Control Period . 278

Table 5-39 Consumer Growth Rate from FY 2017-18 to FY 2019-20 ............................ 279

Table 5-40 Projected O&M Expenses for Wires and Supply Business ........................... 281

Table 5-41 Total O&M Expenses segregated between Wires & Supply Business .......... 281

Table 5-42: Normative O&M Expenses for FY 2019-20 (Rs. Crore) ............................. 283

Table 5-43: Escalation Rates for 4th Control Period ....................................................... 284

Table 5-44: Normative O&M Expenses approved for 4th Control Period (Rs. Crore) ... 284

Table 5-45: Provisional Actual Submitted by AEML-D for H1 of FY 2019-20 ............. 285

Table 5-46: Capital Expenditure and Capitalisation for 4th Control Period as submitted by

AEML-D for Wire Business (Rs. Crore) ......................................................................... 287

Table 5-47: Capital Expenditure and Capitalisation for 4th Control Period as submitted by

AEML-D for Retail Supply Business (Rs. Crore) ............................................................ 287


of 445

Table 5-48: Capitalisation against DPR schemes yet to be approved by the Commission

(Rs. Crore) ........................................................................................................................ 288

Table 5-49: Past Trend of Capitalisation for AEML-D (Rs. Crore) ................................ 289

Table 5-50: Capitalisation approved for 4th Control Period (Rs. Crore) ......................... 289

Table 5-51: Depreciation for Wires Business for 4th Control Period as submitted by AEML-

D (Rs. Crore) .................................................................................................................... 290

Table 5-52: Depreciation for Supply Business for 4th Control Period as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 290

Table 5-53: Depreciation approved for Wires Business for 4th Control Period .............. 291

Table 5-54: Depreciation approved for Supply Business for 4th Control Period ............ 291

Table 5-55: Interest on Long-Term Loan for Wires Business for 4th Control Period as


Table 5-56: Interest on Long-Term Loan for Supply Business for 4th Control Period as


Table 5-57: Interest Expenses approved for Wires Business for 4th Control Period ...... 293

Table 5-58: Interest Expenses approved for Supply Business for 4th Control Period ..... 294

Table 5-59: IoWC for Wires Business for 4th Control Period as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 294

Table 5-60: IoWC for Supply Business for 4th Control Period as submitted by AEML-D

(Rs. Crore) ........................................................................................................................ 295

Table 5-61: IoWC approved for Wires Business for 4th Control Period (Rs. Crore) ...... 295

Table 5-62: IoWC approved for Supply Business for 4th Control Period (Rs. Crore) .... 295

Table 5-63: Interest on Security Deposit for 4th Control Period as submitted by AEML-D

(Rs. Crore) ........................................................................................................................ 296

Table 5-64: Interest on CSD approved for the Supply Business for 4th Control Period (Rs.

Crore) ............................................................................................................................... 296

Table 5-65: Return on Equity for Wires Business for 4th Control Period as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 297

Table 5-66: Return on Equity for Supply Business for 4th Control Period as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 298

Table 5-67: RoE approved for Wires Business for 4th Control Period (Rs. Crore) ........ 299

Table 5-68: RoE approved for Supply Business for 4th Control Period (Rs. Crore) ....... 299

Table 5-69: Provision for Bad Debts for 4th Control Period as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 300

Table 5-70: Provision for Bad Debts for 4th Control Period approved by the Commission

(Rs. Crore) ........................................................................................................................ 300

Table 5-71: Contribution to Contingency Reserve for Wires Business and Supply Business

for 4th Control Period as submitted by AEML-D (Rs. Crore) ......................................... 301


of 445

Table 5-72: Contribution to Contingency Reserve approved for Wires Business for 4th

Control Period (Rs. Crore) ............................................................................................... 301

Table 5-73: Contribution to Contingency Reserve approved for Retail Supply Business for

4th Control Period (Rs. Crore) ......................................................................................... 301

Table 5-74: Non-Tariff Income of Wires Business for 4th Control Period as submitted by

AEML-D (Rs. Crore) ....................................................................................................... 303

Table 5-75: Non-Tariff Income of Retail Supply Business for 4th Control Period as


Table 5-76: Non-Tariff Income approved for 4th Control Period (Rs. Crore) ................ 304

Table 5-77: DSM Expenses submitted by AEML-D for 4th Control Period (Rs. Crore) 304

Table 5-78: DSM Cost approved for 4th Control Period (Rs. Crore) .............................. 305

Table 5-79: Income from Other Business submitted by AEML-D for 4th Control Period

(Rs. Crore) ........................................................................................................................ 305

Table 5-80: Income from Other Business approved for 4th Control Period (Rs. Crore) . 305

Table 5-81: ARR for Wires Business for 4th Control Period as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 306

Table 5-82: ARR for Supply Business for 4th Control Period as submitted by AEML-D (Rs.

Crore) ............................................................................................................................... 307

Table 5-83: Approved ARR for Wires Business for 4th Control Period (Rs. Crore) ...... 308

Table 5-84: Approved ARR for Supply Business for 4th Control Period (Rs. Crore) .... 308

Table 5-85: Approved ARR for Combined Wires Business and Supply Business for 4th

Control Period (Rs. Crore) ............................................................................................... 310

Table 6-1: Incremental Revenue Gap/(Surplus) for FY 2017-18 .................................... 312

Table 6-2: Incremental Revenue Gap/(Surplus) approved for FY 2017-18 ..................... 312

Table 6-3: Revenue Gap/(Surplus) for FY 2018-19 ......................................................... 313

Table 6-4: Revenue Gap/(Surplus) Approved for FY 2018-19 ........................................ 313

Table 6-5: Provisional Revenue Gap/(Surplus) for FY 2019-20 ..................................... 313

Table 6-6: Provisional Revenue Gap/(Surplus) Approved for FY 2019-20 .................... 314

Table 6-7: Carrying/(Holding) cost till FY 2019-20 on Wires Gap /(Surplus) of FY 2017-

18 ...................................................................................................................................... 315

Table 6-8: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY 2017-

18 ...................................................................................................................................... 315

Table 6-9: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply Gap/(Surplus) of

FY 2017-18 ...................................................................................................................... 315

Table 6-10: Carrying/(Holding) cost till FY 2019-20 on Wires Gap/(Surplus) of FY 2018-

19 ...................................................................................................................................... 316

Table 6-11: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY 2018-

19 ...................................................................................................................................... 316


of 445

Table 6-12: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply Gap/(Surplus)

of FY 2018-19 .................................................................................................................. 316

Table 6-13: Carrying/(Holding) cost till FY 2020-21 on Approved Wires Gap/(Surplus) of

FY 2017-18 (Rs. Crore) ................................................................................................... 317

Table 6-14: Carrying/(Holding) cost till FY 2020-21 on Approved Supply Gap/(Surplus) of

FY 2017-18 (Rs. Crore) ................................................................................................... 318

Table 6-15: Carrying/(Holding) cost till FY 2020-21 on Approved Wires & Supply

Gap/(Surplus) of FY 2017-18 (Rs. Crore) ....................................................................... 318

Table 6-16: Carrying/(Holding) cost till FY 2020-21 on Approved Wires Gap/(Surplus) of

FY 2018-19 (Rs. Crore) ................................................................................................... 318

Table 6-17: Carrying/(Holding) cost till FY 2020-21 on Approved Supply Gap/(Surplus) of

FY 2018-19 (Rs. Crore) ................................................................................................... 319


Gap/(Surplus) of FY 2018-19 (Rs. Crore) ....................................................................... 319

Table 6-19: RA Recovery Allowed Vs Actual / estimated RA Recovery ....................... 320

Table 6-20: RA Principal and RA Carrying Cost ............................................................ 320

Table 6-21: Under/(Over) recovery in RA principal along with carrying/(holding) cost till

FY 2019-20 ...................................................................................................................... 321

Table 6-22: RA Principal and RA Carrying Cost Recovery approved by the Commission

.......................................................................................................................................... 321

Table 6-23: Under/(Over) recovery in RA principal along with carrying/(holding) cost

approved till FY 20202-21 (Rs. Crore) ............................................................................ 322

Table 6-24: Under Recovery of RA Carrying Cost .......................................................... 324

Table 6-25: Under Recovery of RA Carrying Cost approved by the Commission (Rs. Crore)

.......................................................................................................................................... 325

Table 6-26: Provisional FBSM Pool cost for FY 2018-19 and FY 2019-20 ................... 328

Table 6-27: Recovery of Cumulative Revenue Gap / Surplus till FY 2020-21 (Rs. Crore)

.......................................................................................................................................... 329

Table 6-28: Approved Cumulative Revenue Gap/(Surplus) of Wires Business till FY 2020-

21 (Rs. Crore) ................................................................................................................... 330

Table 6-29: Approved Cumulative Revenue Gap/(Surplus) of Supply Business till FY

2020-21 (Rs. Crore) .......................................................................................................... 330

Table 6-30: Approved Cumulative Revenue Gap/(Surplus) of combined Distribution

Business till FY 2020-21 (Rs. Crore) ............................................................................... 331

Table 6-31: Proposed Tariff Increase/(Decrease) in each year of Control Period ........... 332

Table 6-32: Average Cost of Supply for Wires Business approved by the Commission 333

Table 6-33: Average Cost of Supply for Supply Business approved by the Commission

.......................................................................................................................................... 334

Table 6-34: Combined Average Cost of Supply approved by the Commission .............. 334


of 445

Table 6-35: Combined Average Cost of Supply approved by the Commission .............. 335

Table 6-36: Wheeling Charges proposed by AEML-D for 4th Control Period ............... 336

Table 6-37: Existing Wheeling Charges and Proposed Wheeling Charges (Rs./ kWh) .. 337

Table 6-38: Revenue from Wheeling Charges from Changeover & OA consumers ....... 337

Table 6-39: Approved Wheeling Charges ........................................................................ 338

Table 6-40: Revenue from Wheeling Charges (Rs. Crore) .............................................. 338

Table 6-41: Existing CSS and CSS Proposed by AEML-D (Rs/kWh) ............................ 338

Table 6-42: Proposed CSS for consumer categories with load more than 20 kW (Rs/kVAh)

.......................................................................................................................................... 340

Table 6-43: Revenue from Proposed CSS ........................................................................ 340

Table 6-44: Transmission and Wheeling Charges considered by the Commission (Rs./kWh)

.......................................................................................................................................... 341

Table 6-45: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kWh) ........................... 341

Table 6-46: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kVAh) ......................... 342

Table 6-47: VCOS from FY 2020-21 to FY 2024-25 as submitted by AEML-D (Rs/kWh)

.......................................................................................................................................... 344

Table 6-48: Existing and Proposed Fixed Charges and Demand Charges ....................... 348

Table 6-49: Percentage of Fixed Cost Recovery from Revenue from Fixed / Demand

Charges ............................................................................................................................. 349

Table 6-50: Existing and Proposed Energy Charges (Rs/kWh) ....................................... 351

Table 6-51: Category-wise Power Factor ......................................................................... 352

Table 6-52: Energy Charges in kVAh terms (Rs/kVAh) ................................................. 353

Table 6-53: Category-wise Cross Subsidy Proposed by AEML-D .................................. 355

Table 6-54: Category-wise Cross Subsidy approved by the Commission (%) ................ 357

Table 6-55: No. of consumers whose cheques bounce multiples times within a year ..... 366

Table 6-56: Consumer and sales details for categories identified for merging by the

Commission ...................................................................................................................... 372

Table 6-57: Summary of categories merged by the Commission .................................... 374

Table 6-59: Proposed Grid Support Charges for FY 2020-21 to FY 2024-25 ................. 389

Table 7-1: Approved Schedule of Charges ...................................................................... 394


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List of Abbreviations

A&G Administrative and General

AAD Advance Against Depreciation

ABR Average Billing Rate

ACoS Average Cost of Supply

AEML Adani Electricity Mumbai Limited

AEML-D Adani Electricity Mumbai Limited – Distribution

AEML-G Adani Electricity Mumbai Limited – Generation

AEML-T Adani Electricity Mumbai Limited – Transmission

AIH All-in-Hire

AMNEPL Abhijeet MADC Nagpur Energy Pvt. Ltd.

APR Annual Performance Review

ARR Aggregate Revenue Requirement

ASCI Administrative Staff College of India

Appellate Tribunal for Electricity

ATL Adani Transmission Limited

BEST Brihanmumbai Electric Supply & Transport Undertaking

BIS Bureau of Indian Standards

BPL Below Poverty Line

BPP Bilateral Power Purchase

BUEUS Bharatiya Udhami Evam Upbhokta Sangh

CAGR Compound Annual Growth Rate

Capex Capital Expenditure

CBA Cost Benefit Analysis

CERC Central Electricity Regulatory Commission

CGRF Consumer Grievance Redressal Forum

CPD Coincident Peak Demand

CPI Consumer Price Index

CSD Consumer Security Deposit

CSS Cross Subsidy Surcharge

DERC Delhi Electricity Regulatory Commission

DGCEI Directorate General of Central Excise Intelligence

DISCOM Distribution Company

DMRC Delhi Metro Rail Corporation

DPC Delayed Payment Charge

DPR Detailed Project Report

DSM Demand Side Management

DSPPL Dhursar Solar Power Plant Ltd.

DSS Distribution Sub-station

DTPS Dahanu Thermal Power Station

EA, 2003 Electricity Act, 2003

ECS Electronic Clearing System

EPA Energy Purchase Agreement

FAC Fuel Adjustment Cost

FBSM Final Balancing and Settlement Mechanism

FCR Fixed Cost Reconciliation

FY Financial Year

G, T & D Generation, Transmission and Distribution


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G<>T Generation - Transmission Interface

GFA Gross Fixed Assets

GoM Government of Maharashtra

GST Goods and Services Tax

HT High Tension

IDC Interest During Construction

IDEMI Institute for Design of Electrical Measuring Instruments

IEX Indian Energy Exchange

IGRC Internal Grievance Redressal Cell

InSTS Intra-State Transmission System

IoWC Interest on Working Capital

IT Income Tax

IT/ITeS Information Technology / Information Technology enabled

Services

kVA kilo Volt Ampere

kW Kilo Watt

kWh Kilo Watt hour

KYC Know Your Customer

LCC Load Control Centre

LMC Load Management Charges

LT Low Tension

MAT Minimum Alternate Tax

MCGM Municipal Corporation of Greater Mumbai

MCLR Marginal Cost of Lending Rate

MD Maximum Demand

MD Charges Maximum Demand Charges

MERC/Commission Maharashtra Electricity Regulatory Commission

MMOPL Mumbai Metro One Private Limited

MOD Merit Order Dispatch

MSEDCL Maharashtra State Electricity Distribution Company Ltd.

MSLDC Maharashtra State Load Despatch Centre

MSME Micro Small and Medium Enterprises

MTPR Mid-Term Performance Review

MTR Mid-Term Review

MU Million Units

MVA Mega-Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

MYT (First Amendment)

Regulations, 2017

Maharashtra Electricity Regulatory Commission (Multi

Year Tariff) (First Amendment) Regulations, 2017

MYT Regulations, 2011 MERC (Multi Year Tariff) Regulations, 2011



NCD Non-convertible Debentures

NCPD Non-Coincident Peak Demand

NTI Non-Tariff Income

O&M Operation and Maintenance

OA Open Access


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PAN Permanent Account Number

PBT Profit Before Tax

PPA Power Purchase Agreement

PS Public Services

PV Photo Voltaic

R&M Repair and Maintenance

RE Renewable Energy

REC Renewable Energy Certificate

REGSL Reliance Electric Generation and Supply Pvt. Ltd.

RInfra Reliance Infrastructure Limited

RInfra-D Reliance Infrastructure Limited- Distribution Business

RInfra-G Reliance Infrastructure Limited- Generation Business

RInfra-T Reliance Infrastructure Limited- Transmission Business

RoC Registrar of Companies

RoE Return on Equity

RPO Renewable Purchase Obligation

RPO Regulations, 2016 MERC (Renewable Purchase Obligation, its Compliance

and implementation of REC framework) Regulations, 2016

RPO Regulations, 2019 MERC (Renewable Purchase Obligation, its Compliance

and implementation of REC framework) Regulations, 2019

RTC Round the Clock

RPS Renewable Purchase Specification

RTS Roof Top Solar

SAIDI System Average Interruption Duration Index

SBAR State Bank of India Advance Rate

SBI PLR State Bank of India Prime Lending Rate

SCADA Supervisory Control and Data Acquisition

SLDC State Load Despatch Centre

SoC Schedule of Charges

T<>D Transmission - Distribution Interface

Tariff Regulations MERC (Terms and Conditions of Tariff) Regulations, 2005

TBIA Thane Belapur Industries Association

TL Transmission Loss

TOD Time of Day

TOSE Tax on Sale of Electricity

TPC-D The Tata Power Company-Distribution

TSU Transmission System User

TVS Technical Validation Session

UI Unscheduled Interchange

VCoS Voltage-wise Cost of Supply

VIPL Vidarbha Industries Private Limited

WL Wheeling Loss

WPCL Wardha Power Company Limited

WPI Wholesale Price Index


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BACKGROUND AND BRIEF HISTORY

1.1 BACKGROUND

Adani Electricity Mumbai Limited (AEML) is an integrated Utility engaged in Generation,

Transmission and Distribution of electricity.

The Commission vide its Order dated 28 June 2018, in Case No. 140 of 2017, approved the

assignment of the Distribution Licence of Reliance Infrastructure Limited (RInfra) to

Reliance Electric Generation and Supply Pvt. Ltd. (REGSL). In the same Order, the

Commission has also approved the sale of 100% shareholding of REGSL to Adani

Transmission Limited (ATL). RInfra-D, vide its submission dated 5 September, 2018,

requested the Commission for substitution of name ‘M/s. Reliance Infrastructure Limited’

(RInfra) with ‘M/s. Adani Electricity Mumbai Ltd.’ (formerly known as M/s. Reliance

Electric Generation and Supply Limited – REGSL) as per the Order dated 19 January , 2017

and___ November 2017, by Hon’ble the Bombay High Court. RInfra-D also enclosed the

copy of the Certificate of Incorporation pursuant to change in name from ‘Reliance Electric

Generation and Supply Limited’ to ‘Adani Electricity Mumbai Limited’ issued by Registrar

of Companies (RoC).

The Distribution Business of AEML, i.e., AEML-D, has a Distribution Licence for the

distribution and supply of electricity in parts of Mumbai, for a period of 25 years with effect

from 16 August , 2011.

1.2 MYT ORDER FOR 3RD CONTROL PERIOD FROM FY 2016-17 TO 2019-20

In its Order dated 21 October , 2016 in Case No. 34 of 2016 (‘MYT Order’), the

Commission carried out the true-up for FY 2014-15, provisional true up for FY 2015-16

and approved the ARR for FY 2016-17 to FY 2019-20 and retail Tariffs and Wheeling

Charges for FY 2016-17 to FY 2019-20, in accordance with the MERC (Multi-Year Tariff)

Regulations, 2015 (MYT Regulations, 2015).

1.3 MID-TERM REVIEW ORDER FOR 3RD CONTROL PERIOD

In its Order dated 12 September , 2018 in Case No. 200 of 2017 (‘MTR Order’), the

Commission approved the true-up for FY 2015-16 and FY 2016-17, provisional true-up for

FY 2017-18, and revised ARR and Tariff for FY 2018-19 and FY 2019-20.


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1.4 MYT REGULATIONS, 2019

The Commission notified the MERC (Multi-Year Tariff) Regulations, 2019 (MYT

Regulations, 2019) on 1 August, 2019 for the 4th Control Period from FY 2020-21 to FY

2024-25.

1.5 PETITION FOR APPROVAL OF MULTI YEAR TARIFF, ADMISSION OF

THE PETITION AND PUBLIC PROCESS

AEML-D filed its Petition for approval of truing up for FY 2017-18 and FY 2018-19,

provisional truing up for FY 2019-20 and ARR and Tariff for FY 2020-21 to FY 2024-25

on 30 November, 2019. The Commission sought replies on the preliminary data gaps raised

on 10 December, 2019 and also certain other information from AEML-D, replies to which

were submitted by AEML-D on 20 December, 2019.

The Technical Validation Session (TVS) was held on 24 December, 2019. The list of

persons who attended the TVS is at Appendix-1. The Commission asked AEML-D to

provide additional information and clarifications on the issues raised during the TVS.

AEML-D submitted its replies and filed its revised MYT Petition on 7 January, 2020, with

the following main prayers:

1) “Admit the petition as submitted herewith;

2) Approve the actual revenue gap/surplus arising on account of truing-up for FY

2017-18 and FY 2018-19 along with the carrying cost as worked out in this petition;

3) Approve the provisional ARR and revenue gap/surplus for FY 2019-20 as worked

out in this petition;

4) Approve the cumulative revenue gap till FY 2019-20 as worked out in this petition

and allow recovery of the same in the manner as presented in this petition.

5) Approve the ARR for each year of Control Period FY 2020-21 to FY 2024-25, as

projected in this Petition;

6) Approve the Retail Tariffs, Wheeling Charges and Cross-Subsidy Surcharge as

proposed in this Petition for each year of the Control Period FY 2020-21 to FY

2024-25;

7) Approve the revisions in Schedule of Charges as proposed in this petition;

8) Take on record the change in Registered Address of Adani Electricity Mumbai

Limited;

9) Allow for specific deviations from the MYT Regulations, 2015 and MYT

Regulations, 2019, wherever sought in this petition;


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10) Grant specific prayers, wherever made in this petition, for reconsideration /

relaxation of rulings made in previous Tariff Orders;

11) Allow additions / alterations / modifications / changes to the Petition at a future

date;

12) Allow any other relief, order or direction, which the Hon’ble Commission deems fit

to be issued;”

The Commission admitted the MYT Petition on January 8, 2020. In accordance with

Section 64 of the Electricity Act, 2003 (EA 2003), the Commission directed AEML-D to

publish its Petition in the prescribed abridged form and manner so as to ensure adequate

public participation, and to reply expeditiously to all the suggestions and objections

received. AEML-D issued a Public Notice inviting suggestions and objections from the

public on its Petition. The Public Notice was published in the daily newspapers, viz,

Hindustan Times and Indian Express (English), on 10 January, 2020 and in Loksatta and

Saamna (Marathi) on 11 January 2020.

The Petition and its summary were made available for inspection/purchase at AEML-D’s

offices and on its website (www.adanielectricity.com). The Public Notice and Executive

Summary of the Petition were also made available on the websites of the Commission

(www.merc.gov.in) in downloadable format. The Public Notice stipulated that the

suggestions and objections, in English or Marathi, may be filed with proof of service on

AEML-D, latest by 31 January, 2020.

The Commission received written suggestions and objections, as well as oral submissions

on various issues at the Public Hearing held on 4 February, 2020 at 10:00 hrs at Centrum

Hall, First floor, World Trade Centre, Centre No. 1, Cuffe Parade, Mumbai 400005. The

list of persons who attended the Public Hearing is at Appendix-2.

The Commission has ensured that the due process contemplated under law to ensure

transparency and public participation was followed at every stage and adequate opportunity

was given to all concerned to file their say.

The suggestions and objections made in writing as well as during the Public Hearing, along

with AEML-D’s responses and the Commission’s rulings, have been summarised in

Chapter 2 of this Order.

http://www.merc.gov.in/


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1.6 ORGANISATION OF THE ORDER

This Order consists of the following chapters as outlined below:

▪ Chapter 1 provides a brief history of the regulatory process undertaken by the

Commission. A list of abbreviations with their expanded forms has been included.

▪ Chapter 2 lists out the suggestions and objections received in writing as well as during

the Public Hearing. These have been summarized issue-wise, followed by the response

of AEML-D and the rulings of the Commission.

▪ Chapter 3 details the Truing-up of FY 2017-18 and FY 2018-19.

▪ Chapter 4 details the Provisional Truing up of FY 2019-20

▪ Chapter 5 details the ARR for FY 2020-21 to FY 2024-25.

▪ Chapter 6 details the Cumulative Revenue Gap/(Surplus), Tariff Philosophy and

category-wise Tariffs for FY 2020-21 to FY 2024-25.

▪ Chapter 7 details the changes approved in the Schedule of Charges

▪ Chapter 8 details the Applicability of the Order

▪ Annexure I details the revenue from revised tariffs for FY 2020-21 to FY 2024-25

▪ Annexure II details the approved Tariff Schedule for FY 2020-21 to FY 2024-25

▪ Appendix-1: List of persons who attended Technical Validation Session (TVS) dated

24 December, 2019

Appendix-2: List of persons who attended Public Hearing dated 04 February, 2020


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SUGGESTIONS/OBJECTIONS, AEML-D’S RESPONSES

AND COMMISSION’S RULING

1.7 POWER PURCHASE COST

The Tata Power Company Limited (Distribution) [TPC-D] submitted that AEML-D has

neither considered fixed cost of VIPL for FY 2019-20, nor has it considered the past Gap

pertaining to VIPL in the Tariff petition.

TPC-D submitted that in the proposed MYT Petition of AEML-D, it is heavily reliant on

the short-term / infirm sources of power and has not presented any Power Purchase plan for

the entire Control Period. TPC-D also submitted that Renewable Energy (RE) power being

infirm, AEML-D may have to procure power from real time markets to meet the sudden

demands on account of unpredictability of RE power, the cost of which cannot be known

upfront and would be passed onto consumers. TPC-D submitted that the Commission

should factor in these costs while approving the power purchase of AEML-D as FAC cannot

be a tool to suppress tariffs and subsequently recover full costs through FAC.

TPC-D stated that AEML-D has considered a rate of Rs. 3.50/kWh for deriving the short-

term power purchase cost for the 4th Control Period, which seems to be lower considering

the actual short-term power purchase rate for FY 2018-19. TPC-D submitted that typically

the actual power purchase rate experienced in the truing up year is considered for projection

of the ensuing years.

Shri Mahaveer Kumar Jain suggested that solar power should be used to meet internal

electricity requirement of AEML-D’s offices, as it will save energy cost. Though in

previous MTR Petition of AEML-D, it was stated that 6 offices of AEML-D have got a

total of 80kWp solar power generation, it is not sufficient and AEML-D should go for solar

in each of its buildings/structures having capability of installation of Solar.

Shri Ashok Pendse submitted that there may be severe impact on AEML-D Tariff to the

tune of Rs. 1600 Crore due to VIPL-G’s pending MTR Petition and requested the

Commission to issue the order on VIPL-G’s Petition before passing the Order on present

MYT Petition of AEML-D.

Shri Ashok Pendse also submitted that for Power Purchase for FY 2020-21, AEML-D has

considered the proposed rate of Rs. 3.35/kWh for the hybrid Solar-Wind project rather than

the approved rate of Rs. 3.24/kWh, which has resulted in an additional impact of Rs. 340

Crore, and which needs modification. Shri Pendse further stated that short-term power


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purchase rate has been assumed at Rs. 3.50/kWh, as compared to the rate of Rs. 3.30/kWh

that can be achieved through long-term power purchase. Shri Pendse added that the rate for

purchase from AEML-G is Rs 4.63 for five years. Mumbai has a problem of transmission

constraints, which is likely to be eased in about two years, and when AEML-G PPA will

come for review. Power should be purchased via competitive bidding, instead of depending

on costly source.

M/s Modern Manufacturing Company and Others submitted that AEML-D is planning to

procure 66% of annual power requirement from the Power Exchange, which does not

guarantee certainty of proposed tariff trajectories. They also requested to scrutinize AEML-

D’s proposal (VIPL’s liability, FBSM Settlement payment) thoroughly to examine whether

they have hidden any cost leading to an unfair competitive situation.

Shri Pavan Kapoor submitted that AEML-D has entered into long-term purchase of power

for only 1/3rd of its power supply requirement. The remaining power requirement is planned

to be procured through short-term sources, which is subjected to market fluctuation. Shri

Kapoor was apprehensive that any increase in prices of short-term power sources would be

passed on to the consumer through FAC and suggested the Commission to either force

AEML-D to procure more power from long-term sources or to put a cap on FAC and share

the burden of power cost escalation beyond the proposed rate of power procurement for

short-term power purchase.

AEML-D’s Response

On the issue of non-consideration of VIPL-G fixed cost and past Gap, AEML-D replied

that VIPL-G is under shut down from January 2019 and the availability of VIPL in FY

2019-20 till date has been zero. Accordingly, no Fixed Charges are payable to VIPL-G in

FY 2019-20. As regards inclusion of the past gap of VIPL-G, AEML-D cannot

hypothetically consider any amount and un-necessarily show a tariff increase as that would

mean proposing to recover the costs which are neither incurred, nor accrued and not having

any certainty of accrual, either.

AEML-D submitted that its Power Purchase plan is robust, as it not only has base load

power from ADTPS, but it shall also have hybrid RE from FY 2021-22, which will be

available from solar during the day and from wind during the off-peak night times. This

allows the availability of power to closely match the demand pattern, as opposed to

contracting long-term thermal power which will be available on RTC basis, leading to

surplus and its consequential cost on consumers. Further, the short-term market is fairly

liquid in the present scheme of things, which ensures both availability and stable pricing.

Going forward, developments such as Real-Time Market and Market Based Economic


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Dispatch will only allow even greater availability of short-term power and reduction in

prices. AEML-D also takes initiatives such as Banking, where it absorbs surplus power

available in other States when AEML-D needs it and vice versa. These arrangements,

including short-term procurement, instead of procurement from VIPL-G, has helped bring

down the cost of power of AEML-D in FY 2018-19 and FY 2019-20 and there is no reason

why the same would not continue to bear fruit going forward.

As regards the projected short-term power purchase rate, AEML-D submitted that TPC-D

has also considered short term rate of Rs. 3.50/kWh for deriving the short-term power

purchase cost for 4th Control Period in its MYT Petition. The rate of short-term power based

on actual short-term purchase in H1 of FY 19-20 for AEML-D is Rs. 3.80/kWh. AEML-D

has procured 1,558.37 MU of short-term power through bilateral mechanism on RTC basis

in H2 of FY 2019-20. Thus, the weighted average rate of RTC power discovered through

bids is Rs. 3.60/kWh. Considering the downward trend of short-term price, AEML-D has

considered the rate of Rs. 3.50/kWh for future. FAC is anyway a mechanism provided in

the Electricity Act, 2003 to recover additional power purchase cost over what is approved,

and that applies equally to TPC-D as well.

AEML-D submitted that it has installed solar PV modules at six office locations so far and

more will be installed in future.

AEML-D submitted that at the time of submission of MYT Petition, the Order in Case No.

281 of 2019 had not been issued. Accordingly, AEML-D has considered the rate at Rs.

3.35/kWh in accordance with the Petition for adoption of tariff in Case No. 281 of 2019.

AEML-D submitted that it carries out procurement of short-term power either through

Power Exchanges or through MoP DEEP Portal. Even bilateral procurement, if any, is at

Exchange-linked rates only and hence, the discovered rates are competitive and as per

market conditions. The actual rate would be different for different times of day and cannot

be forecast with any certainty for a five-year period. It has been assumed as Rs. 3.50 per

unit for the purposes of the Petition. Any variation in power purchase rate shall be adjusted

in FAC.

AEML-D submitted that the observation about long-term thermal power availability at Rs.

3.30 per unit is far from realistic. Further, the MYT Petition of AEML-G (Case No. 298 of

2019) elaborates on the various advantages of ADTPS and the justification of why PPA

should be extended.


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As regards the issue of procurement of 66% of power from Exchange and consequent

uncertainty of tariff trajectories, AEML-D submitted that it has entered into a contract for

procurement of wind-solar hybrid power, which, as projected in the Petition, will be

available from FY 2021-22. Thereafter, the purchase from short-term sources will reduce.

The average annual Round the Clock short-term power rate realised by AEML-D from

Power Exchanges since FY 2014-15 till Dec. 2019 is in the range of Rs. 2.71 to 4.24 per

unit, with the average being Rs. 3.41 per unit. Such consistent trend leads a fair degree of

certainty to the ARR forecast, where short-term price is estimated at Rs. 3.50 per unit.

AEML-D further submitted that short-term purchase allows flexibility to AEML-D for

buying power as and when required rather than being saddled with surplus power during

off-peak hours, which is sold at a loss and which burdens the tariff of the consumers.

AEML-D submitted that all crystallized liabilities, including provisional liability towards

FBSM settlement of FY 2018-19 and FY 2019-20 are included in its projections. AEML-

D has even included estimated FCR liability in its ARR, which is likely to arise as a result

of the Commission’s Order.

AEML-D submitted that based on the existing tie-ups for power procurement, the share of

long-term procurement should increase to around 65%-70% of the total power requirement

in FY 2021-22. In any event, short-term procurement is made today from a very liquid

market, which ensures that neither prices nor availability is volatile. However, as a

Licensee, AEML-D continuously explores cheaper alternatives of power and will therefore,

take future actions depending on the market conditions, availability and the economic long-

term/ medium-term alternatives as may be available.

Commission’s Ruling

As regards non-consideration of power purchase from VIPL-G by AEML-D in its Power

Procurement Plan, the PPA has been terminated by AEML-D, which has been upheld by

the Commission. Further, VIPL-G’s availability was very low in FY 2018-19 and zero in

FY 2019-20 due to non-availability of coal. Though this has increased AEML-D’s reliance

on short-term sources of power, it has also benefited AEML-D in terms of reduction of

power purchase cost. As regards the impact of the past period true-up of VIPL-G, the

Petition filed by VIPL-G in this regard is pending with the Commission, on account of the

matter being sub-judice before the Hon’ble Supreme Court.


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The Commission has considered the cost of Wind-Solar Hybrid at the rate of Rs. 3.24 per

unit as stated in the Order on adoption of the competitively discovered rate. The

Commission has considered the rate of Rs. 3.50 per unit for short term sources in line with

the submission of AEML-D.

The Commission’s analysis of the power purchase quantum from various sources and the

rate of power purchase is detailed in the respective Chapters of this Order, along with the

observations on the high reliance on short-term power by AEML-D.

1.8 CATEGORISATION AND TARIFF DETERMINATION

TPC-D submitted that AEML-D has projected its tariff based on the Voltage-wise Cost of

Supply (VCoS) instead of Average Cost of Supply (ACoS). TPC-D stated that the Tariff

should be based strictly on ACoS but taking into account cost of supply at different Voltage

levels according to Regulation 91 of the MYT Regulations, 2019.

TPC-D submitted that the cross-subsidy provided to 0-100-units residential category

consumers by AEML-D is significantly higher as compared to that by other Distribution

Licensees, hence, AEML-D’s contentions in this regard in the Petition are not correct.

Shri Pavan Kapoor and several others above 100 in numbers (have submitted exactly

identitical comments, some have only signed the letter), stated that AEML-D has reduced

the Tariff of HT Commercial and Industrial Consumers and increased the Tariff of

residential consumers so much that the proposed Tariff of residential consumers having

consumption more than 100 units is more than the proposed tariff of HT and LT

Commercial and Industrial Consumers. Shri Kapoor stated that AEML-D’s proposal was

very unfair and requested the Commission to reduce tariff of residential category

substantially.

Shri Ashok Pendse submitted that for the first time, residential consumers consuming less

than 300 units per month have become cross-subsidizing consumers, as per AEML-D’s

tariff proposal. Shri Pendse requested the Commission to not allow this methodology to

propagate.

Shri Rakshpal Abrol, on behalf of Bhartiya Udhami Evam Upbhokta Sangh (BUEUS),

submitted that AEML-D does not adhere to the Commission’s Order stipulating that

Residential consumers carrying out Commercial/Industrial activities and having a yearly

consumption of 3600 Units should be charged at Residential Tariff. On the contrary, they

serve notices to many premises under Section 126(2), Section 126 (5), and Section 135 of


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the Act. The consumers are not authorised to file Appeals under Section 127 to the

Appellate Authority and are debarred to move the civil courts.

Shri Abrol also submitted that low/medium voltage consumers with food manufacturing

facilities should be under LT-V-Industry and not LT-II non-residential/commercial, and

they are charged higher fixed charges and higher tariff. Shri Abrol suggested to the

Commission to consider small tea shops, hotels, restaurants who are manufacturing and

processing food articles and use electricity at premises for operation of appliances like

lighting, heating, cooling, washing/cleaning, entertainment/leisure, pumping as industry

and categorised as LT-III and not LT-II(A) 0-20 kW and above 20 kW to 50 kW under LT-

III(B) not under LT-II(B).

AEML-D’s Response

AEML-D submitted that it has followed the intent that retail supply tariff shall be

determined on the basis of Retail ARR only. AEML-D submitted that the Wires cost is fully

recovered by way of Wheeling Charges. The total cost allocated to HT and LT is fully

recovered by HT and LT Wheeling Charges separately, meaning thereby that there is

absolutely no cross subsidy in Wheeling Charges. So, ACoS should be determined without

considering network cost.

AEML-D submitted that it has worked out VCoS to show that representation of cross

subsidy based on ACoS is actually incorrect. Tariff setting with respect to ACoS, without

keeping an eye on the actual cost to serve based on voltage of supply, leads to incorrect

conclusion of cross subsidization among their respective consumers. Hence, AEML-D

requested the Commission to determine retail Tariffs w.r.t Retail ARR only, in accordance

with the intent of the MYT Regulations, 2019.

As regards the issue of cross-subsidy to 0-100 units of residential category consumer,

AEML-D submitted that attempts to equalise the tariffs of 0-100 units consumers across

Licensees has resulted in increase of cross-subsidy requirement for AEML-D consumers in

this slab, which has to then be filled by raising tariffs of other slabs of residential and of

subsidising consumers. AEML-D submitted that the cross-subsidy requirement of 0-100

units consumers, which was at 61% in FY 2015-16 is brought down to 46%, due to a

significant reduction in their tariffs with a view to equalise the same across Licensees. It is

in this context that AEML-D has made its submissions in the MYT Period.

As regards the issue of unfair tariff proposed for residential consumers with consumption

more than 100 units, AEML-D submitted that tariffs are proposed based on the cost of

supply. The Electricity Act, 2003 and the Tariff Policy requires that tariff should be brought


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closer to the cost of supply. The network cost (Wheeling Charges) is determined as per

voltage of supply and therefore it is lower for HT as compared to LT. This makes HT cost

of supply lower and consequently their tariffs are lower than LT tariffs. However, within

LT, Residential tariffs are lower than Commercial and Industrial tariffs. Further, the benefit

of lower tariffs of up to 100 units is available to all higher slabs, on account of telescopic

tariff for residential category. Hence, while individual slab of 101-300 units may appear as

cross-subsidizing, in reality, the break-even units for cross-subsidizing are actually much

higher. AEML-D submits that in the MTR Order itself, the tariff for FY 2019-20 is

approved such that the slab 101-300 units appears as cross-subsidizing, when the actual

break-even (due to telescopic application) is at 535 units.

Similarly, in AEML-D proposal for FY 2020-21, the actual break-even for cross-

subsidization is 487 units, thereby representing high end residential consumers.

As regards the issue of incorrect tariff categorization of residential consumers carrying out

commercial activities, AEML-D submitted that it follows the Commission’s Tariff Order

in this regard and submits that the allegations are without any specifics, substance or basis.

Further, if the annual consumption exceeds that limit in a financial year, the tariff is to be

changed to Commercial (LT-II) or Industrial (LT-III) from the next financial year. It has

followed the Tariff Schedule strictly and changed tariff of such premises to commercial or

industrial, as the case may be, in accordance with these provisions. Industrial tariff is

offered in accordance with the purposes designed in the Tariff schedule and after

submission of relevant documents issued to the consumer by appropriate authorities.

AEML-D submitted that it is following the categorization as per applicable Tariff Orders

and any change in the same is a prerogative of the Commission.


Regulation 91.3 of the MYT Regulations, 2019 specifies that the retail supply Tariff shall

be determined on the basis of ACoS. The Commission’s Tariff Philosophy is elaborated in


The Commission has worked out retail supply tariffs based on ACoS and existing Average

Billing Rate (ABR) of each consumer category. The Commission has increased the Fixed

Charges to all consumer categories in order to rationalise the recovery of fixed component

of ARR from Fixed/Demand Charges in line with the methodology adopted in MTR Order.

The Commission has accordingly reduced the Energy Charges to meet the tariff hike

(decrement) after adjustment of Fixed/Demand Charges. The Commission, to the extent


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possible, has tried to maintain the ratio of ABR/ACoS in the prescribed range of +-20%.

The details have been elaborated in the Section on Tariff Philosophy/Design.

1.9 WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE (CSS)

Shri N Ponrathnam has stated that Wheeling Losses and Cross-Subsidy Surcharge (CSS)

are being levied unjustifiably.

Shri Rakshpal Abrol submitted that Wheeling Charges are not being calculated as per

Section 2(76), nor as per Section 62 on the issue of payment of charges. Further, as per the

Hon’ble Supreme Court Judgment dated 8 July, 2008, the Licensees who have not laid

down the distribution lines to supply electricity in retail have to bear the Wheeling Charges

for supplying electricity to consumers. Also, the Service Line Charges have been approved

under Schedule of Charges (SoC).

AEML-D’s Response

As regards the issue of Wheeling loss, AEML-D submitted that there is a certain loss in

transport of power in an electrical system, due to heat loss, core loss in transformers and

other devices. The amount of loss depends on the extent, type and other particulars of the

network, including length of lines, O&M and capex practices, etc. The Regulations specify

a target level of distribution loss to be built into the tariffs and also a corresponding level

of Wheeling Loss for energy accounting of Open Access and change-over transactions. The

Distribution Licensee faces an efficiency loss, in monetary terms, in case it is unable to

maintain the losses within the specified target. Therefore, the losses, only up to a level

deemed efficient, are allowed to be passed on to the consumers.

AEML-D submitted that CSS is being levied in accordance with the Electricity Act, 2003

and Distribution Open Access Regulations, 2016. The option of providing Direct Subsidy

to consumers rests with the Government of Maharashtra.

AEML-D submitted that the Wheeling Charges are shown as part of the tariff and represent

the cost of network usage, and are levied on change-over consumers in accordance with the

Commission’s Orders. AEML-D submitted that the Schedule of Charges only recover the

cost of last-mile connectivity, whereas Wheeling Charges represented the cost of overall

network, since use of network involves use of entire network as per voltage of the consumer

and not just the last mile connectivity.


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The Commission has determined the Wheeling Charges for AEML-D based on the units

wheeled and the approved costs in accordance with the MYT Regulations, 2019. Wheeling

Charges are intended to recover the fixed network cost, in terms of capital related expenses

like interest, depreciation and RoE, and revenue expenses like O&M expenses, and Interest

on Working Capital. The Commission has determined the Wheeling Charges based on the

methodology adopted by the Commission in previous Tariff Orders.

Wheeling losses are payable to compensate the Distribution Licensee for the loss of energy

from injection point to drawal point, and are allowed to be recovered in accordance with

the OA Regulations. The Commission has also determined the Wheeling Loss for HT and

LT levels as elaborated in Chapter 6 in this Order. The Changeover and Open Access

consumers shall bear the approved Wheeling Losses of the Distribution System as per the

prevailing methodology.

The Commission has determined the CSS in line with the formula prescribed in the Tariff

Policy, and on similar lines as done in previous Tariff Orders. The CSS is recovered from

Open Access and Change-over consumers, to offset the loss of cross-subsidy provided by

the subsidizing consumers, in accordance with the Electricity Act, 2003 and the APTEL

Judgment in the matter.

1.10 FIXED/DEMAND CHARGES

Shri Rakshpal Abrol submitted that Demand Charges are based on kVA and consumption

on kWh, which is incorrect, and the consumers should be charged either in kW or kVA.

Shri N Ponrathnam submitted that the proposed increase in Demand Charges are exorbitant

and the Commission should change this philosophy. Shri Ponrathnam also stated that

Demand Charges should be charged in Rs./kWh like Wheeling Charges instead of

Rs./KVA/month.

AEML-D’s Response

The consumers with demand-based Tariffs are levied charges for billed demand in Rs.

/kVA/month and energy consumption in Rs. /kWh/month, as per the Tariff Schedule

approved by the Commission from time to time.

As regards the proposed increase in demand charges, AEML-D submitted that the

Commission had been following this philosophy from FY 2016-17 and has been increasing

the Fixed Charges gradually to enable Distribution Licensees to recover a larger share of


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Fixed Cost through Fixed/Demand Charges. In accordance with the philosophy followed

by the Commission, AEML-D has proposed increase in Fixed/Demand Charges.

AEML-D submitted that Wheeling Charges were being determined in Rs./kWh terms by

the Commission, primarily for ease of implementation. However, Demand Charges should

be charged in Rs./kVA/month in order to recover the cost of capacity reserved for the

consumer by the Distribution Licensee.


There is no inconsistency in Demand Charges being levied on the basis of kVA of

Contract/Billing Demand and Energy Charges being levied on the basis of consumption in

kWh. Demand is recorded in kVA and energy consumption is recorded in kWh. From this

Order, the Commission has introduced kVAh based Energy Charges for HT categories.

The Commission's views and decisions on the increased Fixed/Demand Charges proposed

by AEML-D have been elaborated in Chapter 6 of this Order. Typically, around 50% of the

total ARR of the Distribution Licensee, including the Fixed cost of power purchase, is fixed

in nature, i.e., it has to be incurred irrespective of whether any energy is sold to the

consumer or not. Against this, the recovery of fixed costs through Fixed/Demand Charges

is much lower, i.e., only a part of the Fixed costs of the Licensee are recovered through

Fixed/Demand Charges, and the balance are recovered through Wheeling Charges and

Energy Charges, which are linked to the actual energy sold to consumers. The Distribution

Licensee is entitled to some level of assurance regarding recovery of its fixed costs and,

while the entire fixed costs may not be recovered through Fixed/Demand Charges, a

reasonable proportion of fixed costs should be recovered through them. The Distribution

Licensee is revenue neutral under the Tariff determination process and shall not have any

windfall gain on account of increased Demand Charges.

The Fixed/Demand Charges for every category have been determined keeping in view the

present levels, the Average Billing Rate (ABR), and the cross-subsidy ratio.

The Commission has rationalised the Fixed/Demand Charges keeping in view the share of

fixed costs in the total ARR and the present recovery through Fixed/Demand Charges, as

elaborated in Chapter 6 of this Order.

1.11 VARIABLE CHARGES

Shri N Ponrathnam objected to the introduction of KVAh billing and suggested that the

Distribution Licensee should maintain PF instead of consumers facing a penalty for not

doing so. Shri Rakshpal Abrol also requested the Commission to not approve any kVAh


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based charging system even in HT as kWh is globally recognised unit for measuring and

billing A.C. current.

AEML-D Response

AEML-D submitted that it has proposed kVAh billing for categories with load more than

20 kW according to the intent and directions of the Commission stated in the MTR Order

dated 12 September 2018. Further, even at present, there are PF Incentives and Penalties

and they have been in existence since the regulatory process of tariff determination. In the

proposed system of kVAh billing, the PF is inherent, which means if PF is poor, the kVAh

would be higher and so is the energy bill and if PF is well maintained, the energy bill will

be lower. So, kVAh billing is essentially the same system as existing and will provide the

same signal to consumers for maintaining their PF. The Distribution Licensee’s

responsibility is to install Capacitor Banks at appropriate places in the electricity grid.

APFC installed at substations improves the PF of upstream system resulting in reduction of

losses of upstream system, improving voltage profile, etc. However, in the consumer

apparatus, it is the responsibility of the consumer to do so, so as to prevent injection of

reactive power into the grid.


The Commission has noted the Objection and also reply submitted by AEML-D. The

Commission intends to introduce kVAh based billing in the State in a phased manner. The

Commission has approved kVAh Tariff only for HT consumers through this Tariff Order.

The analysis and ruling of the Commission on kVAh billing are elaborated in Chapter 6 of

this Order.

1.12 CONSUMER SECURITY DEPOSIT

Shri Mahaveer Kumar submitted that as per the Supply Code Regulations and past Tariff

Orders, AEML-D has started collecting Security Deposit and started submitting the relevant

data to the Commission yearly. He requested the Commission to issue direction to AEML-

D to provide category-wise overdue Security Deposit as on 31 March, 2019.

Shri Rakshpal Abrol submitted that AEML-D had not refunded the interest on Security

Deposit paid under Section 47 of EA, 2003. They have not adjusted the security deposit and

excess amount of Rs. 486 Crore due to consumers as mentioned in the Order of the

Distribution Licensee.


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AEML-D Response

AEML-D submitted that it has recovered the Consumer Security Deposit (CSD) from

consumers while providing new connections in accordance with the Supply Code, 2005. It

carries out re-assessment of CSD in every financial year as required by the Regulations,

based on the consumer billing.

As regards the issue of Interest on security deposit, AEML-D submitted that the Order dated

1 November 2018 was a Corrigendum Order issued by the Commission in Case No. 200 of

2017, where the Commission had only modified the para about Interest on CSD by

including a reference to MYT Regulations, 2015. AEML-D submitted that it was providing

interest to consumers in accordance with the Regulations and Orders of the Commission.


The Commission notes the replies of AEML-D in this regard. However, the Distribution

Licensees, as per the Regulatory provisions, are required to do the needful to ensure that

the due amount of CSD is recovered/refunded from/to the consumers. AEML-D is directed

to adjust the excess security deposit, if any, in the bill of the consumer at the time of

reassessment of the Security Deposit amount at the end of the year.

1.13 FINANCIAL MANAGEMENT AND CONTROL

Shri Mahaveer Kumar Jain submitted that AEML-D has submitted huge unexplained

expense relating to A&G, insurance, Security arrangement, Printing and stationery, and

Employee expenses. These huge unexplained expenses that are much beyond past trend,

mostly due to takeover of Mumbai licence area from R-Infra by AEML-D and not due to

operational reasons, and are liable to be rejected. Shri Jain also submitted that expenses

incurred on account of change of name from RInfra to AEML should not be allowed.

Shri Jain sought the information relating to the use of resources by AEML-D of other

Divisions and Group Companies and vice-versa, which needs to be disallowed:

a) Use of property/resources by other divisions and Group Companies.

b) Use of property by Companies of Group / Related parties

Shri Jain also sought information on the expenses on Professional, Consultancy &

Technical Fees from FY 2012-13 to FY 2018-19.

AEML-D Response

AEML-D property or resources are currently not being used by any other Division / Group

Companies / related parties. AEML-D has submitted the Accounting Statement Formats as


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certified by the Statutory Auditors of the Company, which certified that all expenses and

assets claimed in AEML-D MYT Petition pertain to AEML-D only.

AEML-D submitted that, in future, if AEML-D intends to utilise its properties to make

more optimal use of it, it will be within the framework of optimum utilisation of assets as

allowed under Section 51 of the Electricity Act and any income from the same will be

passed on to the consumers in the proportion as prescribed by the Commission in the Tariff

Regulations.

As regards the issue of expenses incurred on account of change of name from RInfra to

AEML, AEML-D submitted that the expenses towards printing of stationery, bills, etc., is

anyway a regular expense even when there is no change of name, as these are ongoing

business expenses in any given year. Further, it is necessary to change signages, etc., on

offices for customers to be aware that their Distribution Licensee is now AEML and not

Reliance Infrastructure. These expenses are therefore essential for the furtherance of the

distribution business.

In any event, AEML-D has controlled its A&G expenses such that the total O&M expenses

are within the normative level approved by the Commission and customers are not unduly

burdened.

As regards the increase in A&G expenses in FY 2017-18 and FY 2018-19, AEML-D

submitted that these expenses keep varying depending upon the actual requirements and

they also depend on several factors such as directions of IRDAI, increase in security guards’

salaries by the Maharashtra Security Guard Board, volume and nature of printing required,

variances in the number of advertisements published in a given year, etc. Some of the

factors are business as usual, while others are external and uncontrollable. In any event,

these are legitimate business expenses. There is absolutely no trend in these expenses from

year to year – there has been significant jumps in the past and then there have been declines

as well. In fact, in Printing and Stationery costs, the expenses for FY 2017-18 and FY 2018-

19 are lower than those incurred up to FY 2015-16.

As regards the increase in Professional, Consultancy & Technical Fees in FY 2018-19,

AEML-D submitted that till FY 2017-18, the allocable Corporate expenses of RInfra were

being allocated to different expenses heads of the O&M expense in the ARR. From FY

2018-19, the corporate expense allocation is included in Professional, Consultancy &

Technical Fees of A&G expense, on the advice of Statutory Auditor of AEML. The

different services being availed by AEML from its Group Companies, against which the

Corporate Expenses are allocated to it, have been submitted in detail in the MYT Petition.


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The Commission has scrutinized the actual O&M expenses claimed in FY 2017-18 and FY

2018-19 and had queried AEML-D in this regard. The Commission has detailed AEML-

D’s replies and the Commission’s analysis in O&M section of Truing-up of FY 2017-18

and FY 2018-19. For FY 2019-20 onwards, the Commission has approved normative O&M

expenses for AEML-D.

1.14 BILLING

Shri Mahaveer Kumar Jain submitted that AEML-D has not provided any data on the bill

generation efficiency. Shri Jain stated that the billing should be done on the date of Meter

reading itself so that the impact of delay is not borne by the consumers. Shri Jain requested

the Commission to issue direction to AEML-D to provide summary information in respect

of bill generation showing category wise bill amount, average days from FY 2015-16 to FY

2018-19.

AEML-D Response

AEML-D submitted that its billing systems were prompt and bills were generated within

three days from Meter reading. AEML-D is in the process of replacing the conventional

meters with smart meters. The first phase of the same shall commence from the East

Division, which will further reduce the time taken for generation of bill. Further, time taken

for bill generation subsequent to availability of meter reading does not depend upon

consumer category.


The Commission has noted the Objection and the response of AEML-D. AEML-D should

ensure that the time period for raising bills after meter reading is as per the Supply Code

Regulations, 2005.

1.15 FUEL ADJUSTMENT CHARGES (FAC)

TPC-D submitted that AEML-D’s FAC rate remains at Rs. 0.50/kWh even though the

power purchase cost in the Petition seems to have increased in the range of Rs. 0.30/kWh

only compared to approved tariff. TPC-D requested the Commission to carry out a prudence

check.

Shri Pavan Kapoor and others submitted that the FAC levied to all categories by AEML

has been much higher than that charged by TPC-D. Shri Kapoor requested the Commission

to allow only reasonable and fair amount of FAC to be charged to the consumers. Shri N

Ponrathnam enquired about the justification for FAC.


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Shri Ashok Pendse submitted that despite power purchase cost decreasing year-on-year by

3-8% in last 3 years when compared to MYT Order, FAC was charged to all consumers.

Shri Pendse requested the Commission to look into the matter.

AEML-D Response

AEML-D submitted that it has charged the FAC in accordance with Section 62(4) of the

Electricity Act, 2003 and the MYT Regulations, 2015 and the FAC till September 2019 has

been submitted to the Commission for post-facto approval.

As regards the issue of charging FAC despite reduction in power purchase cost, AEML-D

submitted that FAC represented the rate variation, which is a result of source-wise variation

in rate of purchase as well as the variation of source-mix, vis-à-vis that approved in the

Order. The power purchase cost in absolute Rs. Cr. terms varies on account of both the

variation in rate as well as the variation in quantum of energy purchased and hence, lower

sales will result in lower purchase quantum and cost, but that will not affect FAC due to

mix and rate variance. The actual weighted average rate of power purchase as realised was

higher than that approved.

Further, for FY 2017-18, the cost of Imbalance Pool has been considered as per FBSM bills

for FY 2017-18 available so far and cost of Stand-by energy (from MSEDCL) has not been

considered as no bills have been raised by MSEDCL. This brings down the actual cost of

power purchase as shown in the MYT Petition vis-à-vis the MTR Order. As these facts are

known now, they have been considered in the Petition to reflect actual power purchase cost.

However, in the MTR Order, these costs were included in power purchase cost on

provisional basis. FAC was also charged during FY 2017-18 using the provisional

estimates.

For FY 2018-19, the actual power purchase cost shown in the Petition does not include cost

towards energy drawn from Imbalance Pool and Stand-by energy purchased from

MSEDCL, as no bills have been received from MSLDC or MSEDCL, respectively.

However, till October 2018, FAC was being calculated considering estimated cost towards

Imbalance Pool and cost of Stand-by energy. In its post-facto FAC approval Orders dated

24 October, 2018 and 14 November, 2018, the Commission considered revised FAC

methodology, where neither energy nor cost was considered for purchase from Imbalance

Pool, due to absence of bills. In fact, due to change in methodology, an additional recovery

of about Rs. 54 crore was approved through FAC, which was recovered over September

2018 to December 2018 period. From November 2018, AEML-D is following the revised

methodology as approved by the Commission and has adopted the same for Stand-by


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energy (as bills are not raised by MSEDCL) as well as Banked energy (as cost towards

return of banked energy in incurred in the subsequent year). Due to the above reasons, the

per unit rate of power purchase for FAC has been higher than the approved rate of power

purchase for FY 2018-19 as per Order, resulting in FAC.

For FY 2019-20, the estimated power purchase cost (without Stand-by charges) is lower

than the cost approved in the MTR Order by about Rs. 130 crore. However, the absolute

reduction in power purchase cost is on account of lower sales and hence, correspondingly

lowers purchase. However, FAC is a rate variance, which depends only on source-wise rate

variation and source-mix variation. The total variance of Rs. 130 crore in power purchase

cost comprises (+) Rs. 118 crore rate variance and (-) Rs. 248 crore Quantum variance.

Therefore, FAC is appearing due to positive rate variance.


Distribution Licensees are allowed to recover the variation in fuel and power purchase costs

through the FAC formula specified in the MYT Regulations, 2015, in line with Section

62(4) of EA, 2003. The Regulations require Distribution Licensees to submit the details of

FAC to the Commission for post facto approval on a quarterly basis. The details of the

Commission's approval for levy of FAC are required to be made available on their websites.

The FAC is approved by the Commission after prudence check for any variation in fuel cost

and power purchase cost and is accordance with the regulatory provisions and the EA, 2003

and the Regulations made thereunder. Regarding objection on levying FAC even after

reduction in power purchase expenses, it is to be noted that FAC mechanism envisages levy

/ refund of charges if per unit power purchase cost undergoes a change from that approved

in the Tariff Order. Per unit rate of power purchase is dependent on power purchase

quantum, source mix and rate of each source. Also, FAC mechanism envisage only actual

incurred cost to be considered for calculation and hence, provisional costs on FBSM was

not allowed to be included in FAC. Hence, it may not be proper to assume that on reduction

of power purchase expenses in absolute amount, FAC will also become negative or zero.

Nevertheless, as stated above, the Commission is scrutinising all FAC computations of

Distribution Licensee on post-facto basis. However, the Commission notes that the impact

of frequent variation in rate on account of FAC needs to be minimised to the extent possible.

Multi-year tariff frame work is also a method for achieving consistency in Tariff. In Order

to address this issue to the extent possible, the Commission has slightly modified the FAC

mechanism as explained subsequentrly in this Order.

1.16 TRANSMISSION AND DISTRIBUTION LOSS

TPC-D submitted that the methodology used by AEML-D for deriving the energy


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Requirement at T< >D for AEML-D consumers by subtracting the normative Change -over

and OA sales is not correct. TPC-D submitted that AEML-D has considered different

figures of energy at T<>D interface than that considered for energy requirement, while

calculating the efficiency gains for reduction in Distribution loss. TPC-D further stated that

the payments made by TPC-D for change-over consumers are on the basis of normative

Distribution losses of AEML-D.

TPC-D submitted that AEML-D has proposed to pass on commercial as well as technical

loss to all consumers including Change-over consumers.

AEML-D Response

As regards the issue of loss computation for Energy Requirement, AEML-D submitted that

the Energy requirement at T-D for AEML-D consumers is derived by subtracting the

grossed-up Changeover sales and OA Consumption (grossed up by approved wheeling loss)

from actual energy drawal at T-D. It is calculated this way because AEML-D is not

responsible for supplying TPC-D consumers connected to its lines and OA consumers. This

is needed as AEML-D has to procure additional power for TPC-D Changeover and OA

consumers and AEML-D’s own consumers has to bear the costs. To prevent these kinds of

situation the present methodology is adopted. Also, AEML-D has considered all sales

(including change-over and OA) to arrive at the Distribution loss, which is apparent from

Table 11 of AEML-D MYT Petition.

As regards the issue of considering different figures of energy at T-D interface, AEML-D

submitted that this is incorrect. AEML-D has computed efficiency gains / losses in

distribution loss achievement as per the methodology in place for several years now. In this

methodology, first the normative total sales (at consumer level, including own, change-over

and OA) is determined by applying normative losses over actual T-D input. By this, AEML-

D works out what the total network sales will have been if actual losses were equal to

normative. From that quantity, the Change-over and OA sales is subtracted to determine

own normative sales, which is then compared with own actual sales to determine additional

sales to own consumers due to loss reduction.

As regards the issue of payments for TPC-D’s changeover consumers, AEML-D submitted

that TPC-D remits the Wheeling Charges, RAC and CSS to AEML-D and all these charges

are applied on metered energy of change-over consumers and not on loss grossed up energy.

Only TPC-D’s own retail tariff charges are applied on metered energy grossed up with

approved wheeling losses of AEML-D network and that revenue is kept by TPC-D itself.

The claim by TPC-D that it has paid surplus revenue to AEML-D is therefore, devoid of

facts and betrays an utter lack of understanding.


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As regards the issue of impact of commercial loss on change-over consumers, AEML-D

submitted that it has proposed technical losses of 1.59% for HT and 7.41% for LT for each

year of the fourth Control Period, which are required to be borne by Change-over and OA

consumers, as evident from Table 223 of the MYT Petition. Form F1.3 only shows the

break-up of Distribution loss into commercial and technical loss – the technical and

commercial losses shown there are not used in the computations.


The Commission has revised the loss levels to be borne by Change-over and OA consumers,

in Chapter 6 of this Order. The Commission is of the view that in case of normal OA, only

technical losses should be borne by the OA consumer, as the Wires Licensee is responsible

for the metering and billing. However, in case of change-over, not only are the meters

owned by the Supply Licensee, the Supply Licensee is also responsible for all metering

related activity comprising accurate metering and billing of the electricity consumption.

Hence, commercial losses, if any, are to the account of the Supply Licensee, and the

Change-over consumers cannot be charged only Technical Losses..

The standard method of computing the Energy Balance of AEML-D, after factoring the

change-over and OA sales, has been adopted for the next Control Period also. The method

of computing the efficiency gains on account of lower than normative Distribution Losses

has been revised as elaborated in Chapter 3 of this Order.

1.17 CAPITAL EXPENDITURE

TPC-D submitted that AEML-D has proposed very high capital expenditure and it needs to

be scrutinized whether AEML-D under garb of network augmentation and replacement, is

actually trying to expand its network such that for every application for which M-DNAC is

approached, only AEML-D is in a position to supply power.

AEML-D Response

AEML-D submitted that its capital expenditure plan is composed mainly of schemes

required to replace the old and obsolete infrastructure. About 77% of total capital

expenditure proposed is towards replacement of age-old assets and modernisation and

technological advancements, such as Smart Meter deployment. The overall approach to

capital expenditure plan for the MYT Control Period has been explained in the Petition and

reply to data gaps, along with its benefits for reliability improvement and betterment of

customer services and customer experience. AEML-D has followed the requirements under

the Commission’s Order in Case No. 182 of _2014, while providing new connections or for

switchover and its DPRs for new supply accordingly demonstrate the same.


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The Commission has scrutinized the submissions made by AEML-D as regards Capital

Expenditure and Capitalization for the next Control Period, which has been elaborated in


1.18 CHANGE IN O&M WIRES COST

TPC-D submitted that AEML-D has requested for a change in methodology of computing

O&M expenses by allocating the total O&M cost in the ratio of 47%:53% to Wires and

Supply without any detailed justification or reason for deviating from MYT Regulations,

2019. AEML-D has proposed the allocation based on turnover ratio where majority

turnover in Supply business is on account of power purchase cost, which has no correlation

with O&M expenditure.

AEML-D Response

AEML-D submitted that the argument that turnover ratio cannot be used to allocate O&M

cost is incorrect, as the idea of cost allocation using turnover ratio is driven by resource

effort involved to produce output. Corporate expenses also represented shared O&M Cost,

but have been allocated in the ratio of turnover, which is an established methodology for

corporate expenses.


The Commission has not considered the submission of AEML-D as regards change in

allocation of O&M cost between Wires and Supply, for reasons elaborated in Chapter 6 of

this Order.

1.19 TIME OF DAY METERING

Shri Mahavir Jain submitted that ToD meters should be made mandatory for consumers

with load more than 15 kW. Shri Jain requested the Commission to give due consideration

to the fact that peak hours are not evening 06:00 to 10:00 pm, but from 03:00 pm onwards.

AEML-D Response

AEML-D submitted that at present ToD applicability is to consumer categories approved

by the Commission in the Tariff Order and meters are installed accordingly. Any change in

ToD applicability is the prerogative of the Commission. As regards the ToD time slot,

AEML-D submitted that it has proposed ToD timeslots after considering its load curve.


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The Commission has not modified the ToD time slots, Tariffs and category of consumers

to which it is being charged, for reasons elaborated in Chapter 6 of this Order.

1.20 CUMULATIVE FULFILMENT OF NON-SOLAR RPO

TPC-D has objected to AEML-D’s proposal to make up the Non-Solar RPO shortfall

through Solar purchase, in view of the Commission’s past Orders in this regard.

AEML-D Response

AEML-D submitted that its plan for meeting RPO for the Control Period in the MYT

Petition and its Hybrid RE procurement is also approved by the Commission at Rs. 3.24

per unit, which PPA, AEML-D is in the process of executing. AEML-D’s MYT Petition is

aligned with the Order of the Commission approving the said RE procurement and the

Commission’s proposed RPO-REC Regulations.


The Commission has taken a considered view on the Solar and Non-Solar shortfall

computed in line with the RPO-REC Regulations, 2015, and the proposed mitigation of the

same during FY 2020-21 to FY 2024-25. The details of the same are elaborated in Chapter

5 of this Order.

1.21 DSM PROGRAM

Shri Mahaveer Kumar Jain submitted that DSM Program should provide a special rebate

for using Thermal Energy Storage (TES) so that usage can be shifted from peak day time

to off peak times. Shri Jain also requested the Commission to direct the Distribution

Licensees to evolve DSM program for Energy saving instruments like 35 W Brushless

Direct Current (BLDC) fan for larger adoption.

AEML-D Response

AEML-D submitted that it has a dedicated DSM wing, which identifies appropriate DSM

schemes from time to time based on the need and potential for savings and load flattening.

The schemes are then proposed to the Commission and are executed after obtaining

approval. The suggestions regarding BLDC scheme will be considered by AEML and if

any changes to the scheme are warranted, appropriate proposals shall be put for the

consideration of the Commission.


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The Commission’s DSM Implementation Framework Regulations,2010 provide a

comprehensive framework for Distribution Licensees to plan and excute cost-effective

DSM measures and to meet their costs.In order to give futher impetus to DSM

measures,AEML-D should encourage the installation of energy-efficient appliances in new

residential,industrial and commercial premises.This may include approaching the

developers as well as consumers,and other means.

The Commission expects DSM Plans/schemes from AEML-D as per Commission’s DSM

Implementation Framework Regulations,2010 for future. The Commission has approved

the DSM expenses for the next Control Period,as elaborated in Chapter 5 of this Order.

1.22 5 STAR RATED PRODUCT

Shri Mahaveer Kumar Jain submitted that AEML-D should not only advocate use of 5 star

rated product but also use it itself. He also requested the Commission to issue direction to

buy only 5 star rated products.

AEML-D Response

AEML-D submitted that generally the appliances in its Offices are energy efficient and

AEML-D always endeavours to procure energy efficiency products only.


AEML-D’s reply is noted.

1.23 ALTERNATE ENERGY SOURCES

Shri Mahaveer Kumar Jain suggested that the Commission should direct all industries

having load more than 1000 kW to mandatorily procure power from RE or non- pollutant

sources to the extent of 10% of their existing demand. Shri Jain stated that facade buildings,

which use at least 200% more energy than regular buildings should mandatorily source at

least 30% of their energy demand from Solar sources or biogas from Sewage Treatment

Plants (STP)/Food waste.

AEML-D Response

AEML-D submitted that these matters are not within the purview of the present proceedings

of approval of ARR and tariff for next Control Period.


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The Commission noted the suggestions and replies of AEML-D.This issue is not relevant

to the present MYT Petition.

1.24 CUSTOMER RELATIONSHIP RELATED

Shri Mahaveer Kumar Jain stated that the soft copy of AMR meter data should be made

available to the consumer for their own review and record purposes by email and online on

portal. Shri Jain also requested to enhance the use of IT infrastructure in processing

consumer requests and reduce the time taken to process the same. Shri Jain further requested

to update the load certificate of consumers periodically.

Ms. Mihika Kulkarni stated that there is no proper customer relationship centre available

for consumers of AEML.

AEML-D Response

AEML-D submitted that at present it provides the electricity bill to consumers in physical

form and E-Bill (pdf copy) if opted by consumers. The Bills carry monthly consumption

data (meter reading) for a period of 12 months. Therefore, the information being sought by

the Objector to be provided in txt file is already available on the energy bill. Moreover, only

HT consumers are covered under AMR, while meters of cycle consumers (LT residential,

commercial and industrial) are read manually. AEML-D has proposed to undertake AMR

of all the consumers above 20 kW which after approvals of the Commission shall be

implemented. Thereafter, such consumers will also be able to view their real time

consumption.

AEML-D submits that there are eight Customer Care Centres, spread across the licence

area, available for AEML-D consumers. The address of the Customer Care Centres can be

found from the AEML website www.adanielectricity.com. The details of various other

customer-service touch points are provided in the Petition.


The Commission has noted the submission of Shri Mahaveer Jain and the reply submitted

by AEML-D. The Commission expects AEML-D to transparently share the consumer

billing data with the individual consumer (to the extent possible) and also explore other

consumer friendly facilities which may enable the consumers to take a considered decision

on energy efficient usage.


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Regarding updation of consumer load data, the Commission notes that meter records the

actual demand of the consumer. However, for categories where demand-based tariff is not

applicable, such recorded demand is not used for any purpose. The Commission opines that

based on such recorded demand, after consulting concerned Consumer, Distribution

Licensee shall update connected load of consumer. Also, consumer related data such as

contact number / mobile number, communication address (subject to the requisite data

security measures) needs to be updated on regular basis. With use of appropriate

technological solutions, such works can be undertaken easily.

1.25 RETENTION OF DATA

Shri Mahaveer Kumar Jain suggested that all submission/data presented during the tariff

process should remain in public domain so that all relevant information is always available.

AEML-D Response

AEML-D submitted that it has an Archive section in its website (URL:

https://www.adanielectricity.com/Archive-Regulatory) where past Petitions and Orders

remain available. At present, the MTR Petitions are available.


As regards the suggestion on retention of data on Tariff filing, the Licensees make available

the Petition and related data for inspection/purchase at their offices and on their website for

public review and to ensure adequate public participation. Retaining the data on their

website is up to the Licensee and is not a mandatory requirement. The Orders issued by the

Commission, which capture the relevant submissions of the Petitioners, are always

available on the Commission’s website.

1.26 MISUSE OF STANDBY SUPPORT

MSEDCL has submitted that it is obligated to provide Standby support to Mumbai

Licensees to the extent of 500 MW. However, AEML-D has been using the provision of

Standby support not as emergency tool for procurement of power but as a means of

commercial gain. To provide AEML-D with Standby power, MSEDCL has had to often

curtail its own demand in other parts of Maharashtra to provide power to Mumbai city,

which is financial hub of the nation. Hence, AEML-D’s use of Standby power not as a last

resort but a way of commercial gain should be frowned upon. Further, MSEDCL has denied

Standby support to AEML-D for reasons such as “Outage under coal shortage scenario” of

Long Term contracted units and shortage of power from STOA/ IEX. Further MSEDCL

has denied Standby support where AEML-D was trying to use Standby supply arrangement

as a mean of commercial gain. However, even though MSEDCL has not given consent to


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AEML-D for Standby support it never requested load curtailment in AEML-D area. As

regards the rate for standby power supply, MSEDCL considers highest power purchase rate

of the time block in which power is provided to Mumbai utilities as rate for Standby supply

as per MSEDCL letter dated 17.11.2014 prescribed in line with CERC’s DSM Regulations,

2014. MSEDCL further stated that AEML-D should not be allowed to discontinue existing

Standby arrangement in view of necessity of uninterrupted power supply to the financial

hub of our country.

AEML-D Response

AEML-D submitted that the Standby arrangement with MSEDCL is a Standby facility

available to the Mumbai Licensees to serve their demand in the event of outage or non-

availability or constrained availability of any of their contracted/ scheduled generation

regardless if it is planned or forced as observed by the Commission in the Order in Case

No. 7 of 2000 dated 07.12.2001.

As regards settlement of Stand-by power, the Commission has clarified through its Order

in Case No. 76 of 2006 dated 15.05.2007 that energy supplied under Standby is to be

charged at the weighted average rate of marginal sources of MSEDCL, however MSEDCL

has been charging the same at the marginal rate including the DSM rate at regional level on

time block basis. Also, in cases where MSEDCL has been surplus and incrementing the

pool, while also supplying power to AEML-D under Stand-by, MSEDCL is billing the

stand-by supply considering the rate of same sources. In view of this AEML-D submitted

that despite paying exorbitant Fixed Charges for stand-by facility, its Mumbai customers

are being denied proper Stand-by support by MSEDCL as and when such support is

required by them, which is significantly denting the value proposition of Stand-by facility

to Mumbai consumers.

AEML-D further rejected all the allegations made by MSEDCL and stated as under:

(a) During FY 2017-18 to FY 2019-20, AEML-D has requested Standby on 116 occasions

out of which on only 47 occasions, the Standby was approved by MSEDCL as sought

by AEML-D.

(b) At all times, the power is arranged on Day Ahead basis to meet the entire demand

without maintaining shortfall. In case of increase in demand in real time every attempt

is made to arrange the power through contingency/bilateral market. However, whenever

any long-term generator is already under outage, AEML-D seeks Standby to avoid over-

drawal from the Pool.

(c) As regards alleged usage of Stand-by support for commercial gain, MSEDCL is always

charging at the costliest source of MSEDCL including Exchange purchase for the stand-

by support. Therefore, at all times while providing Standby support, MSEDCL is


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always cost-neutral. So, applying its discretion and carrying out its due diligence on

why a Distribution Licensee is seeking Standby support is not required as long as that

support is sought in order to meet demand due to outage of any contracted source of the

Licensee.

(d) AEML-D submitted that, when it overdraws from grid, it has to pay Net UI Charges,

Additional UI charges, etc. Further, in the integrated grid operations, power flows from

State participants/ISTS Grid and it is not possible to state certainly that only MSEDCL

has provided such support.

(e) Despite paying entire charges towards Standby facility, which are built in the tariffs,

AEML-D’s consumers are not getting commensurate benefits out of the arrangement.

Hence, there is a need to review the Standby Arrangement as it has not been available

as and when required by AEML-D even after paying exorbitant charges.

Considering this, AEML-D requested the Commission to direct MSEDCL to provide

Standby support whenever availability is reduced from contracted sources, instead of

carrying out its due diligence and applying its own restrictions, which are inconsistent with

the Commission’s Order.


The Commission is of the view that Standby Support is to be used for contingency situations

and should not be considered as a long-term source of power to meet the demand of its

consumers or to be used for commercial gain purposes. The Commission observed that

there has been purchase made from Standby arrangements during FY 2017-18 and FY

2018-19. However, the quantum has been negligible as compared to the total quantum of

power purchase of AEML-D. Considering the importance of reliable power supply to

Mumbai and surplus capacity available with MSEDCL, it is in the best interest of all

stakeholders to continue the existing Standby Arrangement. The Standby Arrangement

should be honoured by all Parties including MSEDCL.

1.27 GRID SUPPORT CHARGES

M/s Mumbai Metro One Pvt. Ltd. (MMOPL) has requested for waiver of the Grid Support

Charges on HT V – HT Metro and monorail category.

AEML-D Response

AEML-D submitted that as per the Maharashtra Electricity Regulatory Commission (Grid

Interactive Rooftop Renewable Energy Generating Systems) Regulations, 2019, Grid

Support Charges are payable by consumers who have installed Roof Top Solar under Net

Metering Systems. However, MMOPL is not a consumer with Roof Top Solar under Net


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Metering or Net Billing arrangement in accordance with the above Regulations. MMOPL

falls under the third category, which is the set of consumers who neither avail Net Metering,

nor Net Billing, but have installed RE generating sets behind the meter. For such consumers,

the Regulations provide for levy of additional Fixed Charges / Demand Charges in the

Tariff Order, based on the proposal of the Distribution Licensee.

AEML-D submitted that, in its MYT Petition, it has shown the losses caused to it in terms

of inter alia, loss of wheeling charges, cross-subsidy, etc., on account of parallel operation

of grid interactive RE generation. AEML-D has not actually proposed Grid Support

Charges or additional Fixed / Demand Charges, it is the prerogative of the Commission to

fix such charges.


AEML-D’s has not actually proposed Grid Support Charges or additional Fixed / Demand

Charges, but has only discussed the probable options for levying the same. The

Commission’s analysis and decision on the issue of Grid Support Charges for AEML-D are

elaborated in Chapter 6 of this Order.

1.28 TAX ON SALE OF ELECTRICITY (TOSE)

Shri N Ponrathnam objected to the imposition of Tax on Sale of Electricity (TOSE).

AEML-D Response

TOSE is being collected from consumers in accordance with Maharashtra Tax on Sale of

Electricity Act, 1983 and is remitted to the State Government.


Imposition of TOSE is within the purview of the State Government.

1.29 UNIFORM TARIFF CHANGES OVER MYT PERIOD

Shri N Ponratnam suggested that consumers should be given uniform Tariff increase or

reduction year on year, rather than have a spike in the same from year to year.

AEML-D Response

AEML-D submitted that it has proposed Tariffs with a view to not have drastic decline or

increase from one year to the next. This philosophy is explained in detail in the Petition.


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The Commission has elaborated its views on the overall design philosophy of the Retail

Supply Tariffs, including determination of Fixed Charges/Demand Charges, wheeling

charges, energy charges in Chapter 6 of this Order.

1.30 CIRCULATION OF PUBLIC NOTICE WITH THE BILLS

Shri N Ponratnam suggested that Public Notice should be circulated with the bills.

AEML-D Response

In this regard, AEML-D submitted that it has published the Public Notice in accordance

with the prevailing Regulations and the directions of the Commission.


The Provisions of MYT Regulations, 2019 lay down specific guidelines not only to publish

the Public Notice but also make the copy of the Petition along with all regulatory filings,

information etc. on the website of the Petitioner and office locations of the Licensee. The

same is sufficient as per the law and has been complied with by AEML-D.

1.31 INCREASE IN RETURN ON EQUITY AND CAPITAL EXPENDITURE

Shri Ashok Pendse submitted that from FY 2019-20 to FY 2020-21, RoE jumps by 25%

and by FY 2024-25, it almost doubles. Further, Shri Pendse observed that almost Rs. 5000

Crore would be spent over the MYT Period as capex, which will give rise to O&M,

depreciation. etc. as expenses and hence, the same should not be allowed without proper

vetting.

AEML-D Response

AEML-D submitted that from FY 2020-21 onwards, RoE has increased because the MYT

Regulations, 2019 permit Income Tax by way of grossing up the RoE by the applicable

Income Tax rate. Therefore, from FY 2020-21 onwards, there is no separate Income Tax

component in the ARR and the RoE is grossed up by the Tax rate.

AEML-D has prepared its capital expenditure plan for the MYT Period, focusing the same

on asset replacements. The overall approach to capital expenditure plan for the MYT

Control Period has been explained in the Petition and later in reply to data gaps, along with

its benefits for reliability improvement and betterment of customer services and customer

experience.


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The Commission has allowed pre-tax RoE for the next Control Period in line with the

MYT Regulations, 2019. As regards capitalization, the Commission has approved the

capitalization from FY 2017-18 to FY 2024-25 after prudence check, as elaborated in

relevant Chapters of this Order.

1.32 OTHERS

Shri Rakshpal Abrol submitted that AEML-D has failed to give justification on why they

have not been able to erect new power receiving stations and substations in Mumbai suburb

area including Mira Bhayandar Municipal Corporation Area.

Shri N. Ponrathnam requested the Commission to direct AEML to enter into formal

agreements for space used for installing substation complying with Section 5.5 of Supply

Code, 2005.

AEML-D Response

AEML-D submitted that the issue is not related to the present proceedings under MYT

Petition in Case No. 325 of 2019. In any event, AEML-D enters into lease arrangement

with the developer / society for substation space.


The Commission is of the view that the above issues are not directly linked to the present

tariff proceedings.


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TRUING UP FOR FY 2017-18 and FY 2018-19

AEML-D submitted that it has filed its Petition for final truing up of expenditure and

revenue for FY 2017-18 and FY 2018-19 based on actual and audited costs and revenue,

vis-à-vis the amounts provisionally approved by the Commission in the MTR Order dated

12 September, 2018 in Case No. 200 of 2017, and provided the justification for the

deviations.

During FY 2018-19, vide a Scheme of Arrangement, which has been duly approved by

Hon’ble the High Court of Bombay vide its Order dated 20 November 2017 read with

earlier Order dated 19 January 2017, the Mumbai Generation, Transmission and

Distribution business (“GTD Business”) of the erstwhile Reliance Infrastructure Limited

was vested with AEML (formerly known as Reliance Electric Generation and Supply

Limited). Accordingly, AEML started conducting the Mumbai GTD business in its own

name from 29 August, 2018.

In this Chapter, the Commission has analysed all the elements of actual expenditure and

revenue of AEML-D for FY 2017-18 and FY 2018-19 and has approved the truing up of

expenses and revenue after prudence check.

1.33 SALES FOR FY 2017-18 and FY 2018-19

AEML-D’s Submission

AEML-D submitted that it sold 8,332.30 MU and 8,361.60 MU to its own consumers in

FY 2017-18 and FY 2018-19, respectively, as against the Commission’s approved sales of

8,321.05 MU and 8,579.21 MU, respectively in the MTR Order (Case No. 200 of 2017),

based on AEML-D’s provisional submissions during MTR proceedings. AEML-D

submitted the category-wise breakup of actual sales in FY 2017-18 and FY 2018-19 in its

Petition.

The energy sold by TPC-D to change-over consumers in FY 2017-18 and FY 2018-19 was

1,696.06 MU and 1,571.86 MU, as against 1,700.91 MU and 1,667.97 MU approved by the

Commission in AEML-D’s MTR Order (Case No. 200 of 2017). AEML-D submitted the

category-wise comparison of own and change-over sales with that approved in the MTR

Order as shown in the Table below:


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Table 0-1 : Own sales and Change-over sales for FY 2017-18 as submitted by

AEML-D (MU)

Particulars

Own Sales Changeover Sales

MTR

Order Actual

MTR

Order Actual

LT Category

LT I - Below Poverty Line 0.02 0.02 - 0.04

LT -I Residential (Single Phase) -

0-100 1,626.69 1,626.69 515.07 497.69

101-300 1,080.89 1,080.89 458.39 439.90

301-500 184.38 184.38 74.38 87.49

500 and above 66.30 66.30 20.66 34.57

LT -I Residential (Three Phase) -

0-100 243.60 243.60 91.41 86.61

101-300 362.38 362.38 141.35 132.17

301-500 190.59 190.59 70.44 68.17

500 and above 376.68 376.68 89.50 103.06

LT II (a) - 0-20 kW 1,783.07 1,783.07 115.85 118.82

LT II (b) - 20-50 kW 231.70 231.70 26.65 27.54

LT II (c) - above 50 kW 536.48 536.48 47.57 51.55

LT III (a) - LT Industrial up to 20 kW 174.56 174.56 20.82 19.27

LT III (b) - LT Industrial above 20 kW 406.14 406.14 13.61 17.58

LT IV - Public Water Works 13.08 13.08 - -

LT-V: LT- Advertisements and Hoardings 3.47 3.47 0.02 0.01

LT VI: LT -Street Lights 58.45 58.45 - -

LT-VII (A): LT -Temporary Supply

Religious 2.00 2.00 - -

LT-VII (B): LT -Temporary Supply Others 14.18 14.18 0.02 0.04

LT VIII: LT - Crematorium & Burial

Grounds 1.22 1.22 0.28 0.29

LT IX (a): PS - Govt. EI & Hospitals 21.98 21.98 - -

LT IX (b): PS - Others 97.88 97.88 3.75 0.26

LT X (a): Agriculture - Pump sets 0.05 0.05 - -

LT X (a): Agriculture - Others 0.13 0.13 - -

Total LT 7475.90 7475.90 1,689.77 1,685.07

33 kV Category

HT V - HT Metro & Monorail 30.93 30.93 - -

11 kV Category

HT I: HT-Industry 299.04 294.11 0.93 0.93

HTII: HT- Commercial 372.09 390.48 10.20 10.05

HT III: HT-Group Housing Society 40.97 40.97 - -

HT IV: HT -Public Water Works 7.25 7.25 - -

HT V - HT Metro & Monorail - - - -

HT VI (a):PS - Govt. EI & Hospitals 7.14 7.14 - -

HT VI (b):PS - Others 84.92 82.70 - -

HT VII: Temporary Supply 2.81 2.81 - -

Total HT 845.15 856.39 11.13 10.98

Total 8321.05 8332.30 1,700.91 1,696.05


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Table 0-2 : Own sales and Change-over sales for FY 2018-19 as submitted by

AEML-D (MU)

Particulars


MTR

Order Actual

MTR

Order Actual

LT Category

LT I - Below Poverty Line 0.02 0.01 0

LT -I Residential (Single Phase)

0-100 1,639.50 1,624.04 502.00

101-300 1,108.32 1,064.20 430.43

301-500 192.01 185.94 70.81

500 and above 69.04 69.19 19.25

LT -I Residential (Three Phase)

0-100 245.52 257.22 88.32

101-300 371.58 375.75 131.97

301-500 198.48 195.28 63.00

500 and above 392.27 398.67 74.75

LT II (a) - 0-20 kW 1,860.49 1,783.80 95.64

LT II (b) - 20-50 kW 236.59 232.58 23.09

LT II (c) - above 50 kW 546.07 542.85 32.90

LT III (a) - LT Industrial up to 20 kW 180.93 172.55 17.90

LT III (b) - LT Industrial above 20 kW 398.79 394.56 10.47

LT IV - Public Water Works 13.44 12.77 0

LT-V: LT- Advertisements and

Hoardings 3.56 3.21 0.02

LT VI: LT -Street Lights 58.96 56.14 0


Religious 2.06 1.89 0

LT-VII (B): LT -Temporary Supply

Others 11.36 10.43 0.02


Grounds 1.31 1.24 0.34

LT IX (a): PS - Govt. EI & Hospitals 23.78 23.84 0

LT IX (b): PS - Others 126.32 117.27 2.97

LT X (a): Agriculture - Pump sets 0.05 0.06 0

LT X (a): Agriculture - Others 0.13 0.19 0

Total LT 7680.56 7523.67 1,563.86

33 kV Category

HT V - HT Metro & Monorail 31.24 29.97 -

11 kV Category

HT I: HT-Industry 369.18 275.57 0.38

HTII: HT- Commercial 348.98 365.03 7.65

HT III: HT-Group Housing Society 38.97 38.72 -

HT IV: HT -Public Water Works 6.99 8.13 -

HT VI (a):PS - Govt. EI & Hospitals 7.86 6.90 -

HT VI (b):PS - Others 92.58 101.31 -

HT VII: Temporary Supply 2.84 12.29 -

Total HT 898.65 837.93 8.02

Total 8579.21 8361.60 1,667.97 1,571.88


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AEML-D referred to the ATE Judgment in Appeal No. 85 of 2012, which held that the

assessed sales should be considered in actual sales for determination of Distribution Loss.

AEML-D submitted that the assessed sales in FY 2017-18 and FY 2018-19 for its own

consumers were 8.38 MU and 9.17 MU, respectively, which has been included in the actual

sales of own consumers. It has included revenue from such assessment in Non-Tariff

Income, instead of sales revenue, in accordance with the direction of the Commission in

Case No. 126 of 2011.

Commission's Analysis and Ruling

The Commission has compared the change-over sales data for FY 2017-18 and FY 2018-

19 submitted by AEML-D and Tata Power Company Ltd. Distribution Business (TPC-D).

TPC-D’s change-over sales figure of 1854.62 MU does not tally with AEML-D’s figure of

1696.06 MU for FY 2017-18. For FY 2018-19, TPC-D’s change-over sales figure is

1721.63 MU, as compared to 1571.86 MU of AEML-D. The Commission sought

clarification from both AEML-D and TPC-D in this regard.

In its reply, AEML-D submitted that it does not have the category-wise change-over sales

reported by TPC-D. Hence, category wise reconciliation of changeover consumers is not

possible. However, as a general practice, sales provided by TPC-D is at T<>D interface

level. Hence, the comparison of change-over sales as reported by AEML-D and TPC-D

after grossing up the HT and LT sales reported by AEML-D with the HT and LT wheeling

losses for respective years. Based on the comparison, AEML-D submitted that the

difference between overall changeover sales as reported by AEML-D and by TPC-D is not

significant. The minor difference could be because of the 15-day adjustment done by TPC-

D while presenting sales at the time of truing-up.

Based on the above explanation and reconciliation provided by AEML-D, the Commission

has approved the actual sales to own consumers and change-over sales for FY 2017-18 and

FY 2018-19 as submitted by AEML-D. The sales approved by the Commission after truing

up for FY 2017-18 and FY 2018-19 is summarised in the Table below:


Commission (MU)

Particulars


MTR

Order

True-up

Petition

Approved after

truing up

MTR

Order

True-up

Petition

Approved after

truing up

Total LT 7,475.90 7,475.90 7,475.90 1,689.77 1,685.07 1,685.07

Total HT 845.15 856.39 856.39 11.13 10.98 10.98

Total 8,321.05 8,332.30 8,332.30 1,700.91 1,696.05 1,696.05


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Commission (MU)

Particulars


MTR

Order

True-up

Petition

Approved after

truing up

MTR

Order

True-up

Petition

Approved after

truing up

Total LT 7680.56 7523.67 7523.67 1,563.86 1,563.86

Total HT 898.65 837.93 837.93 8.02 8.02

Total 8579.21 8361.60 8361.60 1,667.97 1,571.88 1,571.88

1.34 OPEN ACCESS CONSUMPTION


AEML-D submitted the Open Access (OA) consumption in its licence area for FY 2017-

18 and FY 2018-19, as shown in the Table below:

Table 0-5: OA Consumption for FY 2017-18 and FY 2018-19 as submitted by

AEML-D(MU)

Particulars FY 2017-18 FY 2018-19

MTR Order True-up

Petition

MTR

Order

True-up

Petition

OA Consumption 225.70 214.46 225.70 235.25

Commission’s Analysis and Ruling

The Commission has approved the actual OA consumption in AEML-D’s licence area for

FY 2017-18 and FY 2018-19 as submitted by AEML-D in the Petition, as shown in the

Table below:

Table 0-6: Open Access Consumption for FY 2017-18 in AEML-D licence area as

approved by the Commission (MU)

Particulars MTR Order True-up

Petition

Approved after

truing up

OA Consumption 225.70 214.46 214.46

Table 0-7: Open Access Consumption for FY 2018-19 in AEML-D licence area as



Petition

Approved after

truing up

OA Consumption 225.70 235.25 235.25


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1.35 DEMAND-SIDE MANAGEMENT (DSM) MEASURES


AEML-D submitted that it undertakes various DSM schemes for reduction of system

demand and energy consumption after obtaining the Commission’s approval. As to the

estimated reduction in sales due to these schemes in FY 2017-18 and FY 2018-19, AEML-

D clarified that the figures for own sales in MU are net of reduction through DSM measures.

The total energy savings in FY 2017-18 and FY 2018-19 from DSM activities as shown in

the Table below:

Table 0-8: Energy Saving due to DSM Programmes as submitted by AEML-D (MU)

Programme Consumer Category Savings (MU)

in FY 2017-18

Savings (MU) in

FY 2018-19

Solar rooftop PV plants Internal Installations 0.11 0.09

Five Star Refrigerators – Ph I Residential 2.51 2.70

Five Star Fans – Ph II Residential 1.57 1.57

Five Star Split A/C – Ph II Commercial 1.78 1.87

Five Star Split A/C Residential 1.09 1.14

Large Scale Ceiling Fan Residential 0.0008 0.034

Large Scale Refrigerator Residential 0.10 0.44

Total 7.16 7.844


The sales quantum submitted by AEML-D and approved by the Commission for FY 2017-

18 and FY 2018-19 are inclusive of reduction in sales due to DSM activities.

1.36 DISTRIBUTION LOSSES AND ENERGY BALANCE


AEML-D’s Distribution Loss in FY 2017-18 and FY 2018-19 was 8.153% and 7.848%,

respectively, as against 8.86% and 8.61% approved in the MYT Order. AEML-D has thus,

achieved a reduction of 0.707% and 0.762% in FY 2017-18 and FY 2018-19, respectively,

over and above the target, and hence, entitled to claim efficiency gains for its efforts. The

Distribution Loss for FY 2017-18 and FY 2018-19 is shown in the Tables below, along

with the Distribution Loss considered by the Commission during provisional true-up of FY

2017-18 and revised ARR of FY 2018-19, respectively:

Table 0-9: Distribution Loss for FY 2017-18 as submitted by AEML-D

Particulars UoM MTR Order True-up Petition

Energy Sold by AEML-D MU 8,321.05 8,332.30

Consumption by Change-over

Consumers

MU 1,700.91 1,696.05


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Consumption by OA Consumers MU 225.70 214.46

Total MU 10,247.66 10,242.80

Distribution Loss % 8.11% 8.153%

Energy Input at T<>D interface MU 11,151.99 11,151.99

Table 0-10: Distribution Loss for FY 2018-19 as submitted by AEML-D


Energy Sold by AEML-D MU 8,579.21 8,361.60

Consumption by Change-over

Consumers

MU 1,667.97 1,571.88

Consumption by OA Consumers MU 225.70 235.25

Total MU 10,472.88 10,168.73

Distribution Loss % 8.61% 7.848%

Energy Input at T<>D interface MU 11,456.61 11,034.78

From the Energy Balance of FY 2017-18 and FY 2018-19, the energy requirement of

AEML-D for its own consumers has been submitted by AEML-D as shown in the Tables

below:

Table 3-11: Energy Balance for FY 2017-18 as submitted by AEML-D


Migrated HT Sales + OA

consumption MU 236.83 225.43

HT Loss % 1.71% 1.71%

HT grossed up energy at T<>D MU 240.95 229.36

Migrated LT Sale MU 1,689.77 1,685.07

LT Loss % 8.47% 8.47%

LT grossed up energy at T<>D MU 1,846.14 1,841.01

Total T<>D energy attributable to

TPC-D sale & OA consumption MU 2,087.09 2,070.36

Net T<>D energy attributable to

AEML-D sale MU 9,064.89 9,081.62

InSTS Loss % % 3.30% 3.31%

Total requirement of AEML-D

(MU) at G-T MU 9,374.24 9,392.23



Migrated HT Sales + OA consumption MU 243.27

HT Loss % 1.71%


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HT grossed up energy at T<>D MU 247.51

Migrated LT Sale MU 1,563.86

LT Loss % 8.28%

LT grossed up energy at T<>D MU 1,705.04


TPC-D sale & OA consumption MU 1,817.74 1,952.54


AEML-D sale MU 9,638.87 9,082.24

InSTS Loss % % 3.30% 3.10%


(MU) at G-T MU 9,967.81 9,372.79


The Commission has considered the actual Transmission Losses of 3.30% for FY 2017-18

and 3.11% for FY 2018-19 based on inputs from the Maharashtra State Load Despatch

Centre (MSLDC). The change-over sales have been considered as approved earlier in this

Chapter. The Commission has considered the HT and LT losses as 1.71% and 8.47%,

respectively, for FY 2017-18 and 1.71% and 8.28%, respectively for FY 2018-19, as

approved by the Commission for FY 2017-18 and FY 2018-19 in the MTR Order. The

Commission has considered the energy drawn by AEML-D at T<>D interface as 11,152.79

MU for FY 2017-18 and 11,034.31 MU for FY 2018-19, based on State-wide DISCOM-

wise energy drawal data provided by MSLDC, as per usual practice. Accordingly, the

Distribution Losses and Energy Balance approved by the Commission after final true-up

for FY 2017-18 and FY 2018-19, are shown in the Tables below:

Table 0-11: Energy Balance approved by the Commission for FY 2017-18

Particulars UoM MTR Order True-up

Petition

Approved after

truing up

Sales (Own) MU 8,321.05 8,332.30 8,332.30

Sales (change-over) MU 1,700.91 1,696.05 1,696.05

Consumption by OA consumers MU 225.70 214.46 214.46

Total MU 10,247.66 10,242.80 10,242.80

Distribution Loss % 8.11% 8.153% 8.16%

Energy Input to Distribution

System MU 11,151.99 11,151.99 11,152.79


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Table 0-12: Energy Balance approved by the Commission for FY 2018-19

Particulars UoM MTR Order True-up

Petition

Approved after

truing up

Sales (Own) MU 8,579.21 8,361.60 8,361.60

Sales (change-over) MU 1,667.97 1,571.88 1,571.88


Total MU 10,472.88 10,168.73 10,168.73


Energy Input to Distribution

System MU 11,456.61 11,034.78 11,034.31

It can be seen that the Distribution Loss approved by the Commission by considering the

energy drawn by AEML-D at T<>D interface based on MSLDC data, works out to 8.16%

for FY 2017-18 and 7.84% for FY 2018-19, which is slightly different than that submitted

by AEML-D in the True-up Petition. The approved loss trajectory for AEML-D for FY

2017-18 and FY 2018-19 was 8.86% and 8.61%, respectively. The efficiency gain on

account of Distribution Losses lower than target loss levels has been computed

subsequently in this Chapter.

The Energy Requirement approved by the Commission after truing up for FY 2017-18 and

FY 2018-19 is given in the Tables below:

Table 0-13: Energy Requirement approved by the Commission for FY 2017-18

Particulars UoM MTR

Order True-up

Petition Approved

after truing up Migrated HT sales + OA

consumption MU 236.83 225.43 225.43

HT Loss % 1.71% 1.71% 1.71% HT grossed up energy at T<>D

boundary MU 240.95 229.36 229.36

Migrated LT sale MU 1,689.77 1,685.07 1,685.07 LT loss % 8.47% 8.47% 8.47% LT grossed up energy at T<>D

boundary MU 1,846.14 1,841.01 1,841.01


TPC-D sale & OA consumption (A) MU 2,087.09 2,070.36 2,070.36

Total Energy Input at T<>D interface

of AEML-D system (B) MU 11,151.99 11,151.99 11,152.79


AEML-D sale (B) – (A) MU 9,064.89 9,081.62 9,082.43

InSTS losses % % 3.30% 3.31% 3.30% Total requirement of AEML-D

(MU) at G-T MU 9,374.24 9,392.23 9,392.37


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Table 0-14: Energy Requirement approved by the Commission for FY 2018-19

Particulars UoM MTR

Order True-up

Petition Approved

after truing up Migrated HT sales + OA

consumption MU 243.27 243.27

HT Loss % 1.71% 1.71%

HT grossed up energy at T<>D

boundary MU 247.51 247.51

Migrated LT sale MU 1,563.86 1,563.86

LT loss % 8.28% 8.28%

LT grossed up energy at T<>D

boundary MU 1,705.04 1,705.04


TPC-D sale & OA consumption (A) MU 1,817.74 1,952.54 1,952.54

Total Energy Input at T<>D interface

of AEML-D system (B) MU 11,456.61 11,034.78 11,034.31


AEML-D sale (B) – (A) MU 9,638.87 9,082.24 9,081.77

InSTS losses % % 3.30% 3.10% 3.11%


(MU) at G-T MU 9,967.81 9,372.79 9,373.27

1.37 POWER PROCUREMENT


During FY 2017-18 and FY 2018-19, AEML-D has procured power under its long-term

Power Purchase Arrangement with AEML-G (ADTPS) and Power Purchase Agreement

(PPA) with Vidarbha Industries Power Ltd.-Generation (VIPL-G). After accounting for the

availability from long-term sources, the shortfall in power requirement was met by purchase

from contracted short-term sources and from the Power Exchanges. AEML-D has also

contracted Renewable Energy (RE) power from different sources for meeting the

Renewable Purchase Obligation (RPO) specified by the Commission for FY 2017-18 and

FY 2018-19. The surplus power available at different times was sold outside its Licence

area through the Power Exchanges. Further there was offtake (decrement) from the

Imbalance Pool as per real time deviation.

1.37.1 AEML-G (ADTPS)

AEML-D submitted that pursuant to the directions of the Commission vide its Order in

Case No. 8 of 2008, AEML-D had entered into a 10-year Power Purchase Arrangement

with AEML-G valid till 23 February, 2018. The PPA was further extended for five years,

i.e., up to 22 February, 2023 vide Order dated 8 February, 2018 in Case No. 5 of 2017. For

FY 2017-18, AEML-D has considered the Fixed Charge of Rs. 331.45 Crore, as approved


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by the Commission in ADTPS’s MYT Order dated 18 August 2016 (Case No. 14 of 2016),

and actual Variable Charge including FAC of Rs. 3.57 per kWh, amounting to Rs. 1,137.31

Crore payable to ADTPS.

For FY 2018-19, AEML-D has considered the Fixed Charges payable to ADTPS as Rs.

182.94 Crore, as approved by the Commission in ADTPS MTR Order dated 12 September

2018 in Case No. 202 of 2017. However, till the time ADTPS MTR Order was issued,

AEML-D had been charged the Fixed Charges of ADTPS as per the ADTPS MYT Order

dated 18 August, 2016 in Case No. 14 of 2016, wherein the Commission had approved

Fixed Charges of Rs. 350.74 Crore. Thus, for first three months of FY 2018-19, AEML-D

has considered Rs. 29.23 Crore per month and for rest nine months, AEML-D has

considered Rs. 10.58 Crore per month as the Fixed Charges of ADTPS, such that the total

Annual Capacity Charges are limited to the approved amount of Rs. 182.94 Crore as per

the MTR Order. The actual variable cost of generation works out to Rs. 3.88/kWh (Rs.

1,267.13 Crore), which includes the applicable FAC as per MYT Regulations, 2015.

The incentive applicable to ADTPS in FY 2017-18 and FY 2018-19 was zero, as the actual

PLF was lower than 85%. The FAC has been computed as per MYT Regulations, 2015.

The summary of power purchase from ADTPS in FY 2017-18 and FY 2018-19 is

summarized in the Table below:

Table 0-15: Power Purchase Cost from ADTPS for FY 2017-18 as submitted by

AEML-D

Source -

DTPS

Purchase

(MU)

Fixed Cost

(Rs.

Crore)

Variable

Cost (Rs.

Crore)

Incentive

(Rs.

Crore)

Total

Cost (Rs.

Crore)

Rate

(Rs.

/kWh)

MYT Order 3,800.65 331.45 1,235.45 - 1,566.90 4.12

MTR Order 3,189.75

1,468.76 4.60

Actual 3,189.76 331.45 1,137.31 - 1,468.76 4.60

Table 0-16: Power Purchase Cost from ADTPS for FY 2018-19 as submitted by

AEML-D

Source -

DTPS

Purchase

(MU)

Fixed Cost

(Rs.

Crore)

Variable

Cost (Rs.

Crore)

Incentive

(Rs.

Crore)

Total

Cost (Rs.

Crore)

Rate

(Rs.

/kWh)

MTR Order 3,764.17

1,453.35 3.86

Actual 3,268.16 182.94 1,267.13 - 1,450.07 4.44


The cost of power purchase from ADTPS claimed by AEML-D is in line with the Fixed


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Charges and Variable Charges approved by the Commission for AEML-G for FY 2017-18

and FY 2018-19, as well as the revenue considered by ADTPS from sale of power in FY

2017-18 and FY 2018-19. The same has also been approved in MYT Order for AEML-G

dated 30 March 2020 in Case No. 298 of 2019. Hence, the Commission has approved the

actual quantum and cost of power purchase from ADTPS for FY 2017-18 and FY 2018-19,

as follows:

Table 0-17: Power Purchase from ADTPS approved by Commission after truing up

for FY 2017-18 and FY 2018-19

Source

MTR Order True-up Petition Approved after truing up

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

FY 2017-18 3,189.75 1,468.76 4.60 3,189.76 1,468.76 4.60 3,189.80 1,468.76 4.60

FY 2018-19 3,764.17 1,453.35 3.86 3,268.16 1,450.07 4.44 3,268.03 1,450.07 4.44

1.37.2 Vidarbha Industries Power Ltd.


AEML-D has signed a long-term PPA with VIPL-G. The PPA with Unit-2 of VIPL-G was

approved by the Commission vide Order dated 20 February 2013 (Case No. 2 of 2013),

while PPA with Unit-1 was approved vide Order dated 19 July 2013 (Case No. 76 of 2013).

Vide the same Order, the Commission approved a consolidated PPA (Unit 1 and Unit 2

combined) between AEML-D and VIPL-G. The Commission approved the tariff for VIPL-

G from FY 2016-17 to FY 2019-20 in VIPL’s MYT Order dated 20 June 2016 in Case No.

91 of 2015.

In the MYT Order for VIPL-G dated 20 June 2016, the Commission had determined the

variable charge of VIPL-G as Rs. 2.183/kWh for FY 2017-18. Accordingly, AEML-D has

paid the said variable charges to VIPL-G for FY 2017-18. As against fixed charges of Rs.

901.85 Crore approved in MYT Order, AEML-D has paid fixed charges of Rs. 796.42 Crore

to VIPL-G in FY 2017-18 as the actual availability was 75.1% and hence, the capacity

charges were correspondingly pro-rated.

During FY 2018-19, the actual quantum and cost of power from VIPL-G was significantly

lower than the approved quantum and cost, as the actual availability of VIPL-G in FY 2018-

19 was only 46.5%. The reason for low availability given by VIPL in its availability

declarations to MSLDC is lack of availability of coal.


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The summary of power purchase quantum and cost from VIPL-G for FY 2017-18 and FY

2018-19 is shown in the Table below:

Table 0-18: Power Purchase Cost from VIPL-G for FY 2017-18 as submitted by

AEML-D

Source -

VIPL

Purchase

(MU)

Fixed Cost

(Rs. Crore)

Variable Cost

(Rs. Crore)

Total Cost (Rs.

Crore)

Rate (Rs.

/kWh)

MTR Order 3,113.59 1,476.12 4.74

Actual 3,113.59 796.42 679.71 1,476.13 4.74

Table 0-19: Power Purchase Cost from VIPL-G for FY 2018-19 as submitted by

AEML-D

Source -

VIPL

Purchase

(MU)

Fixed Cost

(Rs. Crore)

Variable Cost

(Rs. Crore)

Total Cost (Rs.

Crore)

Rate (Rs.

/kWh)

MTR Order 3,896.43 1,743.65 4.47

Actual 2,026.27 488.40 442.36 930.76 4.59

VIPL-G has filed a Petition (Case No. 199 of 2017) for revised Truing up of FY 2014-15,

truing up of FY 2015-16 and FY 2016-17, provisional truing up of FY 2017-18 and

approval of revised ARR and tariff for FY 2018-19 and FY 2019-20. The Order is yet to be

issued by the Commission. Hence, as a result of this Order, if there is an incremental impact

due to revision in fixed charges and variable charges of VIPL-G, the same will have to be

recovered from consumers.

Commission Analysis and Ruling

VIPL-G has filed its revised MTR Petition in Case No. 199 of 2017, in line with the

directions of the Commission vide Daily Order dated 14 September 2018 in M.A. Nos.

3,4,5 and 6 of 2018 based on the Judgment passed by the Hon’ble Supreme Court in Civil

Appeal No 5399-5400 of 2016 [Energy Watchdog vs CERC] (hereinafter referred to as

"the SC Judgment"). In the SC Judgment, the curtailment of coal supply as well as

non-availability of coal from Coal India Limited (CIL)/ Subsidiaries under Fuel Supply

Agreements (FSAs) / Letter of Assurances (LoAs) issued under the New Coal

Distribution Policy, 2007 (NCDP, 2007) leading to inadequate fuel supply to operate the

plant at Normative Availability / Plant Load Factor (PLF) as well as non-signing of

the FSA despite having granted the Letter of Assurances, has been held as ‘Change in

Law’ event. The Petition filed by VIPL-G in this regard is pending with the Commission,

on account of an Appeal filed by the Commission against the APTEL Judgment being sub-

judice before the Hon’ble Supreme Court. As the matter is sub-judice, it is difficult to assess

the amount payable by AEML-D, if any, to VIPL. As the Commission has yet not been able

to issue its Order on this Petition, based on the latest available Orders issued by the


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Commission for VIPL-G, the Commission has considered the cost of power purchase from

VIPL-G for FY 2017-18 at the same level as allowed by the Commission in AEML-D’s

MTR Order dated 12 September 2018 (Case No. 200 of 2017), which is the same as actual

payment made by AEML-D to VIPL-G.

For FY 2018-19, the Commission has considered the actual quantum and cost of VIPL-G

as submitted by AEML-D in its Petition. The following Table shows the cost and quantum

approved for purchase from VIPL-G after truing up for FY 2017-18 and FY 2018-19:

Table 0-20: Power Purchase from VIPL-G for FY 2017-18 and FY 2018-19 approved

by Commission

Source


MU Rs.

crore

Rate

(Rs./

kWh)

MU Rs.

crore

Rate

(Rs./

kWh)

MU Rs.

crore

Rate

(Rs./

kWh)

FY

2017-18 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74 3,113.59 1,476.13 4.74

FY

2018-19 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59 2,026.27 930.76 4.59

1.37.3 Renewable Energy Procurement

1.37.3.1 Solar RPO


AEML-D signed an Energy Purchase Agreement (EPA) dated 28 March, 2011, for purchase

of energy generated from the 40 MW Solar PV plant of Dhursar Solar Power Pvt. Ltd.

(DSPPL) with effect from 2 September, 2013. The actual power purchase rate from DSPPL

for FY 2017-18 (65.45 MU) was Rs 17.91/kWh, which was restricted to Rs. 10.51/kWh for

FY 2017-18 by the Commission in AEML-D’s MTR Order in Case No. 200 of 2017.

AEML-D has challenged the issue before the Hon’ble ATE in Appeal No. 12 of 2017.

The actual power purchase rate from DSPPL for FY 2018-19 (66.20 MU) was restricted to

Rs. 10.31/kWh based on the methodology adopted by the Commission in MTR Order.

AEML-D has adopted similar approach and derived DSPPL rate of Rs. 10.46/kWh for FY

2018-19, without prejudice to the matters challenged in Appeal No. 12 of 2017.

Accordingly, AEML-D, for the purpose of this Petition has claimed the cost of DSPPL for

FY 2017-18 and FY 2018-19 using the rate derived by the Commission’s methodology.

AEML-D has purchased 93,144 units and 0.48 MU (consumer end) of energy from Roof

Top Solar generators in AEML-D licence area in FY 2017-18 and FY 2018-19, respectively

as per the MERC (Net Metering for Roof Top Solar PV System) Regulations, 2015 [MERC


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Net Metering Regulations, 2015]. The cost of such purchase is accounted in the power

purchase expense for FY 2018-19 and FY 2019-20, respectively. The cost of purchase from

Roof Top Solar generators in AEML-D licence area in FY 2016-17 (8,932 units at consumer

end) and FY 2017-18 (93,144 units at consumer end) of Rs. 36,380/- and Rs. 0.04 Crore is

accounted in FY 2017-18 and FY 2018-19, respectively, as the settlement for balance

unutilised energy happens after the end of the year.

Table 0-21: Cost of Solar Power Purchase in FY 2017-18 and FY 2018-19, as

submitted by AEML-D

Particulars

FY 2017-18 FY 2018-19

Quant

um

(MU)

Rate

(Rs./

kWh)

Cost

(Rs.

Crore)

Quant

um

(MU)

Rate

(Rs./

kWh)

Cost

(Rs.

Crore)

MTR Order 65.45 10.51 68.79 68.52 10.31 70.64

DSPPL 65.45 10.51 68.79 66.20 10.46 69.24

Purchase from RTS

Generators

0.01

0.04

Total 65.45 10.51 68.80 66.20 10.47 69.28

AEML-D submitted that there has been 3.06 MU and 7.96 MU of Roof Top Solar

generation in its licence area during FY 2017-18 and FY 2018-19 respectively, which is

considered for meeting a part of the solar RPO, as all the generation pertains to consumers,

who themselves are not ‘Obligated Entities’. Thus, the total solar quantum to be considered

for meeting a part of solar RPO in FY 2017-18 and FY 2018-19 is 68.52 MU and 74.16

MU, respectively in accordance with MERC Net Metering Regulations, 2015.

AEML-D has not purchased Solar RECs to meet the balance Solar RPO target in FY 2017-

18 due to the stay of trading of Solar RECs in Power Exchanges for a major part of FY

2017-18. The same was also accepted by the Commission in the Order for verification of

RPO for FY 2017-18 for AEML-D in Case No. 39 of 2019 dated 4 April 2019. The

cumulative shortfall in Solar RPO till FY 2017-18, as approved in the Order in Case No.

39 of 2019 dated 4 April 2019 is shown in the Table below:

Table 0-22: Cumulative Shortfall in Solar RPO Target till FY 2017-18 as Approved

in Order in Case No. 39 of 2019

Particulars

Till FY

2015-16

FY 2016-17 FY 2017-18 Till FY

2017-

18

MU % MU % MU

Gross Energy Consumption 8,987.64 9,374.24


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Particulars

Till FY

2015-16

FY 2016-17 FY 2017-18 Till FY

2017-

18

MU % MU % MU

RPO Target 186.13 1 89.88 2 187.48 463.49

Achievement 267.05 0.74 66.55 0.73 68.52 402.12

Shortfall / (Surplus) (80.92) 0.26 23.32 1.27 118.97 61.37

Due to changes in Gross Energy Consumption in FY 2017-18 (due to change in own sales,

Change-over sales and Open Access consumption), the cumulative solar shortfall till FY

2017-18 stands revised, as under:

Table 0-23: Revised Cumulative Shortfall in Solar RPO Target till FY 2017-18

Particulars

Till FY

2015-16

FY 2016-17 FY 2017-18 Till FY

2017-

18

MU % MU % MU


RPO Target 186.13 1 89.88 2 187.84 463.85

Achievement 267.05 0.74 66.55 0.73 68.52 402.12


AEML-D has not purchased any Solar RECs during FY 2018-19 and has requested the

Commission to allow it to meet the Solar RE shortfall of FY 2018-19 through contracted

Hybrid RE Power in the next Control Period.


The Commission has considered the Solar RPO requirement of AEML-D for FY 2017-18

at 2% and 2.75% of the Gross Energy Requirement approved in this Order, in accordance

with Solar RPO target for FY 2017-18 and FY 2018-19, respectively, as specified in the

MERC RPO-REC Regulations, 2016.

The Commission has approved the Solar power purchase cost as submitted by AEML-D

for FY 2017-18 and FY 2018-19 to meet the RPO requirement as per the methodology

followed by it in the MTR Order, as shown in the Table below:


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Table 0-24: Solar RPO Procurement Cost for FY 2017-18 and FY 2018-19 as

approved by the Commission

Particulars

FY 2017-18 FY 2018-19

Quant

um

(MU)

Rate

(Rs./

kWh)

Cost

(Rs.

Crore)

Quant

um

(MU)

Rate

(Rs./

kWh)

Cost

(Rs.

Crore)

MTR Order 65.45 10.51 68.79 68.52 10.31 70.64

Actual 65.45 10.51 68.80 66.20 10.47 69.28

Approved after truing up 65.45 10.51 68.79 66.20 10.31 68.25

Further, the rate for purchase from DSPPL has been considered as approved in the MTR

Order, and has not been revised as proposed by AEML-D, as the Solar generation quantum

for each year and the rate is now fixed, and cannot be revised every year, depending on the

quantum of generation in that year.

AEML-D has considered 3.06 MU and 7.96 MU of Roof Top Solar generation in its licence

area for meeting a part of solar RPO for FY 2017-18 and FY 2018-19, respectively.

Therefore the Commission , considers the total solar quantum of 68.52 MU and 74.16 MU

for meeting solar RPO for FY 2017-18 and FY 2018-19, respectively, as per MERC Net

Metering Regulations, 2015. However, the quantum of 3.06 MU and 7.96 MU of Roof Top

Solar generation has not been considered towards the power purchase quantum and cost.

The Commission has not considered any purchase of Solar RECs by AEML-D in FY 2017-

18 and FY 2018-19, based on the submissions made by AEML-D.

Accordingly, the Commission has considered the revised Cumulative Shortfall in Solar

RPO after final truing up for FY 2017-18 and FY 2018-19, as shown in the Tables below:

Table 0-25: Cumulative Shortfall in Solar RPO for FY 2017-18 as approved by

Commission

Particulars

Till FY

2016-

17

FY 2017-18 as

submitted by

AEML-D

FY 2017-18 as

approved

Approved

till FY

2017-18

MU % MU % MU

Gross Energy

Consumption 9,392.23 9,392.37

RPO Target 276.01 2.00 187.84 2.00 187.85 463.86

Achievement 333.60 0.73 68.52 0.73 68.52 402.11

Shortfall /

(Surplus) (57.59) 1.27 119.33 1.27 119.33 61.74


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Table 0-26: Cumulative Shortfall in Solar RPO for FY 2018-19 as approved by

Commission

Particulars

Approved

till FY

2017-18

FY 2018-19 as

approved

Approved

till FY

2018-19

MU % MU

Gross Energy

Consumption 9,373.27

RPO Target 463.86 2.75 257.76 721.62

Achievement 402.11 0.79 74.16 476.27

Shortfall /

(Surplus) 61.74 1.96 183.61 245.35

For the purpose of arriving at cost implications, the Commission has considered that

AEML-D shall meet the cumulative shortfall of Solar RPO up to FY 2018-19 during the

next Control Period in the ratio of the contracted power of Wind-Solar Hybrid RE

However, final decision on allowing carried forward of shortfall in next control period

would be taken during RPO verification process for FY 2018-19.

1.37.4 Non-Solar RPO


AEML-D has procured Non-Solar RE power from its contracted sources for meeting its

Non-Solar RPO in FY 2017-18 and FY 2018-19, as shown in the Table below:

Table 0-27: Power Purchase Cost from Non-Solar Sources for FY 2017-18 and FY

2018-19 as submitted by AEML-D

Source FY 2017-18 FY 2018-19

Purchase

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

Purchase

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

MTR Order 200.67 102.27 5.10 204.59 106.03 5.18

AEML-D Petition

Reliance Innoventures 76.76 36.08 4.70 89.60 43.46 4.85

AAA Sons Enterprise 2.23 1.05 4.70 2.83 1.34 4.73

Vector Green Energy

Pvt. Ltd. 31.71 14.90 4.70 34.75 16.85 4.85

Vector Green Energy

Pvt. Ltd. 11.53 5.84 5.07 12.28 6.23 5.07

Tembhu Power Pvt.

Limited 7.58 3.23 4.26 5.61 2.39 4.26

Reliance Clean Power

Pvt. Ltd. 70.87 41.17 5.81 69.46 40.35 5.81

Total 200.67 102.27 5.10 214.53 110.62 5.16


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AEML-D has not purchased any Non-Solar RECs during FY 2017-18 and FY 2018-19 to

meet its Non-Solar RPO for the respective years. AEML-D has received an incentive of Rs.

0.13 Crore from Indian Energy Exchange (IEX) for purchase of Non-solar REC’s in earlier

years. The same has been considered in power purchase cost for FY 2017-18.

The cumulative shortfall in Non-solar RPO till FY 2017-18, as approved in the Order for

verification of RPO for FY 2017-18 for AEML-D in Case No. 39 of 2019 dated 4 April

2019, is shown in the Table below:

Table 0-28: Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18 as

approved in Order in Case No. 39 of 2019

Particulars

Till FY

2015-16

FY 2016-17 FY 2017-18 Till FY

2017-18

MU % MU % MU


Non-Solar RPO

Target 3,734.62 10 898.76 10.50 984.30 5,617.68

Achievement 3,749.98 7.45 669.23 2.14 200.60 4,619.80


Mini / Micro RPO

Target 5.90 0.20 1.80 0.20 1.97 9.67

Achievement 5.91 0.00 0.00 0.00 0.00 5.91


Due to change in Gross Energy Consumption in FY 2017-18 (due to change in own sales,

Change-over sales and Open Access consumption), the cumulative Non-Solar shortfall till

FY 2017-18 stands revised, as under:

Table 0-29: Revised Cumulative Shortfall in Non-Solar RPO Target till FY 2017-18

Particulars

Till FY

2015-16

FY 2016-17 FY 2017-18 Till FY

2017-18

MU % MU % MU


Non-Solar RPO

Target 3,734.62 10 898.76 10.50 986.18 5,619.57

Achievement 3,749.98 7.45 669.23 2.14 200.67 4,619.88


Mini / Micro RPO

Target 5.90 0.20 1.80 0.20 1.97 9.67

Achievement 5.91 0.00 0.00 0.00 0.00 5.91



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AEML-D has requested the Commission to allow it to meet the Non-Solar RE shortfall of

FY 2018-19 through contracted Hybrid RE Power in the next Control Period.


The Commission has computed the quantum of Non-solar RPO for FY 2017-18 and FY

2018-19 at 10.50% and 11.00%, respectively, of the Gross Energy Requirement approved

in this Order, in accordance with Non-Solar RPO target for FY 2017-18 and FY 2018-19

specified in the MERC RPO-REC Regulations, 2016. The Commission has not considered

any purchase of Non-Solar RECs during FY 2017-18 and FY 2018-19, as submitted by

AEML-D. The following Table shows the summary of Non-Solar RE purchase approved

by the Commission in the truing up for FY 2017-18 and FY 2018-19:

Table 0-30: Non-Solar RE Purchase for FY 2017-18 as approved by the Commission

Particulars


Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Non-Solar

Power Purchase 200.67 102.27 5.10 200.67 102.27 5.10 200.67 102.27 5.10

Non-Solar REC

Purchase - -

Incentive from

IEX - (0.13) (0.13) (0.13)

Total 200.67 102.14 5.10 200.67 102.14 5.10 200.67 102.14 5.10

Table 0-31: Non-Solar RE Purchase for FY 2018-19 as approved by the Commission

Particulars


Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Quant

um

(MU)

Cost

(Rs.

crore)

Rate

(Rs./

kWh)

Non-Solar Power

Purchase 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16

Non-Solar REC

Purchase

Total 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16

The Commission has considered the revised Cumulative Shortfall in Non-Solar RPO till

FY 2017-18 and FY 2018-19, as shown in the Tables below:


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Commission

Particulars

Till FY

2016-17

FY 2017-18 as

submitted by

AEML-D

FY 2017-18 as

approved

Approved

till FY

2017-18

MU % MU % MU

Gross Energy

Consumption 9,392.23 9,392.37

Non-Solar RPO

RPO Target 4,633.38 10.50 986.18 10.50 986.20 5,619.58

Achievement 4,419.21 2.14 200.67 2.14 200.67 4,619.88

Shortfall / (Surplus) 214.17 8.36 785.51 8.36 785.53 999.70

Mini / Micro RPO

RPO Target 7.70 0.20 1.97 0.20 1.97 9.67

Achievement 5.91 0.00 0.00 0.00 0.00 5.91

Shortfall / (Surplus) 1.79 0.20 1.97 0.20 1.97 3.76


Commission

Particulars

Till FY

2017-18

FY 2018-19 as

approved

Approved till

FY 2018-19

MU % MU

Gross Energy Consumption 9,373.27

Non-Solar RPO

RPO Target 5,619.58 11.00 1,031.06 6,650.64

Achievement 4,619.88 2.29 214.53 4,834.41

Shortfall / (Surplus) 999.70 8.71 816.53 1,816.23

Mini / Micro RPO

RPO Target 9.67 0.20 2.06 11.73

Achievement 5.91 0.00 0.00 5.91

Shortfall / (Surplus) 3.76 0.20 2.06 5.82

For the purpose of arriving at cost implications, the Commission has considered that

AEML-D shall meet the cumulative shortfall of Non-Solar RPO up to FY 2018-19 during

the next Control Period in the ratio of the contracted power of Wind-Solar Hybrid RE.

However, final decision on allowing carried forward of shortfall in next control period

would be taken during RPO verification process for FY 2018-19.

1.37.5 Short-Term Power Purchase


After considering the procurement from long-term sources and RE sources, AEML-D has

purchased the balance requirement from firm short-term sources as well as from Power

Exchanges on day-ahead basis. Further, under the Stand-by arrangement, AEML-D has

procured power from MSEDCL to meet its contingency requirements.


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FY 2017-18

AEML-D has also drawn power from the State Imbalance Pool in FY 2017-18. MSLDC

has issued the provisional FBSM bills only up to last week of February 2018. Accordingly,

AEML-D has considered the estimated pool quantum for the balance period of FY 2017-

18, for the purpose of true up. The pool quantum for the period for which bills are yet to be

issued by MSLDC is estimated considering transmission losses of 3.30% and actual T-D

input and energy sales to own, change-over and open access consumers.

In the MTR Petition (Case No. 200 of 2017), AEML-D had claimed the FBSM cost for FY

2015-16 and FY 2016-17 on provisional basis as no bills were available from MSLDC

(stated as MSEDCL in Petition). The provisional bills were available later in FY 2017-18

and accordingly adjustments for difference between estimated pool cost and provisional

bills for the period from 26 October 2015 to 31 March 2016 (Rs. 2.59 Crore) and 1 April

2016 to 3 April 2016 (Rs. 2.56 Crore) have been made in FAC of FY 2017-18 and

accordingly included in the FBSM cost for FY 2017-18. Further, the bill for power procured

from MSEDCL through Stand-by arrangement has not been received yet and therefore, the

cost for the same has not been claimed at present.

Further, surplus energy of OA consumers is also available to AEML-D and included in its

power purchase quantum. This includes 4.46 MU of lapsed energy from firm OA

consumers, 1.33 MU of banking fee for non-firm OA consumers, 7.11 MU of purchase

from non-firm OA consumers, and 6.39 MU of lapsed energy from non-firm OA

consumers. The cost of purchase of power from non-firm OA consumers in FY 2016-17 is

Rs. 1.58 Crore and has been accounted in FY 2017-18, as the actual payments have been

made in FY 2017-18. The cost of purchase of power from Non-firm OA consumers in FY

2017-18 is accounted in FY 2018-19 (as payments are made in FY 2018-19) and is claimed

in the truing up of FY 2018-19.

FY 2018-19

AEML-D has entered into energy banking contracts from October 2018 onwards. As per

the transaction, AEML-D received energy in the months of October 2018 to March 2019

and returned it in the period from July 2019 to September 2019. Since AEML-D has only

paid for the Open Access charges related to the banking transactions in FY 2018-19,

AEML-D has included only the Open Access charges in the power purchase cost for FY

2018-19. As the actual cost incidence is in FY 2019-20 for the energy procured to return

the banked energy, the same is included in the power purchase cost for FY 2019-20.

Further, under the Stand-by arrangement, AEML-D has procured power from MSEDCL to

meet its contingency requirements. AEML-D has also drawn power from the State


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Imbalance Pool in FY 2018-19. MSLDC has issued the provisional FBSM bills only up to

February 2018 and it is, thus, not possible to submit the energy decrement from Pool from

the provisional FBSM statements. Hence, AEML-D has derived the energy decrement from

Pool by considering the total energy input at T-D, energy at T-D for changeover and open

access consumers, quantum of energy procured from different sources (as per the bills

raised by generators) and the actual transmission loss of 3.11% for FY 2018-19 as per

MSLDC. The Commission had, in the FAC approvals dated 24 October, 2018 and 14

November, 2018, approved the FAC for AEML-D without considering the FBSM cost as

the cost of FBSM booked by AEML-D was on provisional basis. Considering the same

approach, AEML-D has claimed the actual cost based on provisional FBSM bills for FY

2017-18 received in the truing up of FY 2017- 18. As the provisional FBSM bills for FY

2018-19 have not been received so far, AEML-D has not claimed any cost towards energy

decrement from Imbalance Pool for FY 2018-19, under the power purchase cost.

For truing up of FY 2016-17, AEML-D in the MTR Petition (Case No. 200 of 2017) had

claimed the FBSM cost for FY 2016-17 on provisional basis. The adjustments for the period

4 April, 2016 to 31 March, 2017 [(-) Rs. 49.28 Crore] have been passed on in FY 2018-19

as the provisional bills for this period were received in FY 2018-19. Adjustments for the

period 1 April, 2016 to 3 April, 2016 have been included in FBSM cost claimed in the

truing up of FY 2017-18. Further, as the bill for power procured from MSEDCL through

Stand-by arrangement has not been received yet, the cost for the same has not been claimed

at present. Further, surplus energy of OA consumers is also available to AEML-D and is

included in its power purchase quantum. This includes 2.00 MU of lapsed energy from firm

OA consumers, 1.94 MU of banking fee for non-firm OA consumers, 11.45 MU of purchase

from non-firm OA consumers, and 9.06 MU of lapsed energy from non-firm OA

consumers. The cost of purchase of power from Non-firm OA consumers in FY 2017-18 is

Rs. 2.72 Crore and has been accounted in FY 2018-19, as the actual payments have been

made in FY 2018-19. The cost of purchase of power from Non-firm OA consumers in FY

2018-19 is accounted in FY 2019-20 (as payments are made in FY 2019-20).

The summary of short-term power purchase for FY 2017-18 and FY 2018-19 as submitted

by AEML-D is shown in the Table below:


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Table 0-34: Power Purchase from Short Term Sources for FY 2017-18 and FY 2018-

19 as submitted by AEML-D

Source

FY 2017-18 FY 2018-19

Purchase

(MU)

Cost

(Rs.

crore)

Rate

(Rs.

/kWh)

Purchase

(MU)

Cost

(Rs.

crore)

Rate

(Rs.

/kWh)

Approved in MTR

Order 2,829.22 1,058.42 3.74 968.27 338.99 3.50

True-up Petition

Bilateral 326.75 123.73 3.79 442.11 188.96 4.27

Power Exchange 1,629.38 625.95 3.84 470.41 15.88

Stand-by Arrangement

with MSEDCL 11.22 - - 2,119.63 969.32 4.57

Lapsed power from

firm OA consumers 4.46 - - 40.84

Banking fee 1.33 - - 2.00

Purchase from Non-

firm OA consumers 7.11 1.58 - 1.94

Lapsed power from

Non-firm OA

consumers

6.39 - - 11.45 2.72

State Imbalance Pool 860.58 226.91 2.64 9.06

Total 2,847.21 978.18 3.44 733.26 (49.28)

3,830.70 1,127.60 2.94

AEML-D submitted that in the MTR Order, the Commission had provisionally approved a

rate of Rs. 3.74 per unit and 3.50 per unit for purchase of short-term power (including

imbalance pool rate) for FY 2017-18 and FY 2018-19, respectively, and had directed to

submit detailed justification for exceeding the stipulated ceiling rate for purchase of short-

term power. AEML-D has submitted the detailed justification in Compliance to Directives.


The details of actual short-term power purchase in FY 2017-18 and FY 2018-19 submitted

by AEML-D have been analysed.

The Commission notes that the quantum of energy purchased through the Imbalance Pool

is significantly high, at around 9% of the overall power purchase quantum. However, the

quantum purchased through Imbalance Pool in FY 2017-18 is lower than the combined

purchase from Bilateral Sources and Power Exchanges. Though the rate of power purchase

through the Imbalance Pool is lower than that of Bilateral Sources or Power Exchange, the

Imbalance Pool mechanism should not be treated as a source of procuring power and is only

meant for settling the deviations in the real-time power interchange between various pool

participants. Accordingly, AEML-D should plan its power procurement in a way that the

purchases from the Imbalance Pool are minimised.


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The quantum and cost of short-term power purchase approved by the Commission after

truing up for FY 2017-18 and FY 2018-19 is shown in the Tables below:

Table 0-35: Short Term Power Purchase for FY 2017-18 as approved by the

Commission

Particulars

MTR Order True-up Petition Approved after Truing

up

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

(MU) (Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh)

Bilateral 326.75 123.73 3.79 326.75 123.68 3.79

Power

Exchanges 1,629.38 625.95 3.84 1,629.38 625.95 3.84

Firm OA

Lapsed 4.46 - - 4.46 - -

Banking fee 1.33 - - 1.33 - -

Non-firm OA

Purchased 7.11 1.58 - 7.11 1.58 -

Non-firm OA

Lapsed 6.39 - - 6.39 - -

RTS 0.09 - -

Short-Term

Power

Purchase

1,975.42 751.27 3.80 1,975.51 751.22 3.80

MSEDCL

Stand-by 11.22 - - 11.22 - -

Imbalance

Pool 860.58 226.91 2.64 860.58 226.91 2.64

Total Short-

term

Purchase

2,829.22 1,058.42 3.74 2,847.21 978.18 3.44 2,847.21 978.13 3.44

Table 0-36: Short-Term Power Purchase for FY 2018-19 as approved by the

Commission

Particulars

MTR Order True-up Petition Approved after Truing up

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

(MU) (Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh)

Bilateral 442.11 188.96 4.27 442.11 188.96 4.27

Banking 470.41 15.88 470.41 15.88

Power

Exchanges 2,119.63 969.32 4.57 2,119.63 969.32 4.57

Firm OA

Lapsed 2.00 2.00

Banking fee 1.94 1.94


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Particulars

MTR Order True-up Petition Approved after Truing up

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

Qtm. Cost

Rate

per

Unit

(MU) (Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh) (MU)

(Rs.

crore)

(Rs/

kWh)

Non-firm OA

Purchased 11.45 2.72 11.45 2.72

Non-firm OA

Lapsed 9.06 9.06

RTS 0.04 0.48 0.04

Short-Term

Power

Purchase

3,056.61 1,176.66 3.85 3,057.09 1,176.66 3.85

MSEDCL

Stand-by 40.84 - - 40.84 - -

Imbalance

Pool 733.26 (49.28) - 733.26 (49.48) -

Total Short-

term

Purchase

968.27 338.99 3.50 3,830.70 1,127.60 2.94 3,831.18 1,127.38 2.94

FY 2017-18

The Commission approved the ceiling rate of Rs. 3.14 per unit for purchase from short-

term sources for FY 2017-18 in the MYT Order dated 21 October 2016. At the time of

MTR, AEML-D submitted a rate of Rs. 3.74 per unit, which was higher than the stipulated

rate of Rs. 3.14 per unit. The Commission had directed AEML-D, at the time of MTR to

submit detailed justification for exceeding the stipulated ceiling rate for purchase of short-

term power. In accordance with the direction, AEML-D justified that the increase in rate of

short term power is on account of various factors such as reduction in hydro generation due

to lower rainfall in southern and western States, shortage in coal supply by CIL and coal

logistics issues, which were not accounted for in the rate of Rs. 3.14 per unit.

AEML-D submitted that the difference in the rate approved in the MTR Order and now

submitted in Truing-up Petition is on account of change in State Imbalance Pool Quantum

as a result of change in sales and quantum of purchase/ lapsed energy/banking for FY 2017-

18, which was not considered at the time of MTR due to pending finalization of bills. The

Commission based on the justification submitted by AEML-D considers the rate of Rs. 3.79

per unit from Bilateral Sources as submitted in its Petition.

FY 2018-19

The Commission at the time of MTR had approved the ceiling rate of Rs. 3.50 per unit for

purchase from Bilateral Sources. AEML-D filed a Petition (Case No. 335 of 2018) for

approval of procurement of additional power on account of shortfall from approved sources


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due to anticipated increase in demand . The Commission vide its Order dated 1 January

2019, considered the submission of AEML-D with regard to actual discovery of short-term

rates on DEEP Portal and hence increased the ceiling rate from Rs. 3.50 per unit, as

approved in MTR Order, to Rs. 5.00 per unit for FY 2018-19 and FY 2019-20. AEML-D

submitted that the actual rate achieved during FY 2018-19 from Bilateral Sources is Rs.

4.27 per unit, which is still lesser than the ceiling rate of Rs. 5.0 per unit approved vide

Order in Case No. 335 of 2019. The Commission therefore, approves the purchase from

Bilateral Sources as submitted by AEML-D in its Petition.

The Commission has also verified the submission made by AEML-D for procurement

through Power Exchanges during FY 2017-18 and FY 2018-19. The Commission

accordingly approves the quantum and cost submitted by AEML-D for procurement

through Power Exchanges.

1.37.6 Sale of Surplus Power


AEML-D submitted that surplus energy during certain hours of the day resulting from

varying load patterns in FY 2017-18 and FY 2018-19, has been sold outside the Licence

area through the Power Exchanges. The summary of revenue realized from such sale has

been considered to reduce the power purchase cost for FY 2017-18 and FY 2018-19. The

summary of sale of surplus power in FY 2017-18 and FY 2018-19 as submitted by AEML-

D is as under:

Table 0-37: Revenue from Surplus Sale for FY 2017-18 and FY 2018-19 as submitted

by AEML-D

Source

FY 2017-18 FY 2018-19

Quantum

(MU)

Revenue

(Rs.

Crore)

Rate

(Rs./kWh)

Quantum

(MU)

Revenue

(Rs.

Crore)

Rate

(Rs./kWh)

MTR Order (24.45) (8.77) 3.59 (31.64) (11.35) 3.59

True-up Petition (24.45) (8.77) 3.59 (32.94) (10.59) 3.22


The Commission has approved the actual revenue earned by AEML-D from sale of surplus

power in the truing up for FY 2017-18 and FY 2018-19, as shown in the Table below:


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Table 0-38: Sale of Surplus Power in FY 2017-18 and FY 2018-19 as approved by

Commission


Quantu

m

(MU)

Revenue

(Rs.

crore)

Rate

(Rs./

kWh)

Quantu

m (MU)

Revenue

(Rs. crore)

Rate

(Rs./

kWh)

Approved in MTR

Order (24.45) (8.77) 3.59 (31.64) (11.35) 3.59

True-up Petition (24.45) (8.77) 3.59 (32.94) (10.59) 3.22

Approved in this

Order (24.45) (8.77) 3.59 (32.94) (10.59) 3.22

1.37.7 Amount payable to Abhijeet MADC Nagpur Pvt. Ltd.


AEML had entered into a PPA with Abhijeet MADC Nagpur Energy Pvt. Ltd. (AMNEPL)

on 04.08.10 for supply of power from FY 2011-12 to FY 2013-14. AMNEPL had filed a

Petition before the Commission (Case No. 35 of 2016) asking for additional amount

towards Change in Law with interest. The Commission, in its Order dated 2 April, 2018 in

Case No. 35 of 2016, has allowed the prayers of AMNEPL partly. The Commission, in the

MTR Order dated 12 September 2018 (Case No. 200 of 2017), had ruled that any payment

made by AEML-D to AMNEPL in view of this Order shall be considered at the time of

truing up of FY 2018-19. AEML-D has paid an amount of Rs. 9.66 Crore to AMNEPL after

the issuance of the above Order, which has been considered in the power purchase cost for

FY 2018-19.


The Commission has considered the amount claimed by AEML-D to be paid to AMNEPL

in the power purchase cost of FY 2018-19.

1.37.8 FBSM Provisional Fixed Cost


The Commission, in its Daily Order dated 6 February, 2019 in Case No. 25 of 2019 and

Case No. 28 of 2019, had directed AEML-D to deposit 20% of the provisional Fixed Charge

bill raised by MSEDCL on 25 January, 2019 under intra-State ABT for FY 2011-12 to FY

2017-18. AEML-D has paid the amount of Rs. 24.92 Crore and has considered the same as

part of power purchase cost for FY 2018-19.


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The Commission has considered the amount claimed by AEML-D to be paid to MSEDCL

as directed in Daily Order dated 6 February 2019 against FBSM Fixed Cost in power

purchase cost of FY 2018-19.

1.37.9 WRPC DSM Bills


AEML-D submitted that the FBSM billing is delayed by almost 2 years whereas the WRPC

billing is happening with just 2 weeks delay. Whenever WRPC bill is payable, MSLDC

does not have sufficient Funds as the FBSM bills are not in sync. This matter was discussed

in MSPC meeting dated 25 March, 2019. It was decided that MSLDC will raise provisional

bill for payment towards the WRPC bills. Since billing data is not available, it was decided

that each DISCOM will pay 25% share in the interim. Accordingly, AEML-D pays the

WRPC bills as per the provisional bills raised by MSLDC. The actual payment made in FY

2018-19 (Rs. 59,65,478/-) is included in the power purchase cost for FY 2018-19.


The Commission has considered the amount claimed by AEML-D towards payment as

WRPC DSM bills in the power purchase cost of FY 2018-19.

1.37.10Gap/(Surplus) on account of True-up of TPC-G


The Commission had allowed an amount of Rs. (0.25) Crore as AEML-D’s share on

account of truing up of previous years of TPC-G (in Case No. 65 of 2018). The same has

been received from TPC-G and has been considered as part of power purchase cost for FY

2018-19.


The Commission has considered the amount claimed by AEML-D against the gap/(surplus)

on account of True-up of TPC-G in the power purchase cost of FY 2018-19.

1.37.11Transmission Charges, SLDC Charges and Standby Charges

1.37.11.1 Transmission Charges


FY 2017-18 : The Commission had approved Transmission Charges of Rs. 402.02 Crore

to be paid by AEML-D for FY 2017-18 in the Suo Motu Order for determination of Intra-


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State Transmission Charges dated 22 July 2016 in Case No. 91 of 2016. Accordingly,

AEML-D has paid Transmission Charges of Rs. 402.00 Crore to STU in FY 2017-18, which

was also considered by the Commission in the MTR Order in Case No. 200 of 2017, based

on provisional submissions of AEML-D.

FY 2018-19: The Commission had approved Transmission Charges of Rs. 437.03 Crore

for FY 2018-19 in the InSTS MYT Order dated 22 July 2016 in Case No. 91 of 2016. Later,

the Commission determined the Transmission Charges of Rs. 358.49 Crore for FY 2018-

19 in the InSTS MTR Order dated 12 September, 2018 in Case No. 265 of 2017. AEML-D

had paid Transmission Charges in accordance with InSTS MYT Order (Case No. 91 of

2016) till August 2018 and in accordance with InSTS MTR Order (Case No. 265 of 2017)

from September 2018 to March 2019.

The summary of Transmission Charges for FY 2017-18 and FY 2018-19 is shown in the

Table below:

Table 0-39 : Transmission Charges for FY 2017-18 and FY 2018-19 as submitted by

AEML-D (Rs Crore)


MTR Order True-up

Petition MTR Order

True-up

Petition

Transmission

Charges 402.00 402.00 358.49 391.19


The Commission has approved the actual Transmission Charges paid by AEML-D for FY

2017-18 and FY 2018-19, which are as per relevant InSTS Orders issued by the

Commission, as shown in the Table below:

Table 0-40: Transmission Charges for FY 2017-18 and FY 2018-19 as approved by

the Commission (Rs. Crore)


MTR

Order

True-up

Petition

Approved

after

Truing up

MTR

Order

True-up

Petition

Approved

after

Truing up

Transmission

Charges 402.00 402.00 402.00 358.49 391.19 391.19


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1.37.11.2 MSLDC Charges


The Commission had approved MSLDC charges of Rs. 1.30 Crore for FY 2017-18 and Rs.

1.29 Crore for FY 2018-19 in the Order dated 22 July, 2016 in Case No. 20 of 2016.

Accordingly, AEML-D has paid Rs. 1.30 Crore of SLDC charges in FY 2017-18. For FY

2018-19 the Commission determined SLDC charges of 1.18 Crore for FY 2018-19 in the

MSLDC MTR Order dated 12 September, 2018 in Case No. 171 of 2017. AEML-D paid

SLDC charges in accordance with MSLDC MYT Order (Case No. 20 of 2016) till August

2018 and in accordance with MSLDC MTR Order (Case No. 171 of 2017) from September

2018 to March 2019. The summary of SLDC charges for FY 2017-18 and FY 2018-19 is

shown in the Table below:

Table 0-41 : MSLDC Charges for FY 2017-18 and FY 2018-19 as submitted by

AEML-D (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR Order True-up

Petition MTR Order True-up Petition

MSLDC Charges 1.30 1.30 1.18 1.23


The Commission has approved the actual MSLDC Charges paid by AEML-D in the truing

up for FY 2017-18 and FY 2018-19, as the same are in accordance with the MSLDC

Charges approved by the Commission, as shown in the Table below:

Table 0-42: MSLDC Charges for FY 2017-18 and FY 2018-19 as approved by

Commission (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

Approved

after

truing up

MTR

Order

True-up

Petition

Approved

after

truing up

SLDC Charges 1.30 1.30 1.30 1.18 1.23 1.23

1.37.11.3 Standby Charges


FY 2017-18

The Commission had approved Standby Charges of Rs. 171.12 Crore for FY 2017-18 - in

AEML-D’s MYT Order dated 21 October 2016 (Case No. 34 of 2016) for third Control

Period. AEML-D has paid the Standby Charges of Rs. 171.12 Crore in FY 2017-18, which


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was also considered by the Commission in the MTR Order in Case No. 200 of 2017, based

on provisional submissions of AEML-D.

FY 2018-19

The Commission had approved Standby Charges of Rs. 167.60 Crore for FY 2018-19 for

AEML-D in MSEDCL’s MYT Order in Case No. 48 of 2016. Later, the Commission

approved the Standby Charges of Rs. 180.90 Crore for FY 2018-19 for AEML-D in

MSEDCL’s MTR Order in Case No. 195 of 2017. AEML-D had paid Standby Charges in

accordance with MSEDCL MYT Order (Case No. 48 of 2016) till August 2018 and in

accordance with MSEDCL MTR Order (Case No. 195 of 2017) from September 2018 to

March 2019. The summary of Standby Charges for FY 2017-18 and FY 2018-19 is shown

in Table below:

Table 0-43 : Stand-by Charges for FY 2017-18 and FY 2018-19 as submitted by

AEML-D (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR Order True-up

Petition MTR Order

True-up

Petition

Stand-by Charges 171.12 171.12 180.90 175.38


The Commission has approved the actual Standby Charges paid by AEML-D in the truing

up for FY 2017-18 and FY 2018-19, as the same are in accordance with the Standby

Charges approved by the Commission in respective Tariff Orders, as shown in the Table

below:

Table 0-44: Standby Charges approved by the Commission for FY 2017-18 and FY

2018-19 (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-

up

Petition

Approved

after

truing up

MTR

Order

True-up

Petition

Approved

after

truing up

Stand-by Charges 171.12 171.12 171.12 180.90 175.38 175.38

1.37.12Summary of Power Purchase Cost for FY 2017-18 and FY 2018-19


The actual power purchase quantum and cost for FY 2017-18 and FY 2018-19, as against

that approved in the MTR Order, is summarised in the Table below:


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Table 0-45 : Power Purchase Quantum and Cost for FY 2017-18 as submitted by

AEML-D

Source

MTR Order True-up Petition

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

ADTPS 3,189.75 1,468.76 4.60 3,189.75 1,468.76 4.60

VIPL-G 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74

Renewable-Solar 65.45 68.79 10.51 65.45 68.80 10.51

Renewable-Non-Solar 200.67 102.27 5.10 200.67 102.27 5.10

Non-Solar REC (0.13) (0.13)

Short-term Purchase 1,956.13 749.69 3.83 1,975.42 751.27 3.80

Surplus Sale (24.45) (8.77) 3.59 (24.45) (8.77) 3.59

Purchase under Standby

arrangement 11.22 4.49 4.00 11.22 - -

Imbalance Pool 861.88 302.66 3.51 860.58 226.91 2.64

Surplus RE bought

from OA consumers - 1.59 - -

Transmission Charges 402.00 402.00

MSLDC Charges 1.30 1.30

Standby Charges 171.12 171.12

Total 9,374.24 4,739.88 5.06 9,392.23 4,659.65 4.96

Table 0-46 : Power Purchase Quantum and Cost for FY 2018-19 as submitted by

AEML-D

Source


Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

ADTPS 3,764.17 1,453.35 3.86 3,268.03 1,450.07 4.44

VIPL-G 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59

AMNEPL 0 0 9.66

Renewable-Solar 68.52 70.64 10.31 66.20 69.24 10.46

Solar-New 205.60 72.48 3.53 0 0

Renewable-Non-Solar 204.59 106.03 5.18 214.53 110.62 5.16

Non-Solar New 891.87 308.12 3.45 0 0

Short-term Purchase

including Imbalance

Pool

968.27 338.89 3.50 3,830.70 1,127.63 2.94

Surplus Sale (31.64) (11.35) 3.59 (32.94) (10.59) 3.22

FBSM fixed Cost 0 0 24.92

WRPC DSM Bills 0 0 0.60

Sub-Total 9,967.81 4,081.81 4.09 9,372.79 3,712.91 3.96


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Source


Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs.

/kWh)




MSPC Charges 0 0.01

Revenue Gap/

(Surplus) of TPC-G (0.25) (0.25)

Total 9,967.81 4,622.81 4.64 9,372.79 4,280.46 4.57


Based on the source-wise approval of power purchase as discussed above, the power

purchase quantum and cost approved after truing-up for FY 2017-18 and FY 2018-19 is as

shown in the following Tables:

Table 0-47: Power Purchase approved by the Commission for FY 2017-18

Particulars


Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate

(MU) (Rs.

crore)

(Rs./

kWh) (MU)

(Rs.

crore)

(Rs./

kWh) (MU)

(Rs.

crore)

(Rs./

kWh)

ADTPS 3,189.75 1,468.76 4.60 3,189.75 1,468.76 4.60 3,189.80 1,468.76 4.60

VIPL-G 3,113.59 1,476.12 4.74 3,113.59 1,476.13 4.74 3,113.59 1,476.13 4.74

RE – Solar 65.45 68.79 10.51 65.45 68.80 10.51 65.45 68.79 10.51

RE – Non-Solar 200.67 102.27 5.10 200.67 102.27 5.10 200.67 102.27 5.10

Non – Solar REC (0.13) (0.13) (0.13)

Short Term

Purchase 1,956.13 749.69 3.83 1,975.42 751.27 3.80 1,975.51 751.22 3.80

Purchase under

Standby

arrangement

11.22 4.49 4.00 11.22 - - 11.22 - -

Imbalance Pool 861.88 302.66 3.51 860.58 226.91 2.64 860.58 226.91 2.64

Surplus Sale (24.45) (8.77) 3.59 (24.45) (8.77) 3.59 (24.45) (8.77) 3.59

Surplus RE from

OA consumers

1.59

-

-

Transmission

Charges

402.00

402.00

402.00

MSLDC Charges 1.30 1.30 1.30

Standby Charges 171.12 171.12 171.12

Total 9,374.24 4,739.88 5.06 9,392.23 4,659.65 4.96 9,392.37 4,659.60 4.96


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Table 0-48: Power Purchase approved by the Commission for FY 2018-19

Particulars

MTR Order True-up Petition Approved in this Order

Quantum Cost Rate Quantum Cost Rate Quantum Cost Rate

(MU) (Rs.

crore)

(Rs./

kWh) (MU)

(Rs.

crore)

(Rs./

kWh) (MU)

(Rs.

crore)

(Rs./

kWh)

ADTPS 3,764.17 1,453.35 3.86 3,268.03 1,450.07 4.44 3,268.03 1,450.07 4.44

VIPL-G 3,896.43 1,743.65 4.47 2,026.27 930.76 4.59 2,026.27 930.76 4.59

AMNEPL 0 0 9.66 9.66

RE -Solar 68.52 70.64 10.31 66.20 69.24 10.46 66.20 68.25 10.31

Solar-New 205.60 72.48 3.53 0 0 0 0 0

RE -Non-Solar 204.59 106.03 5.18 214.53 110.62 5.16 214.53 110.62 5.16

Non-Solar New 891.87 308.12 3.45 0 0

Short-term Purchase

including Imbalance

Pool

968.27 338.89 3.50 3,830.70 1,127.63 2.94 3,831.18 1,127.38 2.94

Surplus Sale (31.64) (11.35) 3.59 (32.94) (10.59) 3.22 (32.94) (10.59) 3.22

FBSM fixed Cost 0 0 24.92 24.92

WRPC DSM Bills 0 0 0.60 0.60

Sub-Total 9,967.81 4,081.81 4.09 9,372.79 3,712.91 3.96 9,373.27 3,711.91 3.96

Transmission

Charges 358.49 391.19

391.19


Standby Charges 180.90 175.38 175.38

MSPC Charges 0 0.01 0.01

Revenue Gap/

(Surplus) of TPC-G (0.25) (0.25)

(0.25)

Total 9,967.81 4,622.81 4.64 9,372.79 4,280.46 4.57 9,373.27 4,279.46 4.57

1.38 OPERATION AND MAINTENANCE (O&M) EXPENSES

1.38.1 Allowable O&M Expenses for FY 2017-18 and FY 2018-19


The Commission approved the following O&M expenses for FY 2017-18 and FY 2018-19

for AEML-D in the MTR Order (Case No. 200 of 2017)

Table 0-49: O&M Expenses approved in MTR Order for FY 2017-18 and FY 2018-

19 (Rs. Crore)


Wires Business 810.80 851.79

Supply Business 399.99 420.22

Total 1,210.80 1,272.01

AEML-D quoted Regulation 72.2 and 72.3 of MYT (First Amendment) Regulations, 2017

which provides for approval of O&M expenses for Wire Business at the time of ARR and


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true-up. While allowing O&M expenses for FY 2017-18 and FY 2018-19 in the MTR Order

in Case No. 200 of 2017, the Commission had considered an escalation factor of 5.06%.

This escalation factor was derived based on 70% CPI inflation and 30% WPI inflation (for

the period from FY 2012-13 to FY 2016-17) for FY 2017-18 and (for the period from FY

2013-14 to FY 2017-18) for FY 2018-19. The Commission had used Wholesale Price

Indices (WPI) of 2004-05 series for deriving the escalation factor of 5.06%. However, from

FY 2017-18, WPI based on 2004-05 series are no longer published and they have been

replaced by WPI based on 2011-12 series. Since the escalation factor originally considered

was based on WPI of 2004-05 series, the escalation factor to be applied at the time of truing

up should also be based on WPI of 2004-05 (equivalent) series. Therefore, AEML-D has

modified the WPI based on 2011-12 series for FY 2017-18 and FY 2018-19 appropriately

to reflect WPI based on 2004-05 series.

FY 2017-18

Based on the above workings, the inflation factor based on 30% of WPI inflation and 70%

of CPI inflation from FY 2013-14 to FY 2017-18, reduced by efficiency factor of 1%, works

out to 3.76%, as shown in the Table below:

Table 0-50: Inflation Factor for Truing-up of O&M Expenses for FY 2017-18

Year WPI WPI

Inflation CPI

CPI

Inflation

FY 2012-13 168 215

FY 2013-14 178 5.98% 236 9.68%

FY 2014-15 181 2.00% 251 6.29%

FY 2015-16 177 -2.46% 265 5.65%

FY 2016-17 183 3.64% 276 4.12%

FY 2017-18 189 2.92% 284 3.08%

Average from FY 2013-

14 to FY 2017-18 2.41% 5.76%

Weight 30% 70%

Escalation Factor 4.76%

Efficiency Factor 1.00%

Escalation Factor Net

of Efficiency Factor 3.76%

Accordingly, the permissible normative O&M expenses has been computed, along with the

actual O&M Expenses for FY 2017-18 as shown in the Table below:


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Table 0-51: Permissible and Actual O&M Expenses for FY 2017-18 (Rs. Crore)

Particulars / (Rs. Crore)

Approved

O&M

Expense for

FY 2016-17

Inflation

Factor

(%)

Permissible

O&M

Expense for

FY 2017-18

Actual O&M

Expense in

FY 2017-18

Wires Business 771.78 3.76% 800.80 791.21

Supply Business 380.74 3.76% 395.06 383.55

Total 1152.52 3.76% 1195.85 1174.76

As the actual O&M Expenses in FY 2017-18 are lower than the permissible O&M Expenses

for FY 2017-18, AEML-D is eligible for efficiency gains on O&M Expenses.

FY 2018-19

Based on the workings, the inflation factor based on 30% of WPI inflation and 70% of CPI

inflation from FY 2014-15 to FY 2018-19, reduced by efficiency factor of 1%, works out

to 3.07%, as shown in the Table below:

Table 0-52: Inflation Factor for Truing-up of O&M Expenses for FY 2018-19

Year WPI WPI

Inflation CPI

CPI

Inflation

FY 2013-14 178 236

FY 2014-15 181 2.00% 251 6.29%

FY 2015-16 177 -2.46% 265 5.65%

FY 2016-17 183 3.64% 276 4.12%

FY 2017-18 189 2.92% 284 3.08%

FY 2018-19 197 4.33% 300 5.45%

Average from FY

2013-14 to FY 2018-

19

2.08% 4.92%

Weight 30% 70%





AEML-D submitted that the Efficiency Factor of 1% prescribed in the MYT Regulations,

2015 is for each year of the Control Period, due to which it aggregates and becomes 4% by

the end of the Control Period, which is a lot of reduction estimated on account of efficiency.

The efficiency measures are not unlimited and, after a point, further efficiency may not be

achievable as all measures for efficiency are deployed. Therefore, 1% efficiency factor each

year is un-realistic and should be reviewed. As a general rule, it can be said that higher

efficiency factor may be needed in high inflation scenarios to dampen the impact of high


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inflation on O&M expenses. However, when inflation in the economy is already at a

considerably low level, the same level of efficiency at 1% each year should not be expected.

AEML-D has hence, not considered the efficiency factor of 1% to arrive at normative O&M

expenses for FY 2018-19, as the escalation rate is too low, and requested the Commission

to waive the requirement of efficiency factor in the truing up for FY 2018-19. Accordingly,

the permissible normative O&M expenses has been computed, along with the actual O&M

Expenses for FY 2018-19 as shown in the Table below:

Table 0-53: Permissible and Actual O&M Expense for FY 2018-19 (Rs. Crore)


Approved

O&M

Expense for

FY 2017-18

Inflation

Factor

(%)

Permissible

O&M

Expense for

FY 2018-19

Actual O&M

Expense in

FY 2018-19

Wires Business 810.80 4.07% 843.80 852.43

Supply Business 399.99 4.07% 416.27 419.03

Total 1,210.79 4.07% 1,260.07 1,271.46

As the actual O&M Expenses in FY 2018-19 are higher than the permissible O&M

Expenses for FY 2018-19, AEML-D is eligible for efficiency loss on O&M Expenses.

AEML-D submitted that for FY 2018-19, there has been an allocation of Corporate cost

from RInfra for the period from 01.04.2018 to 28.08.2018, which is included in the actual

O&M expenses for pre-AEML period. The Corporate expenses of RInfra represent the

expenses pertaining to common services of Central Procurement, Group Finance and HR,

Centralized IT services, Administration, Security and other common departments where the

resources and personnel available were rendering the services to the entire RInfra Corporate

and accordingly the expenses pertaining to these departments were allocated to all the

individual business segments within RInfra, such as the Mumbai energy vertical, EPC

business, Wind power plants, etc., on the basis of Turnover of these individual business

segments.

Further, subsequent to the transfer of business (i.e., from 29.08.2018), these services

continue to be required by AEML. However, as AEML is a separate Subsidiary Company

of Adani Transmission Limited, a common pool of corporate resources / expertise is no

longer available within AEML and these services are therefore required to be sourced by

AEML from within the expertise and resources available in the Adani Group as a whole.

The cost pertaining to common resources of Adani Group, pertaining to Adani Enterprises

Ltd. (AEL) which are utilized by all Adani Group companies, is required to be allocated on

all such Companies. Accordingly, an allocation of the same for the period 29.08.2018 to


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31.03.2019 has been made on AEML as well, to the extent of Rs. 65.93 Crore which, on

the advice of the Auditors, is booked in AEML books under “professional and consultancy

fee” sub-head of A&G expenses.

In addition to the above, specific services have been procured by AEML from Adani

Transmission Ltd. (ATL) and Adani Enterprises Ltd. (AEL) towards Master Data

Migration, Corporate Communication, HR, IT and Administration services, procurement

support and MIS, etc. AEML has made payment to ATL and AEL towards procurement of

such services of Rs. 5.90 Crore and Rs. 29.47 Crore respectively, against invoices raised,

which is also booked under A&G expenses under the same head of professional and

consultancy fee.

The total cost (corporate allocation plus cost of services procured) booked under AEML

books pertain to the G-T-D business as a whole and accordingly for allocating the cost to

AEML-D (or to generation or transmission business), ratio of revenue of business segment

to total regulated revenue of AEML has been used.

Further, the next wage revision of Unionized employees and contract labour is expected in

FY 2020-21, which would be effective from July 2018. Therefore, AEML-D has made

wage revision provision in its books of accounts (Rs 34 Crore towards Employee Expenses

and Rs. 16 Crore towards wage revision effect on contract labour cost booked in R&M

Expense). The same has not been included the actual expenses shown above, in line with

the philosophy adopted by the Commission in earlier Orders, wherein actual pay-outs due

to wage revisions were allowed in O&M expenses (in the year in which they are incurred)

and not the provisions.

Impact of GST: AEML-D submitted that from July 2017 onwards, Service Tax has been

replaced by Goods and Services Tax (GST), thus, increasing the tax burden from 15% to

18%. The base O&M Expense for calculating the permissible O&M expense for FY 2017-

18 is the approved O&M Expense for FY 2016-17, wherein the Service tax rate was 15%.

The increase in tax rate has increased the O&M Expense for FY 2017-18, which is a Change

in Law event and is uncontrollable as per MYT Regulations, 2015. The Commission in the

MTR Order had directed AEML-D to submit the uncontrollable element of O&M Expense

for FY 2017-18 at the time of truing up. Accordingly, the impact of GST due to increase of

tax rate from 15% to 18% in FY 2017-18 is Rs. 7.82 Crore. The impact of GST due to

increase of tax rate from 15% to 18% in FY 2018-19 is Rs. 10.18 Crore.

Further, vide letter dated 3 May 2018 (Ref. No. AEML-D/MERC/GST Circular/01),

AEML-D has informed the Commission that the Department of Revenue, Govt. of India


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has, vide its Circular No. 34/8/2018-GST, bearing Ref. No. F No. 354/17/2018-TRU, dated

1 March 2018, directed that allied services of transmission and distribution (non-energy

receipts from consumers) are chargeable to GST. AEML-D had further informed the

Commission that due to this, it has started charging GST on income from charges recovered

under the Schedule of Charges from consumers, from 1 April 2018 onwards and, since the

GST regime is effective from 1 July 2017, the GST on these charges from 1 July 2017 up

to 31 March 2018, shall be recovered from ARR, because it would be very difficult to

identify the beneficiaries. The GST paid to the Govt. for the period 1 July 2017 to 31 March

2018, pertaining to these activities of Rs. 0.86 Crore is added as expenditure in A&G

expenses. AEML-D has deducted these amounts from the actual O&M expenses to

determine the net O&M Expenses for FY 2017-18 and has then determined the net

entitlement for FY 17-18.

Access Charges: Mumbai Metropolitan Region Development Authority (MMRDA) has

demanded Access Charges of Rs. 0.91 Crore from AEML-D at the rate of Rs. 100 per

running meter for cables laid in MMRDA area for the period 10 September 2014 to 10

September 2017 for the entire length of all cables ever laid by AEML-D in MMRDA

jurisdiction. AEML-D had paid Rs. 0.10 Crore in FY 2017-18 to MMRDA only for the

cables additionally laid during the period 10 September 2014 to 10 September 2017 and

requested MMRDA not to levy access charges on cables laid prior to 10 September 2014,

as it has direct impact on consumer tariffs. MMRDA has rejected the request of AEML-D

and has claimed the balance amount vide its letter dated 25 April 2018. The balance amount

is hence, paid in FY 2018-19. AEML-D had appraised the Commission regarding the

Access Charges paid to MMRDA in the MTR Petition (Case No.200 of 2017). The

Commission had stated in the MTR Order dated 12 September 2018 that it will consider

the impact of Access Charges paid to MMRDA at the time of truing up of FY 2018-19.

AEML-D has therefore, claimed the Access Charges paid to MMRDA (Rs. 0.10 Crore)

separately in O&M expenses for FY 2017-18. The remaining cost of Rs. 0.81 Crore is

claimed in the O&M expenses for FY 2018-19.

Way Leave charges: Western Railway had claimed way leave charges of Rs. 22.60 Crore

from RInfra for old abandoned cables in its premises. RInfra had contested the matter in the

Hon’ble Bombay High Court, which is pending for decision. In FY 2018-19, permission

was required from Western Railways for laying of cables in its corridor. Western Railways

had communicated that the request for permission can be considered if AEML-D deposits

an amount of Rs. 2 Crore (Rs. 2.36 Crore with GST). Being an uncontrollable expense

never incurred earlier, this expense does not form part of the normative O&M allowance

for FY 18-19. Accordingly, AEML-D has also claimed this amount separately in the O&M

expenses for FY 2018-19.


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The O&M expenses claimed in truing up for FY 2017-18 and FY 2018-19 is shown in the

Tables below:

Table 0-54 : O&M Expenses claimed in Truing up of FY 2017-18 (Rs Crore)

Particulars / (Rs. Crore) Notation Wires Supply Total

Normative O&M Expense A 800.80 395.06 1195.85

Actual O&M Expense B 791.21 383.55 1174.76

Uncontrollable Expense - GST

Impact on taxes C 6.32 1.50 7.82


Impact on SoC for FY 18 D 0.56 0.30 0.86

Access charges paid to MMRDA

– Uncontrollable e 0.10 0 0.10

Net Actual O&M Expenses for

comparing with normative f = b-(c+d+e) 784.32 381.75 1166.07

Net Entitlement g = f+(a-f)/3 789.8 386.18 1176.00

O&M Expense claimed in this

Petition h = g+(c+d+e) 796.70 387.99 1184.78

Table 0-55 : O&M Expenses claimed in Truing up of FY 2018-19 (Rs Crore)

Particulars / (Rs. Crore) Notation Wires Supply Total

Normative O&M Expense A 843.80 416.27 1260.07

Actual O&M Expense B 852.43 419.03 1271.46


Impact on taxes C 8.04 2.10 10.14

Access charges paid to

MMRDA D 0.81 0 0.81

Way leave charges paid to

Western railways e 2.36 0 2.36

Net Actual O&M Expense for

comparing with normative f = b-(c+d+e) 841.22 416.93 1258.15

Net Entitlement g = f+(a-f)/3 842.08 416.49 1258.57

O&M Expense claimed in this

Petition h = g+(c+d+e) 853.29 418.59 1271.88

AEML-D apprised the Commission about the matters, which are at different stages of

litigation and may impact the O&M expenses of AEML-D in case the rulings are made

against AEML-D. It has not made any claim in the Petition with regard to the likely

expenses that might arise as a result of such rulings going against AEML-D, even though

provisions may have been made in accounts, in line with the Commission’s own approach

of considering such expenses only on actual payment basis. Accordingly, as and when any

actual payment is made, AEML-D shall suitably approach the Commission with its claim


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of recovery. The various issues that could have impact on the O&M expenses are listed

below:

▪ Access Charges

▪ Equal Wages for Equal work

▪ Permanency Claim

▪ Service Tax on Cable Laying charges

▪ Employee State Insurance Corporation (ESIC) Matters

Some of these issues, once settled, could have a recurring effect on O&M expenses.

Accordingly, as and when any payment is made by AEML-D, the nature of such expense

will decide whether it is to be claimed as a one-time expense or whether a revision in Base

O&M expenses for the Control Period is also necessary, in case the expense is of recurring

nature. Accordingly, AEML-D shall claim suitable relief in its future Petition(s).


Regulation 72 and Regulation 81 of MERC MYT Regulations, 2015, as amended from time

to time, provides for determination of O&M expenses for Wire Business and Supply

Business respectively for each year of the Control Period. The relevant extracts for Wire

Business are as follows:

“72.2 The Operation and Maintenance expenses shall be derived on the basis of

the average of the Final Trued-up Operation and Maintenance expenses after

adding/deducting the sharing of efficiency gains/losses, for the three years ending

March 31, 2016, excluding abnormal expenses, if any, subject to prudence check by

the Commission, and shall be considered as the Base Year Operation and

Maintenance expenses.

72.3 The Operation and Maintenance expenses for each subsequent year shall be

determined by escalating these Base Year expenses for FY 2015-16 by an inflation

factor with 30% weightage to the average yearly inflation derived based on the

monthly Wholesale Price Index of the past five financial years as per the Office of

Economic Advisor of Government of India and 70% weightage to the average yearly

inflation derived based on the monthly Consumer Price Index for Industrial

Workers (all-India) of the past five financial years as per the Labour Bureau,

Government of India, as reduced by an efficiency factor of 1% or as may be

stipulated by the Commission from time to time, to arrive at the permissible

Operation and Maintenance expenses for each year of the Control Period:

Provided that, in the Truing-up of the Operation and Maintenance expenses for any

particular year of the Control Period, an inflation factor with 30% weightage to the

average yearly inflation derived based on the monthly Wholesale Price Index of the

past five financial years (including the year of Truing-up) and 70% weightage to

the average yearly inflation derived based on the monthly Consumer Price Index

for Industrial Workers (all-India) of the past five financial years (including the year

of Truing-up), as reduced by an efficiency factor of 1% or as may be stipulated by

the Commission from time to time, shall be applied to arrive at the permissible

Operation and Maintenance Expenses for that year


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The Commission has therefore, considered the O&M expenses approved in the Truing-up

for FY 2016-17 as base O&M expenses for arriving at normative O&M expenses for FY

2017-18 and correspondingly, for FY 2018-19. As specified in the above Regulations, the

Commission has computed the inflation factor considering 30% weightage of average

yearly inflation derived based on the monthly WPI of the past five years and 70% weightage

to the average yearly inflation derived based on the monthly Consumer Price Index (CPI)

for Industrial Workers of the past five financial years.

The Commission is of the view that since. the escalation factor originally considered in the

MYT Order was based on WPI of 2004-05 series, the escalation factor to be applied at the

time of truing up should also be based on WPI of 2004-05 series. However, from FY 2017-

18, WPI based on 2004-05 series is no longer published and they have been replaced by

WPI based on 2011-12 series. Hence, the Commission has modified the WPI based on

2011-12 series for FY 2017-18 and FY 2018-19 appropriately to reflect WPI based on 2004-

05 series so as to maintain consistency for comparison of approved numbers vis-à-vis truing

up.

As regards AEML-D’s request to not consider the Efficiency Factor of 1% while

considering the escalation factor to arrive at normative O&M expenses for FY 2018-19, the

Commission is of the view that Efficiency Factor has been specified in the MYT

Regulations, and was also considered for escalating the O&M expenses in the MYT and

MTR Orders. Further, applying the same rationale as adopted above, the Commission has

retained the approach adopted in the MYT and MTR Orders, and has reduced the escalation

factor for FY 2017-18 and FY 2018-19 by the Efficiency Factor of 1%. For the next MYT

Control Period, the Commission has specified certain qualifying criteria for non-

consideration of the Efficiency Factor, as elaborated in a subsequent Chapter of this Order.

The inflation factor worked out for FY 2017-18 and FY 2018-19 is stated in the Table

below:

Table 0-56: Inflation Factor approved for FY 2017-18

Year WPI WPI

Inflation CPI

CPI

Inflation

FY 2012-13 167.62 215.17

FY 2013-14 177.64 5.98% 236.00 9.68%

FY 2014-15 181.19 2.00% 250.83 6.29%

FY 2015-16 176.68 -2.49% 265.00 5.65%

FY 2016-17 183.20 3.69% 275.92 4.12%

FY 2017-18 188.55 2.92% 284.42 3.0%

Average from FY 2013-

14 to FY 2017-18 2.42% 5.76%


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Year WPI WPI

Inflation CPI

CPI

Inflation

Weight 30% 70%





Table 0-57: Inflation Factor approved for FY 2018-19

Year WPI WPI

Inflation CPI

CPI

Inflation

FY 2013-14 177.64 236.00

FY 2014-15 181.19 2.00% 250.83 6.29%

FY 2015-16 176.68 -2.49% 265.00 5.65%

FY 2016-17 183.20 3.69% 275.92 4.12%

FY 2017-18 188.55 2.92% 284.42 3.08%

FY 2018-19 196.62 4.28% 299.92 5.45%

Average from FY

2014-15 to FY 2018-19 2.08% 4.92%

Weight 30% 70%





The Commission has escalated the normative O&M expenses approved in the truing up for

FY 2016-17 with the escalation rate arrived in the above Table to compute normative O&M

expenses for FY 2017-18 and correspondingly for FY 2018-19.

As regards the other impacts considered by AEML-D as uncontrollable, the Commission is

of the view as under:

Impact of GST: The Commission is of the view that the change in Tax regime from Service

Tax to GST is merely change in name. The taxes levied under Service Tax are of same

nature of the taxes levied under GST and therefore, there is no New tax that is being levied

on account of GST. Further, O&M expenses have been linked to escalation index arrived

based on WPI and CPI published by the Govt. of India. Both WPI and CPI include the

impact of all taxes and duties applicable at that point of time. Therefore, as escalation factor

arrived as above already includes impact of all taxes, no separate impact on O&M expenses

on account of GST needs to be allowed. Therefore, the Commission does not consider the

contentions of AEML-D to separately allow impact of GST as an uncontrollable

expenditure under ‘Change in Law’.


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Access Charges: As submitted by AEML-D, MMRDA has levied Access Charges at the

rate of Rs. 100 per running meter for laying cables in MMRDA area. The Commission had

directed AEML-D to include the impact at the time of Truing-up. Accordingly, AEML-D

has submitted the actual amounts paid as Access Charges during FY 2017-18 and FY 2018-

19. The Commission is of the view that the Access Charges are uncontrollable in nature

and a new expense head that is not included in the base O&M expenses. The Commission

has therefore, considered the Access Charges actually paid by AEML-D during FY 2017-

18 and FY 2018-19 as uncontrollable expenses to be allowed separately in O&M expenses.

Way Leave Charges: The Commission has considered the actual Way Leave charges paid

by AEML-D to Western Railway during FY 2018-19 as uncontrollable expenses to be

allowed separately in O&M expenses

The Commission has verified the actual O&M expenses submitted by AEML-D for FY

2017-18 and FY 2018-19 in line with the audited accounts for the respective year and

reconciliation statement of regulated businesses submitted by AEML-D. The Commission

has undertaken prudence check of the actual O&M expenses claimed by AEML-D and

disallowed certain O&M expenses in the truing up for FY 2018-19, as discussed below:

The Commission observed that there was significant increase in some heads of actual O&M

expenses claimed by AEML-D in FY 2017-18 and FY 2018-19, as compared to actuals of

FY 2016-17. The Commission sought justification on the following heads of O&M

expenses, where significant increase was observed:

1. Other Allowances, which have increased from Rs. 92.00 Crore in FY 2016-17 to

Rs. 144.43 Crore in FY 2017-18;

2. Gratuity Payments in FY 2018-19;

3. Professional and Consultancy Fees in FY 2018-19.

AEML-D provided the following reasons for increase in the above expenses:

Other Allowances for FY 2017-18: AEML-D submitted the break-up of expenses but was

not able to justify its claim. The components under Other Allowances are LTA Payments,

Overtime Payments, PLI Payment, Retention allowance, Special Allowances, Shift

Allowances, part of Corporate Allocation, and reversal of old provisions. The Commission

again asked AEML-D for justification, to which AEML-D replied that it has approached

RInfra to seek reasons for the same however, RInfra has not responded till date. AEML-D

submitted that the Commission may take an appropriate call in this matter.


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The Commission is of the view that despite repeated queries, AEML-D has not been able

to justify the steep increase in Other Allowances for FY 2017-18. Therefore, the

Commission has allowed Other Allowances for FY 2017-18 after considering normative

escalation of 3.76%, as arrived in this Order, on actual expenses of FY 2016-17. The

following Table shows the Other allowances approved for FY 2017-18:

Table 0-58: Other Allowances approved for FY 2017-18

Particulars FY 2016-17 CAGR FY 2017-18

Other Allowances for Wires 59.07

3.76%

61.29

Other Allowances for Supply 32.93 34.17

Total Other Allowances 92.00 95.46

Gratuity Payments in FY 2018-19: Terminal Benefits have increased from Rs. 64.23

Crore in FY 2017-18 to Rs. 109.52 Crore in FY 2018-19. Similarly, Gratuity Payments

have increased from Rs. 13.37 Crore in FY 2017-18 to Rs. 59.61 Crore in FY 2018-19.

AEML-D submitted that Gratuity is considered based on inputs from the Registered

Actuarial Valuer at the end of the year for the employees who are on the payroll as on the

Balance Sheet date. The Commission has considered the submissions made by AEML-D

and accordingly approved Rs. 63.80 Crore for FY 2018-19.

Professional and Consultancy Fees in FY 2018-19: Professional and Consultancy Fees

have increased from Rs. 18.42 Crore in FY 2017-18 to Rs. 111.90 Crore in FY 2018-19. In

response to the Commission’s query, AEML-D submitted that the major component in

professional and consultancy fees has been the Corporate Allocation booked in FY 2018-

19 under this head as per the recommendation of its Auditor. On further scrutinizing the

submissions of AEML-D, it is observed that the Corporate Allocation expenses have

increased significantly in FY 2018-19 as compared to the expenses booked in FY 2017-18.

The following Table shows the amount of expenses incurred as Corporate Allocation

Expenses in FY 2017-18 and FY 2018-19, booked under various Business segments based

on the revenue earned from those segments:

Table 0-59: Corporate Expense Allocation for FY 2017-18 and FY 2018-19 of AEML

Particulars FY 2017-18

FY 2018-19 (Pre-AEML)

FY 2018-19 (Post

AEML)

FY 2018-19 (Other

Allocation)

FY 2018-19 (Total)

Generation Business 15.00 3.58 11.11 4.56 19.25

Transmission Business 2.98 0.73 2.26 0.93 3.92

Distribution Business 70.09 18.84 58.46 23.99 101.29

Total Corporate Expenses 88.07 23.15 71.83 29.47 124.46


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The expenses covered under ‘Other Allocation’ in above Table are Services availed from

ATL Master Data migration, corporate communication, HR, IT, and Administration

Services, procurement, support and MIS, etc., which are also Corporate Expenses only, and

have hence, been considered along with Corporate Allocation, for the purpose of analysis.

As seen from the above Table, total Corporate Expenses of AEML have increased from Rs.

88.07 Crore in FY 2017-18 to Rs. 124.46 Crore in FY 2018-19, i.e., an increase of 41.31%.

The Corporate Expenses that have been allotted to AEML-D have increased from 7% of

the total O&M expenses to 10% of the total O&M expenses in FY 2018-19.

The Distribution Business of RInfra was taken over by AEML in FY 2018-19. As seen from

the above Table, the Corporate Expense in Pre-AEML period (1st April 2018 to 28th August

2018) is not as high as the Corporate Expenses in Post-AEML period (29th August 2018 to

31st March 2019). AEML-D has provided auditor certificate for authentication of these

expenses in pre and post AEML-D period and also provided the expenses, which are coming

under the Corporate Allocation.

The Commission is of the view that Corporate expenses allowed to Regulated Entities

cannot be exorbitantly high even though the same is certified by the Statutory Auditor.

There needs to be a cap on the expenses which are allowed under Corporate Allocation.

The Commission is of the view that taking over of Business by AEML from RInfra should

not result in increase in Corporate Expenses and Corporate Allocation for the Regulated

entities. Moreover, RInfra and AEML, while seeking the Commission’s approval for the

transfer of assets and licence from RInfra to AEML in Case No. 139 of 2017, confirmed

that there would not be any tariff impact on the consumers on account of the Transaction.

The relevant extracts of the Commission’s Order in Case No. 139 of 2017 are as follows.

“78 RInfra and ATL have confirmed that the transaction shall not have any adverse

impact on tariff payable by the consumers, as the tariff shall continue to be

determined on the basis of regulated books of accounts.”

The Commission also confirmed that there would not be any adverse impact of the

Transaction on the consumers. The relevant extracts are as follows.

“79 The Commission confirms that the transaction shall not have any adverse

impact on tariff payable by the consumers, as the tariff shall continue to be

determined on the basis of regulated books of accounts.

…


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80 The Commission is of the view that the Petitioners’ proposals for assignment of

licence and transfer of assets can be approved only if it is ensured that the same

shall not have any adverse impact on the tariff payable by the consumers. Hence,

the Commission directs that REGSL/ATL shall not claim any amount from the

consumers on account of the proposed transaction, including inter-alia, any

interest/penalty payable by REGSL/ATL to RInfra as per the terms and conditions

of the Scheme of Arrangement and the SPA. The Commission further directs that

the approval to RInfra to assign the Transmission Licence to REGSL and transfer

transmission assets to REGSL, and sale of 100% shareholding in REGSL to ATL, is

conditional and subject to the above restriction….”(emphasis added)

However, as seen from the above submissions of AEML-D, the takeover of Distribution

Business from RInfra to AEML-D has increased the Corporate Allocation expenses in FY

2018-19 and thereby the cost proposed to be passed on to the consumers. Thus, the

Corporate expenses booked/claimed in FY 2018-19 is against the intent of the approval

given for the transaction in Case No. 139 of 2017.

The Commission has therefore, considered the Corporate Expenses of FY 2017-18 and

escalated the same by the inflation rate considered for escalation of normative O&M

expenses in FY 2018-19, i.e., 3.07% and approved Corporate expenses for FY 2018-19.

The Commission has considered the corporate expenses allocation for AEML-D in

proportion to the expenses submitted in the data gaps reply. The following Table shows the

Corporate Expenses allocation considered for AEML-D:

Table 0-60: Corporate Expense Allocation approved by the Commission for FY 2018-19

Particulars FY 2017-18 Escalation Rate FY 2018-19

Generation Business 15.00

3.07%

15.46

Transmission Business 2.98 3.07

Distribution Business 70.09 72.24

Total Corporate Expenses 88.07 90.77

Based on the above discussion, the following Table shows the amount of expenses that have

been disallowed in O&M expenses for FY 2017-18 and FY 2018-19:

Table 0-61: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for AEML-D (Rs.

Crore)


Other Allowances

Claimed 144.43 -

Approved 95.46 -

Corporate Allocation under Professional and Consultancy fees

Claimed - 101.29


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Approved - 72.24

Disallowed in O&M expenses 48.97 29.05

The Commission has disallowed the following amounts under O&M expenses for Wires

and Supply Business:

Table 0-62: O&M expenses Disallowed in FY 2017-18 and FY 2018-19 for Wires & Supply

(Rs. Crore)

Particulars Other Allowances in FY 2017-18 Corporate Allocation for FY

2018-19

Wires Supply Total Wires Supply Total

Claimed 92.68 51.75 144.43 62.29 39.00 101.29

Approved 61.29 34.17 95.46 44.43 27.81 72.24

Disallowance 31.39 17.58 48.97 17.86 11.19 29.05

As regards the other expenses mentioned by AEML-D in its Petition, which may arise if

rulings on pending litigations go against AEML-D, the Commission shall take a view at the

appropriate time.

The O&M Expenses approved by the Commission after true up for FY 2017-18 and FY

2018-19 are summarised in the Table below:

Table 0-63: O&M Expenses allowed by the Commission after truing up for FY 2017-

18 and FY 2018-19 for Wires Business (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

Submitted

by

AEML-D

Approved

after truing

up

Submitted

by

AEML-D

Approved

after

truing up

Approved O&M Expenses for

previous Year 771.78 771.78 810.80 800.80

Escalation Rate considered 3.76% 3.76% 4.07% 3.07%

Normative O&M Expenses 800.80 800.80 843.80 825.38


Impact on taxes 6.32 - 8.04 -


Impact on Schedule of Charges 0.56 0.56 0.81 0.81

Access charges paid to MMRDA 0.10 0.10 2.36 2.36

Total Allowable Normative O&M

Expenses 784.22 801.46 841.22 828.55

Actual O&M Expenses 791.21 791.21 852.43 852.43

Actual Expenses Disallowed 31.39 17.86

Actual Prudent O&M Expenses 759.82 834.57


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As the actual O&M Expenses are higher/lower than the allowable O&M expenses, and

since O&M expenses are controllable in nature, sharing of the Efficiency Losses/Gains has

been done in accordance with the MYT Regulations 2015, as elaborated subsequently.

Table 0-64: O&M Expenses allowed by the Commission after truing up for FY 2017-

18 and FY 2018-19 for Supply Business (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

Submitted

by

AEML-D

Approved

after truing

up

Submitted

by

AEML-D

Approved

after

truing up

Approved O&M Expenses for

previous Year 380.74 380.74 399.99 395.06

Escalation Rate considered 3.76% 3.76% 4.07% 3.07%

Normative O&M Expenses 395.06 395.06 416.27 407.18


Impact on taxes 1.50 - 2.10 -


Impact on Schedule of Charges 0.30 0.30 - -

Access charges paid to MMRDA - - - -

Total Allowable Normative O&M

Expenses 381.75 395.36 416.93 407.18

Actual O&M Expenses 383.55 383.55 419.03 419.03

Actual Expenses Disallowed 17.58 11.19

Actual Prudent O&M Expenses 365.97 407.84

As the actual O&M Expenses are lower/higher than the allowable O&M expenses, and

since O&M expenses are controllable in nature, sharing of the Efficiency Gains/Losses has

been done in accordance with the MYT Regulations 2015, as elaborated subsequently.

1.39 CAPITAL EXPENDITURE AND CAPITALISATION


AEML-D stated it has carried out capital expenditure against the schemes that were

approved in-principle by the Commission, along with minor works for which DPR

submission is not required as per the Capital Expenditure Guidelines of the Commission.

The actual Capital Expenditure and Capitalisation for the Wires Business and Supply

Business as submitted by AEML-D for FY 2017-18 and FY 2018-19 is shown in the Table

below:


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Table 0-65: Capital Expenditure and Capitalisation for Wires Business and Supply

Business as submitted by AEML-D for FY 2017-18 (Rs. Crore)

Particulars MTR Order AEML-D Petition


Capital

Expenditure

DPR

324.40 19.98 344.38

Non DPR 26.97 - 26.97

Total 351.37 19.98 371.35

Capitalisation DPR

319.45 19.98 339.43

Non DPR 19.09 - 19.09

Total 319.63 19.52 339.15 338.53 19.98 358.51

Table 0-66: Capital Expenditure and Capitalisation for Wires Business and Supply

Business as submitted by AEML-D for FY 2018-19 (Rs. Crore)



Capital

Expenditure

DPR

364.58 22.68 387.26

Non DPR 38.36 0 38.26

Total 402.94 22.68 425.62

Capitalisation DPR

375.94 22.68 398.62

Non DPR 41.39 0 41.39

Total 255.46 38.63 294.09 417.33 22.68 440.01

AEML-D submitted that the above capitalisation includes Interest During Construction

(IDC), for which interest rates for FY 2017-18 and FY 2018-19, and for each intervening

year till FY 2017-18 and FY 2018-19 till the jobs remained in progress, have been

considered as approved by the Commission. The IDC has been calculated for assets

capitalized in Wires Business only and not in Supply Business. Further, IDC has not been

calculated on assets, which were started and completed in FY 2017-18 and FY 2018-19,

itself.

Brief description of Works carried out in FY 2017-18 and FY 2018-19

a. 33/11kV Receiving Station

b. 11kV Mains Network Strengthening

c. Low Tension Mains

d. Low Tension Services

e. Street Lights

f. Metering

g. Instruments (Non-DPR)

h. Information Technology (IT) Infrastructure (Non-DPR)


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i. Others (Non-DPR)

j. Civil (Non-DPR)

k. R&D, Safety and DSM (Non-DPR)

AEML-D submitted justification for the following works for which capitalization was

restricted by the Commission in MTR Order in Case No. 200 of 2017:

a. LT Mains Improvement DPR for FY 2016-17

b. Services New Supply DPR for FY 2016-17

c. Services Improvement DPR for FY 2016-17

d. Street Light New Supply DPR for FY 2016-17

e. Shifting of Airport Receiving station DPR for FY 2017-18

f. LT Mains New Supply DPR FY 2017-18

g. LT Mains Improvement DPR for FY 2017-18

h. Services Improvement DPR for FY 2017-18

i. Metering DPR FY 2018-19

AEML-D submitted justification for increase in capitalization of Services New Supply DPR

for FY 2016-17. The following were the reasons for escalation in capitalization as compared

to approved by the Commission:

a. Lower Quantity consideration in approved DPR

b. Increase in RI charges

c. Increase in Labour Charges

d. Quantity variation

e. Associated cost of extending services

AEML-D submitted justification for disallowance in capitalization of Services

Improvement DPR for FY 2016-17 and FY 2017-18. The following were the reasons for

escalation in capitalization as compared to approved by the Commission:

a. Lower Quantity consideration in approved DPR

b. Increase in RI charges and GST on RI charges

c. Reduction in unit rates of materials

d. Increase in Labour Charges


The Commission has undertaken scheme-wise prudence check, and has accordingly

approved the capitalisation in the truing-up, based on the in-principle approval for the

schemes undertaken by AEML-D. It has approved capitalisation only for those schemes

that have been completed and put to use, based on the addition to GFA reported in the

Accounts, and the half-yearly Reports of progress and status of projects, and the Cost-


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Benefit-Analysis reports submitted by AEML-D. The Commission has primarily analysed

the Schemes, which have incurred cost overrun with respect to the approved DPR cost.

The Scheme-wise analysis undertaken by the Commission is as follows:

LT Mains Improvement DPR FY 2016-17:

The approved DPR cost is Rs. 27.35 Cr. AEML-D has claimed cumulative capitalization

up to FY 2018-19 of Rs. 30.63 Cr. The Commission in the MTR Order in Case No 200 of

2017 had approved capitalisation of Rs 23.27 Cr for FY 2016-17 and provisionally

approved capitalization of Rs. 4.08 Cr in FY 2017-18 as against the actual capitalization of

Rs. 6.44 Cr, thereby limiting the capitalisation to the approved Scheme Cost of Rs 27.35

Cr. The Commission in the Order has stated that final approval of the capitalisation may be

granted after third-party verification and directed AEML-D to inform the Commission after

completion of the scheme.

AEML-D in the present MYT Petition submitted that LT Mains (16-17) Improvement

scheme is completed and the same has been intimated to the Commission vide letter dated

27 August 2019. AEML-D stated that the Commission had allowed the entire capitalization

on this DPR scheme during truing up of FY 2016-17, pending third-party verification after

completion of the scheme. AEML-D requested to allow the entire capitalization of Rs. 6.44

Crore in FY 2017-18 during truing up of FY 2017-18. AEML-D further stated that increase

in the actual capital expenditure is due to the higher Road Reinstatement (RI) charges

actually paid to MCGM and increase in labour charges due to wage Revision. AEML-D

has submitted the bifurcation for the cost over run of the scheme component wise vis-a vis

to the estimated as follows:

LT Mains Improvement DPR for FY 16-17 (Closed)

Particulars Material RI Labour Expenses Total

DPR Estimates 12.15 8.24 11.12 7.15 38.66

31% 21% 29% 18% 100%

Actual Capital

Expenditure till 31st

Dec 19

9.52 9.44 7.89 3.84 30.69

31% 24% 20% 10% 79%

The Commission notes that while approving DPR, the Commission has not given separate

approval for each item such as RI, Labour, taxes etc but it has approved consolidated unit

rate. Therefore, the Commission has carried out the analysis of approved DPR amount

applying the percentile as per AEML-D vis-a vis actual capitalisation and tabularised as

follows:



Approved 8.595512 5.829384 7.866839 5.058264 27.35


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31% 21% 29% 18% 100%

Actual Capital

Expenditure till

31st Dec 19

9.52 9.44 7.89 3.84 30.69

31% 24% 20% 10% 79%

The Commission has also observed there is increase in expenses due to increase in material

as well as RI charges. The Commission also verified the RI charges paid by AEML-D.

The Commission notes that AEML-D had incurred capitalisation of Rs 23.27 Cr up to FY

2016-17, which was within the limit of the approved cost and therefore, the Commission

had approved capitalisation of Rs 23.27 Cr at the time of true up of FY 2016-17. During

provisional true up of FY 2017-18, the Commission in the MTR Order has specified that

approval to the excess capitalisation in the Scheme would be subject to the third-party

verification. As AEML-D has now intimated that the Scheme has been completed, the

Commission may carry out the third party verification of the Scheme.

In light of above, the Commission is approving the actual capitalisation claimed by AEML-

D in FY 2017-18 of Rs 6.44 Cr and Rs 0.91 Cr in FY 2018-19 due to higher expenditure

for RI charges subject to the third-party verification and final capitalization will be

approved based on the third-party verification.

FY 2017-18: - AEML-D claimed capitalization of Rs. 6.44 Cr. The Commission is allowing

the capitalization of Rs. 6.44 Cr. subject to third-party verification.

FY 2018-19: - AEML-D claimed capitalization of Rs. 0.91 Cr. The Commission is allowing

the capitalization of Rs. 0.91 Cr subject to third party verification.

Services New supply DPR FY 2016-17



2017 had approved capitalisation of Rs.41.93 Cr for FY 2016-17 and provisionally

approved capitalization of Rs. 3.20 Cr. in FY 2017-18 as against the actual capitalization

of Rs. 23.20 Cr., thereby limiting the capitalisation to the approved Scheme Cost of Rs

45.13 Cr.

AEML-D in its justification stated that increase in the actual capital expenditure is due to

the higher RI charges actually paid to MCGM and increase in labour charges due to wage

Revision.


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AEML-D has raised this issue in Appeal No 106 of 2019 filed before APTEL against the

Commission’s MTR Order in Case No 200 of 2017. As the matter is pending in APTEL,

the Commission will revisit the issue, if required, depending on the outcome of the Appeal.

FY 2017-18: - AEML-D claimed capitalization of Rs. 23.20 Cr. The Commission is

allowing the capitalization of Rs. 3.20 Cr. thereby limiting the capitalisation to the approved

Scheme Cost. The Commission has considered IDC of Rs 0.09 Cr in proportion to the

approved cost as against IDC of Rs 0.67 Cr. Claimed.

FY 2018-19: - AEML-D claimed capitalization of Rs. 4.52 Cr. and IDC of Rs 0.26 Cr. The

Commission disallows this capitalization along with IDC claimed, as the claimed cost is in

excess of DPR approved cost.

Services Improvement DPR for FY 2016-17

The approved DPR cost is Rs. 0.97 Cr. AEML-D has claimed cumulative capitalization of

Rs. 1.61 Cr. up to FY 2018-19. The Commission in the MTR Order in Case No 200 of 2017

had approved capitalisation of Rs.0.97 Cr for FY 16-17 and disapproved the provisional

capitalization of Rs. 0.28 Cr. for FY 17-18 and Rs. 0.45 Cr for FY 18-19, thereby limited

the capitalisation to the approved Scheme Cost of Rs 0.97 Cr.



Revision.



the capital expenditure over and above approved DPR amount can not be granted by the

Commission.


Commission disallows this capitalization along with IDC claimed.

FY 2018-19: - AEML-D claimed capitalization of Rs. 0.3 Cr. The Commission disallows

the capitalization claimed by AEML-D.

LT Mains New Supply DPR FY 2017-18

The approved DPR cost is Rs. 9.38 Cr. AEML-D has claimed cumulative capitalization of

Rs 10.42 Crore up to FY 2019-20. AEML-D, in its justification for cost overrun, has stated

that actual capex in LT Mains New Supply (2017-18) DPR till December 2019 has reached


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about Rs. 10.38 Cr as compared to 9.38 Cr in-principle approval. The approval for LT cable

is of 29 km but the actual cable utilised till December 2019 is about 36 km under the DPR.

Furthermore, the RI amount actually paid to various authorities till December, 2019 is about

Rs. 5.21 Cr against approved RI cost of about Rs. 1.70 Cr. The capex incurred in order to

release new supply is part of AEML-D’s obligation as a distribution licensee and the over

expenditure (compared to the in-principle approval) is primarily due to more cable laid to

release new supply applications and higher payment of RI to various authorities.

AEML-D has submitted the bifurcation for the cost over-run of the scheme component wise

vis-a vis to the estimated as follows:

LT Mains New Supply DPR for FY 17-18 (WIP)


DPR Estimates (As

submitted by AEML-D)

6.81 4.41 5.01 3.61 19.84

34% 22% 25% 18% 100%

Actual Capital Expenditure

till 31st Dec 19

2.85 5.21 1.42 0.90 10.38

27% 50% 14% 9% 100%




applying the percentile as per AEML-D vis-a vis actual capitalisation and tabulated as

follows:

LT Mains new Supply DPR for FY 17-18 (WIP)


Approved 3.1892 2.0636 2.345 1.6884 9.38

34% 22% 25% 18% 100%

Actual Capital

Expenditure till

31st Dec 19

2.85 5.21 1.42 0.90 10.38

27% 50% 14% 9% 100%

As seen from the table above, actual RI component has increased in comparison with the

estimated RI Component. The Commission also verified the RI charges paid by AEML-D

The Commission notes that while approving the subject DPR on for “LT mains network

Improvement Scheme and New Supply Scheme for FY 16-17 and FY 17-18” through its in

principal approval letter dated 6 March, 2018, the Commission has stated that it may

conduct independent third party asset verification before final approval of capitalization

and its recovery cost through ARR. AEML-D submitted that the scheme is closing in FY

19-20.


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In light of the above, the Commission is approving the actual capitalisation claimed by

AEML-D due to higher expenditure for RI charges subject to the third-party verification

and final capitalisation will be approved based on the third party verification. AEML-D is

directed to inform the Commission immediately after completion of the scheme.

Accordingly, the year wise approval of the scheme is as follows:

FY 2017-18: - AEML-D claimed capitalization of Rs. 6.76 Cr. with IDC of Rs 0.67 Cr. The

Commission is allowing the capitalization of Rs. 6.76 Cr along with IDC of Rs 0.67 Cr

subject to third party verification.

FY 2018-19: - AEML-D claimed capitalization of Rs. 3.20 Cr. and IDC of Rs 0.16 Cr.

The Commission is allowing the capitalization of Rs. 3.20 Cr. and IDC of Rs 0.16 Cr.

subject to third party verification.

LT Mains Improvement DPR FY 2017-18


of Rs. 15.92 Cr up to FY 2019-20. The Commission in the MTR Order in Case No 200 of

2017 had approved capitalisation of Rs 13.94 Cr against Rs 14.09 Cr for FY 2017-18 and

disapproved the claimed capitalization of Rs. 1.32 Crore in FY 2018-19 thereby limiting

the capitalisation to the approved Scheme Cost of Rs 13.94 Cr. The Commission in the

Order has stated that final approval of the capitalisation may be after third-party verification

and directed AEML-D to inform the Commission after completion of the scheme.

AEML-D, in its justification for cost overrun, has stated that actual capex in LT Mains

Improvement (2017-18) DPR till December 2019 has reached about Rs. 15.68 Cr as

compared to 13.94 Cr in-principle approved by the Commission. The approval included

about 98 km of LT cable but actual cable utilisation till December 2019 is about 99 km

under the DPR. Furthermore, the RI amount actually paid to various authorities till

December,2019 is about Rs. 2.99 Cr against approved RI cost of about Rs. 1.60 Cr. Also,

the increase in Labour charges post wage revision in September 2016 resulted in increased

overall labour service expenses under the DPR - about Rs. 4.92 Cr till Dec-19 against in-

principle approved Rs. 4.21 Cr.

The higher expenditure (compared to the in-principle approval) is primarily due to higher

payment of RI to various authorities and increased labour expenses under the DPR.


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AEML-D has submitted the bifurcation for the cost over-run of the scheme component

wise vis-a vis to the estimated as follows:

LT Mains Improvement DPR for FY 17-18


DPR Estimates 15.61 5.88 9.99 6.69 38.17

41% 15% 26% 18% 100%

Actual Capital


Dec 19

5.66 2.99 4.92 2.11 15.68

36% 19% 31% 13% 100%




applying the percentile as per AEML-D vis-a vis actual capitalisation and tabulated as

follows:

LT Mains Improvement DPR for FY 17-18 (WIP)


Approved 5.7154 2.091 3.6244 2.5092 13.94

41% 15% 26% 18% 100%

Actual Capital


Dec 19

5.66 2.99 4.92 2.11 15.68

36% 19% 31% 13% 100%

The Commission notes that during provisional true up of FY 17-18, the Commission in the

MTR Order has specified that approval for the excess capitalisation in the Scheme would

be subject to the third-party verification after closure of the scheme. AEML-D submitted

that the scheme is closing in FY 19-20.

In light of the above, the Commission is approving the actual capitalisation claimed by

AEML-D due to higher expenditure for RI and labour charges subject to the third-party

verification and final capitalisation will be approved based on the third party verification.

AEML-D is directed to inform the Commission immediately after completion of the

scheme.

FY 2017-18: - AEML-D claimed capitalization of Rs. 14.09 Cr. The Commission is

allowing the capitalization of Rs. 14.09 Cr. subject to third party verification.

FY 2018-19: - AEML-D claimed capitalization of Rs. 1.45 Cr. along with IDC of Rs 0.08

Cr. The Commission is allowing the capitalization subject to third party verification.


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Services New Supply DPR FY 2017-18

The approved DPR cost is. Rs. 42.70 Cr. AEML-D has claimed cumulative capitalization


2017 had approved capitalisation of Rs.31.22 Cr for FY 2017-18 and provisionally

approved capitalization of Rs. 11.48 Cr. for FY 2018-19 as against the actual capitalization

of Rs. 17.07 Cr., thereby limiting the capitalisation to the approved Scheme Cost of Rs

42.70 Cr.



Revision.




FY 2017-18: - AEML-D claimed capitalization of Rs. 31.22 Cr. The Commission considers

the capitalization of Rs. 31.22 Cr.


Commission considers capitalisation of Rs 11.48 Cr, thereby, limiting the capitalisation to

the approved Scheme Cost and disallowing IDC.

Services Improvement DPR FY 2017-18

The approved DPR cost is. Rs. 0.86 Cr. AEML-D has claimed cumulative capitalization of

Rs. 2.27 Cr up to FY 2018-19. The Commission in the MTR Order in Case No 200 of 2017

had approved provisional capitalization of Rs.0.86 Cr for FY 2017-18 against claim of Rs

1.49 Cr and disapproved capitalization of Rs. 0.86 Cr. for FY 2018-19, thereby limited the

capitalization to the approved Scheme Cost of Rs 0.86 Cr.



Revision.





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capitalisation of Rs 0.86 Cr, limiting the capitalisation to the approved Scheme Cost.

FY 2018-19: - AEML-D claimed capitalization of Rs. (0.32) Cr. and IDC of Rs 0.02 Cr

The Commission disallows this capitalization claimed along with IDC.

Street Light New Supply DPR FY 2016-17

The approved DPR cost is. Rs. 8.27 Cr. AEML-D has claimed cumulative capitalization of

Rs. 9.56 Cr up to FY 2019-20. The Commission in the MTR Order in Case No 200 of 2017

had approved additional capitalization of 1 Cr for FY 2018-19.

AEML-D submitted that the execution of streetlight schemes is an obligation on part of

AEML-D. The requirement for the same is received from MCGM, MBMC, and MMRDA

(State Government bodies). The requirement is thus “mandatory” in nature. AEML-D is

carrying out the work in order to avoid inconvenience to motorists and pedestrians. AEML-

D stated that as per the Work Orders issued by MCGM and MBMC, new streetlights are

commissioned. Conversion of HPMV lamps to HPSV lamps is also done. Difference in the

approved vis-à-vis actual quantity is as follows:

Sr. No. Description DPR Submission Actual

1. Installation of Street Light Poles 2190 2754 nos.

2. Installation of Luminaires 1830 1860 nos.

3. Laying of LT cables 58 77 km

The Commission considering the nature of obligation approves the actual cost incurred

against the Scheme as follows:


this capitalisation.

FY 2018-19: - AEML-D claimed capitalization of Rs. 0.47 Cr. The Commission approves

the capitalisation.

Shifting of Airport Sub-station

The approved DPR cost is. Rs. 18.44 Cr. AEML-D has claimed cumulative capitalization

of Rs. 22.48 Cr up to FY 2019-20 and submitted the scheme closure report. The

Commission in the MTR Order in Case No 200 of 2017 had approved additional

capitalization of 3.7 Cr. capitalization for FY 2018-19 due to variation in civil cost after


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verification of the work orders. Therefore, the Commission allows the actual expenditure

as follows: -

FY 2017-18: - AEML-D claimed capitalization of Rs. 20.10 and IDC of Rs 0.01 Cr as per

the approved DPR. The Commission therefore, approves this capitalization.

FY 2018-19: - AEML-D claimed capitalization of Rs. 0.87 Cr. and IDC of Rs 1.39 as per

approved DPR. The Commission therefore, approves this capitalization.

For the few other schemes, there is no cost overrun. However, as stated by the Commission,

third party verification may be carried out after the scheme completion. The Schemes

covered under third party verification for the Control Period are LT mains scheme, New

supply and Improvement, Services New Supply and Improvement, 11 kV network

strengthening schemes and New Supply and improvement. Pending third-party verification,

the capitalization is being allowed as claimed (which is below DPR approved cost) on

provisional basis for each year and final capitalization shall be approved after third-party

verification.

The capitalisation approved after truing up for FY 2017-18 and FY 2018-19 is shown in the

Tables below:

Table 0-67: Capitalisation approved by the Commission after truing up for FY 2017-

18 (Rs. Crore)

Particulars

FY 2017-18

MTR Order AEML-D Petition Approved after truing up

Wires Supply Total Wires Supply Total Wires Supply Total

Capitalisa

tion

DPR 299.64 19.99 319.63 319.45 19.98 339.43 297.96 19.98 317.94

Non

DPR 19.52 - 19.52 19.09 - 19.09 19.09 - 19.09

Total 319.16 19.99 339.15 338.53 19.98 358.51 317.05 19.98 337.03

Table 0-68: Capitalisation approved by the Commission after truing up for FY 2018-

19 (Rs. Crore)

Particulars

FY 2018-19

MTR Order AEML-D Petition Approved after truing up


Capitalisa

tion

DPR 375.94 22.68 398.62 356.24 22.68 378.92

Non

DPR 41.39 0 41.39 41.39 0 41.39

Total 255.46 38.63 294.09 417.33 22.68 440.01 397.63 22.68 420.31


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1.40 OPENING GROSS BLOCK FOR FY 2017-18


AEML-D, in its MYT Petition, had submitted the depreciation for FY 2014-15, which was

calculated by the SAP system. During the MYT proceedings, the Commission observed an

error in the depreciation calculation and directed AEML-D, vide its letter dated 16 May

2016, to recalculate the depreciation from FY 2012-13 onwards and submit the same.

AEML-D vide its letter dated 28 June 2016, accepted the error in the calculation and

submitted the revised calculation from FY 2012-13 onwards.

During the process of correcting the mistake related to depreciation, it was found that there

were errors in retirement of assets as well. Correcting these errors led to re-determination

of depreciation, interest on loans and RoE from FY 2012-13 onwards. However, the

Commission held that the true-up of earlier years cannot be reopened and, therefore, while

the depreciation claim of FY 2014-15 was allowed, the incremental interest, return,

depreciation of previous years, etc., was not permitted. AEML-D has raised this issue in the

Appeal before ATE (Appeal No. 12 of 2017) against the MYT Order dated 21 October 2016

and it is pending for decision.

During the proceedings on MTR Petition in Case No. 200 of 2017, AEML-D submitted that

the changes in the previous years on account of asset retirement also lead to the opening

balance of GFA as on 1 April 2015 being different from that approved by the Commission

in the MYT Order. AEML-D submitted that while the issue of whether incremental claims

of already trued-up years can be permitted or not is a subject matter of Appeal No. 12 of

2017 in ATE, the opening balance of asset base as on 1 April, 2015 ought to be corrected

to reflect the figures as per regulatory books of AEML-D. The Commission, however, did

not consider the request of AEML-D and continued with the opening balances as considered

by it in earlier Tariff Orders, stating that the issue is already a subject matter in Appeal No.

12 of 2017. AEML-D has again raised this issue in its Appeal before ATE against the MTR

Order in Case No. 200 of 2017 dated 12 September 2018. Depending on the outcome of

these proceedings, if there is any change required in the opening balances and capitalisation,

the incremental impact of the same shall be presented in subsequent Petition(s).

For the purpose of this Petition, AEML-D has, without prejudice to its contentions,

considered the opening GFA for FY 2017-18 as considered by the Commission in the MTR

Order as shown in the Table below:


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Table 0-69 : Opening GFA for Wires and Supply Business for FY 2017-18 as

submitted by AEML-D (Rs Crore)

Particulars MTR Order True-up Petition

Wires Business 4,916.06 5,274.46

Supply Business 507.08 505.96

TOTAL 5,423.14 5,780.42


The Commission has ruled in the previous MTR Order that it does not consider it advisable

to restate the GFA values when the matter is sub-judice. Therefore, the Commission has

considered the Opening Balance of GFA of AEML-D for FY 2017-18 equal to the Closing

Balance of GFA for FY 2016-17, as approved in the MTR Order at the time of Truing-up.

Table 0-70 : Opening GFA for Wires and Supply Business for FY 2017-18 as

approved by Commission (Rs Crore)

Particulars MTR Order True-up Petition Approved after

truing up Wire Business 4,916.06 5,274.46 4,916.06*

Supply Business 507.08 505.96 507.08

TOTAL 5,423.14 5,780.42 5,423.14

*Opening GFA considered after excluding Consumer Contribution as submitted by AEML-D

1.41 DEPRECIATION


AEML-D submitted that it has calculated the Depreciation on assets for FY 2017-18 and

FY 2018-19 in accordance with the rates specified in the MYT Regulations, 2015, for

depreciating the assets till 70% of the asset value and by considering the depreciation rates

as submitted in its letter dated 28 June 2016 after the asset is depreciated till 70% of the

asset value. The depreciation rates used after accumulated depreciation of an asset reaches

70% is as under:

Table 0-71 : Depreciation Rates for calculating Depreciation submitted by AEML-D

Sr.

No. Type of Asset

Depreciation

Rate till

70%

Useful Life

Year

Lapsed

till

70%

Remaining

Life After

70%

Depreciation

After 70%

1 Lease Hold Land 3.34% 90 21 69 0.29%

2 Building 3.34% 60 21 29 0.51%


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Sr.

No. Type of Asset

Depreciation

Rate till

70%

Useful Life

Year

Lapsed

till

70%

Remaining

Life After

70%

Depreciation

After 70%

3 Plant & Machinery 5.28% 25 14 11 1.46%

4 Distribution System 5.28% 35 14 21 0.77%

5 Vehicles 9.50% 10 8 2 7.00%

6 Furniture/Fixture 6.33% 14 12 2 7.02%

7 Office Equipment 6.33% 14 12 2 7.02%

8 Computer & Software 15.00% 6 5 1 15.00%

9 Elect. Fittings 6.33% 14 12 2 7.02%

10 Refrigerators &

Domestic Appliances 6.33% 14 12 2 7.02%

The effect of retirement of assets and withdrawal of corresponding accumulated

depreciation has been considered while computing depreciation in FY 2017-18 and FY

2018-19. The Depreciation calculation for Wires Business of AEML-D for FY 2017-18 and

FY 2018-19 is shown in the Tables below:

Table 0-72 : Depreciation for Wires Business for FY 2017-18 as submitted by

AEML-D (Rs. Crore)

Particulars MTR Order

True-up Petition

With

Consumer

Contribution

Consumer

Contribution

Without

Consumer

Contribution

Opening GFA 4,916.06 5,274.46 357.75 4,916.71

Addition 290.44 338.53 28.72 309.81

Retirement 21.00 21.44 1.48 19.96

Closing GFA 5,185.50 5,591.55 384.99 5,206.56

Depreciation 214.36 236.62 220.44

Depreciation (as %

average balance) 4.23% 4.36% 4.36%

Table 0-73 : Depreciation for Wires Business for FY 2018-19 as submitted by

AEML-D (Rs. Crore)


True-up Petition

With

Consumer

Contribution

Consumer

Contribution

Without

Consumer

Contribution

Opening GFA 5185.50 5,591.55 384.99 5,206.56

Addition 226.74 417.33 22.29 395.04

Retirement 13.52 0.92 12.60

Closing GFA 5,412.24 5,995.37 406.36 5,589.01

Depreciation 224.38 253.80 236.26


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True-up Petition

With

Consumer

Contribution

Consumer

Contribution

Without

Consumer

Contribution

Depreciation (as %

average balance) 4.23% 4.38% 4.38%

The Table below shows the depreciation for Supply Business of AEML-D for FY 2017-18

and FY 2018-19:

Table 0-74 : Depreciation for Supply Business for FY 2017-18 and FY 2018-19 as

submitted by AEML-D (Rs. Crore)


MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Opening GFA 507.08 505.96 512.87 507.14

Addition 19.99 19.98 38.63 22.68

Retirement 14.20 18.80 0.00 24.95

Closing GFA 512.87 507.14 551.50 504.87

Depreciation 21.20 23.40 22.12 25.59

Depreciation (as % average balance) 4.16% 4.62% 4.16% 5.06%


For computation of Depreciation for FY 2017-18 and FY 2018-19, the Commission has

considered the opening balance of GFA for Wires Business and Supply Business as

approved in the final truing-up of FY 2016-17 in the MTR Order. The Commission has

considered asset addition for FY 2017-18 and FY 2018-19 in line with the approved

capitalisation. As regards asset retirement, it has accepted the submission of AEML-D.

The Commission has considered the weighted average depreciation rate of 4.36% for Wires

Business and 4.62% for Supply Business for FY 2017-18 based on the actual depreciation

and the average GFA as per audited accounts of FY 2017-18. Similarly, the Commission

has considered the weighted average depreciation rate of 4.38% for Wires Business and

5.06% for Supply Business for FY 2018-19 based on the actual depreciation and the average

GFA as per audited accounts of FY 2018-19. Based on the average depreciation rate, the

Commission has worked out Depreciation for Wires Business and Supply Business for FY

2017-18 and FY 2018-19. The Commission has approved depreciation for Wires Business

and Supply Business of AEML-D after final truing up for FY 2017-18 and FY 2018-19, as

shown in the Tables below:


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truing up

Opening GFA 4,916.06 4,916.71 4,916.06

Addition 290.44 309.81 288.33*

Retirement 21.00 19.96 19.96

Closing GFA 5,185.50 5,206.56 5,184.43

Depreciation 214.36 220.44 219.95

Depreciation (as % of GFA) 4.23% 4.36% 4.36%

*After deducting Consumer Contribution during the year




truing up

Opening GFA 507.08 505.96 507.08

Addition 19.99 19.98 19.98

Retirement 14.20 18.80 18.80

Closing GFA 512.87 507.14 508.26

Depreciation 21.20 23.40 23.12

Depreciation (as % of

GFA) 4.16% 4.62% 4.62%




truing up

Opening GFA 5185.50 5,206.56 5,184.43

Addition 226.74 395.04 375.34*

Retirement 12.60 12.60

Closing GFA 5,412.24 5,589.01 5,547.17

Depreciation 224.38 236.26 235.07


*After deducting Consumer Contribution during the year




truing up

Opening GFA 512.87 507.14 508.26

Addition 38.63 22.68 22.68

Retirement 0 24.95 24.95

Closing GFA 551.50 504.87 505.99


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truing up



1.42 FINANCING PLAN AND INTEREST EXPENSES


FY 2017-18

AEML-D submitted that, till FY 2017-18, the ownership of Mumbai Distribution business

was with RInfra. No new borrowings were made for capital expenditure in the distribution

division of RInfra in FY 2017-18 and all capital expenditure was funded through internal

accruals. Therefore, AEML-D has considered 70% of capitalization (net of Consumer

Contribution during FY 2017-18) as normative debt for calculation of interest expenses.

The weighted average interest rate for FY 2017-18 based on the actual interest paid on the

term loan and NCDs of erstwhile RInfra-D was 10.51%, as shown in the Table below:

Table 0-79: Interest on Loans for FY 2017-18 as submitted by AEML-D (Rs. Crore)

Particulars / (Rs. Crore) Opening

FY 17-18

Closing

FY 17-18

Interest

Paid

Interest

Rate (%)

Term Loan - Central Bank of India 224.00 0.00 22.71 10.94%

NCDs:

1000 Cr (LIC, NACIL, Yes Bank)

Series 5 585.00 585.00 61.43 10.50%

Series 6 16.67 0.00 1.71 10.26%

Series 8,9 & 10 124.00 0.00 13.83 11.15%

500 Cr (IDBI)

Series 11A, 11C, 12A, 12D, 13B &

14 318.70 318.70 31.87 10.00%

Series 11B, 11D, 12B, 12C, & 13A 131.30 131.30 12.87 9.80%

Series 16 25.00 25.00 2.55 10.20%

Series 17 25.00 25.00 2.55 10.20%

250 Cr (Axis)

Series 18 200.00 200.00 23.00 11.50%

Series 19 50.00 50.00 5.12 10.24%

Total 1,699.67 1,335.00 177.64 10.51%

Accordingly, AEML-D has submitted the computation of interest expenses for FY 2017-

18 for Wires Business and Retail Supply Business as shown in the Table below:


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Wires Business

Opening Balance 1,517.85 1,517.85

Addition of new loans 203.31 216.87

Repayment 213.87 220.44

Reduction in loans due to retirement in loans - 3.78

Closing Balance 1,507.29 1,510.50

Interest Rate (%) 10.53% 10.51%

Interest on Loans 159.27 159.14

Supply Business

Opening Balance 93.54 93.54

Addition of new loans 13.62 13.62 Repayment 21.20 21.20

Reduction in loans due to retirement in loans - 0.53

Closing Balance 85.96 83.59

Interest Rate (%) 10.53% 10.51%


AEML-D submitted that some of the assets that were retired in FY 2017-18 were already

depreciated for more than 70% of their historical cost and therefore the corresponding debt

is considered as already repaid. However, there were some assets which were not

depreciated till 70% of their historical cost and therefore, the outstanding debt (70% of

historical cost less accumulated depreciation till retirement) has been reduced from the

outstanding debt for FY 2017-18.

FY 2018-19

In FY 2018-19, AEML took over Mumbai Generation, Transmission and Distribution

business of RInfra and, in the process, took over the liabilities pertaining to regulated

business as well, albeit, by replacing the existing loans with lower cost loans. Loans worth

Rs. 8500 Crore were drawn, in the process replacing the existing regulatory loans as well

as 70% of the opening CWIP (normative debt equivalent) as on 29 August, 2018.

For capital expenditure during the period from 01.04.2018 up to 28.08.2018, no actual

borrowings were made / allocated to distribution business and hence, the funding of such

capital expenditure was from internal accruals. Subsequent to acquisition of RInfra’s

business, i.e., from 29 August, 2018, AEML-D has actually borrowed capital from lending

institutions [State Bank of India (SBI) and Yes Bank] towards funding of capital

expenditure. A total of Rs. 79.79 Crore was borrowed by AEML towards capital

expenditure, out of which Rs. 56.51 Crore was borrowed specifically for distribution


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business. This amount has been utilized for funding a part of capital expenditure and

capitalization in post-AEML period. In addition, other loans from SBI, Yes Bank and

funding available from Inter-Corporate Deposits have also been utilised for partly funding

capital expenditure during FY 2018-19.

Considering the total funding available, i.e., the loans allocated towards opening CWIP of

FY 2018-19 and fresh borrowings during the year, the actual debt-equity ratio for FY 2018-

19 works out to 67%:33%. Hence AEML-D has considered the debt:equity ratio of

70%:30% for working out interest expenses and return on equity, in accordance with the

MYT Regulations, 2015.

Refinancing of Debt: As stated above, subsequent to acquisition of RInfra’s business, the

total outstanding debt of Rs. 8500 Crore allocated to REGSL was refinanced by borrowing

new debt from various Financial Institutions. The interest on loan capital is being claimed

considering the weighted average rate of interest pertaining to the original loans for the

period 01.04.2018 to 28.08.2018 and thereafter, based on the interest rate of the new loans.

Interest on Loan Capital for FY 2018-19: As per first proviso of Regulation 29.5 of the

MYT Regulations, 2015, at the time of Truing-Up, the weighted average rate of interest

based on actual loan portfolio during the concerned year needs to be considered as the rate

of interest. The weighted average rate of interest of Pre-AEML period, based on the actual

portfolio of loans of RInfra-D for that period, was 10.43%. Further, post 29.08.2018, actual

loan has been drawn for funding the capex and hence actual interest rate has been

considered. Hence, for the entire FY 2018-19, weighted average interest rate has been

considered, which works out to 9.31%. by considering weighted average loans and interest

rate applicable for both periods.

The interest expenses for Wires Business and Supply Business for FY 2018-19 is shown in

the Table below:

Table 0-81: Interest on Loans for FY 2018-19 as submitted by AEML-D (Rs. Crore) Particulars MTR Order True-up Petition

Wires Business


Addition of new loans 0 0.53

Repayment 158.72 276.53

Reduction in loans due to retirement in loans

224.38 236.26


Interest Rate (%) 10.44% 9.31%



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Supply Business


Addition of new loans 0 3.38

Repayment 27.04 15.88

Reduction in loans due to

retirement in loans 22.12 25.59




Finance Charges

Other Finance Charges mainly comprise Service Charges and other bank charges such as

bank remittance charges, bank commission, stamp duty towards working capital limit

enhancement, consultancy charges for arranging loans, LC opening charges, BG

commission, etc. Accordingly, an amount of Rs. 9.64 Crore has been claimed towards

Finance Charges for Distribution Business. Further, there are finance charges incurred

specifically for AEML-D and the same is considered only for the said business.

Refinancing Cost and Savings in Interest Expenses

AEML has refinanced the outstanding loans by lower cost loans from a consortium of

banks. The Commission, in the Order dated 2 January, 2019 in Case No. 341 of 2018 (Case

of AEML seeking approval of the assignment of its Distribution Licence in favour of

Security Trustee i.e. SBICAP Trustee Company Limited), had observed that the interest

rates of AEML loans are lower than the interest rates approved in the MTR Orders. Thus,

such financing shall reduce the burden of interest cost on the consumers in tariff and

therefore, the same is in the interest of the consumers. The Commission had directed AEML

to submit the actual benefit that may accrue to the consumers on account of proposed

financing in the MYT Petition. The relevant section of the Order is reproduced below:

“AEML is directed to submit the actual benefit that may accrue to the consumers on

account of proposed financing, while submitting its next Tariff Petition.”

Regulation 29.10 of the MERC (MYT) Regulations, 2015 provides the mechanism for

computation of gains associated with savings in interest cost in case of refinancing of loans

and further sharing of the same with the beneficiaries. The relevant extract of the

Regulations is quoted as follows:

"29.10 The Generating Company or the Licensee or MSLDC, as the case may be,

shall make every effort to re-finance the loan as long as it results in net savings on

interest and in that event, the costs associated with such Re-financing shall be borne


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by the Beneficiaries and the net savings shall be shared between the Beneficiaries

and them in the ratio of 2:1, subject to prudence check by the Commission:

Provided that the Generating Company or the Licensee or the MSLDC, as the case

may be, shall submit documentary evidence of the costs associated with such re-

financing:

Provided further that the net savings in interest shall be calculated as an annuity

for the term of the loan, and the annual net savings shall be shared between the

entity and Beneficiaries in the specified ratio."

Table 0-82: Total outstanding debt of AEML raised by AEML post transaction

Sr No Purpose Lender Loan Amount

(Rs. Cr.)

Tenure / Repayment

Period

Interest

Rate *

1

Term

loan

State Bank of

India 3,000

61 quarterly

instalments 9.05%

2 Yes Bank

Limited 2,550

61 quarterly

instalments 9.05%

3 Bank of India 2,000

61 quarterly

instalments 9.05%

4 ICICI Bank

Limited 750

61 quarterly

instalments 9.05%

5 HDFC Bank

Limited 200

61 quarterly

instalments 9.05%

* Interest rate will change as per Marginal Cost of Funds based Lending rate (MCLR)

For the refinancing of loan, AEML has incurred total expenditure of Rs. 157.18 Crore as

refinancing charges. The said expenditure is apportioned among the G, T & D businesses

considering the regulated outstanding debt as on August 29, 2018. The break-up of

refinancing charges is provided below:

Table 0-83: Segregation of Refinancing Charges among ADTPS, AEML-T and

AEML-D

Particulars/ (Rs. Crore) ADTPS AEML-

T

AEML-D

(W)

AEML-D

(S) Total

Upfront Fee 9.87 26.75 87.65 3.99 128.26

Loan underwriting Fee 0.48 1.30 4.25 0.19 6.22

Stamp duty 0.02 0.04 0.14 0.01 0.20

Consultancy charges for

arranging loans 1.73 4.69 15.38 0.70 22.50

Total 12.10 32.78 107.41 4.89 157.18


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In accordance with the Regulations, AEML has determined the net saving in interest cost

for each year over the remaining duration term of the loans and determined the Present

Value of the savings. In order to compute the Present Value (PV) of net savings, AEML

has used discount rate that is equal to the post tax cost of debt for AEML, which is 5.89%.

The net savings in interest cost are then worked out by subtracting the refinancing cost from

the present value of interest savings. The summary of net savings due to refinancing is

shown in the following Table:

Table 0-84: PV of Interest cost saving in FY 2018-19

Particulars / (Rs. Crore) ADTPS AEML-T AEML-D

(W)

AEML-D

(S) Total

Total Interest cost saving 21.99 61.97 174.61 9.45 268.02

Total Interest cost saving (NPV) 16.60 46.78 131.81 7.14 202.31

Refinancing Charges 12.10 32.78 107.41 4.89 157.18

Net Saving 4.50 14.00 24.39 2.25 45.13

Share of consumers 3.00 9.33 16.26 1.50 30.09

Share of Utility 1.50 4.67 8.13 0.75 15.04

AEML-D submits that there has been net savings of Rs. 24.39 Crore for Wires Business

and Rs. 2.25 Crore for Supply Business on account of refinancing and, therefore, AEML-

D proposed to share the net savings on interest in ratio of 2:1 with consumers.


The Commission asked AEML-D to submit the documentary evidence for the opening

balance of loans and the actual interest rates for all outstanding loans on 1 April 2017 and

1 April 2018. AEML-D submitted bank certificate of Term Loan of Central Bank of India

(CBI) and certificate of the outstanding balance of NCDs as on 1 April 2017 and 1 April

2018.

For FY 2018-19, the details were sought in two parts, viz.,

(i) Loan and corresponding Interest outstanding from 1 April 2018 to 28 August

2018

(ii) Loan and corresponding Interest outstanding from 29 August 2018 to 31 March

2019

Accordingly, the Commission has considered the rate of interest on long-term loans for FY

2017-18 as 10.36% and for FY 2018-19 as 9.24% (Weighted average of 10.47% and

9.05%). AEML-D has allocated these loans to the Wires Business and the Supply Business.

The Commission has considered the same rate of interest for long-term loan for both Wires

Business and Supply Business.


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The Commission has considered the Closing Balance of Normative Loan for FY 2016-17

as approved in the MTR Order as the Opening Balance of Normative Loan for FY 2017-

18. For the assets capitalised in FY 2017-18, the Commission has considered 70% of the

additional asset value less Consumer Contribution as normative debt, in accordance with

the MYT Regulations, 2015. The repayment of the loan has been considered equal to the

Depreciation approved for the year. Accordingly, the Commission has approved the interest

on Loan for FY 2017-18, as shown in the Table below:

Table 0-85: Interest Expenses for FY 2017-18 as approved by Commission (Rs.

crore)

Particulars MTR

Order

True-up

Petition Approved after truing up

Wires Business

Opening Balance 1,517.85 1,517.85 1,517.85

Less: Reduction of normative loan due

to retirement of assets 0 3.78 3.78

Addition of new loans 203.31 216.87 201.83

Repayment 213.87 220.44 219.95

Closing Balance 1,507.29 1,510.50 1,495.96

Interest 159.27 159.14 156.14

Supply Business

Opening Balance 93.54 93.54 93.54


to retirement of assets 0 0.53 0.53


Repayment 21.20 23.40 23.12

Closing Balance 85.96 83.59 83.87

Interest 9.45 9.31 9.19

Similarly, the Commission has considered the Opening Balance of the Normative Loan for

FY 2018-19 as equal to the revised Closing Balance of Normative Loan for FY 2017-18,

as approved in this Order. For the assets capitalised in FY 2018-19, the Commission has

considered 70% of the additional asset value less Consumer Contribution as normative debt,

in accordance with the MYT Regulations, 2015. The repayment of the loan has been

considered equal to the Depreciation approved for the year.

Accordingly, the Commission has approved the interest on Loan for FY 2018-19, as shown

in the Table below:


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Table 0-86: Interest Expenses for FY 2018-19 as approved by Commission (Rs.

crore)

Particulars MTR

Order

True-up

Petition

Approved in

this Order

Wires Business

Opening Balance 1,507.29 1,510.50 1,495.96

Less: Reduction of normative loan due to

retirement of assets 0 0.53 0.53


Repayment 224.38 236.26 235.07

Closing Balance 1,441.64 1,550.24 1,523.10

Interest 153.93 142.49 139.45

Finance Charges 9.14 9.14

Interest & Finance Charges 153.93 151.63 148.59

Supply Business


Less: Reduction of normative loan due to

retirement of assets 0

3.38 3.38


Repayment 22.12 25.59 25.65


Interest 9.23 7.17 7.14

Finance Charges 0.49 0.49

Interest & Finance Charges 9.23 7.67 7.64

Refinancing Cost and Savings in Interest Expenses

AEML has refinanced the total loan portfolio of Rs 8500 Crore and has considered the

refinance cost of Rs 157.18 crore.

The Commission has analysed the refinance agreement and other supporting documents of

AEML with consortium of Banks provided as an Exhibit-L and Exhibit-S of the Petition.

As per Credit Facility letter dated 29 March, 2018 along with its amendment which is also

dated 29 March, 2018 provided by Yes Bank, loan facility of Rs. 5,500 Crore was

sanctioned and Rs. 97.35 Crore (inclusive of taxes) was paid as an upfront fees. The relevant

Tax Invoice has been provided as Annexure 1 as part of Exhibit-L along with the Petition

in support of the claim. As per the Credit Facility letter, the loan facility of Yes Bank was

to be utilized by the AEML towards the following purposes:

▪ Meeting the Purchase Consideration, other than equity as agreed between Promoter and

Reliance Infrastructure Limited (RINFRA) for Generation, Transmission and


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Distribution (GTD) business acquisition including repayment of/ prepayment of any

funding availed by the Borrower (other than YBL facility)

▪ Meeting the transaction cost (other than equity)/ financing expenses & other costs

including cost of refinancing/ prepayment, if any;

▪ Meeting of any statutory dues and other duties;

▪ Payments of creditors/ loans of REGSL availed from RINFRA towards acquisition of

GTD business;

Further, as per the Sanction Letter of State Bank of India dated 26 June, 2018, loan facility

of Rs. 3,000 Crore was sanctioned and Rs. 19.67 Crore (inclusive of taxes) was paid as

upfront fees. The relevant Tax Invoice has been provided as Annexure 2 as part of Exhibit-

L along with the Petition. As per the terms of the Sanction Letter, the loan facility of State

Bank of India was to be utilized by AEML towards the following purposes:

▪ Repayment/ prepayment/ refinancing of the existing debt/ NCD of the Borrower;

▪ Repayment/ prepayment of Loan/ NCD from Reliance Infrastructure Limited for

repayment of its identified borrowings;

▪ Meeting the transaction cost/ financing expenses & other costs including cost of

refinancing/ prepayment, if any;

▪ Meeting of any statutory dues and other duties.

It is evident from the above submissions that the higher amount of loan refinanced by

AEML was mainly for the purpose of financing the transaction costs towards acquisition of

the business of RInfra by REGSL.

Subsequent to the above, Yes Bank has undertaken down-selling of its portfolio to other

banks like Bank of India, ICICI Bank and HDFC Bank. Yes Bank has reduced its exposure

from Rs. 5,500 Crore to Rs. 2,550 Crore. As a part of the down-selling process, Bank of

India has approved loan amount of Rs. 2,000 Crore, ICICI has approved loan amount of Rs.

750 Crore and HDFC Bank has approved loan amount of Rs. 200 Crore. To avail the

facility, AEML paid Rs. 8.26 Crore to Bank of India, Rs. 2.21 Crore to ICICI Bank, and

Rs. 0.77 Crore to HDFC Bank as upfront fees. Relevant invoices have been provided by

AEML-D as Annexure 3, Annexure 4 and Annexure 5 to the Petition for Bank of India,

ICICI Bank and HDFC Bank, respectively. Further, Yes Bank has charged underwriting

fees of Rs. 6.22 Crore for the entire loan of Rs. 5,500 Crore and Tax Invoice for the same

has been provided as an Annexure 6 as part of Exhibit-L along with the Petition. AEML

has also incurred stamp duty fees of Rs. 0.2 Crore for the entire transaction.

AEML has refinanced the loan to the tune of Rs. 8,500 Crore and Yes Bank has further

down sold its loan exposure to other banks as per the terms of the Credit Facility Letter

issued to AEML by Yes Bank and agreed by both the parties. As discussed in the earlier


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paragraph, for undertaking the above transaction, AEML has incurred Rs. 134.68 Crore as

refinancing cost, which is claimed for recovery through the ARR subject to the relevant

provisions of the MYT Regulations, 2015.

Further, AEML has also availed services of SBI Capital Markets Limited for providing

M&A Advisory and syndication services for which Agreement was signed on 18 January,

2018. As per Agreement, services to be provided by SBI Capital Markets Limited were as

under:

• M&A Services:

o Assistance in preparation of a detailed financial model for the project, to represent the

base case and financial and operative sensitives to various parameters

o Assisting the management of the Client in negotiation and discussions with the Seller

and finalization of the definitive term sheet for the transaction

o Assisting the Client in finalization of capital structure and structuring of the term loan

for optimizing the valuation.

o Advising the Client on certain measures which may improve the valuation of the

Project post acquisition including refinancing term loan

• Syndication Services:

o The Advisor would provide syndication services mainly by assisting the Company in

arranging the proposed funding for refinancing of the existing debt and additional debt

for capital expenditure requirement for the project. The Advisor would also assist the

Company in arranging the proposed Working capital facilities determined in the course

of financial analysis/ advisory for the Project. The Working Capital Facilities would

comprise of Working Capital Fund based Facilities (FB), Bank Guarantee (BG),

Derivative Limit and other Working Capital Non-Fund based Facilities (NFB).

As can be seen from the above, the scope of services provided by SBI Capital Markets

Limited included activities, which did not pertain to the refinancing of term loans

undertaken by AEML and against which AEML is seeking the refinancing cost incurred as

a pass through in the tariff under the relevant provisions of the MYT Regulations, 2015.

Further, AEML has submitted details of various payments made to SBI Capital Markets

Limited amounting to Rs. 14.24 Crore through five invoices and supporting documents are

provided as Annexure in Exhibit-L of the Petition. The details of the payment and services

provided are as under:


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Table 0-87: Payment to SBI Capital Markets Limited by AEML

Sr.

No.

Services provided by SBI

Capital

Invoice No. Invoice

Date

Amount

(Rs.

Crore)

Supporting

Document –

Exhibit L of

the Petition

1 M&A Buy Side Advisory 18182710137 9/28/2018 5.90 Annexure 7

2 Working Capital 18192710138 9/28/2018 0.32 Annexure 8

3 Term Loan 18192710139 9/28/2018 1.50 Annexure 9

4 Working Capital II 18192710149 10/11/2018 0.35 Annexure 10

5 Term Loan II 18192710150 10/11/2018 6.83 Annexure 11

It is clearly evident from the above that AEML has paid SBI Capital Markets Limited for

services other than refinancing related services for term loan. AEML has paid SBI Capital

Markets for availing M&A Buy side advisory and working capital facility services, which

are not eligible for recovery under refinancing cost. Consequently, only the payments made

to SBI Capital Markets Limited for Term Loan (Rs. 1.50 Crore) and Term Loan II (Rs. 6.83

Crore) are eligible for recovery as part of refinancing cost.

In addition, AEML has also considered Rs. 8.26 Crore paid to Adani Finserve Limited as

part of refinancing cost. AEML has provided letter written by Adani Finserve Limited to

AEML dated 13 September, 2018 for providing financial advisory services for loan

facilities as Annexure 12a of Exhibit S of the Petition. The letter has been signed by only

one party. AEML has made payment of Rs. 8.26 Crore to Adani Finserve on 22 October,

2018 against the services provided under this arrangement.

As per letter, scope of services included the following:

• Advise on refinancing through replacing an existing debt obligation and/or to

attain a change in terms.

• Support on running a competitive financing process with various lenders

• Support for managing dialogue with financiers and compare and analyse offers.

Based on the details submitted by AEML, the process of refinancing of loans was completed

by 29 August, 2018 as the data of opening loans shared by AEML for the post AEML period

shows an opening loan balance of Rs. 8500 Crore with the revised rate of interest of 9.05%

as on 29 August, 2018. In this context, the letter sent by Adani Finserve to AEML for

providing financial advisory services is dated 13 September, 2018, i.e., period after the

process of refinancing of loans was completed. The relevant excerpts of the letter from

Adani Finserve Private Limited mentioning about providing services for the proposed

refinancing of term loans is reproduced below for reference:


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“Dear Sir:

Re: Financial Advisory Services for Loan Facilities

We refer to discussions on our engagement for providing financial services

(“Services”) to Adani Electricity Mumbai Limited (“Company”) in relation to

the proposed refinancing of the Company’s term loan facilities, and the raising

of working capital and capital expenditure loan facilities by the Company

(“Engagement”).

…”

It is evident from the above that the services to be provided by Adani Finserve is possibly

for future refinancing activities to be undertaken by the Company and not for the

refinancing carried out in the past by AEML. Hence, the cost of Rs. 8.26 Crore has not been

considered as part of the refinancing cost incurred by AEML for the refinancing carried out

for Rs. 8,500 Crore of term loans and is hence, not eligible for recovery through the ARR.

Accordingly, the refinancing cost of Rs. 142.35 Crore could be considered subject to due

diligence.

It is also clearly evident from the above that loan amount of Rs. 8,500 Crore refinanced by

AEML is not solely for the purpose repayment of existing loans taken for Generation,

Transmission and Distribution business. AEML has used the loans for other purposes like

financing transaction cost, statutory dues, etc.

The Commission in its Order in Case No. 139 of 2017 has provided approval of Licence

Assignment and Asset Transfer with certain conditions. One of the conditions was that

REGSL shall not claim any amount from the consumers on account of the proposed

transaction. The Commission also approved the sale of 100% shareholding in REGSL to

ATL under Section 17(3) of the Act, subject to various conditions and one of the conditions

was that REGSL/ATL shall not claim any amount from the consumers on account of the

proposed transaction. Relevant part of the Order in Case No. 139 of 2017 is reproduced

below for reference.

“Conditions for Approval of Licence Assignment and Asset Transfer

88. In accordance with the above analysis and rulings, the Commission

approves the assignment of the Transmission Licence of RInfra to REGSL and

transfer of transmission utility including transmission assets from RInfra to


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REGSL, in accordance with the Scheme of Arrangement under Section 17(3) of

the Act, subject to the following conditions:

…..

h. REGSL shall not claim any amount from the consumers on account of the

proposed transaction;

…..

89. In accordance with the above analysis and rulings, the Commission

approves the sale of 100% shareholding in REGSL to ATL under Section 17(3)

of the Act, subject to the following conditions:

…

b. REGSL/ATL shall not claim any amount from the consumers on account

of the proposed transaction;

…”(emphasis added)

Considering the above, it is clear that AEML is not eligible for any amount incurred for the

transaction between RInfra and ATL. AEML is only eligible for proportionate recovery of

refinancing cost pertaining to normative loans as on 29 August, 2018. Outstanding

normative loans as on 29 August, 2018 for AEML-D Wires Business and Supply Business

was Rs. 1437.01 Crore and Rs. 77.81 Crore respectively. Hence, refinancing cost on pro-

rata basis works out to Rs. 24.07 Crore and Rs. 1.30 Crore for AEML-D Wires Business

and Supply Business, respectively. The computation of the proportionate sharing of costs

is provided in the Table below:

Table 0-88: Computation of eligible Refinancing Cost for Regulatory Loan of

AEML-D (Rs. Crore)

Particulars Amount

Total Loan Refinanced by AEML 8,500.00

Total Refinancing Cost claimed by AEML 157.10

Total Eligible Refinancing Cost 142.35

AEML (G, T & D) Regulatory Loan 2,189.01

Pro-rata Refinancing Cost eligible for AEML (G, T & D)

Regulatory Loan 36.66

AEML-D Wires Business Regulatory Loan 1,437.01

AEML-D Supply Business Regulatory Loan 77.81


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Pro-rata Refinancing Cost applicable for AEML-D

Wires Business Regulatory Loan 24.07

Pro-rata Refinancing Cost applicable for AEML-D

Supply Business Regulatory Loan 1.30

For the purpose of working out the benefit from the refinancing transaction, AEML has

considered weighted average interest rate of 10.48%. However, AEML-D has not provided

any supporting documents or basis for the weighted average interest rate of 10.48%.

Further, the credit facility letter from Yes Bank dated 29 March, 2018 included the offered

revised rate of 9.05%. Accordingly, the benefit computation should consider the applicable

interest rates for the existing loan portfolio as on 31 March, 2018 (i.e., date of signing of

the credit facility letter with Yes Bank) and the revised interest rate after signing of the

credit facility letter for refinancing of the term loans.

AEML-D has submitted the details of applicable interest rate for FY 2017-18 and FY 2018-

19. Accordingly, as per details submitted by AEML-D for bank wise outstanding loan and

applicable interest rate, the weighted average interest rate as on 31 March, 2018 was

10.33%.

Accordingly, the Commission has considered 10.33% as weighted average interest rate of

the existing loan portfolio of AEML-D as on 31 March 2018 for working out benefits due

to refinancing of loan. AEML has refinanced the loan at 9.05% and same has been

considered as revised rate for working out benefits due to refinancing of loan.

In order to compute the Present Value of net savings, AEML-D has considered discounting

rate post tax cost of debt for AEML, which is 5.89%. As per MYT Regulations, 2015,

AEML-T is eligible for Income Tax as per PBT method and hence, there will not be any

impact of Income Tax on savings accruing due to refinancing of loan. In cost plus regulatory

regime, approved income allowed for recovery is dependent on the expenses (ARR)

approved for the respective year. Hence, if there is any reduction in expenses (ARR) due to

refinancing, income allowed for recovery through the Tariff Order is automatically adjusted

and taxable income as per PBT method remains unchanged. In view of the same, the

Commission has considered discounting rate of 9.05%, which is cost of debt for the purpose

of working out the present value of net savings.

The Regulation 29.10 of MYT Regulations, 2015 specifies that any saving in interest cost

due to refinancing of loans is to be shared in the ratio of 2:1 and the relevant para is

reproducedbelow:


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“29.10 The Generating Company or the Licensee or the MSLDC, as the case

may be, shall make every effort to re-finance the loan as long as it results in net

savings on interest and in that event, the costs associated with such re-financing

shall be borne by the Beneficiaries and the net savings shall be shared between

the Beneficiaries and them in the ratio of 2:1, subject to prudence check by the

Commission:

Provided that the Generating Company or the Licensee or the MSLDC, as the

case may be, shall submit documentary evidence of the costs associated with

such re-financing:

Provided further that the net savings in interest shall be calculated as an annuity

for the term of the loan, and the annual net savings shall be shared between the

entity and Beneficiaries in the specified ratio.”

For working out the net benefits, though AEML-D has considered repayment schedule as

per loan agreement, as per the provisions of the MYT Regulations, 2015, repayment during

the year shall be deemed to be equal to the depreciation allowed for the year. The

Commission has considered opening normative loan and depreciation approved for FY

2018-19 for calculating saving due to refinancing of existing loan portfolio. For FY 2018-

19, saving is calculated for the number of days for which new rates were applicable and for

remaining period of loan, saving is calculated for full financial year.

The Commission has carried out a Cost-Benefit Analysis of the refinancing transaction and

resultant savings in interest cost. The Commission has considered opening normative loan

for FY 2018-19 as opening loan and the repayment is considered same as the approved

depreciation for FY 2018-19 to compute the closing balance of the loans. The computation

has been carried out till the entire existing normative loan is repaid. No additions to the

normative loans has been assumed for the purpose of this benefit computation as any new

capitalisation proposed by the Licensee during this period will be funded through separate

loans to be approved by the Commission. The year-wise savings in interest cost has been

worked out as the difference between the interest payable considering the existing interest

rate of 10.33% and that payable considering the revised interest rate of 9.05%. The saving

for FY 2018-19 is considered pro-rata to number of days for which revised rate on loan was

applicable and for remaining years, it is considered for full financial year.

To compute the net savings from the transaction, net present value of the year wise savings

is worked out using a discounting rate of 9.05%. This net present value is then compared

with the cost of refinancing incurred by AEML-D and eligible for recovery through the

ARR and the difference between the two is deemed to be the net savings from the

transactions and which is to be shared between the consumers and AEML-D in the ratio


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specified in the MYT Regulations, 2015. The cost of refinancing eligible for recovery from

the ARR is allowed for recovery over and above the share of benefit of AEML-D to be

recovered through the ARR. The Tables below provides the detailed computation of the

sharing of benefit between AEML-D and the consumers:

Table 0-89: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the

Wires Business, as approved by the Commission (Rs. Crore)

Table 0-90: Refinancing Cost and sharing of Net Saving for FY 2018-19 for the

Supply Business, as approved by the Commission (Rs. Crore)

The Commission approves refinancing cost of Rs. 24.07 Crore and sharing of benefits of

Rs. 4.78 Crore for the Wires Business for FY 2018-19. As there is no net saving in case of

the Supply Business, the refinancing cost has not been approved for the Supply Business.

1.43 RETURN ON EQUITY (ROE)


AEML-D submitted that it has computed RoE by applying the rate of return for Wires

Business and Retail Supply Business as specified in the MYT Regulations, 2015, and

considering the equity portion of new capitalisation in FY 2017-18 and FY 2018-19 as 30%

of the capitalisation in that year, after reducing the Consumer Contribution of Rs. 28.72

Financial Year FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Opening Balance of Loan 1,437.01 1,202.21 946.60 665.51 364.03 49.67

Addition

Repayment 234.80 255.61 281.09 301.48 314.36 49.67

Closing Balance of Loan 1,202.21 946.60 665.51 364.03 49.67 -

Average Loan Balance 1,319.61 1,074.40 806.05 514.77 206.85 24.83

Interest @ Existing Rate (10.33%) 80.30 110.99 83.27 53.18 21.37 2.57

Interest @ Revised Rate (9.05%) 70.35 97.23 72.95 46.59 18.72 2.25

Saving in Interest 9.95 13.75 10.32 6.59 2.65 0.32

NPV of Saving @ Revised Rate (9.05%) 38.40

Refinancing Cost to be recovered as part of ARR 24.07

Net Saving 14.33

Share of AEML-D in Net Saving 4.78

Financial Year FY 2018-19 FY 2019-20 FY 2020-21

Opening Balance of Loan 77.81 52.16 26.16

Addition

Repayment 25.65 26.00 26.16

Closing Balance of Loan 52.16 26.16 -

Average Loan Balance 64.98 39.16 13.08

Interest @ Existing Rate (10.33%) 3.95 4.04 1.35

Interest @ Revised Rate (9.05%) 3.46 3.54 1.18

Saving in Interest 0.49 0.50 0.17

NPV of Saving @ Revised Rate (9.05%) 1.09

Refinancing Cost to be recovered as part of ARR 1.30

Net Saving -0.21

Share of AEML-D in Net Saving -0.07


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crore received in FY 2017-18 and Rs. 22.29 Crore received in FY 2018-19. The details of

the RoE computations for the Wires Business for FY 2017-18 and FY 2018-19 along with

RoE provisionally considered by the Commission for FY 2017-18 and FY 2018-19 for

Wires Business in AEML-D’s MTR Order are given in the Table below:

Table 0-91 : Return on Regulatory Equity for Wires Business for FY 2017-18 and

FY 2018-19 as submitted by AEML-D (Rs Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Regulatory Equity at the beginning of

year 1,879.84 1,879.84 1,960.07 1,966.80

Capitalisation during the year 319.16 338.53 255.46 417.33

Consumer Contribution and Grants

during the year towards capital works 28.72 28.72 28.72 22.29

Equity portion of capitalisation during

the year 87.13 92.94 68.02 118.51

Reduction in Equity Capital on account

of retirement / replacement of assets 6.90 5.99 - 3.78

Regulatory Equity at the end of year 1,960.08 1,966.80 2,028.09 2,081.53

Return on Regulatory Equity (%) 15.50% 15.50% 15.50% 15.50%

Return on Regulatory Equity 297.59 298.58 309.08 314.04

The details of the RoE computations for the Supply Business for FY 2017-18 and FY 2018-

19 along with RoE provisionally considered by the Commission for FY 2017-18 for Supply

Business in AEML-D’s MTR Order are given in the below Table:

Table 0-92 : Return on Regulatory Equity for Supply Business for FY 2017-18 and

FY 2018-19 as submitted by AEML-D ( Rs Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Regulatory Equity at the beginning of

year 156.11 156.11 157.85 156.46

Capitalisation during the year 19.99 19.98 38.63 22.68


during the year towards capital works 0 0 0

Equity portion of capitalization during

the year 6.00 5.99 11.59 6.80

Reduction in Equity Capital on account

of retirement / replacement of assets 4.26 5.64 7.48

Regulatory Equity at the end of year 157.85 156.46 169.44 155.78

Return on Regulatory Equity (%) 17.50% 17.50% 17.50% 17.50%

Return on Regulatory Equity 27.47 27.84 28.64 27.98


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To determine the equity eligible for returns as per MYT Regulations, 2015, the Commission

has considered the Closing Equity for FY 2016-17 as approved in the MTR Order, as the

Opening Equity for FY 2017-18. Additional equity has been considered as 30% of the

approved capitalisation in the year after deducting the Consumer Contribution from the

Capitalisation. Further, 30% of the asset retirement approved is reduced to arrive at the

amount of equity eligible for returns as per the Regulations. The Commission has

considered the RoE as 17.50% for Supply Business and 15.50% for the Wires Business, in

accordance with the Regulations. Accordingly, the approved RoE for FY 2017-18 is as

given in the Table below:

Table 0-93: Return on Equity for FY 2017-18 for Wires and Supply Business as

approved by the Commission (Rs. Crore)

Particulars MTR

Order

True-up

Petition

Approved

after truing

up

Wires Business

Regulatory Equity at the beginning of the year 1,879.84 1,879.84 1,879.84

Capitalisation during the year 319.16 338.53 317.05

Consumer Contribution and Grants 28.72 28.72 28.72

Equity portion of capitalisation during the year 87.13 92.94 86.50

Equity portion of asset retired during the year 6.90 5.99 5.55

Regulatory Equity at the end of the year 1,960.08 1,966.80 1,960.79

Rate of Return (%) 15.50% 15.50% 15.50%

Total RoE 297.59 298.58 298.08

Supply Business

Regulatory Equity at the beginning of the year 156.11 156.11 156.11


Consumer Contribution and Grants 0 0 -


Equity portion of asset retired during the year 4.26 5.64 5.64

Regulatory Equity at the end of the year 157.85 156.46 156.46

Rate of Return (%) 17.50% 17.50% 17.50%

Total RoE 27.47 27.84 27.84

Similarly, the Commission has considered the Closing Equity of FY 2017-18 as approved

in this Order, as the Opening Equity for FY 2018-19. Additional equity has been considered

as 30% of the approved capitalisation in the year after deducting the Consumer Contribution

from the Capitalisation. Further, 30% of the asset retirement approved is reduced to arrive


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at the amount of equity eligible for returns as per the Regulations. The Commission has

considered the RoE as 17.50% for Supply Business and 15.50% for the Wires Business, in

accordance with the Regulations. Accordingly, the approved RoE for FY 2018-19 is as


Table 0-94: Return on Equity for FY 2018-19 for Wires and Supply Business as


Particulars MTR

Order

True-up

Petition

Approved

after truing

up

Wires Business





Equity portion of asset retired during the year - 3.78 3.50


Rate of Return (%) 15.50% 15.50% 15.50%

Total RoE 309.08 314.04 312.65

Supply Business



Consumer Contribution and Grants 0 0


Equity portion of asset retired during the year 7.48 7.48


Rate of Return (%) 17.50% 17.50% 17.50%

Total RoE 28.64 27.98 27.98

1.44 INTEREST ON WORKING CAPITAL (IOWC)


AEML-D submitted that it has calculated normative Interest on Working Capital (IoWC)

for the Wires Business and Supply Business in accordance with Regulation 31.3 and 31.4

of the MYT Regulations, 2015. As per MYT (First Amendment) Regulations, 2017, the

Base Rate has been defined as One-year MCLR of SBI plus 150 basis points. However, the

Amendment applies prospectively from date of publication. Hence, for FY 2017-18,

AEML-D has considered a weighted average rate worked out using SBI Base Rate plus 150


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basis points from 1 April 2017 to 29 November 2017 and One-year SBI MCLR for the

remaining period (30 November 2017 to 31 March 2018). This works out to 10.18% for FY

2017-18. Similarly, AEML-D has considered weighted average SBI one-year MCLR plus

150 basis points at 9.89% for FY 2018-19. Considering this, the normative interest on

working capital for Wires Business, , is shown in the Table below:

Table 0-95 : Interest on Working Capital for Wires Business for FY 2017-18 and FY

2018-19 as submitted by AEML-D (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

O&M Expenses for a month 67.55 66.73 70.98 70.32

Maintenance spares at 1% of Opening

GFA 52.74 52.74 55.71 55.92

One and half months of revenue from

charges for use of Distribution Wires 191.96 192.18 191.92 195.22

Less: - -

Amount of Security Deposit from

Distribution System Users - -

Total Working Capital 312.26 311.66 318.61 321.45

Rate of Interest 10.20% 10.18% 9.45% 9.89%

Interest on Working Capital 31.85 31.73 30.11 31.79

The summary of IoWC for Supply Business for FY 2017-18 and FY 2018-19 is shown in

the Table below:

Table 0-96 : Interest on Working Capital for Supply Business for FY 2017-18 as


Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

O&M Expenses for a month 33.33 32.92 35.02 34.69

Maintenance spares at 1% of Opening GFA 5.07 5.06 5.13 5.07

One and half months of revenue from sale of

electricity including revenue from CSS 669.71 671.79 713.65 733.23

Less:

Amount of Security Deposit from Supply

Consumers 405.72 407.30 426.01 431.87

One-month equivalent of cost of power

purchased 273.14 264.62 278.83 235.80

Total Working Capital 29.25 37.85 48.96 105.32

Rate of Interest 10.20% 10.18% 9.45% 9.89%

Interest on Working Capital 2.98 3.85 4.63 10.42


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The Commission has approved IoWC for AEML-D's Wires Business and Supply Business

in accordance with Regulations 31.3 and 31.4 of the MYT Regulations, 2015. The

Commission has considered 10.18% as the interest rate for computation of IoWC for FY

2017-18, being the weighted average rate worked out using SBI Base Rate plus 150 basis

points from 1 April 2017 to 29 November 2017 and One-year SBI MCLR for the remaining

period (30 November 2017 to 31 March 2018). Similarly, Commission has considered the

one-year SBI MCLR plus 150 basis points, i.e., 9.89% as the interest rate for IoWC for FY

2018-19. Accordingly, the IoWC approved by the Commission is as given in the Tables

below:

Table 0-97: Interest on Working Capital for Wires Business for FY 2017-18


Particulars MTR

Order

True-up

Petition

Approved after

truing up

O&M Expenses for a month 67.55 66.73 64.47

Maintenance spares at 1% of Opening GFA 52.74 52.74 49.16

One and half months of revenue from charges

for use of Distribution Wires 191.96 192.18 192.18

Total Working Capital 312.26 311.66 305.81

Rate of Interest (% p.a.) 10.20% 10.18% 10.18%

Interest on Working Capital 31.85 31.73 31.13



Particulars MTR

Order

True-up

Petition

Approved after

truing up



One and half months of revenue from charges

for use of Distribution Wires 191.92 195.22 195.15


Rate of Interest (% p.a.) 9.45% 9.89% 9.89%


Table 0-99: Interest on Working Capital for Supply Business for FY 2017-18


Particulars MTR

Order

True-up

Petition

Approved

after truing up




electricity including revenue from CSS 669.71 671.79 669.86


of 445

Particulars MTR

Order

True-up

Petition

Approved

after truing up

Less:


Consumers 405.72 407.30 407.30


purchased 273.14 264.62 264.62


Rate of Interest 10.20% 10.18% 10.18%




Particulars MTR

Order

True-up

Petition

Approved

after truing up




electricity including revenue from CSS 713.65 733.23 731.15

Less:


Consumers 426.01 431.87 431.87


purchased 278.83 235.80 234.40


Rate of Interest 9.45% 9.89% 9.89%


1.45 INTEREST ON CONSUMERS’ SECURITY DEPOSIT


AEML-D submitted that it has paid interest on consumer security deposit of Rs. 36.29 Crore

for FY 2017-18 at SBI MCLR as on 1 April 2017 plus 150 Basis Points, and Rs. 38.50

Crore for FY 2018-19 at SBI MCLR as on 1 April 2018 plus 150 Basis Points, in accordance

with MYT (First Amendment) Regulations, 2017. The Commission had also approved

interest on consumer security deposit of Rs. 36.29 Crore for FY 2017-18 and Rs. 39.30

Crore for FY 2018-19 in the MTR Order in Case No. 200 of 2017, based on submissions of

AEML-D. The following Table shows the Interest on Security Deposit claimed by AEML-

D.


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Table 0-101: Interest on Consumer Security Deposit for FY 2017-18 and FY 2018-19

as submitted by AEML-D (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Interest on Security Deposit 36.29 36.29 39.30 38.50


The Commission has approved the actual interest on CSD paid by AEML-D, in the truing

up for FY 2017-18 and FY 2018-19, as shown in the Table below:


Commission (Rs. crore)

Particular MTR Order True-up Petition Approved after truing up

Interest on CSD 36.29 36.29 36.29


Commission (Rs. crore)

Particular MTR Order True-up Petition Approved after truing up Interest on CSD 39.30 38.50 38.50

1.46 PROVISION FOR BAD AND DOUBTFUL DEBTS


AEML-D submitted that it has made an actual provision of Rs. 11.74 Crore and Rs. 21.97

Crore towards bad and doubtful debts for FY 2017-18 and FY 2018-19, respectively, in its

accounts. As per the MYT Regulations, 2015, a provision of up to 1.5% of receivables (as

per the Audited Accounts, allocated to Wires and Supply Businesses) is allowable as

provision for bad debts. Accordingly, the provision for bad and doubtful debts works out to

Rs. 16.30 Crore for FY 2017-18 and Rs. 15.99 Crore for FY 2018-19. For FY 2017-18 since

the actual provision made is lower than the allowable amount, AEML-D has restricted its

claim to the lower of the two, i.e., Rs. 11.74 Crore. However, for FY 2018-19, the normative

provision is lower than the actual provision made in annual accounts for FY 2018-19.

Therefore, the normative provision for bad debts of Rs. 15.99 Crore has been considered.

AEML-D has segregated the amount between Wires Business and Supply Business in the

ratio of revenue of Wires and Supply Business in FY 2017-18 and FY 2018-19, as shown

in the Table below:


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Table 0-104 : Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19


Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Receivables 1,086.74 1065.84

% of Receivables 1.50% 1.50%

Provision for Bad Debts –Total 16.30 15.99

Provision for Bad Debts –Actual (considered) 11.74 21.97

Total Revenue - Wires Business 1,537.43 1561.73

Total Revenue - Supply Business 5,357.26 5849.17

Provision for Bad Debts – Wires Business 2.61 2.62 2.61 3.37

Provision for Bad Debts –Supply Business 9.13 9.12 9.13 12.62


Regulations 73 and 82 of the MYT Regulations, 2015 for Wires Business and Retail Supply

Business, respectively, specify the maximum provision for bad and doubtful debts for a

year as 1.5% of the receivables of the respective businesses, provided that it is within 5%

of the receivables. The Regulation also specifies that the provision to be allowed for any

year shall not exceed the provision made by the Licensee in its audited accounts.

Accordingly, the Commission has considered the actual provision made in the audited

accounts for FY 2017-18 and normative provision as per Regulations for FY 2018-19. For

applying these provisions, the Commission has allocated the total value of provision for

bad doubtful debts in the ratio of revenue of Wires and Supply Business in FY 2017-18 and

FY 2018-19, as submitted by AEML-D.

Accordingly, the Commission has approved the provision for bad and doubtful debts as


Table 0-105: Provision for Bad and Doubtful Debts for FY 2017-18 and FY 2018-19


Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

Approved

after truing

up

MTR

Order

True-up

Petition

Approved

after truing

up

Wires Business 2.61 2.62 2.62 2.61 3.37 3.37

Supply Business 9.13 9.12 9.12 9.13 12.62 12.62

Total 11.74 11.74 11.74 11.74 15.99 15.99


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1.47 CONTRIBUTION TO CONTINGENCY RESERVE


In accordance with Regulation 34.1 of the MYT Regulations, 2015, AEML-D has created

a contingency reserve as 0.25% of the opening GFA of Supply Business and Wires Business

for FY 2017-18 and FY 2018-19, respectively. The summary of contribution to

Contingency Reserve is as shown in the Tables below:

Table 0-106 : Contribution to Contingency Reserve for Wires Business & Supply

Business for FY 2017-18 as submitted by AEML-D (Rs. Crore)

Particulars Wires Business Supply Business

MTR Order True-up

Petition

MTR

Order

True-up

Petition

Opening Balance of GFA 5,274.37 5,274.37 507.08 505.96

% Contribution 0.25% 0.25% 0.25% 0.25%

Contribution to

Contingency Reserves 13.19 13.19 1.27 1.26

Table 0-107 : Contribution to Contingency Reserve for Wires Business & Supply

Business for FY 2018-19 as submitted by AEML-D (Rs. Crore)


MTR Order True-up

Petition

MTR

Order

True-up

Petition

Opening Balance of GFA 5,572.00 5,591.55 512.00 508.26

% Contribution 0.25% 0.25% 0.25% 0.25%

Contribution to

Contingency Reserves 13.93 13.98 1.28 1.27


As per Regulation 34.1 of MYT Regulations, 2015, the contribution to the Contingency

Reserves in a year shall be between 0.25% and 0.50% of the original cost of fixed assets.

The Commission had queried AEML-D on the opening balance of contingency reserves for

FY 2017-18 and FY 2018-19 and documentary evidence for investment in various

securities, to which AEML-D replied with the requisite details. AEML-D has invested the

Contingency Reserve contribution in specified securities, in accordance with the MYT

Regulations. The Commission has approved the Contribution to Contingency Reserves for

Wires and Supply Business for FY 2017-18 and FY 2018-19 at 0.25% of the approved value

of the Opening GFA for the respective Businesses as shown in the Table below:


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Table 0-108:Contribution to Contingency Reserves for FY 2017-18 for Wires and

Supply Business approved by the Commission (Rs. Crore)


MTR

Order

True-up

Petition

Approved

after truing up

MTR

Order

True-up

Petition

Approved after

truing up

Opening

Balance of GFA 5,274.37 5,274.46 5,273.81* 507.08 505.96 507.08

% Contribution 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%

Contribution to

CR 13.19 13.19 13.18 1.27 1.26 1.27

*Includes Consumer Contribution

Table 0-109:Contribution to Contingency Reserves for FY 2018-19 for Wires and

Supply Business approved by the Commission (Rs. Crore)


MTR

Order

True-up

Petition

Approved after

truing up

MTR

Order

True-up

Petition

Approved after

truing up

Opening

Balance of GFA 5,572.00 5,591.55 5,569.42* 512.00 508.26 508.26

% Contribution 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%

Contribution to

CR 13.93 13.98 13.92 1.28 1.27 1.27

*Includes Consumer Contribution

1.48 INCOME TAX


AEML-D submitted that for FY 2017-18 and FY 2018-19, the Commission, in the MTR

Order in Case No. 200 of 2017, had approved Income Tax provisionally at the same level

as approved for FY 2016-17, in accordance with MYT Regulations, 2015. Till FY 2017-

18, the ownership of Mumbai Distribution Business was with RInfra, which had other

regulated / unregulated businesses in addition to the regulated business of distribution.

Therefore, Income Tax for FY 2017-18 has been calculated as per Regulatory Profit Before

Tax (PBT) method, in line with the approach adopted by the Commission in its previous

Orders, which is also in accordance with MYT Regulations, 2015. The workings are shown

below:

Table 0-110 : Income Tax Computation for FY 2017-18 as submitted by AEML-D

(Rs. Crore)

Particulars / (Rs. Crore) FY 2017-18

Revenue from sale of Electricity including RAC from

own consumers 7,181.12

Revenue from RAC from Changeover Consumers 119.18


of 445


Income from Wheeling Charges from Changeover and

OA consumers 285.59

Income on account of CSS from OA consumers 161.76

Non-Tariff Income 195.06

Total Revenue 7,942.71

Power Purchase Expenses 4,256.35

O&M Expenses 1,184.72

Depreciation 243.84

Interest on Long Term Loans 168.45

Interest on Working Capital 11.86

Interest on Consumer Security Deposit 36.29

Provision for bad and doubtful debts 11.74

Contribution to contingency reserves 14.45

Transmission Charges - intra State 402.00

MSLDC Fees & Charges 1.30

Total Expense 6,331.00

Profit Before Tax 1,611.71

Add: Depreciation considered in Expenses 243.84

Less: Tax Depreciation 299.91

Total Taxable Income 1,555.64

Corporate Tax Rate (%) 34.61%

Income Tax as per Corporate Tax Rate 538.37

Computation of MAT


MAT (%) 21.34%

MAT 343.94

MAT Credit (FY 16-17 available) 299.19

MAT credit utilization in FY 17-18 194.44

Income Tax applicable (Net of MAT Credit utilization) 343.94

The above Income Tax has been segregated in Wires Business and Supply Business, in the

ratio of Regulatory Profit Before Tax of Wires Business and Supply Business respectively,

as shown in the Table below:




Income Tax - Wires 62.61 105.49

Income Tax - Retail 191.84 238.45

Total 254.45 343.94

In FY 2018-19, the ownership of Mumbai Licensee was transferred to AEML. AEML also

has other businesses in addition to the regulated business of distribution (the regulated


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businesses of generation and transmission). Therefore, Income Tax for FY 2018-19 has

been calculated as per Regulatory PBT method, in accordance with MYT Regulations,

2015. AEML-D has claimed Income Tax as per the philosophy adopted in AEML-D’s MTR

Order in Case No. 200 of 2017. In FY 2018-19, ATL took over Mumbai Generation,

Transmission and Distribution business of RInfra, and in the process took over the liabilities

pertaining to regulated business as well, albeit, by replacing the existing loans with lower

cost loans. The acquisition required loans worth Rs. 8500 Crore and, in the process, the

existing regulatory loans were replaced. The depreciation in the audited accounts and

subsequently the tax depreciation for Income Tax purposes is substantially high as

compared to Regulated depreciation resulting in lower PBT for actual tax purposes.

However, as the consumers have not been burdened with higher interest cost of loans

availed other than Regulated loan and higher depreciation, it is imperative that tax

depreciation is also computed considering the regulatory asset base only. The computation

of Income Tax for FY 2018-19 is shown in the Table below:

Table 0-112 : Income Tax Computation for FY 2018-19 as submitted by AEML-D

(Rs. Crore)


Revenue from sale of Electricity including RAC from

own consumers 7,509.92

Revenue from RAC from Changeover Consumers 80.09

Income from Wheeling Charges from Changeover and

OA consumers 274.64

Income on account of CSS from OA consumers 127.22

Non-Tariff Income 150.32

Less: Eff gains on Dist Loss of FY 16 & FY 17 16.08

Less: Wires and Supply Availability Incentive of FY 16 0.33

Total Revenue 8,125.79

Power Purchase Expenses 3,888.04

O&M Expenses 1,271.88

Depreciation 261.86

Interest on Long Term Loans 159.30

Financing Charges 0.66

Refinancing Cost 112.30

NPV of Interest cost saving 8.88

Interest on Working Capital 28.28

Interest on Consumer Security Deposit 38.50

Provision for bad and doubtful debts 15.99

Contribution to contingency reserves 15.25

Transmission Charges - intra State 391.19

MSLDC Fees & Charges 1.23

Total Expense 6,193.35


of 445



Add: Depreciation considered in Expenses 261.86

Add: Other disallowance while computing IT 301.42

Less: Tax Depreciation 309.51

Less: Other expenses allowed for computing IT 268.24


Corporate Tax Rate (%) 34.95%

Income Tax as per Corporate Tax Rate 670.33

Computation of MAT


Add: Provision for Bad Debts and other disallowances 24.57

Less: Reversal of provision for bad debts against earlier

years provision and other reversals 0


MAT (%) 21.55%

MAT 421.74

MAT Credit (FY 16-17 available) 104.75

MAT credit utilization in FY 17-18 104.75

Income Tax applicable (Net of MAT Credit utilization) 565.57

The above Tax has been segregated in Wires Business and Supply Business, in the ratio of

Regulatory PBT of Wires Business and Supply Business, respectively, as shown in the

Table below:




Income Tax - Wires 62.61 84.73

Income Tax – Supply 191.8 480.85

Total 254.45 565.57


The Commission has computed the regulatory PBT and the Income Tax liability thereon on

a stand-alone basis, in accordance with the approach followed in the MTR Order. The

Commission has considered the Revenue heads and Expense heads as approved after true-

up for FY 2017-18 and FY 2018-19, which are different from the actual expenses

considered by AEML-D in its Petition.

The Commission has computed Income Tax in accordance with Regulation 33.1 of MYT

Regulations, 2015 and the ATE Judgment dated 2 December 2013 in Case No. 138 and

Case No. 139 of 2012.


of 445

As specified in the MYT Regulations, 2015 and ATE Judgment, the Commission has

arrived at Income Tax paid based on Regulatory PBT considering the normative cost

allowed by the Commission. The ratio with regard to tax liability is calculated on the

regulatory income and cost within the MYT regime considering the applicable tax

depreciation for computation of the Income Tax. Accordingly, the calculation of Income

Tax provides the tax payable for the Regulatory business whereby all the items of ARR and

Revenue are considered on normative basis for tariff purpose. Also, in line with MYT

Regulations, 2015, efficiency gains and incentive have not been considered for computation

of Tax on PBT basis.

The computation of the Income Tax for FY 2017-18 and FY 2018-19 as submitted by

AEML-D and as approved by the Commission is given in the Tables below:

Table 0-114: Income Tax for FY 2017-18 as approved by Commission (Rs. crore)

Particulars / (Rs. Crore) MTR

Order AEML-D

Approved after

truing up

Revenue from sale of Electricity including RAC

from own consumers

7,181.12 7,181.12

Revenue from RAC from Changeover Consumers 119.18 119.18

Income from Wheeling Charges from Changeover

and OA consumers

285.59 285.59

Income on account of CSS from OA consumers 161.76 161.76

Non-Tariff Income 195.06 195.06

Less: Efficiency gains on O&M Expenses 7.03

Less: Efficiency gains on IoWC 10.38

Less: Efficiency gains on Distribution loss - FY

2015-16 and FY 2016-17

8.68

Total Revenue 7,942.71 7,916.61

Power Purchase Expenses 4,256.35 4,256.30

O&M Expenses 1,184.72 1,149.86

Depreciation 243.84 243.07

Interest on Long Term Loans 168.45 165.34

Interest on Working Capital 11.86 11.54

Interest on Consumer Security Deposit 36.29 36.29

Provision for bad and doubtful debts 11.74 11.74

Contribution to contingency reserves 14.45 14.45

Transmission Charges - intra State 402.00 402.00

MSLDC Fees & Charges 1.30 1.30

Total Expense 6,331.00 6,291.89

Profit Before Tax 1,611.71 1,624.72

Add: Depreciation considered in Expenses 243.84 243.07

Less: Tax Depreciation 299.91 299.91

Total Taxable Income 1,555.64 1,567.88

Corporate Tax Rate (%) 34.61% 34.608%

Income Tax as per Corporate Tax Rate 538.37 542.61

Computation of MAT


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Order AEML-D

Approved after

truing up


MAT (%) 21.34% 21.34%

MAT 343.94 346.72

MAT Credit (FY 2016-17 available) 299.19 299.19

MAT credit utilization in FY 2017-18 194.44 195.90

Income Tax applicable (Net of MAT Credit

utilization) 254.45 343.94 346.72

Note: As MAT credit is utilized in FY 2017-18 also as per the Commission’s computations, the

closing balance of MAT credit available works out to Rs. 103.29 Crore (299.19 – 195.90)

Table 0-115: Income Tax for FY 2018-19 as approved by Commission (Rs. crore)


MTR

Order

AEML-D

Approved

after truing

up

Revenue from sale of Electricity including RAC

from own consumers

7,509.92 7,509.92

Revenue from RAC from Changeover Consumers 80.09 80.09

Income from Wheeling Charges from Changeover

and OA consumers

274.64 274.64

Income on account of CSS from OA consumers 127.22 127.22

Non-Tariff Income 150.32 150.32

Less: Efficiency Gains on IoWC 6.96

Less: Eff gains on Dist loss - FY 2015-16, FY

2016-17, and FY 2017-18

16.08 25.00

Less: Wires & Supply Availability Incentive - FY

16

0.33 0.33

Total Revenue 8,125.79 8,109.90


O&M Expenses 1,271.88 1,249.16


Interest on Long Term Loans 159.30 156.22

Financing Charges 0.66 -

Refinancing Cost 112.30 24.07

NPV of Interest cost saving 8.88 4.78


Interest on Consumer Security Deposit 38.50 38.50



Transmission Charges - intra State 391.19 391.19


Total Expense 6,193.35 6,092.39


Add: Depreciation considered in Expenses 261.86 260.72

Add: Other disallowance while computing IT 301.42 301.42

Less: Tax Depreciation 309.51 309.51

Less: Other expenses allowed for computing IT 268.24 268.24


of 445


MTR

Order

AEML-D

Approved

after truing

up


Corporate Tax Rate (%) 34.95% 34.95%

Income Tax as per Corporate Tax Rate 670.33 699.66

Computation of MAT


Add: Provision for Bad Debts and other

disallowances

24.57 24.57

Less: Reversal of provision for bad debts against

earlier years provision and other reversals

0 0


MAT (%) 21.55% 21.55%

MAT 421.74 440.07

MAT Credit (FY 2017-18 available) 104.75 103.29

MAT credit utilization in FY 2018-19 104.75 103.29

Income Tax applicable (Net of MAT Credit

utilization) 254.45 565.57 596.37

Note: As MAT credit is utilized in FY 2018-19 also as per the Commission’s computations, the

closing balance of MAT credit available works out to Nil Crore (103.29 – 103.29)

1.49 NON-TARIFF INCOME

1.49.1 Non-Tariff Income of Wires Business

1.49.1.1 Interest on contingency Reserve Investment


AEML-D has calculated the interest on contingency reserves as on 31 March 2018 and 31

March 2019 by applying the weighted average rate of interest on investments on

contingency reserves as per Annual Accounts of AEML-D for FY 2017-18 and FY 2018-

19, respectively.


The Commission has verified the details submitted by AEML-D with regards to interest

income on contingency Reserve Investment. The Commission accordingly approves the

income from Contingency Reserve Investment as submitted by AEML-D.


of 445

1.49.1.2 Land Usage Charges


AEML-T has commissioned 5 nos. of EHV stations at Goregaon, Gorai, Saki, Borivali and

Chembur on existing Receiving stations plots of AEML-D. Similarly, there are a few

installations of AEML-D at Aarey, Versova and Ghodbunder EHV station plots and located

on the land, which is part of AEML-T asset base. AEML-D has included the rent receivable

from AEML-T in NTI of Wires Business, while the rent payable by AEML-D is included

in the A&G Expenses of AEML-D.


The Commission has verified the documents received from AEML-D with regard to the

minutes of meeting for arrangement of Land usage charges between AEML-T and AEML-

D. The Commission accordingly approves the income from Land Usage Charges as

submitted by AEML-D.

1.49.1.3 Other Miscellaneous Receipts of Wires Business


Out of the Other Miscellaneous Receipts of Rs. 137.76 Crore, revenue from All-in-Hire

(AIH) charges received in FY 2017-18 was Rs. 135.36 Crore. Further, out of Rs. 135.36

Crore, Rs. 55.53 Crore pertains to arrears of AIH charges because of revision in AIH

charges with effect from 1 April 2016. The other components of “Other Miscellaneous

Receipts” of Wires Business include asset usage recovery (equipment hire charges) of Rs.

0.18 Crore, liquidated damages of Rs. 1.48 Crore, forex related income of Rs. 0.07 Crore,

tender document fees of Rs. 0.02 Crore and other income of Rs. 0.66 Crore.

Similarly, for FY 2018-19, out of the Other Miscellaneous Receipts of Rs. 107.96 Crore,

revenue from AIH charges received was Rs. 107.56 Crore. In addition, there is further

income from sale of scrap, investments, profit on sale of assets, etc.


The Commission has considered the Miscellaneous Receipt of Rs. 137.76 Crore and Rs.

107.96 Crore under Miscellaneous Receipt in Non-Tariff Income for FY 2017-18 and FY

2018-19, respectively, as submitted by AEML-D.


of 445

1.49.1.4 Liabilities Written back in Wire Business


Liabilities written back in Wires Business of Rs. 7.24 Crore in FY 2017-18 pertain to

reversal of provisions of Octroi payment made in previous years.


The Commission has considered the amount of Rs. 7.24 Crore in Non-Tariff Income of FY

2017-18.

The summary of Non-Tariff Income in Wires Business for FY 2017-18 and FY 2018-19 as

submitted by AEML-D is shown in the Table below:

Table 0-116: Non-Tariff Income for Wires Business for FY 2017-18 and FY 2018-19


Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Rents of land & building 0.52 0.10

Sale of Scrap 0.45 1.60

Income from Investments 8.38 6.58

Other/Miscellaneous receipts 137.76 107.96

Interest on Other Investments 0.14 0.45

Liabilities no longer required written 7.24 0.51

Profit on Sale of Asset 0.01 1.25

Land Usage Charges 5.09 5.34

Total 159.58 159.60 115.04 123.79


The Commission has considered the Non-Tariff Income submitted by AEML-D for FY

2017-18 and FY 2018-19 for Wires Business.

1.49.2 Non-Tariff Income of Supply Business

1.49.2.1 Rebate on Power Purchase Cost


Rebate on Power Purchase Cost availed by AEML-D in FY 2017-18 has been included in

the Non-Tariff Income of Supply Business for FY 2017-18 as per the directions of the

Commission in its Order dated 15 June 2012 (Case No. 180 of 2011)


of 445


The Commission has considered the rebate on power purchase cost availed by AEML-D

during FY 2017-18 and FY 2018-19 as submitted by AEML-D.

1.49.2.2 Other Miscellaneous Receipts for Supply Business


Other Miscellaneous Receipts of Supply Business (Rs. 0.83 Crore) consists of Rs. 0.58 Core

of charges for reinstallation of meters, asset usage recovery of Rs. 0.03 Crore, SLDC

charges collected from OA consumers of Rs. 0.03 Crore and other income of Rs. 0.20 Crore.


The Commission has considered other miscellaneous receipts for Supply Business as


1.49.2.3 Liabilities Written Back in Supply Business


Liabilities written back in Supply Business of Rs. 12.30 Crore in FY 2017-18 consists of

old consumer receivables written back of Rs. 4.04 Crore and unclaimed CSD of

disconnected consumers of Rs. 8.26 Crore.


The Commission has considered the above income under Non-Tariff Income for FY 2017-

18.

1.49.2.4 Delayed Payment Charges and Interest on Delayed Payment


In accordance with Regulation 36.3 of the MYT Regulations, 2015, Delayed Payment

Charges and Interest on Delayed Payment received in FY 2017-18 are not included in the

Non-Tariff Income of Supply Business for FY 2017-18 and FY 2018-19.


The Commission has not considered Delayed Payment Charges and Interest on Delayed

Payment received in line with the MYT Regulations, 2015 and as per submission of AEML-

D.


of 445

1.49.2.5 Income from Consumer Charges levied in accordance with Schedule of Charges


Vide letter dated 3 May 2018 (Ref. No. RInfra-D/MERC/GST Circular/01), AEML-D had

informed the Commission that the Department of Revenue, Govt. of India has, vide its

Circular No. 34/8/2018-GST, bearing Ref. No. F No. 354/17/2018-TRU, dated 1 March

2018, directed that allied services of transmission and distribution (non-energy receipts

from consumers) are chargeable under GST. AEML-D had further informed the

Commission that it has started charging GST on income from charges recovered under the

Schedule of Charges from consumers, from 1 April 2018 onwards and, since the GST

regime is effective from 1 July 2017, the GST on these charges from 1 July 2017 up to 31

March 2018, shall be recovered from ARR, because it would be very difficult to identify

the beneficiaries. In this regard, the portion of GST of Rs. 0.86 crore paid to Govt. relating

to jobs such as service shifting, etc. which are recovered on actual basis as per Schedule of

Charges, is included in the A&G expenses. Further, GST paid to the Govt. on other incomes

under Schedule of Charges, such as cheque bounce charges, meter testing charges,

connection / reconnection charges, burnt meter recovery charges, open access operating

charges, is reduced from Non-Tariff Income of FY 2017-18 and only the Net Income is

shown in the Petition.


The Commission has considered Income from Consumer Charges levied in accordance with

Schedule of Charges, as per submission of AEML-D, under Non-Tariff Income from

Supply Business.

1.49.2.6 Income from Staff Loans

AEML-D has not included interest on staff loans received in FY 2018-19 in the Non-Tariff

Income for FY 2018-19, as these are loans extended out of the Company’s Regulated

Return, which is the capital available to the Company to invest, extend loans, declare

dividend, etc. Also, no corresponding cost of extending the loans is included in the O&M

expenses. The Commission had also accepted the contention of AEML-D in the MTR Order

in Case No. 200 of 2017 and has not included the interest on staff loans while approving

Non-Tariff Income.


The Commission has not considered Income from Staff Loans under Non-Tariff Income in

accordance with the approach adopted by the Commission in MTR Order. The relevant

extract of the MTR Order is given below:


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“Further, in line with methodology followed by the Commission in the Truing up of

FY 2015-16, Interest from Staff Loan has not been included in the Non-Tariff

Income for FY 2016-17…”

The summary of Non-Tariff Income claimed by AEML-D for the Supply Business for FY

2017-18 and FY 2018-19 is as under:

Table 0-117: Non-Tariff Income for Supply Business for FY 2017-18 and FY 2018-

19, as submitted by AEML-D (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-up

Petition

MTR

Order

True-up

Petition

Income from Investment 1.18 0.88

Income from consumer charges levied in

accordance with Schedule of Charges

4.53

5.77

Income from recovery against theft and/or

pilferage of electricity

15.45

16.65

Other/Miscellaneous receipts 0.83 0.86

Rebate on power purchase 0.15 0.76

Liabilities no longer required written back 12.30 -

Burnt Meter Recovery 1.02 0.88

Delayed Payment Charges - -

Interest on Delayed Payment - -

Profit on Sale of Assets 0.73

Total 35.46 35.46 37.01 26.53


The Commission has approved the Non-Tariff Income for FY 2017-18 and FY 2018-19, as

summarised in the Table below:

Table 0-118: Non-Tariff Income for FY 2017-18 and FY 2018-19 as approved by the


Particulars

FY 2017-18 FY 2018-19

MTR

Order

True-

up

Petition

Approved

after

truing up

MTR

Order

True-up

Petition

Approved

after

truing up

Wires Business 159.58 159.60 159.60 115.04 123.79 123.79

Supply

Business 35.46 35.46 35.46 37.01 26.53 26.53

Total 195.04 195.06 195.06 152.05 150.32 150.32


of 445

1.50 INCOME FROM OTHER BUSINESS


AEML-D submitted that it has considered the rental income of Rs. 0.59 Crore received

from RInfra Corporate for FY 2017-18, two third of which is considered as Other Business

Income in accordance with the MYT Regulations, 2015. In FY 2018-19, no income towards

rent from RInfra-Corporate for occupancy of Devidas Lane Office was booked as the

premises were vacated.

Reliance Communication (RCOM) is utilizing rooftops of some of the receiving stations of

AEML-D by installing its BTS (Telecom) Towers. Two third of the total of actual rental

income in FY 2017-18 and FY 2018-19 from RCOM towers has been considered as Other

Business Income in accordance with the MYT Regulations, 2015.

There was an arrangement between RInfra-D and RInfra-Corporate in FY 2016-17 for

payment of rent by RInfra-Corporate to RInfra-D for occupancy of corporate employees at

Santacruz. For the period before the transfer of business, i.e., from 01.04.2018 to

28.08.2018, rent receivable from RInfra Corporate has been considered for the purpose of

truing-up. As the property is not transferred to AEML-D, no rental income for the period

thereafter has been considered. In the MTR Order, the Commission has also acknowledged

that rent from the property shall not be received for the whole of FY 2018-19.

Two third of the actual rent received from erstwhile RInfra-Corporate has been considered

as Other Business Income in accordance with the MYT Regulations, 2015.

An agreement has been made between REGSL (AEML-D) and RCOM on 28 August 2018

through which RCOM has been using the optic fibre network of AEML-D for providing

the backup path for its network. The rent received from RCOM for usage of optic fibre

network has been considered as income from other business and two third of the rent has

been considered for reduction from ARR.

The summary of Other Business Income for FY 2017-18 and FY 2018-19 is shown in the

Table below:

Table 0-119: Income from Other Business for FY 2017-18 as submitted by AEML-D

(Rs. Crore)


Rent from Devidas Lane Office 0.39 0.39

Rental Income from RCOM 0.58 0.58

Rental Income from Santacruz Property 25.00 25.00

Total 25.98 25.98


of 445


(Rs. Crore)


Rental Income for BTS tower business 0.58 0.69

Rental Income for optic fiber business 0 0.12

Rental Income from Santacruz Property 25.00 10.27

Total 25.58 11.08


The Commission has considered two third of the actual Income from Other Business as

submitted by AEML-D in line with the MYT Regulations, 2015, as shown in the Table

below:

Table 0-121: Income from Other Business for FY 2017-18 as approved by the



Petition

Approved after

truing up

Rent from Devidas Lane Office 0.39 0.39 0.39

Rental Income from RCOM 0.58 0.58 0.58

Rental Income from Santacruz

Property 25.00 25.00 25.00

Total 25.98 25.98 25.98

Table 0-122: Income from Other Business for FY 2018-19 as approved by the



Petition

Approved after

truing up

Rental Income for BTS tower business 0.58 0.69 0.69

Rental Income for optic fiber business 0 0.12 0.12

Rental Income from Santacruz

Property 25.00 10.27 10.27

Total 25.58 11.08 11.08

1.51 EFFICIENCY GAIN/ (LOSS) FOR FY 2017-18 and FY 2018-19

1.51.1 Efficiency Gains due to overachievement of Distribution Losses


AEML-D submitted that the Distribution Loss for FY 2017-18 has been 8.153%, against

the target of 8.86% approved by the Commission in AEML-D’s MTR Order in Case No.

200 of 2017. AEML-D has achieved a reduction of 0.707% over and above the target.

AEML-D is, therefore, entitled to claim Efficiency Gains for its efforts on loss reduction,

as under:


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Table 0-123: Efficiency Gains due to Overachievement in Distribution Losses for FY


Particulars UoM True-up Petition

Target Loss % 8.860%

Actual Losses % 8.153%

Difference % -0.707%

Input to Distribution System (Actual) MU 11,151.99

Sales @target loss level MU 10,163.92

Less: Change-over sales & OA sales MU 1,910.51

Net energy sales @ target loss level MU 8,253.41

Sales (Actual) MU 8,332.30

Increase in Sales - A MU 78.88

ABR (Average Billing Rate) - B Rs/kWh 8.62

Efficiency (Gains)/Losses Rs. Crore (67.97)

(Gains)/Losses to be passed on to the

consumers Rs. Crore

(45.31)

(Gains)/Losses to be

retained/absorbed by AEML-D Rs. Crore (22.66)

Similarly, for FY 2018-19, AEML-D submitted that the Distribution Loss has been 7.848%,

against the target of 8.61% approved by the Commission in AEML-D’s MTR Order in Case

No. 200 of 2017. AEML-D has achieved a reduction of 0.762% over and above the target.

AEML-D is, therefore, entitled to claim Efficiency Gains for its efforts on loss reduction,

as under:

Table 0-124: Efficiency Gains due to Overachievement in Distribution Losses for FY


Particulars UoM True-up Petition

Target Loss % 8.610%

Actual Losses % 7.848%

Difference % -0.762%




Net energy sales @ target loss level MU (319.30)

Sales (Actual) MU (235.25)

Increase in Sales – A MU 84.05

ABR (Average Billing Rate) - B Rs/kWh 8.98

Efficiency (Gains)/Losses Rs. Crore (75.49)

(Gains)/Losses to be passed on to the consumers Rs. Crore (50.33)

(Gains)/Losses to be retained/absorbed by

AEML-D Rs. Crore (25.16)


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The Commission has considered Distribution Loss as a controllable parameter, in

accordance with the MYT Regulations, 2015. As the computation of Distribution Losses

for FY 2017-18 and FY 2018-19 shows that the actual losses are lesser than the normative

losses, the Commission has computed the Efficiency Gain on this account considering the

target Distribution Loss in the MYT Order.

The sharing of Efficiency Gains on account of lower Distribution Loss has been computed

considering the difference in actual power purchase quantum and expected power purchase

quantum with target distribution loss. The approach to computation of gains/losses on this

account has been modified from considering additional/lower revenue to additional/lower

power purchase, as AEML-D is already selling all the power that it possibly can, and there

is no load shedding also in Mumbai. Hence, the impact of the lower Distribution Losses

would translate to lower power purchase quantum rather than additional sales revenue.

The average power purchase cost approved by the Commission for the respective year has

been considered for computing the Efficiency Gain. The sharing of Efficiency Gain on

account of lower than target Distribution Loss for FY 2017-18 and FY 2018-19 is shown

in the following Table:

Table 0-125: Sharing of Efficiency Gain on account of lower than target Distribution

Loss for FY 2017-18, as approved by Commission

Particulars UoM True-up

Petition

Approved after

truing up

Target Loss % 8.860% 8.86%

Actual Losses % 8.153% 8.16%

Difference % -0.707% -0.70%




Net energy sales @ target loss level MU 8,253.41

Sales (Actual) MU 8,332.30 8,332.30

Increase in Sales MU 78.88

Target Power Purchase MU 9,142.30

Actual Power Purchase MU 9,082.42

Increase/(Reduction) in Power Purchase MU (59.88)

ABR (Average Billing Rate) Rs/kWh 8.62

Average Power Purchase Rate Rs/kWh 4.35

Efficiency (Gains)/Losses Rs. Crore (67.97) (26.04)


of 445


Petition

Approved after

truing up


consumers Rs. Crore (45.31) (17.36)

(Gains)/Losses to be retained/absorbed

by AEML-D Rs. Crore (22.66) (8.68)

Table 0-126: Sharing of Efficiency Gain on account of lower than target Distribution

Loss for FY 2018-19, as approved by Commission


Petition

Approved after

truing up

Target Loss % 8.61% 8.61%

Actual Losses % 7.85% 7.84%

Difference % -0.76% -0.77%

Input to Distribution System (Actual) MU 11034.78

Sales @target loss level MU 10084.68

Less: Change-over sales & OA sales MU 1807.13

Net energy sales @ target loss level MU 8277.55

Sales (Actual) MU 8361.60 8,361.60

Increase in Sales MU 84.05

Target Power Purchase MU 9,149.36

Actual Power Purchase MU 9,081.76

Increase/(Reduction) in Power Purchase MU (67.60)

ABR (Average Billing Rate) Rs/kWh 8.98

Average Power Purchase Rate Rs/kWh 3.96

Efficiency (Gains)/Losses Rs. Crore (75.49) (26.77)


consumers Rs. Crore (50.33) (17.85)

(Gains)/Losses to be retained/absorbed

by AEML-D Rs. Crore (25.16) (8.92)

1.51.2 Efficiency Gain/Loss on O&M Expenses


AEML-D submitted that the actual O&M expenses in FY 2017-18 and FY 2018-19 were

lower than normative O&M expenses allowable at the time of truing up. AEML-D has

calculated the net entitlement after reducing the uncontrollable expenses from the actual

O&M expenses, as shown in the Tables below:


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Table 0-127: Sharing of Efficiency (Gains)/Loss on deviation in O&M Expenses for

FY 2017-18 as submitted by AEML-D (Rs. Crore)

Particulars Allowable

O&M Expenses

for FY 2017-18

Actuals Deviation 1/3rd Efficiency

(Gains)/

Loss

Net Entitlement of

O&M Expenses for

FY 2017-18

Total O&M

Expenses 1,195.85 1,165.97 (29.98) (9.96) 1,175.93


FY 2018-19 as submitted by AEML-D (Rs. Crore)

Particulars Allowable

O&M Expenses

for FY 2017-18

Actuals Deviation 1/3rd Efficiency

(Gains)/

Loss

Net Entitlement of

O&M Expenses for

FY 2017-18

Total O&M

Expenses 1,260.07 1,258.15 (1.92) (0.64) 1,258.57


As already mentioned earlier in this Chapter, the Commission has followed the

methodology adopted by it in the MTR Order and allowed the component-wise O&M

Expenses, and has accordingly computed the Gain / Loss on account of O&M Expenses as



FY 2017-18, as approved by the Commission (Rs. Crore)

Particulars

Allowable

expenses

approved in

this Order

Actual (Gain)/

Loss

Shared

with

consumers

(Retained)/

Borne by

AEML-D

Net

Entitlement

Wires

Business 801.46 759.82 (41.64) (13.88) (27.76) 773.70

Supply

Business 395.36 365.97 (29.39) (9.80) (19.59) 375.77

Wires +

Supply 1,196.81 1,125.79 (71.02) (23.67) (47.35) 1,149.46


of 445


FY 2018-19, as approved by Commission (Rs. Crore)

Particulars

Allowable

expenses

approved in

this Order

Actual (Gain)/

Loss

Shared

with

consumers

(Retained)/

Borne by

AEML-D

Net

Entitlement

Wires

Business 828.55 834.57 6.02 2.01 4.01 830.56

Supply

Business 407.18 407.84 0.66 0.22 0.44 407.40

Wires +

Supply 1,235.73 1,242.41 6.68 2.23 4.45 1,237.96

1.51.3 Efficiency Gain/Loss on Interest on Working Capital


AEML-D has claimed the net entitlement in interest on working capital, as per the

Commission’s philosophy in the MTR Order in Case No. 200 of 2017, without prejudice to

the contentions it has raised in the Appeal against the MTR Order. The sharing of efficiency

gains/losses as submitted by AEML-D for FY 2017-18 and FY 2018-19, is shown in the

Tables below:



Particulars Wires Supply Total

Normative IoWC 31.73 3.85 35.58

Actual IoWC 0 0 0

Net Entitlement 10.58 1.28 11.86





Actual IoWC 16.06 5.26 21.32



AEML-D has submitted actual Interest on Working Capital (IoWC) as zero for FY 2017-

18. The Commission has accordingly worked out Sharing of Gains/(Losses) on IoWC for

FY 2017-18 in line with the MYT Regulations, 2015.


of 445

For FY 2018-19, AEML-D submitted actual Interest on Working Capital of Rs. 16.06 crore

for Wires Business and Rs. 5.26 Crore for Supply Business. Regulation 31.6 provides for

receipt of Delayed Payment Charges and interest on Delayed Payment Charges to be

adjusted in actual IoWC for carrying out Sharing of Gains/(Losses). The relevant extract is

as follows.

“31.6 For the purpose of Truing-up for each year, the variation between the

normative interest on working capital computed at the time of Truing-up and the

actual interest on working capital incurred by the Generating Company or Licensee

or MSLDC, substantiated by documentary evidence, shall be considered as an

efficiency gain or efficiency loss, as the case may be, on account of controllable

factors, and shared between it and the respective Beneficiary or consumer as the

case may be, in accordance with Regulation 11:

Provided that the contribution of delay in receipt of payment to the actual interest

on working capital shall be deducted from the actual interest on working capital,

before sharing of the efficiency gain or efficiency loss, as the case may

be”(emphasis added)

In line with the above Regulations, the Commission has adjusted the Delayed Payment

Charges and interest on Delayed Payment Charges of Rs. 42.98 Crore (Rs. 26.30 Crore

+Rs. 16.68 Crore) as reflecting in Note 21 of audited accounts of FY 2018-19 against actual

IoWC of Rs. 21.32 Crore (Rs. 16.06 for Wires and Rs. 5.26 for Supply). The net actual

IOWC thus, works out to be negative, and is hence, considered to be zero for FY 2018-19.

The Commission has worked out Sharing of Gains on account of savings in Interest on

Working Capital in line with Regulation 11.1 of the MYT Regulations, 2015 as shown in

the following Table:





Actual IoWC 0 0 0






Actual IoWC 0 0 0



of 445

1.52 SUMMARY OF AGGREGATE REVENUE REQUIREMENT


The summary of the ARR for the Wires Business for FY 2017-18 and FY 2018-19 is as


Table 0-135: ARR of Wires Business for FY 2017-18 as submitted by AEML-D (Rs.

Crore)


Petition

Net entitlement

Operation & Maintenance

Expenses 810.80 784.22 789.75


Impact on taxes in FY 18 0 6.32 6.32


Impact on SoC for FY 18 0 0.56 0.56

Access charges paid to MMRDA 0 0.10 0.10

Depreciation 214.36 220.44 220.44

Interest on Loan Capital 159.27 159.14 159.14


Provision for bad and doubtful

debts 2.61 2.62 2.62

Contribution to contingency

reserves 13.19 13.19 13.19

Income Tax 62.61 105.49 105.49

Total Revenue Expenditure 1,294.69 1,323.81 1,308.18

Add: Return on Equity Capital 297.59 298.58 298.58

Aggregate Revenue

Requirement 1,592.28 1,622.39 1,606.76

Less: Non-Tariff Income 159.58 159.60 159.60

Less: Income from other business 25.98 25.98 25.98

Net Aggregate Revenue

Requirement 1,406.72 1,436.81 1,421.19

Table 0-136: ARR of Wires Business for FY 2018-19 as submitted by AEML-D (Rs.

Crore)


O&M Expenses - Net Entitlement 851.79 842.08

Uncontrollable Expense - GST Impact on taxes in

FY 19 0 8.04

Access charges paid to MMRDA 0 0.81

Way leave charges paid to Western railways 0 2.36


Interest on Loan Capital 153.93 151.63


of 445


Other Charges 0 0.63

Refinancing Cost 0 107.41

PV of Interest cost saving 0 8.13

Interest on Working Capital - Net Entitlement 30.11 21.30



Income Tax 62.61 84.73

Total Revenue Expenditure 1,343.22 1,480.73

Add: Return on Equity Capital 309.08 314.04

Aggregate Revenue Requirement 1,652.30 1,794.77

Less: Non-Tariff Income 115.04 123.79

Less: Income from other business 25.58 11.08

Net Aggregate Revenue Requirement 1,511.68 1,659.90

The following Tables gives the summary of the ARR for the Supply Business of AEML-D

for FY 2017- 18 and FY 2018-19:


Crore)


Petition

Net entitlement

Power Purchase Expenses

(including Inter-State Transmission

Charges)

4,336.58 4,256.35 4,256.35

Operation & Maintenance Expenses 399.99 381.75 386.18




Impact on SoC for FY 18 0 0.30 0.30




Interest on deposit from Consumers

and Distribution System Users 36.29 36.29 36.29


debts 9.13 9.12 9.12


reserves 1.27 1.26 1.26

Intra-State Transmission Charges 402.00 402.00 402.00

MSLDC Fees & Charges 1.30 1.30 1.30

Income Tax 191.84 238.45 238.45



Aggregate Revenue Requirement 5,439.47 5,392.73 5,394.60


of 445


Petition

Net entitlement


Less: Income from other business 0 0 0

Add: Efficiency Gain/(Loss) - Dist

Loss 0 22.66 22.66


Requirement 5,404.04 5,379.93 5,381.80


Crore)

Particulars / (Rs. Crore) MTR Order True-up

Petition

Power Purchase Expenses (including Inter-State

Transmission Charges) 4,262.46 3,888.04

O&M Expenses - Net Entitlement 420.22 416.49

Uncontrollable Expense - GST Impact on taxes in FY

19 0 2.10






Interest on Working Capital - Net Entitlement 4.63 6.98

Interest on deposit from Consumers and Distribution

System Users 39.30 38.50



Intra-State Transmission Charges 358.49 391.19


DSM Expense 2.22 0

Income Tax 191.84 480.85





Less: Income from other business 0 0

Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16


The summary of the ARR for the combined Wires Business and Supply Business for FY

2017-18 and FY 2018-19 is as shown in the Tables below:


of 445

Table 0-139: Combined ARR for Wires Business and Supply Business in FY 2017-18


Particulars MTR Order True-up Petition Net entitlement

Power Purchase Expenses (including Inter-

State Transmission Charges) 4,336.58 4,256.35 4,256.35

Operation & Maintenance Expenses 1,210.79 1,165.97 1,175.93



Uncontrollable Expense - GST Impact on

SoC for FY 18 0 0.86 0.86

Access charges paid to MMRDA 0 0.10 0.10

Depreciation 235.56 243.84 243.84



Interest on deposit from Consumers and

Distribution System Users 36.29 36.29 36.29

Provision for bad and doubtful debts 11.74 11.74 11.74

Contribution to contingency reserves 14.45 14.45 14.45



Income Tax 254.45 343.94 343.94






Add: Efficiency Gain/(Loss) - Dist Loss 0 22.66 22.66

Net Aggregate Revenue Requirement 6,810.76 6,816.74 6,802.98





State Transmission Charges) 4,262.46 3,888.04

O&M Expenses - Net Entitlement 1,272.01 1,258.57

Uncontrollable Expense - GST Impact

on taxes in FY 19 0 10.14

Access charges paid to MMRDA 0 0.81

Way leave charges paid to Western railways 0 2.36







of 445


Interest on Working Capital - Net

Entitlement 34.74 28.28


Distribution System Users 39.30 38.50



Intra-State Transmission Charges 358.49 391.19


DSM Expense 2.22 0

Income Tax 254.45 565.57





Less: Income from other business 25.58 11.08

Add: Efficiency Gain/(Loss) - Dist Loss 0 25.16



Based on the components as approved in the above paragraphs, the Commission has

approved the ARR for Wires Business and Supply Business for FY 2017-18 and FY 2018-

19, as shown in the Tables below:

Table 0-141: ARR for Wires Business for FY 2017-18 as approved by Commission

(Rs. Crore)


Petition

Approved

after truing up

O&M Expenses 810.80 796.73 773.70

Depreciation 214.36 220.44 219.95





Income Tax 62.61 105.49 106.34







Requirement 1,406.72 1,436.81 1,394.81


of 445

Table 0-142: ARR for Wires Business for FY 2018-19 as approved by Commission

(Rs. Crore)

Particulars MTR

Order

True-up

Petition

Approved after

truing up

O&M Expenses - Net Entitlement 851.79 853.29 830.56

Depreciation 228.23 236.26 235.07


Other Charges 0 0.63 -

Refinancing Cost 0 107.41 24.07

PV of Interest cost saving 0 8.13 4.78

Interest on Working Capital - Net Entitlement 30.11 21.30 10.42



Income Tax 62.61 84.73 89.34







Table 0-143: ARR for Supply Business for FY 2017-18 as approved by Commission

(Rs. Crore)

Particulars MTR

Order

True-up

Petition

Approved after

truing up



Operation & Maintenance Expenses 399.99 387.98 375.77










Income Tax 191.84 238.45 240.37









of 445

Table 0-144: ARR for Supply Business for FY 2018-19 as approved by Commission

(Rs. Crore)

Particulars / (Rs. Crore) MTR Order True-up

Petition

Approved after

truing up

Power Purchase Expenses (including Inter-State

Transmission Charges) 4,262.46 3,888.04 3,887.05

O&M Expenses - Net Entitlement 420.22 418.59 407.40




Refinancing Cost 0 4.89 -

PV of Interest cost saving 0 0.75 -

Interest on Working Capital - Net Entitlement 4.63 6.98 3.43







DSM Expense 2.22 0

Income Tax 191.84 480.85 507.03








Table 0-145: Combined ARR for Wires and Supply Business for FY 2017-18 as


Particulars MTR

Order

True-up

Petition

Approved after

truing up

Power Purchase Expenses (including

Inter-State Transmission Charges) 4,336.58 4,256.35 4,256.30

Operation & Maintenance Expenses 1,210.79 1,184.71 1,149.46

Depreciation 235.56 243.84 243.07



Interest on deposit from Consumers

and Distribution System Users 36.29 36.29 36.29




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Particulars MTR

Order

True-up

Petition

Approved after

truing up



Income Tax 254.45 343.94 346.72






Add: Efficiency Gain/(Loss) - Dist

Loss 0 22.66 8.68


Requirement 6,810.76 6,802.98

6,751.78

Table 0-146: Combined ARR for Wires and Supply Business for FY 2018-19 as

approved by Commission (Rs. Crore)

Particulars MTR

Order

True-up

Petition

Approved after

truing up



O&M Expenses - Net Entitlement 1,272.01 1,271.88 1,237.96

Depreciation 250.35 261.86 260.72



Refinancing Cost 0 112.30 24.07

PV of Interest cost saving 0 8.88 4.78

Interest on Working Capital - Net

Entitlement 34.74 28.28 13.85







DSM Expense 2.22 0 0

Income Tax 254.45 565.57 596.37









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1.53 REVENUE


For FY 2017-18, AEML-D has charged tariffs as approved in AEML-D’s MYT Order in

Case No. 34 of 2016. The revenue [excluding Regulatory Asset (RA) recovery] earned from

sales of energy and FAC charged to the consumers in FY 2017-18 is Rs. 6,448.92 Crore.

The Commission had approved Rs 6,447.33 Crore as revenue from sales in AEML-D’s

MTR Order in Case No. 200 of 2017, based on provisional submissions of AEML-D.

Table 0-147: Revenue from Sales (excluding RA) submitted by AEML-D for FY

2017-18


Revenue (Rs. Crore) 6,447.33 6,448.92

Own Sales (MU) 8,321.05 8,332.30

ABR (Rs. /kWh) 7.75 7.74

The Commission, in AEML-D’s MYT Order (Case No. 9 of 2013), had directed AEML-D

to separately account for RA recovery. Accordingly, the revenue received though

Regulatory Asset Charges (RAC) from own consumers is not included in the revenue shown

in the above Table.

From April 2018 to August 2018, AEML-D has charged tariffs as approved for FY 2018-

19 in AEML-D’s MYT Order dated 21 October 2016 in Case No. 34 of 2016. From

September 2018 to March 2019, AEML-D has charged tariffs as approved in AEML-D’s

MTR Order (Case No. 200 of 2017). The revenue (excluding RA recovery) earned from

sales of energy to the consumers in FY 2018-19 is shown in the Table below:

Table 0-148: Revenue from Sales (excluding RA) submitted by AEML-D for FY

2018-19


Revenue (Rs. Crore) 7008.88 7009.04

Own Sales (MU) 8579.21 8361.60

ABR (Rs. /kWh) 8.17 8.38

The Commission, in AEML-D’s MYT Order (Case No. 9 of 2013), had directed AEML-D

to separately account for RA recovery. Accordingly, the revenue received though RAC

from own consumers is not included in the revenue shown in the above Table.


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The Commission asked for the audited Reconciliation Statement showing income and

expenses and their allocation to generation, transmission and distribution businesses of

AEML. From the Reconciliation Statement, the Commission has verified the revenue from

sale of power.

The Commission has accepted the submission of AEML-D regarding revenue from

assessed sales. Accordingly, it has not been considered as part of revenue, since it is

included in Non-Tariff Income.

Accordingly, the Commission approves the actual total revenue from sale of electricity to

own consumers, as shown in the Table below:




truing up

Revenue (Rs. Crore) 6,447.33 6,448.92 6,448.92

Own Sales (MU) 8,321.05 8,332.30 8,332.30

ABR (Rs. /kWh) 7.75 7.74 7.74




truing up

Revenue (Rs. Crore) 7,008.88 7,009.04 7,009.04

Own Sales (MU) 8,579.21 8,361.60 8,361.60

ABR (Rs. /kWh) 8.17 8.38 8.38

1.54 REVENUE FROM WHEELING CHARGES FROM CHANGE-OVER AND

OPEN ACCESS CONSUMERS


The revenue earned from Wheeling Charges in FY 2017-18 paid by Change-over

consumers and OA consumers is Rs. 285.59 Crore. The Commission, in AEML-D’s MTR

Order (Case 200 of 2017), had provisionally approved revenue from Wheeling Charges of


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Rs. 283.83 Crore, considering the provisional figures provided by AEML-D. The details of

revenue from Wheeling Charges are as under:

Table 0-151: Wheeling Revenue from Change-over and OA Consumers in FY 2017-

18 as submitted by AEML-D (Rs. Crore)

Particulars MTR

Order AEML-D

Petition Revenue from Wheeling Charges from Change-over &

OA Consumers 283.83 285.59

The revenue earned from Wheeling Charges in FY 2018-19, paid by Change-over

consumers and OA consumers is Rs. 274.64 Crore. The Commission, in AEML-D’s MTR

Order (Case 200 of 2017), had approved revenue from Wheeling Charges of Rs. 299.87

Crore. The details of revenue from Wheeling Charges are as under:



Particulars MTR

Order AEML-D

Petition Revenue from Wheeling Charges from Change-over &

OA Consumers 299.87 274.64

Reduction in revenue from Wheeling Charges vis-à-vis the MTR Order is on account of

lower network sales and is hence, uncontrollable.


The Commission has approved the actual revenue from Wheeling Charges from change-

over and OA consumers as submitted by AEML-D, as shown in the following Table:


18 as approved by Commission (Rs. Crore)

Particulars MTR

Order AEML-D

Petition Approved after

truing up

Revenue from Wheeling Charges from

Changeover & OA Consumers 283.83 285.59 285.59


19 as approved by Commission (Rs. Crore)

Particulars MTR

Order AEML-D

Petition Approved after

truing up


Changeover & OA Consumers 299.87 274.64 274.64


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1.55 REVENUE FROM CROSS-SUBSIDY SURCHARGE FROM OA

CONSUMERS


The revenue earned from CSS in FY 2017-18, paid by Change-over consumers and OA

consumers is Rs. 161.76 Crore. The Commission, in AEML-D’s MTR Order (Case No. 200

of 2017), had provisionally approved revenue from CSS of Rs. 162.17 Crore, considering

the provisional figures provided by AEML-D. The details of revenue from CSS are as

below:

Table 0-155: Revenue from CSS in FY 2017-18 as submitted by AEML-D (Rs.

Crore)


Revenue from CSS 162.17 161.76

The revenue earned from CSS in FY 2018-19, paid by Change-over consumers and OA

consumers is Rs. 127.22 Crore. The Commission in AEML-D’s MTR Order (Case No. 200

of 2017) had approved revenue from CSS of Rs. 111.07 Crore. The details of revenue from

CSS are as under:

Table 0-156: Revenue from CSS in FY 2018-19 as submitted by AEML-D (Rs.

Crore)


Revenue from CSS 111,07 127.22


The Commission has verified the revenue from CSS from the audited Reconciliation

Statement, and has approved it as shown in the following Table:

Table 0-157: Revenue from CSS in FY 2017-18 as approved by Commission (Rs.

Crore)

Particulars MTR

Order

True-up

Petition

Approved after

truing up

Revenue from CSS 162.17 161.76 161.76

Table 0-158: Revenue from CSS in FY 2018-19 as approved by Commission (Rs.

Crore)

Particulars MTR

Order

True-up

Petition

Approved after

truing up

Revenue from CSS 111,07 127.22 127.22


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1.56 REVENUE GAP


FY 2017-18

The Revenue Gap for the Wires Business as per Net Entitlement and as approved in the

MTR Order in Case No. 200 of 2017 are as under:

Table 0-159: Revenue Gap for Wires Business for FY 2017-18 as submitted by

AEML-D (Rs Crore)

Particulars MTR Order Net Entitlement

Wires ARR 1,406.72 1,421.19

Revenue Gap/(Surplus) allowed in MYT

Order 179.36 179.36

Wires ARR with Revenue Gap 1,586.08 1,600.55


changeover and OA consumers 283.83 285.59

Net Wires ARR 334.24 348.71


Own Consumers 1,251.84 1,251.84

Revenue Gap/(Surplus) of Wires

Business 50.41 63.12

The Revenue Gap for Supply Business as per Net Entitlement and as approved in the MTR

Order in Case No. 200 of 2017 are as under:

Table 0-160: Revenue Gap/(Surplus) for Supply Business in FY 2017-18


Particulars MTR Order Net Entitlement

Supply ARR 5,404.04 5,381.80

Revenue Gap/(Surplus) allowed in MYT

Order 98.86 98.86

Supply ARR with Revenue Gap 5,502.90 5,480.66

Revenue from CSS from change-over and OA

consumers 162.17 161.76

Net Supply ARR 5,340.73 5,318.90

Revenue from Sales 5,195.50 5,197.08

Revenue Gap/(Surplus) of Supply Business 145.23 121.81

The combined Revenue Gap for Wires and Supply Business as per Net Entitlement and as

approved in the MTR Order in Case No. 200 of 2017 are as under:


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Table 0-161: Combined Revenue Gap for Wires Business and Supply Business in FY


Particulars / (Rs. Crore) MTR Order Net

Entitlement

Wire and Supply ARR 6,810.76 6,802.98

Revenue Gap allowed in MYT Order (Case No.

36 of 2016) 278.22 278.22

Wires & Supply ARR with Revenue Gap 7,088.98 7,081.20

Revenue from Wheeling Charges and CSS from

changeover and OA consumers 446.00 447.35

Net Wires and Supply ARR 6,642.96 6,633.85

Revenue from Sales from Own Consumers 6,447.34 6,448.92

Revenue Gap of Wires and Supply Business 195.64 184.93

FY 2018-19

The Commission had allowed a Revenue Gap of Rs. 242.47 Crore (Rs. 162.69 Crore in

Wires Business and Rs. 79.78 Crore in Supply Business) to be recovered in FY 2018-19 in

the MYT Order dated 21 October 2016 in Case No. 34 of 2016. The Tariffs decided in

MYT Order for FY 2018-19 were applied for the first five months of FY 2018-19 before

getting revised as per the MTR Order. In the revised ARR/tariffs of FY 2018-19 as per the

MTR Order, a further Revenue Gap of Rs. 250.65 Crore was added in the Supply Business

(no amount was added in the Wires Business ARR). Therefore, while the Revenue Gap of

Rs. 242.47 Crore was recovered throughout FY 2018-19, the addition Revenue Gap of Rs.

250.65 Crore could be recovered from tariffs from 1 September 2018 onwards only.

Based on the above principle, the Revenue Gap for Wires Business as per Net Entitlement

and as approved in the MTR Order in Case No. 200 of 2017 are as under:

Table 0-162: Revenue Gap for Wires Business for FY 2018-19 as submitted by

AEML-D (Rs Crore)


Order

Net

Entitlement

Wires ARR 1,511.68 1,659.90

Revenue Gap allowed in MYT Order (Case No. 36 of 2016) 162.69 162.69

Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 0 0


Revenue from Wheeling Charges from changeover and OA

consumers 299.87 274.64

Net Wires ARR 1,374.50 1,547.95

Revenue from Wheeling Charges from Own Consumers 1,374.50 1,287.09

Revenue Gap of Wires Business 0 260.86


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The Revenue Gap for Supply Business as per Net Entitlement and as approved in the MTR

Order in Case No. 200 of 2017 are as under:

Table 0-163: Revenue Gap/(Surplus) for Supply Business in FY 2018-19



Order

Net

Entitlement

Supply ARR 5,313.72 5,304.79


Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 250.65 250.65


Revenue from CSS 111.07 127.22

Net Supply ARR 5,533.08 5,508.00


Revenue Gap of Supply Business 1.24 (213.95)

The combined Revenue Gap for Wires and Supply Business as per Net Entitlement and as

approved in the MTR Order in Case No. 200 of 2017 are as under:




Order

Net

Entitlement

Wire and Supply ARR 6,825.40 6,964.70


Revenue Gap allowed in MTR Order (Case No. 200 of 2017) 250.65 250.65


Revenue from Wheeling Charges and CSS from changeover

and OA consumers 410.94 401.86

Net Wires and Supply ARR 6,907.58 7,055.95


Revenue Gap of Wires and Supply Business 1.24 46.92


Based on the approved ARR and Revenue as discussed in the previous paragraphs, the

Commission has approved the Revenue Gap/(Surplus) for the Wires Business and Supply

Business of AEML-D for FY 2017-18 and FY 2018-19 as shown in the Tables below:


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Table 0-165: Revenue Gap/(Surplus) for Wires Business for FY 2017-18 as approved

by the Commission (Rs. Crore)


Petition

Approved after

truing up

Wires ARR 1,406.72 1,421.19 1,394.81

Revenue Gap/(Surplus) allowed in

MYT Order 179.36 179.36 179.36

Wires ARR with Revenue Gap 1,586.08 1,600.55 1,574.17


changeover and OA consumers 283.83 285.59 285.59

Net Wires ARR 1,302.25 1,314.96 1,288.58


Own Consumers 1,251.84 1,251.84 1,251.84

Revenue Gap/(Surplus) of Wires

Business 50.41 63.12 36.75

Table 0-166: Revenue Gap/(Surplus) for Supply Business for FY 2017-18 as



Petition

Approved

after truing up

Supply ARR 5,404.04 5,381.79 5,356.96

Revenue Gap/(Surplus) allowed in

MYT Order 98.86 98.86 98.86

Supply ARR with Revenue Gap 5,502.90 5,480.65 5,455.82

Revenue from CSS from change-

over and OA consumers 162.17 161.76 161.76

Net Supply ARR 5,340.73 5,318.90 5,294.06

Revenue from Sales 5,195.50 5,197.08 5,197.08

Revenue Gap/(Surplus) of Supply

Business 145.23 121.81 96.98




Order

True-up

Petition

Approved after

truing up

Wire and Supply ARR 6,810.76 6,802.98 6,751.78


36 of 2016) 278.22 278.22 278.22

Wires & Supply ARR with Revenue Gap 7,088.98 7,081.20 7,030.00



Net Wires and Supply ARR 6,642.96 6,633.85 6,582.65

Revenue from Sales from Own Consumers 6,447.34 6,448.92 6,448.92

Revenue Gap of Wires and Supply Business 195.62 184.93 133.72


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Table 0-168: Revenue Gap/(Surplus) for Wires Business for FY 2018-19 as approved



Order

True-up

Petition

Approved

after truing up

Wires ARR 1,511.68 1,659.90 1,537.90


36 of 2016) 162.69 162.69 162.69

Revenue Gap allowed in MTR Order (Case No.

200 of 2017) 0 0 0




Net Wires ARR 1,374.50 1,547.95 1,425.95

Revenue from Wheeling Charges from Own

Consumers 1,374.50 1,287.09 1,287.09

Revenue Gap of Wires Business 0 260.86 138.86

Table 0-169: Revenue Gap/(Surplus) for Supply Business for FY 2018-19 as



Order

True-up

Petition

Approved after

truing up

Supply ARR 5,313.72 5,304.79 5,293.36


36 of 2016) 79.78 79.78 79.78


200 of 2017) 250.65 250.65 250.65

Supply ARR with Revenue Gap 5,644.15 5,635.22 5,623.79

Revenue from CSS 111.07 127.22 127.22

Net Supply ARR 5,533.08 5,508.00 5,496.57


Revenue Gap of Supply Business 1.24 (213.95) (225.38)


2018-19 as approved by the Commission (Rs. Crore)


Order

True-up

Petition

Approved

after truing

up

Wire and Supply ARR 6,825.40 6,964.70 6,831.26


36 of 2016) 242.47 242.47 242.47


200 of 2017) 250.65 250.65 250.65

Wires & Supply ARR with Revenue Gap 7,318.52 7,457.82 7,324.38



Net Wires and Supply ARR 6,907.58 7,055.95 6,922.52


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Order

True-up

Petition

Approved

after truing

up


Revenue Gap/(Surplus) of Wires and Supply

Business 1.24 46.92 (86.52)

As regards Carrying Cost on the Revenue Gap/(Surplus), the same has been elaborated

subsequently while discussing the ‘Recovery of Past Gaps’.

1.57 REGULATORY ASSETS RECOVERY IN FY 2017-18 AND FY 2018-19


AEML-D has levied Regulatory Asset Charges in FY 2017-18 as approved in MYT Order

in Case No. 34 of 2016 for FY 2017-18. The actual RA recovery in FY 2017-18 from all

consumers was Rs. 851.37 Crore. The RA under recovery in FY 2017-18 is thus, Rs. 42.51

Crore. The Commission had also considered RA under recovery based on the submissions

of AEML-D of Rs. 42.51 Crore for FY 2017-18 in the MTR Order in Case No. 200 of 2017.

Table 0-171: Actual Regulatory Assets Recovery in FY 2017-18 as submitted by

AEML-D (Rs. Crore)


RA Recovery approved in FY 17-18 893.88 893.88

Actual RA Recovery in FY 17-18 851.37 851.37

Under recovery in FY 17-18 42.51 42.51

For the first five months of FY 2018-19, Regulatory Asset Charges levied to consumers

were as per the MYT Order dated 21st October 2016 in Case No. 34 of 2016. From 1

September 2018 onwards, the Regulatory Asset Charges levied to consumers were as per

the MTR Order dated 12 September 2018. The actual RA recovery in FY 18-19 is shown

in the table below:

Table 0-172: Actual Regulatory Assets Recovery in FY 2018-19 as submitted by

AEML-D (Rs. Crore)

Particulars True-up Petition

Recovery from own consumers 500.88

Recovery from changeover consumers 80.09

Total 580.98

The Commission, in the MTR Order dated 12 September 2018, had approved RA recovery

of Rs. 471.43 Crore in FY 2018-19. As can be seen from the table above, there is an over


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recovery of RA in FY 2018-19. This is because for the first five months of FY 2018-19, the

RAC was higher than the RAC approved in the MTR Order dated 12 September 2018.


The Commission has considered the actual RA recovery as submitted by AEML-D. The

RA over/under-recovery determined by the Commission after true-up is given in the

following Table:

Table 0-173: Regulatory Asset Over/Under Recovery in FY 2017-18 as approved by

the Commission (Rs. Crore)

Particulars True-up Petition Approved in

this Order

RA Recovery approved in FY 2017-18 893.88 893.88

Actual RA Recovery in FY 2017-18 851.37 851.37 Under recovery in FY 2017-18 42.51 42.51

Table 0-174: Actual Regulatory Assets Recovery in FY 2018-19 as approved by the


Particulars True-up Petition Approved in

this Order

Recovery from own consumers 500.88 500.88

Recovery from changeover consumers 80.09 80.09 Total 580.98 580.98

The treatment of this Over/Under Recovery of Regulatory Asset is discussed along with the

treatment of Cumulative Revenue Gap/(Surplus) in Chapter 6 of this Order.


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PROVISIONAL TRUING-UP FOR FY 2019-20

AEML-D submitted that it has filed its Petition for provisional truing-up of expenditure and

revenue for FY 2019-20, in accordance with Regulation 5.1 (a) of the MYT Regulations,

2019, which require the Distribution Licensee to file the MYT Petition comprising inter

alia, provisional truing up for FY 2019-20 to be carried out under the MYT Regulations,

2015. Accordingly, in this Chapter, AEML-D has presented the unaudited actuals of H1 of

FY 2019-20 and the estimates of H2 of FY 2019-20. A comparison with the approved

figures as per MTR Order is also presented along with reasons for deviations, wherever

required.

The Commission has analysed the estimated expenses and revenue under each head and

provisionally approved the expenditure and revenue of AEML-D for FY 2019-20, in

accordance with the MYT Regulations, 2015, as discussed in the subsequent paragraphs.

1.58 SALES


1.58.1 Actuals for H1 of FY 19-20

AEML-D submitted the actual category-wise own sales and change-over sales in H1 of FY

2019-20.

AEML-D submitted that it is not possible to quantify the exact quantum of OA consumption

till September 2019, as the Generation Credit Note (GCN) of non-firm OA consumers till

September 2019 has not been received yet. AEML-D has therefore, estimated the OA

consumption in H1 of FY 2019-20, based on the OA consumption during H1 of FY 2018-

19, as shown in the Table below:

Table 0-1: Estimated OA Consumption in H1 of FY 2019-20 as submitted by AEML-

D (MU)

Particulars H1 of FY 19-20 -Estimates

HT I - Industrial 49.70

HT II - Commercial 74.09

HT VI(B) - Public Service

(Others) 2.69

Total 126.48


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1.58.2 Estimates for H2 of FY 19-20

AEML-D has estimated the sales to own consumers in H2 of FY 2019-20 by considering

migration and reverse migration of consumers., AEML-D has considered the average of

number of consumers migrated in the months from April 2019 to August 2019 as the

monthly number of consumers migrating in H2 of FY 2019-20.

As regards reverse migration of change-over consumers back to AEML-D, the tariff of LT

– I (Residential high end with consumption of more than 500 units per month), LT II(a),

LT II(c) and LT III(a) consumers in change-over category is higher than AEML-D tariff.

Therefore, most of the reverse migration is happening in these categories. For these

categories, AEML-D has considered the average number of consumers from April 2019 to

August 2019 as the number of consumers that will migrate back to AEML-D in H2 of FY

2019-20.

Post the issuance of the Order in Case No. 182 of 2014 dated 12 June, 2017, there was

switch-over of consumers from AEML-D network to TPC-D. During H1 of FY 2019-20,

mostly residential consumers (consuming up to 500 units per month) and LT II(a)

consumers have switched over to TPC-D, both from change-over and AEML-D direct.

AEML-D expects the trend to continue in H2 of FY 2019-20. Hence AEML-D has

considered the average number of consumers in these categories who had switched over

from April 2019 to August 2019 as the number of consumers switching over to TPC-D in

H2 of FY 2019-20. Further, AEML-D expects some of the consumers of HT – I Industry

category with annual consumption of about 180 MU to switch-over to AEML-D from TPC-

D in H2 of FY 2019-20. 70% of this sale is expected to be addition in OA sales and rest

30% is expected to be addition in own sales of AEML-D. AEML-D has appropriately

factored in this sale in own and OA sales in FY 2019-20.

At present, AEML-D is carrying out two DSM programs – large scale refrigerator program

and large-scale ceiling fan program, after getting approval from the Commission. The

estimated incremental reduction in sales due to these two programs has been factored in the

sales projections by AEML-D. AEML-D expects reduction of 0.169 MU in sales of H2 of

FY 2019-20.

In FY 2018-19, a total of 7,680.56 kW Roof top solar (RTS) PV has been installed in

AEML-D licence area as per MERC (Net Metering for Solar Roof-top PV systems)

Regulations, 2015. For the purpose of estimating increase in Solar PV installations, AEML-

D has considered the same capacity addition of 7,680.56 kW in FY 2019-20 as well.

AEML-D expects a reduction of 8.94 MU in sales of H2 of FY 2019-20, in different

categories, on account of energy generation by RTS system.


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AEML-D has provided detailed methodology for computation of sales of H2 of FY 2019-

20 and has accordingly estimated sales for H2 and subsequently total sales for entire FY

2019-20.

The actual own sales in H1 of FY 19-20 and the estimated own sales in H2 of FY 19-20

worked out based on the methodology and assumptions is shown as under:

Table 0-2: Own Sales of Actual H1 and estimated H2 for FY 2019-20 as submitted by

AEML-D (MU)

Particulars / (MU) MTR Order

FY 2019-20

Own Sales

(H1) -

Provisional

Actuals

Own Sales

(H2) -

Estimates

Own Sales

(Total) -

Estimates

LT Category

LT I - Below Poverty Line 0.02 0.00 0.01 0.01


0-100 1,656.03 838.66 819.13 1,657.78

101-300 1,141.55 632.08 480.10 1,112.18

301-500 201.39 124.91 68.12 193.03

500 and above 72.59 47.03 18.72 65.75


0-100 247.99 133.31 138.23 271.54

101-300 382.72 205.20 196.95 402.15

301-500 208.17 115.61 94.77 210.37

500 and above 412.42 227.80 177.19 404.99

LT II (a) - 0-20 kW 1,934.67 934.90 842.57 1,777.46

LT II (b) - 20-50 kW 241.35 124.17 116.49 240.66

LT II (c) - above 50 kW 552.58 292.88 273.61 566.49

LT III (a) - LT Industrial upto 20

kW 186.82 83.76 79.40 163.16

LT III (b) - LT Industrial above 20

kW 394.49 194.13 183.43 377.56

LT IV - Public Water Works 13.81 6.49 6.51 12.99


Hoardings 3.65 1.23 1.27 2.51

LT VI: LT -Street Lights 59.47 23.43 25.92 49.36

LT-VII (A): LT -Temporary

Supply Religious 2.13 0.55 1.62 2.17

LT-VII (B): LT -Temporary

Supply Others 8.24 5.58 5.46 11.04

LT VIII: LT - Crematorium &

Burial Grounds 1.40 0.65 0.68 1.33


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FY 2019-20

Own Sales

(H1) -

Provisional

Actuals

Own Sales

(H2) -

Estimates

Own Sales

(Total) -

Estimates

LT IX (a): PS - Govt. EI &

Hospitals 25.80 13.04 12.65 25.69

LT IX (b): PS - Others 162.50 62.95 59.97 122.93

LT X (a): Agriculture - Pumpsets 0.06 0.03 0.03 0.06

LT X (b): Agriculture - Others 0.14 0.12 0.11 0.23

LT XI: EV Charging Stations 0 0.00 0.01 0.01

Total LT 7,909.99 4,068.51 3,602.94 7,671.45

HT Category

HT I: HT-Industry 442.14 142.58 144.76 287.34

HT II: HT- Commercial 345.26 250.73 227.13 477.86

HT III: HT-Group Housing

Society 40.04 20.78 18.35 39.13

HT IV: HT -Public Water Works 6.74 4.42 3.89 8.31

HT V - HT Metro & Monorail 31.56 15.87 11.91 27.78

HT VI (a):PS - Govt. EI &

Hospitals 8.66 3.13 2.68 5.81

HT VI (b):PS - Others 100.16 52.45 51.53 103.98

HT VII: Temporary Supply 2.87 0.78 2.48 3.26

HT VIII: EV Charging Stations 0 0 0 0

Total HT 977.43 490.74 462.72 953.47

Total 8,887.42 4,559.25 4,065.66 8,624.92

The estimated change-over sales in H2 of FY 2019-20 is worked out based on the

methodology and assumptions adopted for estimating own sales for H2 of FY 2019-20 and

is shown as under:

Table 0-3: Estimated Changeover Sales of H1 and H2 of FY 2019-20 as submitted by

AEML-D (MU)


FY 2019-20

Changeover

Sales (H1) -

Provisional

Actuals

Changeover

Sales (H2) -

Estimates

Changeover

Sales (Total)

- Estimates

LT Category

LT I - Below Poverty Line 0 0 0


0-100 260.04 248.32 508.36

101-300 259.41 188.42 447.83

301-500 49.76 21.45 71.22

500 and above 13.28 3.68 16.96


0-100 44.54 45.29 89.83


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FY 2019-20

Changeover

Sales (H1) -

Provisional

Actuals

Changeover

Sales (H2) -

Estimates

Changeover

Sales (Total)

- Estimates

101-300 70.63 64.78 135.41

301-500 36.80 26.69 63.48

500 and above 41.04 27.27 68.31

LT II (a) - 0-20 kW 45.64 38.85 84.49

LT II (b) - 20-50 kW 11.82 10.76 22.58

LT II (c) - above 50 kW 13.05 10.40 23.46

LT III (a) - LT Industrial upto 20

kW

7.92 7.40 15.32

LT III (b) - LT Industrial above 20

kW

4.95 4.47 9.42

LT IV - Public Water Works 0 0 0


Hoardings

0.01 0.01 0.01

LT VI: LT -Street Lights 0 0 0


Supply Religious

0 0 0


Supply Others

0.01 0.02 0.03


Burial Grounds

0.12 0.14 0.26


Hospitals

0 0 0

LT IX (b): PS - Others 1.27 1.22 2.50

LT X (a): Agriculture - Pumpsets 0 0 0

LT X (b): Agriculture - Others 0 0 0

LT XI: EV Charging Stations 0 0 0

Total LT 860.30 699.17 1,559.48

HT Category

HT I: HT-Industry 0.10 0.09 0.19

HTII: HT- Commercial 2.25 1.99 4.24


Society

0 0 0

HT IV: HT -Public Water Works 0 0 0

HT V - HT Metro & Monorail 0 0 0


Hospitals

0 0 0

HT VI (b):PS - Others 0 0 0

HT VII: Temporary Supply 0 0 0

HT VIII: EV Charging Stations 0 0 0

Total HT 2.35 2.08 4.43

Total 1,664.01 862.66 701.25 1,563.91


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The Commission had approved changeover sales of 1,664.01 MU for FY 2019-20 in the

MTR Order dated 12 September 2018 on provisional basis. The actuals are expected to be

lower than the same, considering the actuals of H1 of FY 2019-20 and also the fact that the

actuals of previous years have been lower than the figures considered by the Commission.

The estimated OA consumption for H1 and H2 of FY 2019-20 are shown in the table below:

Table 0-4: Estimated OA consumption of FY 2019-20 as submitted by AEML-D

(MU)

Particulars /(MU) MTR

Order

OA

Consumption

(H1) -

Estimates

OA

Consumption

(H2) -

Estimates

OA

Consumption

(Total) -

Estimates

HT I - Industrial 49.70 94.88 144.59

HT II - Commercial 74.09 56.52 130.60

HT VI(B) - Public Service

(Others)

2.69 1.95 4.64

Total 225.70 126.48 153.34 279.83


For projecting sales in the Control Period, the Commission in previous MYT and MTR

Order had adopted a holistic approach as it is difficult to establish any trend in the growth

rates for specific consumer categories due to migration and reverse migration of consumers

in some categories from AEML-D to TPC-D and back to AEML-D over past 2-3 years. The

Commission projected total consolidated category-wise sales as the summation of the direct

sales of TPC-D, direct sales of AEML-D, the change-over sales and OA consumption.

Before projecting the energy sales for FY 2019-20 and subsequently for fourth Control

Period, it is important to review the projections for FY 2017-18 and FY 2018-19 made in

MTR Order as against the actual sales achieved during this period. The Commission had

projected energy sales for own consumers of AEML-D as 8321.05 MU for FY 2017-18 and

8,579.21 MU for FY 2018-19. As against this, the actual sales were 8,332.30 MU for FY

2017-18 and 8,361.60 MU for FY 2018-19. As the provisional actuals of FY 2017-18 were

available at the time of the MTR Order, no significant variation is expected for this year.

The variation of actual sales from the approved sales for FY 2018-19 are within the range

of +-5%.

Further, actual changeover sales during FY 2017-18 and FY 2018-19 also did not deviate

much from the projected changeover sales of FY 2017-18 and FY 2018-19. The actual

changeover sales during FY 2018-19 were 1,571.86 MU as against the projected sales of

1,667.97 MU. Moreover, OA consumption projected was also in line with actual

consumption during FY 2018-19.


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Hence, the methodology adopted by the Commission for sales projections is appropriate

given the difficulties in assessing the category-wise trend of sales of AEML-D and TPC-D

on stand-alone basis. In view of the above, for FY 2019-20 and for fourth Control Period

(i.e., FY 2020-21 to FY 2024-25), the Commission has continued with the holistic approach

and projected the energy sales accordingly, as elaborated in the following paragraphs:

(a) The Commission has analysed the growth trend of the category-wise total energy

sales for past period. The Commission has analysed the growth trend of past sales in

various segments as AEML-D Own sales, Changeover Sales, TPC-D Direct sales in

AEML-D’s area of supply, TPC-D Direct sales in BEST’s area of supply, Open

Access sales on TPC-D’s network, and OA sales on AEML-D’s network.

(b) The overall trend of growth in consolidated sales gives a realistic picture of category-

wise trends, which have been used to project the overall category-wise sales for TPC-

D and AEML-D combined for the area of supply overlapping with AEML-D.

(c) Since, the actual energy sales for FY 2018-19 are available now, the Commission has

considered the past sales up to FY 2018-19 for growth trend analysis. The energy

sales for FY 2018-19 has been considered as base value for projecting the energy

sales for FY 2019-20 and for the fourth Control Period, i.e., FY 2020-21 to FY 2024-

25.

(d) CAGR of actual consolidated sales for different periods in the past eight years, i.e.,

FY 2010-11 to FY 2018-19, has been analysed and an appropriate CAGR has been

considered.

(e) Direct sales of TPC-D were projected based on past trends as these are not affected

by migration or reverse migration and are sales on TPC-D’s own distribution network.

Further, TPC-D’s overall sales have been projected based on past growth trends in

different segments, viz., sales in AEML-D’s area of supply, sales in BEST’s area of

supply, sales because of new Direct consumers in BEST area, sales because of new

Direct Consumers in AEML-D’s area and OA sales on TPC-D’s network.

(f) Different CAGRs have been considered for TPC-D for the areas overlapping with

AEML-D and BEST areas.

(g) The Commission has not considered any additional change-over sales on account of

change-over of residential category consumers in the 0-300 units slab since it is

difficult to anticipate the extent of consumers shifting considering the difference in

tariffs. The impact, if any, on this account shall be addressed at the time of truing up.

(h) The category-wise CAGR considered for projecting the revised energy sales for FY

2019-20 and for the fourth Control Period (i.e. FY 2020-21 to FY 2024-25), is shown



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Table 0-5: Category-wise CAGR considered for projection of Energy Sales

Consumer Category

CAGR

Considered

for

Consolidat

ed Sales

TPC-D

Direct Sales

CAGR in

AEML-D

area

TPC-D

Direct Sales

CAGR in

BEST area

LT Category

LT I - Below Poverty Line 0% 0% 0%

LT -I Residential

0-100 3% 15% 26%

101-300 3% 15% 26%

301-500 3% 15% 26%

500 and above 3% 15% 26%

LT Commercial

LT II (a) - 0-20 kW 3% 15% 5%

LT II (b) - 20-50 kW 3% 15% 8%

LT II (c) - above 50 kW 1% 4% 6%

LT III (a) - LT Industrial up to 20 kW 1% -3% 8%

LT III (b) - LT Industrial above 20 kW 0% 3% 14%

LT IV - Public Water Works 0% 0% 0%

LT-V: LT- Advertisements and Hoardings -2% 14% 0%

LT VI: LT -Street Lights -4% -16% 0%


Religious -2% -39% 0%

LT-VII (B): LT -Temporary Supply

Others 0% 0% 0%


Grounds 6% 0% 0%

LT X: LT -Public Service

LT IX(A) - Public Service Govt Hosp &

Edu Inst 13% 13% 8%

LT IX(B) - Public Services Others 20% -49% 8%

LT X: LT -Agriculture 26% 0% 0%

HT Category

HT I: HT-Industry 4% 5% 0%

HT II: HT- Commercial -6% -5% 0%

HT III: HT-Group Housing Society -2% 25% 0%

HT IV - PWW & Sewage Treatment Plants 0% 0% 0%

HT V (A) - Railways 1% 1% 0%

HT V (B): Metro/Monorail 0% -39% -39%

HT VI - Public Service 1% 3% 0%

HT VII: HT - Temporary Supply 29% 31% 0%


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(i) The energy sales for AEML-D have been derived after deducting the TPC-D sales,

Changeover Sales and Open Access Sales from the projected consolidated energy

sales for FY 2019-20 and for fourth Control Period.

In view of the above, the category-wise energy sales approved by the Commission for

FY 2019-20 are shown in the following Table:

Table 0-6: Category-Wise Own Sales for FY 2019-20 as approved by Commission

(MU)

Particulars MTR

Order

AEML-D

Petition

Approved after

Provisional

truing up

LT Category

LT I - Below Poverty Line 0.02 0.01 0.01


0-100 1,656.03 1,657.78 1,974.73

101-300 1,141.55 1,112.18 1,515.95

301-500 201.39 193.03 398.68

500 and above 72.59 65.75 476.80


0-100 247.99 271.54

101-300 382.72 402.15

301-500 208.17 210.37

500 and above 412.42 404.99

LT II (a) - 0-20 kW 1,934.67 1,777.46 1,824.38

LT II (b) - 20-50 kW 241.35 240.66 233.53

LT II (c) - above 50 kW 552.58 566.49 537.37

LT III (a) - LT Industrial up to 20 kW 186.82 163.16 178.15

LT III (b) - LT Industrial above 20 kW 394.49 377.56 392.59

LT IV - Public Water Works 13.81 12.99 12.77

LT-V: LT- Advertisements and Hoardings 3.65 2.51 3.13

LT VI: LT -Street Lights 59.47 49.36 54.19

LT-VII (A): LT-Temporary Supply Religious 2.13 2.17 1.86

LT-VII (B): LT -Temporary Supply Others 8.24 11.04 10.43

LT VIII: LT - Crematorium & Burial Grounds 1.40 1.33 1.32

LT IX (a): PS - Govt. EI & Hospitals 25.80 25.69 27.12

LT IX (b): PS – Others 162.50 122.93 142.23

LT X (a): Agriculture – Pump sets 0.06 0.06 0.07

LT X (a): Agriculture - Others 0.14 0.23 0.24

LT XI: EV Charging Stations - 0.01 -

Total LT 7909.98 7,671.45 7,785.54

HT 33 kV Category

HT V – HT Metro and Monorail 31.56 27.78 30.51

HT 11 kV Category

HT I: HT-Industry 442.14 287.34 305.56

HT II: HT- Commercial 345.26 477.86 333.31

HT III: HT-Group Housing Society 40.04 39.13 36.84


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Particulars MTR

Order

AEML-D

Petition

Approved after

Provisional

truing up

HT IV: HT-Public Water Works 6.74 8.31 8.13

HT VI (a):PS - Govt. EI & Hospitals 8.66 5.81 6.68

HT VI (b):PS - Others 100.16 103.98 100.04

HT VII: Temporary Supply 2.87 3.26 15.41

Total HT 977.43 953.47 836.50

Total 8887.41 8,624.92 8,622.04

Accordingly, the Change-over Sales provisionally approved by the Commission for FY

2019-20 is as stated in the Table below:

Table 0-7: Category-Wise Change-over Sales of FY 2019-20 as approved by

Commission (MU)

Particulars MTR

Order

AEML-D

Petition

Approved after

Provisional

truing up

LT Category

LT I - Below Poverty Line 0 0


0-100 508.36 567.08

101-300 447.83 540.27

301-500 71.22 128.54

500 and above 16.96 90.30


0-100 89.83

101-300 135.41

301-500 63.48

500 and above 68.31

LT II (a) - 0-20 kW 84.49 95.64

LT II (b) - 20-50 kW 22.58 23.09

LT II (c) - above 50 kW 23.46 32.90

LT III (a) - LT Industrial up to 20 kW 15.32 14.02

LT III (b) - LT Industrial above 20 kW 9.42 6.36

LT IV - Public Water Works 0 0

LT-V: LT- Advertisements and Hoardings 0.01 0.02

LT VI: LT -Street Lights 0 0

LT-VII (A): LT-Temporary Supply Religious 0 0

LT-VII (B): LT -Temporary Supply Others 0.03 0.02


Grounds

0.26 0.35

LT IX (a): PS - Govt. EI & Hospitals 0 0

LT IX (b): PS - Others 2.50 3.72

LT X (a): Agriculture – Pump sets 0 0

LT X (a): Agriculture - Others 0 0

LT XI: EV Charging Stations 0 0

Total LT 1,559.48 1,502.31


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Particulars MTR

Order

AEML-D

Petition

Approved after

Provisional

truing up

HT 33 kV Category

HT V – HT Metro and Monorail 0 0

HT 11 kV Category

HT I: HT-Industry 0.19 0.16

HT II: HT- Commercial 4.24 3.48

HT III: HT-Group Housing Society 0 0

HT IV: HT-Public Water Works 0 0

HT VI (a):PS - Govt. EI & Hospitals 0 0

HT VI (b):PS - Others 0 0

HT VII: Temporary Supply 0 0

Total HT 4.43 3.63

Total 1,664.01 1,563.91 1,505.94

The Commission has also provisionally approved the figures of OA consumption as shown

in the Table below:

Table 0-8: OA Consumption for FY 2019-20 as approved by the Commission (MU)

Particulars /(MU) MTR

Order

AEML-D

Petition

Approved after

Provisional

truing up

HT I - Industrial 144.59 136.85

HT II - Commercial 130.60 93.77

HT VI(B) - Public Service (Others) 4.64 4.63

Total 225.70 279.83 235.25



The Commission had approved Distribution Loss of 8.36% for FY 2019-20 for AEML-D.

The actual distribution loss for FY 2018-19 was 7.85%. For FY 2019-20, AEML-D has

considered 0.05% reduction in losses over the actual distribution loss of FY 2018-19. The

energy input to the distribution system of AEML-D for FY 2019-20 considering estimated

sales to own consumers, change-over consumption and OA consumption is shown in the

table below:


Particulars MTR Order AEML-D

Petition

Energy Sold (MU) by AEML-D 8,887.41 8,624.92

Consumption (MU) by Changeover Consumers 1,664.01 1,563.91


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Petition

Consumption (MU) by OA Consumers 225.70 279.83

Total (MU) 10,777.12 10,468.65

Distribution Loss 8.36% 7.80%

Energy Input (MU) at T<>D 11,757.39 11,354.36

The Energy Balance for FY 2019-20 based on the estimated energy input to AEML-D

distribution system and the wheeling losses of HT consumers (1.71%) and LT consumers

(8.08%) and State Transmission Losses of 3.30% is shown in the Table below:

Table 0-10: Energy Requirement for FY 2019-20 as submitted by AEML-D (MU)

Particulars MTR

Order

AEML-D

Petition

Migrated HT Sales + OA consumption 284.26

HT Loss 1.71%

HT grossed up energy at T<>D 289.20

Migrated LT Sale 1,559.48

LT Loss 8.08%

LT grossed up energy at T<>D 1,696.56

Total T<>D energy attributable to TPC-D sale & OA

consumption 1,809.49 1,985.76

Net T<>D energy attributable to AEML-D sale 9,947.90 9,368.60

InSTS Loss % 3.30% 3.30%

Total requirement of AEML-D (MU) at G-T 10,287.38 9,688.32

AEML-D submitted that though for provisional true-up, Distribution Losses of 7.80% have

been considered, instead of the MYT approved level of 8.36%, the same does not amount

to resetting of target losses for the purposes of measuring efficiency gains at the time of

true-up of FY 19-20. For that purpose, the actual performance on losses must be compared

to the target approved in the MYT Order, i.e., 8.36% only. This approach of considering

estimated actual Distribution Losses for provisional true-up stems from the Commission’s

own approach in case of Generation Business, where the actual estimated performance in

terms of SHR, aux. consumption, etc., is considered for estimating fuel cost for provisional

true-up purposes only, while the efficiency gains are determined compared to normative

performance at the time of final true-up.


The Commission has considered the normative HT wheeling losses of 1.71% and LT

Wheeling loss of 8.08% as approved for FY 2019-20 in MTR Order. The Commission has

considered the Transmission Losses of 3.18% for FY 2019-20 based on actual Transmission

Loss of FY 2019-20 as per inputs from MSLDC. The change-over sales have been

considered as approved earlier in this Chapter. The Commission has considered the energy


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drawn by AEML-D at T<>D interface as 11,240.02 MU. Accordingly, the Distribution

Losses and Energy Balance provisionally approved by the Commission for FY 2019-20 are


Table 0-11: Energy Balance for FY 2019-20 as approved by the Commission

Particulars UoM MTR

Order

AEML-

D

Approved after

Provisional

truing up

Sales (Own) MU 8,887.41 8,624.92 8,622.04

Sales (Change-over) MU 1,664.01 1,563.91 1,505.94


Total MU 10,777.12 10,468.65 10,363.23


Energy Input to the Distribution System MU 11,757.39 11,354.36 11,240.02

The Commission has approved the Distribution Loss of 7.80% in line with the submissions

made by AEML-D for FY 2019-20. The following Table shows the Energy requirement

worked out for FY 2019-20 by the Commission based on the approved Distribution Losses:

Table 0-12: Energy Requirement of AEML-D for FY 2019-20 as approved by the

Commission

Particulars UoM MTR

Order AEML-D

Approved after

Provisional

truing up

Migrated HT sales + OA consumption MU 284.26 238.88

HT Loss % 1.71% 1.71%

HT grossed up energy at T<>D boundary MU 289.20 243.04

Migrated LT sale MU 1,559.48 1,502.31

LT loss % 8.08% 8.08%

LT grossed up energy at T<>D boundary MU 1,696.56 1,634.36

Total T<>D energy attributable to TPC-D

sale & OA consumption (A) MU 1,809.49 1,985.76 1,877.40

Total Energy Input at T<>D interface of

AEML-D system (B) MU 9,947.90 9,368.60 9,351.51

InSTS losses % % 3.30% 3.30% 3.18%

Total requirement of AEML-D (MU) at

G-T MU 10,287.38 9,688.32 9,658.66

1.60 POWER PROCUREMENT

1.60.1 AEML-G (ADTPS)


AEML-D submitted the energy availability from ADTPS as per actuals for the first half of

FY 2019-20. No PLF incentive is payable to ADTPS as the PLF of ADTPS had been less

than 85% during first half of FY 2019-20. Regarding H2 of FY 2019-20, AEML-D has


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considered the projections of energy from ADTPS considering the actual details of ADTPS

available with it so far, with projections for the balance period. AEML-D has considered

the variable cost of ADTPS as per the MYT Petition of AEML-G (Case No. 298 of 2019).

Fixed Charges for the whole of FY 2019-20 have been considered as approved by the

Commission in ADTPS MTR Order dated 12 September 2018 (Case No. 202 of 2017). No

PLF Incentive is at present estimated for H2 of FY 2019-20.

AEML-D submitted that it has considered backing down ADTPS to its technical minimum,

till the generation schedule matches the demand requirement of AEML-D considering

surplus for H2 of FY 2019-20. Technical minimum is considered since AEML-D is not in

a position to estimate demand and availability of generating stations for the State as a whole,

which has an impact on the backing down of the generating station. AEML-D has submitted

the following power purchase from ADTPS in FY 2019-20.

Table 0-13: Power Procurement from ADTPS in FY 2019-20 as submitted by

AEML-D


H1 Provisional Actuals 1,609.00

H2 Estimates 1,639.02

Total Quantum (MU) 3,775.15 3,248.02

Fixed Cost (Rs. Crore)

346.62

Variable Cost (Rs. Crore) 1,211.18

Incentive (Rs. Crore) -

Rate (Rs./kWh) 4.29 4.80

Total Cost (Rs. Crore) 1,620.73 1,557.80


The Commission has considered the quantum of power from ADTPS for FY 2019-20 in

line with the generation approved for AEML-G in its Provisional Truing-up of FY 2019-

20. The Commission has considered the fixed and variable cost as approved by the

Commission in Provisional Truing-up of AEML-G for FY 2019-20.

Table 0-14: Quantum & Cost of Power Purchase from AEML-G for FY 2019-20 as

approved by Commission

DTPS

MTR Order AEML-D Petition Approved after Provisional

truing up

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantum

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

FY

2019-

20

3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80 3,290.05 1,573.45 4.78


of 445

1.60.2 Vidarbha Industries Power Ltd.


AEML-D had issued a termination letter to VIPL-G on 20 April 2019 for termination of the

PPA between AEML-D and VIPL-G. VIPL-G has filed a Petition before the Commission

challenging the validity and legality of the termination letter (Case No. 247 of 2019). The

Commission has issued the Order in Case No. 247 of 2019 on 16 December 2019. As per

the said Order, the Termination Notice is held valid and the Termination Notice shall be

deemed to have been issued to the Lenders on the date of the Order. The Lenders may take

further necessary action as per the provisions of the PPA to exercise their right of

substituting VIPL with an entity for operating the thermal station for recovery of their dues.

Thus, considering the termination of the PPA, AEML-D has not considered any power

purchase from VIPL-G for FY 2019-20.

VIPL-G has drawn power from grid for its auxiliary operations in H1 of FY 2019-20.

AEML-D has charged VIPL at the rate of energy charge for HT – I (Industry) as approved

in the MTR Order dated 12 September 2018 in Case No. 200 of 2017. VIPL filed a Petition

(Case No. 232 of 2019) seeking a clarification on netting off the energy drawn by it with

the energy injected into the grid for supply to AEML-D. The Commission in the Order

dated 17 October 2019 in Case No. 232 of 2019 has stated that for the period till October

2019 energy drawn by VIPL from the grid has to be settled with AEML-D at the energy

charge rate of AEML-D as approved in the MTR Order dated 12 September 2018 in Case

No. 200 of 2017. Accordingly, the revenue corresponding to the energy drawn from grid

by VIPL till September 2019 is adjusted in the power purchase expense for H1 of FY 2019-

20.

The actual revenue in October 2019 together with revenue till September 2019 will be

presented at the time of truing up of FY 2019-20. Considering the above, the summary of

power purchase from VIPL-G in FY 2019-20 is shown in table below:

Table 0-15: Power Purchase Quantum and Cost from VIPL-G in FY 2019-20 as

submitted by AEML-D


H1 Provisional Actuals (2.23)

H2 Estimates 0

Quantum (MU) 4,000.97 (2.23)

Fixed Cost (Rs. Crore)

0

Variable Cost (Rs. Crore) (1.73)

Rate (Rs./kWh) 4.40 7.75

Total Cost (Rs. Crore) 1,759.25 (1.73)


of 445


The Commission vide its Order dated 16 December 2019 in Case No. 247 of 2019 has

already considered the termination notice as valid. Hence the Commission accepts the

submission made by AEML-D and, not consider any power purchase from VIPL-G in FY

2019-20. The Power Purchase quantum and cost approved by the Commission from VIPL-

G is shown in the Table below:

Table 0-16: Power Purchase from VIPL-G for FY 2019-20 as approved by the

Commission

VIPL-G

MTR Order AEML-D Petition Approved after

Provisional truing up

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m (MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

FY 2019-20 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75 (2.23) (1.73) 7.75

1.60.3 RENEWABLE ENERGY PROCUREMENT

1.60.3.1 Solar Power Procurement


In the MTR Order dated 12 September 2018, the Commission had considered that the RPO

shortfall till FY 2017-18 and the stand-alone RPO requirement of FY 2019-20 shall be met

through purchase of Solar power in FY 2019-20 and, for this purpose, all the additional

Solar power requirement was considered by the Commission as being available from a new

source at Rs. 2.72/kWh. Subsequently, vide its Order in Case No. 39 of 2019, dated 4 April

2019, the Commission allowed AEML-D to meet its Solar and Non-solar RPO

cumulatively till FY 2019-20. AEML-D has not tied up with any new source for procuring

Solar RE and has procured Solar power from its existing contracted source of DSPPL only,

in H1 of FY 2019-20. For estimating the energy availability from DSPPL in H2 of FY 2019-

20, AEML-D has considered the trend in generation of DSPPL in second half of previous

years. The actual power purchase details from DSPPL in H1 of FY 2019-20 and the cost

for estimated power purchase from DSPPL in H2 of FY 2019-20 are shown in the table

below:

Table 0-17: Power Purchase from DSPPL in FY 2019-20 as submitted by AEML-D


Petition

H1 Provisional Actuals 29.33

H2 Estimates 32.79


of 445


Petition

Quantum (MU) 68.70 62.12

Rate (Rs. /kWh) 10.30 10.30

Cost (Rs. Crore) 70.75 63.99

AEML-D submitted the Solar RPO target for FY 2019-20 as per RPO-REC Regulations,

2016 as shown in the Table below:

Table 0-18: Solar RPO Target till FY 2019-20 as submitted by AEML-D

Particulars / (MU) H1 of FY 19-20 -

Provisional Actuals

H2 of FY 19-

20 - Estimates

FY 19-20 (Total)

- Estimates

Total Power Purchase 5,086.70 4,601.62 9,688.32

Solar RPO (%) 3.50% 3.50% 3.50%

Solar RPO Target 178.03 161.06 339.09

RE Purchase 29.33 32.79 62.12

Solar RE Shortfall 148.70 128.27 276.97

AEML-D submitted that it plans to meet the Solar RPO till FY 2019-20 during the period

from FY 20202-21 to FY 2024-25, as elaborated in the respective Chapter.


The Commission has considered the actual power purchase of H1 and estimated power

purchase from H2 from DSPPL Solar as submitted by AEML-D. The Commission has

considered the rate of DSPPL in line with the rate approved in MTR Order. The

Commission has approved Solar purchase from DSPPL as shown in the Table below:

Table 0-19: Power Purchase from DSPPL in FY 2019-20 as approved by the

Commission (MU)


Petition

Approved after

Provisional truing up

H1 Provisional Actuals 29.33 29.33

H2 Estimates 32.79 32.79

Quantum (MU) 68.70 62.12 62.12

Rate (Rs. /kWh) 10.30 10.30 10.30

Cost (Rs. Crore) 70.75 63.99 63.99

Accordingly, the Commission has worked out the shortfall of Solar RPO till FY 2019-20

based on the cumulative shortfall till FY 2018-19 approved in previous Chapter and targets

for FY 2019-20 as per RPO-REC Regulations, 2016, as shown in the Table below:


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Table 0-20: Cumulative shortfall of Solar RPO Target till FY 2019-20 as approved

by the Commission (MU)

Particulars

Approved

till FY

2018-19

FY 2019-20 as

approved

Approved

till FY

2019-20

MU % MU


RPO Target 721.62 3.50 338.05 1,059.68

Achievement 476.27 0.65 62.12 538.39


Accordingly, the Commission has approved the shortfall of 521.28 MU of Solar RPO till

FY 2019-20 as shown in the Table above. The above shortfall in Solar RPO has been

considered for cost implications in next Control Period. However, it does not automatically

means that Commission has allowed carry forward of RPO. Decision of carry forward can

be made only under RPO verification process under MERC RPO Regulations. AEML-D

needs to justify its request of allowing carry forward in that proceedings.

1.60.3.2 Non-Solar Power Procurement


In the MTR Order, the Commission had considered that the RPO shortfall till FY 2017-18

and the stand-alone RPO requirement of FY 2019-20 shall be met through purchase of Non-

Solar power in FY 2019-20 and for this purpose, all the additional Non-Solar power

requirement was considered by the Commission as being available from a new source (other

than Mini/Micro hydro) at Rs. 2.87/kWh and from Mini/Micro hydro source at Rs

5.64/kWh. Subsequently, vide its Order in Case No. 39 of 2019 dated 4 April 2019, the

Commission allowed AEML-D to meet its Solar and Non-solar RPO cumulatively till FY

2019-20.

AEML-D has not tied up with any new source for procuring Non-Solar RE and has procured

Non-Solar power from its existing contracted sources only, in H1 of FY 2019-20. For

estimating the energy availability from existing contracted sources in H2 of FY 2019-20,

AEML-D has considered the trend in generation from the sources in second half of previous

years. The summary of power procured by AEML-D from different sources for meeting its

Non-Solar RPO in FY 2019-20 is as shown in the Table below:


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Table 0-21: Estimated Non-Solar RE Purchase in FY 2019-20 as submitted by

AEML-D

Particulars Total (MU) (Rs. /kWh) Cost (Rs.

Crore)

MTR Order 204.83 5.26 107.82

AEML-D Petition

Reliance Innoventures 77.66 5.00 38.83

AAA Sons Enterprise 2.89 5.00 1.44

Vector Green Energy Pvt. Ltd 33.60 5.00 16.80

Vector Green Energy Pvt. Ltd 10.29 5.07 5.22

Tembhu Power Private Limited 4.64 4.26 1.97

Reliance Clean Power Pvt. Ltd 78.66 5.81 45.70

Total 207.74 5.29 109.97

The Non-Solar RPO target and estimated achievement for FY 2019-20 as per RPO-REC

Regulations, 2016 is shown in the Table below:

Table 0-22: Non-Solar RPO target for FY 2019-20 as submitted by AEML-D

Particulars / (MU) H1 of FY 19-20 -

Provisional Actuals

H2 of FY 19-

20 - Estimates

FY 19-20

(Total) -

Estimates

Total Power Purchase 5,086.70 4,601.62 9,688.32

Non-Solar RPO (%) 11.50% 11.50% 11.50%

Non-Solar RPO Target 584.97 529.19 1,114.16

Non-Solar RE Purchase 170.26 37.48 207.74

Non-Solar RE Shortfall 414.71 491.70 906.41

AEML-D submitted that the plan for meeting the Non-Solar RPO till FY 2019-20 is

presented in the section of ARR for FY 2020-21 to FY 2024-25.


The Commission observed that the quantum and cost from Non-solar RE purchase has been

estimated by AEML-D based on the long term/medium term contracts tied -up by AEML-

D in FY 2019-20. The Commission has therefore, considered the submission made by

AEML-D for Non-Solar RE purchase in provisional Truing-up of FY 2019-20. The

following Table shows the Non-Solar RE purchase considered by the Commission:


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Table 0-23: Non-Solar RE power purchase for FY 2019-20 as approved by

Commission

Particulars


truing up

Quant

um

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Reliance

Innoventures 77.66 38.83 5.00 77.66 38.83 5.00

AAA Sons

Enterprise 2.89 1.44 5.00 2.89 1.44 5.00

Vector Green

Energy Pvt. Ltd 33.60 16.80 5.00 33.60 16.80 5.00

Vector Green

Energy Pvt. Ltd 10.29 5.22 5.07 10.29 5.22 5.07

Tembhu Power

Private Limited 4.64 1.97 4.26 4.64 1.97 4.26

Reliance Clean

Power Pvt. Ltd 78.66 45.70 5.81 78.66 45.70 5.81

Total 204.83 107.82 5.26 207.74 109.97 5.29 207.74 109.97 5.29

Accordingly, the Commission has worked out the shortfall of Non-Solar RPO till FY 2019-

20 based on the cumulative shortfall till FY 2018-19 approved in previous Chapter and

targets for FY 2019-20 as per RPO-REC Regulations, 2016, as shown in the Table below:

Table 0-24: Cumulative shortfall of Non-Solar RPO Target till FY 2019-20 as


Particulars

Till FY

2018-19

FY 2019-20 as

approved

Approved till

FY 2019-20

MU % MU


Non-Solar RPO

RPO Target 6,650.64 11.50 1,110.75 7,761.38

Achievement 4,834.41 2.18 207.74 5,042.15

Shortfall / (Surplus) 1,816.23 9.32 903.00 2,719.23

Mini / Micro RPO

RPO Target 11.73 0.20 2.22 13.96

Achievement 5.91 - - 5.91


Accordingly, the Commission has approved the shortfall of 2,719.23 MU of Non-Solar

RPO till FY 2019-20 as shown in the Table above. The Commission additionally approves

cumulative shortfall of Mini / Micro RPO of 8.05 MU till FY 2019-20. The above shortfall

in non-Solar RPO has been considered for cost implications in next Control Period.


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However, it does not automatically mean that Commission has allowed carry forward of

RPO. Decision of carry forward can be made only under RPO verification process under

MERC RPO Regulations. AEML-D needs to justify its request of allowing carry forward

in that proceedings.

1.60.4 SHORT-TERM POWER PURCHASE


AEML-D has considered the actual short-term purchase during H1 of FY 2019-20 from

Bilateral Sources and Power Exchanges. For H2, AEML-D has estimated that MSLDC shall

raise the revised energy settlement bills for the period from FY 2011-12 to FY 2017-18 as

per the said Order within the present financial year (FY 2019-20). However, there is no way

of estimating at present as to what would be the differential amount recoverable or payable

to the consumers, considering the pool cost as per the revised bills for these periods vs. the

pool cost already approved in truing-up of each of these years. Accordingly, if the revised

bills are received before the MYT Order on this Petition, the differential can be built in the

new tariffs, else it shall be recoverable / refundable in FAC, subsequent to the MYT Order.

20.

Further, 470.41 MU of energy was availed by AEML-D through banking in FY 2018-19.

Return transaction for the same was made in H1 of FY 2019-20. The corresponding cost of

the banking return is included in power purchase cost for H1 of FY 2019-20.

In order to estimate the short-term power purchase in H2 of FY 2019-20, AEML-D has

considered the hourly demand forecast and generation / availability forecast from firm

sources in H2 of FY 2019-20. After meeting the demand with estimated generation from

firm sources, the shortfall is estimated to be procured from short-term sources. No Standby

purchase from MSEDCL has been considered in H2 of FY 2019-20, as the same cannot be

forecast with any degree of certainty. Similarly, no increment / decrement to State

Imbalance Pool has been estimated in H2 of FY 2019-20, as the same would be included in

the hourly deficit / surplus as forecast. AEML-D submitted that it intends to procure

1,558.37 MU of short-term power through bilateral mechanism on RTC basis in H2 of FY

2019-20. AEML-D has conducted the competitive bidding process through DEEP portal.

The weighted average rate of RTC power discovered through the bids is Rs. 3.60/kWh.

AEML-D has considered the same for estimating the cost of short-term power to be

purchased on RTC basis in H2 of FY 2019-20. Also, AEML-D has also entered into banking

contracts in H2 of FY 2019-20 similar to the banking contracts entered in FY 2018-19,

under which, AEML-D shall receive 226.80 MU of energy in H2 of FY 2019-20 and return


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it in FY 2020-21. Since AEML-D will have to pay only OA charges for this banking

transaction in FY 2019-10, the same is included in the power purchase cost for H2 of FY

2019-20 on provisional basis. For the remaining short-term requirement (intra-day, non-

RTC), AEML-D has considered the short-term rate equivalent to the average of Market

Clearing Prices (MCP) at IEX (09:00 Hours to 24:00 Hours) for the period April 2019 to

September 2019. The power purchase quantum and cost from short-term sources for H1

and H2 of FY 2019-20 are as under:

Table 0-25: Power Purchase from Short-Term sources for FY 2019-20 as submitted

by AEML-D

Particulars

FY 2019-20 (H1) FY 2019-20 (H2)

Quantu

m (MU) Rate

(Rs.

/kWh)

Cost

(Rs.

Crore)

Quantum

(MU) Rate (Rs.

/kWh)

Cost

(Rs.

Crore)

Bilateral 1,145.04 3.86 442.18 1,558.37 3.60 561.01

Power Exchanges 1,630.73 3.67 597.77 1,113.94 3.85 428.87

Cost of banked energy 210.85 226.80 8.36

Energy from OA consumers 2.90

Standby arrangement

with MSEDCL 4.40 -

State Imbalance Pool 500.17 -

Total 3,280.33 3.79 1,244.70 2,899.11 3.44 998.24


The Commission has considered the submissions made by AEML-D as regards short term

purchase. The shortfall in purchase from VIPL-G is being met through short-term sources.

VIPL-G had generated 2,026.27 MU in FY 2018-19 at a rate of Rs. 4.59 per unit, which

came down to almost Nil generation in FY 2019-20. Consequntly, there is an estimated

increase in short-term (Bilateral Sources and Power Exchange) purchase by 2,886.33 MU

at Rs. 3.73 per unit in FY 2019-20 as compared to FY 2018-19. Therefore, the quantum of

short-term purchase has been higher than the estimated quantum from short-term

sources.The Commission has verified that actual purchase made in H1 of FY 2019-20 is

through competitive bidding platform from DEEP portal.

The Commission observed that the average rate of Rs. 3.73 per kWh is lower than the

revised approved ceiling rate of Rs. 5.0 per kWh as approved by the Commission vide Order

in Case No. 335 of 2018 for FY 2019-20. Further, though the rate is higher than that in the

previous year, it is still lower than the VIPL-G rate. The Commission has therefore,

accepted the short-term power purchase rate as submitted by AEML-D for FY 2019-20.


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AEML-D is directed to submit detailed justification with documentary proof on the final

rate discovered through DEEP Portal at the time of Truing-up of FY 2019-20.

The Commission for the purpose of estimation has considered the actual procurement of

short-term sources in H1 of FY 2019-20 and accordingly approved the same for FY 2019-

20. The actual rates from these short-term sources in H1 have been considered for the

purpose of projection for FY 2019-20.

The Commission has considered the balance purchase of energy requirement after

considering the power purchase quantum from short-term contracted sources of FY 2019-

20, to be met through Power Exchanges. The rate considered for purchase from Power

Exchanges is equal to the actual rate in H1 of FY 2019-20.

Banking of Energy

The Commission observed that AEML-D has made certain banking transactions in FY

2018-19 and FY 2019-20. The Commission asked AEML-D to submit the details of the

banking transactions. AEML-D submitted that it had received 470.41 MU in FY 2018-19

under banking arrangement, against which it had paid only OA charges and Trading Margin

in FY 2018-19. The energy was returned in FY 2019-20 for which Energy Charges, OA

charges and Trading Margin are claimed in the Petition.

In FY 2019-20, AEML-D received 226.80 MU of energy under Banking Arrangement for

which OA charges are claimed in FY 2019-20. The energy shall be returned in FY 2020-21

and consequent cost of energy with OA charges and Trading Margin shall be claimed in FY

2020-21.

In view of the above clarification, the quantum of banking energy is received in previous

year while the cost of energy purchase is booked in the subsequent year. The Commission

analysed the banking energy received in FY 2018-19 and the cost booked in H1 of FY 2019-

20. The per unit cost of the banking transaction works out to Rs. 4.04 per unit.

The Commission is of the view that energy banking transaction should benefit the end

consumers by bringing down the average power purchase cost of AEML-D. The

Commission observed that in FY 2018-19, there was significant reduction in generation of

VIPL-G, and AEML-D had to rely on short-term/Power Exchanges to meet its power

purchase quantum. The rates discovered in Power Exchanges during FY 2018-19 were quite

high as compared to FY 2019-20. AEML-D has purchased power at average rate of Rs.

4.60 per unit from IEX during FY 2018-19. From the above, it can be concluded that the

banking transaction made by AEML-D in FY 2018-19 for which the cost is booked in FY


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2019-20 is a beneficial transaction since the energy rate for the return banking transaction

is lower than the IEX rate in that year.

However, the Commission feels that the energy rate of Rs. 4.04 per unit for the return

banking transaction is still on a higher side and AEML-D needs to review its banking

arrangements in order to further bring down the cost of banking transactions. The

Commission therefore, approves the cost of banking claimed in FY 2019-20 for provisional

Truing-up. The Commission also directs AEML-D to further evaluate its banking

arrangements with the contracted parties and substantiate and submit the party-wise

benefits of such transactions at the time of filing of Truing-up Petition for FY 2019-20. The

Commission has dealt with the cost of energy received in FY 2019-20 that has been claimed

in FY 2020-21, in the subsequent MYT Chapter.

The Commission has considered the submission of AEML-D, whereby it has claimed the

actual quantum of Standby arrangement from MSEDCL and Imbalance Pool in H1 of FY

2019-20. The Commission has not considered any cost against such quantum as submitted

by AEML-D, in the provisional truing up of FY 2019-20. The Commission has dealt with

the matter of cost of Imbalance Pool in the Chapter on Cumulative Revenue Gap till FY

2019-20.

Accordingly, the Commission has provisionally approved the power procurement from the

short-term sources in FY 2019-20, as shown in the Table below:

Table 0-26: Short Term Power Purchase for FY 2019-20 as provisionally approved

by the Commission

Particulars


truing up

Quantum Cost Rate per

Unit Quantum Cost

Rate per

Unit Quantum Cost

Rate per

Unit

(MU) (Rs.

Crore)

(Rs/

kWh) (MU)

(Rs.

Crore)

(Rs/

kWh) (MU)

(Rs.

Crore)

(Rs/

kWh)

Bilateral / Power

Exchanges 5,448.07 2,029.83 3.73 5,369.61 2,013.15 3.75

Cost of banked

energy 226.80 210.21 - 226.80 210.21 -

Standby

Arrangement 4.40 - - 4.40 - -

State Imbalance

Pool 500.17 - - 500.17 - -

Total Short-

Term Purchase - - - 6,179.44 2,242.94 3.63 6,100.97 2,223.36 3.64


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The weighted average per unit rate for procurement of short-term purchase during FY 2019-

20 works out to Rs. 3.64 per unit.

1.60.5 Sale of Surplus Power


There was no sale of surplus power through Power Exchange in H1 of FY 2019-20. In order

to estimate the surplus quantum in H2 of FY 2019-20, AEML-D has considered the hourly

demand forecast and generation / availability forecast from firm sources in H2 of FY 2019-

20. Wherever the generation from firm sources in any time block was more than the energy

requirement, generation from the ADTPS is reduced (backed down) up to its technical

minimum. The excess available generation (since the sources have to run at technical

minimum level) from firm sources over demand will be sold through Power Exchanges.

Most of the surplus sale occurs during off-peak periods (night hours) when the demand of

AEML-D consumers is low. For estimating the revenue from sale of surplus power, AEML-

D has considered the average MCP of night period (10:00 Hours to 06:00 Hours) of W2

region of IEX for H1 of FY 2019-20, which works out to Rs. 3.20/kWh. Considering a

margin of Rs. 0.17/kWh towards OA charges payable, the net realisable rate of surplus sale

is considered at Rs. 3.03/kWh. AEML-D has considered this rate for estimating the revenue

from sale of surplus power in H2 of FY 2019-20 The details of sale of surplus power in FY

2019-20 (provisional actuals) are as under:

Table 0-27: Sale of Surplus Power in FY 2019-20 as submitted by AEML-D


Quantum (MU) (632.04) (6.78)

Rate (Rs. / kWh) 3.59 3.03

Cost (Rs. Crore) (226.75) (2.05)


There was no sale of surplus power through Power Exchange in H1 of FY 2019-20. The

Commission has considered the balance amount of energy requirement to be purchased

from Power Exchanges, after considering all the purchase from contracted long-term/short-

term sources. Therefore, the Commission has not considered any surplus sale for FY 2019-

20 as there is no surplus power considered to be procured in FY 2019-20. Any such quantum

and revenue shall be considered at the time of true-up for FY 2019-20, based on prudence

check.


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1.60.6 Power purchase cost from OA consumers


The actual cost of power purchase from OA consumers as per DOA Regulations, 2016 in

H1 of FY 2019-20 is Rs. 2.90 Crore, for the purchase done in FY 2018-19. No additional

purchase cost has been estimated at present for H2 of FY 2019-20, and the same shall be

presented at the time of true-up.


The Commission will take a considered view regarding the quantum of purchase at the time

of True up of FY 2019-20, based on the detailed submissions to be made by AEML-D.

1.60.7 Payment towards WRPC DSM bills


As discussed in the true-up of FY 2018-19, each DISCOM is required to pay 25% interim

share towards WRPC bills. Accordingly, AEML-D pays the WRPC bills as per the

provisional bills raised by MSLDC. The actual payment made in H1 of FY 2019-20 is

included in the power purchase cost for H1 of FY 2019-20. However, no estimates of the

same have been made for H2 of FY 2019-20. The actual payment made shall be claimed at

the time of truing up of FY 2019-20.


The Commission has allowed the actual amount paid in H1 of FY 2019-20, to the extent of

Rs. 11.16 Crore in the provisional Truing-up of FY 2019-20.

1.60.8 Impact on Hon’ble Supreme Court Judgment regarding Additional Energy

Charges (AEC)


The Hon’ble Supreme Court in its interim Order dated 14 December, 2009 in CA No 4161

of 2008 and 4423 of 2008 has directed AEML to deposit Rs. 25 Crore and furnish Bank

Guarantee (BG) of Rs. 10 Crore. AEML had complied with the said order. The amount of

Rs. 25 Crore was withdrawn by TPC as per the said Order of the Hon’ble Supreme Court.

The Civil Appeals of AEML and TPC were finally disposed of by the Hon’ble Supreme

Court by its Judgment dated 23 July, 2019, wherein it has upheld the Order of Hon’ble

APTEL but reduced the interest to 9% p.a. As per the said Judgment, TPC raised a demand

of Rs. 41.92 Crore in September 2019. The said amount of Rs. 41.92 Crore has been paid


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by AEML-D to TPC-D and included in the estimated power purchase cost of FY 2019-20.

Balance amount of Rs. 47.88 Crore is shown separately to be recovered through tariff.


In line with the direction of the Hon’ble Supreme Court, the Commission has considered

the amount of Rs. 41.92 Crore to be passed in power purchase for provisional; Truing-up

of FY 2019-20. The balance amount pending to be paid is included separately in the

Cumulative Revenue Gap/(Surplus).

1.60.9 TRANSMISSION, MSLDC AND STANDBY CHARGES

1.60.9.1 Transmission Charges


The actual transmission charges paid by AEML-D in H1 of FY 2019-20 are Rs. 199.38

Crore. Similarly, for H2 of FY 2019-20, Transmission Charges of Rs. 199.34 Crore is

payable by AEML-D. The summary of Transmission Charges for FY 2019-20 is shown in

Table below:

Table 0-28: Transmission Charges for FY 2019-20 as submitted by AEML-D (Rs.

Crore)



STU has levied charges of Rs. 4.40 Crore as Additional Transmission Charges, in addition

to the charges for Base TCR as approved in the InSTS Order for FY 2019-20. AEML-D

has not claimed any charges. AEML-D requested the Commission to provide clarity

regarding the billing of the same in accordance with the provisions of MYT Regulations,

2015 and the approved Power Procurement plan.


The Commission has approved the actual Transmission Charges paid by AEML-D for H1

of FY 2019-20 and estimated for H2 of FY 2019-20, as the same are in accordance with the

Transmission Charges approved by the Commission in the MTR Order, as shown in the

Table below:

Table 0-29: Transmission Charges for FY 2019-20 approved by Commission (Rs.

Crore)

Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after

provisional truing up

Transmission Charges 398.72 398.72 398.72


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The Commission has not considered the Additional Transmission Charges levied by STU

in the provisional truing up for FY 2019-20. The same shall be considered based on actuals

at the time of truing up, if applicable.

1.60.9.2 MSLDC Charges


The actual SLDC charges paid by AEML-D in H1 of FY 2019-20 are Rs. 1.00 Crore.

Similarly, for H2 of FY 2019-20, SLDC charges of Rs. 1.00 Crore is payable by AEML-D.

The summary of SLDC charges for FY 2019-20 is shown in the Table below:

Table 0-30: MSLDC Charges for FY 2019-20 as submitted by AEML-D (Rs. Crore)




The Commission has approved the MSLDC Charges estimated by AEML-D for FY 2019-

20, as the same are in accordance with the MSLDC Charges approved by the Commission

in the MTR Order, as shown in the Table below:

Table 0-31: MSLDC Charges for FY 2019-20 approved by Commission (Rs. Crore)


Petition

Approved after



1.60.9.3 Stand-by Charges


The actual Standby charges paid by AEML-D in H1 of FY 2019-20 is Rs. 91.16 Crore.

Similarly, for H2 of FY 2019-20, Standby charges of Rs. 91.16 Crore is payable by AEML-

D. The summary of Standby charges for FY 2019-20 is shown in table below:

Table 0-32: Stand-by Charges for FY 2019-20 as submitted by AEML-D (Rs Crore)


Stand-by Charges 182.32 182.32


The Commission has approved the Standby Charges submitted by AEML-D, as the same

are in accordance with the Standby Charges approved by the Commission in MTR Order,



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Table 0-33: Stand-by Charges for FY 2019-20 as approved by Commission (Rs.

Crore)

Particulars MTR Order AEML-D Petition Approved after


Stand-by Charges 182.32 182.32 182.32

1.60.10SUMMARY OF POWER PURCHASE

AEML-D Submission

The summary of estimated power purchase quantum and cost for FY 2019-20 as against the

quantum and cost approved by the Commission in AEML-D’s MTR Order is as under:

Table 0-34: Power Purchase for FY 2019-20 as submitted by AEML-D

Source

MTR Order AEML-D Petition

Quantum

(MU)

Cost (Rs.

Crore)

Rate (Rs.

/ kWh)

Quantum

(MU)

Cost (Rs.

Crore)

Rate (Rs.

/ kWh)

DTPS 3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80

VIPL 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75

DSPPL 68.70 70.75 10.30 62.12 63.99 10.30

New Solar 437.43 118.98 2.72 0 0

Non-Solar - Existing

sources 204.83 107.82 5.26 207.74 109.62 5.28

New Non-Solar 2,432.34 703.78 2.89 0 0

Short Term Purchase 6,179.44 2,240.04 3.63

Purchase from OA 2.90

Surplus Sale (632.04) (226.75) 3.59 (6.78) (2.05) 3.03

Impact of SC Judgment

(AEC matter) 41.92

WRPC DSM Bills 11.16

Sub-Total 10,287.38 4,154.56 4.04 9,688.32 4,023.64 4.15


SLDC Charges 2.00 2.00


Total 10,287.38 4,737.60 4.61 9,688.32 4,606.68 4.75


Based on the source-wise approval of power purchase as discussed above, the power

purchase quantum and cost approved after provisional truing-up for FY 2019-20 is as shown



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Table 0-35: Power Purchase for FY 2019-20 approved by the Commission (MU)

Particulars

MTR Order AEML-D Petition Approved after provisional

truing up

Quantu

m

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

Quantu

m

(MU)

Cost

(Rs.

Crore)

Rate

(Rs./

kWh)

DTPS 3,775.15 1,620.73 4.29 3,248.02 1,557.80 4.80 3,290.05 1,573.45 4.78

VIPL 4,000.97 1,759.25 4.40 (2.23) (1.73) 7.75 (2.23) (1.73) 7.75

DSPPL 68.70 70.75 10.30 62.12 63.99 10.30 62.12 63.99 10.30

New Solar 437.43 118.98 2.72 0 0 0 0 0

Non-Solar - Existing

sources 204.83 107.82 5.26 207.74 109.62 5.28 207.74 109.97 5.29

New Non-Solar 2,432.34 703.78 2.89 0 0

Short Term Purchase 6,179.44 2,240.04 3.63 6,100.97 2,223.36 3.64

Cost of OA consumer 2.90 -

Surplus Sale (632.04) (226.75) 3.59 (6.78) (2.05) 3.03 0 0 0

Impact of SC

Judgment (AEC

matter)

41.92 41.92

WRPC DSM Bills 11.16 11.16

Sub-Total 10,287.38 4,154.56 4.04 9,688.32 4,023.64 4.15 9,658.66 4,022.12 4.16

Transmission

Charges 398.72 398.72 398.72

SLDC Charges 2.00 2.00 2.00

Standby Charges 182.32 182.32 182.32

Total 10,287.38 4,737.60 4.61 9,688.32 4,606.68 4.75 9,658.66 4,605.16 4.77

1.61 OPERATION AND MAINTENANCE EXPENSES

AEML-D Submission

AEML-D submitted the actual O&M expense for H1 of FY 2019-20. AEML-D submitted

that the next wage revision of Unionized employees and contract labour will be made in FY

2020-21, which is effective from July 2018. Therefore, it has made wage revision provision

in its books of accounts (Rs 22.5 Crore towards Employee Expenses and Rs. 13 Crore

towards wage revision effect on contract labour cost booked in R&M Expenses). However,

the same has not been considered in actual H1 of FY 2019-20.

AEML-D submitted that it has considered the Base O&M expenses of FY 2018-19 as

approved in the MTR Order dated 12 September 2018 and the escalation factor of 4.07%

as worked out for FY 2018-19 true-up has been applied to arrive at the allowable normative

O&M expenses of FY 2019-20. The escalation factor has been considered up to FY 2018-

19 only at present as FY 2019-20 index numbers are available till August/September only.

AEML-D submitted that in accordance with the reasoning given in the section on truing up

of FY 2018-19, Efficiency Factor of 1% has not been considered, in view of the fact that


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the inflation based escalation factor is itself very moderate and reducing it further would

squeeze the cash available to manage its day to day operations effectively.

Further, in accordance with the Judgment of the Hon’ble Supreme Court on the issue of

contribution to Provident Fund, an additional impact on O&M expenses of Rs. 4.22 Crore

is estimated and included in O&M cost for FY 2019-20. As per MYT Regulations, 2015

the above falls under definition of “Change in Law” (Regulation 2.1 (14)). Thus, the same

may be considered as uncontrollable as per Regulation 9.1 (b) and claimed to be allowed

above the normative O&M expenses for FY 2019-20. The summary of the O&M expenses

as estimated by AEML-D for FY 2019-20 for Wires and Supply Business is shown in the

Table below:

Table 0-36: Summary of O&M Expenses for FY 2019-20 for Wires Business as

submitted by AEML-D (Rs Crore)


Approved for

FY 18-19 in

MTR Order

Escalation

Rate (%)

Allowable for

FY 19-20

Base O&M Expense 851.79 4.07% 886.46

Impact of GST on O&M Expenses 8.37

Impact of SC Judgment / GoM

notification on O&M Expense 8.16

Total 851.79 902.99

Table 0-37: Summary of O&M Expenses for FY 2019-20 for Retail Supply Business

as submitted by AEML-D (Rs Crore)


Approved for

FY 18-19 in

MTR Order

Escalation

Rate (%)

Allowable for

FY 19-20

Base O&M Expense 420.22 4.07% 437.32




Total 420.22 443.54

The summary of Wires and Supply O&M expenses for FY 2019-20 is shown in table below:

Table 0-38: Summary of O&M Expenses for FY 2019-20 for Wires and Retail

Supply Business as submitted by AEML-D (Rs Crore)


Approved for

FY 18-19 in

MTR Order

Escalation

Rate (%)

Allowable for

FY 19-20

Base O&M Expense 1,272.01 4.07% 1,323.78



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Approved for

FY 18-19 in

MTR Order

Escalation

Rate (%)

Allowable for

FY 19-20



Total 1,272.01 1,346.52

AEML-D also submitted that there are certain ongoing litigations between AEML and

Employee Unions / other statutory authorities. In case of adverse impact of the litigations

on AEML, the expenses incurred shall be claimed separately by AEML-D in future

Petitions. The nature of such expenses will decide whether it is to be claimed as a one-time

expense or a recurring one, which will require a revision in Base O&M expenses for the

next Control Period.


For the provisional truing up of FY 2019-20, the Commission has escalated the trued up

Normative O&M Expenses for FY 2018-19 as approved in this Order, by the Escalation

Factor of 3.07% worked out for FY 2018-19 as per MYT Regulations, 2015, to arrive at the

Normative O&M Expenses for FY 2019-20. The Commission has excluded the Access

Charges and Way leave Charges allowed separately in FY 2018-19, at the time of

considering the base expenses for projecting O&M expense for FY 2019-20. The

Commission shall take a view on these charges at the time of Truing-up pf FY 2019-20.

AEML-D has estimated an impact of Rs. 12.19 Crore on account of the Judgment of the

Hon’ble Supreme Court on the issue of contribution to Provident Fund and incremental

gratuity pay out to employees due to the revision in wages on account of the GoM Order.

The Commission is of the view that though these are legitimate expenses, which are bound

to be incurred in FY 2019-20, it would be appropriate to consider these expenses on the

basis of actual payout at the time of Truing-up of FY 2019-20, rather than on estimation

basis.

The Commission in accordance with the methodology adopted in Truing-up of FY 2018-

19 has not considered the Impact of GST as claimed by AEML-D for FY 2019-20.

Accordingly, the Commission has approved the O&M Expenses as shown in the Table

below:


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Table 0-39: O&M Expenses for FY 2019-20 for Wires Business as approved by the



Approved for

FY 2018-19 in

this Order

Escalation

Rate (%)

Allowable for

FY 2019-20

Base O&M Expense 825.38 3.07% 850.72

Impact of GST on O&M Expense -


notification on O&M Expense -

Total 850.72

Table 0-40: O&M Expenses for FY 2019-20 for Retail Supply Business as approved



Approved for

FY 2018-19 in

this Order

Escalation

Rate (%)

Allowable for

FY 2019-20

Base O&M Expense 407.18 3.07% 419.68




Total 419.68

Table 0-41: O&M Expenses for FY 2019-20 for Wires and Retail Supply Business as



Approved for

FY 2018-19 in

this Order

Escalation

Rate (%)

Allowable for

FY 2019-20

Base O&M Expense 1,232.57 3.07% 1,270.41




Total 1,270.41


AEML-D Submission

AEML-D submitted that at the time of MTR, many of the capex schemes were pending for

approval with the Commission. Accordingly, in the MTR Order, the Commission only

provisionally considered 20% of the capitalisation towards such schemes and hence, the

projected capitalisation as considered in the MTR Order was on the lower side.

Subsequently, several DPR schemes have been approved by the Commission. Accordingly,

the revised projections of FY 2019-20 include the likely capitalisation against all those

schemes as well, based on the progress of indenting / works. The actual capital expenditure


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and capitalization in H1 of FY 2019-20 and estimated capital expenditure and capitalization

in H2 of FY 2019-20 in Wires Business is shown in table below:

Table 0-42: Capital Expenditure and Capitalization for Wires Business for FY 2019-

20

Particulars / (Rs.

Crore) MTR Order

H1 of FY 19-

20 -

Provisional

Actuals

H2 of FY 19-

20 - Estimates

FY 19-20

(Total) -

Estimates

Capital Expenditure - 226.44 514.53 740.97

Capitalization 216.01 66.24 639.71 705.95

AEML-D has submitted Services New Connection DPR (Extension) for FY 19-20 to the

Commission on 24 October 2019, which is awaiting in-principle approval. AEML-D has

included the capital expenditure estimated for the said DPR, in the Capital expenditure for

H2 of FY 19-20 shown in table above.

As seen from above, most of the capitalization is proposed to be made in H2 of FY 19-20.

This is in line with the historical trend of capitalization, because first half is mostly monsoon

months where excavation permission is not available from MCGM.

The actual capital expenditure and capitalization in H1 of FY 19-20 and estimated for H2

of FY 19-20 for Supply Business are shown in table below:

Table 0-43: Capital Expenditure and Capitalization for Retail Supply Business for

FY 2019-20

Particulars MTR

Order

H1 of FY 19-20

- Provisional

Actuals

H2 of FY 19-20 -

Estimates

FY 19-20

(Total) –

Estimates

Capital Expenditure 8.48 163.36 171.84

Capitalization 21.99 8.48 163.36 171.84

AEML-D has submitted Smart Metering DPR on 21 May 2019, which has been accorded

in-principle approval vide MERC Order dated 22 October 2019. AEML-D has also

submitted a DPR for Automatic Meter Reading using 4G cellular modems DPR to the

Commission vide letter dated 22 July 2019, which is awaiting approval. AEML-D has

included the capital expenditure and capitalization estimated against these DPRs in FY

2019-20 in H2 of FY 2019-20 shown in table above.

For H2 of FY 2019-20, AEML-D has considered asset-class wise capitalization in the

proportion of asset class wise capitalization of FY 2018-19. AEML-D has calculated


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Interest During Construction (IDC) on provisional basis on assets capitalized in Wires

Business using appropriate interest rates.


In a clarification sought by the Commission, AEML-D submitted that there have been cost

over-runs in some schemes due to uncontrollable factors such as due to the higher RI

charges actually paid to MCGM and increase in labour charges due to wage Revision.

As discussed in the earlier Chapter on Truing up for FY 2017-18 and FY 2018-19, there is

cost overrun in certain Schemes, and the capitalisation against certain Schemes has already

been capped up to the approved Scheme cost. Hence, for such Schemes, the capitalisation

claimed by AEML-D has not been allowed, as detailed below:

i. Services (16-17) New Supply: AEML-D claimed capitalization of Rs. 1.37 Cr. and

IDC of Rs 0.02 Cr., which has been disallowed, as the Scheme cost has exceeded the

DPR approved cost.

ii. LT Mains (17-18) New Supply: AEML-D claimed capitalization of Rs. 0.46 Crore,

which has been allowed by the Commission. However, final capitalisation will be

approved based on the third-party verification. AEML-D is directed to inform the

Commission immediately after completion of the scheme.

iii. LT Mains (17-18) Improvement: AEML-D claimed capitalization of Rs. 0.39 Crore,

which has been allowed by the Commission. However, final capitalisation will be

approved based on the third-party verification. AEML-D is directed to inform the

Commission immediately after completion of the scheme.

iv. Services (17-18) New Supply: AEML-D claimed capitalization of Rs. 5.35 Crore. and

IDC of Rs 0.08 Crore, which has been disallowed, as the Scheme cost has exceed the

DPR approved cost.

v. Services (17-18) Improvement: AEML-D claimed capitalization of Rs. 1.11 Cr. and

IDC of Rs 0.02 Cr, which has been disallowed, as the Scheme cost has exceeded the

DPR approved cost.

vi. Street Light (16-17) New Supply: AEML-D submitted that the execution of street

light schemes is an obligation on part of AEML-D, and is thus "mandatory" in nature.

AEML claimed capitalisation of Rs. 0.20 crore, which has been approved by the

Commission.


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For the few other schemes there is no cost overrun. However, third party verification may

be carried out after the scheme completion. The Schemes covered under third party

verification for the Control Period are LT mains scheme new supply and Improvement,

services New Supply and Improvement, 11 kV network strengthening schemes new Supply

and improvement. Considering third party verification, the capitalization is being allowed

as claimed (which is below DPR approved cost) on provisional basis for each year and final

capitalization shall be approved after third party verification.

The following Table shows the approved capitalization for FY 2019-20:

Table 0-44: Capitalization approved by the Commission for FY 2019-20

(Rs. Crore) Particulars

MTR Order AEML-D Petition Approved after



DPR Schemes 151.66 21.99 173.65 601.98 171.84 773.82 598.72 22.00 620.72

Non DPR Schemes 34.01 - 34.01 62.03 62.03 62.03 - 62.03

20% towards planned

/ unplanned DPRs yet

to be approved

30.33 - 30.33 41.94 41.94 - -

Total 216.01 21.99 238.00 705.95 171.85 877.84 660.75 22.00 682.75

1.63 DEPRECIATION


AEML-D submitted that it has computed depreciation on provisional basis by considering

the asset class-wise average depreciation rate for FY 2018-19. Consumer contribution

received in H1 of FY 2019-20 is Rs. 10.50 Crore. AEML-D has considered the expected

consumer contribution in H2 of FY 2019-20 at the same level of Rs. 10.50 Crore.

Depreciation on consumer contribution estimated for Wires Business is not considered, in

accordance with the MYT Regulations. 2015. The estimate of depreciation for Wires

Business for FY 2019-20 is shown in table below:

Table 0-45: Depreciation in FY 2019-20 for Wires Business as submitted by AEML-

D (Rs. Crore)

Particulars MTR

Order

AEML-D Petition

With CC

Consumer

Contributio

n (CC)

Without

CC

Opening GFA 5,412.25 5,995.37 406.36 5,589.01

Addition 187.28 705.96 21.01 684.95

Retirement 0 9.18 0.63 8.55

Closing GFA 5,599.53 6,692 426.74 6,265.41


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Particulars MTR

Order

AEML-D Petition

With CC

Consumer

Contributio

n (CC)

Without

CC

Depreciation 233.14 274.95 256.48

Depreciation (% of Av. Balance) 4.23% 4.33% 4.33%

Actual asset retirement in H1 of FY 2019-20 has been considered while computing

depreciation. No asset retirement has been estimated for H2 of FY 2019-20 at present. The

estimated depreciation for Supply Business for FY 2019-20 is shown in the table below

Table 0-46: Depreciation in FY 2019-20 for Supply Business as submitted by AEML-

D (Rs. Crore)


Opening GFA 551.50 504.87

Addition 21.99 171.84

Retirement 0.00 5.88

Closing GFA 573.49 670.83


Depreciation (as % of average balance) 4.16% 4.71%


For computation of Depreciation for FY 2019-20, the Commission has considered the

Opening Balance of GFA as the Closing Balance of GFA net of CC as approved in the final

True up for FY 2018-19 in this Order. The Commission has considered asset addition for

FY 2019-20 in line with the approved Capitalisation elaborated above. The Commission

has considered asset retirements in line with the submissions of AEML-D for provisional

Truing-up. .. The CC for asset addition during the year has been considered in proportion

to the Consumer Contribution received in FY 2017-18 and FY 2018-19 with regards to the

capitalization, and has been reduced from the addition to GFA, for the purpose of

computation of Depreciation for the Wires Business, in accordance with the MYT

Regulations, 2015. Accordingly, the Commission has approved the Depreciation for FY

2019-20 as shown in the Tables below:



Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after


Opening GFA 5,412.25 5,589.01 5,547.17

Addition 187.28 684.95 613.59

Retirement 0 8.55 8.55


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Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after


Closing GFA 5,599.53 6,265.41 6,152.20

Depreciation 233.14 256.48 256.27




Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after


Opening GFA 551.50 504.87 505.99

Addition 21.99 171.84 22.00

Retirement 0.00 5.88 5.88

Closing GFA 573.49 670.83 522.11



1.64 FINANCING PLAN AND INTEREST EXPENSES


AEML-D submitted that some loans have been tied up for the proposed capex during the

year, while others are under negotiation. However, AEML-D shall fund its capital

expenditure requirement by debt to the extent of 70% only. Therefore, for the purposes of

ARR and tariff for FY 2019-20, AEML-D has considered normative funding of capex

schemes in the ratio of 70:30 for the purpose of computation of RoE and Interest on loan.

As per the MYT Regulations, 2015, interest expenses at the time of approving ARR shall

be allowed on the basis of weighted average interest rate of opening balance of all existing

actual loans for the year. The weighted average interest rate of opening balance of loans in

the loan portfolio of AEML in FY 2019-20 is 9.05%. Accordingly, AEML-D has

considered this interest rate for calculation of interest expense on the normative loans for

FY 2019-20. 70% of the capitalization (net of consumer contribution estimated for FY 19-

20) has been considered as normative loan addition in FY 2019-20.



Wires



Repayment 233.14 256.48


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Interest 146.29 150.39

Supply



Repayment 23.38 27.70


Interest 9.14 10.57

Financing Charges

As explained earlier, other Finance Charges mainly comprise Service Fees and other bank

charges such as bank remittance charges, bank commission, stamp duty towards working

capital limit enhancement, consultancy charges for arranging loans, LC opening charges,

BG commission, etc. Since all these charges will depend on the actual loan borrowed and

Bank Charges incurred based on the business requirement, no estimation of Finance

Charges has been made at this stage. Actual Finance Charges incurred for FY 2019-20 shall

be claimed at the time of truing up of FY 2019-20.


The Commission has considered the weighted average interest rate on the opening balance

of loans for FY 2019-20, in accordance with the MYT Regulations, 2015, as given below:

Table 0-50: Applicable Rate of Interest for FY 2019-20 (Rs. Crore)

Source of loan

Amount

outstanding as on 1

April, 2019

Applicable interest

rate as on 1 April, 2019

Consortium Loan 5,707.40 9.05%

SBI Bank 26.33 9.05%

Yes Bank 30.08 9.05%

Total 5,763.81 9.05%

The Commission has considered the closing balance of loan approved for FY 2018-19 as

the opening balance of loan for FY 2019-20. For assets capitalised in FY 2019-20, it has

considered 70% of the additional asset value as normative debt, in accordance with the

MYT Regulations, 2015. The repayment of loan has been considered equal to the

Depreciation allowed for the Year. Accordingly, the Commission has approved interest on

loan for FY 2019-20 as given in the following Table:


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Table 0-51: Interest Expenses for FY 2019-20 as approved by the Commission (Rs.

Crore)

Particulars MTR

Order

AEML-D

Petition

Approved after


Wires Business

Opening Balance 1,441.64 1,550.24 1,523.10


to retirement of assets


Repayment 233.14 256.48 256.27

Closing Balance 1,339.61 1,773.22 1,714.65


Interest 146.29 150.39 146.51

Supply Business



to retirement of assets


Repayment 23.38 27.70 26.00


Interest Rate 9.05% 9.05%

Interest 9.14 10.57 5.92

1.65 RETURN ON EQUITY


Return on Equity (RoE) has been determined by applying the rates specified in the MYT

Regulations, 2015. As stated earlier, Consumer Contribution received in H1 of FY 2019-

20 is Rs. 10.50 Crore. AEML-D has considered the expected consumer contribution in H2

of FY 2019-20 at the same level of Rs. 10.50 Crore. 30% of capitalization, net of consumer

contribution, has been considered as equity addition in FY 2019-20. The estimates of RoE

for the Wires Business and Supply Business for FY 2019-20 is shown in the Tables below:

Table 0-52: Return on Equity for FY 2019-20 for Wires Business as submitted by

AEML-D (Rs. Crore)


Petition

Regulatory Equity at the beginning of the year 2,028.10 2,081.53

Capitalisation during the year 216.00 705.96

Consumer Contribution and Grants during the year

towards capital works 28.72 21.01

Equity portion of capitalisation during the year 56.19 205.49

Reduction in Equity Capital on account of

retirement / replacement of assets 0 2.75


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Petition

Regulatory Equity at the end of the year 2,084.29 2,284.26

Rate of Return (%) 15.50% 15.50%

Total RoE 318.71 338.56

Table 0-53: Return on Equity for FY 2019-20 for Supply Business as submitted by

AEML-D (Rs. Crore)


Petition

Regulatory Equity at the beginning of the year 169.44 155.78

Capitalisation during the year 21.99 171.84

Consumer Contribution and Grants during the year

towards capital works

- 0

Equity portion of capitalisation during the year 6.60 51.55

Reduction in Equity Capital on account of

retirement / replacement of assets

0 0

Regulatory Equity at the end of the year 176.04 207.33

Rate of Return (%) 17.50% 17.50%

Total RoE 30.23 31.77

No asset retirement and corresponding reduction in regulatory equity has been estimated in

H2 of FY 19-20 at present.


The Commission has computed RoE for FY 2019-20 in accordance with Regulation 28 of

the MYT Regulations, 2015. The Commission has considered the closing equity of FY

2018-19 as approved in the final true up in this Order, as the opening equity for FY 2019-

20. Additional equity has been approved as 30% of the approved Capitalisation in FY 2019-

20, after deducting the Consumer Contribution. The Commission has considered Consumer

Contribution in line with the submission of AEML-D. Further, 30% of the equity

corresponding to asset retirement during the year has been reduced to arrive at the amount

of equity eligible for returns as per the Regulations.

The rate of Return on Equity has been taken as 15.5% for the Wires Business and 17.5%

for the Supply Business, in accordance with Regulation 28 of the MYT Regulations, 2015.

The RoE approved by the Commission for Wires Business and Supply Business for FY

2019-20 is as shown in the Table below:


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Table 0-54: Return on Equity for Wires Business and Supply Business for FY 2019-

20 as approved by the Commission (Rs. Crore)

Particulars MTR

Order

AEML-D

Petition

Approved after

provisional

truing up

Wires Business





Equity portion of asset retired during the year 0 2.75 2.38


Rate of Return (%) 15.50% 15.50% 15.50%

Total RoE 318.71 338.56 335.71

Supply Business



Consumer Contribution and Grants - 0 0


Equity portion of asset retired during the year 0 0 1.76


Rate of Return (%) 17.50% 17.50% 17.50%

Total RoE 30.23 31.77 27.84

1.66 INTEREST ON WORKING CAPITAL


AEML-D has calculated the interest on working capital for the Wires Business and Supply

Business in accordance with Regulation 31.3 and 31.4 of the MYT Regulations, 2015.

While there shall be actual working capital borrowings in FY 2019-20 as in the previous

year, the extent of the same and the interest cost thereon cannot be estimated at this stage.

Therefore, for provisional true-up, the normative working capital interest as per MYT

Regulations, 2015 has been considered. As per the MYT Regulations, 2015, the interest of

working capital on normative working capital while approving ARR shall be allowed at

SBI MCLR existing on the date of filing of Petition plus 150 basis points, which works out

to 9.50%. The same has been used for calculating interest on working capital for provisional

truing up of FY 19-20. The interest on working capital for Wires Business computation is

shown in table below:


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Table 0-55:Interest on Working Capital for FY 2019-20 for Wires Business as



Petition

O&M Expenses for a month 74.57 75.25

Maintenance spares at 1% of Opening GFA 59.53 59.95

One and half months of revenue from charges for

use of Distribution Wires

202.72 193.04

Total Working Capital 336.82 328.24

Rate of Interest (%) 9.45% 9.50%


The actual consumer security deposit as on 30 September 2019 is Rs. 456.72 Crore, while

it was Rs. 431.87 Crore on 31 March 2019. Thus, the additional security deposit received

in H1 of FY 2019-20 is Rs. 24.85 Crore. AEML-D has considered additional security

deposit of Rs. 24.85 Crore in H2 of FY 2019-20 as well. Thus, the estimated security deposit

on 31 March 2019 has been considered as Rs. 481.57 Crore. The interest on working capital

for Supply Business computation is shown in the table below:

Table 0-56:Interest on Working Capital for FY 2019-20 for Supply Business as



Petition

O & M Expenses for a month 36.79 36.96

Maintenance spares at 1% of Opening GFA 5.51 5.05


electricity including revenue from CSS

728.51 807.63

Less:

Amount of Security Deposit from supply

consumers

447.31 481.57

One-month equivalent of cost of power purchased 290.73 252.71

Total Working Capital 32.77 115.35

Rate of Interest (%) 9.45% 9.50%



The Commission has approved the IoWC for FY 2019-20 in accordance with Regulations

31.3 and 31.4 of the MYT Regulations, 2015. The Commission has considered the

applicable rate of IoWC as 9.50%, which is the SBI MCLR during FY 2019-20 plus 150

basis points. Accordingly, IoWC approved by the Commission is given in the Tables below:


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Particulars

FY 2019-20

MTR

Order

AEML-D

Petition

Approved

after

provisional

truing up

O & M Expenses for a month 74.57 75.25 70.89


One and half months of revenue from charges for

use of Distribution Wires 202.72 193.04 194.58


Rate of Interest (%) 9.45% 9.50% 9.50%




Particulars

FY 2019-20

MTR

Order

AEML-D

Petition

Approved

after

provisional

truing up

O & M Expenses for a month 36.79 36.96 34.97



electricity including revenue from CSS

728.51 807.63 801.64

Less:

Amount of Security Deposit from supply consumers 447.31 481.57 481.57

One-month equivalent of cost of power purchased 290.73 252.71 202.69


Rate of Interest (%) 9.45% 9.50% 9.50%


1.67 INTEREST ON CONSUMER’S SECURITY DEPOSIT


As per MYT Regulations, 2015, the Interest on Consumer Security Deposit is to be allowed

at SBI MCLR as on 1 April of a financial year plus 150 Basis Points. The SBI MCLR

prevailing on 1 April 2019 was 8.55%. Accordingly, AEML-D has calculated the interest

on consumer security deposit by applying the interest rate of 10.05% to the average balance

of actual security deposit on 1 April 2019 and estimated security deposit on 31 March 2020.:


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Table 0-59: Interest on Consumer’s Security Deposit in FY 2019-20 as submitted by

AEML-D (Rs. Crore)


CSD as on 31.03.20 447.31 481.57

Interest on CSD 41.26 45.90


The Commission has provisionally approved the interest on CSD for FY 2019-20 for the

Supply Business at Rs. 45.90 Crore, as estimated by AEML-D.



AEML-D has considered the provision for bad debts for FY 19-20 at the same level as

considered for truing up of FY 18-19 as per first proviso to Regulation 73 and 82 of MYT

Regulations, 2015.

Table 0-60: Provision for Bad and Doubtful Debts for FY 2019-20 as submitted by

AEML-D (Rs. Crore)


Provision for Bad Debts - Wires 2.61 3.37

Provision for Bad Debts - Supply 9.13 12.62

Provision for Bad Debts - Total 11.74 15.99


Regulation 73 of the MYT Regulations, 2015 states as under:

“For any Year, the Commission may allow …

Provided that the Commission, in its MYT Order, shall provisionally approve provision

for bad and doubtful debts for each Year of the Control Period, based on the actual

provision for bad and doubtful debts made by the Distribution Licensee in the latest

Audited Accounts available for the Petitioner, as allowed by the Commission:

…”

The Commission has approved the provision for Bad and Doubtful Debts for FY 2019-20

as approved in Truing-up of FY 2018-19, in accordance with the above Regulations and as

per submissions of AEML-D. The following Table shows the Provision for Bad and

Doubtful Debts considered for FY 2019-20.


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Table 0-61: Provision for Bad and Doubtful Debts for FY 2019-20 approved by the



Petition

Approved after


Wires Business 2.61 3.37 3.37

Supply Business 9.13 12.62 12.62

Total 11.74 15.99 15.99



AEML-D, in accordance with Regulation 34.1 of MYT Regulations, 2015, has considered

the contribution to contingency reserve equal to 0.25% of the respective opening GFA of

Supply Business and Wires Business for FY 2019-20. The Table below gives the summary

of contribution to Contingency Reserve for the Wires and Supply Business for FY 2019-

20:

Table 0-62: Contribution to Contingency Reserves in FY 2019-20 for Wires Business



Opening GFA 5,824.00 5,995.37

% Contribution 0.25% 0.25%

Contribution to CR 14.56 14.99

Table 0-63: Contribution to Contingency Reserves in FY 2019-20 for Supply

Business as submitted by AEML-D (Rs. Crore)


Opening GFA 552.00 504.87

% Contribution 0.25% 0.25%

Contribution to CR 1.38 1.26


As per Regulation 34, the Contribution to Contingency Reserves in a year shall be between

0.25% and 0.50% of the original cost of fixed assets. The Commission has approved the

contribution to Contingency Reserves for Wires Business and Supply Business for FY

2019-20 at 0.25% of the approved value of the opening GFA for the respective Businesses

as shown in the following Table:


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Table 0-64: Contribution to Contingency Reserves for FY 2019-20 approved by the



Petition

Approved after


Wires Business

Opening Balance of GFA 5,824.00 5,995.37 5,547.17

% Contribution 0.25% 0.25% 0.25%

Contribution to CR 14.56 14.99 13.87

Supply Business

Opening Balance of GFA 552.00 504.87 505.99

% Contribution 0.25% 0.25% 0.25%

Contribution to CR 1.38 1.26 1.26

Total Contribution to

Contingency Reserves 15.94 16.25 15.13

1.70 DSM EXPENSES


The Commission had allowed DSM expenses of Rs. 3.84 Crore in FY 19-20 towards solar

water heating system program, large scale ceiling fan program and large-scale refrigerator

program. However, as stated in the section on truing up of FY 18-19, the response to the

two programs - large scale ceiling fan and large-scale refrigerator - has been very poor and

hence the expense on these programs is very less. The LMC fund balance at the beginning

of FY 19-20 is Rs. 1.48 Crore. The estimated expense on these two programs in FY 19-20

is Rs. 23.30 Lakh based on the estimated number of new installations in FY 19-20 and

hence the estimated balance of LMC fund at the end of FY 19-20 is likely to be Rs. 1.25

Crore. As these expenses would be met out of LMC fund, no additional amount is estimated

to be claimed from ARR in FY 19-20.

Table 0-65: DSM Expenses for FY 2019-20 as submitted by AEML-D (Rs. Crore)


DSM Expense 3.84 -


The Commission considered the submissions of AEML-D and has not added any expenses

towards DSM in provisional Truing-up of FY 2019-20.


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1.71 INCOME TAX


In the MTR Order in Case No. 200 of 2017, the Commission has considered the Income

Tax for FY 2019-20 at the same level as that approved for FY 2016-17. AEML-D is

engaged in more than one regulated businesses and therefore, in accordance with the

Regulations 33.1 of the MYT Regulations, 2015, the Income Tax for AEML-D has been

provisionally considered for FY 2019-20 at the same level as the actually payable Income

Tax for FY 2018-19 worked out on the basis of Regulated Profit Before Tax. Based on the

above reasoning, the Income Tax approved in the MTR Order and that re-estimated now is

provided in the Table below:

Table 0-66: Income Tax for FY 2019-20 as submitted by AEML-D (Rs. Crore)


Income Tax-Wires 62.61 84.73

Income Tax- Supply 191.84 480.85

Total 254.45 565.57


Regulation 33.1 of the MYT Regulations, 2015 specifies as follows:

“33.1 The Commission, in its MYT Order, shall provisionally approve Income Tax

payable for each year of the Control Period based on the actual Income Tax paid

by the Generating Company or Licensee or MSLDC, in case the Generating

Company or Licensee or MSLDC has not engaged in any other regulated or

unregulated Business or Other Business, as allowed by the Commission relating to

the electricity Business regulated by the Commission, as per latest available Audited

Accounts, subject to prudence check :

…

Provided also that the Income Tax shall be computed for the Generating Company

as a whole, and not Unit-wise/Station-wise.”

The Commission has considered the same Income Tax as approved for FY 2018-19, in

accordance with the MYT Regulations, 2015. Accordingly, the Commission has approved

the Income Tax for FY 2019-20 as shown in the Table below:

Table 0-67: Income Tax for FY 2019-20 approved by the Commission (Rs. Crore)


Petition Approved in this Order

Income Tax-Wires 62.61 84.73 89.34


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Petition Approved in this Order

Income Tax- Supply 191.84 480.85 507.03

Total 254.45 565.57 596.37



AEML-D has adopted the following approach for different components of Non-Tariff

Income of Wire Business as follows:

a) Interest on Contingency Reserve Investment: Earlier, the contingency reserve

investments were made in Govt. of India securities as per Indian Trust Act, 1882.

In FY 2019-20, AEML moved the Contingency Reserve investments from Govt. of

India securities to Mutual Funds. The interest received from Govt. of India

Securities on the contingency reserve investments in H1 of FY 2019-20 was Rs.

1.41 Crore. Further, the gains received from redemption of Mutual Fund

investments of contingency reserve was Rs. 0.89 Crore in H1 of FY 2019-20. Thus,

a total of Rs. 2.30 Crore (segregated between Wires Business and Supply Business

in the ratio of cumulative contingency reserve till FY 2019-20) has been considered

in Non-Tariff Income for H1 of FY 2019-20. For H2 of FY 2019-20, AEML-D has

estimated a further gain of Rs. 0.89 Crore from mutual fund investments of

contingency reserve in Non-Tariff Income (segregated between Wires Business and

Supply Business in the ratio of cumulative contingency reserve till FY 2019-20).

b) Land Usage Charges: As stated in the section of truing up of FY 2017-18 and FY

2018-19, the land usage charges payable by AEML-T to AEML-D has been

considered in the Non-Tariff Income for FY 2019-20.

c) Other Miscellaneous Receipt of Wires Business: AEML-D has received Rs. 52.44

Crore of AIH charges from MCGM/MBMC in H1 of FY 2019-20 for maintenance

of streetlights, which has been accounted as other miscellaneous receipts of Wires

Business. AEML-D has considered the same amount as estimate in H2 of FY 2019-

20.

d) Sale of Scrap: The income generated from sale of scrap in H1 of FY 2019-20 was

Rs. 1.75 Crore. Since there is no certainty of this income in future, AEML-D has

not estimated any income from sale of scrap in H2 of FY 2019-20.


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e) Insurance Claim received: The insurance claim received in H1 of FY 2019-20 was

Rs. 0.09 Crore. Since there is no certainty of this income in future, AEML-D has

not estimated any income from insurance claim in H2 of FY 2019-20.

f) Liabilities written back in Wires Business: There has been no revenue on account

of liabilities written back in H1 of FY 2019-20. However, AEML-D has estimated

the revenue from liabilities written back in FY 2019-20 at the same level as that of

FY 18-19.

AEML-D has estimated the other components of Non-Tariff Income for Wires Business for

FY 2019-20 by escalating their values for FY 2018-19 by 5%. The actual values in H1 of

FY 2019-20 were deducted from the estimated values for FY 2019-20 and were considered

for H2 of FY 2019-20. The summary of Non-Tariff Income for Wires Business for FY 19-

20 is as under:

Table 0-68: Non-Tariff Income in FY 2019-20 for Wires Business as submitted by

AEML-D (Rs. Crore)

Particulars MTR

Order

AEML-D

Petition

Rents of land & building 0.11

Sale of Scrap 1.75

Income from CR Investments 2.83

Other/Miscellaneous receipts 104.88

Interest on Other Investments 0.47

Liabilities no longer required written back 0.51

Insurance Claim received 0.09

Land Usage Charges 5.61

Total 113.50 116.24

AEML-D has adopted the following approach for different components of Non-Tariff

Income of Supply Business as follows:

a) Interest on Contingency Reserve Investment: As stated in earlier section, a total of

Rs. 2.30 Crore (segregated between Wires Business and Supply Business in the ratio

of cumulative contingency reserve till FY 19-20) has been considered in Non-Tariff

Income for H1 of FY 2019-20. For H2 of FY 2019-20, AEML-D has considered a

gain of Rs. 0.89 Crore from mutual fund investments of contingency reserve in Non-

Tariff Income (segregated between Wires Business and Supply Business in the ratio

of cumulative contingency reserve till FY 2019-20)


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b) Rebate on Power Purchase Cost: AEML-D has availed rebate on power purchase

of Rs. 8.18 Crore in H1 of FY 2019-20. AEML-D has estimated the rebate on power

purchase in H2 of FY 2019-20 at the same level.

c) Recovery from Theft of Electricity: The recovery from theft of electricity in H1 of

FY 2019-20 is Rs. 0.40 Crore (provisional actuals). AEML-D has considered the

recovery from theft of electricity for FY 2019-20 at the same level as that of FY

2018-19 (Rs. 16.65 Crore). The difference of Rs. 16.25 Crore has been considered

in H2 of FY 2019-20.

AEML-D has estimated the other components of Non-Tariff Income for Supply Business

for FY 2019-20 by escalating their values for FY 2018-19 by 5%. The actual values in H1

of FY 2019-20 were deducted from the estimated values for FY 2019-20 and were

considered for H2 of FY 2019-20. The summary of Non-Tariff Income for Supply Business

for FY 2019-20 is as under:

Table 0-69: Non-Tariff Income in FY 2019-20 for Retail Supply Business as



Petition

Income from CR Investments 0.36

Income from consumer charges levied in accordance

with Schedule of Charges approved by the Commission

6.06

Income from recovery against theft and/or pilferage of

electricity

16.65

Other/Miscellaneous receipts 0.91

Rebate on power purchase 16.36

Burnt Meter Recovery 0.92

Total 38.99 41.25


The Commission has provisionally accepted Non-Tariff Income estimated by AEML-D for

the Wires Business and Supply Business for FY 2019-20, as shown in the Table below:

Table 0-70: Non-Tariff Income for FY 2019-20 approved by Commission (Rs. Crore)

Non-tariff Income

FY 2019-20

MTR Order AEML-D Petition Approved in this

Order

Wires Business 113.50 116.24 116.24

Supply Business 38.99 41.25 41.25

Total 152.49 157.49 157.49


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The Commission has observed that AEML-D has invested in Mutual Fund Growth Option

wherein the investments are market linked and carries greater market risk. The Net Asset

Value (NAV) of Mutual Fund is volatile due to dependency on market conditions and there

can be instances wherein the losses are incurred. Therefore, the investment in Mutual Funds

does not serve the intent of the MYT Regulations, 2015 regarding making investment

towards Contingency Reserves. The intent of making investment towards Contingency

Reserves is to create a Reserve Fund by the Utility to deal with certain situations. The

situations wherein the utility is allowed to draw from the Contingency Reserve are clearly

identified in Regulation 34.2 of the MYT Regulations, 2015.

While framing of MYT Regulations, the Commission had envisaged that the Utilities will

invest only in securities which are safe, and the reserve created out of these investments

would be available to them in Force Majeure situations. However, though mutual funds are

part of the list of securities authorised under the Indian Trusts Act, 1882, investment in such

instruments exposes the reserve created to market risk. While the Regulation 34.3 of the

MYT Regulations, 2015 clearly mentions that no diminution in the value of Contingency

Reserve will be permitted, the Commission does not want the utilities to land in difficult

situations wherein the value of the Contingency Reserve is negatively impacted due to

market fluctuations. This in a way defeats the intent of the Regulations. Considering the

above, the Commission is of the view that the Licensee shall not invest the Contingency

Reserves amount in market linked instruments such as Mutual Funds, etc., since

considering the purpose of this reserve, the risk cannot be passed on to consumers and also

should not create situations wherein the fund is not available with the utility when it is

required the most. Therefore, the Commission in exercise of its “Power to remove

difficulties” as per Regulation 102 of MYT Regulations, 2015 directs AEML-D to transfer

the existing Mutual Fund investment towards Contribution to Contingency Reserve to safer

instruments, i.e., Government Securities (G-Sec) within the 6 months of the issue of this

Order. AEML-D also to ensure that the Contribution to Contingency Reserve for future

period shall be invested only in the above specified investments.



Rental Income from RCOM Towers: The agreement between Reliance Communication and

AEML-D for utilizing rooftops of some of the receiving stations of AEML-D has been

discontinued in FY 2019-20. Hence, no rent has been received in H1 of FY 2019-20.

AEML-D has also not considered any rent in H2 of FY 2019-20 from RCOM


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Rental Income from Fibre Optics: As stated in the section on truing up of FY 2018-19, an

agreement was made between REGSL (AEML-D) and RCOM on 28 August 2018 through

which RCOM was using the optic fibre network of AEML-D for providing the backup path

for its network. The initial agreement was valid till 31 March 2019. The agreement was

renewed in September 2019 and the rental income from RCOM has been received in

September 2019. Two thirds of the rent (Rs. 0.01 Crore) has been considered as part of

Non-Tariff Income in H1 of FY 2019-20. An estimate for the same is included in H2 of FY

2019-20.

In the MTR Order, rental income from use of Santacruz property of erstwhile RInfra was

included. However, in accordance with the Order dated 28 June 2018 in Case No. 140 of

2017, the properties are not retained by AEML-D post transaction and hence, no income

has been considered on this account in FY 2019-20. The summary of other business income

for FY 2019-20 considered in Wires Business is as under.


(Rs. Crore)


Rental Income from RCOM 0.58 0

Rental Income from Santacruz Property 25.00 0

Rental Income from Optic Fibre 0 0.08

Total 25.58 0.08


The Commission has provisionally accepted Other Income estimated by AEML-D for the

Wires Business and Supply Business for FY 2019-20, as shown in the Table below.

Table 0-72: Income from Other Business for FY 2019-20 approved by the


Particulars MTR

Order

AEML-

D

Petition

Approved after

provisional truing

up

Rental Income from RCOM 0.58 0 0

Rental Income from Santacruz Property 25.00 0 0

Rental Income from Optic Fibre 0 0.08 0.08

Total 25.58 0.08 0.08

1.74 SUMMARY OF AGGREGATE REVENUE REQUIREMENT


The summary of the ARR for the Wires Business is shown in the Table below:


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Table 0-73: ARR for Wires Business for FY 2019-20 as submitted by AEML-D (Rs.

Crore)


Petition

O&M Expenses 894.86 886.46

Impact of GST on O&M Expense 0 8.37

Impact of SC Judgment / GoM notification on O&M

Expense

0 8.16


Interest on Long-term Loan Capital 146.29 150.39


Provisioning for Bad & Doubtful Debts 2.61 3.37


Income Tax 62.61 84.73


Return on Equity Capital 318.71 338.56



Less: Income from Other Business 25.58 0.08


The summary of the ARR for the Supply Business is shown in the Table below:


Crore)

Particulars MTR

Order

AEML-D

Petition


O&M Expenses 441.46 437.32

Impact of GST on O&M Expense 0.00 2.19

Impact of SC Judgment / GoM notification on O&M

Expense

0.00 4.03




Interest on Consumer Security Deposits 41.26 45.90



Intra State Transmission Charges 398.72 398.72


DSM Expenses 3.84 0

Income Tax 191.84 480.85




of 445

Particulars MTR

Order

AEML-D

Petition




The summary of the ARR for the combined Wires Business and Supply Business is as






O&M Expenses 1,336.32 1,323.78

Impact of GST on O&M Expense 0 10.55

Impact of SC Judgment / GoM notification

on O&M Expense

0 12.19




Interest on Consumer Security Deposits 41.26 45.90



Intra State Transmission Charges 398.72 398.72


DSM Expenses 3.84 0

Income Tax 254.45 565.57





Less: Income from Other Business 25.58 0.08



Based on the components of the ARR approved in the above paragraphs, the Commission

has approved the ARR for Wires Business and Supply Business for FY 2019-20 as shown

in the Tables below:

Table 0-76: ARR for Wires Business for FY 2019-20 approved by the Commission

(Rs. Crore)


Petition

Approved after

provisional

truing up

O&M Expenses 894.86 886.46 850.72


of 445


Petition

Approved after

provisional

truing up

Impact of GST on O&M Expense 0 8.37 -


notification on O&M Expense 0 8.16 -

Depreciation 244.59 256.48 256.27

Interest on Long-term Loan Capital 146.29 150.39 146.51


Provisioning for Bad & Doubtful

Debts 2.61 3.37 3.37


reserves 14.56 14.99 13.87

Income Tax 62.61 84.73 89.34


Return on Equity Capital 318.71 338.56 335.71



Less: Income from Other Business 25.58 0.08 0.08


Requirement 1,576.99 1,666.36 1,609.95

The main reasons for the difference between the Wires ARR claimed by AEML-D for FY

2019-20 and that approved in this Order are:

1. Normative O&M Expenses approved in this Order are lower than that claimed by

AEML-D, on account of consideration of lower escalation rate;

2. Interest on Loan Capital approved in this Order is lower than that claimed by

AEML-D;

3. RoE is lower than that claimed by AEML-D, on account of the lower capitalisation.

Table 0-77: ARR for Supply Business for FY 2019-20 approved by the Commission

(Rs. Crore

Particulars MTR

Order

AEML-D

Petition

Approved after

provisional

truing up

Power Purchase Expenses 4,336.89 4,205.96 4,204.44

O&M Expenses 441.46 437.32 419.68

Impact of GST on O&M Expense 0.00 2.19 -


notification on O&M Expense 0.00 4.03

-




Interest on Consumer Security Deposits 41.26 45.90 45.90

Provisioning for Bad & Doubtful Debts 9.13 12.62 12.62


Intra State Transmission Charges 398.72 398.72 398.72


of 445

Particulars MTR

Order

AEML-D

Petition

Approved after

provisional

truing up


DSM Expenses 3.84 0 -

Income Tax 191.84 480.85 507.03






The main reasons for the difference between the Supply ARR claimed by AEML-D and

that approved in this Order for FY 2019-20 are:

1. O&M Expenses allowed in this Order are lower than that claimed by AEML-D, on

account of consideration of lower escalation rate;

2. Interest on Working Capital is higher than that claimed by AEML-D

3. Income Tax allowed in this Order is higher than that claimed by AEML-D, as the

Income Tax has been claimed at the same level as that approved for FY 2018-19 in

this Order, in accordance with the MYT Regulations, 2015.

Table 0-78: Combined ARR for Wires Business and Supply Business for FY 2019-20


Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after

provisional

truing up

Power Purchase Expenses 4,336.89 4,205.96 4,204.44

O&M Expenses 1,336.32 1,323.78 1,270.41

Impact of GST on O&M Expense 0 10.55 -


notification on O&M Expense

0 12.19 -

Depreciation 267.97 284.18 282.26



Interest on Consumer Security Deposits 41.26 45.90 45.90

Provisioning for Bad & Doubtful Debts 11.74 15.99 15.99


Intra State Transmission Charges 398.72 398.72 398.72


DSM Expenses 3.84 0 -

Income Tax 254.45 565.57 596.37






of 445

Particulars

FY 2019-20

MTR Order AEML-D

Petition

Approved after

provisional

truing up

Less: Income from Other Business 25.58 0.08 0.08


1.75 REVENUE

1.75.1 Revenue from Wheeling charges from Change-over and Open Access

Consumers


The actual revenue from wheeling charges from change-over and OA consumers in H1 of

2019-20 along with the estimated revenue from the same in H2 of FY 2019-20 are shown

in the Table below:




OA consumers

24.88

Change-over Consumers (HT) 245.89

Change-over Consumers (LT)

Total 274.35 270.77


The Commission has worked out the revenue based on the sales estimated for changeover

and OA consumers as elaborated in the earlier Sections of this Chapter, grossed up with

corresponding LT and HT level losses approved by the Commission for AEML-D and

corresponding Wheeling Charges applicable to particular category during the year, as


Table 0-80: Wheeling Revenue from Change-over & Open Access Consumers in FY

2019-20 approved by the Commission (Rs. Crore)

Particulars MTR

Order

AEML-D

Petition

Approved after

provisional truing

up

Wheeling Revenue from Change-

over & Open Access Consumers 274.35 270.77 274.09


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1.75.2 Revenue from Cross-Subsidy Surcharge (CSS)


The actual revenue from CSS from changeover and OA consumers in H1 of FY 2019-20

and the revenue from CSS from estimated changeover sales in H2 of FY 2019-20 are shown

in the table below:

Table 0-81: Estimated Revenue from CSS in FY 2019-20 as submitted by AEML-D

(Rs. Crore)


OA consumers

34.74

Changeover Consumers 110.82

Total 158.08 145.56


The Commission has estimated the revenue from CSS from OA consumers and Changeover

consumers based on the category wise cross subsidy surcharge applicable to estimated

consumption, grossed up with corresponding LT and HT level losses approved by the

Commission for AEML-D. The revenue from CSS estimated for FY 2019-20 is as shown

in the Table below.

Table 0-82: Revenue from CSS in FY 2019-20 approved by the Commission (Rs.

Crore)

Particulars MTR

Order

AEML-D

Petition

Approved after

provisional

truing up

Revenue from CSS 158.08 145.56 166.38

.

1.75.3 Revenue from sale of Electricity


In H1 of FY 2019-20, AEML-D has charged tariffs as approved by the Commission in

AEML-D’s MTR Order dated 12 September 2018. The actual revenue (excluding the

revenue from RAC) from energy sales along with the FAC charged in accordance with the

MYT Regulations, 2015 in H1 of FY 2019-20 is shown in the Table below. Further, the

revenue expected from energy sales in H2 of FY 2019-20 is also presented in the Table

below. AEML-D has estimated the revenue in second half of FY 2019-20 by applying the

approved tariffs for FY 2019-20 to the estimated sales of second half of FY 2019-20. The

actual revenue billed in H1 of FY 2019-20 (excluding RA Recovery) and the revenue from


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estimated sales in H2 of FY 2019-20 (at approved tariffs without RAC) is summarized

below:

Table 0-83: Estimated Revenue from sale of power in FY 2019-20 as submitted by

AEML-D


Revenue (Rs. Crore) 7,263.69 7,574.35

Sales (MU) 8,887.42 8,624.92

ABR (Rs. /kWh) 8.17 8.78


The Commission has computed the revenue based on estimated sales for FY 2019-20 and

applicable Tariff approved for FY 2019-20 in MTR Order dated 12 September 2018, as


Table 0-84: Total Revenue in FY 2019-20 approved by Commission (Rs. Crore)


Petition

Approved after


Revenue from Wheeling Charges

from own consumers 1,309.49 1,273.56 1,282.56

Revenue from Sale of Electricity

from own consumers 5,954.20 6,298.80 6,246.77

Total Revenue (Rs. Crore) 7,263.69 7,574.35 7,529.33

Own Sales (MU) 8,887.42 8,624.92 8,622.04

ABR (Rs. /kWh) 8.17 8.78 8.73

1.76 REVENUE GAP/SURPLUS FOR FY 2019-20 FOR THE WIRES BUSINESS

AND SUPPLY BUSINESS


The estimated Revenue Gap/(Surplus) for FY 2019-20 for the Wires Business and Supply

Business is as shown in the Tables below:

Table 0-85: Revenue Gap/(Surplus) for Wires Business in FY 2019-20 as submitted

by AEML-D (Rs. Crore)

Particulars MTR

Order

AEML-D

Petition

Wires ARR 1,576.99 1,666.36

Revenue Gap allowed in MTR Order 18.46 18.46



of 445

Particulars MTR

Order

AEML-D

Petition

Revenue from Wheeling Charges from changeover and OA

consumers

274.35 270.77

Net Wires ARR 1,321.10 1,414.06

Revenue from Wheeling Charges from Own Consumers 1,309.49 1,273.56

Revenue Gap of Wires Business 11.61 140.50

Table 0-86: Revenue Gap/(Surplus) for Supply Business in FY 2019-20 as submitted



Petition

Supply ARR 5,453.38 5,630.59



Revenue from CSS from changeover and OA consumers 158.08 145.56

Net Supply ARR 5,944.60 6,134.33


Revenue Gap of Supply Business (9.60) (164.46)

Table 0-87: Revenue Gap for Wires & Supply Business in FY 2019-20 as submitted



Petition

Wires & Supply ARR 7,030.37 7,296.96



Revenue from Wheeling Charges / CSS from

Changeover Consumers 432.43 416.33

Net ARR 7,265.70 7,548.39


Revenue Gap 2.01 (23.96)


Based on the ARR and revenue provisionally approved for FY 2019-20 in the earlier

paragraphs, the Revenue Gap/(Surplus) for the Wires Business and Supply Business for FY

2019-20 as provisionally approved by the Commission is shown in the Tables below:

Table 0-88: Provisional Revenue Gap/(Surplus) for the Wires Business for FY 2019-



Petition

Approved after

provisional

truing up

Wires ARR 1,576.99 1,666.36 1,609.95

Revenue Gap allowed in MTR

Order 18.46 18.46 18.46



of 445


Petition

Approved after

provisional

truing up


from changeover and OA

consumers

274.35 270.77 274.09

Net Wires ARR 1,321.10 1,414.06 1,354.32


from Own Consumers 1,309.49 1,273.56 1,282.56

Revenue Gap of Wires Business 11.61 140.50 71.76

Table 0-89: Provisional Revenue Gap/(Surplus) for the Supply Business for FY 2019-


Particulars MTR Order AEML-D Petition Approved after


Supply ARR 5,453.38 5,630.59 5,625.12

Revenue Gap allowed in

MTR Order 649.30 649.30 649.30

Supply ARR with

Revenue Gap 6,102.68 6,279.89 6,274.42

Revenue from CSS from

changeover and OA

consumers

158.08 145.56 166.38

Net Supply ARR 5,944.60 6,134.33 6,108.03


Revenue Gap of Supply

Business (9.60) (164.46) (138.74)

Table 0-90: Total Revenue Gap/Surplus for FY 2019-20 as approved by the



Petition

Approved after

provisional

truing up

Wires & Supply ARR 7,030.37 7,296.96 7,235.07

Revenue Gap allowed in MTR

Order 667.76 667.76 667.76

Wires & Supply ARR with

Revenue Gap 7,698.13 7,964.72 7,902.83

Revenue from Wheeling Charges /

CSS from Changeover Consumers 432.43 416.33 440.48

Net ARR 7,265.70 7,548.39 7,462.35


Revenue Gap 2.01 (23.96) (66.98)

The treatment of the above Revenue Gap/(Surplus) is discussed along with the treatment of

Cumulative Revenue Gap / (Surplus), in subsequent Chapter of this Order.


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1.77 REGULATORY ASSET RECOVERY IN FY 2019-20


The Commission had approved RA recovery of Rs. 451.08 Crore in FY 2019-20 in the

MTR Order dated 12 September 2018. Based on the estimated sales for H2 of FY 2019-20,

the total RA recovery in FY 2019-20 is likely to be Rs. 411.13 Crore and the RA under

recovery in FY 2019-20 is Rs. 39.95 Crore, as shown below:

Table 0-91: Regulatory Assets Recovery in FY 2019-20 as submitted by AEML-D

(Rs. Crore)

Particulars AEML-D Petition

RA Recovery approved by the Commission 451.08

Actual RA Recovery 411.13

Under-recovery 39.95


The Commission has worked out the RA recovery based on estimated own and Changeover

sales in FY 2019-20 and the RAC approved for FY 2019-20 in MTR Order dated 12

September 2019. The RA under-recovery determined by the Commission in provisional

true-up for FY 2019-20 is given in the following Table:

Table 0-92: Regulatory Asset Over/Under-recovery in FY 2019-20 approved by


Particulars AEML-D Petition Approved after

provisional

truing up

RA Recovery approved by the Commission 451.08 451.08

Actual RA Recovery 411.13 409.36 Under-recovery 39.95 41.72

The treatment of this Over / Under Recovery of Regulatory Asset is discussed along with

the treatment of Cumulative Revenue Gap / (Surplus) in subsequent Chapter of this Order.


of 445

5 AGGREGATE REVENUE REQUIREMENT FOR FY 2020-

21 TO FY 2024-25

In accordance with the MYT Regulations, 2019, AEML-D submitted the projected ARR

for each year of the 4th Control Period, along with projected expenses over the Control

Period for the Wires Business and Supply Business separately. The Commission has

discussed the expenditure allowed on each of the expense heads and the total expenses

approved by it for the 4th Control Period in the subsequent paragraphs.

5.1 SALES

AEML-D's Submission

AEML-D has projected the total energy sales to all consumers connected to its network,

including Change-over and OA consumers and thereafter subtract the projected Change-

over and OA consumption from the same.

5.1.1 Total Network Sales

AEML-D has considered a conventional approach considering growth factors of past few

years, which is less prone to errors with the growth rate rendering a combined effect of

various factors affecting energy consumption. Accordingly, AEML-D has considered

CAGR based forecast for total network energy sales of the licence area (own + change-over

+ OA).

5.1.2 Migration of consumers from / to AEML-D Supply

As stated in the provisional true-up for FY 2019-20, AEML-D expects that the rate of

migration of residential (0-500) consumers will continue at the same pace in future also.

Therefore, AEML-D has considered the average of number of consumers migrated in the

months from April 2019 to August 2019 as the monthly number of consumers migrating in

each year of the Control Period. Most of the reverse migration happens in tariff of LT – I

(Residential high end with consumption of more than 500 units per month), LT II(a), LT

II(c) and LT III(a) category as TPC-D tariff is higher than the AEML-D tariff. Therefore

AEML-D has considered the average number of consumers from April 2019 to August

2019 as the monthly number of consumers that will migrate back to AEML-D in each year

of the Control Period.

5.1.3 Switchover of consumers from/to AEML-D Supply

AEML-D has considered the average number of consumers in residential category

(consuming up to 500 units per month) and LT II(a) consumers who had switched over


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from April 2019 to August 2019 as the number of consumers switching over to TPC-D in

each year of the Control Period.

5.1.4 Reduction in Sales due to DSM Programs

AEML-D has estimated reduction in sales due to two DSM programs, i.e., large-scale

refrigerator program and large-scale ceiling fan program for the Control Period.

5.1.5 Reduction in Sales due to Roof Top Solar Generation

AEML-D has considered the same capacity of 7,680.56 kW of Rooftop Solar, in line with

the actual capacity in FY 2018-19, for each year of the Control Period. /

5.1.6 Sales Forecast Methodology

AEML-D has continued to follow the sales forecast methodology detailed in provisional

Truing-up of FY 2019-20 for projection of category-wise sales for 4th Control Period.

5.1.7 Total Projected Sales for 4th Control Period

Based on the above assumptions, projected Direct Sales and Change-over Sales for the 4th

Control Period are shown in the Table below:

Table 5-1: Projected Sales for 4th Control Period as submitted by AEML-D (MU)

Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Direct Sales 8,871.31 9,045.30 9,219.33 9,396.31 9.579.52

Change-over Sales 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18

Overall Sales 10.444.01 10,628.57 10,817.50 11,009.88 11,208.70

AEML-D has also worked out the OA consumption for the 4th Control Period as shown in

the Table below:

Table 5-2: Projected OA consumption for 4th Control Period as submitted by

AEML-D (MU)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT-I Industry 235.84 241.51 247.32 253.69 259.42

HT-II Commercial 131.91 137.23 142.73 148.99 154.28

HT VI PS Others 4.68 4.87 5.07 5.29 5.48

Total 372.43 383.61 395.12 407.97 419.18


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The Commission has adopted a holistic approach and projected the own sales, change over

sales and OA consumption for FY 2019-20 and for the 4th Control Period (i.e., FY 2020-21

to FY 2024-25) as elaborated earlier in the section on Sales projection for FY 2019-20. For

projecting the energy sales for the 4th Control Period, the category-wise CAGR, as shown

in Chapter 4 of this Order, has been applied on category-wise energy sales approved for FY

2019-20.

In view of the above, the category-wise Direct Sales approved for the 4th Control Period are



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Table 5-3: Category-wise Direct Sales approved for 4th Control Period (MU)

Consumer Category

AEML-D Petition Approved in this Order

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

LT I - Below Poverty Line 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01


0-100 1,709.09 1,754.40 1,801.14 1,849.43 1,899.24 1,757.32 1,817.31 1,877.45 1,937.51 1,997.17

101-300 1,155.77 1,186.90 1,218.79 1,251.62 1,285.27 1,152.32 1,189.56 1,226.29 1,262.33 1,297.35

301-500 204.83 211.76 218.76 225.96 233.23 196.90 201.65 206.12 210.29 214.03

500and above 70.22 73.11 76.07 78.90 81.90 68.03 68.36 68.30 67.64 66.54


0-100 280.44 289.41 298.66 308.15 317.91 288.35 299.79 311.31 322.83 334.30

101-300 418.76 432.92 447.49 462.42 477.70 417.51 433.89 450.24 466.37 482.19

301-500 222.25 231.43 240.77 250.27 259.92 213.66 220.38 226.85 232.91 238.53

500and above 425.53 441.96 459.01 476.64 494.88 412.24 413.25 412.12 408.62 402.03

LT II (a) - 0-20 kW 1,801.78 1,821.07 1,840.65 1,860.52 1,880.68 1,864.62 1,904.30 1,943.16 1,980.91 2,017.19

LT II (b) - 20-50 kW 242.06 242.35 242.65 242.95 243.25 233.40 231.98 229.04 224.31 217.48

LT II (c) - above 50 kW 578.75 587.76 592.77 597.55 602.39 531.48 525.16 518.38 511.14 503.41

LT III (a) - LT Industrial upto 20 kW 166.08 168.46 170.88 173.33 175.82 182.89 186.97 190.52 193.66 196.48

LT III (b) - LT Industrial above 20 kW 382.14 385.11 388.11 391.16 394.25 388.81 383.85 378.08 371.72 364.92

LT IV - Public Water Works 13.15 13.29 13.44 13.59 13.74 12.77 12.77 12.77 12.77 12.77

LT-V: LT- Advertisements and Hoardings 2.55 2.57 2.60 2.62 2.65 3.04 2.95 2.87 2.78 2.69

LT VI: LT -Street Lights 50.45 50.95 51.46 51.97 52.49 52.30 50.47 48.70 46.99 45.33

LT-VII (A): LT -Temporary Supply Religious 2.85 2.90 2.96 3.02 3.08 1.82 1.79 1.75 1.72 1.68

LT-VII (B): LT -Temporary Supply Others 11.12 11.23 11.35 11.46 11.57 10.43 10.43 10.43 10.43 10.43

LT VIII: LT - Crematorium & Burial Grounds 1.44 1.54 1.65 1.76 1.88 1.41 1.50 1.61 1.71 1.83

LT IX (a): PS - Govt. EI & Hospitals 26.25 26.54 26.84 27.14 27.44 30.85 35.09 39.92 45.41 51.66

LT IX (b): PS - Others 124.69 125.83 126.99 128.17 129.36 171.62 206.62 248.53 298.80 359.18


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Consumer Category


FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

LT X (a): Agriculture - Pumpsets 0.06 0.06 0.07 0.07 0.07 0.09 0.11 0.14 0.18 0.23

LT X (b): Agriculture - Others 0.22 0.23 0.23 0.23 0.23 0.30 0.38 0.48 0.61 0.76

LT XI: EV Charging Stations 0.01 0.01 0.01 0.01 0.01 - - - - -

LT Total 7,890.49 8,061.82 8,233.34 8,408.95 8,588.98 7,992.17 8,198.59 8,405.08 8,611.66 8,818.19

HT I: HT-Industry 312.50 313.91 315.27 316.19 317.86 339.76 375.11 411.70 449.59 488.81

HTII: HT- Commercial 477.71 477.68 477.53 476.68 476.87 304.26 276.26 249.75 224.84 201.55

HT III: HT-Group Housing Society 39.60 39.73 39.87 40.00 40.14 34.70 32.24 29.37 25.98 21.95

HT IV: HT -Public Water Works 8.35 8.44 8.52 8.61 8.69 8.13 8.13 8.13 8.13 8.13

HT V - HT Metro & Monorail 27.52 27.80 28.08 28.36 28.64 30.84 31.04 31.17 31.24 31.29

HT VI (a):PS - Govt. EI & Hospitals 5.91 5.97 6.03 6.09 6.15 6.45 6.21 5.96 5.69 5.41

HT VI (b):PS - Others 105.64 106.34 107.04 107.72 108.45 98.67 97.20 95.61 93.90 92.07

HT VII: Temporary Supply 3.58 3.62 3.65 3.69 3.73 19.30 24.13 30.13 37.56 46.75

HT VIII: EV Charging Stations 0 0 0 0 0 0 0 0 0 0

Sub-total 980.81 983.48 985.99 987.35 990.54 842.12 850.33 861.82 876.95 895.96

Total 8,871.31 9,045.30 9,219.33 9,396.31 9,579.52 8,834.29 9,048.92 9,266.90 9,488.60 9,714.15

The category-wise Change-over sales approved for the 4th Control Period are given in the Table below:


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Table 5-4: Category-wise Change-over Sales approved for 4th Control Period (MU)

Consumer Category


FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

LT Category

LT I - Below Poverty Line 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00


0-100 520.58 533.58 546.68 559.82 573.06 483.15 484.36 485.55 486.68 487.77

101-300 457.90 468.82 480.07 491.52 503.31 416.87 418.98 421.05 423.05 425.01

301-500 71.40 71.64 72.01 72.36 72.83 68.93 70.00 71.12 72.23 73.40

500and above 16.31 15.54 14.75 14.16 13.45 18.28 18.64 19.10 19.94 20.89


0-100 90.44 91.12 91.80 92.49 93.18 83.93 82.72 81.53 80.40 79.31

101-300 135.55 135.72 135.93 136.20 136.50 123.40 121.29 119.22 117.22 115.27

301-500 61.74 59.92 58.14 56.41 54.71 59.61 58.54 57.42 56.31 55.14

500and above 64.27 59.75 54.99 49.97 44.71 72.02 71.66 71.20 70.36 69.41

LT II (a) - 0-20 kW 82.22 79.72 77.17 74.55 71.88 95.64 95.64 95.64 95.64 95.64

LT II (b) - 20-50 kW 22.80 23.03 23.26 23.49 23.73 23.09 23.09 23.09 23.09 23.09

LT II (c) - above 50 kW 18.30 14.09 13.94 14.08 14.22 32.90 32.90 32.90 32.90 32.90

LT III (a) - LT Industrial up to 20 kW 14.37 13.33 12.27 11.19 10.08 10.99 8.61 6.75 5.29 4.14

LT III (b) - LT Industrial above 20 kW 9.52 9.61 9.71 9.81 9.90 3.87 2.35 1.43 0.87 0.53

LT IV - Public Water Works 0 0 0 0 0 - - - - -

LT-V: LT- Advertisements and Hoardings 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

LT VI: LT -Street Lights 0 0 0 0 0 - - - - -

LT-VII (A): LT -Temporary Supply Religious 0 0 0 0 0 - - - - -

LT-VII (B): LT -Temporary Supply Others 0.03 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02

LT VIII: LT - Crematorium & Burial Grounds 0.26 0.27 0.27 0.27 0.27 0.36 0.38 0.39 0.40 0.42

LT IX (a): PS - Govt. EI & Hospitals 0 0 0 0 0 - - - - -


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Consumer Category


FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

FY 2020-21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

LT IX (b): PS - Others 2.52 2.55 2.57 2.60 2.62 4.64 5.81 7.26 9.07 11.34

LT X (a): Agriculture - Pumpsets 0 0 0 0 0 0 0 0 0 0

LT X (b): Agriculture - Others 0 0 0 0 0 0 0 0 0 0

LT XI: EV Charging Stations 0 0 0 0 0 0 0 0 0 0

LT Total 1,568.22 1,578.75 1,593.61 1,608.96 1,624.52 1,497.72 1,495.00 1,493.68 1,493.49 1,494.29

HT I: HT-Industry 0.19 0.19 0.19 0.20 0.20 0.06 0.03 0.01 0.00 0.00

HTII: HT- Commercial 4.28 4.33 4.37 4.41 4.46 1.58 0.72 0.33 0.15 0.07

HT III: HT-Group Housing Society 0 0 0 0 0 0 0 0 0 0

HT IV: HT -Public Water Works 0 0 0 0 0 0 0 0 0 0

HT V - HT Metro & Monorail 0 0 0 0 0 0 0 0 0 0

HT VI (a):PS - Govt. EI & Hospitals 0 0 0 0 0 0 0 0 0 0

HT VI (b):PS - Others 0 0 0 0 0 0 0 0 0 0

HT VII: Temporary Supply 0 0 0 0 0 0 0 0 0 0

HT VIII: EV Charging Stations 0 0 0 0 0 0 0 0 0 0

Sub-total 4.48 4.52 4.57 4.61 4.66 1.64 0.75 0.34 0.15 0.07

Total 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18 1,499.36 1,495.74 1,494.02 1,493.64 1,494.36

The category-wise OA consumption approved for the 4th Control Period are given in the Table below:


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Table 5-5: Category-wise OA Consumption approved for 4th Control Period (MU)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT-I Industry 136.85 136.85 136.85 136.85 136.85

HT-II Commercial 93.77 93.77 93.77 93.77 93.77

HT VI PS Others 4.63 4.63 4.63 4.63 4.63

Total 235.25 235.25 235.25 235.25 235.25


AEML-D's Submission

AEML-D submitted that considering the target losses of 8.36% for FY 2019-20 and a

further reduction of 0.25% over the same, the target losses for FY 2020-21 would be 8.11%.

However, AEML-D has already reached a Distribution loss level of 7.80% in FY 2019-20

and is therefore commencing the next Control Period at a loss level, which is already much

lower than what would be if the target losses are approved moving along the previously

approved trajectory. AEML-D has therefore considered the following Distribution Loss

Trajectory from FY 2020-21 to FY 2024-25:

Table 5-6: Distribution Loss for 4th Control Period submitted by AEML-D

Particulars FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Distribution Loss 7.60% 7.45% 7.35% 7.30% 7.30%

Loss Reduction

Trajectory 0.20% 0.15% 0.10% 0.05% 0.00%

AEML-D submitted that if the Distribution Losses are approved extrapolating the

previously approved trajectory of 0.25% reduction each year, the starting losses (FY 2020-

21) would be higher at 8.11% and the ending losses (FY 2024-25) would be lower at 7.11%,

as against the proposed trajectory, which starts at 7.60% and ends at 7.30% respectively.

AEML-D has worked out the additional revenue from sale of electricity in each year of the

Control Period considering both the trajectories and has worked out the net benefit to

consumers over the Control Period. AEML-D also submitted zone-wise Distribution loss

of FY 2018-19 and stated the reasons for increased losses in Eastern Zone. AEML-D

submitted the number of steps taken to reduce these losses. AEML-D submitted that it has

to employ dedicated manpower for carrying out various loss reduction activities, which

results in additional cost of manpower and other resources. Therefore, the O&M cost of

AEML-D is also higher as compared to other Licensees such as BEST.

The energy requirement at T-D periphery for the next Control Period as submitted by

AEML-D is shown in the Table below:


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Table 5-7: Energy Balance for 4th Control Period as submitted by AEML-D (MU)


21

FY 2021-22

FY 2022-23

FY 2023-24

FY 2024-25

Own Sales 8,871.31 9,045.30 9,219.33 9,396.31 9,579.52

Changeover Sales 1,572.70 1,583.27 1,598.17 1,613.57 1,629.18

OA Consumption 372.43 383.61 395.12 407.97 419.18

Total 10,816.44 11,012.18 11,212.62 11,417.85 11,627.88

Distribution Loss (%) 7.60% 7.45% 7.35% 7.30% 7.30%

Energy Requirement at T<>D 11,705.67 11,898.20 12,101.71 12,316.59 12,543.18

AEML-D submitted that based on the Technical Loss assessment study for FY 2018-19,

the actual Technical Loss for HT consumers works out to 1.59% and actual Technical Loss

for LT consumers works out to 7.41%. AEML-D has considered this Technical Loss for the

next Control Period for deriving the Energy Balance. AEML-D has considered the

Transmission Loss of 3.30% approved in the MTR Order, as the Transmission Loss for

each year of the Control Period. The power purchase requirement for each year of the

Control Period is submitted in the Table below:

Table 5-8: Power Purchase Requirement for 4th Control Period as submitted by

AEML-D (MU)

Particulars / (MU) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Migrated HT Sales + OA 376.91 388.13 399.69 412.58 423.84

Wheeling Loss - HT (%) 1.59% 1.59% 1.59% 1.59% 1.59%

Migrated HT Sales + OA at T<>D 383.00 394.40 406.14 419.25 430.68

Migrated LT Sales 1,568.22 1,578.75 1,593.61 1,608.96 1,624.52

Wheeling Loss - LT (%) 7.41% 7.41% 7.41% 7.41% 7.41%

Migrated LT Sales at T<>D 1,693.73 1,705.10 1,721.14 1,737.73 1,754.53

Total migrated Sales + OA at T<>D 2,076.73 2,099.50 2,127.28 2,156.97 2,185.22

Energy Requirement of AEML-D

consumers at T<>D 9,628.94 9,798.70 9,974.43 10,159.61 10,357.96

Transmission Loss (%) 3.30% 3.30% 3.30% 3.30% 3.30%

Energy Requirement of AEML-D

consumers at G<>T 9,957.54 10,133.10 10,314.82 10,506.32 10,711.44


AEML-D has achieved actual Distribution Loss lower than the target Distribution Loss in

FY 2018-19. The Commission observes that AEML-D has projected Distribution Loss for

the 4th Control Period considering a reducing trend every year starting from 0.20% in FY

2020-21 to 0.00% in FY 2024-25.

The Commission appreciates the fact that AEML-D has been able to achieve actual

Distribution Loss lower than the target Distribution Loss, for which AEML has been able


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to retain its share of the efficiency gains. However, overachievement of Distribution Loss

in previous Control Period does not mean that the loss reduction trajectory to be set for the

next Control Period should be less stringent.

The Commission has to determine the trajectory for Distribution Loss for the 4th Control

Period in accordance with Regulation 7 of the MYT Regulations, 2019. The Commission

has considered the Distribution Loss projected by AEML-D for FY 2019-20, for approving

the Loss trajectory for the next Control Period.

The Commission is of the view that AEML-D should continue to take efforts to bring down

the losses in its Eastern Zone to optimum levels. It may be noted that the Commission has

also been allowing significant Capitalization proposed by AEML-D for each year, which

also includes the capex for reduction in Distribution Losses through meter replacement,

cable replacement, etc., which will help in reducing the Technical Losses as well as

Commercial Losses.

The Commission is of the view that Distribution Licensees like Torrent Power Limited

operating in cities like Surat and Ahmedabad, which have similar demographics as those of

AEML-D, have been able to achieve Distribution Losses as low as around 3.59% in the

past. Even BEST, which operates in the city of Mumbai, and is very much comparable to

AEML-D in terms of HT:LT ratio and geography, has achieved Distribution Losses of

4.18% in FY 2018-19. Therefore, there is enough scope for AEML-D to put in more efforts

to achieve optimum Distribution Loss levels.

The Commission has therefore, adopted a similar approach as it had adopted in the previous

MYT Control Period and accordingly considers the Distribution Loss reduction of 0.25%

annually for each year of the Control Period, taking the base distribution loss of 7.80%

approved for FY 2019-20. The following Table shows the approved Distribution Loss for

4th Control Period:

Table 5-9: Distribution Loss approved for 4th Control Period Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Distribution Loss 7.55% 7.30% 7.05% 6.80% 6.55%

For the Control Period from FY 2020-21 to FY 2024-25, the Commission has considered

the Transmission Loss of 3.18%, i.e., same as provisional Transmission Loss for FY 2019-

20. The Direct Sales and Change-over Sales have been considered as approved earlier in

this Section.


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The Commission has considered LT and HT Losses of FY 2020-21 as submitted by AEML-

D in Form F1.3, for applicability for OA and Changeover consumers for the entire Control

Period. The Commission approves the HT and LT Distribution Losses for the 4th Control

Period, applicable for Change-over and OA consumption, as given in the Table below:

Table 5-10: HT and LT losses approved for 4th Control Period AEML-D Approved


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT Loss 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59% 1.59%

LT Loss 7.41% 7.41% 7.41% 7.41% 7.41% 6.43% 6.43% 6.43% 6.43% 6.43%

Accordingly, the Distribution Losses and Energy Balance provisionally approved the

Commission for FY 2020-21 to FY 2024-25 are shown in the Tables below:

Table 5-11: Energy Input requirement approved for 4th Control Period (MU)


Own Sales 8,834.29 9,048.92 9,266.90 9,488.60 9,714.15

Change-over Consumption 1,499.36 1,495.74 1,494.02 1,493.64 1,494.36

OA consumption 235.25 235.25 235.25 235.25 235.25

Total 10,568.90 10,779.92 10,996.16 11,217.49 11,443.75

Distribution Loss (%) 7.55% 7.30% 7.05% 6.80% 6.55%

Energy Input at T<>D Interface 11,432.10 11,628.90 11,830.27 12,036.02 12,245.94

Energy Injected by TPC-D for

Changeover consumers 1,562.43 1,546.71 1,532.99 1,520.66 1,509.43

InSTS Loss 3.18% 3.18% 3.18% 3.18% 3.18%

Energy Requirement at G<>T

Interface 9,869.67 10,082.19 10,297.29 10,515.36 10,736.51

5.3 POWER PURCHASE QUANTUM AND COST

AEML-D's Submission

AEML-D has prepared the Power Procurement plan for the Control Period considering the

available sources with which AEML-D is having long-term power procurement

arrangement and the identified new source with which AEML-D intends to enter PPA.

5.3.1 Procurement from ADTPS (AEML-G)

AEML-D has a Power Purchase Arrangement with ADTPS valid till 22nd February 2023 as

approved by the Commission vide Order dated 8 February 2018 in Case No. 5 of 2017.

AEML-D intends to extend the PPA with ADTPS for which it will separately approach the

Commission in accordance with the provisions of the MYT Regulations, 2019. At present,

AEML-D has considered the energy availability from ADTPS for the Control Period, as


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projected by ADTPS in its MYT Petition for 4th Control Period. The following Table shows

the power purchase projected by AEML-D for the Control Period:

Table 5-12: Energy Availability from ADTPS from FY 2020-21 to FY 2024-25


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Capacity (MW) 500 500 500 500 500

Availability (%) 94.38% 94.38% 94.38% 93.45% 94.38%

Aux. Consumption (%) 10.50% 10.50% 10.50% 10.50% 10.50%

Net Generation (MU) 3,699.93 3,699.93 3,699.93 3,710.50 3,699.93

5.3.2 Backing Down of ADTPS (AEML-G)

AEML-D submitted that the Commission has issued the MERC (Deviation Settlement

Mechanism and Related Matters) Regulations, 2019, which will be effective from 1st April

2020. As per these Regulations, the Distribution Licensees are required to back down their

contracted sources as per their demand requirement. In order to make a realistic assessment

of generation availability for AEML-D from ADTPS, the energy balance of AEML-D is

evaluated on hourly basis.

Generation availability based on the generation plan submitted by ADTPS in its MYT

Petition is considered. RE generation from contracted sources is considered as per historical

trend. Mapping of estimated demand requirement and generation is done at hourly intervals.

Wherever power is surplus, ADTPS is considered as backed down up to Technical

Minimum. Balance surplus, if any, is considered for short-term sale. The short-term sale is

minimum and only during few hours in night off-peak period during monsoon and winter

months. Shortfall, if any, after considering the energy availability from ADTPS and the new

solar source is considered for short-term purchase. Fixed and Variable Cost of ADTPS have

been considered in line with the cost projected by ADTPS in its MYT Petition.

Table 5-13: Power Purchase from ADTPS from FY 2020-21 to FY 2024-25


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Power Purchase Quantum (MU) 3,699.93 3,649.70 3,662.71 3,676.83 3,675.61

Fixed Charges (Rs. Crore) 339.26 373.80 381.70 386.16 394.54

Variable Charges (Rs./kWh) 3.71 3.71 3.71 3.71 3.71

Variable Charges (Rs. Crore) 1,374.15 1,355.50 1,360.33 1,365.57 1,365.12

Total Charges (Rs. Crore) 1,713.41 1,729.30 1,742.03 1,751.73 1,759.66


Since the total installed capacity of ADTPS is allocated to AEML-D, the Commission has

considered the generation quantum and cost as approved for AEML-G (ADTPS) in its MYT

Order for the 4th Control Period vide Order dated 30 March 2020 in Case No. 298 of 2019,


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as power purchase quantum and cost for AEML-D. The Commission has considered the

power purchase from ADPTS till FY 2024-25, even though the existing PPA is valid up to

22 February 2023, only for the purpose of estimating the power purchase cost for this MYT

Order. The mere fact that the Commission has considered this source beyond the period of

validity of the Arrangement, does not convey explicit or implicit approval of the

Commission for extension of the Arrangement. AEML-D shall approach the Commission

at least 6 months before expiration of its Arrangement, in case of extension of Arrangement

or power purchase from alternate source. The Commission may take a considered view on

the extension of the Arrangement or approval of the alternate source, at the appropriate

time. While submitting its Power Procurement plan, AEML-D has to ensure that the most

optimum power purchase tie-ups are made to secure the supply for its consumers,

irrespective of whether the generator is a Group Company or otherwise.

The following Table shows the quantum and cost of AEML-G considered in power

purchase of AEML-D, for the 4th Control Period:

Table 5-14: Power Purchase from ADTPS approved by the Commission from FY

2020-21 to FY 2024-25


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

PP Quantum (MU) 3,733.00 3,733.00 3,733.00 3,743.84 3,733.00

Fixed Charges (Rs. Crore) 313.81 326.87 337.97 341.37 352.53

Variable Charges (Rs. /kWh) 3.79 3.90 4.02 4.14 4.26

Variable Charges (Rs. Crore) 1,414.81 1,456.99 1,500.67 1,549.95 1,591.38

Total Charges (Rs. Crore) 1,728.62 1,783.86 1,838.64 1,891.32 1,943.91

5.3.3 Procurement from VIPL-G

AEML-D's Submission

AEML-D issued a termination letter to VIPL-G on 20th April 2019 for termination of PPA

between AEML-D and VIPL-G. VIPL filed a Petition before the Commission challenging

the validity and legality of the termination letter (Case No. 247 of 2019). The Commission

has issued the Order in Case No. 247 of 2019 on 16 December 2019. As per the said Order,

the Termination Notice is held valid and the Termination Notice shall be deemed to have

been issued to the Lenders on the date of the Order. Thus, considering the termination of

the PPA, purchase from VIPL-G has not been considered in the power purchase of AEML-

D.


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The Commission in line with the Order in Case No. 247 of 2019 issued on 16 December

2019 and as per the submission made by AEML-D, has not considered any power purchase

from VIPL-G in the 4th Control Period.

5.3.4 Solar Purchase

AEML-D's Submission

AEML-D has an Energy Purchase Agreement (EPA) with Dhursar Solar Power Private Ltd.

(DSPPL) for 40 MW. AEML-D has considered the energy availability from DSPPL for

each year of the Control Period at the same level as the actuals of FY 2018-19. The projected

power purchase cost for purchase from DSPPL, considering the rate of Rs. 10.30/kWh (as

considered for FY 2019-20 on provisional basis) is shown in the Table below:

Table 5-15: Power Purchase from DSPPL for FY 2020-21 to FY 2024-25


PP Quantum (MU) 66.19 66.19 66.19 66.39 66.19

PP Rate (Rs./kWh) 10.30 10.30 10.30 10.30 10.30

PP Cost (Rs. Crore) 68.38 68.38 68.38 68.38 68.38


The Commission has considered the submission made by AEML-D with regard to quantum

of power purchase from DSPPL. The Commission has considered the rate approved for

purchase from DSPPL in FY 2019-20 for the entire Control Period. The Commission

accordingly approves the Solar Power Purchase from DSPPL for the 4th Control Period as


Table 5-16: Power Purchase from DSPPL approved by the Commission for FY

2020-21 to FY 2024-25


PP Quantum (MU) 66.19 66.19 66.19 66.19 66.19

PP Rate (Rs. /kWh) 10.30 10.30 10.30 10.30 10.30

PP Cost (Rs. Crore) 68.17 68.17 68.17 68.17 68.17

5.3.5 Non-Solar Purchase

AEML-D's Submission

AEML-D has EPA with six sources for procurement of Non-Solar RE power. Some of the

PPAs are expiring during the tenure of the next Control Period. AEML-D has considered

the availability from these sources till the expiry of EPA with these sources. The energy

availability from these sources has been considered at the same level as actuals of FY 2018-

19. Based on the projected availability of energy, AEML-D has projected the power


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purchase cost considering the rates as per EPA with these sources. The energy availability

from the presently available Non-Solar RE sources during the Control Period is as under:

Table 5-17: Energy Availability from Non-Solar for FY 2020-21 to FY 2024-25 (MU)


Reliance

Innoventures 78.84 78.84 0 0 0

AAA Sons Enterprise 6.21 6.21 0.14 0 0

Vector Green Energy

Pvt. Ltd 31.54 31.54 0 0 0

Vector Green Energy

Pvt. Ltd 10.51 10.51 10.51 0.78 0

Tembhu Power

Private Limited 11.83 11.83 11.83 11.86 11.83

Reliance Clean

Power Pvt. Ltd 75.15 75.15 75.02 74.42 75.12

Total 214.08 214.08 97.63 87.05 86.95

Based on the rates as per EPA, AEML-D has projected the power purchase cost for FY

2020-21 to FY 2024-25 from Non-Solar RE sources, as shown in the Table below:

Table 5-18: Power Purchase Cost from Non-Solar for FY 2020-21 to FY 2024-25 (Rs.

Crore)


Reliance

Innoventures 40.60 41.79 0 0 0

AAA Sons

Enterprise 3.20 3.29 0.07 0 0

Vector Green Energy

Pvt. Ltd 16.24 16.71 0 0 0

Vector Green Energy

Pvt. Ltd 5.33 5.33 5.33 0.39 0

Tembhu Power

Private Limited 5.04 5.04 5.04 5.05 5.04

Reliance Clean

Power Pvt. Ltd 43.66 43.66 43.59 43.24 43.65

Total 114.07 115.82 54.03 48.68 48.68


The Commission has accepted the power purchase quantum projected by AEML-D for FY

2020-21 and has kept the same quantum from respective sources for the entire Control

Period. The Commission has considered the date of expiration of EPA as submitted by

AEML-D and accordingly has reduced the quantum of power purchase from these sources

for the respective years.


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The Commission has considered the per unit cost of each of the Non-Solar RE sources, as

approved in provisional Truing-up of FY 2019-20. Accordingly, the Commission has

worked out the power purchase quantum and cost from each of the Non-Solar RE sources

and approved the same for the 4th Control Period, as shown in the Table below:

Table 5-19: Power Purchase from Non-solar Re Purchase approved by the

Commission for FY 2020-21 to FY 2024-25

Particulars Unit FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Reliance

Innoventures

MU 78.84 78.84

Rs/kWh 5.00 5.00

Rs. Crore 39.42 39.42

AAA Sons

Enterprise

MU 6.21 6.21 0.14

Rs/kWh 5.00 5.00 5.00

Rs. Crore 3.10 3.10 0.07

Vector Green

Energy Pvt. Ltd

MU 31.54 31.54

Rs/kWh 5.00 5.00

Rs. Crore 15.77 15.77

Vector Green

Energy Pvt. Ltd

MU 10.51 10.51 10.51 0.78

Rs/kWh 5.07 5.07 5.07 5.07

Rs. Crore 5.33 5.33 5.33 0.39

Tembhu Power

Private Limited

MU 11.83 11.83 11.83 11.83 11.83

Rs/kWh 4.26 4.26 4.26 4.26 4.26

Rs. Crore 5.04 5.04 5.04 5.04 5.04

Reliance Clean

Power Pvt. Ltd

MU 75.15 75.15 75.02 75.02 75.05

Rs/kWh 5.81 5.81 5.81 5.81 5.81

Rs. Crore 43.66 43.66 43.59 43.59 43.60

Total

MU 214.08 214.08 97.49 87.62 86.87

Rs/kWh 5.25 5.25 5.54 5.59 5.60

Rs. Crore 112.32 112.32 54.02 49.02 48.64

5.3.6 Proposed Wind Solar Hybrid Source

AEML-D's Submission

AEML-D intends to tie up power from a new 350 MW wind-solar hybrid power plant with

a green-shoe option of additional 350 MW wind-solar hybrid power. AEML-D conducted

the competitive bidding process consistent with the Standard Bidding Guidelines issued

separately for procurement of Solar and Wind power by MoP, National Wind-Solar Hybrid

Policy dated 14th May 2018, and various Orders issued by the Commission from time to

time. The rate discovered from the L1 bidder through the bidding process was Rs. 3.35/

kWh. AEML-D has filed a Petition before the Commission for adoption of tariff for the

new source of power procurement under Section 63 of the Electricity Act, 2003. The power

from the new source is expected to be available from FY 2021-22. Hence, AEML-D has


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considered the same from FY 2021-22 onwards. The projected power purchase cost from

the new hybrid RE source is shown in the Table below:

Table 5-20: Power Purchase Cost from new Hybrid RE Sources for FY 2020-21 to

FY 2024-25


PP Quantum (MU) 0 3,068.77 3,068.77 3,076.77 3,068.77

PP Rate (Rs. /kWh) 0 3.35 3.35 3.35 3.35

PP Cost (Rs. Crore) 0 1,028.04 1,028.04 1,030.72 1,028.04


The Commission has accorded approval for the power purchase from Wind Solar Hybrid

Source vide Order dated 8 January 2020 (Case No. 281 of 2019). The Commission in this

Order has directed AEML-D to re-negotiate the rate discovered through competitive

bidding and thereby lowered the rate to Rs. 3.24 per unit. Therefore he Commission hence,

approves the rate of Rs. 3.24 per unit as stated in the aforesaid Order. As regards the Power

Purchase quantum, the Commission has considered installed capacity of 700 MW

(including green shoe option) and CUF of 50%, as committed by the selected Bidder. The

following Table shows the Power purchase quantum and cost approved from Hybrid Wind

Solar RE Source:

Table 5-21: Power Purchase Cost from new Hybrid RE Source approved by the

Commission for FY 2020-21 to FY 2024-25


PP Quantum (MU) 0 3,066.00 3,066.00 3,066.00 3,066.00

PP Rate (Rs. /kWh) 0 3.24 3.24 3.24 3.24

PP Cost (Rs. Crore) 0 993.38 993.38 993.38 993.38

5.3.7 Solar and Non-Solar RPO for Control Period

AEML-D's Submission

AEML-D has proposed to procure power from Hybrid Wind-Solar RE Source from FY

2021-22 and has therefore, not proposed to purchase any REC in FY 2020-21 for meeting

standalone or cumulative shortfall till FY 2020-21. AEML-D has worked out the following

Solar and Non-Solar Shortfall till FY 2020-21:

Table 5-22: Solar RPO Shortfall till FY 2020-21

Particulars Till FY 17-18 FY 18-19 FY 19-20 FY 20-21 Till FY 20-21

MU % MU % MU % MU MU

Gross Energy

Consumption 9,372.79 9,688.32 9,957.54

Target 463.85 2.75% 257.75 3.50% 339.09 4.50% 448.09 1,508.78

Achievement 402.12 0.79% 74.16 0.64% 62.12 0.66% 66.19 604.59

Shortfall /

(Surplus) 61.73 1.96% 183.59 2.86% 276.97 3.84% 381.90 904.19


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Table 5-23: Non-Solar RPO Shortfall till FY 2020-21

Particulars Till FY 17-18 FY 18-19 FY 19-20 FY 20-21

Till FY 20-

21

MU % MU % MU % MU MU

Gross Energy

Consumption 9,372.79 9,688.32 9,957.54

Target 5,619.57 10.98% 1,028.94 11.48% 1,111.93 11.50% 1,145.12 8,905.56

Achievement 4,619.88 2.29% 214.53 2.14% 207.74 2.15% 214.08 5,256.23

Shortfall / (Surplus) 999.69 8.69% 814.42 9.33% 904.18 9.35% 931.04 3,649.33

Mini / Micro RPO

Target 9.67 0.20% 2.06 0.20% 2.22 0% 0 13.95

Achievement 5.91 0.00% 0.00 0.00% 0.00 0% 0 5.91

Shortfall / (Surplus) 3.76 0.20% 2.06 0.20% 2.22 0% 0 8.04

AEML-D hence submitted a cumulative shortfall of 4,561.59 MU for Solar and Non-Solar

RPO till FY 2020-21. AEML-D proposed to meet the shortfall in Solar and Non-Solar RPO

through Hybrid RE purchase as stated above. The following Table shows the Standalone

Solar and Non-Solar RPO target and projected solar achievement by AEML-D:

Table 5-24: Standalone Solar RPO target and projected solar achievement from FY

2021-22 to FY 2024-25

Particulars / (MU) FY 21-22 FY 22-23 FY 23-24 FY 24-25

Gross Energy Consumption 10,133.10 10,314.82 10,506.32 10,711.44

Solar RPO (%) 6.00% 8.00% 10.50% 13.50%

Solar RPO (MU) 607.99 825.19 1,103.16 1,446.04

Achievement

DSPPL 66.19 66.19 66.39 66.19

New Hybrid Source 1,534.38 1,534.38 1,538.38 1,534.38

Total 1,600.57 1,600.57 1,604.78 1,600.57

Shortfall / (Surplus) (992.59) (775.39) (501.61) (154.53)

Shortfall till FY 20-21 904.19

Shortfall / (Surplus) after

meeting Shortfall till FY 20-

21

(88.40) (775.39) (501.61) (154.53)

Table 5-25: Standalone Non-Solar RPO target and projected Non-Solar achievement

from FY 21-22 to FY 24-25


Gross Energy Consumption 10,133.10 10,314.82 10,506.32 10,711.44

Solar RPO (%) 11.50% 11.50% 11.50% 11.50%

Solar RPO (MU) 1,165.31 1,186.20 1,208.23 1,231.82

Achievement


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Existing Non-Solar 214.08 97.49 87.05 86.95

New Hybrid Source 1,534.38 1,534.38 1,538.38 1,534.38

Total 1,748.46 1,631.87 1,625.43 1,621.33

Shortfall / (Surplus) (583.16) (445.67) (417.21) (389.52)

AEML-D requested the Commission to allow it to offset its cumulative Non-Solar shortfall

against the surplus in Solar purchase as per RPO-REC Regulations, 2019 and has

accordingly proposed to purchase Non-Solar REC in FY 2024-25 for balance shortfall.


The Commission has computed the cumulative shortfall in Solar and Non-Solar RPO till

FY 2019-20 in the Chapter on Provisional Truing-up of FY 2019-20 in this Order. The

Commission has computed the Solar and Non-Solar cumulative surplus / shortfall till FY

2024-25 after considering the power purchase from New Wind-Solar Hybrid Source and in

line with the obligation specified in RPO REC Regulations, 2019, as shown in the Table

below:

Table 5-26: Cumulative Solar RPO Shortfall approved by the Commission till FY

2024-25 (MU) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 Cumulative

Gross Energy

Consumption

9,869.67 10,082.19 10,297.29 10,515.36 10,736.51

RPO Target 444.13 604.93 823.78 1,104.11 1,449.43 5,486.07

DSPPL 66.19 66.19 66.19 66.19 66.19 869.34

Wind-Solar Hybrid

(50% of purchase) - 1,533.00 1,533.00 1,533.00 1,533.00 6,132.00

Shortfall / (Surplus) 377.95 (994.26) (775.41) (495.08) (149.76) (1,515.27)

Table 5-27: Cumulative Non-Solar RPO Shortfall approved by the Commission till

FY 2024-25 Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 Cumulative

Gross Energy

Consumption

9,869.67 10,082.19 10,297.29 10,515.36 10,736.51

RPO Target 1,135.01 1,159.45 1,184.19 1,209.27 1,234.70 13,684.00

Non-Solar Purchase 214.08 214.08 97.49 87.62 86.87 5,742.30

Wind-Solar Hybrid (50%

of purchase) - 1,533.00 1,533.00 1,533.00 1,533.00 6,132.00

Shortfall / (Surplus) 920.93 (587.62) (446.31) (411.36) (385.17) 1,809.70

The Commission has considered expenses on Wind-Solar Hybrid project for the purpose of

4th MYT Control Period. However, AEML-D has requested to carry forward the shortfall

of 3rd Control Period in 4th Control Period. As ruled in provisional true-up section, such

decision can be taken only after RPO verification process under REPO Regulations, 2016.

Further, AEML-D has also requested to carry forward RPO compliance till end of 4th

Control Period. In this regard, the Commission notes that RPO Regulations, 2019 allows


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carry forward till 3rd Year of Control Period and subsequently to 5th year. Hence, this request

of AEML-D also could not be allowed through present proceeding. AEML-D may raise

these issues during next RPO verification process for Commission’s consideration.

5.3.8 Short-Term Power Purchase

AEML-D's Submission

AEML-D has projected the hourly demand and generation availability from ADTPS,

DSPPL, existing contracted Non-Solar RE sources and new hybrid RE sources as described

above and determined, on an hourly basis, the surplus and shortfall in energy for entire

Control Period from FY 2020-21 to FY 2024-25. AEML-D expects that short-term power

from FY 2020-21 onwards shall be available at a weighted average rate of Rs. 3.50 / kWh

and has considered the same for projecting the short-term power purchase cost for each year

of the Control Period, as shown in the Table below:

Table 5-28: Short Term Power Purchase Cost for FY 2020-21 to FY 2024-25


PP Quantum (MU) 5,977.34 3,151.02 3,430.64 3,610.17 3,820.58

PP Rate (Rs./kWh) 3.50 3.50 3.50 3.50 3.50

PP Cost (Rs. Crore) 2,092.07 1,102.86 1,200.72 1,263.56 1,337.20


The Commission asked AEML-D to justify its plan to procure such a high quantum of

power from short-term sources, rather than other long-term/medium/term sources through

competitive bidding, to replace the power originally tied-up with VIPL-G. In reply, AEML-

D submitted that it had filed a Petition for adoption of tariff for its proposed purchase of

350 MW + 350 MW (green shoe option) RE hybrid energy on long-term basis. Once the

tariff is adopted by the Commission, the power flow is expected to commence sometime in

FY 2021-22, which has been considered in the MYT Petition. AEML-D submits that based

on the power available from the proposed long-term source, AEML-D shall assess its

balance energy requirement, including its peak and RTC requirements and shall plan its

future procurement of long-term/medium-term power and suitably approach the

Commission.

It is observed that the quantum of power purchase from short-term sources has been high

in case of AEML-D even in the past, and ranges around 30-40% of the total power purchase

quantum. For the next Control Period, the quantum of power purchase from short-term

sources projected by AEML-D is in excess of 50% of the total energy requirement, and is

projected to reduce to around 30-33% by the end of the next Control Period. This is a very

high reliance on short-term power purchase, given the price volatility of such short-term


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power and the uncertainty attached to such short-term power. It is expected that a

Distribution Licensee of the size of AEML-D supplying electricity to consumers in the

financial capital of the country, would secure the power supply by tying-up power from

long-term/medium-term sources at optimum rates for the bulk of its requirement and rely

on short-term power for only around 10-12% of its power requirement. The Commission

accordingly directs AEML-D to rationalise its Power Procurement plan with the view to

ensure security of power supply at the most optimum rates, so that the consumers are not

subjected to any risks of supply failure or spike in the power purchase rates.

For the purpose of this MYT Order, the Commission has computed the balance amount of

energy required after taking into account all the long-term/medium-term sources tied-up by

AEML-D for each year of the Control Period, which has been considered as purchase from

short-term sources. The Commission has considered the rate of Rs. 3.50 per unit as

submitted by AEML-D in its submission. The following Table shows the power purchase

quantum and cost considered from short-term sources:

Table 5-29: Short Term Power Purchase Cost approved by the Commission for FY

2020-21 to FY 2024-25


PP Quantum (MU) 5,856.40 3,002.93 3,334.60 3,551.71 3,784.45

PP Rate (Rs./kWh) 3.50 3.50 3.50 3.50 3.50

PP Cost (Rs. Crore) 2,049.74 1,051.02 1,167.11 1,243.10 1,324.56

5.3.9 Surplus Sale

AEML-D's Submission

AEML-D has projected hourly surplus power that will be available during the Control

Period for sale, considering availability of different sources and likely backing down of

base load sources. AEML-D has assumed that all surplus power will be sold through Power

Exchanges. Regarding the rate of sale of surplus power, AEML-D has considered the

estimated sale rate of Rs. 3.03/kWh for projecting the revenue from surplus sale. Based on

the above, the estimated revenue from sale of surplus power over the Control Period is


Table 5-30: Revenue from Surplus Power for FY 2020-21 to FY 2024-25


PP Quantum (MU) 0.00 (16.66) (10.98) (10.88) (6.66)

PP Rate (Rs./kWh) 3.03 3.03 3.03 3.03 3.03

PP Cost (Rs. Crore) 0.00 (5.05) (3.33) (3.30) (2.02)


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The Commission has computed the short-term purchase after considering the balance

energy requirement during each year of the 4th Control Period. Therefore, the Commission

has not considered any surplus sale for any year of the Control Period. The quantum and

revenue from surplus sale, if any, shall be considered at the time of true-up for the respective

years, based on the necessary justification to be provided by AEML-D.

5.3.10 Cost of Banked Energy in H2 of FY 2019-20

AEML-D's Submission

As stated in the section on Provisional Truing up of FY 2019-20, AEML-D intends to bank

226.80 MU of energy in H2 of FY 2019-20, which will be returned in FY 2020-21. AEML-

D has included the cost of this energy on provisional basis in the power purchase cost for

FY 2020-21, as the cost for returning this power shall be incurred in FY 2020-21. The rate

at which this energy shall be procured for returning the same is considered equivalent to

the rate of procurement of short-term power in FY 2019-20, i.e., Rs. 3.73 per unit. Further,

OA charges for this energy return (estimated at the same level as estimated for H2 of FY

2019-20) is also included in the power purchase cost for FY 2020-21.


The Commission has considered the per unit cost of this banking transaction as Rs. 3.73 per

unit (226.80 MU @ Rs. 84.50 Crore). The Commission observed that the per unit cost of

banking is comparable to the average purchase cost from Power Exchanges during FY

2019-20. The Commission therefore approves the cost of banking power as Rs. 84.50 crore

in the power purchase cost of FY 2020-21. The Commission also considers Rs. 8.36 Crore

towards OA charges for banked energy in FY 2019-20.

The Commission reiterates that the banking transactions carried out by AEML-D should

benefit the consumers and therefore, AEML-D shall review the banking arrangement with

each of the parties and justify to the Commission that such transactions are in the overall

benefit to the consumers, in its next Tariff Petition. The Commission based on the

submissions made by AEML-D shall take a considered view on the banking transactions at

the time of MTR Order for the 4th Control Period.


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5.3.11 Power Purchase from OA consumers and Solar Roof Top Systems

AEML-D's Submission

No projection of purchase from OA consumers and RTS generation has been made, as this

energy is in the nature of imbalance and it cannot be projected. Any actual power purchase

made from OA consumers or Solar Rooftop PV systems will be presented at the time of

truing up of respective years.


The Commission has not considered any power purchase from Open Access and RTS

generation, in line with AEML-D submission.

5.3.12 Transmission Charges

AEML-D's Submission

AEML-D has considered the Transmission Charges as per the revised Petition for

determination of Intra-State Transmission tariff for the 4th Control Period by the State

Transmission Utility (STU). Accordingly, the Transmission Charges for the Control Period

as considered in this Petition are as under:

Table 5-31: Transmission Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)


Transmission Charges 835.32 507.05 527.21 567.14 607.62


The Commission has considered the Transmission Charges for the 4th Control Period in line

with the share of AEML-D as approved in the InSTS Order dated 30 March 2020 in Case

No. 327 of 2019 for FY 2020-21 to FY 2024-25. The following Table shows the approved

Transmission Charges for AEML-D:

Table 5-32: Transmission Charges approved by the Commission for FY 2020-21 to

FY 2024-25 (Rs. Crore)

Particulars/ (Rs.

Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Transmission Charges 476.65 480.59 484.83 488.14 486.30

5.3.13 SLDC Charges

AEML-D's Submission

AEML-D has considered the SLDC charges payable in each year of the Control Period at

the same level as the approved SLDC Charges for FY 2019-20. Accordingly, the SLDC

Charges for the Control Period as considered in this Petition are as under:


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Table 5-33: SLDC Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)

Particulars/ (Rs.


SLDC Charges 2.00 2.00 2.00 2.00 2.00


The Commission has considered the SLDC charges for the 4th Control Period in line with

the SLDC charges approved by the Commission for AEML-D in the MYT Order for

MSLDC dated 30 March 2020 in Case No. 291 of 2019.

Table 5-34: SLDC Charges approved by the Commission for FY 2020-21 to FY

2024-25 (Rs. Crore)

Particulars/ (Rs.


SLDC Charges 2.36 2.22 2.39 2.55 2.58

5.3.14 Standby Charges

AEML-D's Submission

AEML-D submitted that it does not see any value in continuing with the Stand-by support

from MSEDCL and requests the Commission to allow discontinuation of the same in the

interest of its consumers. This will provide much needed tariff relief to the consumers.

However, as the present arrangement of stand-by continues, without prejudice to its views,

AEML-D has considered the cost of Stand-by Charges in the ARR forecast for each year

of the Control Period. AEML-D has considered the average of Coincident Peak Demand

(CPD) and Non-coincident Peak Demand (NCPD) of AEML-D, TPC-D and BEST as per

the revised Petition for determination of Intra-State Transmission tariff for the 4th Control

Period by the State Transmission Utility (STU) and has calculated its share of Standby

Charges. The Standby Charges considered for each year of the fourth Control Period is


Table 5-35: Standby Charges for FY 2020-21 to FY 2024-25 (Rs. Crore)

Particulars/ (Rs.


Standby Charges 189.49 190.71 191.94 193.16 194.38


The Commission has considered AEML-D’s share of Standby Charges for the 4th Control

Period, as approved in MSEDCL’s MYT Order dated 30 March 2020 in Case No. 322 of



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Table 5-36: Standby Charges approved by the Commission for FY 2020-21 to FY

2024-25 (Rs. Crore)

Particulars/ (Rs.


Standby Charges 183.25 184.15 185.04 185.93 186.81

5.3.15 Summary of Power Purchase

AEML-D's Submission

AEML-D submitted the following power purchase quantum and cost based on the

discussions made in above sections:


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Table 5-37: Power Purchase Cost Projected by AEML-D for 4th Control Period

Unit

FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

ADTPS 3,699.93 4.63 1,713.41 3,649.70 4.74 1,729.30 3,662.71 4.76 1,742.03 3,676.83 4.76 1,751.73 3,675.61 4.79 1,759.66

DSPPL 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.39 10.30 68.38 66.19 10.30 68.17

Existing Non-Solar Sources

214.08 5.33 114.07 214.08 5.41 115.82 97.49 5.54 54.03 87.05 5.59 48.68 86.95 5.60 48.68

New Wind-Solar Hybrid

0 - 0 3,068.77 3.35 1,028.04 3,068.77 3.35 1,028.04 3,076.77 3.35 1,030.72 3,068.77 3.35 1,028.04

Short Term Sources

5,977.34 3.50 2,092.07 3,151.02 3.50 1,102.86 3,430.64 3.50 1,200.72 3,610.17 3.50 1,263.56 3,820.58 3.50 1,337.20

Surplus Sales 0 - 0 (16.66) 3.03 (5.05) (10.98) 3.03 (3.33) (10.88) 3.03 (3.30) (6.66) 3.03 (2.02)

Cost of banking for FY 19-20

84.50

OA charges for energy banked in FY 19-20

8.36

REC Cost 0.00

Sub-Total 4,080.59 4,039.14 4,089.67 4,159.78 4,239.74

Transmission Charges

835.32

507.05

527.21

567.14

607.62

SLDC Charges 2.00 2.00 2.00 2.00 2.00

Standby Charges

189.49

190.71

191.94

193.16

194.38

Total 9,957.54 5.13 5,107.40

10,133.10

4.68 4,738.90 10,314.8

2 4.66 4,810.81

10,506.32

4.68 4,922.08 10,711.4

4 4.71 5,043.75


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Based on the analysis submitted above, the Commission has approved the Power Purchase quantum and cost for 4th Control Period as given in the

Table Below:

Table 5-38 Power Purchase Cost approved by the Commission for 4th Control Period

Unit

FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

Quantum (MU)

Rate (Rs/

kWh)

Cost (Rs

Crore)

ADTPS 3733.00 4.63 1,728.62 3733.00 4.78 1,783.86 3733.00 4.93 1,838.64 3,743.84 5.05 1,891.32 3,733.00 5.21 1,943.91

DSPPL 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17 66.19 10.30 68.17

Existing Non-Solar Sources

214.08 5.25 112.32 214.08 5.25 112.32 97.49 5.54 54.02 87.62 5.59 49.02 86.87 5.60 48.64

New Wind-Solar Hybrid

3,066.00 3.24 993.38 3,066.00 3.24 993.38 3,066.00 3.24 993.38 3,066.00 3.24 993.38

Short Term Sources

5,856.40 3.50 2,049.74 3,002.93 3.50 1,051.02 3,334.60 3.50 1,167.11 3,551.71 3.50 1,243.10 3,784.45 3.50 1,324.56

Banking 84.50

OA charges 8.36

Sub-Total 9,869.67 4.11 4,051.72

10,082.19

3.98 4,008.77 10,297.2

9 4.00 4,121.33

10,515.36

4.04 4,244.99 10,736.5

1 4.08 4,378.66


476.65 480.59 484.83 488.14 486.30

SLDC Charges

2.36

2.22 2.39 2.55 2.58

Standby Charges

183.25

184.15 185.04 185.93 186.81

Total 9,869.67 4.78 4,713.98

10,082.19

4.64 4,675.73 10,297.2

9 4.66 4,793.59

10,515.36

4.68 4,921.62 10,736.5

1 4.71 5,054.36


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5.4 OPERATION AND MAINTENANCE EXPENSES

AEML-D's Submission

In accordance with the MYT Regulations, 2019, AEML-D has considered the Net

entitlement of total O&M expenses for FY 2016-17 to FY 2018-19 and averaged the same

to arrive at the midpoint, i.e., FY 2017-18. For FY 2016-17, AEML-D has considered the

total O&M expenses (net entitlement) approved by the Commission in AEML-D’s MTR

Order dated 12 September 2018 in Case No. 200 of 2017. For FY 2017-18 and FY 2018-

19, AEML-D has considered the O&M expenses (net entitlement) as claimed in the sections

on truing up of FY 2017-18 and FY 2018-19. Thereafter, the escalation rate for FY 2018-

19 and FY 2019-20 have been applied to arrive at the Base Year (FY 2019-20) O&M

expenses for the next Control Period.

As regards the escalation rate for each year subsequent to FY 2019-20, Regulation 73.3

specifies that it shall be derived based on 30% WPI (2011-12 series) inflation and 70% CPI

inflation for the past five years, reduced by the Efficiency Factor of 1%, while approving

ARR for each year of the Control Period. Since the escalation factor based on 30% WPI

(2011-12 series) inflation and 70% CPI inflation for the past five years till FY 2019-20

works out to 3.84%, the same has been considered for determining O&M expenses from

FY 2020-21 on provisional basis.

As per the MYT Regulations, the 1% Efficiency Factor shall be considered as zero

depending upon growth of consumers in the last three years. In case the increase in number

of consumers is lower than 2% annually over the last three years, then reduction in

Efficiency Factor shall be considered in proportion to the percentage growth in number of

consumers. In this regard, AEML-D has analysed the growth rate of consumers as below

(considering projected number of consumers for FY 2019-20):

Table 5-39 Consumer Growth Rate from FY 2017-18 to FY 2019-20

Number of consumers FY 16-17 FY 17-18 FY 18-19 FY 19-20 CAGR

Own supply consumers (A) 2,405,026 2,445,618 2,466,420 2,499,828

Change-over consumers (B) 566,260 563,233 563,980 567,716

Open Access consumers (C) 40 66 62 62

Total (A+B+C) 2,971,326 3,008,917 3,030,462 3,067,606 1.07%

Based on the above, it can be seen that the growth rate of consumers works out to 1.07%.

Accordingly, as per the MYT Regulations, 2019, the Efficiency Factor has been considered

as 0.47% and the net escalation factor for projecting O&M expenses in each year of the

Control Period works out to 3.37 %.


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AEML-D reviewed costs, which were being directly considered under ‘Wires’ and ‘Supply’

and those which were being considered under “Common” and are subsequently allocated

to Wires and Supply. It was found that A&G expenses were largely identified entirely under

“Common” expenses, which AEML-D submits is a correct proposition as A&G expenses

are related to the business as a whole and cannot be identified with Wires or Supply

functions directly. Similarly, certain costs such as housekeeping was being considered

under R&M, which should be more appropriately considered as “Common” A&G cost,

instead. AEML-D has also reviewed the way the ‘common’ costs are being allocated

between Wires and Supply and has found that the allocation of costs leaves much room for

improvement to make it reflective of actual cost incidence.

As a result of this exercise, AEML-D has not only moved out some costs from Wires /

Supply to Common expense head, but has also allocated the ‘Common’ costs between

Wires and Supply in a more logical manner using the ratio of Turnover of Wires and Supply

business. The turnover ratio for FY 2018-19 for Wires and Supply business is 20:80, which

has been considered to allocate the common costs. Given that presently the common costs

were being allocated in a largely adhoc manner between Wires and Supply, the proposed

method ensures that the same will be done in a logical way going forward. This method of

allocation reflects the cause-effect relationship better because the common employees,

resources, activities and services are rendered for the business as a whole and hence, the

allocation of this cost input to a function must represent the output of the function. In RInfra

period, the Corporate expenses of RInfra were also being allocated on all its business

segments in the ratio of turnover. This methodology was also following the logic of a closer

representation of input with output and was accepted by the Commission as well. Similarly,

the expenses for common corporate services incurred by AEML as a whole and recorded

under ‘professional and consultancy fee’ in A&G expenses are also allocated to AEML-G,

AEML-T and AEML-D in the ratio of Turnover.

The exercise when carried using FY 2018-19 data yields a revised ratio of 47%:53% for

Wires:Supply cost allocation. As the normative allowance for Wires and Supply O&M cost

for the past years, which are being trued-up or provisionally trued-up in this Petition have

been approved based on the norms prepared using the past data, the re-allocation of costs

is only proposed from FY 2020-21 onwards, i.e., for the new Control Period. The expenses

for FY 2017-18 to FY 2019-20 are being recorded in the books in Wires and Supply in the

existing manner only, so as to remain comparable with the normative allowances for the

two segments.

Due to proposed change in ratio of expenses between Wires and Supply business, it is not

possible to apply the escalation rate directly to the Base Wires or Supply O&M expense for


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the MYT Control Period. Hence, AEML-D has applied the escalation rate to the Base O&M

expenses for the Distribution business as a whole to project the total Distribution O&M

expenses allowable for each year from FY 20-21 to FY 24-25 and thereafter segregated the

same into Wires and Supply considering the ratio 47:53. AEML-D has requested the

Commission to consider these submissions and approve the O&M expenses accordingly.

AEML-D has additionally claimed O&M expenses on account of Impact of GST and

Impact of SC Judgement / GoM Notification over and above the normative O&M claimed

in its Petition, as shown in the Table below:

Table 5-40 Projected O&M Expenses for Wires and Supply Business Particulars / (Rs.

Crore)

FY 16-

17

FY 17-

18

FY 18-

19

Averag

e FY 19-20

FY 20-

21

FY 21-

22

FY 22-

23

FY 23-

24

FY 24-

25

Base O&M

Expense (Net

Entitlement)

1,158.53 1,175.93 1,258.57 1,197.68 1,299.39 1,343.23 1,388.56 1,435.41 1,483.85 1,533.91

Impact of GST 10.53 10.88 11.25 11.63 12.02 12.43

Impact of SC

Judgment/GoM

notification

12.19 12.60 13.03 13.47 13.92 14.39

Total 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73

The total O&M Expenses are segregated between Wires Business and Supply Business in

the ratio of 47%:53%, as shown in the Table below:

Table 5-41 Total O&M Expenses segregated between Wires & Supply Business

Particulars / (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Wires Business 646.05 667.85 690.38 713.68 737.76

Supply Business 720.67 744.99 770.12 796.11 822.97

Total 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73


Regulations 75 and 84 of the MYT Regulations, 2019 specify the methodology for

determination of O&M expenses for the Control Period from FY 2020-21 to FY 2024-25

for the Wires Business and Supply Business, respectively. The relevant Regulations are

quoted as below (Only for Wires):

75.2 The Operation and Maintenance expenses shall be derived on the basis of the average

of the Trued-up Operation and Maintenance expenses after adding/deducting the share of

efficiency gains/losses, for the three Years ending March 31, 2019, excluding abnormal

Operation and Maintenance expenses, if any, subject to prudence check by the Commission:

Provided that the average of such Operation and Maintenance expenses shall be considered

as Operation and Maintenance expenses for the Year ended March 31, 2018, and shall be


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escalated at the respective escalation rate for FY 2018-19 and FY 2019-20, to arrive at the

Operation and Maintenance expenses for the base year ending March 31, 2020:

Provided further that the escalation rate for FY 2018-19 and FY 2019-20 shall be computed

by considering 30% weightage to the average yearly inflation derived based on the monthly

Wholesale Price Index of the respective past five financial years as per the Office of

Economic Advisor of Government of India and 70% weightage to the average yearly

inflation derived based on the monthly Consumer Price Index for Industrial Workers (all-

India) of the respective past five financial years as per the Labour Bureau, Government of

India:

Provided also that at the time of true-up for each Year of this Control Period, the Operation

and Maintenance expenses shall be derived on the basis of the Final Trued-up Operation

and Maintenance expenses after adding/deducting the sharing of efficiency gains/losses,

for the base year ending March 31, 2020, excluding abnormal expenses, if any, subject to

prudence check by the Commission, and shall be considered as the Base Year Operation

and Maintenance expenses.

75.3 The Operation and Maintenance expenses for each subsequent year shall be

determined by escalating these Base Year expenses of FY 2019-20 by an inflation factor

with 30% weightage to the average yearly inflation derived based on the monthly Wholesale

Price Index of the respective past five financial years as per the Office of Economic Advisor

of Government of India and 70% weightage to the average yearly inflation derived based

on the monthly Consumer Price Index for Industrial Workers (all-India) of the past five

financial years as per the Labour Bureau, Government of India, as reduced by an efficiency

factor of 1% or as may be stipulated by the Commission from time to time, to arrive at the

permissible Operation and Maintenance expenses for each year of the Control Period:

Provided that, in the Truing-up of the O&M expenses for any particular year of the Control

Period, an inflation factor with 30% weightage to the average yearly inflation derived

based on the monthly Wholesale Price Index of the respective past five financial years

(including the year of Truing-up) and 70% weightage to the average yearly inflation

derived based on the monthly Consumer Price Index for Industrial Workers (all-India) of

the respective past five financial years (including the year of Truing-up), as reduced by an

efficiency factor of 1% or as may be stipulated by the Commission from time to time, shall

be applied to arrive at the permissible Operation and Maintenance Expenses for that year:

Provided further that the efficiency factor shall be considered as zero, in case there is an

increase in the number of consumers including Open Access consumers connected to the

Distribution Wires of at least 2 percent annually over the last 3 years:

Provided also that in case such increase in the number of consumers is lower than 2 percent

annually over the last 3 years, then the reduction in efficiency factor shall be considered in

proportion to the percentage growth in the number of consumers.”

Accordingly, the Commission has considered the O&M expenses approved in the Truing-

up of FY 2016-17 to FY 2018-19, after deducting sharing of gains/(losses), to arrive at 3-


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year average expenses. The average expenses thus arrived are considered as average

expenses for FY 2017-18 and are escalated twice, i.e., by escalation rate of FY 2018-19 and

FY 2019-20 to arrive at normative expenses for FY 2019-20, to be considered as base O&M

expenses for projecting O&M expenses for the MYT Control Period.

The computation of normative O&M expenses for FY 2019-20 in accordance with the MYT

Regulations, 2019 is shown in the Table below:

Table 5-42: Normative O&M Expenses for FY 2019-20 (Rs. Crore)

Particulars

FY

2016-17

FY

2017-18

FY

2018-19 Average

Normative O&M

expenses for FY

2019-20

O&M Expenses for Wires

Business 774.08 773.48 828.45 792.00 847.01

O&M Expenses for Retail

Supply Business 384.45 375.67 407.40 389.17 416.20

Total O&M Expenses 1,158.53 1,149.14 1,235.85 1,181.17 1,263.21

The Commission has considered the WPI and CPI as per the 2011-12 series to work out

escalation rates for the next Control Period, in accordance with the MYT Regulations, 2019.

As specified in the above Regulations, the Commission has computed the inflation factor

considering 30% weightage of average yearly inflation derived based on the monthly WPI

of the past five years and 70% weightage to the average yearly inflation derived based on

the monthly Consumer Price Index (CPI) for Industrial Workers of the past five financial

years. Based on the above computation, the Commission has worked out the escalation rate

of 3.83% for FY 2020-21 and onwards for projection of O&M expenses, before accounting

for the Efficiency Factor.

The Commission observes that AEML-D has considered the Efficiency Factor of 0.47% for

computing the Escalation Rate, in accordance with the MYT Regulations, 2019. In this

regard, AEML-D submitted that as per Regulations 75.3 of the MYT Regulations, 2019,

Efficiency Factor would be considered zero if increase in number of consumers for past

three years are more than 2% annually. The extract of the Regulation is reproduced below:

“Provided further that the efficiency factor shall be considered as zero, in case there is

an increase in the number of consumers including Open Access consumers connected to

the Distribution Wires of at least 2 percent annually over the last 3 years:


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Provided also that in case such increase in the number of consumers is lower than 2

percent annually over the last 3 years, then the reduction in efficiency factor shall be

considered in proportion to the percentage growth in the number of consumers”

Accordingly, since increase in consumer numbers are around 1.07% annually over the past

three years, AEML-D has considered any efficiency factor of 0.47%. The Commission has

verified the increase in number of consumers of AEML-D in the past three years. The

Commission observed an increase of 1.07% in Wires Consumers and 1.02% Supply

consumers. Accordingly, the Efficiency Factor has been considered as 0.47% and 0.49%

for Wires Business and Supply Business, respectively, in line with the MYT Regulations,

2019.

After consideration of Efficiency Factor as stated above, the escalation rate for 4th Control

Period is reduced to 3.36% for Wires Business and 3.34% for Supply Business. The

following Table shows the Escalation rates derived for Wires and Supply considering the

Efficiency Factor based on the consumer growth in past three years:

Table 5-43: Escalation Rates for 4th Control Period

Particulars Wires

Business

Supply

Business

Escalation Rate for FY 2018-19 3.76% 3.76%

Escalation Rate for FY 2019-20 3.07% 3.07%

Escalation Rate from FY 2020-21 onwards 3.83% 3.83%

Consumer growth rate 1.07% 1.02%

Efficiency Factor 0.47% 0.49%

Escalation Rate from FY 2020-21 onwards

considering Efficiency Factor 3.36% 3.34%

The Commission has worked out the Normative O&M expenses based on the above

escalation rates as shown in the Table below:

Table 5-44: Normative O&M Expenses approved for 4th Control Period (Rs. Crore)

Particulars

Normative

FY 2019-

20

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

O&M Expenses for

Wires Business 847.01 875.50 904.96 935.41 966.88 999.40

O&M Expenses for

Supply Business 416.20 430.09 444.45 459.28 474.61 490.45

Total O&M

Expenses 1,263.21 1,305.60 1,349.41 1,394.69 1,441.49 1,489.86


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Re-Allocation of O&M Expenses

The Commission observes that AEML-D has sought re-allocation of O&M expenses

between Wires Business and Supply Business in the ratio of 47:53 respectively. The

Commission is of the view that the Business with higher asset base requires more O&M

expenses as compared to Businesses with lower asset base. Wires Business is capital

intensive business and requires more asset handling than Supply Business. The Commission

had accordingly considered the ratio of 65:35 for Wires Business and Supply Business in

the MYT Regulations, 2019.

Further, the the O&M expenses actually incurred in H1 of FY 2019-20 as submitted by

AEML-D in Form F3.2 to F3.4 is shown in the Table below:

Table 5-45: Provisional Actual Submitted by AEML-D for H1 of FY 2019-20


Employee Expenses 217.35 165.86 383.22

A&G expenses 86.62 58.47 145.09

R&M Expenses 145.75 8.99 154.74

Total O&M expenses 449.73 233.32 683.05

% of O&M expenses 65.84% 34.16% 100%

AEML-D has stated that expenses for FY 2017-18 to FY 2019-20 are being recorded in the

books in Wires and Supply in the existing manner only, so as to remain comparable with

the normative allowances for the two segments. As seen from the above Table, the actual

O&M expenses as submitted by AEML-D for H1 of FY 2019-20 is in the ratio of 66:34 for

Wires and Supply Business, which is in line with the Allocation Matrix specified in the

MYT Regulations, 2019. The Commission has been considering the allocation of expenses

between Wires Business and Supply Business as submitted by AEML-D all these years,

based on AEML-D contention that it is allocating the expenses using some rationale, and

hence, it is not required to adopt the Allocation Matrix specified in the MYT Regulations,

2015 (or MYT Regulations, 2011 earlier, where the same Allocation Matrix was specified).

The Commission is very clear that for a Distribution Licensee like AEML-D with an

established distribution network spread evenly across its area of supply, higher O&M

expenses would be incurred in the Wires Business as compared to Supply Business, which

is in contradiction to the submissions made by AEML-D. The Commission has therefore,


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not re-allocated the O&M expenses between Wires Business and Supply Business, for the

next Control Period, as sought by AEML-D.


AEML-D's Submission

AEML-D has proposed Capital Expenditure and Capitalization in the following Schemes:

1. 33/11 kV Receiving Station

a. Installation & commissioning of new 33-22/11kV substations

b. Augmentation of capacity at existing 33-22/11kV substations

c. Laying of 33kV cables for diversion/reconfiguration of existing network

d. Replacement of old and obsolete equipment/ cables

e. Any other associated works

2. 11 kV Mains Network Strengthening

a. Installation & commissioning of new 11/0.433 kV substations along with

the associated 11kV feeders.

b. 11kV network improvement schemes to relieve over-loaded infrastructure.

c. Up-gradation of cable network.

d. Replacement of old and obsolete switchgears (Oil-type RMU) / cables

e. Any other associated works

3. Low Tension Mains

a. Laying of new LT feeders and installation of LT pillars

b. LT network improvement schemes to relieve loaded infrastructure.

c. Replacement of old and obsolete equipment/ cables

d. Any other associated works

4. Low Tension Services

5. Street Lights

6. System Modernization

7. Instruments

8. Information Technology (IT) Infrastructure

9. Others

10. Civil

11. R&D, Safety & DSM


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The Summary of the capital expenditure and capitalization proposed by AEML-D for the

Wires Business for each year of the Control Period is shown in the Table below:

Table 5-46: Capital Expenditure and Capitalisation for 4th Control Period as

submitted by AEML-D for Wire Business (Rs. Crore) Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

Capital Expenditure

DPR Schemes 1,066.28 920.58 899.42 1,027.92 1,042.24

Non-DPR Schemes 84.00 119.00 103.00 85.00 92.00

Total 1,150.28 1,039.58 1,002.42 1,112.92 1,134.24

Capitalization

DPR Schemes 980.34 951.08 915.56 1,063.33 996.76

Non-DPR Schemes 81.08 114.85 112.24 88.61 92.57

Total 1,061.42 1,065.93 1,027.80 1,151.94 1,089.33

AEML-D submitted the Smart Metering DPR on 21 May 2019, which has been accorded

in-principle approval vide MERC Order dated 22 October 2019. The Capital expenditure

proposed to be incurred in that DPR in FY 2020-21 and FY 2021-22 has been considered

in the capital expenditure plan. The conventional Metering DPRs are under preparation and

will be submitted for approval after finalization. In the absence of Metering DPRs, AEML-

D has considered the capital expenditure at Rs. 22 Crore for each year of the Control Period

(at the same level as approved for FY 2019-20 in the approved Metring DPR for FY 2019-

20).

The summary of capital expenditure and capitalization proposed by AEML-D for the

Supply Business for each year of the Control Period is shown in the Table below:

Table 5-47: Capital Expenditure and Capitalisation for 4th Control Period as

submitted by AEML-D for Retail Supply Business (Rs. Crore)


Capital Expenditure 218.57 174.74 22.00 22.00 22.00

Capitalization 218.57 174.74 22.00 22.00 22.00


The Commission has undertaken prudence check of the capitalisation proposed during the

Control Period. The Commission has considered the Capital Expenditure and Capitalization

submitted by AEML-D for the Control Period based on the DPR schemes approved by the

Commission till date. The Commission has considered the DPR approved cost for

approving capitalization for the Control Period.


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The Commission also observes that AEML-D has proposed capitalisation in the Control

Period against DPR schemes that are submitted to the Commission, but yet to be approved

by the Commission. The summary of proposed capitalisation against such DPR schemes

for Wires Business and Supply Business is given in the Table below:

Table 5-48: Capitalisation against DPR schemes yet to be approved by the


Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

Wires Business 445.38 674.08 738.89 1048.68 996.76

Supply Business 22.00 22.00 22.00 22.00 22.00

If DPR schemes are pending approval, then additional capitalisation up to 20% of

capitalisation approved for that year may be added, in accordance with Regulation 24.6 of

MYT Regulations, 2019, as reproduced below:

“24.6 The Commission may approve, for each year of the Control Period, an additional

amount equivalent to 20% of the total capital expenditure approved for that year,

towards planned or unplanned capital expenditure that is yet to be approved by the

Commission.”

Accordingly, against DPR schemes pending for approval, the Commission has allowed

additional capitalisation at 20% of the approved DPR capitalisation for Wires Business and

Supply Business for FY 2021-22 to FY 2024-25.

Non-DPR to DPR ratio for Wires Business is within the limit of 20% in FY 2020-21 and

FY 2021-22. Therefore, Non-DPR capitalisation for these years is considered same as

submitted by AEML-D. However, from FY 2022-23 onwards, Non-DPR to DPR ratio

works out to be higher than the limit of 20%. Therefore, the Commission has approved

capitalisation against Non-DPR schemes at 20% of approved DPR capitalisation for Wires

Business for FY 2022-23, FY 2023-24 and FY 2024-25.

The Commission notes that after allowing additional DPR capitalisation of 20% against

Schemes pending for approval and Non-DPR capitalisation as above, the approved

capitalisation for the Wires Business is found to be very low for the period from FY 2022-

23 to FY 2024-25 as compared to the past average capitalisation. The Commission has

computed 50% of average capitalisation of past 5 years (FY 2014-15 to FY 2018-19) for

which Truing-up has been completed by the Commission and is as shown in the Table

below:


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Table 5-49: Past Trend of Capitalisation for AEML-D (Rs. Crore)


15 FY 2015-

16 FY 2016-

17 FY 2017-

18 FY 2018-

19 Average

Wires Business (A) 660.75 449.34 400.03 317.04 397.63 444.96

Supply Business (B) 22.00 22.63 16.94 19.98 22.68 20.85

50% average capitalisation of past 5 years for Wires Business (A*50%) 222.48

50% average capitalisation of past 5 years for Supply Business (B*50%) 10.42

For FY 2023-24 and FY 2024-25, the sum of DPR and Non-DPR capitalisation approved

by the Commission for Wires Business and Supply Business is lower than 50% of the

average capitalisation, i.e., Rs. 222.48 Crore and Rs. 10.42 Crore, respectively. Therefore,

the Commission has allowed additional capitalisation equal to the difference between the

approved capitalisation and Rs. 222.48 Crore for Wires Business and Rs. 10.42 Crore for

Supply Business, towards DPRs yet to be submitted/yet to be approved.

For FY 2020-21 to FY 2022-23, the DPR and Non-DPR capitalisation approved by the

Commission for Wires Business and Supply Business is higher than Rs.222.48 Crore and

Rs. 10.42 Crore, respectively, therefore, no additional capitalisation is considered towards

DPR schemes yet to be approved and DPRs yet to be submitted.

It is to be noted that mere consideration of capital expenditure/capitalisation in the MYT

Order does not mean that the same is approved. No Scheme shall be undertaken unless the

same is approved by the Commission under the separate in-principle approval process or

qualifies under Non-DPR scheme.

The capitalisation approved by the Commission for FY 2020-21 to FY 2024-25 is

summarised in the Table below:

Table 5-50: Capitalisation approved for 4th Control Period (Rs. Crore) Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

Capitalisation - Wires Business 629.83 388.45 246.83 222.48 222.48

Capitalisation - Supply Business 130.49 218.57 174.74 10.42 10.42

5.6 DEPRECIATION

AEML-D's Submission

AEML-D has considered opening balance of assets and depreciation for each year of the

Control Period on such assets is determined by considering the depreciation rates as per


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MYT Regulations, 2019. AEML-D has calculated the depreciation on assets net of

consumer contribution, which is received for asset creation of Wires Business only. Asset

retirement has not been projected at this time, as no estimate for the same is presently

available. Actual asset retirement for each year would be presented at the time of true-up.

The summary of depreciation for each year of the Control Period for Wires Business is

shown below:

Table 5-51: Depreciation for Wires Business for 4th Control Period as submitted by

AEML-D (Rs. Crore)

Depreciation FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Opening GFA 6,265.41 7,305.82 8,350.74 9,357.54 10,488.47

Addition 1,040.41 1,044.92 1,006.79 1,130.94 1,068.32

Retirement 0.00 0.00 0.00 0.00 0.00

Closing GFA 7,305.82 8,350.74 9,357.54 10,488.47 11,556.79

Depreciation 289.93 336.38 413.60 426.98 438.63

Depreciation (%) 4.27% 4.30% 4.67% 4.30% 3.98%

AEML-D submitted that the addition of Consumer Contribution for each year of the Control

Period has been kept at the same level as the estimated addition of Consumer Contribution

in FY 2019-20. The summary of depreciation for Supply Business for each year of the

Control Period is shown below:

Table 5-52: Depreciation for Supply Business for 4th Control Period as submitted by

AEML-D (Rs. Crore)

Depreciation FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Opening GFA 670.83 889.40 1,064.14 1,086.14 1,108.14

Addition 218.57 174.74 22.00 22.00 22.00

Closing GFA 0.00 0.00 0.00 0.00 0.00

Dep Rate 889.40 1,064.14 1,086.14 1,108.14 1,130.14

Depreciation 36.66 47.57 38.03 39.02 40.16

Depreciation (%) 4.70% 4.87% 3.54% 3.56% 3.59%


The Commission has computed the Depreciation for the 4th Control Period in accordance

with Regulation 28 of the MYT Regulations, 2019 for the Distribution Wires and Retail

Supply Business, separately.

It has considered the closing GFA for FY 2019-20 as approved in this Order, as the opening

GFA for FY 2020-21, and the addition of GFA equivalent to the capitalisation approved.

The asset addition has been considered net of projected Consumer Contribution, which has

been considered in proportion to the approved capitalisation. It has computed the

Depreciation on the average GFA for the year by applying the weighted average


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Depreciation rate as approved for FY 2018-19 in this Order. The Commission has applied

the weighted average Depreciation rate of 4.38% for the Wires Business and 5.06% for

Retail Supply Business, based on the average depreciation rates approved in the truing up

for FY 2018-19.

The Depreciation approved by the Commission for Wires and Supply Business for the

Control Period is shown in the Table below:

Table 5-53: Depreciation approved for Wires Business for 4th Control Period

(Rs. Crore) Particulars FY 2020-21 FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening GFA 6,152.20 6,737.08 7,097.80 7,327.02 7,533.62

Addition (net of CC) 584.88 360.72 229.22 206.60 206.60

Closing GFA 6,737.08 7,097.80 7,327.02 7,533.62 7,740.22

Depreciation 282.33 303.04 315.97 325.51 334.56

% Depreciation 4.38% 4.38% 4.38% 4.38% 4.38%

Table 5-54: Depreciation approved for Supply Business for 4th Control Period

(Rs. Crore) Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening GFA 522.11 652.60 871.17 1,045.91 1,056.33

Addition 130.49 218.57 174.74 10.42 10.42

Closing GFA 652.60 871.17 1,045.91 1,056.33 1,066.75

Depreciation 29.71 38.53 48.48 53.16 53.69

% Depreciation 5.06% 5.06% 5.06% 5.06% 5.06%

5.7 INTEREST ON LONG-TERM LOAN

AEML-D's Submission

Regulation 27 of the MERC MYT Regulations, 2019 specifies the funding of capex

schemes as per the Debt-Equity ratio of 70:30. AEML-D submitted that currently no loans

have been tied up for the proposed capex for the next Control Period. AEML-D submitted

that it will endeavour to restrict the actual loan drawal to 70% of the total capitalisation

during the year. Future debt shall be tied up gradually during the Control Period, which will

also depend upon the Commission’s in-principle approvals of Schemes before and during

the Control Period. Therefore, for the purposes of ARR and tariff for each year of the

Control Period, AEML-D has considered normative funding of capex schemes in the ratio


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of 70:30 for the purpose of computation of RoE and Interest on loan for each year of the

Control Period.

AEML-D has considered a normative Debt:Equity ratio of 70:30 for capitalized assets

during each year of the Control Period in accordance with the MYT Regulations, 2019.

Regulation 30.5 of the MERC MYT Regulations, 2019 specifies that for computing interest

on loan capital allowable in the ARR, the rate of interest shall be the weighted average rate

of interest computed on the basis of the actual long-term loan portfolio at the beginning of

each year. In this regard, AEML-D submitted that the weighted average rate of interest as

on 01.04.2020 has been considered as per the existing loans, which is 9.05%. Further, the

weighted average interest rate for each year going forward from FY 2020-21 to FY 2024-

25 has been assumed as per the existing loan portfolio, because further debt shall be tied up

during the Control Period, for which the interest rate cannot be estimated at this stage.

Accordingly, the weighted average interest rate based on actual loan works out to 9.05%.

AEML-D submitted that the abovementioned weighted average interest rate has been

applied on the average of opening and closing normative loan balance for each year,

considering the closing loan balance of previous year as worked out in this Petition and the

loan added during current year corresponding to 70% of capitalisation during the year. In

accordance with Regulation 30.3, loan repayment during each year of the Control Period

has been considered equal to the depreciation claimed for that year. Further, as per

Regulation 30.4, no moratorium has been considered and repayment of loan has been

considered from the first year of commercial operation of the scheme. Based on the above,

the interest expenses estimated for the Control Period from FY 2020-21 to FY 2024-25 are


Table 5-55: Interest on Long-Term Loan for Wires Business for 4th Control Period



21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening Balance 1,773.22 2,226.29 2,636.06 2,941.92 3,321.30

Additions 743.00 746.15 719.46 806.36 762.53

Repayments 289.93 336.38 413.60 426.98 438.63

Closing Balance 2,226.29 2,636.06 2,941.92 3,321.30 3,645.20

Average Balance 1,999.75 2,431.17 2,788.99 3,131.61 3,483.25

Effective Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%

Total Interest Expenses 180.98 220.02 252.40 283.41 315.23


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Table 5-56: Interest on Long-Term Loan for Supply Business for 4th Control Period



21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening Balance 116.79 233.13 307.88 285.24 261.62

Additions 153.00 122.32 15.40 15.40 15.40

Repayments 36.66 47.57 38.03 39.02 40.16

Closing Balance 233.13 307.88 285.24 261.62 236.86

Average Balance 174.96 270.50 296.56 273.43 249.24

Effective Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%

Total Interest Expenses 15.83 24.48 26.84 24.75 22.56


The opening loan for FY 2020-21 has been considered equal to the closing loan for FY

2019-20 as approved in the provisional Truing-up for FY 2019-20, in earlier Sections of

this Order.

The Commission has considered the debt amount for each year of the 4th Control Period

equal to 70% of the capitalisation approved. The loan repayments have been considered

equal to the depreciation approved for the respective years. The interest rate has been

considered equal to the rate of interest considered for FY 2019-20 and the interest on long-

term loan has been computed on the normative average loan for each year of the 4th Control

Period.

The interest expenses on long-term loans approved by the Commission for FY 2020-21 to

FY 2024-25 are summarised in the Tables below:

Table 5-57: Interest Expenses approved for Wires Business for 4th Control Period


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening Balance of Loan 1,714.65 1,873.20 1,842.07 1,698.89 1,529.11

Additions during the Year 440.88 271.91 172.78 155.74 155.74

Loan Repayment during the year 282.33 303.04 315.97 325.51 334.56

Closing Balance of Loan 1,873.20 1,842.07 1,698.89 1,529.11 1,350.29

Average Balance 1,793.93 1,857.64 1,770.48 1,614.00 1,439.70

Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%

Interest Expenses 162.35 168.12 160.23 146.07 130.29


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Table 5-58: Interest Expenses approved for Supply Business for 4th Control Period


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Opening Balance of Loan 60.12 121.75 236.22 310.06 264.20

Additions during the Year 91.34 153.00 122.32 7.29 7.29

Loan Repayment during the

year 29.71 38.53 48.48 53.16 53.69

Closing Balance of Loan 121.75 236.22 310.06 264.20 217.80

Average Balance 90.94 178.99 273.14 287.13 241.00

Interest Rate 9.05% 9.05% 9.05% 9.05% 9.05%

Interest Expenses 8.23 16.20 24.72 25.99 21.81

5.8 INTEREST ON WORKING CAPITAL

AEML-D's Submission

AEML-D has calculated IoWC as per Regulation 32.3 and Regulation 32.4 of the MYT

Regulations, 2019. At present the prevailing SBI MCLR is 8.00%. Therefore, AEML-D has

considered interest rate of 9.50% for determining interest on Working Capital (Base Rate

plus 150 basis points as per MYT Regulations, 2019). The summary of IoWC for Wires

Business for each year of the Control Period is shown below:

Table 5-59: IoWC for Wires Business for 4th Control Period as submitted by

AEML-D (Rs. Crore)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

O&M 53.84 55.65 57.53 59.47 61.48

Maintenance Spares 66.92 77.54 88.19 98.47 109.99

Receivables 238.39 204.30 228.05 243.90 259.96

Less: Amount of Security Deposit

Total Working Capital Requirement 359.15 337.49 373.78 401.84 431.43

Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%

Interest on Working Capital 34.12 32.06 35.51 38.18 40.99

For working out working capital requirement for Supply Business, AEML-D has estimated

consumer security deposit by considering the annual addition of security deposit at the same

level as the estimated addition in FY 2019-20. The summary of IoWC for Supply Business

for each year of the Control Period is shown below:


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Table 5-60: IoWC for Supply Business for 4th Control Period as submitted by

AEML-D (Rs. Crore) Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

O&M 60.06 62.08 64.18 66.34 68.58


Receivables 769.33 703.28 715.60 732.83 755.77

Less: Amount of Security Deposit 531.27 580.97 630.67 680.37 730.07

Less: One-month equivalent cost of power 281.40 249.30 254.15 262.54 274.75

Total Working Capital Requirement 23.42 (56.01) (94.40) (132.87) (169.39)

Rate of Interest 9.50% 9.50% 9.50% 9.50% 9.50%



The Commission has computed the IoWC for the Wires Business and Supply Business in

accordance with Regulations 32.3 and 32.4 of the MYT Regulations, 2019. The

Commission has considered the rate of interest for computation of IoWC as 9.50%

considering the applicable MCLR of SBI plus 150 basis points, in accordance with the MYT

Regulations, 2019. It has accepted the submission of AEML-D regarding the amount of

CSD for Supply consumers. The IoWC approved by the Commission for the Wires and the

Business for FY 2020-21 to FY 2024-25 is shown in the Tables below:

Table 5-61: IoWC approved for Wires Business for 4th Control Period (Rs. Crore) Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

O&M Expenses 72.96 75.41 77.95 80.57 83.28


Receivables 195.95 200.01 204.14 208.32 212.56

Less: Amount of Security Deposit

Total Working Capital Requirement 330.43 342.80 353.07 362.17 371.18

Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%


Table 5-62: IoWC approved for Supply Business for 4th Control Period (Rs. Crore) Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

O&M Expenses 35.84 37.04 38.27 39.55 40.87


Receivables 797.43 815.23 833.53 850.85 868.51

Less: Amount of Security Deposit 531.27 580.97 630.67 680.37 730.07

Less: One-month equivalent cost of

power 248.78 240.99 246.25 252.52 259.20

Total Working Capital Requirement 58.45 36.83 3.60 (32.03) (69.33)

Rate of interest 9.50% 9.50% 9.50% 9.50% 9.50%



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5.9 INTEREST ON CONSUMER SECURITY DEPOSIT

AEML-D's Submission

Regulation 30.11 of the MYT Regulations, 2019 provides that interest shall be allowed on

the amount held in cash as security deposit from retail consumers at the Bank Rate as

declared by RBI as on 1st April of the year. Accordingly, considering the prevailing Bank

Rate of RBI of 5.40%, AEML-D has considered interest rate of 5.40% for projecting the

interest on consumer security deposit for each year of the Control Period, as given below:

Table 5-63: Interest on Security Deposit for 4th Control Period as submitted by

AEML-D (Rs. Crore) Security Deposit FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

CSD at the end of the year 531.27 580.97 630.67 680.37 730.07

Interest Rate (%) 5.40% 5.40% 5.40% 5.40% 5.40%

Interest on CSD 27.35 30.03 32.71 35.40 38.08


For approving the Interest on CSD, the Commission has taken the Bank Rate as on 1st April

2019 of 5.40%, as specified in the MYT Regulations, 2019. It has accepted the amount of

CSD as projected by AEML-D. Accordingly, the Interest on CSD approved by the

Commission is shown in the Table below:

Table 5-64: Interest on CSD approved for the Supply Business for 4th Control

Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Interest on CSD 27.35 30.03 32.71 35.40 38.08

5.10 RETURN ON EQUITY

AEML-D's Submission

Regulation 29.2 of the MERC MYT Regulations, 2019 specifies the provision of Base RoE

capital @ 14% per annum for Distribution Wires and 15.5% for Retail Supply, and

Regulation 29.8 and 29.9 specifies additional RoE of 1.5% for Distribution Wires and 2%

for Retail Supply, based on performance in terms of Wires Availability and Assessed Bills

and Collection Efficiency, respectively, for the two segments. Regulation 29.3.a specifies

that RoE shall be allowed at 14% on the equity capital at the commencement of the year.

Regulation 29.3.b specifies that RoE shall also be allowed on 50% of the equity capital

portion of the allowable capital cost, for the investment put to use such year.

AEML-D submitted that allowing additional RoE at the time of true-up only amounts to

deferring a near-certain cost impact in case of AEML-D, as AEML-D’s Wires Availability


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and its performance on Collection Efficiency has historically been significantly better than

the thresholds considered for additional RoE in the said Regulations.

AEML-D submitted the actual Wires Availability and Supply Availability from FY 2016-

17 to FY 2018-19 and Percentage of Assessed Bills from FY 2016-17 to FY 2019-20 (up

to October 2019) and stated that the performance in the past has been much better than the

threshold set in the Regulations. Accordingly, AEML-D has considered the RoE as 15.5%

for Wires and 17.5% for Supply business for each year of the Control Period in its Petition.

Regulation 34.2 of the MERC MYT Regulations, 2019 specifies that the rate of RoE,

including additional rate of RoE as allowed by the Commission, at the time of true-up, shall

be grossed up with the effective tax rate of respective financial year.

Further, the second Proviso of Regulation 34.4 of the MERC MYT Regulations, 2019

specifies that effective tax rate shall be estimated for future years based on actual tax paid

as per latest available Audited accounts, subject to prudence check. For AEML, the latest

available Audited Accounts is for FY 2018-19 and during the year Minimum Alternate Tax

(MAT) has been paid at the rate of 21.55%.

AEML-D has considered the effective tax rate of 17.47% for grossing up the RoE rate, for

the benefit of consumers. The actual tax rate based on actual tax paid by AEML shall be

used for grossing up the RoE at the time of truing up. Rate of pre-tax return on equity

considered for estimating the RoE on pre-tax basis for each year of the Control Period works

out to 17.845%

Pre-tax Return on equity for each year of the Control Period for Wires Business is as shown

below:

Table 5-65: Return on Equity for Wires Business for 4th Control Period as



21 FY 2021-

22 FY 2022-

23 FY 2023-

24 FY 2024-

25

Regulatory Equity at the beginning of year 2,095.50 2,407.62 2,721.10 3,023.14 3,362.42

Capitalization during the year 1,061.42 1,065.93 1,027.80 1,151.94 1,089.33

Consumer Contribution and Grants during the year towards capital works

21.01 21.01 21.01 21.01 21.01

Equity portion of capitalization during the year

312.12 313.48 302.04 339.28 320.50

Reduction in Equity Capital on account of retirement / replacement of assets

0.00 0.00 0.00 0.00 0.00

Regulatory Equity at the end of year 2,407.62 2,721.10 3,023.14 3,362.42 3,682.91

Pre-Tax Rate of Return (%) 18.78% 18.78% 18.78% 18.78% 18.78%

Return on Regulatory Equity 422.88 481.63 539.43 599.65 661.61


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AEML-D submitted that the addition of consumer contribution for each year of the Control

Period has been kept at the same level as the estimated addition of consumer contribution

in FY 2019-20. RoE for each year of the Control Period for Supply Business is as shown

below:

Table 5-66: Return on Equity for Supply Business for 4th Control Period as


Particulars FY

2020-21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Regulatory Equity at the beginning of year 158.33 223.90 276.32 282.92 289.52

Capitalization during the year 218.57 174.74 22.00 22.00 22.00

Consumer Contribution and Grants during the year towards capital works

0.00 0.00 0.00 0.00 0.00

Equity portion of capitalization during the year 65.57 52.42 6.60 6.60 6.60

Reduction in Equity Capital on account of retirement / replacement of assets

0.00 0.00 0.00 0.00 0.00

Regulatory Equity at the end of year 223.90 276.32 282.92 289.52 296.12

Pre-Tax Rate of Return (%) 21.20% 21.20% 21.20% 21.20% 21.20%

Return on Regulatory Equity 40.53 53.04 59.29 60.69 62.09


The Commission has computed the RoE for the Control Period in accordance with

Regulation 29 of the MERC MYT Regulations, 2019. The Closing Equity of FY 2019-20

has been considered as Opening Equity of FY 2020-21 and onwards. Addition to equity is

considered equal to 30% of the capitalization approved in this Order for respective year of

the Control Period as specified in the MYT Regulations, 2019.

Further, Regulation 34 of the MYT Regulations, 2019 provides for pre-tax RoE to be

computed for the Control Period. The MYT Regulations, 2019 specify that the effective tax

rate as per latest truing up year shall be considered for grossing up the RoE for MYT Control

Period. The MAT rate for FY 2017-18 and FY 2018-19 was 21.34% and 21.55%,

respectively. The Corporate Tax Rate for FY 2017-18 and FY 2018-19 was 34.608% and

34.95%, respectively. However, the Government of India (GoI) has reduced the effective

Income Tax rates recently. The effective MAT rate is reduced to 17.472% and effective

Corporate Tax rate is reduced to 25.17%. Therefore, the Commission has considered the

Effective Income Tax rate after factoring the reduced Tax rates, for allowing pre-tax RoE

for the MYT Control Period, so that the benefit of reduced Tax rates is passed on to the

consumers.

Since Tax payable for AEML-D for FY 2018-19 has been calculated under MAT rate, the

Commission has considered the effective Tax rate of 17.472% which has been applied on

base rate of RoE of 14% for Wires Business and 15.50% for Retail Supply Business to


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arrive at pre-tax RoE to be allowed for the Control Period. Further, as regards AEML-D’s

request to consider the entire RoE rate (base rate and additional rate) at the tariff

determination stage itself, the Commission is of the view that this would be in violation of

the provisions of the MYT Regulations, 2019, and amount to pre-empting the process of

assessment of performance at the true-up stage, to ascertain whether the Licensee is entitled

to the additional RoE. Hence, the Commission has allowed the RoE at the Base Rate only,

duly grossed up by the applicable Tax rate.

The pre-tax ROE approved by the Commission for the Wires Business and Supply Business

for the Control Period is shown in the Tables below:

Table 5-67: RoE approved for Wires Business for 4th Control Period (Rs. Crore) Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Equity at the beginning of the year (A) 2,259.44 2,434.90 2,543.12 2,611.88 2,673.86

Capitalization during the year (B) 629.83 388.45 246.83 222.48 222.48


during the year for Capitalization 44.95 27.73 17.62 15.88 15.88

Equity portion of the capital

expenditure capitalised during the year

(C=B*30%)

175.46 108.22 68.76 61.98 61.98

Equity at the end of the year 2,434.90 2,543.12 2,611.88 2,673.86 2,735.84

Return on equity at the beginning of

the year (D=A* 16.964%) 383.29 413.06 431.41 443.08 453.59

Return on Equity on Capitalization

during the year 14.88 9.18 5.83 5.26 5.26

Total Return on Regulatory Equity 398.17 422.23 437.25 448.34 458.85

Table 5-68: RoE approved for Supply Business for 4th Control Period (Rs. Crore) Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Equity at the beginning of the year (A) 160.62 199.77 265.34 317.76 320.89

Capitalization during the year (B) 130.49 218.57 174.74 10.42 10.42

Equity portion of the capital

expenditure capitalised during the year

(C=B*30%)

39.15 65.57 52.42 3.13 3.13

Equity at the end of the year 199.77 265.34 317.76 320.89 324.01

Return on equity at the beginning of

the year (D=A* 18.78%) 30.17 37.52 49.83 59.68 60.27

Return on Equity on Capitalization

during the year 3.68 6.16 4.92 0.29 0.29

Total Return on Regulatory Equity 33.84 43.68 54.76 59.97 60.56


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AEML-D's Submission

AEML-D submitted that the provision for bad debts as per the latest audited books of

accounts of AEML are both for Wires Business and Supply Business and there is no

segregation between Wires Business and Supply Business. Hence, for the purpose of

projections, AEML-D has considered the provision for Bad and Doubtful debts at the same

level as actuals for FY 2018-19. The following Table shows the provision for bad and

doubtful debts proposed by AEML-D:

Table 5-69: Provision for Bad Debts for 4th Control Period as submitted by AEML-

D (Rs. Crore)


Provision for Bad Debts - Wires 3.37 3.37 3.37 3.37 3.37

Provision for Bad Debts - Supply 12.62 12.62 12.62 12.62 12.62

Provision for Bad Debts - Total 15.99 15.99 15.99 15.99 15.99


The Commission has considered the provision for bad and doubtful debts in line with the

figures approved in Provisional Truing-up of FY 2019-20. The following Table shows the

provision for bad and doubtful debts approved by the Commission for the 4th Control

Period.

Table 5-70: Provision for Bad Debts for 4th Control Period approved by the



Provision for Bad Debts - Wires 3.37 3.37 3.37 3.37 3.37

Provision for Bad Debts - Supply 12.62 12.62 12.62 12.62 12.62

Provision for Bad Debts - Total 15.99 15.99 15.99 15.99 15.99


AEML-D's Submission

Regulation 35.1 of the MYT Regulations, 2019 specify that a sum not less than 0.25 per

cent and not more than 0.5 per cent of the original cost of fixed assets shall be allowed as

Contribution to Contingency Reserve. AEML-D has calculated the contribution to

contingency reserve for each year of the Control Period as 0.25% of the opening GFA of

that year for Wires Business and Supply Business separately.

The summary of contribution to contingency reserve for each year of the Control Period is



of 445

Table 5-71: Contribution to Contingency Reserve for Wires Business and Supply

Business for 4th Control Period as submitted by AEML-D (Rs. Crore)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Contribution to CR - Wires 16.73 19.38 22.05 24.62 27.50

Contribution to CR - Supply 1.68 2.22 2.66 2.72 2.77

Contribution to CR- Total 18.41 21.61 24.71 27.33 30.27


The Commission has computed the Contribution to Contingency Reserves at 0.25 % of the

Opening GFA in accordance with the MYT Regulations, 2019 and based on the

capitalisation approved for FY 2020-21 to FY 2024-25, as shown in the Tables below:

Table 5-72: Contribution to Contingency Reserve approved for Wires Business for

4th Control Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Opening Balance of GFA 6,152.20 6,737.08 7,097.80 7,327.02 7,533.62

% Contribution 0.25% 0.25% 0.25% 0.25% 0.25%

Contribution to Contingency

Reserves 15.38 16.84 17.74 18.32 18.83

Table 5-73: Contribution to Contingency Reserve approved for Retail Supply

Business for 4th Control Period (Rs. Crore) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Opening Balance of GFA 522.11 652.60 871.17 1,045.91 1,056.33

% Contribution 0.25% 0.25% 0.25% 0.25% 0.25%


Reserves 1.31 1.63 2.18 2.61 2.64


AEML-D's Submission

Wires Business

Interest on Contingency Reserve Investment: The gains received from Mutual Fund

investments of Contingency Reserve have been estimated as Rs. 1.78 Crore for FY 2019-

20. For each year of the Control Period, AEML-D has worked out the estimated gains

(income) of FY 2019-20 as a percentage of investment and applied the same RoI so arrived


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at on the projected balance of Contingency Reserve in each year of the Control Period and

segregated the same between Wires business and Supply business in the ratio of cumulative

contribution in each business. Actual gains from Mutual Fund investments of Contingency

Reserve shall be presented at the time of truing up for the respective years.

Land Usage Charges: Land usage charges are paid by AEML-T to AEML-D for usage of

AEML-D land by AEML-T. The existing MoM between AEML-T and AEML-D is valid

till FY 2019-20. In the absence of any MoM for the future period, AEML-D has

provisionally considered the estimated land usage charges for FY 2019-20, as the land

usage charges for each year of the Control Period. AEML-D shall present the actual land

usage charges for each year of Control Period at the time of truing up of respective years.

Other Miscellaneous Receipts of Wire Business: AEML-D has received Rs. 52.44 Crore

of All-in-Hire (AIH) charges from MCGM/MBMC in H1 of FY 2019-20 for maintenance

of streetlights, which has been accounted as other Miscellaneous Receipts of Wires

Business. AEML-D has considered the same amount as estimate in H2 of FY 2019-20.

Sales of Scrap: The income generated from sale of scrap in H1 of FY 2019-20 was Rs.

1.75 Crore. Since there is no certainty of this income in future, AEML-D has not estimated

any income from sale of scrap in each year of the Control Period.

Insurance Claim Received: The insurance claim received in H1 of FY 2019-20 was Rs.

0.09 Crore. Since there is no certainty of this income in future, AEML-D has not estimated

any income from insurance claim in each year of the Control Period.

Liabilities Written Back: There has been no revenue on account of liabilities written back

in H1 of FY 2019-20. AEML-D has estimated the revenue from liabilities written back in

FY 2019-20 at the same level as that of FY 2018-19. For each year of the Control Period,

AEML-D has considered the revenue from liabilities written off at the same level as that of

FY 2018-19.

AEML-D has estimated the other components of Non-Tariff Income for Wires Business for

each year of the Control Period by escalating their estimated values for FY 2019-20 by 5%.

The summary of Non-Tariff Income for Wires Business for each year of the Control Period

is as under:


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Table 5-74: Non-Tariff Income of Wires Business for 4th Control Period as


Particulars / (Rs. Crore) FY 20-

21

FY 21-

22

FY 22-

23

FY 23-

24

FY 24-

25

Rents of land & building 0.11 0.12 0.13 0.13 0.14

Sale of Scrap 1.75 1.75 1.75 1.75 1.75

Income from CR Investments 1.77 1.99 2.23 2.51 2.82

Other/Miscellaneous receipts 110.12 115.63 121.41 127.48 133.86

Interest on Other Investments 0.50 0.52 0.55 0.57 0.60

Liabilities no longer required

written back 0.51 0.51 0.51 0.51 0.51

Land Usage Charges 5.61 5.61 5.61 5.61 5.61

Total 120.36 126.12 132.18 138.56 145.28

Retail Supply Business

Interest on Contingency Reserve Investment: Gains received from Mutual Fund

investments of Contingency Reserve have been estimated as Rs. 1.78 Crore for the whole

of FY 2019-20. For each year of Control Period, AEML-D has worked out the estimated

gains (income) of FY 2019-20 as a percentage of investment and applied the same RoI so

arrived at on the projected balance of Contingency Reserve in each year of the Control

Period and segregated the same between Wires Business and Supply Business in the ratio

of cumulative contribution in each business.

Recovery from Theft of Electricity: Since there is no certainty of revenue from recovery

of theft, AEML-D has considered the same for each of the Control Period at the same level

as that of FY 18-19.

AEML-D has estimated the other components of Non-Tariff Income for Supply Business

for each year of the Control Period by escalating their estimated values for FY 2019-20 by

5%. The summary of Non-Tariff Income for Supply Business for each year of the Control

Period is as under:

Table 5-75: Non-Tariff Income of Retail Supply Business for 4th Control Period as



Income from CR Investments 0.22 0.25 0.28 0.31 0.34

Income from consumer charges levied in

accordance with Schedule of Charges


6.37 6.69 7.02 7.37 7.74

Income from recovery against theft

and/or pilferage of electricity 16.65 16.65 16.65 16.65 16.65

Other/Miscellaneous receipts 0.95 1.00 1.05 1.10 1.16

Rebate on power purchase 17.17 18.03 18.93 19.88 20.87

Burnt Meter Recovery 0.97 1.01 1.06 1.12 1.17


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Total 42.32 43.62 44.99 46.42 47.93


The Commission has considered the submissions of AEML-D for 4th Control Period and

has accordingly approved the Non-Tariff Income for Wires and Supply Business, as shown

in the Table below:

Table 5-76: Non-Tariff Income approved for 4th Control Period (Rs. Crore)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

NTI- Wires Business 120.36 126.12 132.18 138.56 145.28

NTI- Supply Business 42.32 43.62 44.99 46.42 47.93

However, as stated in the provisional truing up for FY 2019-20, the Commission has

directed AEML-D to transfer the existing Mutual Fund investment towards Contribution to

Contingency Reserve to safer instruments, i.e., Government Securities (G-Sec) within 6

months of the issue of this Order. AEML-D has to also ensure that the Contribution to

Contingency Reserve for future period shall be invested only in the above specified

investments.

5.14 DEMAND SIDE MANAGEMENT EXPENSES

AEML-D's Submission

The expected closing balance of LMC fund at the end of FY 2019-20 is Rs. 1.25 Crore.

AEML-D has projected the expenses on two DSM programs in each year of the Control

Period, as shown in the Table below. Based on the projected expenses, the LMC fund is

likely to be exhausted in FY 2023-24. The balance expenses have been considered to be

met out of ARR of the Supply Business. The Table showing the projected expenses to be

met from LMC Fund and those from ARR in each year of the Control Period as shown

below:

Table 5-77: DSM Expenses submitted by AEML-D for 4th Control Period (Rs.

Crore)


Opening Balance of LMC Fund 1.25 0.96 0.61 0.21 0

Expenses on DSM programs 0.29 0.35 0.41 0.41 0.47

Utilization from LMC Fund 0.29 0.35 0.41 0.21 0

Utilization through ARR 0 0 0 0.20 0.47

Closing Balance of LMC Fund 0.96 0.61 0.21 0 0


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The Commission has accepted the contentions of AEML-D and accordingly approved the

DSM expenses for FY 2023-24 and FY 2024-25, as shown in the Table below:

Table 5-78: DSM Cost approved for 4th Control Period (Rs. Crore)

Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

Total DSM Expenses - - - 0.20 0.47

However, AEML-D shall obtain the necessary approvals before undertaking the DSM

Schemes.


AEML-D's Submission

Rental Income from RCOM Towers: The Agreement between Reliance Communication

and AEML-D for utilizing rooftops of some of the receiving stations of AEML-D has been

discontinued in FY 2019-20. Hence AEML-D has not considered any revenue towards

rental income from RCOM towers in the Control Period.

Rental Income from Fibre Optics: As stated in the provisional truing up of FY 2019-20,

the agreement between REGSL (AEML-D) and RCOM through which RCOM can use the

optic fibre network of AEML-D for providing the backup path for its network was renewed

in September 2019. AEML-D has considered the per month rental income of Rs. 0.01 Crore

(two third amount) as the income from Other Business for each year of the Control Period.

The summary of Income from Other Business considered for reduction from Wires ARR is

as under:

Table 5-79: Income from Other Business submitted by AEML-D for 4th Control

Period (Rs. Crore)


Rental Income from Optic Fibre 0.13 0.13 0.13 0.13 0.13


The Commission has accepted the contentions of AEML-D and accordingly approved

Income from Other Business for 4th Control Period, as shown in the Table below:

Table 5-80: Income from Other Business approved for 4th Control Period (Rs.

Crore)

Particulars FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

Rental Income from Optic Fibre 0.13 0.13 0.13 0.13 0.13


of 445

5.16 PAYMENT OF TPC-G FOR STANDBY

The Commission has approved AEML-D’s share of Standby Charges of past period to be

paid to TPC-G in TPC-G’s MYT Order for FY 2020-21 to FY 2024-25 in Case No. 300 of

2019. The Commission has considered the cost of Rs. 88.28 Crore in the ARR of FY 2020-

21 to be paid to TPC-G.

5.17 GAP/(SURPLUS) OF AEML-G AFTER TRUING-UP OF FY 2017-18 AND

FY 2018-19 AND APR OF FY 2019-20


The Commission in its MYT Order for AEML-G for FY 2020-21 to FY 2024-25 in Case

No. 298 of 2019 has worked out the cumulative Surplus of Rs. 91.96 Crore, which is to be

passed on to AEML-D being its sole beneficiary and to the ultimate consumers. The

Commission therefore considers the adjustment of this surplus in the ARR of AEML-D for

FY 2020-21.

5.18 AGGREGATE REVENUE REQUIREMENT FOR 4TH CONTROL PERIOD

AEML-D's Submission

The summary of the ARR for the Wires Business and Supply Business for the 4th Control

Period is given in the Tables below:

Table 5-81: ARR for Wires Business for 4th Control Period as submitted by AEML-

D (Rs. Crore)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

O&M Expenses 646.05 667.85 690.38 713.68 737.76

Depreciation 289.93 336.38 413.60 426.98 438.63

Interest on Long-term Loan Capital 180.98 220.02 252.40 283.41 315.23


Provisioning for Bad & Doubtful Debts 3.37 3.37 3.37 3.37 3.37

Contribution to contingency reserves 16.73 19.38 22.05 24.62 27.50

Total Revenue Expenditure 1,171.17 1,279.06 1,417.31 1,490.23 1,563.48

Return on Equity Capital 422.88 481.63 539.43 599.65 661.61

Aggregate Revenue Requirement 1,594.04 1,760.69 1,956.74 2,089.88 2,225.08

Less: Non-Tariff Income 120.36 126.12 132.18 138.56 145.28

Less: Income from Other Business 0.13 0.13 0.13 0.13 0.13

Net Aggregate Revenue Requirement 1,473.55 1,634.44 1,824.42 1,951.18 2,079.67


of 445

Table 5-82: ARR for Supply Business for 4th Control Period as submitted by AEML-

D (Rs. Crore) Particulars FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Power Purchase Expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94

O&M Expenses 720.67 744.99 770.12 796.11 822.97

Depreciation 36.66 47.57 38.03 39.02 40.16

Interest on Long-term Loan Capital 15.83 24.48 26.84 24.75 22.56


Interest on Consumer Security Deposits 27.35 30.03 32.71 35.40 38.08

Provisioning for Bad & Doubtful Debts 12.62 12.62 12.62 12.62 12.62

Contribution to contingency reserves 1.68 2.22 2.66 2.72 2.77

Intra State Transmission Charges 835.32 507.05 527.21 567.14 607.62

MSLDC Charges 2.00 2.00 2.00 2.00 2.00

DSM Expenses 0.00 0.00 0.00 0.20 0.47

Total Revenue Expenditure 5,924.43 5,600.81 5,693.80 5,832.89 6,017.19

Return on Equity Capital 40.53 53.04 59.29 60.69 62.09

Aggregate Revenue Requirement 5,964.96 5,653.84 5,753.09 5,893.58 6,079.28

Less: Non-Tariff Income 42.32 43.62 44.99 46.42 47.93

Net Aggregate Revenue Requirement 5,922.63 5,610.22 5,708.11 5,847.16 6,031.35


Based on the components of the ARR approved in the above paragraphs, the Commission

has approved the ARR for the Wires and the Supply Business for the 4th Control Period as



of 445

Table 5-83: Approved ARR for Wires Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

O&M expenses 646.05 667.85 690.38 713.68 737.76 875.50 904.96 935.41 966.88 999.40

Depreciation 289.93 336.38 413.60 426.98 438.63 282.33 303.04 315.97 325.51 334.56

Interest Expense 180.98 220.02 252.40 283.41 315.23 162.35 168.12 160.23 146.07 130.29

Interest on working capital 34.12 32.06 35.51 38.18 40.99 31.39 32.57 33.54 34.41 35.26


debts 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37 3.37


Reserves 16.73 19.38 22.05 24.62 27.50 15.38 16.84 17.74 18.32 18.83

Total Revenue Expenditure 1,171.17 1,279.06 1,417.31 1,490.23 1,563.48 1,370.33 1,428.90 1,466.25 1,494.55 1,521.73

Return on Equity 422.88 481.63 539.43 599.65 661.61 398.17 422.23 437.25 448.34 458.85

Aggregate Revenue

Requirement 1,594.04 1,760.69 1,956.74 2,089.88 2,225.08 1,768.50 1,851.13 1,903.50 1,942.88 1,980.57

Less: Non-Tariff Income 120.36 126.12 132.18 138.56 145.28 120.36 126.12 132.18 138.56 145.28

Less: Income from Other

Business 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13

Total Wires ARR 1,473.55 1,634.44 1,824.42 1,951.18 2,079.67 1,648.00 1,724.88 1,771.19 1,804.19 1,835.16

Table 5-84: Approved ARR for Supply Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Power Purchase expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94 4,234.97 4,192.92 4,306.37 4,430.92 4,565.47

O&M Expenses 720.67 744.99 770.12 796.11 822.97 430.09 444.45 459.28 474.61 490.45


of 445

Particulars AEML-D Petition Approved by the Commission

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Depreciation 36.66 47.57 38.03 39.02 40.16 29.71 38.53 48.48 53.16 53.69

Interest on Long Term Loans 15.83 24.48 26.84 24.75 22.56 8.23 16.20 24.72 25.99 21.81

Interest on Working Capital 2.22 0.00 0.00 0.00 0.00 5.55 3.50 0.34 - -

Interest on Consumer Security

Deposit 27.35 30.03 32.71 35.40 38.08 27.35 30.03 32.71 35.40 38.08

Bad and Doubtful Debts 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62 12.62


Reserve 1.68 2.22 2.66 2.72 2.77 1.31 1.63 2.18 2.61 2.64

Intra-State Transmission

Charges 835.32 507.05 527.21 567.14 607.62 476.65 480.59 484.83 488.14 486.30

MSLDC Fees & Charges 2.00 2.00 2.00 2.00 2.00 1.65 1.82 1.97 2.12 2.16

DSM expenses 0.00 0.00 0.00 0.20 0.47 - 0.20 0.47

Payment to TPC-G for

Standby 88.28

True-up Gap/(Surplus) of

AEML-G (91.96)


Add: RoE 40.53 53.04 59.29 60.69 62.09 33.84 43.68 54.76 59.97 60.56

Aggregate Revenue

Requirement 5,964.96 5,653.84 5,753.09 5,893.58 6,079.28 5,258.28 5,265.96 5,428.25 5,585.74 5,734.25


Total Annual Revenue

Requirement 5,922.63 5,610.22 5,708.11 5,847.16 6,031.35 5,215.96 5,222.34 5,383.26 5,539.32 5,686.32


of 445

The summary of the approved ARR for the combined Wires Business and Supply Business for each year of the Control Period is shown in the

Table below:

Table 5-85: Approved ARR for Combined Wires Business and Supply Business for 4th Control Period (Rs. Crore) Particulars AEML-D Petition Approved by the Commission

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Power purchase expenses 4,270.08 4,229.85 4,281.60 4,352.94 4,467.94 4,234.97 4,192.92 4,306.37 4,430.92 4,565.47

O&M Expenses 1,366.72 1,412.83 1,460.51 1,509.79 1,560.73 1,305.60 1,349.41 1,394.69 1,441.49 1,489.86

Depreciation 326.59 383.95 451.63 466.00 478.79 312.04 341.58 364.44 378.67 388.25

Interest on Long Term Loans 196.81 244.50 279.24 308.16 337.79 170.58 184.31 184.95 172.05 152.10

Interest on Working Capital 36.34 32.06 35.51 38.18 40.99 36.94 36.06 33.88 34.41 35.26

Interest on Consumer Security

Deposit 27.35 30.03 32.71 35.40 38.08 27.35 30.03 32.71 35.40 38.08

Bad and Doubtful Debt 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99 15.99


Reserve 18.41 21.61 24.71 27.33 30.27 16.69 18.47 19.92 20.93 21.47

Intra-State Transmission

Charges 835.32 507.05 527.21 567.14 607.62 476.65 480.59 484.83 488.14 486.30

MSLDC Fees & Charges 2.00 2.00 2.00 2.00 2.00 1.65 1.82 1.97 2.12 2.16

DSM expenses 0.00 0.00 0.00 0.20 0.47 0.20 0.47

Payment to TPC-G for

Standby 88.28

True-up Gap/(Surplus) of

AEML-G (91.96)


Add: RoE 463.40 534.66 598.72 660.34 723.70 432.02 465.91 492.00 508.31 519.41

Aggregate Revenue 7,559.00 7,414.53 7,709.83 7,983.46 8,304.37 7,026.78 7,117.09 7,331.75 7,528.63 7,714.82


of 445

Particulars AEML-D Petition Approved by the Commission

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Requirement


Less: Less: Income from Other

Business 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13

Total Annual Revenue

Requirement 7,396.18 7,244.66 7,532.53 7,798.34 8,111.02 6,863.96 6,947.22 7,154.45 7,343.51 7,521.48


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6 CUMULATIVE REVENUE GAP, TARIFF PHILOSOPHY

AND CATEGORY-WISE TARIFFS FOR 4TH CONTROL

PERIOD FROM FY 2020-21 TO FY 2024-25

6.1 INCREMENTAL REVENUE GAP/SURPLUS FOR FY 2017-18

AEML-D's Submission

AEML-D has considered the Revenue Gap/(Surplus) for FY 2017-18 as calculated in its

Petition. The Commission had determined provisional Revenue Gap for FY 2017-18 at Rs.

195.65 Crore (Rs. 50.41 Crore in Wires Business and Rs. 145.24 Crore in Supply Business)

in AEML-D’s MTR Order dated 12 September, 2018 as shown in the Table below:

Table 6-1: Incremental Revenue Gap/(Surplus) for FY 2017-18


Revenue Gap /

(Surplus) allowed

in MTR Order

Revenue Gap /

(Surplus) after

truing up

Incremental

Gap /

(Surplus)

Wires Business 50.41 63.12 12.71

Supply Business 145.24 121.81 (23.43)

Wires & Supply Business 195.65 184.93 (10.72)


The Commission had determined provisional Revenue Gap for FY 2017-18 at Rs. 195.65

Crore (Rs. 50.41 Crore in Wires Business and Rs. 145.24 Crore in Supply Business) in

AEML-D’s MTR Order dated 12 September, 2018. The Commission has now approved

Revenue Gap of Rs. 36.75 Crore for Wires Business and Rs. 96.98 Crore for Supply

Business, after truing up for FY 2017-18 in this Order. The Commission has thus, approved

Total Revenue Gap of Rs. 133.72 Crore for the Wires and Supply Business in Truing-up

for FY 2017-18. The following Table shows the Incremental Gap/(Surplus) approved by

the Commission after truing up for FY 2017-18:

Table 6-2: Incremental Revenue Gap/(Surplus) approved for FY 2017-18


Revenue Gap /

(Surplus)

allowed in MTR

Order

Revenue

Gap

Approved

after truing

up

Incremental

Gap /

(Surplus)

Wires Business 50.41 36.75 (13.66)

Supply Business 145.24 96.98 (48.25)

Wires & Supply Business 195.65 133.72 (61.89)


of 445

6.2 REVENUE GAP / SURPLUS FOR FY 2018-19

AEML-D's Submission

The Revenue Gap/(Surplus) for FY 2018-19 has been calculated by AEML-D as shown in

the Table below:

Table 6-3: Revenue Gap/(Surplus) for FY 2018-19

Particulars / (Rs. Crore) Wires Business Supply

Business

Wires & Supply

Business

Revenue Gap / (Surplus) 260.86 (213.95) 46.92


The Commission has approved the Revenue Gap of Rs. 139.41 Crore for Wires Business

and Revenue Surplus of Rs. 225.38 Crore for the Supply Business, after truing up for FY

2018-19. The Commission has thus, approved Total Revenue Surplus of Rs. 85.98 Crore

for the Wires Business and Supply business after Truing-up for FY 2018-19, as shown in

the Table below:

Table 6-4: Revenue Gap/(Surplus) Approved for FY 2018-19

Particulars / (Rs. Crore) Wires

Business

Supply

Business

Wires & Supply

Business

Revenue Gap/(Surplus) 138.86 (225.38) (86.52)

6.3 PROVISIONAL REVENUE GAP/ SURPLUS FOR FY 2019-20

AEML-D's Submission

The provisional Revenue Gap/(Surplus) for FY 2019-20 as computed by AEML-D is shown

in the Table below:

Table 6-5: Provisional Revenue Gap/(Surplus) for FY 2019-20


Business

Supply

Business

Wires & Supply

Business

Provisional Revenue Gap / (Surplus) 140.50 (164.46) (23.96)


The Commission has approved Revenue Gap of Rs. 71.76 Crore for the Wires Business and

Revenue Surplus of Rs. 138.74 Crore for the Supply Business, after provisional truing up

for FY 2019-20. The Commission has thus, approved Total Revenue Surplus of Rs. 66.98


of 445

Crore for the Wires Business and Supply Business after provisional truing-up for FY 2019-


Table 6-6: Provisional Revenue Gap/(Surplus) Approved for FY 2019-20


Business

Supply

Business

Wires & Supply

Business

Provisional Revenue Gap / (Surplus) 71.76 (138.74) (66.98)

6.4 CARRYING/(HOLDING) COST TILL FY 2019-20 ON REVENUE

GAP/(SURPLUS) OF FY 2017-18 AND FY 2018-19

AEML-D's Submission

In AEML-D’s MTR Order dated 12 September 2018, the Commission had determined the

provisional Revenue Gap for FY 2017-18 at Rs. 195.66 Crore and the cumulative Revenue

Gap till FY 2017-18 at Rs. 835.51 Crore. The said amount of Rs. 835.51 Crore was allowed

to be recovered in the balance two years of the third Control Period considering 30%

recovery in FY 2018-19 and 70% recovery in FY 2019-20. Thus, the amount of Rs. 195.66

Crore was allowed to be recovered in the balance two years of the third Control Period

considering 30% recovery in FY 2018-19 and 70% recovery in FY 2019-20. The recovery

of 30% of the amount in FY 2018-19 and 70% of the amount in FY 2019-20 has been

appropriately considered while calculating the carrying cost on Gap/(Surplus) of FY 2017-

18 till FY 2019-20.

AEML-D has considered the SBI Base Rate plus 150 basis points from 1 April 2017 to 29

November 2017 and one-year SBI MCLR plus 150 basis points for the remaining period

(30 November 2017 to 31st March 2018), in accordance with the First Amendment to the

MYT Regulations, 2015. This works out to 10.20% for FY 2017-18. For FY 2018-19,

AEML-D has considered the interest rate at 9.89%, which is the weighted average SBI

MCLR for FY 2018-19 plus 150 basis points. For FY 2019-20, AEML-D has considered

the rate at 9.50% (SBI MCLR prevailing at the time of filing of Petition plus 150 basis

Points).

As per the Judgment of Hon’ble the APTEL dated 11 November 2011 in OP 1 of 2011, if

the Regulatory Asset/Gap is recognized in a given year, the carrying cost on the same is

required to be allowed in the said year itself. As the Revenue Gap for a given year is realized

mid-year, the same is required to be financed in the said year itself. Therefore, Revenue

Gap of a given financial year is considered by including the cost of funding such gap in the

said year itself and the total Revenue Gap is carried forward till year of recovery, along


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with further carrying cost, determined on simple interest basis. AEML-D has calculated the

carrying/(holding) cost on Gap/(Surplus) of FY 2017-18 and FY 2018-19 by including the

carrying/(holding) cost for half year to the gap/(surplus) for that year. The total

carrying/(holding) cost till FY 2019-20 on the Gap/(Surplus) of FY 2017-18 for the Wires

Business, Supply Business, and combined Distribution Business is shown in the Tables

below:

Table 6-7: Carrying/(Holding) cost till FY 2019-20 on Wires Gap /(Surplus) of FY

2017-18

Particulars / (Rs. Crore) FY 2017-18 FY 2018-19 FY 2019-20

Carrying Cost (%) 10.18% 9.89% 9.50%

Opening Balance 0 66.33 51.21

Addition 63.12 0 0

Recovery 0 15.12 35.28


Carrying cost 3.21 5.81 3.19

Total Carrying Cost 12.21

Table 6-8: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY

2017-18


Carrying Cost (%) 10.18% 9.89% 9.50%


Addition 121.81 0 0

Recovery* 0 43.57 101.67

Closing Balance 121.81 84.44 (17.23)



Table 6-9: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply

Gap/(Surplus) of FY 2017-18


Carrying Cost (%) 10.18% 9.89% 9.50%


Addition 184.93 0 0

Recovery 0 58.69 136.95

Closing Balance 184.93 135.65 (1.30)




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The total carrying/(holding) cost till FY 2019-20 on Gap/(Surplus) of the Wires Business,

Supply Business, and combined Distribution Business for FY 2018-19 is shown in the

Tables below:

Table 6-10: Carrying/(Holding) cost till FY 2019-20 on Wires Gap/(Surplus) of FY

2018-19

Particulars / (Rs. Crore) FY 2018-19 FY 2019-20

Carrying Cost (%) 9.89% 9.50%

Opening Balance 0 273.76

Addition 260.86 0

Recovery 0 0


Carrying cost 12.90 26.01


Table 6-11: Carrying/(Holding) cost till FY 2019-20 on Supply Gap/(Surplus) of FY

2018-19



Opening Balance 0 (224.53)

Addition (213.95) 0

Recovery 0 0

Closing Balance (213.95) (224.53)

Carrying cost (10.58) (21.33)

Total Carrying Cost (31.91)

Table 6-12: Carrying/(Holding) cost till FY 2019-20 on Wires and Supply

Gap/(Surplus) of FY 2018-19



Opening Balance 0 49.24

Addition 46.92 0

Recovery 0 0






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The Commission has considered the Revenue Gap/(Surplus) approved after Truing-up of

FY 2017-18 and FY 2018-19 for Wires Business and Supply Business and accordingly

computed the Carrying/(Holding) cost till FY 2020-21, as the amounts shall be

recovered/adjusted from FY 2020-21 onwards.

The Commission has considered the interest rate of 10.18% for FY 2017-18, which is the

weighted average rate of SBI Base Rate plus 150 basis points before the amendment of

MYT Regulations, 2015 and one-year SBI MCLR rate plus 150 basis points, after the

amendment of the MYT Regulations, 2015. For FY 2018-19, FY 2019-20, and the 4th

Control Period the interest rate has been considered equal to the one-year SBI MCLR rate

plus 150 basis points, at 9.89% and 9.50%, respectively.

The Commission had approved certain amount in the Provisional Truing-up of FY 2017-

18 and had passed on the same without any carrying cost in FY 2018-19 and FY 2019-20

in the ratio of 30% and 70%, respectively. The Commission has therefore, considered the

incremental Revenue Gap/(Surplus) for FY 2017-18 and accordingly computed the

carrying/(holding) cost on the same.

However, in case of FY 2018-19, the Commission has considered the entire Revenue

Gap/(Surplus) approved in the Truing-up in this Order. The Revenue Gap/(Surplus) along

with carrying/(holding) cost is computed till FY 2020-21.

In case of FY 2019-20, the Commission has considered only the Standalone Revenue

Gap/(Surplus) worked out in Provisional Truing-up in this Order without considering any

carrying/(holding) cost as per the methodology adopted by the Commission in previous

Tariff Orders. The Commission shall consider the carrying cost for FY 2019-20 based on

the Revenue Gap/(Surplus) approved at the time of final Truing-up of FY 2019-20.

The following Tables shows the Revenue Gap/(Surplus) for FY 2017-18 and FY 2018-19

along with carrying/(holding) cost computed till FY 2020-21:

Table 6-13: Carrying/(Holding) cost till FY 2020-21 on Approved Wires

Gap/(Surplus) of FY 2017-18 (Rs. Crore)

Particulars FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%

Opening Balance 0 36.75 21.62 (13.66)

Addition 36.75 0.00 0.00 0.00

Recovery 0 15.12 35.28 (13.66)

Closing Balance 36.75 21.62 (13.66) 0.00

Carrying cost 1.87 2.89 0.38 (0.65)



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Table 6-14: Carrying/(Holding) cost till FY 2020-21 on Approved Supply



Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%

Opening Balance 0.00 96.98 53.41 (48.25)

Addition 96.98 0.00 0.00 0.00

Recovery 0.00 43.57 101.66 (48.25)

Closing Balance 96.98 53.41 (48.25) 0.00

Carrying cost 4.94 7.44 0.24 (2.29)





Carrying Cost (%) 10.18% 9.89% 9.50% 9.50%

Opening Balance 0.00 133.72 75.03 (61.91)

Addition 133.72 0.00 0.00 0.00

Recovery 0.00 58.69 136.95 (61.91)

Closing Balance 133.72 75.03 (61.91) 0.00

Carrying cost 6.81 10.32 0.62 (2.94)


The total carrying/(holding) cost on approved Gap/(Surplus) for the Wires Business, Supply

Business, and combined Distribution Business for FY 2018-19, till FY 2020-21 is shown

in the Tables below:

Table 6-16: Carrying/(Holding) cost till FY 2020-21 on Approved Wires


Particulars FY 2018-19 FY 2019-20 FY 2020-21

Carrying Cost (%) 9.89% 9.50% 9.50%


Addition 138.86 0.00 0.00

Recovery 0.00 0.00 138.86





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Table 6-17: Carrying/(Holding) cost till FY 2020-21 on Approved Supply



Holding Cost (%) 9.89% 9.50% 9.50%

Opening Balance 0.00 (225.38) (225.38)

Addition (225.38) 0.00 0.00

Recovery 0.00 0.00 (225.38)

Closing Balance (225.38) (225.38) 0.00

Carrying cost (11.15) (21.41) (10.71)

Total Holding Cost (43.26)




Holding Cost (%) 9.89% 9.50% 9.50%

Opening Balance 0 (86.52) (86.52)

Addition (86.52) 0 0

Recovery 0 0 (86.52)

Closing Balance (86.52) (86.52) 0.00

Carrying cost (4.28) (8.22) (4.11)

Total Holding Cost (16.61)

The Commission has included the above amounts in the cumulative Revenue Gap/(Surplus)

of Wires Business and Supply Business till FY 2020-21 along with other relevant costs.

6.5 RECOVERY OF REGULATORY ASSET

AEML-D's Submission

The Commission had determined the Regulatory Asset (RA) principal amount of Rs. 861.45

Crore as on 1 April 2018 in the MTR Order dated 12 September 2018 in Case No. 200 of

2017. AEML-D subsequently filed Petition for Review of the MTR Order (Case No. 317

of 2018), wherein AEML-D, inter-alia, submitted that there was an error in calculation of

carrying cost while approving the RA recovery in FY 2018-19. In Order dated 24 December

2018 in Case No. 317 of 2018, the Commission acknowledged the error in calculation of

carrying cost and allowed additional carrying cost of Rs. 20.35 Crore in FY 2018-19. As

against the RA recovery allowed in FY 2018-19 and FY 2019-20, the actual RA recovery

in FY 2018-19 and estimated RA recovery in FY 2019-20 (based on estimated sales for FY

2019-20) are shown in the Table below:


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Table 6-19: RA Recovery Allowed Vs Actual / estimated RA Recovery


RA Recovery allowed 471.43 451.08

Actual / Estimated RA Recovery 580.98 411.13

The actual RA recovery in FY 2018-19 was more than the allowed recovery as the

Regulatory Asset Charges (RAC) for first five months of FY 2018-19 (approved in the

MYT Order dated 21 October 2016 in Case No. 34 of 2016) were higher, even though the

actual network sales in FY 2018-19 was lower than the network sales approved for FY

2018-19 in the MTR Order dated 12 September 2018. The Commission had considered the

recovery of RA principal out of the actual RA recovery by segregating the actual RA

recovery in the ratio of RA principal and RA carrying cost allowed for recovery at the time

of its approval. The Commission had considered this philosophy at the time of issuance of

MYT Order dated 21 October 2016. AEML-D has raised this issue in its Appeal against the

MYT Order (Appeal No. 12 of 2017). Pending the decision of Hon’ble ATE on this issue,

AEML-D had presented the RA principal recovery and RA carrying cost recovery in FY

2016-17 and FY 2017-18 as per the Commission’s philosophy. AEML-D has presented the

RA principal recovery and RA carrying cost recovery in FY 2018-19 and FY 2019-20 also

using the Commission’s philosophy. AEML-D shall claim the consequential impact on RA

recovery in future, based on the decision of Hon’ble ATE in Appeal No. 12 of 2017.

The RA principal and RA carrying cost recovery allowed by the Commission in the MTR

Order dated 12 September 2018 is shown in the Table below:

Table 6-20: RA Principal and RA Carrying Cost


As per MTR Order


Principal Recovery 430.73 430.73

Carrying cost Recovery 40.70 20.35

Actual/ Estimated



Carrying cost recovery 50.16 18.55

As the estimated RA recovery in FY 2019-20 is lower than the allowed RA recovery in FY

2019-20, the estimated RA principal recovery in FY 2019-20 is less than the RA principal


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recovery allowed for FY 2019-20 in the MTR Order. The under/(over) recovery of RA

principal together with holding/(carrying) cost till FY 2019-20 is shown in the Table below:

Table 6-21: Under/(Over) recovery in RA principal along with carrying/(holding)

cost till FY 2019-20



Opening Balance 0 (100.09)

(Over) / Under Recovery in Principal (100.09) 38.15

Closing Balance (100.09) (61.94)

(Holding) / Carrying cost (4.95) (7.70)

Total with holding cost (74.59)

AEML-D has included the above amount in the cumulative Revenue Gap/(Surplus) of the

Wires Business till FY 2019-20, since this amount pertains to over recovery of RA, which

was being recovered from network consumers only.


The Commission has considered the recovery of RA Principal amount with carrying cost

as submitted by AEML-D for FY 2018-19, based on the actual recovery. For FY 2019-20,

the Commission has worked out the RA recovery based on the estimated Own and

Changeover sales for FY 2019-20 and the RAC charge per unit applied approved for FY

2019-20 in the MTR Order dated 12 September 2019.

The following Tables show the RA recovery approved by the Commission for FY 2018-19

and FY 2019-20 and accordingly worked out the RA under/(over) recovery and

corresponding carrying/(holding) cost on RA recovery till FY 2020-21, as these amounts

shall be recovered/adjusted in FY 2020-21.

Table 6-22: RA Principal and RA Carrying Cost Recovery approved by the

Commission


As per MTR order



Carrying cost Recovery 40.70 20.35

Actual/ Estimated



Carrying cost recovery 50.16 18.47


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Table 6-23: Under/(Over) recovery in RA principal along with carrying/(holding)

cost approved till FY 20202-21 (Rs. Crore)


Interest Rate 9.89% 9.50% 9.50%

Opening Balance 0.00 (100.09) (60.25)

Under/(Over) Recovery in Principal (100.09) 39.84 0.00

Recovery (60.25)

Closing Balance (100.09) (60.25) 0.00

Carrying/(Holding) cost (4.95) (7.62) (2.86)

Total with holding cost (75.68)

In the MTR Order, the Commission had stated that any balance arising out of over-

recovery/under-recovery of Regulatory Asset may be adjusted through the Revenue

Gap/(Surplus) of Supply Business. However, both AEML-D and TPC-D and AEML-D

requested that the Gap/(Surplus) against RA recovery should be adjusted against the Wires

ARR.

The Commission needs to take the same approach to adjust the Gap/(Surplus) appropriately

for TPC-D and AEML-D, being parallel licensees operating in the same area of supply. The

Commission notes that the Regulatory Assets were created to recover the gap of Supply

Business, however, in actual it is recovered only from the consumers of the Wires Business.

A similar approach exists in case of recovery of CSS, which is recovered from the

consumers of the Wires Business against the cross-subsidy requirement of the Supply

Business but the revenue from CSS is considered against the Supply Business. Hence, by

applying same rationale, the Gap/(Surplus) against RAC should also be adjusted against the

ARR of the Supply Business.

However, given that the Wheeling Charges are quite high and both competing Distribution

Licensees have desired that the Gap/(Surplus) against RAC should be adjusted against the

ARR of the Wires Business, the Commission decides to adjust the Gap/(Surplus) from RAC

recovery against the ARR of the Wires Business.

Therefore, the Commission has adjusted the estimated over recovery of Rs. 75.68 Crore

against the Wires Business, rather than the Supply Business.


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6.6 RECOVERY OF AMOUNTS PERTAINING TO RINFRA

6.6.1 Impact of Supreme Court Judgment regarding Additional Energy Charges

(AEC)

AEML-D's Submission

RInfra-D (erstwhile Licensee) had filed an Appeal in the Hon’ble Supreme Court (Appeal

No. 4161 of 2009) in the matter of Additional Energy Charges payable to TPC-D (total

claim of Rs 34.98 Crore), against the Hon’ble APTEL’s Judgment dated 12.05.2008 in

Appeal No. 3 of 2008, wherein the Hon’ble APTEL had directed RInfra to pay Rs. 0.32 per

unit Additional Energy Charges (the difference between unit rate of Rs. 2.09 demanded by

TPC and Rs. 1.77 per unit paid by RInfra), in respect of the payment of energy drawn at

220 kVA interconnection.

During the proceedings of the case, the Hon'ble Supreme Court, vide Daily Order dated

14.12.2009 in the said Appeal No. 4161 of 2009 had directed RInfra-D to deposit Rs. 25

Crore with Secretary General of the Supreme Court, which can be withdrawn by TPC

subjected to their giving undertaking to the Court that in the event any of these Appeals are

decided against them, the amount may be refunded to RInfra without demur together with

interest as may be determined by the Court. The Hon’ble Supreme Court also directed

RInfra to submit a Bank Guarantee for the remaining principal amount of Rs. 9.98 Crore to

TPC.

Pursuant to the direction of Hon’ble Supreme Court, RInfra-D had made payment of Rs. 25

Crore on 31.01.2010. RInfra-D, in its Petition in Case No. 72 of 2010 for True up of FY

2008-09, Annual Performance Review for FY 2009-10 and Tariff determination for FY

2010-11, had apprised the Commission that it has deposited a sum of Rs. 25 Crore with the

Hon’ble Supreme Court following the directions of the Hon’ble Court in Civil Appeal No.

4161 of 2009 and RInfra-D had included this amount in the ARR of FY 2009-10 in the said

Petition in Case No. 72 of 2010. However, the Commission did not consider this amount in

ARR stating that the matter is pending before the Hon’ble Supreme Court and based on

final outcome the same will be considered for recovery.

In Case No. 126 of 2011, RInfra-D had not included this amount of Rs. 25 Crore in the

ARR of FY 2009-10 for final truing up purposes as per the directions of the Commission

issued in the Order in Case No. 72 of 2010. The Hon’ble Supreme Court has now

pronounced its Judgment in the pending matter. As per the said Judgment, TPC raised a

demand of Rs. 41.92 Crore in September 2019, after adjusting for Rs. 25 Crore already


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deposited by RInfra. As stated in the provisional true-up of FY 2019-20, the said Rs. 41.92

Crore has been paid by AEML-D to TPC-D and included in the estimated power purchase

cost of FY 2019-20. Therefore, now the amount of Rs. 25 Crore deposited by RInfra, which

was earlier not allowed to be recovered from ARR, shall have to be passed on for recovery

in tariff, along with applicable carrying cost @ 9% in accordance with the said Judgment.

Accordingly, AEML-D has considered the total amount of Rs. 47.88 Crore (Rs. 25 Crore

Principal + Rs. 22.88 Crore carrying cost up to the close of FY 2019-20) to the cumulative

Revenue Gap/(Surplus) till FY 2019-20.


The Commission is of the view that the amounts towards Additional Energy Charges are to

be paid by AEML-D (erstwhile RInfra-D) to TPC-D as per the Judgment of the Hon’ble

Supreme Court. The Commission therefore allows the amount of Rs. 47.88 Crore to be paid

by RInfra-D to TPC-D in the Cumulative Gap/(Surplus) till FY 2019-20, as this amount

was not allowed for recovery in the previous Tariff Orders.

6.6.2 Recovery of understated carrying cost on the Regulatory Asset recovery in FY

2018-19 due to error in calculation of carrying cost for FY 2018-19

AEML-D's Submission

In the MTR Order dated 12 September 2018, there was an error in calculation of carrying

cost for FY 2018-19. The recovery of Regulatory Asset for FY 2018-19 with correct

carrying cost should have been Rs. 491.78 Crore instead of Rs. 471.43 Crore. AEML-D has

now proposed the under recovery of the carrying cost, as shown in the Table below:

Table 6-24: Under Recovery of RA Carrying Cost




Addition 20.35 0.00



Total with holding cost 23.29


The Commission has considered the recovery of understated carrying cost on the RA

recovery in FY 2018-19. The Commission approves the amount of Rs. 24.26 Crore,


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considering the principal amount and carrying cost till FY 2020-21, in the Cumulative

Revenue Gap/(Surplus) as shown in the Table below:

Table 6-25: Under Recovery of RA Carrying Cost approved by the Commission (Rs.

Crore)


Interest Rate 9.89% 9.50% 9.50%


Addition 20.35 0.00 0.00

Recovery 20.35



Total with holding cost 24.26

6.6.3 Recovery of way leave charges payable to Western Railways

Western Railways, citing reference of the master Circular issued vide Railway Board’s

letter No. 97/LML/24/3 dated 27.11.2001, had demanded Rs. 35.94 crore vide letter dated

13.11.2009 being Way leave charges for 27 cables for 2 blocks of 10 years. RInfra-D had

paid Rs. 5.57 Crore (for 23 cables) against total way leave charges on 28.09.2012 reducing

the liability to Rs. 30.37 Crore. However, in view of repeated demands from Western

Railway, RInfra-D, under protest, by its letter dated 28.09.2012 made a payment of Rs. 5.57

Crores in respect of cables which were live and in-service. This action of Western Railways

is contested by RInfra-D in correspondence and it is sought to be contended that Way Leave

Charges in respect of these 4 cables is not at all applicable. However, joint inspections were

undertaken in December 2012 and June 2013 pursuant to which Western Railway decided

to waive off the demand for the remainder duration in respect of two cables. Resultantly,

the revised final demand stands at Rs. 22.60 Crore for four cables. RInfra-D has challenged

the enhanced levy of Way Leave Charges and the discrimination made between Private

Utility and Public Utility in levy of Way Leave Charges. In order to get permission for

HDD crossing near Ram Mandir Road Station on an immediate basis from Western

Railway, AEML-D (the present Licensee) pursuant to its request, was required to pay Way

Leave charges of Rs. 2.00 Crore on 25.01.2019, towards part payment of the disputed

demand of Way Leave Charges in respect of the 4 disputed cables. Hence, Rs. 2.36 Crore

with GST has been claimed as an uncontrollable expense.

To avoid delay in execution of cable related work, Way leave charges needs to be paid to

Western Railways. Hence AEML-D requested to allow recovery of Rs. 22.60 Crore Way


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Leave charges. The said amount has been included in the amount of Revenue Gap till FY

2019-20.


The Commission has already allowed the actual amount paid in this regard separately in

O&M expenses of FY 2019-20. However, the balance amount is yet to be paid and is in

dispute. The Commission is of the view that such amount can be allowed to be passed

through only after payment. The Commission has therefore, not accepted the submission of

AEML-D and has not included the Way leave charges of Rs. 22.60 Crore in cumulative

Revenue Gap/(Surplus) till FY 2019-20. As and when this amount become actually payable

and is actually paid by AEML-D, the same may be claimed at the time of true-up for the

respective years, along with the necessary documentary proof of payment.

6.6.4 Recovery of Service Tax and associated cost paid on cheque bounce charges

AEML-D's Submission

The office of Commissioner of Central GST Audit quantified/observed that the Service Tax

amounting to Rs.1.45 Crore on amount received towards Bounced Cheque Charges is

payable stating that amount collected falls under the declared service in terms of Section

66 E(e) of Finance Act, 1994. RInfra had contested this demand vide written reply dated

14.02.2019 that these charges are collected for delayed payment of consumer’s electricity

bill on account of dishonouring of the cheques as mandated by the Commission. However,

RInfra’s contention was not accepted and the demand was imposed. Service Tax being an

uncontrollable item, the recovery of the same for the past period is proposed separately.

Therefore, this amount along with carrying cost has been included as part of cumulative

Revenue Gap/(Surplus) till FY 2019-20.

AEML-D added that in addition to the Service Tax on cheque bounce charges mentioned

above, Service Tax has also been demanded on the Delayed Payment Charges, penalty for

actual demand exceeding the contract demand and street light maintenance charges. At

present no payment has been made against these demands and as on when any payment due

is finalized, AEML-D will approach the Commission for recovery of the same through

tariff.


The Commission has accepted AEML-D’s submission as regards to Service Tax on Cheque

Bounce Charges and has included the recovery of Rs. 1.52 Crore in the Cumulative


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Revenue Gap/(Surplus).

As regards AEML-D’s submissions regarding additional Service Tax demand on the

delayed payment charges, penalty for actual demand exceeding the contract demand and

street light maintenance charges, the same shall be considered at the appropriate time based

on actual payment and prudence check. It is also clarified that as Delayed Payment Charges

are not considered as income by the Commission, any Service Tax/GST on such income

shall not be passed through to the consumers.

6.7 PROVISIONAL RECOVERY OF NEAR CERTAIN FUTURE COST

AEML-D's Submission

AEML-D submitted that there are certain other costs, which have already accrued and for

which payments shall be made in the next year itself. AEML-D has not considered these

costs in the stand-alone ARR for FY 2020-21 or in any other year during the Control Period

but it is necessary to recognise and provide for these costs in tariffs now, so as to avoid a

significant tariff decline now, only to result in a tariff shock almost immediately after the

commencement of the Control Period, in the form of high FAC.

6.7.1 FBSM Pool Cost for FY 2018-19 and FY 2019-20

AEML-D has not considered any cost towards energy decrement from Imbalance Pool in

FY 2018-19 and FY 2019-20, since MSLDC has issued the provisional FBSM bills till

February 2018 only. The impact of this cost of energy decrement in FY 2018-19 and FY

2019-20 will be realized in future, which will then have to be recovered from consumers

and passed on to MSLDC. AEML-D proposes to set off the cumulative surplus in the

Supply Business against the provisional cost of the FBSM Pool decrement in FY 2018-19

and FY 2019-20.

For estimating the provisional cost of the FBSM Pool decrement in FY 2018-19, AEML-D

has considered the derived FBSM Pool quantum for FY 2018-19 and the variable rate of

ADTPS for FY 2018-19. Similarly, for FY 2019-20, AEML-D has considered the derived

FBSM Pool quantum for H1 of FY 2019-20 and the variable rate of ADTPS for H1 of FY

2019-20. No provision towards FBSM Pool cost for H2 of FY 2019-20 has been made at

present, since AEML-D has not forecast any separate Pool decrement in H2 of FY 2019-20

and the same is subsumed in the short-term power purchase estimated for H2 of FY 2019-

20. The estimated provisional FBSM pool cost for FY 2018-19 and FY 2019-20 are shown

in the Table below:


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Table 6-26: Provisional FBSM Pool cost for FY 2018-19 and FY 2019-20

Particulars Quantum

(MU)

Rate

(Rs./kWh)

Cost (Rs.

Crore)

Cost of FBSM Pool for FY 2018-19 733.26 3.88 284.31

Cost of FBSM Pool for FY 2019-20 500.17 3.73 186.66

Total 1,233.42 470.97

AEML-D submitted that the above amounts have not been included in the Truing up of FY

2018-19 and FY 2019-20, as these costs are provisional and including these amounts in the

respective power purchase cost for FY 2018-19 and FY 2019-20 would have increased the

Revenue Gap/decreased the Revenue Surplus of corresponding years. This would have

attracted carrying cost till FY 2019-20.

6.7.2 Fixed cost Reconciliation

MSLDC is in the process of finalising the Fixed Cost Reconciliation (FCR) bills and the

same could be raised at any time in the next few months. As per the provisional bill raised

earlier (dated 25 January 2019) AEML-D’s share in FCR was Rs. 124.60 Crore out of which

provisionally 20% payment was made in FY 2018-19 and the same is included in this

Petition for true-up of FY 2018-19. AEML-D proposes to set off the cumulative Surplus in

its Supply Business as at the start of the Control Period, with the provisional amount

towards FCR and for this AEML-D has considered the differential FCR of Rs. 99.68 Crore

as per the earlier provisional bill raised (i.e., the total amount as per provisional bill, less

the 20% payment already made).


AEML-D has submitted that the ARR of FY 2018-19 and FY 2019-20 is suppressed in the

absence of FBSM Pool cost in both the years. The Commission finds merit in AEML-D’s

submission that passing on this surplus to consumers in the tariffs for 4th Control Period

shall decrease the retail tariff initially, but the same cost will then get included in the FAC,

when the revised energy bills are raised by MSLDC.

The Commission has estimated the likely impact of above aspect on AEML-D for FY 2018-

19 and FY 2019-20, as under. The Commission has applied the FBSM rate of Rs. 2.86/kWh

based on latest data on the pool imbalance purchase of 733.26 MU for FY 2018-19 to

estimate the likely FBSM claim, which works out to Rs. 209.71 Crore. Similar, FBSM

impact of Rs. 209.71 Crore is considered for FY 2019-20 also. Overall, the Commission

considers FBSM payment of Rs. 419.42 Crore for FY 2020-21.


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Approval of likely impact of FBSM payment by the Commission is over and above the

power purchase cost approved by the Commission, to provide buffer to the Distribution

Licensee in case payments are required to be made for the past period. This will not be

considered as part of power purchase cost for calculation of FAC. AEML-D should make

payment of FBSM bills through this Fund and should not load such bill amount in FAC

computation. In case actual bill amount of FBSM is more than the above Fund, such

incremental amount may be considered for FAC computation. As this Fund is being

provided over and above the approved power purchase cost, the Holding cost on such Fund

shall be computed at the time of true-up, based on complete data and calculations to be


As regards AEML-D’s claim for pass through of balance 80% of the Fixed Cost

Reconciliation amount, the Commission is of the view that this amount is yet to be

crystallised by SLDC. Such amounts shall be payables as and when SLDC raises the final

bills on the Distribution Licensees, after adjusting for the payments (20%) already made.

Such payments by the Distribution Licensee against FCR reconciliation may be recovered

through FAC at the appropriate time.

6.8 CUMULATIVE REVENUE GAP / SURPLUS TILL FY 2019-20

AEML-D's Submission

The past Gap/(Surplus) proposed by AEML-D is shown in the Table below:

Table 6-27: Recovery of Cumulative Revenue Gap / Surplus till FY 2020-21 (Rs.

Crore)

Particulars Wires

Business

Supply

Business Total

Incremental Revenue Gap of FY 2017-18 13.32 (24.54) (11.22)

Revenue Gap of FY 2018-19 273.26 (224.11) 49.14

Provisional Revenue Gap of FY 2019-20 147.18 (172.28) (25.10)

Carrying cost on Revenue Gap of FY

2017-18 12.79 20.84 33.64

Carrying cost on Revenue Gap of FY

2018-19 40.76 (33.43) 7.33

Over recovery in RA with holding cost (78.13) 0 (78.13)

Cost of FBSM Pool for FY 2018-19 &

FY 2019-20 0 493.34 493.34

Impact of FBSM FCR till FY 2017-18 0 104.42 104.42

Impact of AEC (SC Judgment) 0 50.15 50.15


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Particulars Wires

Business

Supply

Business Total

Impact of RA Carrying cost allowed in

Case No. 347 of 2018 24.40 0 24.40

Way Leave Charges payable to Western

Railways 23.67 0 23.67

Service Tax paid on Cheque Bounce

Charges 0 1.59 1.59

Total 457.24 215.99 673.22


The Commission approves the cumulative Revenue Gap/(Surplus) of Wires Business,

Supply Business and combined Distribution Business till FY 2020-21, based on the

amounts approved in earlier paragraphs, as shown in the Tables below:

Table 6-28: Approved Cumulative Revenue Gap/(Surplus) of Wires Business till FY

2020-21 (Rs. Crore)

Particulars AEML-D

Petition

Approved by the

Commission

Incremental Revenue Gap of FY 2017-18 13.32 (13.66)

Revenue Gap of FY 2018-19 273.26 138.86

Provisional Revenue Gap of FY 2019-20 147.18 71.76

Carrying cost on Revenue Gap of FY 2017-18 12.79 4.49


Over recovery in RA with holding cost (78.13) (75.68)

Impact of RA Carrying cost allowed in Case No.

347 of 2018 24.40 24.26

Way Leave Charges payable to Western Railways 23.67 0.00

Total 457.24 176.68

Table 6-29: Approved Cumulative Revenue Gap/(Surplus) of Supply Business till FY

2020-21 (Rs. Crore)

Particulars AEML-D

Petition

Approved by the

Commission

Incremental Revenue Gap of FY 2017-18 (24.54) (48.25)

Revenue Gap of FY 2018-19 (224.11) (225.38)

Provisional Revenue Gap of FY 2019-20 (172.28) (138.74)



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Particulars AEML-D

Petition

Approved by the

Commission

Carrying cost on Revenue Gap of FY 2018-19 (33.43) (43.26)

Cost of FBSM Pool for FY 2018-19 & FY 2019-20 493.34 419.42

Impact of FBSM FCR till FY 2017-18 104.42 0.00

Impact of AEC (SC Judgment) 50.15 50.15

Service Tax paid on Cheque Bounce Charges 1.59 1.59

Total 215.99 25.85

Table 6-30: Approved Cumulative Revenue Gap/(Surplus) of combined Distribution

Business till FY 2020-21 (Rs. Crore)

Particulars AEML-D

Petition

Approved by the

Commission

Incremental Revenue Gap of FY 2017-18 (11.22) (61.91)

Revenue Gap of FY 2018-19 49.14 (86.52)

Provisional Revenue Gap of FY 2019-20 (25.10) (66.98)


Carrying cost on Revenue Gap of FY 2018-19 7.33 (16.61)

Over recovery in RA with holding cost (78.13) (75.68)

Cost of FBSM Pool for FY 2018-19 & FY 2019-20 493.34 419.42

Impact of FBSM FCR till FY 2017-18 104.42 0.00

Impact of AEC (SC Judgment) 50.15 50.15

Impact of RA Carrying cost allowed in Case No.

347 of 2018 24.40 24.26

Way Leave Charges payable to Western Railways 23.67 0.00

Service Tax paid on Cheque Bounce Charges 1.59 1.59

Total 673.22 202.53

6.9 APPROACH FOR RECOVERY OF PAST GAP / (SURPLUS)

AEML-D has proposed to recover the entire Revenue Gap/Surplus till FY 2019-20 in FY

2020-21 itself (with half year carrying cost), as deferring the past gap recovery in future

years would mean that consumers will be burdened with corresponding carrying cost as

well. Further, AEML-D has considered the Gap/(Surplus) of the Wires Business against the


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Wires ARR for the Control Period, rather than combining the same with the Gap/(Surplus)

of the Supply Business for the Control Period.

AEML-D has proposed tariffs based on the tariff hike /(decrease) in each year of the Control

Period as shown in the Table below:

Table 6-31: Proposed Tariff Increase/(Decrease) in each year of Control Period


Wires and Supply ARR 7,396.47 7,244.66 7,532.53 7,798.34 8,111.02

Past Gap Recovery 673.22 0 0 0 0

Total to be recovered 8,069.69 7,244.66 7,532.53 7,798.34 8,111.02

Revenue at revised Wheeling

Charge & CSS from changeover

consumers

503.11 433.17 467.24 494.65 519.09

Net ARR to be recovered from

own consumers 7,566.58 6,811.49 7,065.29 7,303.70 7,591.94

Revenue at existing tariff from

own consumers 8,120.28 7,713.83 6,942.27 7,202.09 7,446.43

Short fall / (Excess) at existing

Tariff (553.70) (902.34) 123.02 101.61 145.51

Tariff Hike / (Decrease)

required -6.82% -11.70% 1.77% 1.41% 1.95%

AEML-D submitted that despite including accrued costs related to FBSM and FCR, there

is a reduction in tariff proposed for FY 2020-21 as compared to the existing tariff of FY

2019-20. This is primarily because of absence of RAC in FY 2020-21. There is no past gap

recovery from FY 2021-22 onwards. Hence, there is further drop in tariffs in FY 2021-22

with respect to the proposed tariff for FY 2020-21. After FY 2021-22, there is marginal

increase in tariff every year till FY 2024-25.


So far, though the ARR of the Wires Business and Supply Business have been determined

separately, the Commission has been combining the Gap/(Surplus) of the Wires Business

and Supply Business and recovering the same through the combined ACoS and Supply

tariffs. However, the normal consumer who is taking Wires and Supply from the same

Distribution Licensee would be paying Wheeling Charges and Energy Charges of the same

Licensee, and would hence, be neutral to recovery of such past Gap/(Surplus) from Wires

Business or Supply Business. However, for consumers who are only availing Wheeling

facility, if Gap/(Surplus) is recovered from the Supply Business, then it would lead to

subsiding of such Wheeling consumer by the Supply consumer. Hence, from this MYT


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Order, the Commission has commenced recovery of the Gap/(Surplus) of the Wires

Business through the Wires ARR, rather than combining it with the combined ARR of

Wires Business and Supply Business.

The Commission has computed the total ARR for recovery through tariff including past

revenue gaps vis-à-vis existing tariff. For computation of revenue at existing tariff, the

Commission has considered the tariff for FY 2019-20 as approved in the MTR Order, plus

the prevalent category-wise FAC and RAC.

Further, the Commission has ensured recovery of the Revenue Gap/(Surplus) of the Wires

Business and Supply Business in the first year of the Control Period, viz., FY 2020-21, for

both AEML-D and TPC-D, considering the quantum of Gap/(Surplus) and to minimise the

incidence of Carrying Cost and in order to ensure similarity in approach between the two

competing Distribution Licensees..

The Commission has approved the Tariff in the manner such that the revenue requirements

for the respective years are adequately met, and also tariff is almost flat during the Control

Period. Further, there would be Mid-Term Review undertaken in FY 2022-23, wherein the

revised ARR and Tariffs for FY 2023-24 and FY 2024-25 would be determined. At that

time, these amounts would have been crystallised and the impact, whether positive or

negative, can be passed through the revised ARR and Tariffs.

Accordingly, the Commission has computed the Revenue Gap at existing tariff including

prevalent RAC and prevalent FAC for the month of March 2020 for the Wires Business and

Supply Business, as shown in the following Tables:

Table 6-32: Average Cost of Supply for Wires Business approved by the Commission

Particulars Legend

Wires Business

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

Standalone ARR - Rs Crore 1 1648.00 1724.88 1771.19 1804.19 1835.16

Past Recovery including

carrying cost - Rs Crore 2 176.68 - - - -

Less: Revenue from Revised

Wheeling Charges from OA

& Change-over consumers

3 252.91 234.49 236.38 236.54 236.52

Total ARR Requirement -

Rs Crore 4=1+2-3 1,571.78 1,490.39 1,534.81 1,567.64 1,598.64

Total Sale - MU 5 10568.90 10779.92 10996.16 11217.49 11443.75

Average Cost - Rs/kWh 6=4/5

*10 1.49 1.38 1.40 1.40 1.40


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Table 6-33: Average Cost of Supply for Supply Business approved by the

Commission

Particulars Legend

Supply Business

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25



carrying cost - Rs Crore

2 25.85 - - - -

Less: Revenue from Revised

CSS from OA & Change-

over consumers

3

68.04 89.20 88.30 77.51 74.39

Total ARR Requirement -

Rs Crore

4=1+2-3 5,173.77 5,133.14 5,294.96 5,461.81 5,611.93

Total Sale - MU 5 8834.29 9048.92 9266.90 9488.60 9714.15


*10 5.86 5.67 5.71 5.76 5.78

Table 6-34: Combined Average Cost of Supply approved by the Commission

Particulars Legebd

Total ARR for Distribution Business

FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25



carrying cost - Rs Crore 2 202.53 - - - -

Less: Expected Revenue from

OA 3 320.94 323.69 324.67 314.06 310.91

Total ARR Requirement - Rs

Crore 4=1+2-3 6,745.55 6,623.53 6,829.78 7,029.45 7,210.57

Revenue from existing tariff 8042.93 8235.83 8412.57 8592.39 8775.46

Revenue Gap at existing tariff (1297.38) (1612.30) (1582.79) (1562.94) (1564.89)

Tariff Increase/(Reduction) % -16% -4.1% 0.7% 0.5% 0.2%

Total Sale - MU 5 8834.29 9048.92 9266.90 9488.60 9714.15

Average Cost - Rs/kWh 6=4/5*10 7.64 7.32 7.37 7.41 7.42

Note: The average tariff increase from second year of the Control Period onwards has been

computed assuming that the tariff revision of the first year is in place, whereas the Revenue

Gap/(Surplus) has been computed considering the existing tariff as on date

As can be seen from the above Table 6-34, the average tariff reduction is 16% in FY 2020-

21, with further reduction possible in FY 2021-22 and future years. The Commission has

recast the Revenue Requirement in such a manner that the steeper tariff reduction takes

place in FY 2020-21, and the tariffs remain almost flat thereafter over the Control Period.

This will impart tariff stability to the consumers and the Distribution Licensees. The

corresponding carrying/(holding) cost has also been considered. The revised Revenue

Requirement for each year of the Control Period and revised ACoS are shown in the Tables

below, along with the computation of Carrying/(Holding) Cost:


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Table 6-35: Combined Average Cost of Supply approved by the Commission Particulars

Total ARR for Distribution Business

FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Total ARR

Requirement - Rs Crore 1 6,745.55 6,623.53 6,829.78 7,029.45 7,210.57

ARR adjustment for tariff

levelisation 2 (150) 100 50

Carrying cost on

adjustment/deferment 3 7.13 9.50 2.38

Revised ARR 4 = 1 +2

+3 6,602.67 6,733.03 6,882.15 7,029.45 7,210.57

Revenue from existing

tariff 5 8042.93 8235.83 8412.57 8592.39 8775.46

Revenue Gap at existing

tariff 6 = 4 - 5 (1440.26) (1502.80) (1530.42) (1562.94) (1564.89)

Average Tariff

Increase/(Reduction) % 7 = 6/5 -17.9% -0.4% -0.2% -0.2% 0.2%

Total Sale - MU 8 8834.29 9048.92 9266.90 9488.60 9714.15


*10 7.47 7.44 7.43 7.41 7.42

As can be seen from the above Table, the Revenue Requirement has been adjusted in such

a manner that the average tariff reduction is around 18% in FY 2020-21, and the tariffs are

remaining in the range of +1% thereafter.

6.10 WHEELING CHARGES

AEML-D's Submission

AEML-D has proposed the Wheeling Charges in terms of Rupees/kWh for the 4th Control

Period in accordance with Regulation 73.2 of the MYT Regulations, 2019. However, for

consumers with load more than 20 kW, Wheeling Charges has been proposed in terms of

Rupees/kVAh, as Energy Charges have also been proposed in Rs/kVAh terms for these

categories. As there are no EHT consumers on AEML-D network, the Wires ARR is

distributed between HT and LT consumers and accordingly AEML-D has proposed

Wheeling Charges for HT and LT consumers only. AEML-D has calculated the Wheeling

Charges for the 4th Control Period as per the methodology followed in the past by the

Commission. The total wires revenue requirement is distributed between HT and LT

voltage levels on the basis of GFA at these voltage levels and thereafter, the cost allocated

to HT is shared between HT and LT by distributing the HT allocated cost in proportion to

the sales volume at HT and LT.


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Table 6-36: Wheeling Charges proposed by AEML-D for 4th Control Period


Wires ARR (Rs. Crore) 1,473.83 1,634.44 1,824.42 1,951.18 2,079.67

Past Gap Recovery (Rs.

Crore) 457.24 0 0 0 0

Wires Recovery (Rs.

Crore) 1,931.07 1,634.44 1,824.42 1,951.18 2,079.67

GFA attributable to 11

kV Network (%) 43.34% 43.34% 43.34% 43.34% 43.34%

GFA attributable to LT

Network (%) 56.66% 56.66% 56.66% 56.66% 56.66%

Charge recoverable

from 11 kV consumers

(Rs. Crore)

836.91 708.35 790.69 845.63 901.31

Charge recoverable

from LT consumers (Rs.

Crore)

1,094.16 926.08 1,033.73 1,105.56 1,178.36

Total HT Sales (MkWh) 1,357.72 1,371.61 1,385.68 1,399.93 1,414.38

Total HT Sales

(MkVAh) 1,410.15 1,424.59 1,439.21 1,454.04 1,469.06

Total LT Sales (MkWh) 9,458.72 9,640.57 9,826.94 10,017.92 10,213.50

Total LT Sales (MkWh)

- below 20 kW 8,141.55 8,314.36 8,491.59 8,673.31 8,859.52

Total LT Sales (MkWh)

- above 20 kW 1,317.17 1,326.20 1,335.35 1,344.61 1,353.98

Total LT Sales

(MkVAh) - above 20

kW

1,559.09 1,569.70 1,580.44 1,591.31 1,602.31

Charge recoverable

from HT consumers (Rs.

Crore)

105.05 88.23 97.72 103.68 109.63

Charge recoverable


Crore)

1,826.02 1,546.21 1,726.71 1,847.50 1,970.04

Charge recoverable


Crore) - below 20 kW

1,571.74 1,333.51 1,492.07 1,599.53 1,708.87

Charge recoverable


Crore) - above 20 kW

254.28 212.70 234.64 247.97 261.16

HT Wheeling Charge

(Rs./kVAh) 0.74 0.62 0.68 0.71 0.75

LT Wheeling Charge

(Rs./kWh) - for

consumers with load

below 20 kW

1.93 1.60 1.76 1.84 1.93

LT Wheeling Charge

(Rs./kVAh) - for 1.63 1.36 1.48 1.56 1.63


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consumers with load

above 20 kW

The summary of proposed Wheeling Charges for the 4th Control Period along with the

prevailing Wheeling Charges is shown in the Table below:

Table 6-37: Existing Wheeling Charges and Proposed Wheeling Charges (Rs./ kWh)

Particulars / (Rs./kWh) FY 19-20

(Existing) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

HT Wheeling Charge

(Rs./kVAh) 0.72 0.74 0.62 0.68 0.71 0.75

LT Wheeling Charge

(Rs./kWh) - for consumers

with load below 20 kW

1.57

1.93 1.60 1.76 1.84 1.93

LT Wheeling Charge

(Rs./kVAh) - for

consumers with load

above 20 kW

1.63 1.36 1.48 1.56 1.63

Table 6-38: Revenue from Wheeling Charges from Changeover & OA consumers


Total Revenue from Wheeling

Charges from Changeover and OA

consumers (Rs. Crore)

331.91 278.18 308.20 327.28 346.20


The Commission has distributed the total Wires ARR over HT and LT consumers and

computed the Wheeling Charges for HT and LT category. The Wires ARR is distributed

between HT and LT voltage levels based on the basis of GFA at these voltage levels. In this

regard, it is observed that AEML-D has changed the ratio of GFA between HT and LT from

48.92:51.08 proposed by AEML-D and approved in the MTR Order to 43.34:56.66 in the

present MYT Petition. However, AEML-D has not submitted any rationale or justification

for the proposed revision in HT:LT asset ratio.

The proposed revision in HT:LT asset ratio is quite significant and does not appear justified.

The Commission is of the view that these asset ratios cannot be modified every time,

depending on the prevalent competitive strategies of the competing Distribution Licensees.

There has to be a proper study of the asset ratios being claimed by the Distribution

Licensees. In the absence of any submission, leave alone justification for the modified


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HT:LT asset ratio, the Commission has computed the Wheeling Charges based on the

HT:LT asset ratio of 48.92:51.08 considered in the MTR Order. Thereafter, the cost

allocated to HT is shared between HT and LT by distributing the HT allocated cost in

proportion to the sales volume at HT and LT.

The Wheeling Charges determined by the Commission for AEML-D’s Wire consumers for

the Control Period from FY 2020-21 to FY 2024-25, and the Revenue from Wheeling

Charges are shown in the Table below:

Table 6-39: Approved Wheeling Charges

Particulars / (Rs./kWh) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

HT Wheeling Charge (Rs/kWh) 0.73 0.68 0.68 0.68 0.68

HT Wheeling Charge (Rs/kVAh) 0.70 0.65 0.66 0.66 0.66

LT Wheeling Charge (Rs/kWh)* 1.57 1.46 1.47 1.48 1.48

Note: * as kVAh billing has not been introduced for LT categories in this MYT Order, the

Wheeling Charges have been determined in Rs/kWh only

Table 6-40: Revenue from Wheeling Charges (Rs. Crore)


Total Revenue from Wheeling Charges

from Changeover and OA consumers 252.91 234.49 236.38 236.54 236.52

6.11 CROSS SUBSIDY SURCHARGE (CSS)

AEML-D's Submission

AEML-D has ensured that the category-wise CSS determined using the formula as per the

Tariff Policy does not exceed 20% of the tariff (ABR) applicable to the category, as per the

provisions of Tariff Policy. The category-wise CSS determined for each year of the 4th

Control Period along with the prevailing CSS are shown in the Table below:

Table 6-41: Existing CSS and CSS Proposed by AEML-D (Rs/kWh)



HT Category

HT I: HT-Industry 1.80 1.56 1.35 1.33 1.30 1.28

HTII : HT- Commercial 1.97 1.57 1.37 1.36 1.38 1.35


Society 1.73 1.24 0.68 0.52 0.38 0.21


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HT IV : HT -Public Water

Works 1.61 1.46 0.98 0.86 0.77 0.70

HT V - HT Metro & Monorail 1.60 1.61 1.39 1.39 1.40 1.41


Hospitals 1.66 1.54 1.18 1.19 1.16 1.10

HT VI (b):PS - Others 1.84 1.33 0.97 0.92 0.97 0.93

HT VII: Temporary Supply 1.80 1.68 1.49 1.49 1.50 1.51

HT VIII: EV Charging

Stations 0 0 0 0 0 0

LT Category

LT I - Below Poverty Line 0 0 0 0 0 0

LT -I Residential 0.59 0.61 0.56 0.58 0.63 0.65

LT II (a) - 0-20 kW 1.89 1.91 1.69 1.73 1.75 1.78

LT II (b) - 20-50 kW 2.02 1.55 1.38 1.37 1.38 1.35

LT II (c) - above 50 kW 2.13 1.78 1.53 1.50 1.48 1.42

LT III (a) - LT Industrial upto

20 kW 1.69 1.18 1.01 0.96 0.86 0.76

LT III (b) - LT Industrial

above 20 kW 1.82 1.55 1.38 1.35 0.95 0.93

LT IV - Public Water Works 1.64 1.34 1.16 1.14 1.13 1.14

LT-V : LT- Advertisements

and Hoardings 2.16 2.13 1.87 1.91 1.93 1.97

LT VI: LT -Street Lights 1.69 1.51 1.29 1.30 1.32 1.37


Supply Religious 0.74 0.67 0.57 0.50 0.47 0.52


Supply Others 2.13 1.63 1.47 1.52 1.58 1.61


Burial Grounds 0 0 0 0 0 0


Hospitals 1.13 0.72 0.64 0.68 0.66 0.69

LT IX (b): PS - Others 1.47 1.31 1.12 1.16 1.14 1.11

LT X (a): Agriculture -

Pumpsets 0 0 0 0 0 0

LT X (b): Agriculture - Others 0.30 0.03 0 0 0 0

LT XI: EV Charging Stations 0 1.17 1.03 0.98 1.02 1.01

As AEML-D has proposed Energy and Wheeling Charges in Rs./kVAh terms for

consumers categories with load more than 20 kW, the CSS for consumer categories with

load more than 20 kW is also proposed in Rs./kVAh terms, by applying the category-wise

Power Factor (PF) to the CSS in Rs./kWh terms. The category wise CSS in Rs./kVAh terms

for consumers with load more than 20 kW are shown in the Table below:


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Table 6-42: Proposed CSS for consumer categories with load more than 20 kW

(Rs/kVAh)


HT Category

HT I: HT-Industry 1.50 1.30 1.27 1.24 1.23

HTII : HT- Commercial 1.52 1.32 1.32 1.33 1.30

HT III: HT-Group

Housing Society 1.22 0.67 0.51 0.37 0.20

HT IV : HT -Public Water

Works 1.42 0.96 0.83 0.75 0.68

HT V - HT Metro &

Monorail 1.49 1.29 1.29 1.30 1.30


Hospitals 1.42 1.10 1.10 1.08 1.02

HT VI (b):PS - Others 1.28 0.94 0.89 0.94 0.90

HT VII: Temporary

Supply 1.51 1.34 1.34 1.35 1.36

LT Category

LT II (b) - 20-50 kW 1.25 1.12 1.11 1.11 1.09

LT II (c) - above 50 kW 1.56 1.34 1.32 1.30 1.25


above 20 kW 1.28 1.14 1.12 0.78 0.76

LT IV - Public Water

Works 1.19 1.03 1.01 1.00 1.01

LT VI: LT -Street Lights 1.21 1.04 1.04 1.06 1.10

LT XI: EV Charging

Stations 0.94 0.83 0.79 0.82 0.82

Table 6-43: Revenue from Proposed CSS

Particulars (Rs. Crore) FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25

Revenue from Proposed

CSS 171.20 154.99 159.04 167.36 172.89


The Commission has computed the CSS based on the Formula stipulated in the Tariff

Policy, 2016 as detailed below:

S= T – [C/ (1-L/100) + D+ R],


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To arrive at the CSS for the various consumer categories, the values considered for the

components of the CSS are as below:

The Transmission Loss has been considered as 3.18% as approved in the InSTS Tariff

Order, while Wheeling Losses have been considered as 1.59% for HT and 6.43% for LT

voltage. Transmission Charges have been computed based on the Transmission Charges

approved and total sales (including OA sales) approved for the Control Period. These

charges have been deducted for computing the CSS. The Transmission Charge and

Wheeling Charge considered for the Control Period is as shown in the Table below:

Table 6-44: Transmission and Wheeling Charges considered by the Commission

(Rs./kWh) Particulars FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25

Wheeling Charges

HT Charges 0.73 0.68 0.68 0.68 0.68

LT Charges 1.58 1.46 1.48 1.48 1.48


HT Charges 0.54 0.53 0.52 0.51 0.50

LT Charges 0.54 0.53 0.52 0.51 0.50

There is Nil per unit carrying cost for each year.

Based on the above, the category-wise CSS approved by the Commission for FY 2020-21

to FY 2024-25 in Rs/kWh and Rs/kVAh terms is as given in the Tables below:

Table 6-45: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kWh)

Consumer Categories FY 2020-

21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT I – Industry 1.58 1.56 1.55 1.53 1.53

HT II – Commercial 1.79 1.84 1.89 1.97 2.08

HT III - Group Housing Society

(Residential) 1.55 1.56 1.56 1.60 1.67

HT IV – Railways, Metro &

Monorail 1.54 1.51 1.58 1.59 1.61

HT V - Public Services

a) Govt. Edu. Inst. & Hospitals 1.60 1.61 1.65 1.64 1.68

b) Others 1.66 1.66 1.64 1.67 1.71

HT VI - EV Charging Stations - - - - -

LT CUSTOMERS

LT I (A) - Residential (BPL) - - - - -

LT I (B) - Residential - 0.16 0.16 0.07 0.04

LT II - Commercial


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21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

(A) - Upto 20 kW 1.66 1.64 1.61 1.62 1.62

(B) - > 20 kW & < 50kW 1.86 1.82 1.84 1.86 1.90

(C ) - > 50kW 1.92 1.93 1.95 1.96 1.99

LT III (A) - Industry < 20 kW 0.84 1.01 1.00 0.90 0.90

LT III (B) - Industry > 20kW 1.73 1.72 1.74 1.76 1.78

LT IV- Public Services

a) Govt. Edu. Inst. & Hospitals 0.62 0.77 0.74 0.71 0.67

b) Others 1.00 1.15 1.12 1.08 1.05

LT V - EV Charging Stations - - - - -

Table 6-46: Approved CSS for FY 2020-21 to FY 2024-25 (Rs/kVAh)


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT I – Industry 1.51 1.50 1.48 1.47 1.47

HT II – Commercial 1.73 1.78 1.83 1.91 2.01

HT III - Group Housing Society 1.52 1.54 1.53 1.57 1.64

HT V(B) - Railways Metro &

Monorail 1.43 1.40 1.46 1.47 1.49

HT VI - Public Services

HT VI - Public Services 1.48 1.50 1.53 1.52 1.56

HT VI - Public Services 1.60 1.61 1.59 1.61 1.65

HT VII - EV Charging Stations - - - - -

Note: CSS has not been determined in Rs/kVAh terms for LT categories as kVAh tariffs

have not been introduced for LT categories in this Order

The CSS is calculated as the difference between the ABR and cost elements for that

category/sub-category. However, on account of the telescopic nature of tariffs for the

Residential category, the ABR for any slab, if calculated, shall also include the revenue

against consumption of consumers consuming higher than that slab. Hence, the

Commission computes the ABR as well as the CSS for the category/sub-category as a

whole, rather than the consumption slab. Further, the Tariff Policy does not stipulate

anywhere that CSS cannot be levied for subsidised categories. Hence, the Commission has

continued to determine the CSS for the category/sub-category as a whole. Further, in order

to ensure consistency in approach, the CSS has been determined in the same manner for

AEML-D and TPC-D.

6.12 TARIFF DESIGN CONSIDERATION

The Commission’s views on each aspect of Tariff Philosophy raised by AEML-D as well

as on other relevant aspects are detailed below.


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The Commission has considered the main objectives of the Electricity Act, 2003 (“EA,

2003”) including the protection of the interest of consumers, the supply of electricity to all

areas and rationalisation of tariffs. The EA, 2003 also enjoins the Commission to maintain

a healthy balance between the interest of the Utilities and the reasonableness of the cost of

power being supplied to consumers. The Commission has also kept in view the principles

of tariff determination set out in Sections 61 and Section 62 of the EA, 2003, the Tariff

Policy, 2016 and the MYT Regulations, 2019, and also taken into consideration TPC-D’s

submissions as well as the Public responses in these MYT proceedings.

Apart from tariff levels, the complexity of the tariff structure plays an important role in

building transparency and limiting the discretionary power of Distribution Licensees

(Discoms). A simpler tariff structure helps easy understanding by consumers and on the

other hand, creation of many different categories gives discretionary power to Discoms

while charging tariffs.

At the national level, there is a thought process that the tariff structure across the States has

become very complex and there is a need to not only simplify and rationalize the tariff

structure, but also to make it harmonious across States. The Draft proposed Amendments

to Tariff Policy suggests that new tariff structure should have maximum five categories

having different slabs in Sanction Load and units consumed. It also suggests to provide

rebate to incentivise bulk customers to take power at higher voltage category, adopt kW

and kWh or kVA and kVAh based tariff linked to the load, create EV category, etc. among

other suggestions.

As a progressive step towards simpler and rationalized tariff structure, the Commission

intends to reduce the number of categories from the existing tariff structure, as detailed

subsequently.

6.12.1 Cross Subsidy

AEML-D's Submission

AEML-D submits that even Voltage-wise Cost of Supply (VCoS) method is inferior and

under-states cross-subsidy and needs further refinement in terms of allocation of power

purchase and related costs based on coincident demand factors and further refinements in

network cost allocation as well. These further refinements lead to the Cost of Supply, which

in industry parlance is termed Category-wise Cost to Serve, because in this method cost of

supply of one consumer category is different from that of the other, i.e., the differentiation

is not just limited to voltage-levels, but drills down to category-level. However, the


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application of this superior method requires great deal of data availability in terms of

representative load profiles of each consumer category, coincident demand of each

category, identification of demand, energy and customer related cost, etc.

In Maharashtra, while the present Wheeling Charges for Distribution Licensees are being

determined on a voltage-wise basis, the retail tariffs are still determined using the total

Average Cost of Supply. As a result, there is distortion in the representation of cross-

subsidy and the true cross-subsidisation of one category by another is under-stated, leading

to incorrect conclusions.

AEML-D has compared the Category-wise Cross Subsidy from FY 2016-17 to FY 2019-

20 based on ACoS and VCoS. It was observed that the ACoS methodology as determined

by the Commission resulted into more subsidizing sales and less subsidized sales as

compared to the VCoS methodology.

AEML-D has proposed tariffs based on VCoS methodology and requested the Commission

to approve tariffs based on VCoS methodology instead of ACoS as the same is affecting

AEML-D adversely.

Table 6-47: VCOS from FY 2020-21 to FY 2024-25 as submitted by AEML-D

(Rs/kWh)


VCoS - LT (Rs./kWh) 8.87 7.84 7.97 8.09 8.24

VCoS - HT (Rs./kWh) 5.81 5.03 5.07 5.11 5.20


Regulation 91 of the MYT Regulations, 2019 provides for methodology to be adopted for

determination of Retail Supply Tariff. The relevant extracts are as follows.

“91.3 The retail supply tariff for different consumer categories shall be determined

on the basis of the Average Cost of Supply, computed as the ratio of the Aggregate

Revenue Requirement of the Distribution Licensee for the Year determined in

accordance with Regulation 81, and including unrecovered revenue gaps of

previous years to the extent proposed to be recovered, to the total sales of the

Distribution Licensee for the respective Year.

91.4 The Commission shall endeavour to gradually reduce the cross-subsidy

between consumer categories with respect to the Average Cost of Supply in

accordance with the provisions of the Act.


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91.5 While determining the tariff, the Commission shall also keep in view the

cost of supply at different voltage levels and the need to minimise tariff shock to

consumers…”(emphasis added)

As seen from the above extract, the Regulation clearly specifies that the retail supply tariffs

shall be determined based on the ACoS and the cross-subsidy shall also reduce over a period

of time with respect to ACoS. Though, the Commission may consider the VCoS at the time

of deciding the tariffs, the Commission shall approve tariff based on ACoS. The

Commission therefore rejects the plea of AEML-D to approve the category-wise tariffs

based on VCoS.

6.12.2 Considerations for Cross – Subsidization and Tariff Design with respect to fair

competition

AEML-D's Submission

In the case of AEML-D and TPC-D, while both are Distribution Licensees in the same area

of supply, there is a vast difference between the consumer mix and cost structure of the two

on account of the way the businesses evolved. AEML-D started off as a conventional

Distribution Licensee, which slowly and gradually rolled out its distribution network in its

entire area of supply and served each and every consumer that applied to it for power

supply, without regard to economic strata of the consumer, voltage level or its geographical

location. TPC-D, on the other hand, chose to remain a Bulk Licensee for more than 80

years, supplying power only to bulk power consumers and Distribution Licensees and only

thereafter, from about 2004-05 onwards, TPC-D started showing interest in retail supply.

AEML-D has its network laid over the years all across the area and thereby has a

depreciated network with associated economies of scale, which allows lower cost of

incremental expansion. This helps AEML-D keep its network costs lower than the parallel

licensee. However, the retail cost of AEML-D (other than power purchase) is higher than

the parallel licensee on account of its consumer profile and spread of consumers. The

overall load factor of consumers on parallel Licensee’s network is around 75%, whereas

the load factor for AEML-D is around 65%. This also makes the retail cost of AEML-D

higher than the parallel Licensee. The contrast between the two Licensees has remained

over the years and would continue to remain in foreseeable future, offering an advantage of

suppressed cost of supply to the parallel Licensee.

The competition between AEML-D and the parallel Licensee is, therefore, not being played

out on a level playing field inasmuch as the cost structure and per unit cost of supply of the


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two Licensees is deeply influenced by the extent of network reach, number and type of

customers being served by them. In order to ensure sustenance of competition and choice

of supply, it is important that future tariffs are set in such manner that the present tariff

differences between the two Licensees should endeavour to correct the mix balance so as

to create a level playing field between the two Licensees whose cost structure are different

only because of legacy they have inherited and not due to any other factor.


The Commission feels that in a parallel Licence environment, all the Licensees shall

compete on a level playing field. The Commission has, therefore, while determining tariffs

for the 4th Control Period, has tried to adopt the same principles for determining the revenue

requirement and tariffs of both competing Distribution Licensees, viz., AEML-D and TPC-

D.

The Commission is of the view that the approach suggested by AEML-D, i.e., to determine

the retail tariff with respect to the Supply ACoS only, is nothing else, but tariff

determination based on VCoS. As already stated, the MYT Regulations, 2019 specifies that

tariffs shall be determined on the basis of ACoS.

The Commission has hence, considered the ACoS of the combined Distribution Business

to ensure reduction of the cross-subsidy. the Commission has adopted the same approach

for both AEML-D and TPC-D.

The Commission determines the category-wise tariffs of Distribution Licensees with the

following primary objectives:

▪ Reduction in the cross-subsidies between the Licensee’s consumers with respect to

the prevalent cross-subsidies;

▪ No category is subjected to a tariff shock;

▪ To meet the approved revenue requirement through the revised tariffs;

In case of AEML-D and TPC-D, the Commission has to also to consider the added aspect

of ensuring that the same tariff philosophy is adopted for both and that the inter-se

competitiveness is also not affected. The category-wise tariffs are also impacted by the

consumer and consumption mix of different Distribution Licensees. The situation also

varies with whether there is an overall tariff increase or tariff reduction. In case of overall

tariff reduction, it is easier to achieve most of the above stated objectives.


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However, this is a delicate balancing job, and it is likely that some unintended consequences

or anomalies in tariff structure creep in. The Commission is always responsive to

suggestions of tariff rationalisation, and even attempts to match the sometimes-conflicting

proposals made by the Distribution Licensees.

In the past, in order to correct certain anomalies in the consumer mix, the Commission had

consciously decided the category-wise tariffs of the competing Distribution Licensees, in

order to achieve the larger objective of having fair competition and a level playing field.

Over the years, the anomalies are been corrected though not fully and the Commission is

aware that the same cannot be achieved overnight.

It is observed that based on the tariff measures implemented by the Commission in the

previous Tariff Orders, the consumption mix of TPC-D and AEML-D are now similar to

each other, in terms of mix of subsidising and subsidised sales and mix of residential sales

to overall sales. The consumption of residential category is primarily the subsidised

category in both Distribution Licensees, and comprises 41% of the total sales in case of

TPC-D and 46% of total sales in case of AEML-D. The share of subsidised sales is same

as the share of residential sales. The Commission has hence, continued to rationalise the

category-wise tariffs to achieve the primary objectives stated above.

6.12.3 Fixed Charges and Demand Charges

AEML-D's Submission

The Commission, in the MYT Order dated 21 October 2016 in Case No. 34 of 2016, had

decided to gradually increase the Fixed Charges and Demand Charges of consumers to

increase the percentage recovery of Fixed Cost in the ARR through Fixed Charges and

Demand Charges. In continuation with the same principle, the Commission, in the MTR

Order dated 12 September 2018, increased the Fixed Charges and Demand Charges in FY

2018-19 and FY 2019-20 over the Fixed and Demand Charges applicable for FY 2017-18.

As per the MTR Order, the recovery of Fixed Cost from Fixed Charge / Demand Charge is

around 27% in FY 2019-20. The Fixed Cost includes the fixed cost of power purchase

contracts (capacity charges), Transmission Charges, Stand-by charges, SLDC charges and

the fixed cost of retail supply business. In order to increase the percentage recovery of Fixed

Cost through Fixed Charges, AEML-D has proposed gradual increase in Fixed Charges and

Demand Charges from the current level. The category-wise proposed Fixed and Demand

Charges for each year of the Control Period along with the existing Fixed / Demand Charges

are shown in the Table below:


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Table 6-48: Existing and Proposed Fixed Charges and Demand Charges

Particulars UoM FY 19-20

(Existing)

FY 20-

21

FY 21-

22

FY 22-

23

FY 23-

24

FY 24-

25

LT Category

LT I - Below Poverty

Line Rs./Consumer/Month 10 10 10 10 10 10

LT -I Residential

(Single Phase)

0-100 Rs./Consumer/Month 65 100 120 140 160 180



500 and above Rs./Consumer/Month 130 160 200 240 280 320

LT -I Residential

(Three phase)




500 and above Rs./Consumer/Month 130 160 200 240 280 320

LT II (a) - 0-20 kW Rs./Consumer/Month 365 425 500 575 600 700

LT II (b) - 20-50 kW Rs./kVA/ Month 305 350 425 500 600 700

LT II (c) - above 50

kW Rs./kVA/ Month 305 350 425 500 600 700

LT III (a) - LT

Industrial upto 20 kW Rs./Consumer/Month 365 425 500 575 600 700

LT III (b) - LT

Industrial above 20

kW

Rs./kVA/ Month 305 350 425 500 600 700


Works Rs./kVA/ Month 305 350 425 500 600 700

LT-V : LT-

Advertisements and

Hoardings

Rs./Consumer/Month 585 610 675 725 775 825

LT VI: LT -Street

Lights Rs./kVA/ Month 305 350 425 500 600 700

LT-VII (A): LT -

Temporary Supply

Religious


LT-VII (B): LT -

Temporary Supply

Others


LT VIII: LT -

Crematorium &

Burial Grounds


LT IX (a): PS - Govt.

EI & Hospitals Rs./Consumer/Month 365 425 500 575 600 700


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Particulars UoM FY 19-20

(Existing)

FY 20-

21

FY 21-

22

FY 22-

23

FY 23-

24

FY 24-

25

LT IX (b): PS –

Others Rs./Consumer/Month 365 425 500 575 600 700

LT X (a): Agriculture

- Pumpsets Rs./HP 40 40 40 40 40 40

LT X (b): Agriculture

- Others Rs./kW 95 95 95 95 95 95

LT XI: EV Charging

Stations Rs./kVA/ Month 70 70 70 70 70 70

HT Category

HT I: HT-Industry Rs./kVA/ Month 305 350 425 500 600 700

HTII : HT-

Commercial Rs./kVA/ Month 305 350 425 500 600 700

HT III: HT-Group

Housing Society Rs./kVA/ Month 305 350 425 500 600 700

HT IV : HT -Public

Water Works Rs./kVA/ Month 305 350 425 500 600 700

HT V - HT Metro &

Monorail Rs./kVA/ Month 305 350 425 500 600 700

HT VI (a):PS - Govt.

EI & Hospitals Rs./kVA/ Month 305 350 425 500 600 700

HT VI (b):PS –

Others Rs./kVA/ Month 305 350 425 500 600 700

HT VII: Temporary

Supply Rs./Consumer/Month 585 610 675 725 775 825

HT VIII: EV

Charging Stations Rs./kVA/ Month 70 70 70 70 70 70

Based on the proposed Fixed / Demand Charges, the percentage recovery of Fixed Cost

from Fixed/ Demand Charges for each year of the Control Period is shown in the Table

below:

Table 6-49: Percentage of Fixed Cost Recovery from Revenue from Fixed / Demand

Charges

Particulars / (Rs.

Crore)

FY 19-20


Revenue as % of

fixed charge 27% 38% 53% 61% 68% 77%

As seen from above Table, the percentage recovery of Fixed Cost from proposed Fixed /

Demand Charges from FY 2020-21 onwards is increasing significantly as compared to 27%

approved for FY 2019-20 in the MTR Order dated 12 September 2018. This is mainly


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because the fixed cost liability from FY 2020-21 onwards is reducing as compared to the

approved fixed cost for FY 2019-20, as there is no Fixed Charge of VIPL-G in the power

purchase cost from FY 2020-21.


The Fixed Costs of a Distribution Licensee includes all expenses, except the variable cost

of power purchase.

Of the total ARR of AEML-D, the fixed cost is around 46% during the period FY 2020-21

to FY 2024-25 while the variable cost is in the range of 54% of the total ARR for the same

period. However, recovery of the Fixed Cost through existing Fixed/Demand Charges is in

the range of 22% for the period FY 2020-21 to FY 2024-25, which is on the low side.

Accordingly, the Commission has decided to gradually increase the Fixed/Demand Charges

for all consumer categories by around 10% for each year of the 4th Control Period, i.e., FY

2020-21 to FY 2024-25. This is expected to increase the recovery of fixed cost of AEML-

D from Fixed/Demand Charges from 23% to 27%. The higher revenue from this increase

has been used to offset the Energy Charges of different consumer categories. The category-

wise Fixed/Demand Charges approved for each year of the 4th Control Period are

summarised subsequently in this Section, along with other Charges.

6.12.4 Energy Charges

AEML-D's Submission

AEML-D has proposed Energy Charges for each category, considering the Cross-Subsidy

for consumer categories as derived using the ratio of Retail ABR to Retail ACoS. For

residential consumers, AEML-D has proposed the energy charges for FY 2020-21 in such

a way that the total variable charge for FY 2020-21 is equal to the existing total variable

charge for 2019-20. Thus, residential consumers’ tariff (total variable charge) has been

proposed at the same level as that of FY 2019-20 to improve the coverage of cost of supply.

In FY 2021-22, residential tariff has been reduced as ARR in FY 2021-22 is itself reducing

as compared to FY 2020-21 due to the absence of any past Gap. From FY 2022-23 onwards

there is marginal increase in proposed tariffs (ABR) for residential category. To the extent

possible, AEML-D has tried to reduce / maintain the same level of cross-subsidy for

subsidizing consumers and has increased the cross-subsidy percentage of other subsidized

consumers. Based on above principles, AEML-D has proposed the Energy Charges for each

year of the 4th Control Period as shown in the Table below:


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Table 6-50: Existing and Proposed Energy Charges (Rs/kWh)



LT Category

LT I - Below Poverty Line 1.00 1.00 1.00 1.00 1.00 1.00

LT-I Residential (Single Phase)

0-100 3.00 3.15 2.75 2.60 2.55 2.50

101-300 6.02 6.50 5.55 5.40 5.30 5.25

301-500 7.15 7.75 6.75 6.70 6.55 6.50

500 and above 8.90 9.70 8.50 8.30 8.25 8.15

LT -I Residential (Three phase)

0-100 3.00 3.15 2.75 2.60 2.55 2.50

101-300 6.02 6.50 5.55 5.40 5.30 5.25

301-500 7.15 7.75 6.75 6.70 6.55 6.50

500 and above 8.90 9.70 8.50 8.30 8.25 8.15

LT II (a) - 0-20 kW 6.75 6.45 5.45 5.25 5.20 5.00

LT II (b) - 20-50 kW 6.85 5.51 4.46 4.09 3.65 3.22

LT II (c) - above 50 kW 7.15 5.86 4.78 4.44 4.04 3.64


20 kW 6.55 6.30 5.50 5.35 5.25 5.10

LT III (b) - LT Industrial above

20 kW 6.75 5.87 4.90 4.60 3.87 3.57

LT IV - Public Water Works 5.45 5.25 4.18 3.78 3.33 2.94


Hoardings 6.65 5.50 4.20 4.00 3.75 3.60

LT VI: LT -Street Lights 5.65 5.41 4.29 3.91 3.48 3.11


Supply Religious 5.25 6.15 5.50 5.40 5.40 5.50


Supply Others 7.90 6.65 5.90 5.90 5.95 6.00


Burial Grounds 4.90 5.25 4.65 4.60 4.60 4.60


Hospitals 6.00 6.15 5.50 5.50 5.50 5.55

LT IX (b): PS - Others 6.40 6.75 6.00 6.00 6.00 6.00


Pumpsets 3.40 3.85 3.50 3.40 3.40 3.40

LT X (b): Agriculture - Others 4.80 5.55 4.90 4.90 4.90 4.95

LT XI: EV Charging Stations 3.98 5.39 4.71 4.64 4.71 4.77

HT Category

HT I: HT-Industry 7.75 5.84 4.64 4.33 3.96 3.65

HTII : HT- Commercial 7.95 5.85 4.66 4.29 3.93 3.57


Society 7.30 5.81 4.53 4.18 3.82 3.46


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HT IV: HT -Public Water

Works 6.60 5.72 4.48 4.12 3.76 3.45

HT V - HT Metro & Monorail 6.70 6.05 4.76 4.32 3.84 3.30


Hospitals 6.80 5.44 4.15 3.83 3.40 2.96

HT VI (b):PS - Others 7.65 5.48 4.34 4.03 3.78 3.47

HT VII: Temporary Supply 8.45 7.61 6.78 6.72 6.72 6.78

HT VIII: EV Charging Stations 4.52 5.38 5.33 5.28 5.23 5.17

AEML-D submits that the kVAh data is available from November 2018 onwards and the

data for categories with load more than 20 kW is provided. In addition to the Energy

Charges in Rs./kWh terms proposed above, AEML-D has also proposed the Energy

Charges in Rs./kVAh terms (for categories with load more than 20 kW). In the first step,

AEML-D has derived the sales in kVAh terms from sales in kWh terms using the respective

category-wise PF. Based on the kWh and kVAh data from November 2018 to October 2019,

the category-wise PF are shown in the Table below:

Table 6-51: Category-wise Power Factor

Particulars Power Factor

LT II (b) - 20-50 kW 0.81

LT II (c) - above 50 kW 0.88

LT III (b) - LT Industrial above 20 kW 0.83

LT IV - Public Water Works 0.89

LT VI: LT -Street Lights 0.80

HT I: HT-Industry 0.96

HTII: HT- Commercial 0.97

HT III: HT-Group Housing Society 0.98

HT IV: HT -Public Water Works 0.97

HT V - HT Metro & Monorail 0.92

HT VI (a):PS - Govt. EI & Hospitals 0.93

HT VI (b):PS - Others 0.97

HT VII: Temporary Supply 0.90

The Energy Charges in kVAh terms have been derived by dividing the revenue from energy

charges (Rs./kWh) with the sales in kVAh terms. The Energy Charges in kVAh terms for

categories with load more than 20 kW is shown in the Table below:


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Table 6-52: Energy Charges in kVAh terms (Rs/kVAh)


LT II (b) - 20-50 kW 4.45 3.60 3.30 2.95 2.60

LT II (c) - above 50 kW 5.15 4.20 3.90 3.55 3.20


above 20 kW 4.85 4.05 3.80 3.20 2.95

LT IV - Public Water Works 4.65 3.70 3.35 2.95 2.60


LT XI: EV Charging Stations 4.35 3.80 3.75 3.80 3.85

HT Category

HT I: HT-Industry 5.60 4.45 4.15 3.80 3.50

HTII : HT- Commercial 5.65 4.50 4.15 3.80 3.45


Society 5.70 4.45 4.10 3.75 3.40


Works 5.55 4.35 4.00 3.65 3.35

HT V - HT Metro & Monorail 5.60 4.40 4.00 3.55 3.05


Hospitals 5.05 3.85 3.55 3.15 2.75

HT VI (b):PS - Others 5.30 4.20 3.90 3.65 3.35

HT VII: Temporary Supply 6.85 6.10 6.05 6.05 6.10

HT VIII: EV Charging

Stations 5.20 5.15 5.10 5.05 5.00


The Commission, in the MTR Orders issued in September 2018 for Distribution Licensees

in the State, had expressed its intention to implement kVAh billing for all HT consumer

and LT consumers having load above 20 kW from 1 April, 2020, so as to provide the

Licensees enough lead time to take necessary steps such as meter replacement, if required,

preparedness of billing software, etc., to ensure their operational preparedness for

implementing the kVAh billing.

AEML-D has also proposed to implement kVAh billing for all HT consumers and LT

consumers having load above 20 kW, in line with the Commission’s intention. However,

in view of the different state of readiness of different Distribution Licensees in Mumbai,

the Commission intends to implement kVAh tariffs in a phased manner for all the

consumers subject to the readiness of the Distribution Licensee. Accordingly, the

Commission allows implementation of kVAh billing for all HT categories of AEML-D. For


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other categories presently subjected to PF incentive and penalty mechanism, the same shall

continue till the kWh tariffs are replaced by kVAh tariffs.

The Commission intends to implement kVAh billing for LT consumers with load of 20 kW

and above at the time of MTR proceedings, based on the feedback received after

implementation of kVAh billing for HT consumers.

The Commission is cognisant of the fact that in the present billing system, Consumer, based

on the incentive/penalty levied in the monthly bill was kept informed of Power Factor (PF)

maintained by it during the month. The consumer was therefore, in the position to take

corrective action in case of penalty was levied due to poor PF based on the information

from the monthly Bill. However, with implementation of kVAh billing, any adverse impact

of due to poor PF will be recorded in increase consumption in kVAh and Consumer will

not be aware of actual PF for the month unless it is being recorded and monitored separately.

For smooth transition to new billing system and to keep Consumer aware at all times, the

Commission directs AEML-D to display PF (computed by considering leading and lagging

RkVAh) recorded during the month in the bill of all the Consumer categories till further

directions.

Further, such PF can be used for converting kVAh into kWh for arriving at payment to be

made towards taxes / duties imposed by the GoM, if applicable.

While determining per unit charges in kVAh, the Commission has used category-wise PF,

which is lower than unity. This makes the per unit kVAh tariff lower than the tariff, which

would have been determined in kWh terms, though the consumer will have to pay the same

amount and revenue generated shall be the same. The approved category-wise Energy

Charges are summarised subsequently for each Year of the Control Period.

6.12.5 Additional Surcharge for the Control Period

The Commission has not determined any Additional Surcharge, as AEML-D has not

proposed the same.

6.12.6 Category-wise Tariffs for each year of the Control Period

AEML-D's Submission

AEML has proposed category-wise tariffs for FY 2020-21 to FY 2024-25 based on the

above philosophy, which are not reproduced herein.


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The Commission has continued to determine the tariffs with an in-built incentive to

consumers to reduce their consumption. The billing impact is designed to increase as the

consumption increases on account of the higher telescopic tariffs applicable to higher

consumption slabs, while at the same time ensuring that even consumers in the higher

consumption slabs are charged at a lower rate to the extent of the consumption

corresponding to lower slabs.

As mentioned previously, the Commission has attempted to bring the tariff of most of the

categories in the ± 20% of ACoS range as prescribed by the Tariff Policy. Further, the

Commission has also tried to ensure that the level cross-subsidy either remains constant or

reduces in the subsequent year so as to steadily approach the ACoS as envisaged in the

Tariff Policy.

6.12.7 Category wise Cross Subsidy trajectory

Cross-subsidy in AEML-D system, considering Retail Average Cost of Supply

AEML-D's Submission

Based on the proposed tariffs and the Retail ACoS, the category-wise cross subsidy

reduction trajectory for each year of the fourth Control Period is shown in the Table below:

Table 6-53: Category-wise Cross Subsidy Proposed by AEML-D



LT Category

LT I - Below Poverty Line 55% 66% 70% 69% 69% 67%

LT -I Residential 87% 93% 94% 94% 95% 95%

LT II (a) - 0-20 kW 113% 110% 111% 111% 111% 111%

LT II (b) - 20-50 kW 120% 104% 105% 105% 105% 104%

LT II (c) - above 50 kW 123% 107% 107% 106% 106% 105%

LT III (a) - LT Industrial

upto 20 kW 103% 100% 100% 99% 98% 97%


above 20 kW 112% 104% 105% 104% 99% 99%


Works 103% 102% 102% 101% 101% 101%


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LT-V : LT-

Advertisements and

Hoardings

130% 123% 122% 123% 123% 123%

LT VI: LT -Street Lights 105% 104% 104% 104% 104% 104%

LT-VII (A): LT -

Temporary Supply

Religious

92% 94% 94% 93% 93% 94%

LT-VII (B): LT -

Temporary Supply Others 129% 105% 106% 106% 107% 107%

LT VIII: LT -

Crematorium & Burial

Grounds

80% 85% 85% 85% 85% 85%

LT IX (a): PS - Govt. EI

& Hospitals 94% 95% 95% 96% 96% 96%

LT IX (b): PS - Others 98% 102% 101% 102% 102% 101%


Pumpsets 67% 68% 68% 68% 68% 67%

LT X (b): Agriculture -

Others 85% 87% 86% 86% 86% 86%

LT XI: EV Charging

Stations 100% 100% 99% 100% 100%

HT Category

HT I: HT-Industry 114% 104% 101% 101% 100% 100%

HTII : HT- Commercial 124% 105% 102% 101% 101% 101%

HT III: HT-Group

Housing Society 111% 97% 91% 89% 87% 84%


Works 103% 100% 96% 94% 93% 91%

HT V - HT Metro &

Monorail 102% 107% 104% 103% 103% 102%


Hospitals 106% 102% 98% 99% 98% 97%

HT VI (b):PS - Others 117% 98% 95% 95% 95% 95%

HT VII: Temporary

Supply 116% 112% 111% 111% 110% 110%

ACoS (Rs./kWh) 8.68 8.53 7.53 7.66 7.77 7.93


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As stated earlier, the Commission has determined the cross-subsidy and category-wise

tariffs with respect to the ACoS, in accordance with the MYT Regulations, 2019, rather

than the Supply ACoS as proposed by AEML-D. Based on the approved tariffs and the cost

of supply, as described above, the category-wise cross-subsidy approved by the

Commission for AEML-D based on revised tariffs, is presented in the following Table:

Table 6-54: Category-wise Cross Subsidy approved by the Commission (%)

Consumer Categories Existing* FY

2020-21

FY

2021-22

FY

2022-23

FY

2023-24

FY

2024-25

HT I – Industry 142% 106% 105% 104% 103% 103%

HT II – Commercial 136% 104% 105% 105% 108% 112%

HT III - Group Housing Society 128% 103% 101% 106% 107% 109%

HT V(B) - Railways Metro &

Monorail 128% 103% 101% 106% 107% 109%

HT VI - Public Services

Government Hospitals &

Educational Institutions 133% 107% 108% 111% 111% 113%

Public Services Others 142% 111% 112% 111% 112% 115%

LT Category

LT I - Residential (BPL) 87% 80% 78% 79% 79% 79%

LT I – Residential 99% 87% 88% 88% 88% 88%

LT II(A) - Commercial upto 20

kW 138% 111% 110% 108% 110% 109%

LT II(B) - Commercial 20 to 50

kW 148% 125% 123% 124% 126% 128%

LT II(C) - Commercial > 50 kW 150% 128% 129% 131% 132% 134%

LT III (A)- Industrial upto 20

kW 125% 103% 102% 103% 99% 99%

LT III (B) - Industrial > 20 kW 139% 116% 116% 117% 118% 120%

LT IX - Public Services

Government Hospitals &

Educational Institutions 113% 97% 96% 96% 97% 96%

Public Services Others 119% 102% 101% 101% 102% 101%

Note: * Existing cross-subsidy has been calculated based on prevalent tariff and projected

sales for FY 2020-21, and is not the cross-subsidy approved for FY 2019-20 in the MTR

Order

6.12.8 Other Issues

Revision in Billing Demand

AEML-D's Submission

AEML-D submitted that the current methodology for calculation of Billing Demand for HT

consumers, as stipulated by the Commission in MTR Order dated 12 September 2018 is as

under:

“Monthly Billing Demand will be the higher of the following:


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• Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;

• 75% of the highest Billing Demand recorded during the preceding eleven months,

subject to the limit of Contract Demand;

• 50% of the Contract Demand.”

Similarly, the methodology for calculation of Billing Demand for LT consumers is as under:


• 65% of the actual Maximum Demand recorded in the month during 0600 hours to

2200 hours;


AEML-D submitted that the actual Billing Demand for AEML-D consumers is much lower

than the Contract Demand due to lower capacity utilization by consumers. The Commission

emphasized on higher percentage of recovery of Fixed Cost through Fixed/Demand

Charges in the previous Tariff Orders. Recovery of fixed cost through Demand charges can

also be increased by increasing the percentage of Contract Demand to be treated as Billing

Demand, in case the actual Maximum Demand is lower than the threshold of Contract

Demand. This will also provide an incentive to consumers to increase their capacity

utilization factor. Thus AEML-D proposes to revise the Billing Demand methodology for

HT consumers to the following:


• Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;

• 75% of the highest Billing Demand recorded during the preceding eleven months,



Similarly, AEML-D proposes to revise the Billing Demand methodology for LT consumers

to the following:


• 65% of the actual Maximum Demand recorded in the month during 0600 hours to

2200 hours;



Over the period, the Commission is maintaining uniformity in basic tariff design principles

across all Distribution Licensees. Definition of Billing demand includes minimum

threshold level at which consumer will be billed against its Contract Demand. Such


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minimum threshold in case of HT consumers is 50% of the Contract Demand. The

Commission finds it to be much lower as compared to other States, which have stipulated

it at 85% to 95% of Contract Demand. The Commission notes that having higher Contract

Demand and not utilising it would cause underutilisation of distribution assets. Hence, in

order to dis-incentivise such underutilisation, the Commission proposes to gradually

increase minimum threshold limit by 5% in each year of the 4th Control Period so as to

reach 75% level in FY 2024-25.

Demand Charges for Street Lights and other lighting facilities having

“Automatic Timers

AEML-D's Submission

The Commission has stipulated the Demand Charges (in Rs./kVA/month) for LT VI: Street

Lights category, at the same level as that for other categories to which Demand Charges are

applicable. However, the Commission has stipulated that Street Lights and other lighting

facilities having “Automatic Timers” for switching on / off would be levied Demand

Charges on the lower of the following:

i. 50% of Contract Demand

ii. Actual Recorded Demand

Due to the above condition, there is lower recovery of Fixed Charges from Street Light

connections. The recorded demand for Street Light connections is usually equal to the

Sanctioned Load / Contract Demand and due to the above conditions, Demand Charges are

levied on 50% of Contract Demand instead of the actual recorded Maximum Demand.

Street Light consumption starts from evening 6 pm of the day and hence, part of their

consumption coincides with the peak demand time of load curve. Recovery of Demand

Charges considering 50% of the Contract Demand would mean recovery of balance cost

from other consumers. Therefore, AEML-D requested the Commission to change the

methodology for charging Demand Charges for Street Lights and other lighting facilities to

the following. Also, for higher recovery of fixed cost through Demand Charges, AEML-D

has proposed to revise the threshold of Contract Demand applicable while calculating

Billing Demand, as under:

“Street Lights and other lighting facilities having “Automatic Timers” for switching on /

off would be levied Demand Charges on the higher of the following:

i. 60% of Contract Demand

ii. Actual Recorded Maximum Demand”


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AEML-D submitted that in case the Commission does not wish to change the methodology

of calculation of Billing Demand for Street Lights and other lighting facilities with

Automatic Timers, then the Demand Charges for Street Light category may be doubled to

recover the higher percentage of fixed cost from Demand Charges.


LT VI – Street Light and LT IX (B) – Public Services (Others) consumer categories have

consumers which serve the public in general. As both have similar end use, the Commission

merges the LT VI – Street Light into LT IX (B) – Public Services (Others) as the latter one

has broader coverage of consumers who are into Public Services. As a result, the Fixed

Charges are now applicable to Streetlights, rather than Demand Charges as applicable

earlier.

Applicability of Demand Charges below 20 kW sanctioned load

AEML-D's Submission

Demand Charges should apply only to connections where the Sanctioned Load is more than

20 kW. In the present Tariff Schedule, there are several types of connections where

sanctioned load would be much less than 20 kW, but Demand Charges (Rs./kVA) are

provided. In this situation, AEML is forced to carry out change in meter of these consumers.

For connections such as those given for public gardens / traffic signals / fountains / public

places (presently included in Street Light category), the sanctioned load is often less than

20 kW. Similarly, there could be connections within LT-IV PWW and LT XI – EV charging

station requiring less than 20 kW sanctioned load. It is suggested that a uniform practice of

tariff categorisation is adopted wherein Demand Charges in Rs./kVA/month are prescribed

for all connections (except residential) with sanctioned load of more than 20 kW and Fixed

Charges in Rs./month are prescribed for connections with sanctioned load lower than or

equal to 20 kW. This will also bring uniformity in applicability of PF incentive / penalty

among all consumer categories.


As discussed subsequently, the Commision has merged certain categories based on purpose

of use. As a result, the Streetlight Category has been merged with the Public Service Others

category, for which Demand Charges are not applicable. Hence, the concern raised by

AEML-D stands addressed.


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Residential tariff for Public Sanitary Conveniences

AEML-D's Submission

As per the Tariff Schedule approved by the Commission in the MTR Order dated 12

September 2018, tariff applicable to Street lights (LT VI) are also applicable to the

following:

i. lighting in Public Gardens (i.e. which are open to the general public free of charge);

ii. Traffic Signals and Traffic Islands;

iii. Public Sanitary Conveniences;

iv. Public Water Fountains; and

v. Such other public places open to the general public free of charge.

The Tariff approved for this category includes Rs./kVA demand charges as well. Out of the

connections mentioned in the above list, Public Sanitary Convenience premises are almost

always small and with little lighting load. Their inclusion in streetlight category means that

the connections must be levied demand charges for which demand recording meter needs

to be installed. Given the size of individual load (way less than 20 kW), there is no reason

for inclusion of these connections in streetlight category. Moreover, most of these premises

are managed by MCGM and in few cases, a minor fee for use is charged in order to ensure

maintenance and upkeep. The MCGM has made a representation to AEML in this regard

vide their letter dated 16 May 2019, wherein they have requested public toilets to be

categorised under Residential category (LT-1B). Based on the above, it is requested that

Public Sanitary Conveniences be categorised under LT-I (B) Residential category.


As stated above, LT VI – Street Lights, and LT IX (B) – Public Services (Others) consumer

categories have consumers, which serve the public in general. As both have similar end use,

the Commission merges the LT VI – Street Light into LT IX (B) – Public Services (Others)

as the latter one has broader coverage of consumers who are into Public Services. However,

Power Factor Incentive/Penalty for LT VII (B) – Temporary Supply Others

AEML-D's Submission

The Commission may consider the following if it chooses to continue with kWh billing for

connections above 20 kW sanctioned load, with accompanying mechanism of PF

Incentive/Penalty:

As per the Tariff Schedule approved by the Commission in the MTR Order dated 12

September 2018, PF Incentive / Penalty is applicable for the following consumer categories:


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HT Categories:

i. HT-I: Industry,

ii. HT II - Commercial,

iii. HT-IV: PWW,

iv. HT V- Railways, Metro & Monorail,

v. HT-VI: Public Services [ HT VI (A) and HT VI (B)],

vi. HT VII - Temporary Supply,

vii. HT VIII – Electric Vehicle Charging Stations

LT Categories:

i. LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract

Demand/Sanctioned Load above 20 kW),

ii. LT III (B): Industry above 20 kW,

iii. LT IV- PWW,

iv. LT VII (B) – Temporary Supply (Others),

v. LT IX: Public Service [LT IX (A) and LT IX (B)] having contract

demand/sanctioned load above 20 kW

vi. LT XI – Electric Vehicle Charging Stations.

AEML-D submits that most of the consumers under LT VII(B) – Temporary Supply

(Others) have very small sanctioned load and it is not advisable to levy PF incentive /

penalty to them as it is not feasible to install compatible meters for them capable for

measuring power factor. Hence PF incentive / penalty should be applicable to LT VII(B) –

Temporary Supply (Others) only for those consumers whose sanctioned load is more than

20 kW. Similarly, PF incentive/ penalty should be applicable to LT IV – PWW and LT IX

– EV Charging Station consumers, only if their sanctioned load is more than 20 kW.

AEML-D requests the Commission to amend the Tariff Schedule for LT IV – PWW, LT

VII(B) – Temporary Supply (Others), LT IX – EV charging station accordingly. AEML-D

also submits that in case the Commission intends to move towards kVAh based billing from

FY 2020-21 onwards, kVAh based billing should be applicable to LT IV – PWW, LT VI –

Street Lighting and LT IX – EV charging station only for those consumers having

sanctioned load of more than 20 kW.


The Commission, in the MTR Orders issued in September 2018 for Distribution Licensees

in the State, had expressed its intention to implement kVAh billing for all HT consumer

and LT consumers having load above 20 kW from 1 April, 2020, so as to provide the

Licensees enough lead time to take necessary steps such as meter replacement, if required,


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preparedness of billing software, etc., to ensure their operational preparedness for

implementing the kVAh billing.

As the Commission had indicated to implement kVAh billing for all HT consumers and LT

consumers having load above 20 kW, however, AEML-D has also proposed to implement

kVAh billing for such consumers. The Commission intends to implement the same in a

phased manner for all the consumers subject to the readiness of the Distribution Licensee.

Accordingly, the Commission allows implementation of kVAh billing for all HT categories

of AEML-D and accordingly, there is no relevance of continuing with the Power Factor

Incentive/Penalty mechanism for HT consumer.

The Commission is cognisant of the fact that in the present billing system, Consumer, based

on the incentive/penalty levied in the monthly bill was kept informed of Power Factor (PF)

maintained by it during the month. The Consumer was therefore, in the position to take

corrective action in case of penalty was levied due to poor PF based on the information

from the monthly Bill. However, with implementation of kVAh billing, any adverse impact

of due to poor PF will be recorded in increase consumption in kVAh and Consumer will

not be aware of actual PF for the month unless it is being recorded and monitored separately.

For smooth transition to new billing system and to keep Consumer aware at all times, the

Commission directs AEML-D to display PF (computed by considering leading and lagging

RkVAh) recorded during the month in the bill of all the Consumer categories till further

directions.

Further, such PF can be used for converting kVAh into kWh for arriving at payment to be

made towards taxes / duties imposed by the GoM, if applicable.

For other categories presently subjected to PF incentive and penalty mechanism, the same

shall continue till the kWh tariffs are replaced by kVAh tariffs.

The Commission, subject to the feedback received after implementation of kVAh billing

for HT consumers, intends to implement kVAh billing for LT consumers with load of 20

kW and above at the time of MTR proceedings.

While determining per unit charges in kVAh, the Commission has used category-wise PF,

which is lower than unity. This makes the per unit kVAh tariff lower than the tariff at unity

PF, which would have been determined in kWh terms, though the consumer will have to

pay the same amount and revenue generated shall be the same.


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Further, as discussed subsequently, the Commission has merged the LT VII (B) –

Temporary Supply (Others) category with LT II (A) Commercial with load less than 20

kW. As PF PF incentive/penalty is not applicable for this category, the concern raised by

AEML stands addressed.

Change in Formula for Calculation of Power Factor and Load Factor

AEML-D's Submission

The Commission may consider the following if it chooses to continue with kWh billing and

accompanying mechanism of PF incentive / penalty.

The Commission, in the MTR Order dated 12 September 2018, had stipulated the formula

for Power Factor and Load Factor. However, the Commission, in the review of MSEDCL’s

MTR Order (Case No. 321 of 2018 dated 24 December 2018), has modified the formula for

calculation of Load factor. Further, the Commission, in the Order dated 2 January 2019

(Case No. 329 of 2018), had changed the formula for Power Factor. It is submitted that all

of these changes made in separate Orders may now be brought in the Tariff Schedules of

all Distribution Licensees to be specified with the MYT Orders, so that the same can be

uniformly applied.


The Commission has standardised the formula for Power Factor and Load Factor across the

Distribution Licensees.

The Commission notes that the existing Formula stipulated in the Tariff Order for

calculation of Load factor presumes 60 hours of interruptions in a month. However, with

AMR/MRI enabled meters being installed for all HT consumers, actual hours of

interruptions are recorded in the meter and are readily available at the time of processing of

monthly bill. Hence, in order to compute correct Load Factor, the Commission has changed

the Formula and included actual interruption hours recorded in the meter instead of

provision for 60 hours. In case of faulty meter, interruption hours in the meter shall not be

available, then interruption hours recorded on feeder meter shall be considered.

Discount for opting for “E-Bill”

AEML-D's Submission

The Commission, in the MTR Order dated 26 June 2015 in Case No. 4 of 2015, had allowed

AEML-D to issue E-Bills to consumers who opt for them instead of, or in addition to, hard


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copy of the bill. AEML-D submitted that in order to incentivize more consumers to opt for

E-Bills, a discount of Rs. 10/- may be given to consumers, who opt for E-Bill instead of

physical bill. AEML-D submitted that there shall be savings in bill printing and bill

distribution costs as well, along with applicable service tax on the same, which shall reflect

in O&M cost. AEML-D submitted that the Calcutta Electric Supply Company (CESC) also

provides a discount of Rs. 5/- on electricity bill, if paperless bill is opted for by the

consumer. Hence AEML-D requested the Commission to allow the discount for consumers

who opt for E-Bill instead of physical bill.


The Commission approves a discount of Rs. 10 per consumer for those opting for E-bills.

No hard copy of the bills shall be generated for such consumers.

Limit of accepting cash towards payment of electricity bill to Rs. Two Thousand

Five Hundred only

AEML-D's Submission

AEML-D submits that MERC (Electricity Supply Code and Other Conditions of Supply)

Regulations, 2005 or MERC (Standards of Performance of Distribution Licensees, Period

for Giving Supply and Determination of Compensation) Regulations, 2015 do not provide

for any compulsion for digital payment. However, as specified under Section 40 A (3) of

Income Tax Act, 1961, generally payment up to Rs. 20,000/- is accepted in cash and above

Rs. 20,000/- is accepted either by cheque or through various modes of digital payment.

AEML-D submits that, to further encourage the consumers to make payment through digital

modes, the Commission may limit acceptance of Cash Payment only up to Rs. 2500/-

(approximately equal to Residential Consumer bill amount equivalent to 300 units per

month). This will ensure digital payment from all high-end residential, commercial and

industrial consumers who have access to digital payment avenues. The limit of Rs 2500/-

will also ensure that low end consumers are not inconvenienced by such restrictions of cash

payment.

The Commission in its draft MERC (Electricity Supply Code and Other Conditions of

Supply) Regulations, 2015, have already proposed to restrict cash payment up to Rs.

10,000/-. AEML-D submitted that Delhi Electricity Regulatory Commission, it its Tariff

Order dated 28.03.2018 in Petition No. 68 of 2017, has directed BSES Rajdhani Power

Limited (BRPL) to restrict the receipt of cash payment up to Rs. 4000/-


The Commission takes cognizance of the matter in this regard and approves restriction of

cash payment on electricity bills up to Rs. 5,000/- per consumer per month.


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Levy of penalty of Rs. Seven Hundred and Fifty for second and subsequent

cheque bounce for the same consumer

AEML-D's Submission

Out of total cheques received, regularly about 4000 to 5000 cheques bounce on presentation

on monthly basis. The Commission has approved charges for dishonoured cheques at Rs

250/- in its Order dated 12 September 2018. AEML-D submitted that the aforesaid charges

are approved by the Commission mainly towards administration expenses incurred by the

Licensee as a result of bouncing of a cheque. There are a number of consumers, details of

which are mentioned herein below, whose cheques bounce multiple times within the year.

Table 6-55: No. of consumers whose cheques bounce multiples times within a year

No. of times

Cheques

Bounced

Consumer Count

2015-16 2016-17 2017-18 2018-19 2019-20 (Till

Sept 19)

1 39,349 38,754 40,832 45,697 22,140

2 6,169 5,708 6,288 6,041 1,162

3 728 596 1036 695 63

4 114 102 204 117 20

5 34 25 64 28 5

6 15 13 32 5 0

7 10 6 16 4 0

8 4 4 8 2 0


The Commission approves the levy of penalty of Rs. 750 for second and subsequent cheque

bounce from the same consumer as proposed by AEML-D.

Change in methodology for calculation of Security Deposit from

consumers

AEML-D's Submission

AEML-D submitted that the average of last twelve months’ billing is often not sufficient in

case the tariff increase is there in subsequent years. Further, in case the consumer had been

disconnected during the high billing months due to non-payment of dues and subsequently

reconnected, then the average of the last twelve months billing does not reflect the

electricity charges for average consumption during the year. Hence, AEML-D proposes to

modify the method of calculation of security deposit from average of last twelve months


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billing to maximum of last twelve months billing. AEML-D also proposes to collect twice

the maximum of last twelve months’ billing from consumers.


The Commission does not accept AEML-D’s proposal to increase the Security Deposit to

twice the maximum of last twelve months’ billing. This will significantly increase the

amount of Security Deposit payable by the consumers.

Recovery of arrears from Changeover consumers

AEML-D's Submission

AEML-D submits that consumers who have migrated to TPC-D as change-over consumers

often do not pay the arrears payable to AEML-D after the change-over process. As part of

the change-over process, the consumption recorded by the meter on the date of change-over

is read before allowing for change-over and based on the final meter reading on the date of

changeover, a final bill is issued to the change-over consumers by AEML-D. However,

changeover consumers often do not pay this final bill as TPC-D supply is already available.

TPC-D is also unable to recover such arrears from the change-over consumers on behalf of

AEML-D due to lack of any specific regulatory provisions in the Change-over Protocol

approved by the Commission in Case No. 50 of 2009 dated 15 October 2009. AEML-D

submits that similar situations can arise when a consumer switches over to TPC-D from

AEML-D. However, there is specific provision for collection of outstanding arrears in the

Switchover Protocol approved by the Commission in the Order dated 12 June 2017 in Case

No. 182 of 2014 and 40 of 2015. AEML-D requests the Commission to make similar

provision for recovery of arrears from change-over consumers by TPC-D on behalf of

AEML-D and remit the same to AEML-D. AEML-D also requests the Commission to direct

TPC-D to recover the arrears from change-over consumers as intimated by AEML-D to

TPC-D and remit the same to AEML-D.


The Commission recognises that there is an issue of recovery of the amount against

consumption recorded on the meter from the date of change-over application till

disconnection, which is read during actual reverse change over and billed in the Final Bill.

A similar concern has been raised by TPC-D also. Hence, there is a need to alleviate the

genuine concerns of the Distribution Licensees on this matter.

The Commission rules that change-over consumers shall have to pay such balance amount

to the new Licensee, who shall remit the same to the original Licensee. The new Licensee


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is thus, authorised to bill such amount to the change-over consumer and remit the amount

to the earlier Licensee against collection.

Time of Day (ToD) Tariff

AEML-D's Submission

Based on the FY 2018-19 sales, only 25% of the consumption is subjected to ToD billing.

AEML has undertaken a detailed study of the overall system level demand pattern to study

the effectiveness of the current ToD slots. AEML-D has concluded that there is no need for

any change in ToD slots or the rates of discount / premium.


In the past the Commission has followed centralized MoD approach and standardised ToD

timeslots and rates. The existing ToD structure matches with the rates prevalent in the

Power Exchange, i.e., ToD rate is high when Power Exchange power is costly and ToD rate

is low when Power Exchange power is cheaper. From 1 April 2020, the State is shifting to

decentralized MoD under the DSM framework, and each DISCOM has to plan its power

procurement as per its load curve. Hence, the ToD structure can be different for each

DISCOM.

Also, RPO Regulations for the next Control Period envisages substantial increase in Solar

power, which will be helping the load curve as it shall be contributing to meet the day time

3.08

2.79 2.61

2.48 2.47 2.65

2.96 3.11 3.03 3.11 3.05 2.98

2.85 2.70

2.82 3.01 3.09 3.14

3.55

4.18 4.11 3.91

3.72

3.35

(1.50)

-

0.80

-

1.10

(1.50)

(2.00)

(1.00)

-

1.00

2.00

3.00

4.00

5.00

-1000

-500

0

500

1000

1500

2000

2500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Mumbai Discoms-TOD Analysis

Load in MW (TPC) Load in MW (APML) Load in MW (Best) PX Price ToD Rate


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peak load requirement. Such RE projects would be commissioned in the next couple of

years. Hence, at the time of MTR, the Commission would be better placed to revise the

ToD timeslots and rates as per DISCOM’s power procurement planning. The Commission

may also consider having seasonal ToD rate in order to assist the DISCOMs to absorb

seasonal variation in RE generation which as per RPO Regulations, 2019 would be 25% in

FY 2024-25.

Therefore, for the time being, the Commission is not making any changes in ToD tariff

structure but directs the Distribution Licensee to come with a detailed proposal at the time

of MTR. The Commission has retained the existing ToD time slots and ToD tariffs for

AEML-D. Further, the ToD rates in kVAh terms for HT category have not been multiplied

by the Power Factor, in order to ensure rounded numbers. Hence, the ToD rates are same

in Rs/kWh terms for LT categories and in Rs/kVAh terms for HT categories.

Strict Adherence to Tariff Schedule

AEML-D's Submission

AEML-D submits that there are instances in the past where the parallel Distribution

Licensee, i.e., TPC-D has not adhered to the Tariff Schedule stipulated in the Tariff Orders

to provide electricity connection. There are tariff categories such as LT II(b) – Commercial

(20 – 50 kW) where TPC-D tariff is lower than AEML-D tariff, whereas there are other

tariff categories such as LT II(a) – Commercial (0 – 20 kW) where the TPC-D tariff is

higher than AEML-D tariff. In one such instance, TPC-D provided electricity connection

to a certain consumer under LT II(b) – Commercial (20 – 50 kW) category, even though

the consumer belonged to LT II(a) – Commercial (0 – 20 kW). The Commission should

issue strict directions for adherence to Tariff Schedule and categorization stipulated in the

Tariff Orders and to provide electricity connection to consumers under the relevant category

only, even if the tariff for the category is higher than the other category.


The Commission is of the view that this issue is not the subject matter of this Petition. If

AEML-D feels that such an event has been taken place, AEML-D may approach the

appropriate authority separately with detailed facts and figures and supporting documents

in this regard.


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Uniform Tariff for EV Charging Stations

AEML-D's Submission

The Commission in the MTR Orders of AEML-D and TPC-D had approved uniform tariff

for EV Charging Stations. AEML-D requested the Commission to approve uniform tariff

for EV charging stations for both AEML-D and TPC-D, like the MTR Orders


The Commission has approved uniform tariffs for EV Charging Station for AEML-D and

TPC-D.

6.13 COMMISSION’S TARIFF PHILOSOPHY

The Commission’s views on each aspect of Tariff Philosophy are detailed below.

The Commission has considered the main objectives of the Electricity Act, 2003 (“EA,

2003”) including the protection of the interest of consumers, the supply of electricity to all

areas and rationalisation of tariffs. The EA, 2003 also enjoins the Commission to maintain

a healthy balance between the interest of the Utilities and the reasonableness of the cost of

power being supplied to consumers. The Commission has also kept in view the principles

of tariff determination set out in Sections 61 and Section 62 of the EA, 2003, the Tariff

Policy, 2016 and the MYT Regulations, 2019, and also taken into consideration AEML-

D’s submissions as well as the Public responses in these MYT proceedings.

Apart from tariff levels, the complexity of the tariff structure plays an important role in

building transparency and limiting the discretionary power of Distribution Licensees

(Discoms). A simpler tariff structure helps easy understanding by consumers and on the

other hand, creation of many different categories gives discretionary power to Discoms

while charging tariffs.

It is felt that the tariff structure across the States has become very complex and there is a

need to not only simplify and rationalize the tariff structure, but also to make it harmonious

across States. Draft proposed Amendments to Tariff Policy suggests that new tariff

structure should have maximum five categories having different slabs in Sanction Load and

units consumed. It also suggests to provide rebate to incentivise bulk customers to take

power at higher voltage category, adopt kW and kWh or kVA and kVAh based tariff linked

to the load, create EV category, etc. among other suggestions.

As a progressive step towards simpler and rationalized tariff structure, the Commission

intends to reduce the number of categories from the existing tariff structure. The


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Commission is aware that AEML-D has not proposed many changes in tariff structure

except kVAh billing for HT category, separate category for EHV, separate determination

of Wheeling Charges and Supply Tariffs, and hence, no indication has been given to public

for any other changes in the tariff structure.

The Hon’ble Appellate Tribunal of Electricity (APTEL), vide its Order in Appeal No. 106

of 2008, has ruled that the Commission has the power to design the tariff as per its own

wisdom. It also mentions that the Commission does not need to seek public comments

before announcement of the tariff. The relevant part of the APTEL Order in Appeal No.

106 of 2008 is reproduced below:

“…

14) It is not the case of the appellant that the Commission had no power to create a

tariff design different from the one proposed by the licensee. The Commission has the

power to design the tariff as per its own wisdom. The Commission need not, before

issuing the actual order, publicly announce the tariff it proposed and call for public

comments. In fact this is not even the appellant’s contention.

15) The rule of natural justice requires the Commission to issue a public notice about

the ARR and Tariff petition of the licensee and to allow the public to make its

submissions on the ARR and Tariff proposals. The Commission has, thereafter, to

design the scheme for recovery of the ARR keeping in view various relevant factors. If

the classification of the consumers can be supported on any of the grounds mentioned

in section 62(3) it would not be proper to say that the tariff fixing was violative of

principles of natural justice because the Commission did not issue a public notice of

the tariff categories which the Commission had intended to create.

…”

In the present tariff structure of AEML-D, there are 8 number of consumer categories and

9 number of consumer sub-categories for HT consumers and 11 number of consumer

categories and 17 number of consumer sub-categories for LT consumers. In view of the

above, the Commission intends to reduce the number of categories. The Commission has

analysed existing consumer categories and identified certain consumer categories, which

can be merged with other existing categories so as to progress towards achieving the

objectives set out in the draft Tariff Policy and at the same time ensuring that the impact of

such merging of categories is either minimal or limited to very few consumers / less sales

quantum. The number of consumers and sales of identified consumer categories are as

under:


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Table 6-56: Consumer and sales details for categories identified for merging by the

Commission

Category

FY 2020-21 (Projected)

No. of

Consumers

Sales

(MU)

HT IV- PWW 8 8.13

HT-VII Temporary Supply 7 19.30

LT-IV PWW 148 12.77

LT - V Advertisement & Hoardings 1,124 3.04

LT - VI Street Lights 238 52.30

LT - VII (a) Temporary Supply Religious 40 1.82

LT - VII (b) Temporary Supply Others 726 10.43

LT - VIII Crematorium and Burial Grounds 62 1.41

Merging or elimination of existing consumer categories can be done considering the End

Use, Energy Consumption, Socio-Economic Profile, Consumption Pattern/ Loan Factor,

etc. These factors have been examined by the Commission while deciding on merging of

categories.

6.13.1 Merging of HT IV – PWW and Sewage Treatment Plants into HT VI (B) –

Public Services (Others)

HT IV – PWW and HT VI (B) – Public Services (Others) consumer categories have

consumers, which serve the public in general. Considering the similar nature of end use,

these categories are merged. Accordingly, the Commission merges the HT IV – PWW

category into HT VI (B) – Public Services (Others) as the latter category has broader

coverage of consumers who are into providing Public Services. The tariff differential is also

not very significant in these two categories and hence, the impact of merging will be limited.

6.13.2 Merging of HT VII – Temporary Supply into HT II – Commercial

HT VII – Temporary supply has around 7 number of consumers with sale of 19.30 MU. HT

VII – Temporary supply is not associated with any particular type of end usage as it is

temporary in nature. As the electricity supply under HT VII – Temporary supply category

is used for purposes, which are similar to those in the HT II Commercial category, the

Commission has merged the HT VII – Temporary Supply into HT II – Commercial.

However, in order to maintain the difference in rate on account of nature of supply, i.e.,

Temporary vs. Permanent supply, Temporary supply consumer shall pay 1.5 times the

Fixed Charges and 1.25 times the Energy Charges applicable for the category.


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6.13.3 Merging of LT IV – PWW into LT IX (B) – Public Services (Others)

LT IV – PWW and LT IX (B) – Public Services (Others) categories have consumers, which

serve the public in general. Considering the similar nature of end use, these categories are

merged. Accordingly, the Commission merges the LT IV – PWW into LT IX (B) – Public

Services (Others) as the latter category has broader coverage of consumers who are into

Public Services.

6.13.4 Merging of LT V – Advertisement & Hoardings into LT II – Commercial

LT V – Advertisement & Hoardings and LT II – Commercial category of consumers are

involved in similar end use, i.e., commercial activities. As both have similar end use, the

Commission merges the LT V – Advertisement & Hoardings into LT II – Commercial as

the latter one has broader coverage of consumers who are into Commercial activities.

6.13.5 Merging of LT VI – Street Light into LT IX (B) – Public Services (Others)

LT VI – Street Light and LT IX (B) – Public Services (Others) consumer categories have

consumers which serve the public in general. As both have similar end use, the Commission

merges the LT VI – Street Light into LT IX (B) – Public Services (Others) as the latter one

has broader coverage of consumers who are into Public Services.

6.13.6 Merging of LT VII (a) – Temporary Supply (Religious) into LT I (B) –

Residential

LT VII (a) – Temporary Supply (Religious) has around 40 number of consumers with sale

of 1.82 MU. LT VII (a) – Temporary Supply (Religious) is not associated with any

particular type of end usages as it is temporary in nature. As LT VII (a) – Temporary Supply

(Religious) category is consuming small quantum of energy, the Commission merges the

LT VII – Temporary Supply (Religious) into LT I (B) – Residential category. However, in

order to maintain difference in rate on account of nature of supply, i.e., Temporary vs.

Permanent supply, Temporary supply consumers shall pay 1.5 times the Fixed Charges.

6.13.7 Merging of LT VII (b) – Temporary Supply (Others) into LT II – Commercial

LT VII (b) – Temporary Supply (Others) has around 726 number of consumers with sale of

10.43 MU. LT VII (b) – Temporary Supply (Others) is not associated with any particular

type of end usages as it is temporary in nature. As the electricity supply under LT VII (b) –

Temporary Supply (Others) category is used for purposes which are similar to those in the

LT II Commercial category, the Commission merges the LT VII – Temporary Supply

(Others) into LT II – Commercial category. However, in order to maintain difference in rate

on account of nature of supply, i.e., Temporary vs. Permanent supply, Temporary supply

consumers shall pay 1.5 times the Fixed Charges and 1.25 times the Energy Charge

applicable for the category.


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6.13.8 Merging of LT VIII – Crematorium and Burial Grounds into LT I (B) –

Residential

LT VIII – Crematorium and Burial Grounds has around 62 number of consumers with sale

of 1.41 MU. LT VIII – Crematorium and Burial Grounds category of consumers are not

associated with any commercial or industrial activity. LT VIII – Crematorium and Burial

Grounds category is consuming small quantum of energy and it has tariff rates similar to

LT I (B) – Residential. In view of the same, the Commission merges the LT VIII –

Crematorium and Burial Grounds into LT I (B) – Residential.

6.13.9 Based on the above changes, the summary of the categories merged by the

Commission in this Order is given below:

Table 6-57: Summary of categories merged by the Commission

Sr.

No.

Existing Category Proposed Category

1 HT IV - Public Water Works and Sewerage

Treatment Plant

HT - Public Services (Others)

2 HT VII - Temporary Supply HT - Commercial

3 LT IV - Public Water Works and Sewerage

Treatment Plant

LT - Public Services (Others)

4 LT V - Advertisement and Hoardings LT - Non-Residential or Commercial

5 LT VI - Street Lights LT - Public Services (Others)

6 LT VII - Temporary Supply (Religious) LT - Residential

7 LT VII - Temporary Supply (Others) LT - Non-Residential or Commercial

8 LT VIII - Crematoriums and Burial Grounds LT - Residential

In addition, the Commission has also recategorized the following consumer classifications:

6.13.10Recategorization of Activities:

Independent R&D Units: These are presently categorised under Commercial Category. In

order to promote Research and Development, the Commission has categorised it under

Industrial Category

IT and ITeS Units: Under existing tariff structure, IT and ITeS units having registration

certificate under GoM’s IT and ITeS Policy are categorised under Industrial Category. The

APTEL in its Judgment dated 12 February, 2020 in Appeal No. 337 of 2016 & Others has

ruled that tariff categorisation cannot be based on any certification under Policy and it

should be based on criteria specified under Section 62 (3) of the Act. Accordingly, the

Commission has removed the requirement of having certification under GoM Policy for

claiming Industrial Tariff for IT and ITeS Units


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Hostels: Presently all Student Hostels are covered under Residential Category. All

Education Institutes are covered under Public Service category. Hence, it would be

appropriate to categories Hostels into Public Service Category. This will avoid subjecting

these Hostels at high tariff rate on account of telescopic tariff structure in Residential

Category.

Public Sanitary Conveniences: Presently all Public Sanitary Conveniences are covered

under Streetlight category. The Commission has merged the Streetlight category with the

‘Public Service Others’ category, as elaborated above. However, in view of the essential

nature of these facilities, and keeping in view the Government of India’s Swacch Bharat

campaign, the Commission has included Public Sanitary Conveniences under LT IV (A)

Public Service - Government Educational Institutions and Hospitals.

6.13.11Load Factor Incentives

In order to avoid misuse of Load factor Incentive, the Commission, in its Tariff Order, has

stipulated that if a consumer exceeds its Contract Demand on more than three occasions in

a Calendar Year, the Distribution Licensee may take corrective action of restating Contract

Demand as per Supply Code Regulations, 2005. However, as per provision of Supply Code

Regulation, 2005, Contract Demand can be restated only on receiving an application from

the consumer in this respect. The Commission has come across cases in other Distribution

Licensee area wherein consumers have refused to cooperate with the Distribution Licensee

for restating their Contract Demand.

In order to ensure secure operation of electricity grid, it is critical that every constituent of

the system acts within its assigned boundaries. Intentional violation of Contract Demand

limit by individual consumer for its own financial gain may lead to a system failure, which

may affect other consumers. Hence, the Commission is constrained to restrict the Load

Factor Incentive to only those consumers who do not exceed their Contract Demand during

the month.

Accordingly, the Commission rules that Load Factor Incentive shall not be applicable for

the month if the consumer exceeds its Contract Demand in that month. Consumers

exceeding Contract demand during the off-peak hours (2200 hrs to 0600 hrs) would also

not be eligible for Load factor Incentive for that month.

The Commission notes that the existing Formula stipulated in the Tariff Order for

calculation of Load factor presumes 60 hours of interruptions in a month. However, with

AMR/MRI enabled meters being installed for all HT consumers, actual hours of


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interruptions are recorded in the meter and are readily available at the time of processing of

monthly bill. Hence, in order to compute correct Load Factor, the Commission has changed

the Formula and included actual interruption hours recorded in the meter instead of

provision for 60 hours. In case of faulty meter, interruption hours in the meter shall not be

available, then interruption hours recorded on feeder meter shall be considered.

6.13.12Discount for Digital Payment

The Government of India has been encouraging digitization across various areas including

monetary transactions. To support the initiatives of the Government, a discount of 0.25%

of the monthly bill (excluding taxes and duties), subject to a cap of Rs. 500/- per month per

bill, shall be provided to LT category consumers for payment of electricity bills through

various modes of digital payment such as credit cards, debit cards, UPI, BHIM, internet

banking, mobile banking, mobile wallets, etc.

6.13.13Mode for communication

The Commission notes that the Hon’ble High Court of Judicature at Mumbai in its Order

in the matter of Notice No. 1148 of 2015 in Execution Application No. 1196 of 2015 dated

11 June, 2018 has taken on record the Whatsapp message sent to serve notice on the

Respondent and ruled that the same is sufficient for the purposes of service of Notice

The relevant portion of the Order is reproduced below:

“2. The Claimants have also learnt that the Respondent resides at

Nalasopara in a place which he seems to have taken on rent. The Claimant

will furnish the particulars of address so that a warrant, if necessary, can

be issued against him.

3. In the meantime, the present Notice is made absolute.

4. A print-out of the WhatsApp message is taken on record and marked “N”

for identification with today’s date. The second print out is of the WhatsApp

contact number of the Respondent. This shows his contact number. This is

also taken on record and marked “N2” for identification with today’s date.

This is sufficient for the purposes of service of Notice under Order XXI Rule

22.

5. By way of abandon caution and so that it remains a part of the record a

scan of the print outs is attached to this order as well.”

The Commission notes that serving of Notices to the consumers through digital medium

such as WhatsApp message, email, SMS etc. will not only be environmentally friendly and

save administrative cost but also free the human resources for other consumer service-

related works. Hence, the Commission allows the Distribution Licensee to issue notice

under Section 56 of the Electricity Act, 2003 through digital mode such as WhatsApp

message, email, SMS etc. The Licensee can also use the digital medium of communication


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for issuing other information to the consumers including information regarding billing,

outstanding payment, outage details, etc. There is also a need to create awareness regarding

this provision and accordingly, the consumer needs to be made aware of this by informing

him through various means of communication including messages on bills and other

publicity means.

6.13.14Stabilising variation in consumer bill on account of FAC

As per MYT Regulations, 2019, the aggregate gain or loss to a Distribution Licensee on

account of variation in cost of fuel, power purchase, and inter-State Transmission Charges

shall be passed through under the Fuel Adjustment Charge (FAC) component of the Z-

factor Charge (ZFAC), as an adjustment in its tariff on a monthly basis. Relevant part of the

MYT Regulations, 2019 is reproduced below:

“10.2 The aggregate gain or loss to a Distribution Licensee on account of variation in

cost of fuel, power purchase, and inter-State Transmission Charges, covered under

Regulation 9.1, shall be passed through under the Fuel Adjustment Charge (FAC)

component of the Z-factor Charge (ZFAC), as an adjustment in its Tariff on a monthly

basis, as specified in these Regulations and as may be determined in orders of the

Commission passed under these Regulations, and shall be subject to ex-post facto

approval by the Commission on a quarterly basis:…”

Similar arrangement of passing on variation in fuel and power purchase cost existed in all

earlier Tariff Regulations of the Commission. Such mechanism is in line with the provision

of the EA, 2003 which mandates recovery of the fuel cost in timely manner so that the

Distribution Licensees are able to recover their legitimate power purchase cost variation in

a timely manner. This has helped regular recovery of power purchase variations without

accumulating it till the next tariff revision. This provision also addresses the financial issues

of Distribution Licensee wherein the payments for power purchase are required to be made

in timely manner at an increased rate. At the same time, it also helped in reducing carrying

cost burden on consumer, which otherwise have to be borne, if instead of such monthly

levy, accumulated gap is recovered through annual tariff revision. Although, consumers are

also acquainted with this mechanism, there is a general and reasonable expectation that

once the tariff is approved by the Commission, to the extent possible, it should remain

consistent during the year and there should not be huge variations due to FAC. The

unknown variation in the tariff on account of FAC has adverse financial implications on all

the categories especially Industrial and Commercial categories where the impact of FAC is

generally higher. Variation in tariff is magnified when there is negative FAC leading to

reduction in tariff during a particular month and positive FAC in the immediate next month

thereby increasing the tariff.


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Variation in FAC is either on account of change in fuel related costs or mix of power

procurement. During the Public Hearing process on Tariff Petitions of Distribution

Licensees in the State, many suggestions were received on this issue and the consumers

requested that a mechanism be put in place wherein there is a minimum impact of FAC.

The Commission opines that this is a very reasonable expectation of the consumers. To

alleviate this issue to the extent possible and to minimise the impact of FAC, the

Commission, while approving this Tariff Order, has built-in annual fuel cost escalation.

The Commission is fully aware that in spite of approving this annual escalation rate, the

possibility of FAC cannot be ruled out completely since change in power procurement mix

on account of changing sales may lead to FAC besides change in rate of power procurement

in future years. To achieve this stabilisation of tariffs to the extent possible, and to minimise

the variation in FAC, the Commission thinks it fit to approve FAC Fund with Distribution

Licensee which can be built up over a period of time and be used for payment of FAC bills

of Generating Companies without immediately loading it on consumers.

Therefore, using its powers for Removing Difficulty under Regulation 106 of the MYT

Regulations, 2019, the Commission is making following changes in the FAC mechanism

specified under Regulation 10 of the MYT Regulations, 2019:

a. Distribution Licensee shall undertake computation of monthly FAC as per Regulation

10 of the MYT Regulations, 2019 except for treatment to be given to negative FAC

as follows:

(i) Negative FAC amount shall be carried forward to the next FAC billing cycle

with holding cost;

(ii) Such carried forward negative FAC shall be adjusted against FAC amount for

the next month and balance negative amount shall be carried forward to

subsequent month with holding cost;

(iii) Such carry forward of negative FAC shall be continued till the accumulated

negative FAC becomes 20% of monthly tariff revenue approved by the

Commission in Tariff Order. In case of AEML-D, such limit shall be Rs. 110

crore. Any accumulated amount above such limit shall be refunded to

consumers through FAC mechanism;

(iv) In case such FAC Fund is yet to be generated or such generated fund is not

sufficient to adjust against FAC computed for given month, then Distribution

Licensee can levy such amount to the consumers through FAC mechanism.


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In order to maintain transparency in management and use of such FAC Fund, the

Distribution Licensee shall maintain monthly account of such FAC fund and upload it on

its website for information of stakeholders. Further, till date, the Distribution Licensees

have been levying FAC up to the prescribed limit of 20% of variable component of tariff

without prior approval in accordance with the MYT Regulations, 2015, and submitting the

FAC computations on a quarterly basis within 60 days of the close of each quarter, for post

facto approval. However, as the Commission has created a FAC fund as stated above to

address the increase in fuel prices and power purchase costs, the Commission has modified

the FAC mechanism such that the Distribution Licensees shall submit the FAC

computations on a monthly basis for prior approval, irrespective of whether FAC is

chargeable in a month or whether some amount is accruing to the Fund on account of

negative FAC. This will ensure that the FAC mechanism is implemented with the changes

as desired by the Commission, and the consumers are not levied FAC without prior

approval.

The details of the FAC as per the Regulations, shall be submitted by the 15th of every month

prior to the month in which the FAC is proposed to be levied and the Commission will

endeavour to decide on the same within 10 days so that the same can be levied from the 1st

of the subsequent month. This prior approval will facilitate the addressing of any difficulties

that may arise in giving effect to this fund. All the details will be submitted by the

Distribution Licensee as is being done for approval of FAC on post facto basis. Thus, the

FAC to the consumers shall now be levied with prior approval of the Commission.

Based on the experience of implementing this mechanism, during the MTR Process, the

Commission may decide to discontinue with prior approval process.

6.13.15Regulatory Asset Charge

AEML-D's Submission

AEML-D has not proposed any Regulatory Asset Charge (RAC) for the next Control

Period.


RAC was created in earlier Tariff Orders to address certain specific compulsions. The

Commission had indicated in the MTR Order that the RAC was in place till FY 2019-20.

AEML-D is expected to have surplus recovery against RAC, as stated earlier. Hence, there

is no requirement of creation of RAC in the present MYT Order.


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6.14 REVISED TARIFF FOR THE CONTROL PERIOD

AEML-D's Submission

AEML-D has proposed the Tariff applicable for each year of the Control Period, which

have not been reproduced below.


The Commission has continued to determine the tariffs with an in-built incentive to

consumers to reduce their consumption. The billing impact is designed to increase as the

consumption increases on account of the higher telescopic tariffs applicable to higher

consumption slabs, while at the same time ensuring that even consumers in the higher

consumption slabs are charged at a lower rate to the extent of the consumption

corresponding to lower slabs.

As mentioned previously, the Commission has attempted to bring the tariff of most of the

categories in the ± 20% of ACoS range as prescribed by the Tariff Policy. Further, the

Commission has also tried to ensure that the level cross-subsidy either remains constant or

reduces in the subsequent year so as to steadily approach the ACoS as envisaged in the

Tariff Policy.

The approved category-wise tariffs for the period from FY 2020-21 to FY 2024-25 are

given in the Tables below:

6.15 REVISED TARIFFS EFFECTIVE FROM 1 APRIL, 2020 (FY 2020-21)

Sl.

No

Consumer Category & Consumption

Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

LT Category

1 LT I (A)- Below Poverty Line Rs. 10 1.00 1.57

2 LT -I (B) Residential

0-100 Rs. 70 $$ 2.90 1.57

101-300 Rs. 110 $$

4.85 1.57

301-500 6.65 1.57

500 and above Rs. 135 $$ 7.80 1.57

3 LT II - LT Commercial

(A) ≤ 20 kW load Rs. 385 5.70 1.57

(B) > 20 kW and ≤ 50 kW load Rs. 320 per kVA

6.05 1.57

(C) > 50 kW load 6.55 1.57

4 LT III - LT Industry

(A) Upto 20 kW load Rs. 385 5.55 1.57

(B) Above 20 kW Rs. 320 per kVA 5.95 1.57


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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

5 LT IV – Public Services

(A) Government Hospitals & Educational

Institutions Rs 385 5.60 1.57

(B) Others Rs 385 6.00 1.57

6 LT V - Agriculture

(A) Pumpsets Rs 40 per HP 3.80 1.57

(B) Others Rs. 90 per kW 5.30 1.57

7 LT VI: Electric Vehicle Charging

Stations (New Category) Rs. 70 per kVA 3.93 1.57

TOD Tariffs (in addition to above base

tariffs) – compulsory for LT II (B) and

(C), LT III (B), and LT IV (A) and (B),

and optional for LT II (A) and LT III

(A) categories

0600 hours to 0900 hours 0.00




2200 hours to 0600 hours -0.75

Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

33 kV Category

1 HT IV - HT Railways, Metro &

Monorail Rs. 320 per kVA 5.55 0.70

11 kV Category

2 HT I: HT-Industry Rs. 320 per kVA 5.90 0.70

3 HT II: HT- Commercial Rs. 320 per kVA 6.23 0.70

4 HT III: HT-Group Housing Society Rs. 320 per kVA 6.19 0.70

5 HT V (A): Public Service - Government

Hospitals & Educational Institutions Rs. 320 per kVA 5.61 0.70

6 HT V (B): Public Service - Others Rs. 320 per kVA 6.24 0.70

7 HT VI: Electric Vehicle Charging

Stations Rs. 70 per kVA 4.61 0.70


tariffs) for all EHT Categories, and HT

I, HT II, HT V (A) and (B), and HT VI

categories






Notes:

1. Fuel Adjustment Cost will be applicable to all consumers and will be charged over the

above tariffs, on the basis of the FAC formula specified by the Commission, and

computed on a monthly basis.


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2. $$: Fixed Charge of Rs. 135 per month will be levied on residential consumers availing

3 phase supply. Additional Fixed Charge of Rs. 135 per 10 kW load or part thereof

above 10 kW load shall be payable.

3. $$$: Additional Fixed Charge of Rs. 250 per 10 kW load or part thereof above 10 kW

load shall also be payable.


Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

LT Category



0-100 Rs. 75 $$ 3.05 1.46

101-300 Rs. 115 $$

5.00 1.46

301-500 6.65 1.46

500 and above Rs. 140 $$ 7.80 1.46


(A) ≤ 20 kW load Rs. 405 5.65 1.46


6.05 1.46

(C) > 50 kW load 6.60 1.46


(A) Upto 20 kW load Rs. 405 5.55 1.46




Institutions Rs 405

5.60 1.46

(B) Others Rs 405 6.00 1.46










(A) categories






Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

33 kV Category


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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)



11 kV Category












categories






Notes:










Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

LT Category



0-100 Rs. 80 $$ 3.05 1.47

101-300 Rs. 120 $$

5.00 1.47

301-500 6.70 1.47

500 and above Rs. 145 $$ 7.80 1.47


(A) ≤ 20 kW load Rs. 425 5.45 1.47


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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)


6.00 1.47

(C) > 50 kW load 6.55 1.47


(A) Upto 20 kW load Rs. 425 5.55 1.47




Institutions Rs. 425 5.60 1.47

(B) Others Rs. 425 6.00 1.47










(A) categories






Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

33 kV Category



11 kV Category












categories






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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)


Notes:










Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

LT Category



0-100 Rs. 85 $$ 2.95 1.48

101-300 Rs. 125 $$

4.90 1.48

301-500 6.75 1.48

500 and above Rs. 155 $$ 7.85 1.48


(A) ≤ 20 kW load Rs. 450 5.45 1.48


5.95 1.48

(C) > 50 kW load 6.50 1.48


(A) Upto 20 kW load Rs. 450 5.45 1.48





(B) Others Rs. 450 6.00 1.48










(A) categories




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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)




Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

33 kV Category



11 kV Category












categories






Notes:










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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kWh)

Wheeling

Charges (Rs /

kWh)

LT Category



0-100 Rs. 90 $$ 2.90 1.48

101-300 Rs. 130 $$

4.90 1.48

301-500 6.75 1.48

500 and above Rs. 165 $$ 7.85 1.48


(A) ≤ 20 kW load Rs. 475 5.40 1.48


5.95 1.48

(C) > 50 kW load 6.50 1.48


(A) Upto 20 kW load Rs. 475 5.45 1.48





(B) Others Rs. 475 6.00 1.48










(A) categories






Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

33 kV Category

1 HT V (B) - HT Railways, Metro &


11 kV Category




5 HT IV (A): Public Service - Government



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Sl.

No


Slab

Fixed/ Demand

Charge per

month

Energy

Charge

(Rs/kVAh)

Wheeling

Charges (Rs /

kVAh)

6 HT IV (B): Public Service - Others Rs. 395 per kVA 6.14 0.66

7 HT V: Electric Vehicle Charging





categories






Notes:









The detailed computation of category-wise revenue with revised tariffs for FY 2020-21 to

FY 2024-25 is set out at Annexure I of this Order.

The approved Tariff Schedule for the MYT Control Period from FY 2020-21 to FY 2024-

25 is given at Annexure II of this Order.

6.20 GRID SUPPORT CHARGES


AEML submitted that when a consumer opts for Rooftop Solar PV under Net Metering, it

causes a loss of revenue to the Licensee to the extent of energy not supplied and against the

same, the Licensee also avoids purchase of power. The difference between the two would

encompass the entire loss suffered by the Licensee and against the same the Licensee

realises the benefit of RPO and reduction of distribution losses due to supply being met

from embedded generation.


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Accordingly, AEML-D has proposed that the total losses and benefits on account of a Net

Metering connection should be worked out as below:

Loss to Licensee (Rs/kWh) = Average Billing Rate for category (Rs/kWh – Avoided Power

Purchase cost (Rs/kWh)

Benefits to Licensee = RPO benefit + avoidance of Transmission & Distribution loss

Grid Support charges based on above approach will offer the advantage of being simplistic

and easy to apply and does not suffer from any subjectivity as the figures for working out

the above would be readily available from the Tariff Order itself.

Accordingly, AEML-D has computed the following Grid Support Charges for Net Metering

systems:

Table 6-58: Proposed Grid Support Charges for FY 2020-21 to FY 2024-25


21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

HT Category

HT I: HT-Industry 2.75 1.84 1.88 1.91 1.96

HTII: HT- Commercial 2.81 1.92 1.93 2.00 2.03


Society 2.23 1.16 1.07 1.00 0.89


Works 2.46 1.46 1.41 1.39 1.38

HT V - HT Metro & Monorail 2.98 2.04 2.06 2.12 2.12


Hospitals 2.62 1.66 1.74 1.78 1.78

HT VI (b):PS - Others 2.32 1.45 1.47 1.59 1.62

HT VII: Temporary Supply 3.34 2.52 2.55 2.59 2.65

LT Category

LT I - Below Poverty Line 0.43 0.18 0.29 0.31 0.30

LT -I Residential (Single

Phase)

0-100 0.39 0.00 0.07 0.21 0.31

101-300 4.25 3.35 3.58 3.77 3.96

301-500 5.26 4.25 4.52 4.61 4.74

500and above 7.09 5.90 6.05 6.26 6.38

LT -I Residential Three phase

0-100 0.20 0.00 0.00 0.13 0.30


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21

FY 2021-

22

FY 2022-

23

FY 2023-

24

FY 2024-

25

101-300 3.56 2.59 2.78 2.96 3.16

301-500 4.88 3.85 4.12 4.21 4.37

500and above 6.62 5.35 5.43 5.58 5.65

LT II (a) - 0-20 kW 4.29 3.33 3.53 3.65 3.79

LT II (b) - 20-50 kW 3.76 2.87 3.03 3.15 3.24

LT II (c) - above 50 kW 3.98 3.02 3.16 3.26 3.31


20 kW 3.39 2.50 2.62 2.64 2.65

LT III (b) - LT Industrial above

20 kW 3.76 2.87 3.01 2.72 2.82

LT IV - Public Water Works 3.55 2.66 2.79 2.90 3.03


Hoardings 5.35 4.22 4.47 4.57 4.74



Supply Religious 2.87 2.06 2.15 2.25 2.41


Supply Others 3.83 2.96 3.18 3.36 3.50


Burial Grounds 2.10 1.35 1.50 1.59 1.67


Hospitals 2.92 2.13 2.34 2.44 2.58

LT IX (b): PS - Others 3.52 2.62 2.82 2.92 3.00


Pumpsets 0.59 0.08 0.15 0.24 0.30

LT X (b): Agriculture - Others 2.23 1.41 1.59 1.68 1.78

LT XI: EV Charging Stations 3.37 2.52 2.64 2.79 2.90

Further, Regulation 7.9 also requires the Distribution Licensees to propose additional Fixed

/Demand Charges for consumers opting for such insallations behind the meter. AEML-D

submitted that the same approach as above for working out losses and benefits can be

considered for these types of connections also. However, in this case, the net loss would be

more as there is no benefit of RPO available.

AEML-D further proposed that in case of change-over consumers opting for Net Metering

or behind the meter connections (neither Net Metering nor Net Billing), a significant portion

of the loss would be caused to AEML-D, even though the consumer is considered a

consumer of TPC-D. This is because the loss includes wheeling charges and balancing cost,

which services are actually provided by AEML-D as the consumer is physically connected


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to AEML-D’s network and TPC-D only supplies power to the consumer. Therefore,

AEML-D proposes that 50% of the Grid Support Charges and Additional Fixed Charges

billed to such change-over consumers by TPC-D, should be provided to AEML-D. As per

the present mechanism in case of change-over consumers, these Grid Support Charges shall

be billed by TPC-D to such consumers and 50% of the same will be remitted to AEML-D.


The MERC (Grid Interactive Rooftop Renewable Energy Generating Systems)

Regulations, 2019 specify as under:

“11.5 The Commission may determine in the retail Tariff Order such Grid Support Charges

to be levied on the generated energy under Net Metering systems which shall cover

balancing, banking and wheeling cost after adjusting RPO benefits, avoided

distribution losses and any other benefits accruing to the Distribution Licensee.

These Grid Support Charges would be determined consumer tariff category wise,

based on the proposal of the Distribution Licensee in its retail supply Tariff Petition,

supported by adequate justification:

Provided that the consumers of all Categories having Sanctioned Load up to 10 kW

shall be exempted from payment of Grid Support Charges for Net Metering

systems:…”(emphasis added)

From the above, it can be seen that the Grid Support Charges are intended to cover the

balancing, banking and wheeling cost after adjusting RPO benefits, avoided distribution

losses and any other benefits accruing to the Distribution Licensee.

AEML-D has confirmed in the Public Notice and in the reply to the objections that it has

not proposed any specific Grid Support Charges, and has only the probable methodology

for computing the Grid Support Charges. As there is no proposal of AEML-D in the public

domain and stakeholders have not been afforded the opportunity of submitting their

comments on AEML-D’s specific proposal in this regard, the Commission has not approved

levy of Grid Support Charges for Net Metering connections by AEML-D.

Further, the Commission is not commenting on the merits/demerits of the computation

submitted by AEML-D in this regard. It may be noted that the Commission has approved

the levy of Grid Support Charges in MSEDCL’s MYT Order dated 30 March 2020 in Case

No. 327 of 2019. If AEML-D desires, it may submit its proposal for levy of Grid Support

Charges in line with the methodology approved for MSEDCL, at a later date.


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As regards AEML-D’s proposal that 50% of the Grid Support Charges and Additional Fixed

Charges billed to such change-over consumers by TPC-D, should be provided to AEML-

D, it is observed that TPC-D has not proposed any Grid Support Charges and Additional

Fixed Charges in its Petition. Further, TPC-D has not given its submissions on the issue of

sharing of such Charges with AEML-D. Hence, for the purpose of this Order, the

Commission has not given any decision in this regard.


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7 SCHEDULE OF CHARGES


The Commission had last approved the Schedule of Charges in the MTR Order dated 12

September 2018. While approving the Schedule of Charges in the MTR Order, the

Commission had kept the Service Connection Charges at the same level and other charges

were increased using an escalation rate equal to the Consumer Price Index for Industrial

Workers (CPI-IW) increase between December 2012 and September 2017.

AEML-D proposes to continue with the same Service Connection charges as at present.

AEML-D requests the Commission to approve the same Service Connection charges for

consumers switching over to AEML-D from TPC-D. AEML-D has proposed increase in

charges for Cost of Meter (applicable when consumers opts to purchase meter from AEML-

D and in case of lost or burnt meters) based on increase in WPI (rounded off to the nearest

hundredth place). AEML-D submits that at present there is no specific Service Connection

Charge for connections taken for Alternate Fire Fighting. In case of Alternate Fire Fighting

connections, the energy consumption is usually NIL. Since the present fixed / demand

charges being levied do not recover the entire Retail fixed cost of AEML-D, the fixed cost

related to providing connection to Alternate Fire Fighting is also not getting recovered.

Therefore AEML-D has proposed to recover the Service Connection charges for Alternate

Fire Fighting connections at ten times the normative Service Connection charges.

Since the increase in CPI-IW is more than 12%, AEML-D has proposed increase in other

charges in line with increase in CPI-IW. However, AEML-D has rounded off the proposed

charges to the nearest tenth place.


In line with the MERC (Electricity Supply Code and Other Conditions of Supply)

Regulations, 2005, AEML-D has sought approval for revision of certain components of

“Schedule of Charges” (SoC) for the various services provided to the consumers.

The Commission observed that most of the charges have been proposed to increase inline

with the CPI-WPI, while service connection charges are proposed to be kept at the same

level as approved in MTR Order. The Commission feels that it is fair rationale to increase

the charges in line with the CPI-Industrial workers index.


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The Commission considers the submission made by AEML-D with regards to Schedule of

Charges and hence, approves the Schedule of Charges, except for the proposed ten-fold

increase in Service Connection Charge for connections taken for Alternate Fire Fighting,


Table 7-1: Approved Schedule of Charges

Sr.

No. Particulars

Existing

Charges (Rs.)

Approved

Charges (Rs.) Basis

A

New connections/ Reduction or

addition of Load/Shifting of service/

Extension of service/Change of

Tariff Category/Temporary

Connection

a) Single phase 65 70 Increase in line with

increase in CPI - IW

b) Three phase 100 110 Increase in line with


c) HT supply 250 280 Increase in line with


B Change of Name

a) Single phase 65 70 Increase in line with


b) Three phase 65 70 Increase in line with


c) HT supply 200 220 Increase in line with


C Service Connection Charges

1 L.T. Supply

Single Phase

For loads upto 5 kW 2,000 2,000 Kept at the same level For loads above 5 kW and upto 10 Kw 2,000 2,000 Kept at the same level Three Phase

Motive power upto 27 HP or other

loads upto 20 kW 3,000 3,000 Kept at the same level

Motive power > 27 HP but <= 67 HP

or other loads >20 kW but <= 50 kW 6,500 6,500 Kept at the same level

Motive power > 67 HP but <= 134 HP

or other loads >50 kW but <= 100 kW 12,000 12,000 Kept at the same level

Motive power >134 HP but <= 201 HP

or other loads >100 kW but <=150 kW 12,000 12,000 Kept at the same level

Above 150 kW 250,000 250,000 Kept at the same level

2 H.T. Supply

If line extended from existing network

For loads upto 500 kVA 3,50,000 3,50,000 Kept at the same level For loads above 500 kVA 4,00,000 4,00,000 Kept at the same level


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Sr.

No. Particulars

Existing

Charges (Rs.)

Approved

Charges (Rs.) Basis

Consumer wishing to have dedicated

line from AEML-D’s 22/33/11kV

substation /Provision of dedicated

distribution facility for power supply

to HT consumer

At actual At actual Kept at the same level

3 Temporary Connection At actual At actual Kept at the same level

4

Supervision Charges in case work is

carried out by Licensed Electrical

Contractor (LEC)

For providing HT supply 15,000 15,000 Kept at the same level

For providing LT supply to three phase

Industrial/Commercial Consumers

only

6,000 6,000 Kept at the same level

Extension of Load: the charges will be

applicable on the total load (existing as

well as additional load demanded)

As in Sr.

No.1,2, 3 & 4

above

As in Sr.

No.1,2, 3 & 4

above

Kept at the same level

C Miscellaneous and General Charges

1 Re-connection Charges

a) Re-installation of fuse cut-out 130 150 Increase in line with


b) Re-installation of meter 400 450 Increase in line with


c) HT Supply 650 730 Increase in line with


d) Re-connection of Service Cable 1000 1120 Increase in line with


2 Shifting of Meter, if carried out only

on consumer’s request

Single Phase 130 150 Increase in line with


Three Phase 260 290 Increase in line with


3 Shifting of services, if carried out only

on consumer’s request

Single Phase At Actual At Actual Kept at the same level Three Phase At Actual At Actual Kept at the same level

4 Meter Testing on site on Consumer’s

request





5 Meter Testing at Laboratory




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Sr.

No. Particulars

Existing

Charges (Rs.)

Approved

Charges (Rs.) Basis



HT Tri-vector/TOD meter 1300 1460 Increase in line with


Meter testing at Government approved

laboratory At actual At actual

6

Cost of Meter (applicable when

consumer opts to purchase the meter

from AEML-D & in case of Lost or

Burnt meter)

Single Phase meter 1300 1400 Increase in line with


Three Phase whole current meter 3900 4100 Increase in line with


Three Phase CT operated meter 5200 5500 Increase in line with


HT TOD meter 5850 6200 Increase in line with


ABT compliant meter At actual At actual

7

First visit Charges (Only for new

connection or additional supply

request)

100 110 Increase in line with


8 Charges for Additional copies of test

reports (Rs./page) 1 1 Kept at the same level

9 Photocopying of Regulatory Orders

etc. (Rs./Page) 1 1 Kept at the same level

10 Duplicate copy of each monthly bill

(Rs./Bill) 2 2 Kept at the same level

11 Statement of Accounts (Rs./Page) 3 3 Kept at the same level

12

Charges for Dishonored Cheques

(irrespective of cheque amounts) - for

first instance

250 250 Kept at the same level

13

Charges for Dishonored Cheques

(irrespective of cheque amounts) - for

2nd and subsequent instance

- 750 New charge

D Schedule of Charges related to Open

Access

1 Open Access Processing fee per

application 3000 3000 Kept at the same level

2 Open Access Operating Charges per

month 3000 3000 Kept at the same level


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8 APPLICABILITY

8.1 APPLICABILITY OF REVISED TARIFF

The Tariffs determined in this Order shall be applicable from 1 April, 2020. Where the

billing cycle of a consumer is different with respect to the date of applicability of the

revised tariffs, they should be made applicable for the consumption on a pro rata basis.

The bills for the respective periods as per the existing and revised tariffs shall be

calculated based on the pro-rata consumption (units consumed during the respective

periods, computed on the basis of average unit consumption per day multiplied by the

number of days in the respective periods covered in the billing cycle).

The Commission has determined the revenue from the revised tariffs as if they were

applicable for the entire year. Any shortfall or surplus in the actual revenue against the

approved ARR will be revised during Truing-Up at the end of the Control Period, as

specified in the MYT Regulations 2019.

8.2 APPLICABILITY OF ORDER

This Multi Year Tariff Order for the 4th Control Period from FY 2020-21 to FY 2024-25

shall come into force from 1 April, 2020.

Special Interim Dispensation:

This Tariff Order is being issued at a critical time when the country is passing through

one of the most debilitating epidemics in the form of Covid19. In fact, taking note of the

current situation prevailing in the State, the Commission issued a Practice Direction on

26 March, 2020, whereby meter reading and physical bill distribution work was

suspended and Utilities were asked to issue bills on average usage basis till the current

crisis gets subsided. The Commission is aware that a number of industrial and commercial

establishments have been shut down due to the lockdown enforced by the Government.

To mitigate to some extent the difficulties being faced by the electricity consumers of

Maharashtra and all out efforts to contain the spread of Corona Pandemic, the

Commission deems it fit to put a moratorium on payment of fixed charges of the

electricity bill by consumers under Industrial and Commercial category for next three

billing cycles beginning from the lockdown date of 25 March, 2020.


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The Distribution Licensees will be required to borrow/avail additional working capital

over and above the Regulations. Also, there will be other additional cost required to be

incurred for continuing of operations. Associated with this, there will be an additional

working capital interest. The Commission opines that in the present situation, relief needs

to be given to the electricity consumers affected by the Lockdown directions. The

Commission will take an appropriate view on the additional expenses that are likely to be

incurred by the Distribution Licensees on account of additional Interest on Working

Capital during the MTR process.

The Petition of Adani Electricity Mumbai Limited – Distribution Business (AEML-D) in

Case No. 325 of 2019 stands disposed of accordingly.

Sd/- Sd/-

(Mukesh Khullar)

Member

(I.M. Bohari)

Member


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Annexure I (A): Revenue with Revised Tariffs for FY 2020-21

Fixed

Charges

(Rs./connect

ion/Month)

Demand

Charges

(Rs./kVA/M

onth)

Energy

Charges

(Rs./kWh)

Wheeling

Charges

(Rs./kWh)

Billing

Demand in

KVA

Sales in MU

Revenue

from Fixed

Charges

Revenue

from

Demand

Charges

Revenue from

Energy

Charges

Revenue from

Wheeling

Charges

PF

Surcharge PF Incentive

Load Factor

Incentive

Prompt

Payment

Discount

Time of Day

(ToD)

Digital

Incentive

HT Category

HT I: HT-Industry 201 - 320.00 6.15 0.73 89,173 339.76 - 34.24 208.95 24.72 (0.01) (2.13) 2.32 - 268.09

HTII : HT- Commercial 272 - 320.00 6.45 0.73 1,42,224 304.26 - 54.61 196.25 22.14 (0.05) (4.60) 4.59 - 272.93

HT III: HT-Group Housing Society 17 - 320.00 6.30 0.73 7,660 34.70 - 2.94 21.86 2.52 - (0.39) - - 26.94 HT IV - HT Railways, Metro &

Monorail6 - 320.00 6.00 0.73 8,582 30.84 - 3.30 18.51 2.24 - (0.28) - - 23.77

HT V (a):PS - Govt. EI & Hospitals 6 - 320.00 6.05 0.73 2,107 6.45 - 0.81 3.90 0.47 - (0.05) 0.03 - 5.16

HT V (b):PS - Others 65 - 320.00 6.45 0.73 28,527 98.67 - 10.95 63.64 7.18 - (0.92) 0.83 - 81.69

Sub-total 582 2,80,353 842.12 - 107.66 530.81 61.27 - - (0.06) (8.44) 7.82 - 699.05

LT Category

LT I - Below Poverty Line 222 10.00 - 1.00 1.57 0.01 0.00 - 0.00 0.00 - - - (0.00) - (0.00) 0.00

LT -I Residential (Single Phase) 0 - - - 4,506.33 - - - - - - - - - - 2,939.69

0-100 8,74,967 70.00 - 2.90 1.57 1,757.32 73.50 - 509.62 276.52 - - - (2.55) - (1.24) 855.86

101-300 7,76,401 110.00 - 4.85 1.57 1,152.32 102.48 - 558.87 181.32 - - - (1.92) - (0.93) 839.83

301-500 1,01,308 110.00 - 6.65 1.57 196.90 13.37 - 130.94 30.98 - - - (0.38) - (0.18) 174.73

500and above 28,108 135.00 - 7.80 1.57 68.03 4.55 - 53.06 10.70 - - - (0.14) - (0.07) 68.10

LT -I Residential Three phase 0 - - - - - - - - - - - - - - -

0-100 63,787 135.00 - 2.90 1.57 288.35 10.33 - 83.62 45.37 - - - (0.85) - (0.24) 138.24

101-300 98,955 135.00 - 4.85 1.57 417.51 16.03 - 202.49 65.70 - - - (1.31) - (0.37) 282.53

301-500 60,452 135.00 - 6.65 1.57 213.66 9.79 - 142.08 33.62 - - - (0.74) - (0.21) 184.54

500and above 69,856 135.00 - 7.80 1.57 412.24 11.32 - 321.55 64.87 - - - (1.46) - (0.41) 395.86

LT II (a) - 0-20 kW 4,31,860 385.00 - 5.70 1.57 1,864.62 199.52 - 1,062.83 293.41 0.00 (0.03) - (5.04) 0.00 (1.63) 1,549.06

LT II (b) - 20-50 kW 6,266 - 320.00 6.05 1.57 87,492 233.40 - 33.60 141.21 36.73 7.06 (3.36) - (1.01) 3.14 (0.29) 217.08

LT II (c) - above 50 kW 5,227 - 320.00 6.55 1.57 1,92,653 531.48 - 73.98 348.12 83.63 9.26 (9.21) - (3.10) 7.86 (0.51) 510.02

LT III (a) - LT Industrial upto 20 kW 15,421 385.00 - 5.55 1.57 - 182.89 7.12 - 101.50 28.78 - - - (0.50) - (0.11) 136.79

LT III (b) - LT Industrial above 20 kW 3,398 - 320.00 5.95 1.57 1,07,953 388.81 - 41.45 231.34 61.18 6.63 (5.97) - (2.36) 4.55 (0.26) 336.57

LT IV (a): PS - Govt. EI & Hospitals 813 385.00 - 5.60 1.57 30.85 0.38 - 17.27 4.85 0.08 (0.20) - (0.06) 0.10 (0.01) 22.42

LT IV (b): PS - Others 2,995 385.00 - 6.00 1.57 171.62 1.38 - 102.97 27.00 0.78 (1.31) - (0.53) 1.04 (0.08) 131.26

LT VI (a): Agriculture - Pumpsets 17 40.00 3.80 1.57 0.09 0.00 - 0.03 0.01 - - - (0.00) - (0.00) 0.05

LT VI (b): Agriculture - Others 8 90.00 5.30 1.57 0.30 - - 0.16 0.05 - - - (0.00) - (0.00) 0.21

LT V: EV Charging Stations 1 - 70.00 3.93 1.57 18 - - 0.00 - - 0.00 (0.00) - (0.00) 0.00 (0.00) 0.00

Sub-total 25,42,400 4,13,665 7,992.17 450.84 149.03 4,055.98 1,257.60 24.19 (20.37) - (22.22) 16.75 (6.58) 5,905.23

Total 25,42,982 6,94,017 8,834.29 450.84 256.69 4,586.78 1,318.87 24.19 (20.37) (0.06) (30.65) 24.57 (6.58) 6,604.28

No. of

consumers

Components of tariff Full year revenue excluding Government subsidy (Rs. Crore)

Full year

revenue (Rs.

Crore)

Relevant sales & load/demand

data for revenue calculation


of 445

Annexure I (B): Revenue with Revised Tariffs for FY 2021-22

Fixed

Charges

(Rs./connect

ion/Month)

Demand

Charges

(Rs./kVA/M

onth)

Energy

Charges

(Rs./kWh)

Wheeling

Charges

(Rs./kWh)

Billing

Demand in

KVA

Sales in MU

Revenue

from Fixed

Charges

Revenue

from

Demand

Charges

Revenue from

Energy

Charges (MU)

Revenue from

Wheeling

Charges

PF

Surcharge

PF

Incentive

Load Factor

Incentive

Prompt

Payment

Discount

Time of Day

(ToD)

Digital

Incentive

HT Category

HT I: HT-Industry 203 - 335.00 6.15 0.68 90065 375.11 - 36.21 230.69 25.37 (0.01) (2.13) 2.34 - 292.46

HTII : HT- Commercial 275 - 335.00 6.45 0.68 143646 276.26 - 57.75 178.19 18.68 (0.05) (4.60) 4.59 - 254.55

HT III: HT-Group Housing Society 18 - 335.00 6.30 0.68 7737 32.24 - 3.11 20.31 2.18 - (0.39) - - 25.22

HT IV - HT Railways, Metro & Monorail 6 - 335.00 5.80 0.68 9012 31.04 - 3.62 18.01 2.10 - (0.28) - - 23.45

HT V (a):PS - Govt. EI & Hospitals 6 - 335.00 6.05 0.68 2128 6.21 - 0.86 3.76 0.42 - (0.05) 0.03 - 5.01

HT V (b):PS - Others 66 - 335.00 6.45 0.68 28812 97.20 - 11.58 62.69 6.57 - (0.92) 0.84 - 80.77

HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - -

Sub-total 589 2,83,499 850.33 - 113.97 534.46 57.51 - - (0.06) (8.44) 7.84 - 705.28

LT Category


LT -I Residential (Single Phase) - - - - 1.46 4,644.20 - - - 678.85 - - - - - - 3,039.10

0-100 8,82,697 75.00 - 3.05 1.46 1,817.31 79.44 - 554.28 265.64 - - - (2.55) - (1.24) 895.58

101-300 7,81,680 115.00 - 5.00 1.46 1,189.56 107.87 - 594.78 173.88 - - - (1.92) - (0.93) 873.68

301-500 1,02,369 115.00 - 6.65 1.46 201.65 14.13 - 134.10 29.48 - - - (0.38) - (0.18) 177.14

500and above 28,856 140.00 - 7.80 1.46 68.36 4.85 - 53.32 9.99 - - - (0.14) - (0.07) 67.95

LT -I Residential Three phase

0-100 68,741 140.00 - 3.05 1.46 299.79 11.55 - 91.44 43.82 - - - (0.85) - (0.24) 145.71

101-300 1,08,491 140.00 - 5.00 1.46 433.89 18.23 - 216.94 63.42 - - - (1.31) - (0.37) 296.91

301-500 63,826 140.00 - 6.65 1.46 220.38 10.72 - 146.55 32.21 - - - (0.74) - (0.21) 188.54

500and above 75,811 140.00 - 7.80 1.46 413.25 12.74 - 322.34 60.41 - - - (1.46) - (0.41) 393.61

LT II (a) - 0-20 kW 4,37,247 405.00 - 5.65 1.46 1,904.30 212.50 - 1,075.93 278.35 - (5.04) 0.00 (1.63) 1,560.12

LT II (b) - 20-50 kW 6,432 - 335.00 6.05 1.46 88,367 231.98 - 35.52 140.35 33.91 - (1.01) 3.15 (0.29) 211.63

LT II (c) - above 50 kW 5,464 - 335.00 6.60 1.46 1,94,580 525.16 - 78.22 346.60 76.76 - (3.10) 7.98 (0.51) 505.95

LT III (a) - LT Industrial upto 20 kW 15,697 405.00 - 5.55 1.46 - 186.97 7.63 - 103.77 27.33 - (0.50) - (0.11) 138.11

LT III (b) - LT Industrial above 20 kW 3,434 - 335.00 5.95 1.46 1,09,033 383.85 - 43.83 228.39 56.11 - (2.36) 4.59 (0.26) 330.29


LT IV (b): PS - Others 3,027 405.00 - 6.00 1.46 206.62 1.47 - 123.97 30.20 0.78 (1.31) - (0.53) 1.05 (0.08) 155.56

LT VI (a): Agriculture - Pumpsets 18 40.00 - 3.80 1.46 0.11 0.00 - 0.04 0.02 - - - (0.00) - (0.00) 0.06

LT VI (b): Agriculture - Others 8 - 90.00 5.30 1.46 0.38 - - 0.20 0.06 - - - (0.00) - (0.00) 0.26

LT V: EV Charging Stations 1 - 70.00 4.04 1.46 19 - - 0.00 - - - (0.00) 0.00 (0.00) 0.00

Sub-total 25,87,206 4,17,801 8,198.59 482.64 159.69 4,199.81 1,877.24 1.03 (1.62) - (22.22) 16.93 (6.58) 6,028.07

Total 25,87,795 7,01,301 9,048.92 482.64 273.66 4,734.28 1,934.75 1.03 (1.62) (0.06) (30.65) 24.76 (6.58) 6,733.35

No. of consumers


Full year

revenue (Rs.

Crore)



of 445

Annexure I (C): Revenue with Revised Tariffs for FY 2022-23

Fixed

Charges

(Rs./connect

ion/Month)

Demand

Charges

(Rs./kVA/M

onth)

Energy

Charges

(Rs./kWh)

Wheeling

Charges

(Rs./kWh)

Billing

Demand in

KVA

Sales in MU

Revenue

from Fixed

Charges

Revenue

from

Demand

Charges

Revenue from

Energy

Charges (MU)

Revenue from

Wheeling

Charges

PF

Surcharge

PF

Incentive

Load Factor

Incentive

Prompt

Payment

Discount

Time of Day

(ToD)

Digital

Incentive

HT Category

HT I: HT-Industry 205 - 355.00 6.10 0.68 90965 411.70 - 38.75 251.14 28.11 (0.01) (2.13) 2.35 - 318.20





HT V (b):PS - Others 67 - 355.00 6.25 0.68 29100 95.61 - 12.40 59.75 6.53 - (0.92) 0.84 - 78.60


Sub-total 594 2,86,695 861.82 - 122.13 532.52 58.85 - - (0.06) (8.44) 7.85 - 712.85

LT Category



0-100 8,90,523 80.00 - 3.05 1.47 1,877.45 85.49 - 572.62 276.89 - - - (2.55) - (1.24) 931.21

101-300 7,87,057 120.00 - 5.00 1.47 1,226.29 113.34 - 613.14 180.85 - - - (1.92) - (0.93) 904.48

301-500 1,03,449 120.00 - 6.70 1.47 206.12 14.90 - 138.10 30.40 - - - (0.38) - (0.18) 182.83

500and above 29,607 145.00 - 7.80 1.47 68.30 5.15 - 53.28 10.07 - - - (0.14) - (0.07) 68.29

LT -I Residential Three phase - - - - 1.47 - - - - - - - - - - - -

0-100 74,059 145.00 - 3.05 1.47 311.31 12.89 - 94.95 45.91 - - - (0.85) - (0.24) 152.65

101-300 1,18,803 145.00 - 5.00 1.47 450.24 20.67 - 225.12 66.40 - - - (1.31) - (0.37) 310.51

301-500 67,368 145.00 - 6.70 1.47 226.85 11.72 - 151.99 33.46 - - - (0.74) - (0.21) 196.22

500and above 82,035 145.00 - 7.80 1.47 412.12 14.27 - 321.46 60.78 - - - (1.46) - (0.41) 394.64

LT II (a) - 0-20 kW 4,42,686 425.00 - 5.45 1.47 1,943.16 225.77 - 1,059.02 286.58 - (5.04) 0.00 (1.63) 1,564.71

LT II (b) - 20-50 kW 6,602 - 355.00 6.00 1.47 89,251 229.04 - 38.02 137.42 33.78 - (1.01) 3.15 (0.29) 211.07

LT II (c) - above 50 kW 5,690 - 355.00 6.55 1.47 1,96,525 518.38 - 83.72 339.54 76.45 - (3.10) 8.05 (0.51) 504.15

LT III (a) - LT Industrial upto 20 kW 15,973 425.00 - 5.55 1.47 190.52 8.15 - 105.74 28.10 - (0.50) - (0.11) 141.37



LT IV (b): PS - Others 3,058 425.00 - 6.00 1.47 248.53 1.56 - 149.12 36.65 0.78 (1.31) - (0.53) 1.06 (0.08) 187.25




Sub-total 26,33,846 4,21,979 8,405.08 515.51 170.92 4,254.93 1,944.36 1.03 (1.62) - (22.22) 17.05 (6.58) 6,168.60

Total 26,34,440 7,08,674 9,266.90 515.51 293.05 4,787.46 2,003.20 1.03 (1.62) (0.06) (30.65) 24.90 (6.58) 6,881.46

No. of consumers


Full year

revenue (Rs.

Crore)



of 445

Annexure I (D): Revenue with Revised Tariffs for FY 2023-24

Fixed

Charges

(Rs./connect

ion/Month)

Demand

Charges

(Rs./kVA/M

onth)

Energy

Charges

(Rs./kWh)

Wheeling

Charges

(Rs./kWh)

Billing

Demand in

KVA

Sales in MU

Revenue

from Fixed

Charges

Revenue

from

Demand

Charges

Revenue from

Energy

Charges (MU)

Revenue from

Wheeling

Charges

PF

Surcharge

PF

Incentive

Load Factor

Incentive

Prompt

Payment

Discount

Time of Day

(ToD)

Digital

Incentive

HT Category

HT I: HT-Industry 207 - 375.00 6.05 0.68 91875 449.59 - 41.34 272.00 30.74 (0.01) (2.13) 2.35 - 344.29





HT V (b):PS - Others 67 - 375.00 6.25 0.68 29391 93.90 - 13.23 58.69 6.42 - (0.92) 0.85 - 78.26


Sub-total 599 2,89,940 876.95 - 130.47 537.39 59.95 - - (0.06) (8.44) 7.86 - 727.17

LT Category



0-100 8,98,447 85.00 - 2.95 1.48 1,937.51 91.64 - 571.56 285.99 - - - (2.55) - (1.24) 945.41

101-300 7,92,536 125.00 - 4.90 1.48 1,262.33 118.88 - 618.54 186.33 - - - (1.92) - (0.93) 920.89

301-500 1,04,551 125.00 - 6.75 1.48 210.29 15.68 - 141.95 31.04 - - - (0.38) - (0.18) 188.11

500and above 30,359 155.00 - 7.85 1.48 67.64 5.65 - 53.10 9.98 - - - (0.14) - (0.07) 68.51


0-100 79,768 155.00 - 2.95 1.48 322.83 14.84 - 95.23 47.65 - - - (0.85) - (0.24) 156.63

101-300 1,29,948 155.00 - 4.90 1.48 466.37 24.17 - 228.52 68.84 - - - (1.31) - (0.37) 319.85

301-500 71,086 155.00 - 6.75 1.48 232.91 13.22 - 157.21 34.38 - - - (0.74) - (0.21) 203.87

500and above 88,542 155.00 - 7.85 1.48 408.62 16.47 - 320.77 60.32 - - - (1.46) - (0.41) 395.68

LT II (a) - 0-20 kW 4,48,177 450.00 - 5.45 1.48 1,980.91 242.02 - 1,079.60 292.40 - (5.04) 0.00 (1.63) 1,607.35

LT II (b) - 20-50 kW 6,776 - 375.00 5.95 1.48 90,143 224.31 - 40.56 133.46 33.11 - (1.01) 3.16 (0.29) 208.99

LT II (c) - above 50 kW 5,925 - 375.00 6.50 1.48 1,98,491 511.14 - 89.32 332.24 75.45 - (3.10) 8.12 (0.51) 501.51




LT IV (b): PS - Others 3,090 450.00 - 6.00 1.48 298.80 1.67 - 179.28 44.11 0.78 (1.31) - (0.53) 1.07 (0.08) 224.99




Sub-total 26,82,463 4,26,199 8,611.66 554.72 182.35 4,306.89 1,995.68 1.03 (1.62) - (22.22) 17.16 (6.58) 6,302.88

Total 26,83,062 7,16,139 9,488.60 554.72 312.83 4,844.28 2,055.63 1.03 (1.62) (0.06) (30.65) 25.02 (6.58) 7,030.05

No. of consumers

Components of tariff Relevant sales & load/demand Full year revenue excluding Government subsidy (Rs. Crore)

Full year

revenue (Rs.

Crore)


of 445

Annexure I (E): Revenue with Revised Tariffs for FY 2024-25

Fixed

Charges

(Rs./connect

ion/Month)

Demand

Charges

(Rs./kVA/M

onth)

Energy

Charges

(Rs./kWh)

Wheeling

Charges

(Rs./kWh)

Billing

Demand in

KVA

Sales in MU

Revenue

from Fixed

Charges

Revenue

from

Demand

Charges

Revenue from

Energy

Charges (MU)

Revenue from

Wheeling

Charges

PF

Surcharge

PF

Incentive

Load Factor

Incentive

Prompt

Payment

Discount

Time of Day

(ToD)

Digital

Incentive

HT Category

HT I: HT-Industry 209 - 395.00 6.05 0.68 92794 488.81 - 43.98 295.73 33.40 (0.01) (2.13) 2.36 - 373.34





HT V (b):PS - Others 68 - 395.00 6.35 0.68 29685 92.07 - 14.07 58.46 6.29 - (0.92) 0.86 - 78.76

HT VIII: EV Charging Stations 0 - 70.00 4.82 0.68 0 - - - - - - - - -

Sub-total 605 2,93,237 895.96 - 138.99 549.56 61.23 - - (0.06) (8.44) 7.88 - 749.16

LT Category -



0-100 9,06,469 90.00 - 2.90 1.48 1,997.17 97.90 - 579.18 294.63 - - - (2.55) - (1.24) 967.92

101-300 7,98,115 130.00 - 4.90 1.48 1,297.35 124.51 - 635.70 191.39 - - - (1.92) - (0.93) 948.74

301-500 1,05,674 130.00 - 6.75 1.48 214.03 16.49 - 144.47 31.57 - - - (0.38) - (0.18) 191.97

500and above 31,113 165.00 - 7.85 1.48 66.54 6.16 - 52.23 9.82 - - - (0.14) - (0.07) 68.00


0-100 85,894 165.00 - 2.90 1.48 334.30 17.01 - 96.95 49.32 - - - (0.85) - (0.24) 162.18

101-300 1,41,990 165.00 - 4.90 1.48 482.19 28.11 - 236.27 71.13 - - - (1.31) - (0.37) 333.83

301-500 74,986 165.00 - 6.75 1.48 238.53 14.85 - 161.01 35.19 - - - (0.74) - (0.21) 210.09

500and above 95,348 165.00 - 7.95 1.48 402.03 18.88 - 319.62 59.31 - - - (1.46) - (0.41) 395.93

LT II (a) - 0-20 kW 4,53,722 475.00 - 5.40 1.48 2,017.19 258.62 - 1,089.28 297.58 - (5.04) 0.00 (1.63) 1,638.82

LT II (b) - 20-50 kW 6,955 - 395.00 5.95 1.48 91,044 217.48 - 43.16 129.40 32.08 - (1.01) 3.16 (0.29) 206.50

LT II (c) - above 50 kW 6,169 - 395.00 6.50 1.48 2,00,475 503.41 - 95.03 327.22 74.26 - (3.10) 8.18 (0.51) 501.07




LT IV (b): PS - Others 3,122 475.00 - 6.00 1.48 359.18 1.78 - 215.51 52.99 0.78 (1.31) - (0.53) 1.08 (0.08) 270.21




Sub-total 27,33,166 4,30,461 8,818.19 595.54 194.00 4,382.31 2,043.24 1.03 (1.62) - (22.22) 17.28 (6.58) 6,460.62

Total 27,33,771 7,23,698 9,714.15 595.54 332.99 4,931.87 2,104.47 1.03 (1.62) (0.06) (30.65) 25.16 (6.58) 7,209.78

No. of consumers

Components of tariff Relevant sales & load/demand Full year revenue excluding Government subsidy (Rs. Crore)

Full year

revenue (Rs.

Crore)


of 445

Annexure II: Tariff Schedule for FY 2020-21 to FY 2024-25

ADANI ELECTRICITY MUMBAI LIMITED – DISTRIBUTION BUSINESS

SCHEDULE OF ELECTRICITY TARIFFS

(With effect from 1 April, 2020)

The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it

under Sections 61 and 62 of the Electricity Act, 2003 and all other powers enabling it in

this behalf, has determined, by its Multi Year Tariff Order dated 30 March, 2020 in Case

No. 325 of 2019, the Tariff for supply of electricity by the Distribution Licensee, Adani

Electricity Mumbai Limited – Distribution Business (AEML-D) to various classes of

consumers as applicable from 1 April, 2020.

General

1. These Tariffs supersede all Tariffs so far in force.

2. The Tariffs are subject to revision and/or surcharge that may be levied by the

Distribution Licensee from time to time as per the directives of the Commission.

3. The Tariffs are exclusive of the separate Electricity Duty, Tax on Sale of Electricity and

other levies by the Government or other competent authorities, which will be payable

by consumers over and above the Tariffs.

4. The Tariffs are applicable for supply at one point only.

5. The Distribution Licensee may measure the Maximum Demand for any period shorter

than 30 minutes of maximum use, subject to conformity with the Commission’s

Electricity Supply Code Regulations, where it considers that there are considerable load

fluctuations in operation.

6. The Tariffs are subject to the provisions of the applicable Regulations and any directions

that may be issued by the Commission from time to time.

7. Unless specifically stated to the contrary, the figures of Energy Charge and Wheeling

Charge are denominated in Rupees per unit (kWh or kVAh as case may be) for the

energy consumed during the month.

8. Fuel Adjustment Charge (FAC) computed in accordance with provisions of MYT

Regulations, 2019 and Commission’s directions in this regard from time to time shall


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be applicable to all categories of consumers, and will be charged over and above the

base tariff.

LOW TENSION (LT) TARIFF

LT I (A): LT – Residential (BPL)

Applicability:

This Below Poverty Line (BPL) Tariff category is applicable to Residential consumers who

have a Sanctioned Load upto 0.25 kW and who have consumed upto 360 units per annum

in the previous financial year. The eligibility of such consumers will be reassessed at the

end of each financial year. If more than 360 units have been consumed in the previous

financial year, the LT I(B) - Residential Tariff shall thereafter be applicable, and such

consumer cannot revert thereafter to the BPL category irrespective of his future

consumption level.

The categorisation of BPL consumers will be reassessed at the end of the financial year on

a pro rata basis if there has been consumption for only a part of the year The categorisation

of BPL consumers who have been added during the previous year would be assessed on a

pro rata basis, i.e., 30 units per month.

This BPL category will also be applicable to all new consumers subsequently added in any

month with a Sanctioned Load of upto 0.25 kW and consumption between 1 to 30 units (on

pro rata basis of 1 unit/day) in the first billing month.

The BPL Tariff is applicable only to individuals and not to institutions.

Tariff w.e.f. 1 April, 2020 to 31 March, 2021

Consumption

Slab (kWh)

Fixed Charge

(Rs./Connection/

Month)

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

BPL Category 10 1.57 1.00


Consumption

Slab (kWh)

Fixed Charge

(Rs./Connection/

Month)

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)




of 445

Consumption

Slab (kWh)

Fixed Charge

(Rs./Connection/

Month)

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge

(Rs./Connection/

Month)

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge

(Rs./Connection/

Month)

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)


LT I (B): LT – Residential

This Tariff category is applicable for electricity used at Low/Medium Voltage for operating

various appliances used for purposes such as lighting, heating, cooling, cooking,

washing/cleaning, entertainment/leisure, water pumping in the following premises:

a) Private residential premises, Government/semi-Government residential quarters;

b) Premises used exclusively for worship, such as temples, gurudwaras, churches,

mosques, etc.; provided that halls, gardens or any other part of such premises that

may be let out for a consideration or used for commercial activities would be

charged at the applicable LT-II Tariff;

c) Government / Private / Co-operative Housing Colonies/complexes (where

electricity is used exclusively for domestic purposes) only for common facilities

such as Water Pumping / Street and other common area Lighting / Lifts /Parking

Lots/ Fire-fighting Pumps and other equipment, etc.;

d) Sports Clubs or facilities / Health Clubs or facilities / Gymnasium / Swimming Pool

/ Community Hall of Government / Private / Co-operative Housing

Colonies/complexes - provided that they are situated in the same premises, and are

for the exclusive use of the members and employees of such Housing

Colonies/complexes;

e) Telephone booths owned/operated by Persons with Disabilities/Handicapped

persons;

f) Residential premises used by professionals like Lawyers, Doctors, Engineers,

Chartered Accountants, etc., in furtherance of their professional activities, but not

including Nursing Homes and Surgical Wards or Hospitals;


of 445

g) Single-phase household Flour Mills (Ghar-ghanti) used only for captive purposes;

h) A residential LT consumer with consumption upto 500 units per month (current

month of supply) who undertakes construction or renovation activity in his existing

premises: such consumer shall not require a separate temporary connection, and

would be billed at this Residential Tariff rate;

Note:

This Tariff category shall also be applicable to consumers who are supplied power

at High Voltage for any of the purposes (a) to (k) above.

i) Consumers undertaking business or commercial / industrial / non-residential

activities from a part of their residence, whose monthly consumption is upto 300

units a month and annual consumption in the previous financial year was upto 3600

units. The applicability of this Tariff to such consumers will be assessed at the end

of each financial year. In case consumption has exceeded 3600 units in the previous

financial year, the consumer will thereafter not be eligible for the Tariff under this

category but be charged at the Tariff otherwise applicable for such consumption,

with prior intimation to him.

j) Entities supplied electricity at a single point at Low/Medium Voltage for residential

purposes, in accordance with the Electricity (Removal of Difficulties) Eighth Order,

2005, in the following cases:

(i) a Co-operative Group Housing Society which owns the premises, for making

electricity available to the members of such Society residing in the same

premises for residential purposes; and

(ii) a person, for making electricity available to its employees residing in the same

premises for residential purposes.

k) Crematoriums and Burial Grounds for all purposes, including lighting.

l) Temporary purposes for public religious functions like Ganesh Utsav, Navaratri,

Eid, Moharrum, Ram Lila, Diwali, Christmas, Guru Nanak Jayanti, etc., and for

areas where community prayers are held; and for functions to commemorate

anniversaries of personalities and National or State events for which Public

Holidays have been declared, such as Gandhi Jayanti, Ambedkar Jayanti,

Chhatrapati Shivaji Jayanti, Republic Day, Independence Day, etc.:

Provided that such temporary connection shall be subjected to 1.5 times of Fixed

Charges.


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge$$

Wheeling

Charge

(Rs/kWh)

Energy

Charge

(Rs/kWh)

0-100 units 70 1.57 2.90

100-300 units 110 1.57 4.85

301-500 units 110 1.57 6.65

Above 500 units 135 1.57 7.80


of 445


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge$$

Wheeling

Charge

(Rs/kWh)

Energy

Charge

(Rs/kWh)

0-100 units 75 1.46 3.05

100-300 units 115 1.46 5.00

301-500 units 115 1.46 6.65

Above 500 units 140 1.46 7.80


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge$$

Wheeling

Charge

(Rs/kWh)

Energy

Charge

(Rs/kWh)

0-100 units 80 1.47 3.05

100-300 units 120 1.47 5.00

301-500 units 120 1.47 6.70

Above 500 units 145 1.47 7.80


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge$$

Wheeling

Charge

(Rs/kWh)

Energy

Charge

(Rs/kWh)

0-100 units 85 1.48 2.95

100-300 units 125 1.48 4.90

301-500 units 125 1.48 6.75

Above 500 units 155 1.48 7.85


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge$$

Wheeling

Charge

(Rs/kWh)

Energy

Charge

(Rs/kWh)

0-100 units 90 1.48 2.90

100-300 units 130 1.48 4.90

301-500 units 130 1.48 6.75

Above 500 units 165 1.48 7.85

Note:

a) $$: The above Fixed Charges are for single-phase connections. A Fixed Charge of

Rs. 135 per month will be levied on Residential consumers availing 3-phase supply.

An Additional Fixed Charge of Rs.135 per 10 kW load or part thereof above 10 kW

load shall also be payable for FY 2020-21. This amount will increase to Rs. 140 per

month and per 10 KW, respectively, in FY 2021-22, and to Rs. 145 per month and

per 10 KW, respectively, in FY 2022-23, and Rs. 155 per month and per 10 KW,


of 445

respectively, in FY 2023-24, and Rs. 165 per month and per 10 KW, respectively, in

FY 2024-25

b) Professionals like Lawyers, Doctors, Professional Engineers, Chartered

Accountants, etc., occupying premises exclusively for conducting their profession,

shall not be eligible for this Tariff, and will be charged at the Tariff applicable to

the respective categories.

LT II: LT – Non-Residential or Commercial

Applicability:

This Tariff category is applicable for electricity used at Low/Medium voltage in non-

residential, non-industrial and/or commercial premises for commercial consumption meant

for operating various appliances used for purposes such as lighting, heating, cooling,

cooking, washing/cleaning, entertainment/ leisure and water pumping in, but not limited to,

the following premises:

a) Non-Residential, Commercial and Business premises, including Shopping Malls

and Showrooms;

b) Combined lighting and power supply for facilities relating to Entertainment,

including film studios, cinemas and theatres (including multiplexes), Hospitality,

Leisure, Meeting/Town Halls, and places of Recreation and Public Entertainment;

c) Offices, including Commercial Establishments;

d) Marriage Halls, Hotels / Restaurants, Ice-cream parlours, Coffee Shops, Guest

Houses, Internet / Cyber Cafes, Telephone Booths not covered under the LT I

category, and Fax / Photocopy shops;

e) Automobile and all other types of repairs, servicing and maintenance centres (unless

specifically covered under another Tariff category); Retail Gas Filling Stations,

Petrol Pumps and Service Stations, including Garages;

f) Tailoring Shops, Computer Training Institutes, Typing Institutes, Photo

Laboratories, Laundries, Beauty Parlours and Saloons;

g) Banks and ATM centres, Telephone Exchanges, TV Stations, Microwave Stations,

Radio Stations;

h) Common facilities, like Water Pumping / Lifts / Fire-Fighting Pumps and other

equipment / Street and other common area Lighting, etc., in Commercial

Complexes;

i) Sports Clubs/facilities, Health Clubs/facilities, Gymnasiums, Swimming Pools not

covered under any other category;

j) External illumination of monuments/ historical/ heritage buildings approved by

Maharashtra Tourism Development Corporation (MTDC) or the concerned Local

Authority;


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k) Construction of all types of structures/ infrastructure such as buildings, bridges, fly-

overs, dams, Power Stations, roads, Aerodromes, tunnels for laying of pipelines for

all purposes;

Note:

Residential LT consumers with consumption above 500 units per month (current

month of supply) and who undertake construction or renovation activity in their

existing premises shall not require a separate Temporary category connection, and

shall be billed at the LT-II Commercial Tariff rate;

l) Milk Collection Centres;

m) Sewage Treatment Plants/ Common Effluent Treatment Plants for Commercial

Complexes not covered under the LT – Public Services or LT – Industry categories;

n) advertisements, hoardings (including hoardings fixed on lamp posts/installed along

roadsides), and other commercial illumination such as external flood-lights,

displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs,

hotels and other such establishments

o) Temporary supply for any of the activity not covered under Residential category:

Provided that Temporary supply consumer shall pay 1.5 times applicable

Fixed/Demand Charges and applicable 1.25 times Energy Charges:

Provided further that temporary supply for operating Fire-Fighting pumps and

equipment in residential or other premises shall be charged as per the Tariff category

applicable to such premises.


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

(A) 0-20 kW Rs. 385 per month 1.57 5.70

(B) >20 kW and ≤ 50 kW

Rs. 320 per kVA

month

1.57 6.05

(C) > 50 kW

Rs. 320 per kVA

month

1.57 6.55

TOD Tariffs (in addition to above base Tariff)

0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


of 445


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

(A) 0-20 kW Rs. 405 per month 1.46 5.65

(B) >20 kW and ≤ 50 kW Rs. 335 per kVA month 1.46 6.05

(C) > 50 kW Rs. 335 per kVA month 1.46 6.60


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

(A) 0-20 kW Rs. 425 per month 1.47 5.45




0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

(A) 0-20 kW Rs. 450 per month 1.48 5.45




0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


of 445


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

(A) 0-20 kW Rs. 475 per month 1.48 5.40




0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

Note:

The ToD Tariff is applicable to the LT-II (B) and (C) categories, and optionally available

to LT- II (A) category consumers having ToD meter installed.

LT III: LT- Industry:

LT III (A): LT - Industry upto 20 kW load

LT III (B): LT - Industry, above 20 kW load

Applicability:

This Tariff category is applicable for electricity for Industrial use, at Low/Medium Voltage,

for purposes of manufacturing and processing, including electricity used within such

premises for general lighting, heating/cooling, etc.

It is also applicable for use of electricity / power supply for Administrative Offices /

Canteens, Recreation Hall / Sports Club or facilities / Health Club or facilities/ Gymnasium

/ Swimming Pool exclusively meant for employees of the industry; lifts, water pumps, fire-

fighting pumps and equipment, street and common area lighting; Research and

Development units, dhobi/laundry, etc. -

Provided that all such facilities are situated within the same industrial premises and supplied

power from the same point of supply;

This Tariff category shall also be applicable for use of electricity / power supply by an

Information Technology (IT) or IT-enabled Services (ITeS) Unit as defined in the

applicable IT/ITeS Policy of Government of Maharashtra.


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It shall also be applicable for use of electricity / power supply for (but not limited to) the

following purposes:

a) Flour Mill, Dal Mill, Rice Mill, Poha Mill, Masala Mill, Saw Mill;

b) Ice Factory, Ice-cream manufacturing units, Milk Processing / Chilling Plants

(Dairy);

c) Engineering Workshops, Engineering Goods Manufacturing units; Printing Presses;

Transformer Repair Workshops; Tyre Retreading units; and Vulcanizing units;

d) Mining, Quarrying and Stone Crushing units;

e) Garment Manufacturing units;

f) LPG/CNG bottling plants, etc.;

g) Sewage Treatment Plant/ Common Effluent Treatment Plant for industries, and not

covered under the LT – Public Water Works category;

h) Start-up power for Generating Plants, i.e. the power required for trial run of a Power

Plant during Commissioning of the Unit and its Auxiliaries, and for its start-up after

planned or forced outage (but not for construction);

i) Brick Kiln (Bhatti);

j) Biotechnology Industries covered under the Biotechnology Policy of Government

of Maharashtra;

k) Cold Storages not covered under LT X (B) – Agriculture (Others);

l) Food (including seafood and meat) Processing units.

m) Stand-alone Research and Development units;

n) Auxiliary Consumption for Transmission Sub-stations;

o) Telecommunications Towers.


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

LT III(A): 0-20 kW Rs. 385 per month 1.57 5.55

LT III(B): Above 20kW Rs. 320 per kVA month 1.57 5.95

TOD Tariffs (Optional - in addition to above base Tariff)

0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



of 445

Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)




0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)




0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



of 445

Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling

Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

Note:

a) The ToD Tariff is compulsorily applicable to LT III (B) (i.e., above 20 kW), and

optionally available to LT- III (A) (i.e., up to 20 kW) having ToD meter installed.

LT IV: Public Services

LT IV (A): LT - Government Educational Institutions and Hospitals

Applicability:

This Tariff category is applicable for electricity supply at Low/Medium Voltage for

Educational Institutions, such as Schools and Colleges; Health Care facilities, such as

Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic Centres and

Pathology Laboratories; Libraries and public reading rooms - of the State or Central

Government or Local Self-Government bodies such as Municipalities, Zilla Parishads,

Panchayat Samitis, Gram Panchayats, etc.;

It shall also be applicable for electricity used for Sports Clubs and facilities / Health Clubs

and facilities / Gymnasium / Swimming Pools / Hostels attached to such Educational

Institutions / Hospitals, provided that they are situated in the same premises and are meant

primarily for their students / faculty/ employees/ patients.

It shall also be applicable for Public Sanitary Conveniences.


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

All Units Rs. 385 per month 1.57 5.60


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50


of 445

Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


of 445


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

Note:

a) The ToD Tariff is compulsorily applicable to the LT IV (A) category with Contract

Demand/Sanctioned Load above 20 kW; and optionally available to the LT IV (A)

category with Contract Demand/Sanctioned Load up to 20 kW having ToD meter

installed.

LT IV (B): LT - Public Services - Others

Applicability:

This Tariff category is applicable for electricity supply at Low/Medium Voltage for:

a) Educational Institutions, such as Schools and Colleges; Health Care facilities, such

as Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic

Centres and Pathology Laboratories; Libraries and public reading rooms - other than

those of the State or Central Government or Local Self-Government bodies such as

Municipalities, Zilla Parishads, Panchayat Samitis, Gram Panchayats, etc.

Sports Clubs and facilities / Health Clubs and facilities / Gymnasium / Swimming

Pools attached to such Educational Institutions /Health Care facilities, provided that

they are situated in the same premises and are meant primarily for their students /

faculty/ employees/ patients;

b) All Students Hostels affiliated to Educational Institutions;

c) All other Students’ or Working Men/Women’s Hostels;

d) Other types of Homes/Hostels, such as (i) Homes/Hostels for Destitutes, Disabled

Persons (physically or mentally handicapped persons, etc.) and mentally ill persons

(ii) Remand Homes (iii) Dharamshalas, (iv) Rescue Homes, (v) Orphanages -

subject to verification and confirmation by the Distribution Licensee’s concerned

Zonal Chief Engineer or equivalent;

e) All offices of Government and Municipal/ Local Authorities/ Local Self-

Government bodies, such as Municipalities, Zilla Parishads, Panchayat Samitis,

Gram Panchayats; Police Stations and Police Chowkies; Post Offices; Armed

Forces/Defence and Para-Military establishments;

f) Service-oriented Spiritual Organisations;


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g) State or Municipal/Local Authority Transport establishments, including their

Workshops;

h) Fire Service Stations; Jails, Prisons; Courts;

i) Airports;

j) Ports and Jetties;

k) Railway/Metro/Monorail Stations, including Shops, Workshops, Yards, etc., if the

supply is at Low/ Medium Voltage.

l) Waste processing units not covered under LT IV category.

m) lighting of public streets/ thorough fares which are open for use by the general

public

Provided that Street lights in residential complexes, commercial complexes,

industrial premises, etc. will be billed at the Tariff of the respective applicable

categories.

n) Lighting in Public Gardens (i.e. which are open to the general public free of charge);

o) Traffic Signals and Traffic Islands;

p) Public Water Fountains;

q) Lighting of Such other public places open to the general public free of charge.

r) pumping of water, purification of water and allied activities relating to Public Water

Supply Schemes, Sewage Treatment Plants and waste processing units


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


of 445


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

Note:

a) The ToD Tariff is compulsorily applicable to the LT IV (B) category with Contract

Demand/Sanctioned Load above 20 kW; and optionally available to the LT IV (B)

category with Contract Demand/Sanctioned Load up to 20 kW having ToD meter

installed.


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LT V: LT – Electric Vehicle (EV) Charging Stations

Applicability:

This Tariff category is applicable for Electric Vehicle Charging Station including battery

swapping station for electric vehicle.

In case the consumer uses the electricity supply for charging his own electric vehicle at his

premises, the tariff applicable shall be as per the category of such premises.

Electricity consumption for other facilities at Charging Station such as restaurant, rest

rooms, convenience stores, etc., shall be charged at tariff applicable to Commercial

Category.


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

All Units Rs. 70 per kVA 1.57 3.93


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75



of 445

Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

LT VI (A): LT - Agriculture - Pumpsets

Applicability:

This Tariff category is applicable for motive power supplied for agricultural metered

pumping loads, and for one lamp of wattage up to 40 to be connected to the motive power

circuit for use in pump-houses at Low/Medium Voltage.


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It is also applicable for power supply for cane crushers and/or fodder cutters for self-use for

agricultural processing operations, but not for operating a flour mill, oil mill or expeller in

the same premises, either operated by a separate motor or a change of belt drive.


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

All Units Rs. 40 per HP 1.57 3.80


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)


Note:

a) Consumers who avail power supply at High Voltage for the above purposes shall

also be billed as per this Tariff category.

LT VI (B): LT – Agriculture– Others

Applicability:


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This Tariff category is applicable for use of electricity / power supply at Low / Medium

Voltage for:

a) Pre-cooling plants and cold storage units for Agricultural Products – processed or

otherwise;

b) Poultries exclusively undertaking layer and broiler activities, including Hatcheries;

c) High-Technology Agriculture (i.e. Tissue Culture, Green House, Mushroom

cultivation activities), provided the power supply is exclusively utilized for

purposes directly concerned with the crop cultivation process, and not for any

engineering or industrial process;

d) Floriculture, Horticulture, Nurseries, Plantations, Aquaculture, Sericulture, Cattle

Breeding Farms, etc.


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)

All Units Rs. 90 per kW 1.57 5.30


Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)



Consumption

Slab (kWh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kWh)

Energy Charge

(Rs/kWh)


Note:

a) Consumers who avail power supply at High Voltage for the above purposes shall

also be billed as per this Tariff category.


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HIGH TENSION (HT) TARIFF

HT I: HT – Industry

Applicability:

This Tariff category is applicable for electricity for Industrial use at Extra High Voltage

(132 kV/110 kV) and High Voltage (33 kV/11 kV) for purposes of manufacturing and

processing, including electricity used within such premises for general lighting,

heating/cooling, etc.

It is also applicable for use of electricity / power supply for Administrative Offices /

Canteen, Recreation Hall / Sports Club or facilities / Health Club or facilities/ Gymnasium

/ Swimming Pool exclusively meant for employees of the industry; lifts, water pumps, fire-

fighting pumps and equipment, street and common area lighting; Research and

Development units, etc.:

Provided that all such facilities are situated within the same industrial premises and supplied

power from the same point of supply.

This Tariff category shall be applicable for use of electricity / power supply by an

Information Technology (IT) or IT-enabled Services (ITeS) Unit as defined in the

applicable IT/ITes Policy of Government of Maharashtra.

It shall also be applicable for use of electricity / power supply for (but not limited to) the

following purposes:

a) Flour Mills, Dal Mills, Rice Mills, Poha Mills, Masala Mills, Saw Mills;

b) Ice Factories, Ice-cream manufacturing units, Milk Processing / Chilling Plants

(Dairy);

c) Engineering Workshops, Engineering Goods manufacturing units; Printing Presses;

Transformer Repair Workshops; Tyre Retreading units, and Vulcanizing units;

d) Mining, Quarrying and Stone Crushing units;

e) Garment Manufacturing units;

f) LPG/CNG bottling plants, etc.;

g) Sewage Treatment Plant/ Common Effluent Treatment Plant for industries, and not

covered under the HT – PWW category;

h) Start-up power for Generating Plants, i.e., the power required for trial run of a Power

Plant during Commissioning of the Unit and its Auxiliaries, and for its start-up after

planned or forced outage (but not for construction);

i) Brick Kiln (Bhatti);

j) Biotechnology Industries covered under the Biotechnology Policy of Government

of Maharashtra;


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k) Cold Storages not covered under LT X (B) – Agriculture (Others);

l) Food (including Seafood and meat) Processing units.

m) Stand-alone Research and Development units,

n) Telecommunications Towers.


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)

EHV Rs. 320 per kVA - 5.90

HV Rs. 320 per kVA 0.70 5.90


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 335 per kVA 0.65 5.90


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 355 per kVA 0.66 5.85


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours 1.00

2200 to 0600 hours

-0.75


of 445


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 375 per kVA 0.66 5.80


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 395 per kVA 0.66 5.80


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75

Note:

a) Demand Charge shall be applicable at the rate of 25% of the above rates on the

start-up demand contracted by the Power Plant (as referred to at (h) above) with

the Distribution Licensee.

HT II: HT- Commercial

Applicability:

This Tariff category is applicable for electricity used at Extra High Voltage (132 kV/110

kV) and High Voltage (33 kV/11 kV) in non-residential, non-industrial and/or commercial

premises for commercial consumption meant for operating various appliances used for

purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/

leisure and water pumping in, but not limited to, the following premises:

a) Non-Residential, Commercial and Business premises, including Shopping Malls

and Showrooms;


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b) Combined lighting and power services for facilities relating to Entertainment,

including film studios, cinemas and theatres (including multiplexes), Hospitality,

Leisure, Meeting/Town Halls, and places of Recreation and Public Entertainment;

c) Offices, including Commercial Establishments;

d) Marriage Halls, Hotels / Restaurants, Ice-cream parlours, Coffee Shops, Guest

Houses, Internet / Cyber Cafes, Telephone Booths and Fax / Photocopy shops;

e) Automobile and all other types of repairs, servicing and maintenance centres (unless

specifically covered under another Tariff category); Retail Gas Filling Stations,

Petrol Pumps & Service Stations, including Garages;

f) Tailoring Shops, Computer Training Institutes, Typing Institutes, Photo

Laboratories, Laundries, Beauty Parlours and Saloons;

g) Banks and ATM centres, Telephone Exchanges, TV Stations, Micro Wave Stations,

Radio Stations;

h) Common facilities, like Water Pumping / Lifts / Fire-Fighting Pumps and other

equipment / Street and other common area Lighting, etc., in Commercial

Complexes;

i) Sports Clubs/facilities, Health Clubs/facilities, Gymnasiums, Swimming Pools not

covered under any other category;

j) External illumination of monuments/ historical/heritage buildings approved by

Maharashtra Tourism Development Corporation (MTDC) or the concerned Local

Authority;

k) Construction of all types of structures/ infrastructure such as buildings, bridges, fly-

overs, dams, Power Stations, roads, Aerodromes, tunnels for laying of pipelines for

all purposes;

Note:

Residential LT consumers with consumption above 500 units per month (current

month of supply) and who undertake construction or renovation activity in their

existing premises shall not require a separate Temporary category connection but

be billed at the LT-II Commercial Tariff;

l) Milk Collection Centres;

m) Sewage Treatment Plant/ Common Effluent Treatment Plant for Commercial

Complexes, not covered under the Public Services or Industrial category;

n) advertisements, hoardings (including hoardings fixed on lamp posts/installed along

roadsides), and other commercial illumination such as external flood-lights,

displays, neon signs at departmental stores, malls, multiplexes, theatres, clubs,

hotels and other such establishments;

o) Temporary supply for any of the activity not covered under any other HT category:

Provided that Temporary supply consumer shall pay 1.5 times applicable

Fixed/Demand Charges and 1.25 times applicable Energy Charges.


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 320 per kVA 0.70 6.23


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 335 per kVA 0.65 6.23


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 355 per kVA 0.66 6.09


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours 1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 375 per kVA 0.66 6.04



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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)

0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 395 per kVA 0.66 6.04


0600 to 0900 hours

0.00

0900 to 1200 hours

0.50

1200 to 1800 hours

0.00

1800 to 2200 hours

1.00

2200 to 0600 hours

-0.75

Note:

a) A consumer in the HT II category requiring single-point supply for the purpose of

downstream consumption by separately identifiable entities shall have to operate as

a Franchisee authorised as such by the Distribution Licensee; or such downstream

entities shall be required to take separate individual connections and be charged

under the Tariff category applicable to them.

HT III: HT - Group Housing Society (Residential)

Applicability:

Entities supplied electricity at a single point at High Voltage for residential purposes in

accordance with the Electricity (Removal of Difficulties) Eighth Order, 2005, in the

following cases:

a) a Co-operative Group Housing Society which owns the premises, for making

electricity available to the members of such Society residing in the same premises

for residential purposes; and

b) a person, for making electricity available to its employees residing in the same

premises for residential purposes.


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HT IV- Railways/Metro/Monorail

This Tariff category is applicable to power supply at Extra High Voltage (132 kV/110 kV)

and High Voltage (33 kV/11 kV) for Railways, Metro and Monorail, including Stations and

Shops, Workshops, Yards, etc.


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 320 per kVA 0.70 5.55


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 335 per kVA 0.65 5.36


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 355 per kVA 0.66 5.55


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 375 per kVA 0.66 5.46


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 395 per kVA 0.66 5.46

HT V - Public Services

HT V – (A): HT - Government Educational Institutions and Hospitals

Applicability:

This Tariff category is applicable for electricity supply at Extra High Voltage (132 kV/110

kV) and High Voltage (33 kV/11 kV) for Educational Institutions, such as Schools and

Colleges; Health Care facilities, such as Hospitals, Dispensaries, Clinics, Primary Health

Care Centres, Diagnostic Centres and Pathology Laboratories; Libraries and public reading

rooms - of the State or Central Government, Local Self-Government bodies such as

Municipalities, Zilla Parishads, Panchayat Samitis, Gram Panchayats, etc.;

It shall also be applicable for electricity used for Sports Clubs and facilities / Health Clubs

and facilities / Gymnasium / Swimming Pools attached to such Educational Institutions /

Health Care facilities, provided that they are situated in the same premises and are meant

primarily for the students / faculty/ employees/ patients of such Educational Institutions and

Hospitals.


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)

HV Rs. 320 per kVA 0.70 5.61


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 335 per kVA 0.65 5.61


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 355 per kVA 0.66 5.61


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 375 per kVA 0.66 5.43


0600 to 0900 hours 0.00


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 395 per kVA 0.66 5.43


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

HT V - (B): Public Service - Others

This Tariff category is applicable for electricity supply at Extra High Voltage (132 kV/110

kV) and High Voltage (33 kV/11 kV) for:

a) Educational Institutions, such as Schools and Colleges; Health Care facilities, such

as Hospitals, Dispensaries, Clinics, Primary Health Care Centres, Diagnostic

Centres and Pathology Laboratories; Libraries and public reading rooms - other than

those of the State or Central Government, Local Self-Government bodies such as

Municipalities, Zilla Parishads, Panchayat Samities, Gram Panchayats, etc.

Sports Clubs and facilities / Health Clubs and facilities / Gymnasium / Swimming

Pools attached to such Educational Institutions / Health Care facilities, provided that

they are situated in the same premises and are meant primarily for their students /

faculty/ employees/ patients;

b) All offices of Government and Municipal/ Local Authorities/ Local Self-

Government bodies, such as Municipalities, Zilla Parishads, Panchayat Samitis,

Gram Panchayats; Police Stations and Police Chowkies; Post Offices; Armed

Forces/Defence and Para-Military establishments;

c) Service-oriented Spiritual Organisations;

d) State or Municipal/Local Authority Transport establishments, including their

Workshops;

e) Fire Service Stations; Jails, Prisons; Courts;

f) Airports;

g) Ports and Jetties.


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h) Waste processing units.

i) pumping of water, purification of water and allied activities relating to Public Water

Supply Schemes, Sewage Treatment Plants and waste processing units.


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 320 per kVA 0.70 6.24


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 335 per kVA 0.65 6.24


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 355 per kVA 0.66 6.04


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 375 per kVA 0.66 6.04


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)


HV Rs. 395 per kVA 0.66 6.14


0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

HT VI: HT – Electric Vehicle (EV) Charging Stations

Applicability:

This Tariff category is applicable for Electric Vehicle Charging Station including battery

swapping station for Electric Vehicle.

In case the consumer uses the electricity supply for charging his own electric vehicle at his

premises, the tariff applicable shall be as per the category of such premises.

Electricity consumption for other facilities at Charging Station such as restaurant, rest

rooms, convenience stores, etc., shall be charged at tariff applicable to Commercial

Category.


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Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75


of 445


Consumption Slab

(kVAh)

Fixed Charge /

Demand Charge

Wheeling Charge

(Rs/kVAh)

Energy Charge

(Rs/kVAh)



0600 to 0900 hours 0.00

0900 to 1200 hours 0.50

1200 to 1800 hours 0.00

1800 to 2200 hours 1.00

2200 to 0600 hours -0.75

MISCELLANEOUS AND GENERAL CHARGES

Fuel Adjustment Charge (FAC) Component of Z-factor Charge

The Fuel Adjustment Charge (FAC) component of the Z-factor Charge will be determined

in accordance with the formula specified in the relevant Multi Year Tariff Regulations and

any directions that may be given by the Commission from time to time, and will be

applicable to all consumer categories for their entire consumption.

In case of any variation in the fuel prices and power purchase prices, the Distribution

Licensee shall pass on the adjustments through the FAC component of the Z-factor Charge

accordingly.

The details of the applicable ZFAC for each month shall be available on the Distribution

Licensee’s website www.adanielectricity.com

Electricity Duty and Tax on Sale of Electricity

Electricity Duty and Tax on Sale of Electricity shall be levied in addition to the Tariffs

approved by the Commission, and in accordance with the Government of Maharashtra

stipulations from time to time. The rate and the reference number of the Government

Resolution/ Order under which the Electricity Duty and Tax on Sale of Electricity are

applied shall be stated in the consumers’ energy bills. A copy of such Resolution / Order

shall be provided on the Distribution Licensee’s website www.adanielectricity.com

Power Factor Computation

Where the average Power Factor measurement is not possible through the installed meter,

the following formula for calculating the average Power Factor during the billing period

shall be applied:


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Total (kWh)

Average Power Factor =

Total (kVAh)

Wherein the kVAh is = √∑(KWh)2 + ∑(RkVAh Lag + RkVAh Lead )2

Further, average PF so computed can be considered as leading or lagging based on the

following test:

If “RkVAh lead” > “RkVAh lag” then “Average P.F.” is to be treated as “Lead P.F.”

If “RkVAh lead” = < “RkVAh lag” then “Average P.F.” is to be treated as “Lag

P.F.”

Power Factor Incentive

Applicable for LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract

Demand/Sanctioned Load above 20 kW), LT III (B): Industry above 20 kW, LT IV : Public

Service [LT IV (A) and LT IV (B)], and LT VI – Electric Vehicle (EV) Charging Stations

having contract demand/sanctioned load above 20 kW.

Whenever the average Power Factor is more than 0.95 (lag or lead) and upto 1, an incentive

shall be given at the rate of the following percentages of the amount of the monthly

electricity bill, excluding Taxes and Duties:

Sl. Range of Power Factor Power Factor Level Incentive

1 0.951 to 0.954 0.95 0.0%

2 0.955 to 0.964 0.96 0.5%

3 0.965 to 0.974 0.97 1.0%

4 0.975 to 0.984 0.98 1.5%

5 0.985 to 0.994 0.99 2.5%

6 0.995 to 1.000 1.00 3.5%

Note: Power Factor shall be measured/computed upto 3 decimals, after universal rounding

off.

Power Factor Penalty

Applicable for LT II: Non-Residential/Commercial [LT II (B), LT II (C)] (for Contract

Demand/Sanctioned Load above 20 kW), LT III (B): Industry above 20 kW, LT IV : Public


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Service [LT IV (A) and LT IV (B)], and LT VI – Electric Vehicle (EV) Charging Stations

having contract demand/sanctioned load above 20 kW.

Whenever the average PF is less than 0.9 (lag or lead), penal charges shall be levied at the

rate of the following percentages of the amount of the monthly electricity bill, excluding

Taxes and Duties:

Sl. Range of Power Factor Power Factor Level Penalty

1 0.895 to 0.900 0.90 0.0%

2 0.885 to 0.894 0.89 1.0%

3 0.875 to 0.884 0.88 1.5%

4 0.865 to 0.874 0.87 2.0%

5 0.855 to 0.864 0.86 2.5%

6 0.845 to 0.854 0.85 3.0%

7 0.835 to 0.844 0.84 3.5%

8 0.825 to 0.834 0.83 4.0%

9 0.815 to 0.824 0.82 4.5%

10 0.805 to 0.814 0.81 5.0%

... ... ... ...

Note: Power Factor shall be measured/computed upto 3 decimals, after universal rounding

off.

Prompt Payment Discount

A prompt payment discount of one percent of the monthly bill (excluding Taxes and Duties)

shall be provided to consumers for payment of electricity bills within 7 days from the date

of their issue.

Delayed Payment Charges

In case the electricity bill is not paid within the due date mentioned on the bill, delayed

payment charges on the billed amount, including the taxes, cess, duties, etc., shall be levied

on simple interest basis at the rate of 1.25% on the billed amount for the first month of

delay.

Discount for digital payment

A discount of 0.25% of the monthly bill (excluding taxes and duties), subject to a cap of

Rs. 500/-, shall be provided to LT category consumers for payment of electricity bills

through various modes of digital payment such as credit cards, debit cards, UPI, BHIM,

internet banking, mobile banking, mobile wallets, etc.


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Discount for E-Bill

A discount of Rs. 10 per consumer per bill shall be provided for those opting for E-bills

through written/email confirmation. No hard copy of the bills shall be generated for such

consumers.

Rate of Interest on Arrears

The rate of interest chargeable on the arrears of payment of billed dues shall be as given

below:

Sr.

No.

Delay in Payment (months) Interest Rate

per annum (%)

1 Payment made after 60 days and before 90 days from the date

of billing

12%

2 Payment made after 90 days from the date of billing 15%

Load Factor Incentive

Consumers having Load Factor above 75% and upto 85% will be entitled to an incentive in

the form of a rebate of 0.75% on the Energy Charges for every percentage point increase in

Load Factor from 75% to 85%. Consumers having a Load Factor above 85 % will be

entitled to a rebate of 1% on the Energy Charges for every percentage point increase in

Load Factor from 85%. The total rebate will be subject to a ceiling of 15% of the Energy

Charges applicable to the consumer.

This incentive is applicable only to consumers in the Tariff categories HT I: Industry, HT

II: Commercial and HT V: Public Services - HT V (A) and HT V (B) only.

The Load Factor incentive will be available only if the consumer has no arrears with the

Distribution Licensee, and payment is made within seven days from the date of the

electricity bill. However, it will be available to consumers in whose case payment of arrears

in instalments has been allowed by the Distribution Licensee, and such payment is being

made as scheduled. The Distribution Licensee shall take a commercial decision on the

schedule for such payments.


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The Load Factor is to be computed as follows:

Load Factor = ______Consumption during the month in MU__________

Maximum Consumption possible during the month in MU

Maximum consumption possible = Contract Demand (kVA) × Unity Power Factor

× (Total no. of hours during the month, less actual interruptions hours recorded on meter

for billing period)

In case the consumer exceeds its Contract Demand (including during the non-peak hours,

i.e., 22:00 hrs to 06:00 hrs.) in any particular month, the Load Factor Incentive will not be

payable to the consumer in that month.

Penalty for exceeding Contract Demand

In case a consumer (availing Demand-based Tariff) exceeds his Contract Demand, he will

be billed at the applicable Demand Charge rate for the Demand actually recorded, and also

be charged an additional amount at the rate of 150% of the applicable Demand Charge (only

for the Demand in excess of the Contract Demand).

Under these circumstances, the consumer shall not be liable for any other action under

Section 126 of the EA, 2003, since the penal additional Demand Charge provides for the

penalty that the consumer is liable to pay for exceeding his Contract Demand. In case a

consumer exceeds his Contract Demand on more than three occasions in a calendar year,

the action to be taken would be governed by the provisions of the Supply Code Regulations.

Additional Demand Charges for Consumers having Captive Power Plant

For consumers having a Captive Power Plant, additional Demand Charges at the rate of Rs.

20/kVA/month shall be payable only on the extent of the Stand-by demand component and

not on the entire Contract Demand. The additional Demand Charges will be levied on the

Stand-by component only if the consumer’s demand exceeds his Contract Demand.

Consumers’ Security Deposit

1) Subject to the provisions of Section 47(5) of the Electricity Act, 2003, the

Distribution Licensee shall require any person to whom supply of electricity has

been sanctioned to deposit an amount as security in accordance with the provisions

of Section 47(1) (a).


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2) The amount of the Security Deposit shall be equal to the average of three months’

of billing or the billing cycle period, whichever is lesser. For determining the

average billing, the average of the billing to the consumer for the last twelve months

or, where supply has been provided for a shorter period, the average of the billing

of such shorter period, shall be considered

3) Where the Distribution Licensee requires security from a consumer at the time of

commencement of service, the amount of such security shall be estimated based on

the Tariff category and Contract Demand/Sanctioned Load, Load Factor, diversity

factor and number of working shifts of the consumer.

4) The Distribution Licensee shall re-calculate the amount of Security Deposit

payable, based on the actual billing of the consumer, once in each financial year.

5) Where the amount of Security Deposit maintained by the consumer is higher than

the security required to be maintained under the Supply Code Regulations, the

Distribution Licensee shall refund the excess amount to the consumer in a single

instalment.

6) Such refund shall be made upon a request of the person who gave the security, and

with intimation to the consumer if different from such person; and shall be made, at

the option of such person, by way of adjustment in the next bill or by way of a

separate cheque payment within 30 days from the receipt of such request;

7) No refund shall be required to be made where the amount of refund does not exceed

10% of the amount of the Security Deposit required to be maintained by the

consumer or Rs. 300/-, whichever is higher.

8) Where the amount of security re-assessed as above is higher than the Security

Deposit of the consumer, the Distribution Licensee shall be entitled to raise a

demand for additional security deposit. The consumer shall be given not less than

30 days to deposit the additional security pursuant to such demand.

9) Upon termination of supply, the Distribution Licensee shall, after recovery of all

amounts due, refund the remaining amount of security to the person who deposited

it, with intimation to the consumer if different from such person.


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10) A consumer - (i) with a consumption of electricity of not less than one lakh kilo-

Watt hours per month; and (ii) with no undisputed sums payable to the Distribution

Licensee under Section 56 of the Electricity Act, 2003 may, at the option of such

consumer, deposit security by way of cash, irrevocable letter of credit or

unconditional Bank Guarantee issued by a scheduled commercial Bank.

11) The Distribution Licensee shall pay interest on the amount of Security Deposit in

cash (including by cheque or demand draft) at the Bank Rate declared by the

Reserve Bank of India as on 1st April of the financial year for which the interest is

payable, provided that the amount of such cash Deposit maintained by the consumer

is at least Rs. 50/-.

12) Interest on the Security Deposit made in cash shall be payable from the date of its

deposit by the consumer till the date of dispatch of the refund by the Distribution

Licensee.

Definitions

Maximum Demand:

Maximum Demand in kilo-Watts or kilo-Volt Amperes, in relation to any period shall,

unless otherwise provided in any general or specific Order of the Commission, mean twice

the highest number of kilo-watt-hours or kilo-Volt Ampere hours supplied and taken during

any consecutive thirty-minute blocks in that period.

Contract Demand:

Contract Demand means the demand in kilo-Watt (kW) or kilo–Volt Amperes (kVA),

mutually agreed between the Distribution Licensee and the consumer as entered into in the

agreement or agreed through other written communication. (For conversion of kW into

kVA, the Power Factor of 0.80 shall be applied.)

Sanctioned Load:

Sanctioned Load means the load in kW mutually agreed between the Distribution Licensee

and the consumer.

Billing Demand - LT Tariff categories:

Monthly Billing Demand will be the higher of the following:


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a) 65% of the actual Maximum Demand recorded in the month during 0600 hours to

2200 hours;

b) 40% of the Contract Demand.

Note:

• Only the Demand registered during the period 0600 to 2200 Hrs. will be considered

for determination of the Billing Demand.

• In case of a change in Contract Demand, the above period will be reckoned from

the month following the month in which the change in Contract Demand is effected.

Billing Demand - HT Tariff categories:

Monthly Billing Demand will be the higher of the following:

a) Actual Maximum Demand recorded in the month during 0600 hours to 2200 hours;

b) 75% of the highest Billing Demand recorded during the preceding eleven months,


c) 55% of the Contract Demand*.

*For FY 2020-21: 55%, FY 2021-22: 60%, FY 2022-23: 65%, FY 2023-24: 70%, FY

2024-25: 75%

Note:

• Only the Demand registered during the period 0600 to 2200 Hrs. will be considered

for determination of the Billing Demand.

In case of a change in Contract Demand, the above period will be reckoned from the month

following the month in which the change of Contract Demand is effected.


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APPENDIX – 1: List of persons who attended the Technical

Validation Session (TVS) held on 24 December, 2019

Sr. No. Name of Representative Organization

1. Shri Kandarp Patel AEML-D

2. Shri Kapil Sharma AEML-D

3. Shri Kishor Patil AEML-D

4. Shri Vivek Mishra AEML-D

5. Shri Anupam Patra AEML-D

APPENDIX – 2: List of persons who attended Public Hearing

dated 04 February, 2020

Sr. No. Name of Representative Organization

1. Dr. Ashok Pendse TBIA

2. Shri Rakshpal Abrol Individual

3. Shri N. Ponrathnam Individual

4. Ms. S.R. Mehendale Tata Power

5. Shri Madhav Tekawade VIPL

6. Shri Saurabh Gupta NUPLLP

7. Shri Rakesh Bodalia VPPL

8. Shri Somit Sen TOI

9. Ms. Priyanka Gharote KEIPL

10. Shri Suresh C. Solanki Individual

11. Shri Kishor Patil AEML-D

12. Shri Vivek Mishra AEML-D

13. Shri Anupam Patra AEML-D

14. Shri Abaji Naralkar AEML-D

15. Shri Kapil Sharma AEML-D

16. Shri Sachin Gupta AEML-D

before the maharashtra electricity regulatory ......case no.325 of 2019 merc multi-year tariff order...

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