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KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2016

OF

MESCOM

ANNUAL PERFORMANCE REVIEW FOR FY15

&

ANNUAL REVENUE REQUIREMENT FOR FY17-19

&

REVISION OF RETAIL SUPPLY

TARIFF FOR FY17

30th

March 2016

6th and 7th Floor, Mahalaxmi Chambers

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

Phone: 080-25320213 / 25320214

Fax : 080-25320338

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

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

ii

C O N T E N T S

CHAPTER

Page No.

1.0 Mangalore Electricity Supply Company Ltd., -

MESCOM

3

1.1 MESCOM at a Glance 5

1.2 Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue

for FY15

5

2 Summary of Filing and Tariff Determination

Process

7

2.0 Background for Current Filing 7

2.1 Preliminary Observations of the Commission 7

2.2 Public Hearing Process 8

2.3 Consultation with the Advisory Committee of the

Commission

9

3.0 Public Consultation – Suggestions / Objections

and Replies

10

3.1 List of persons who filed written objections 10

4 Annual Performance Review for FY15 13

4.0 MESCOM’s Application for APR for FY15 13

4.1 MESCOM’s Submission 13

4.2 MESCOM’s Financial Performance as per

Audited Accounts for FY15

15

4.2.1 Sales for FY15 16

4.2.2 Distribution Losses for FY15 20

4.2.3 Power Purchase for FY15 21

4.2.4 RPO Compliance by MESCOM for FY15 24

4.2.5 Operation and Maintenance Expenses 25

4.2.6 Depreciation 28

4.2.7 Capital Expenditure for FY15 29

4.2.8 Prudence check of capital expenditure for FY15 31

4.2.9 Prudence Check of Capital Expenditure for FY13

& FY14

34

4.2.10 Interest and Finance Charges 35

4.2.11 Interest on Working Capital 36

4.2.12 Interest on Consumer Deposits 37

4.2.13 Other Interest and Finance Charges 38

4.2.14 Capitalisation of Interest and other Expenses 38

4.2.15 Other Debits 38

4.2.16 Net Prior Period Charges 39

4.2.17 Return on Equity 40

4.2.18 Income Tax 40

4.2.19 Other Income 41

4.2.20 Fund towards Consumer Relations / Consumer

Education

41

4.3 Abstract of Approved ARR for FY15 41

iii

4.3.1 Gap in Revenue for FY15 43

5.0 Annual Revenue Requirement for FY7-19 -

MESCOM’s Filing

44

5.1 Annual Performance Review for FY15 & FY16 45

5.2 Annual Revenue Requirement for FY17-19 45

5.2.1 Capital Investments for FY17-19 45

5.2.2 Sales Forecast for FY17-19 51

5.2.3 Distribution Losses for FY17-19 62

5.2.4 Power Purchase for FY17-19 63

5.2.5 Sources of Power 65

5.2.6 MESCOM’s Power Purchase Cost and

Transmission Charges

67

5.2.7 RPO Target for FY17 71

5.2.8 O & M Expenses for FY17-19 72

5.2.9 Depreciation 76

5.2.10 Interest on Capital Loans 78

5.2.11 Interest on Working Capital 80

5.2.12 Interest on Consumer Security Deposit 82

5.2.13 Other Interest and Finance Charges 83

5.2.14 Interest and other expenses capitalised 83

5.2.15 Interest on belated payment of power purchase

cost

83

5.2.16 Other Debits 84

5.2.17 Net Prior Period Credit / Charges 84

5.2.18 Return on Equity 85

5.2.19 Other Income 87

5.2.20 Fund Towards Consumer Relations / Consumer

Education

88

5.3 Treatment of Regulatory Asset 88

5.4 Abstract of ARR for FY17-19 89

5.5 Segregation of ARR into ARR for Distribution

Business and ARR for Retail Supply Business

90

5.6 Gap in Revenue for FY17 92

5.7 Application for Additional Revenue Requirement

for FY17

93

6 Determination of Tariff for FY17 95

6.0 MESCOM’s Proposal and Commission’s Analysis

for FY17

95

6.1 Tariff Application 95

6.2 Statutory Provisions Guiding Determination of

Tariff

95

6.3 Consideration for Tariff filing 96

6.4 New Tariff Proposals by MESCOM 97

6.5 Revenue at Existing tariff and deficit for FY17 99

6.6 Other issues 131

6.6.1 Tariff for Green Power 131

6.6.2 Determination of Wheeling Charges 132

6.6.3 Wheeling within MESCOM area 132

6.6.4 Wheeling of Energy using Transmission Network

or network of more than one licensee

134

iv

6.6.5 Charges for Wheeling of energy by RE sources

(Non REC route) to consumer in the State

135

6.6.6 Charges for Wheeling Energy by RE sources

wheeling energy from the State to a

consumer/other outside the State and for those

opting for Renewable Energy Certificate

135

6.7 Other Tariff related issues 135

6.8 Cross Subsidy Levels for FY17 140

6.9 Effect of Revised Tariff 140

6.10 Summary of the Tariff Order 141

6.11 Commission’s Order 143

Appendix 144

Appendix - I 178

v

LIST OF TABLES

Table

No.

Content Page

No.

4.1 ARR for FY15 – MESCOM’s Submission 14

4.2 Financial Performance of MESCOM for FY15 15

4.3 MESCOM’s Accumulated Profit / Losses 16

4.4 Approved & Actual Sales for FY15 19

4.5 MESCOM’s Power Purchase for FY15 21

4.6 RPO Compliance as submitted by MESCOM for FY15 24

4.7 Normative O & M Expenses – MESCOM’s Submission 25

4.8 Approved O & M Expenses as per Tariff Order dated

12.05.2014

26

4.9 Allowable O & M Expenses for FY15 27

4.10 Capital Expenditure of MESCOM for FY15 29

4.11 Approved Vs Actual Capital Investment 31

4.12 Gist of Prudence Check Findings for FY15 32

4.13 Summary of Works having cost overrun 32

4.14 Summary of Woks having time overrun 32

4.15 Allowable Interest on Loans – FY15 35

4.16 Allowable Interest on Working Capital for FY15 37

4.17 Allowable Interest and Finance Charges 38

4.18 Allowable Other Debits 39

4.19 Allowable Return on Equity 40

4.20 Approved revised ARR for FY15 as per APR 42

5.1 Proposed ARR for FY17-19 44

5.2 Proposed capital investment program by MESCOM

for FY17 to FY19

46

5.3 Physical Progress of E&I Works for FY13 onwards 47

5.4 Category wise approved number of installations 60

5.5 Category wise approved Energy Sales 61

5.6 Projected Distribution Losses – FY17-19 –MESCOM’s

Submission

62

5.7 Approved & Actual Distribution Losses – FY10-FY16 62

5.8 Approved Distribution Losses for FY16 63

5.9 Requirement of Electricity as filed by Licensees 64

5.10 Energy Requirement as field by MESCOM 64

5.11 Power Purchase requirement allowed for the control

period FY17 to FY19

65

5.12 Abstract of Power Purchase allowed for ESCOMs for

the control period FY17 to FY19

67

5.13 Power Purchase Cost of MESCOM for FY17 69



5.16 O & M Expenses for FY17-19 – MESCOM’s Proposal 73

5.17 Computation of Inflation Index for FY17 74

5.18 Approved O & M Expenses for FY17-19 75

vi

5.19 Depreciation FY17-19 – MESCOM’s Proposal 76

5.20 Approved Depreciation for FY17-19 77

5.21 Interest on Capital Loans - MESCOM’s Proposal 78

5.22 Approved Interest on Capital Loan for FY17-19 80

5.23 Interest on Working Capital – MESCOM’s Submission 80

5.24 Approved Interest on Working Capital for FY17-19 81

5.25 Interest on Consumer Security Deposits for FY17-19 –

MESCOM’s Proposal

82

5.26 Approved Interest on Consumer Security Deposits for

FY17-19

83

5.27 Approved Interest and Finance Charges for FY17-19 84

5.28 Return on Equity – MESCOM’s Proposal 85

5.29 Status of Debt Equity Ratio for FY17-19 86

5.30 Approved Return on Equity for FY17-19 86

5.31 Other Income – MESCOM’s Proposal 87

5.32 Approved other Income for FY17-19 87

5.33 Treatment of Regulatory Asset 89

5.34 Approved ARR for FY17-19 89

5.35 Approved Segregation of ARR FY17-19 91

5.36 Approved Revised ARR for Distribution Business – FY17-

19

91

5.37 Approved ARR for Retail Supply Business- FY17-19 91

5.38 Revenue Gap for FY17 92

6.1 Revenue Deficit for FY17 99

6.2 Wheeling charges 133

vii

LIST OF ANNEXURES

SL.NO. DETAILS OF ANNEXURES Page

No.

I Total Approved Energy and Cost of all ESCOMs for

FY17

206

II Approved Power Purchase of MESCOM – FY17 212

III Proposed and approved Revenue for FY17 218

IV Electricity Tariff – 2017 225

viii

ABBREVIATIONS

AAD Advance Against Depreciation

AEH All Electric Home

ABT Availability Based Tariff

A & G Administrative & General Expenses

ARR Annual Revenue Requirement

ATE Appellate Tribunal for Electricity

BBMP Bruhut Bangalore Mahanagara Palike

BDA Bangalore Development Authority

BESCOM Bangalore Electricity Supply Company

BMP Bangalore Mahanagara Palike

BST Bulk Supply Tariff

BWSSB Bangalore Water Supply & Sewerage Board

CAPEX Capital Expenditure

CCS Consumer Care Society

CERC Central Electricity Regulatory Commission

CEA Central Electricity Authority

CESC Chamundeshwari Electricity Supply Corporation

CPI Consumer Price Index

CWIP Capital Work in Progress

DA Dearness Allowance

DCB Demand Collection & Balance

DPR Detailed Project Report

EA Electricity Act

EC Energy Charges

ERC Expected Revenue From Charges

ESAAR Electricity Supply Annual Accounting Rules

ESCOMs Electricity Supply Companies

FA Financial Adviser

FKCCI Federation of Karnataka Chamber of Commerce & Industry

FR Feasibility Report

FoR Forum of Regulators

FY Financial Year

GESCOM Gulbarga Electricity Supply Company

GFA Gross Fixed Assets

GoI Government Of India

GoK Government Of Karnataka

GRIDCO Grid Corporation

HESCOM Hubli Electricity Supply Company

HP Horse Power

HRIS Human Resource Information System

ICAI Institute of Chartered Accountants of India

IFC Interest and Finance Charges

IW Industrial Worker

ix

IP SETS Irrigation Pump Sets

KASSIA Karnataka Small Scale Industries Association

KEB Karnataka Electricity Board

KER Act Karnataka Electricity Reform Act

KERC Karnataka Electricity Regulatory Commission

KM/Km Kilometre

KPCL Karnataka Power Corporation Limited

KPTCL Karnataka Power Transmission Corporation Limited

KV Kilo Volts

KVA Kilo Volt Ampere

KW Kilo Watt

KWH Kilo Watt Hour

LDC Load Despatch Centre

MAT Minimum Alternate Tax

MD Managing Director

MESCOM Mangalore Electricity Supply Company

MFA Miscellaneous First Appeal

MIS Management Information System

MoP Ministry of Power

MU Million Units

MVA Mega Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

NFA Net Fixed Assets

NLC Neyveli Lignite Corporation

NCP Non Coincident Peak

NTP National Tariff Policy

O&M Operation & Maintenance

P & L Profit & Loss Account

PLR Prime Lending Rate

PPA Power Purchase Agreement

PRDC Power Research & Development Consultants

REL Reliance Energy Limited

R & M Repairs and Maintenance

ROE Return on Equity

ROR Rate of Return

ROW Right of Way

RPO Renewable Purchase Obligation

REC Renewable Energy Certificate

SBI State Bank of India

SCADA Supervisory Control and Data Acquisition System

SERCs State Electricity Regulatory Commissions

SLDC State Load Despatch Centre

SRLDC Southern Regional Load Dispatch Centre

STU State Transmission Utility

TAC Technical Advisory Committee

x

TCC Total Contracted Capacity

T&D Transmission & Distribution

TCs Transformer Centres

TR Transmission Rate

VVNL Visvesvaraya Vidyuth Nigama Limited

WPI Wholesale Price Index

WC Working Capital

xi

KARNATAKA ELECTRICITY REGULATORY COMMISSION,

BANGALORE - 560 001

Dated this 30th day of March, 2016

Order on MESCOM’s Annual Performance Review for FY15 & Annual

Revenue

Requirement for FY17-19 & Revision of

Retail Supply Tariff for FY17

In the matter of:

Application of MESCOM in respect of the Annual Performance Review for

FY15, Annual Revenue Requirement for FY17-19 and Revision of Retail Supply

Tariff for FY17, under Multi Year Tariff framework.

Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member

Shri D.B.Manival Raju Member

O R D E R

The Mangalore Electricity Supply Company Ltd., (hereinafter

referred to as MESCOM) is a Distribution Licensee under the

provisions of the Electricity Act, 2003, and has, on 15.12.2015, filed

the following applications for consideration and orders:

a) Review of Annual Performance for FY15 and approval of

revised ARR thereon.

b) Approval of ARR for FY17-19

xii

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

year 2016-17 (FY17)

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

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

conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations 2006, and other enabling Regulations, the

Commission has considered the applications and the views and

objections submitted by the consumers and other stakeholders. The

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

xiii

CHAPTER – 1

INTRODUCTION

1.0 Mangalore Electricity Supply Company Ltd.- (MESCOM):

The MESCOM is a Distribution Licensee under Section 14 of the

Electricity Act, 2003 (hereinafter referred to as the Act). The MESCOM

is responsible for purchase of power, distribution and retail supply of

electricity to its consumers and also providing infrastructure for open

access, Wheeling and Banking in its area of operation which includes

four Districts of the State as indicated below:

1. Dakshina

Kannada

2. Udupi

3. Shivamogga

4. Chikamagaluru

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

incorporated on 30thApril, 2002. The MESCOM commenced its

operations on 1stJune, 2002.

xiv

At present the MESCOM’s area of operations are structured as follows:

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

Mangalore

Mangalore Circle

Mangaluru-1

Mangaluru-2

Bantwal

Puttur

Udupi Circle

Udupi

Kundapura

Shivamogga Circle

Shivamogga

Bhadravathi

Sagar

Shikaripura

Chikamagaluru Circle

Kadur

Chikamagaluru

Subsequently, the MESCOM was split into two companies namely the

Mangalore Electricity Supply Company Ltd., with headquarters at

Mangalore covering five districts namely Dakshina Kannada, Udupi,

Shimoga, Chikkamagauru and Kodagu and the Chamundeshwari

Electricity Supply Corporation Ltd., (CESC) with headquarters at Mysore

covering four districts namely Mysore, Chamarajanagar, Mandya and

Hassan. This came into effect from 1st April, 2005.

Further, the Madikeri Division (Kodagu District) was transferred from the

MESCOM to the CESC with effect from 1st April, 2006.

The O & M divisions of the MESCOM are further divided into forty nine

sub-divisions with each of the sub-divisions having two to three O & M

xv

section offices. There are 189 O & M accounting / non-accounting

section offices.

The section offices are the base level offices looking into operation

and maintenance of the distribution system in order to provide reliable

and quality power supply to the MESCOM’s consumers.

1.1 The MESCOM at a glance:

The profile of MESCOM is as indicated below:

Sl.

No.

Particulars

Statistics

1 Area Sq. Km. 26222

2 Districts No.s 4

3 Taluks No.s 22

4 Population Lakhs 61.55

5 KPTCL Sub-stations (66 kV &above) No.s 82

9 MESCOM Sub-stations (33 kV) No.s 36

10 Distribution Transformer Centers No.s 51594

11 HT lines Ckt. Km 30779

8 LT lines Ckt. Km 76181

6 Net Fixed Assets (As on 31-03-2015) Rs. in Cr. 872.92

7 No. of Consumers Lakhs 21.18

12 Energy Sales in FY-15 MU 4146.37

13 Rev. Demand in FY15 Rs. in Cr. 2281.60

14 Rev. Collection in FY-15 Rs. in Cr. 2172.53

15 Revenue Collection Efficiency in FY-15 % 95.22% Note: Data as per Tariff filing of MESCOM dtd.15.12.2015

1.2 Number of Consumers, Sales in MU to various categories of

consumers and details of Revenue for FY15 as filed by

MSECOM are as follows:

Category No. of

Installation

Sales in

MU

Revenue

in Rs.Crs.

Domestic 1557078 1235.2 550.14

Commercial 182823 458.55 364.57

Industrial 26555 836.29 545.93

Agriculture 263567 1116.58 429.90

Others 44602 499.74 391.06

Total 2074625 4146.37 2281.60

xvi

M/s MSEZL, as a deemed licensee, is purchasing power from MESCOM as per

the bulk supply tariff determined by the Commission. M/s MSEZL, has filed

separate application for approval of ARR and retail supply tariff for its

distribution and supply area for the control period FY17 - 19.

The MESCOM has filed its application for approval of Annual Performance

Review for FY15, Annual Revenue Requirement (ARR) for FY17-19 and Retail

Supply Tariff for FY17.

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

Commission’s decisions are discussed in detail in the subsequent Chapters of this

Order.

xvii

CHAPTER – 2

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

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

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

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

MESCOM in its present application filed on 15th December, 2015 has

sought approval for the Annual Performance Review (APR) for FY15

based on the audited accounts, ARR for the fourth control period i.e.,

FY17-19 and Revised Retail Supply Tariff for FY17.

2.1 Preliminary Observations of the Commission:

After a preliminary scrutiny of applications, the Commission had

communicated its observations to MESCOM on 1st January, 2016. The

preliminary observations were mainly on the following points:

Capital Expenditure for FY15

Proposed capex for FY17-19

Estimation of Sales for FY17-19

Estimation of sales to IP sets consumption for FY17-19

Power Purchase

Interest and Finance charges

Other new proposals

Compliance to Directives issued by the Commission

MESCOM in response has furnished its replies on 11th January, 2016. The

replies furnished by MESCOM are considered in the respective Chapters of

this Order. Further, the Commission also held a validation meeting to discuss

the proposals of MESCOM on 10th February, 2016.

xviii

2.2 Public Hearing Process:

As per the Karnataka Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of

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

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

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

the application of the MESCOM as petition and directed the MESCOM

to publish the summary of ARR and Tariff proposals in the newspapers

calling for objections if any from interested persons.

Accordingly, the MESCOM has published the same in the following

newspapers:

Name of the News Paper Language Date of Publication

THE NEW INDIAN EXPRESS English

17/1/2016

&

18/1/2016

THE HINDU

VIJAYAVANI

Kannada

VIJAYA KARNATAKA

MESCOM’s application on APR for FY15, ARR for FY17-19 and revision of

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

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

public.

In response to the application of MESCOM, the Commission has received

three hundred and fifty eight statements / letters of objections. MESCOM has

furnished its replies to all these objections. The Commission has held a

Public Hearing on 29th February, 2016 at Mangaluru. The details of the

written / oral submissions made by various stake holders and the response

from MESCOM thereon have been discussed in Chapter - 3 / Appendix to

this Order.

xix

2.3 Consultation with the Advisory Committee of the Commission:

The Commission has also discussed the proposals of KPTCL and all

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

During the meeting the following important issues were also discussed:

Performance of KPTCL / ESCOMs during FY15

Major items of expenditure of KPTCL / ESCOMs

Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while

issuing the order.

xx

CHAPTER – 3

PUBLIC CONSULTATION

SUGGESTIONS / OBJECTIONS & REPLIES

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

the Commission undertook the process of public consultation, to

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

on the application filed by MESCOM, for Annual Performance Review

for FY15, approval of ERC and ARR for FY17, FY18 and FY19 and

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

In the written submissions as well as during the public hearing, the

Stake-holders and the public have raised several objections/ made

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

have filed written objections and made oral submissions are given

below:

List of persons who filed written objections:-

Sl.

No

Application No. Name & Address of Objectors

1 MB -01 Mangalore, SEZ

2 MB-02 Sri Yagnanarayana M.N, General Secretary, Laghu

Udyog Bharati – Karnataka, Bengaluru.

3 MB- 03 Sri Balasubaramanya Bhat. J, Belthangady Taluk.

4 MB-04 SriM.G.Bharath, Maddikere

5 MA- 01 to MA-62 Sri K.C. Umesh & Others Thirthahalli.

6 MA-63 to MA-128 Sri K. Narasimha Nayak & Others Thirthahalli.

7 MA-129 Sri Anil Savur D, Secretary, The Karnataka Planters’

Association, Chikmagalur

8 MA-130 Sri K.B. Arasappa, Hon. Gen Secretary, KASSIA,

Bengaluru.

9 MA- 131 Sri Lokaraj, Secretary, Federation of Karnataka

Chambers of Commerce and Industry, Bengaluru.

xxi

10 MA-132 Sri Rajendra Suvarna, President, The Karnataka

Coastal Ice Plant and Cold Storage Owners

Association, Udupi.

11 MA-133 to 232 Sri Shankarappa & Others Thirthahalli

12 MA- 233 Sri Sushil K Shenoy, Chief Executive Officer, ONGC

Mangalore Petrochemicals Limited, Mangaluru.

13 MA-234 Sri Venkatagiri Rao, Secretary Consumers’ Forum,

Sagar.

14 MA-235 Ms.Vathika Pai, Secretary, Kanara Chamber of

Commerce & Industry, Mangaluru.

15 MA-236- MA-242 Sri T.S. Prakash & others, Thirthahalli.

16 MA- 243 Sri Sathyanaryana Udupa, Principal Secretary,

Bharathiya Kissan Sangha, Udupi District.

17 MA-244 to MA-343 Sri K. Parameshappa & others, Tarikere and Kadur

18 MA-344 Sri D. Subrahmanya Bhat, Dakshina Kannada District.

19 MA-345 Sri Ajith Kamath, Secretary, Kanara Small Industries

Association.

20 MA-346 to MA-354 Sri Srinivasa Bhat & others Udupi District Krishika

Sangha.

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

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

Police, Administration, Bengaluru

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

Hearing, held on 29.02.2016.

SL.No. Names & Addresses of Objectors

1 Sri Satvinder, Indus Towers.

2 Sri Ramamohan Pai, Sri B.A. Nazeer, Sri Srinivasa Kamath, Sri S.S.

Kamath, Kanara Chamber of Commerce & Industry & Kanara Small

Industries Association.

3 Sri Devadas Shetty & Uday Kumar, Karnataka Coastal Ice Plant &

Cold Storage Owners Association.

4 Sri Bala Subramanya Bhat, Savayava Krishi Parivara

xxii

5 Sri Narasimha Nayak, President, Thirthahalli Irrigation Pumpset Users

Association

6 Sri Ramakrishna Sharma, Udupi Zilla Krishika Sangha.

7 Sri Kudi Srinivasa Bhat, Udupi Zilla Krishika Sangha.

8 Sri Venugopal M, Udupi Zilla Krishika Sangha.

9 Sri Anil Savur, Karnataka Planters Association

10 Sri B.V. Poojary, President, Bharatiya Kissan Sangha, Udupi.

11 Sri Satyanarayana Udupa, General Secretary, Bharatiya Kissan

Sangha, Udupi.

12 Sri V. Suryanarayana, Vice President, Mangalore SEZ.

13 Sri K. Parameshwarappa, Bharatiya Kissan Sangha, Chikmagalur.

14 Sri M.G. Lokeshappa, Kallapura, Tarikere Taluk, Bharatiya Kissan

Sangha.

15 Sri K.N. Venkatagiri Rao, Balakedarara Vedike, Sagar

16 Sri Chethan Jain, IEx.

17 Sri Dr. K.V.Rao, Director, Regional Science Centre.

18 Sri K.Jayaraj Pai representing KASSIA & FKCCI, Bangalore.

19 Sri Manjunath M.M & Sri Bharath, Vidyuth Balakedarara Sangha

Mudigere.

20 Sri Eshwar Raj, Journalist, Mangalore.

21 Sri Hanif Saheb, Human Rights Federation, Member, Mangalore

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

views is in Appendix-1 of this order.

xxiii

CHAPTER – 4

ANNUAL PERFORMANCE REVIEW FOR FY15

4.0 MESCOM’s Application for APR for FY15:

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

approval of its revised ARR in the Annual Performance Review (APR) for

FY15 based on the Audited Accounts.

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

its preliminary observations on its application. MESCOM, in its letter

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

observations of the Commission.

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

had approved MESCOM’s Annual Revenue Requirement (ARR) for

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

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

for FY15 along with Retail Supply Tariff for FY15.

The Annual Performance Review for FY15 based on MESCOM’s Audited

Accounts is discussed in this Chapter.

4.1 MESCOM’s Submission:

MESCOM has submitted its proposals for revision of ARR for FY15 based

on the Audited Accounts as follows:

xxiv

TABLE – 4.1

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

Sl.

No Particulars As Filed

1 Energy @ Gen Bus in MU 4838.62

2 Energy @ Interface in MU 4688.54

3 Distribution Losses in % 11.57

Sales in MU

4 Sales to other than IP & BJ/KJ 3046.70

5 Sales to IP & BJ/KJ 1099.48

Total Sales 4146.18

Revenue

6 Revenue from tariff and Misc. Charges 1760.59

7 Revenue Subsidy 430.75

Total 2191.34

Expenditure

8 Power Purchase Cost 1467.63

9 Transmission charges of KPTCL 184.41

10 SLDC Charges 6.10

Power Purchase Cost including cost of

transmission 1658.14

11 Employee Cost 226.41

12 Repairs & Maintenance 34.94

13 Admin & General Expenses 60.42

Total O&M Expenses 321.77

14 Depreciation 63.68

Interest & Finance charges

15 Interest on Loans 63.44

16 Interest on Working capital 34.61

17 Interest on consumer deposits 33.96

18 Other Interest & Finance charges 2.19

19 Less interest & other expenses capitalised 2.39

Total Interest & Finance charges 131.81

20 Other Debits 6.46

21 Net Prior Period Debit/Credit (28.62)

22 Return on Equity 66.23

23 Provision for taxation (3.43)

24

Funds towards Consumer

Relations/Consumer Education 0.05

25 Other Income 38.63

26 Tariff subsidy of prior period 23.67

Net ARR 2204.56

xxv

Considering the revenue of Rs.2191.34 Crores against a net ARR of

Rs.2204.56 Crores, MESCOM has reported a gap in revenue of Rs.13.22

Crores for FY15.

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

Overview of the financial performance of MESCOM for FY15, as per its

Audited Accounts is given below:

TABLE – 4.2

Financial Performance of MESCOM for FY15

Amount in Rs. Crores

Sl.

No. Particulars FY15

Receipts

1 Revenue from Tariff and misc. charges 1663.88

2 Tariff Subsidy 425.93

Total Revenue 2089.81

Expenditure

3 Power Purchase Cost 1467.63

4 Transmission charges of KPTCL 184.41

5 SLDC Charges 6.10

Power Purchase Cost including cost of transmission 1658.14

6 O&M Expenses 322.81




9 Interest on Working capital 25.08

Interest on belated payment of power purchase 85.43


11 Other Interest & Finance charges 2.20

12 Less: Interest and other expenses capitalized 3.39

Total Interest & Finance charges 193.57

13 Other Debits 6.19

14 Net Prior Period Debit/Credit (28.62)

15 Other income 140.17

16 Income tax 0

Net ARR 2075.87

As per the Audited Accounts, MESCOM has earned a profit of Rs.13.93

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

accounts in the previous years are as follows:

xxvi

TABLE – 4.3

MESCOM’s Accumulated Profit / Losses

Particulars

Amount in

Rs.Crs

Accumulated losses as at the end of FY10 50.73

Profit earned in FY11 1.70

Profit earned in FY12 6.41

Losses incurred in FY13 (12.60)

Profits earned in FY14 0.20

Profits earned in FY15 13.93

Accumulated losses as at the end of FY15 85.57

As seen from the above table, the accumulated profits are Rs.85.57

Crores.

Commission’s analysis and decisions:

The Annual Performance Review for FY15 has been taken up duly

considering the actual expenditure as per the Audited Accounts

against the expenditure approved by the Commission in its Tariff Order

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

decisions of the Commission thereon are as discussed in the following

paragraphs:

4.2.1 Sales for FY15:

a) Sales - other than IP sets:

The Commission in its Tariff order dated 12.05.2014 had approved

total sales to various consumer categories at 4193.00 MU as against

xxvii

the MESCOM’s proposal of 4143.19 MU. The actual sale of energy of

MESCOM, as per the audited accounts, is 4103.29 MU [excluding SEZ,

KPCL & wheeled energy] indicating a short fall in sales to the extent of

89. 70 MU, as against the approved sales. The reduction in sales is

67.88 MU in LT-categories and 21.83 MU in HT-categories. It is noted

that, as against approved sales[excluding KPCL sales and supply to

SEZ] of 3043.01 MU to categories other than BJ/KJ and IP sets, the

actual sales achieved by MESCOM is 3003.82 MU, resulting in the

reduction of sales to these categories by 39.18 MU. Further, MESCOM

has sold 1099.47 MU to BJ/KJ and IP category against approved sales

of 1149.99 MU, resulting in reduction sales to these categories by 50.52

MU.

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

73.21%, as against the estimated share of 72.57% resulting in 0.64

percentage point increase in share to these categories, while the

actual share of sales to BJ/KJ and IP sets has decreased by the same

percentage.

b) Sales to IP sets

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

specific consumption of IP sets as 4,597 units/installation/annum for the

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

consumption reported by the MESCOM in its filing, the specific

consumption works out to 4,280 units /installation/annum for the FY15,

which indicates a decrease in the specific consumption by 317

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

MESCOM for the FY15 was 1086.18 MU as against 1134.10 MU sales

quantity approved by the Commission. Thus, the specific consumption

has decreased by 317 units /installation/annum with the corresponding

decrease in overall sales by 47.92 MU as compared to the quantum

approved by the Commission.

Further, the Commission had approved 2,48,638 as number of

installations which would be serviced in the FY15; whereas the actual

number of installations serviced as reported by the MESCOM was

xxviii

2,60,399. The difference in number of installations is 11,761. This

indicates around 5 per cent increase in the number of installations as

compared to that approved by the Commission for the FY15. Further, it

is also noted that the increase in number of installations has not

resulted in increase in sales which indicates that the number of

installations may have been serviced during the later half of the FY15.

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

the MESCOM to furnish every month to the Commission, the IP set

consumption by considering the actual readings of individual IP set

installations, in view of substantial progress achieved in metering of IP

sets, instead of assessing the IP set consumption based on the meter

readings of sample DTCs feeding predominant IP loads. However, the

MESCOM has not submitted the total IP set consumption based on the

metered data of individual IP set installations but has submitted the IP

consumption based on the meter readings of sample DTCs feeding

predominant IP set loads, the methodology followed previously for

assessing the IP set consumption.

The Commission in its preliminary observations on the tariff filing by the

MESCOM had directed it to justify its claims of IP consumption of

1,086.18 MU considered for the FY15, with necessary data in its support.

The MESCOM, in its reply to the preliminary observations, has submitted

the data in respect of IP set consumption from April, 2014 to March,

2015 with the details of assessment based on the meter readings of

sample DTCs feeding predominant IP set loads, instead of IP set

consumption based on the metered data of individual IP set

installations as directed. The MESCOM has not furnished any reason as

to why it has not considered the meter readings of individual IP set

installations for arriving at a total consumption of 1,086.18 MU for the

FY15.

xxix

Further, during the validation meeting held on 10.02.2016, the

MESCOM, while submitting the data of IP set consumption, has

reiterated that the total IP consumption for the FY15 has been arrived

at on the basis of energy meter readings of sample DTCs feeding

predominant IP set loads, instead of IP set consumption based on the

metered data of individual IP set installations and requested the

Commission to approve the sales of 1086.18 MU for the FY15.

The Commission notes that the specific consumption as well as the

overall sales to IP sets has decreased as compared to the quantity

approved by the Commission for the FY15. It is also noted that NJY is

not implemented in the MESCOM area to compute the IP set

consumption on the basis of metered data of segregated agricultural

feeders unlike in other ESCOMs; but the MESCOM should have

considered the meter readings of individual IP sets, where substantial

metering of IP sets has been achieved, instead of arriving at the total

consumption based on the readings of sample meters fixed to DTCs

feeding predominant IP set loads. Henceforth, the MESCOM shall

consider the actual readings of IP sets wherever metering has been

completed and report the actual consumption of IP sets on the basis of

data from IP set meters every month to the Commission as this would

be an accurate measure of IP set consumption.

For the present, in the absence of 100 per cent metered data of IP sets,

the Commission decides to accept the sales to IP sets for the FY15 as

1,086.18 MU as submitted by the MESCOM.

The category wise sales approved by Commission and the actuals for

FY15 are indicated in the table below:

TABLE – 4.4

Approved & Actual Sales for FY15

Figures in MU

Category Approved Actuals

Actuals –

Approved (

Difference)

LT-2a* 1224.76 1221.90 -2.86

xxx

LT-2b 11.98 11.49 -0.49

LT-3 306.93 304.69 -2.24

LT-4b 0.78 1.22 0.44

LT-4c 5.15 5.97 0.82

LT-5 128.90 131.44 2.54

LT-6 111.17 107.63 -3.54

LT-6 62.12 58.20 -3.92

LT-7 27.22 19.12 -8.10

HT-1 86.96 83.34 -3.62

HT-2a 720.61 710.78 -9.83

HT-2b 221.13 153.86 -67.27

HT-2c 77.16 146.64 69.48

HT-3a & b 23.40 23.22 -0.18

HT-4 16.13 14.40 -1.73

HT-5 18.60 9.92 -8.69

Sub total 3043.01 3003.82 -39.18

BJ/KJ 15.89 13.29 -2.60

IP 1134.10 1086.18 -47.93

Sub total 1149.99 1099.47 -50.52

Grand

total**

4193.00 4103.29 -89.70

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

**Excludes sale of 10.68 MU to KPCL , 8.64 MU to SEZ and wheeled energy of 32.39MU.

From the above table it is noted that the major categories

contributing to the reduction in sales with respect to the approved

figures are HT Commercial (67.27 MU) and IP sets (47.93 MU).

The Commission during the course of validation had sought

explanation from MESCOM regarding unbilled sales of 20 MU

declared in revised ARR for FY15. MESCOM, in its replies, has stated

that, subsidy in respect of IP sets is being claimed on actual amount

billed as per DCB and the unbilled sales (both revenue & energy) are

being considered for energy audit purpose on accrual basis and

therefore subsidy on unbilled sales is not claimed from GoK. Since the

revenue demand for this unbilled sales is included in the revenue for

sale of power to IP sets in the revised ARR for FY15, this has to be

claimed from the Government as subsidy.

As such the Commission approves 4103.29 MU as the overall sales to

various categories of consumers of MESCOM for FY-15. In addition,

10.68 MU sold to KPCL is also approved. The sales made by the

xxxi

Mangalore SEZ to its consumers after procuring power from MESCOM

are dealt with separately in the order passed in the case of

Mangalore SEZ.

4.2.2 Distribution Losses for FY15:

MESCOM’s Submission:

The Commission had approved distribution losses for FY15 as

shown in the table below:

Range FY15

Upper limit 11.75%

Average 11.50%

Lower Limit 11.25%

MESCOM has reported a loss level of 11.56% in its annual

accounts for FY15.

1 Energy at Interface Points in MU 4688.54

2 Total sales in MU 4146.37

3 Distribution losses as a percentage of

input energy at IF points 11.56%


The distribution losses of 11.56% reported by MESCOM is based on the

sales of 4146.37 MU as against the energy of 4688.54 MU at interface

points. MESCOM in its audited accounts has reported that 32.39 MU of

energy is wheeled energy which is considered for loss calculations.

Considering the approved range of losses for FY15, the actual

distribution losses of MESCOM falls within the approved range of losses.

Hence no penalty/incentive regarding distribution loss has been

factored for FY15.

4.2.3 Power Purchase for FY15:

MESCOM’s submission:

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

source wise quantum and cost of power purchase for FY15. MESCOM,

xxxii

in its application has submitted the details of actual power purchase

for FY15 for the purpose of review of its Annual Performance. The

details of power purchases made during FY15 are indicated as under:

TABLE – 4.5

MESCOM’s POWER PURCHASE FOR FY 15

Particulars

Actuals for FY15 Approved for FY15

Difference of Actuals

over the Approved-for

FY15

% increase /decrease over

an approved figures

Energy

in MUs

Cost in

Rs. Crs.

Rate

in Rs

per

Unit

Energy

in MUs

Cost in

Rs. Crs.

Rate

in Rs

per

Unit

Energy

in MUs

Cost

in Rs

Crs.

Rate

in Rs

per

Unit

Energy Cost Rate

KPCL Hydel

Stations

1274.85 70.77 0.56 1297.75 68.70 0.53 -22.90 2.07 0.03 -1.76 3.01 -22.90

KPCL-

Thermal

Stations

1285.38 489.45 3.81 1337.92 509.52 3.81 -52.54 -20.07 0.00 -3.93 -3.94 -52.54

Total 2560.23 560.22 2.19 2635.67 578.22 2.19 -75.44 -18.00 -0.01 -2.86 -3.11 -75.44

CGS 967.87 311.42 3.22 1045.73 306.77 2.93 -77.86 4.65 0.28 -7.45 1.52 -77.86

Major IPPs 82.99 37.30 4.49 53.10 24.24 4.56 29.89 13.06 -0.07 56.29 53.88 29.89

IPPs -Minor

(NCE

Projects)

729.90 274.06 3.75 875.19 312.10 3.57 -145.29 -38.04 0.19 -16.60 -12.19 -145.29

Other

States

Projects

14.01 4.40 3.14 17.14 5.46 3.19 -3.13 -1.06 -0.04 -18.26 -19.41 -3.13

Short

/Medium

term

including U

I & Sce-11

444.28 227.40 5.12 298.66 155.79 5.22 145.62 71.61 -0.10 48.76 45.97 145.62

Transmissio

n Charges

(KPTCL &

PGCIL)

216.61 214.79 0.00 1.82 0.00 0.85

LDC

Charges

(POSOO &

SLDC)

6.36 2.29 0.00 4.07 0.00 177.73

Energy

Balancing

39.34 20.17 5.13 39.34 20.17 5.13

Others

Charges

0.20 0.00 0.20 0.00

TOTAL 4838.62 1658.14 3.43 4925.49 1599.66 3.25 -86.87 58.48 0.18 -1.76 3.66 5.52

Commission’s analysis and decisions;

1. The actual power purchase for FY15 as filed by MESCOM for

approval of its Annual Performance Review is 4838.62 MU at a cost

of Rs.1658.14 Crores, as against the approved quantum of 4925.49

MU at Rs.1599.66 Crores. Thus, there is a reduction in actual

xxxiii

quantum of power purchase to an extent of 86.87 MU but with an

increase in the cost to an extent of Rs. 58.48 Crores.

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

purchases, the following deviations in the quantum of energy and

its cost of power purchase are found:

i. As against the approved quantum of 4925.49 MU, the actual

power purchased by the MESCOM is 4838.62 MU, indicating

decrease in sales to an extent of 86.87 MU, which is about 1.76%

of the approved quantum. Such decrease during FY14 was 2.52%

and thus the accuracy of projection of approved power

purchase has increased from 97.48% to 98.24 %.

ii. The reduced purchase of energy is reflected in reduction in sales.

iii. On an analysis of the source wise power purchase, it is found that,

except from Major IPPs, the energy supply from other sources has

decreased to an extent of 301.72 MU including a cost of Rs.52.45

Crores. Consequently, in excess of approved quantum MESCOM

has purchased additional Short term power, to a tune of 145.62

MU thus incurring an additional cost of Rs.71.61 Crores. This has

resulted in increase in overall power purchase cost to a tune of

Rs.58.48 Crores. Consequent to reduction in supply of energy

from KPCL Thermal, CGS, IPPs, NCE and projects located outside

the States, the power purchase cost has increased by 18 Paise

per unit for FY15.

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

supply and reconciliation of energy and its cost among ESCOMs

have resulted in increased average power purchase cost of

MESCOM at the rate of Rs.3.43 per KWh as against the approved

rate of Rs.3.25 per unit, leading to an overall increase by Rs.0.18

per unit. During FY 14 the increase in per unit cost was 8.31% i.e.,

Rs. 0.27per unit and during FY15, the percentage increase in the

cost is 5.52%, i.e., Rs.0.18 per unit.

xxxiv

v. The D1 format of MESCOM indicates the energy balancing

among other ESCOMs of 39.34 MU amounting to Rs. 14.96 Crores,

as against 39.36 MU costing Rs.32.18 Crores, as per the SLDC

Energy Balancing Statement. Considering the energy balancing

statement furnished by the SLDC, the actual power purchase of

MESCOM would be 4838.64 MU at a cost of Rs 1670.15 Crores. As

the SLDC has furnished the final energy balancing statement after

the accounts of MESCOM were audited during August, 2015, the

Power Purchase as per the Energy Balancing Statement furnished

by SLDC could not be accounted for. Thus, there is a difference in

the cost to an extent of Rs 12.01 Cr which needs to be accounted

for, during FY16.

3. The Commission notes that the SLDC has not implemented the intra-

state ABT scheme. As per the directions issued by the Government

of Karnataka vide its letter dated 28th January 2016, intra state ABT

scheme has to be implemented immediately by the KPTCL and

ESCOMs. The Commission therefore directs all the stakeholders to

take appropriate action immediately to implement intra-state ABT

scheme and to host the details thereof details on their respective

websites.

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

directed MESCOM to move the Government to effect necessary

adjustments in the tariff subsidy payable to the ESCOMs and ensure

that there are no inter ESCOM payments outstanding in their

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

ESCOM exchanges and its costs duly making necessary

adjustments to ensure proper accounting of energy and its cost.

5. MESCOM is directed to reconcile the inter-ESCOM energy

exchanges and its costs every month and such costs shall be

collected/paid, out of the tariff subsidy received from Government

of Karnataka, to ensure proper accounting of energy and its cost.

xxxv

6. In terms of the MYT Regulations, the Commission having recognized

the above facts decides, to consider 4838.62 MU at a cost of Rs.

1658.14 Crores towards power purchase for FY15.

4.2.4 Renewable Purchase Obligation (RPO) compliance by MESCOM for

FY15:

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

solar RPO are at 14.80% and 0.88% respectively as against target of

10% and 0.25% respectively, as indicated below:

TABLE – 4.6

RPO compliance as submitted by MESCOM for FY15

Company

Name

Total

Input

Energy

(MU)

Non-Solar RPO Solar RPO

Target Achieved Target Achieved

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

MESCOM 4838.62 483.86 10 715.88 14.80 12.10 0.25 42.53 0.88

The Commission has perused the source-wise renewable energy

purchased, as submitted by MESCOM under D1 format of the Petition

vis-à-vis the RPO compliance data submitted by MESCOM in its reply to

the Commission’s preliminary observations.

The Commission has approved total input energy of 4838.62 MU for

FY15 in its APR. Thus, MESCOM was required to purchase 483.86 MU of

Non-solar energy and 12.10 MU of solar energy to meet its RPO targets.

Based on the information furnished, the Commission notes that

MESCOM has achieved 14.80% of non-solar and 0.88% of solar RPO for

FY15. Thus, MESCOM has over-achieved its non-solar and solar RPO

target by 4.80 percentage points and 0.63 percentage points

respectively.

4.2.5 Operation and Maintenance Expenses:


xxxvi

MESCOM has sought approval of O&M expenditure of Rs.321.77

Crores for FY15. The break-up of O&M expenses are as follows:

TABLE – 4.7

Normative O & M Expenses – MESCOM’s submission

Amount in Rs. Crores.

Particulars FY15

Employee cost 226.41

Administrative & General Expenses 60.42

Repairs and Maintenance 34.94

Total O & M Expenses 321.77


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

O&M expenses for FY15 as detailed below:

xxxvii

TABLE – 4.8

Approved O&M Expenses as per Tariff Order dated 12.05.2014

Particulars FY15

No. of installations as per actuals as per Audited Accts 2063968

Weighted Inflation Index 6.89%

CGI based on 3 Year CAGR 3.96%

Actual O&M expenses for FY13 - in Rs.Crs. 260.07

Total approved O&M Expenses for FY15 – in Rs.Crs. 315.06

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

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

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

Bureau, Government of India and adopting the methodology followed

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

inflation for FY15 is computed as follows:

Year WPI CPI Composite

Series Yt/Y1=Rt Ln Rt

Year

(t-1)

Product [(t-

1)* (LnRt)]

2003 92.6 107 104.12

2004 98.72 111.1 108.624 1.04 0.04 1 0.04

2005 103.37 115.8 113.314 1.09 0.08 2 0.17

2006 109.59 122.9 120.238 1.15 0.14 3 0.43

2007 114.94 130.8 127.628 1.23 0.20 4 0.81

2008 124.92 141.7 138.344 1.33 0.28 5 1.42

2009 127.86 157.1 151.252 1.45 0.37 6 2.24

2010 140.08 175.9 168.736 1.62 0.48 7 3.38

2011 153.35 191.5 183.87 1.77 0.57 8 4.55

2012 164.93 209.3 200.426 1.92 0.65 9 5.89

2013 175.35 232.2 220.83 2.12 0.75 10 7.52

2014 182 246.9 233.92 2.25 0.81 11 8.90

A= Sum of the product column 35.36

B= 6 Times of A 212.19

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

D=B/C 0.07

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

e=Annual Escalation Rate (%)=g*100 7.24

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

the Commission has considered the following:

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

to Pension and Gratuity Trust.

xxxviii

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

number of installations considering the actual number of

installations as per audited accounts up to FY15.

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

d) Efficiency factor at 1% as considered in the earlier two control

periods.

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

Particulars FY15

No. of Installations As per actuals as per Audited Accts 2074626

Weighted Inflation Index 7.24%

Consumer Growth Index (CGI) based on 3 Year CAGR 4.14%

Base year O & M expenses for FY13 excluding P&G

contribution - Rs. Crores 217.49

O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores. 264.32

The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity trust.

The Commission has treated the employee costs on account of

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

component has been allowed beyond the normative O&M expenses

to enable the ESCOMs to meet their actual employee costs.

MESCOM in its audited accounts for FY15 has indicated an amount of

Rs.38.80 Crores towards contribution to Pension and Gratuity trust.

Considering the request of MESCOM to treat gratuity contribution as

uncontrollable O & M expenses, the Commission computes the

allowable O & M expenses for FY15 as follows:

TABLE – 4.9

Allowable O & M Expenses for FY15


Sl.


1 Normative O & M expenses 264.32

2 Additional employee cost (uncontrollable

O & M expenses)

38.80

3 Allowable O & M expenses for FY15 303.12

xxxix

Thus, the Commission decides to allow an amount of Rs.303.12 Crores

as O&M expenses for FY15.

4.2.6 Depreciation:


MESCOM in its application has claimed an amount of Rs.63.68 Crores

as depreciation worked out after deducting depreciation on account

of assets created out of consumer’s contributions / grants as per

Accounting Standards (AS) – 12.

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


Particulars

Opening

Balance of

Asset as on

01.04.2014

Closing

Balance of

Asset as on

31.03.2015

Depreciation

Buildings 29.11 30.85 1.01

Civil 2.21 2.43 0.13

Other Civil 0.42 0.63 0.02

Plant & M/c 212.22 221.33 12.88

Line, Cable Network 1022.26 1120.70 49.63

Vehicles 3.89 3.98 0.08

Furniture 3.06 3.28 0.17

Office Equipment 0.70 0.76 0.03

Sub Total 1273.87 1383.96 63.95

Net Depreciation 63.95 Note: The assets value indicated in the table are without Consumer Contribution/Grants.


The depreciation has been determined by the Commission in

accordance with the provisions of the KERC (Terms and Conditions for

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

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

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

weighted average rate of depreciation works out to 4.81%.

xl

Further, an amount of Rs.22.48 Crores of depreciation on assets

created out of consumer contribution / grants has been deducted as

per the Accounting Standards (AS) – 12.

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

depreciation of Rs.63.95 Crores for FY15.

4.2.7 Capital Expenditure for FY15:

MESCOM has reported a capital expenditure of Rs.261.18 Crores (as per

D17-Rs.274.25 Crores) against the approved capex of Rs.262.33 Cores for

FY15. MESCOM has furnished the actual expenditure incurred during

FY15 against the approved capex in its reply to the Commission’s

preliminary observation as shown in the following table:

TABLE – 4.10

Capital Expenditure of MESCOM for FY15


Sl.

No Particulars

Approved in

FY 15

Actual

Expenditure

For FY 15

1.

Extension & Improvement (Addl. DTCs,

Link-Lines, HT/LT Reconductoring,

providing intermediate poles, HVDS, etc.)

95.00 80.20

2. DTC Metering -

3. R-APDRP Programme 25.00 8.89

4. Replacement of faulty DTCs 20.00 28.82

5. Service Connections 30.00 34.74

6. Rural Electrification (General)

a. RGGVY Programme 20.00 59.62

b. Electrification of Hamlets 2.00 0.28

c. Energization of IP sets (including providing

infrastructure of UA IP sets) 35.00 28.40

d. Kutir Jyothi scheme 0.25 0.19

Sub-Total (a+b+c+d) 57.25 88.49

7 Tribal Sub Plan

a. Electrification of Tribal Colonies 0.60 0.07

b. Energization of IP sets 0.35 0.06

c. Kutir Jyothi scheme 0.03 0.01

Sub-Total 0.98 0.14

8. Special Component Plan

a. Electrification of S.C. Colonies 1.00 0.14

b. Energization of IP sets 1.00 0.27

c. Kutir Jyothi 0.10 0.01

Sub-Total 2.10 0.42

9. Tools & Plants and Computers 2.00 3.71

xli

10. Civil Engineering Works 15.00 5.02

11. 33 KV sub stations & Line works 15.00 10.75

TOTAL 262.33 261.18

Commission’s analysis and decision:

From the above table, the Commission notes that, though MESCOM

has achieved a total capital expenditure almost equal to the

approved amount, it has exceeded its capex in some categories of

works. In the case of RGGVY Programme, MESCOM has achieved a

capex of Rs.59.62 Crores as against an approved amount of Rs.20

Cores and in the case of tools and plants, it has exceeded the capex

from Rs.2 Crores to Rs.3.71 Crores.

Also, in capital expenditure incurred on Replacement of Faulty

transformers by new Transformers MESCOM is indicated a capex of

Rs.28.82 Crores, against the approved capex of Rs.20 Crores. In this

regard, MESCOM shall note that, the failed transformers should be

replaced by repaired good transformers only and it should be charged

to revenue expenditure. In case, the failed transformer is not fit for

repairs and is to be scrapped only then such transformers can be

replaced by a new transformers and can be booked under capex.

The Commission had sought the details of failure of transformers,

repairs and procurement installation of new transformers for

replacement of failed transformers for FY15 from MESCOM in its

preliminary observations. In reply, MESCOM has stated that, total failed

transformers were 5740 out of which 4650 are repaired and 565 are

scrapped. But, MESCOM has stated that, it has used 1060 new

transformers for replacing failed transformers at a total cost of Rs.9.11

Crores. This amount of Rs.9.11 Crores is to be shown as capex incurred

for Replacement of Faulty transformers by new Transformers. Thus, the

total capex incurred for FY15 would be Rs.252.07 Crores instead of

Rs.261.18 Crores.

The year-wise expenditure incurred by MESCOM against the approved

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

TABLE – 4.11

Approved Vs Actual capital investment


Particulars FY12 FY13 FY14 FY15

Capital Investment Proposed

& Approved 348.55 249.85 281.44 262.33

Capital Investment actually

incurred 127.4 130.92 193.17 252.07

xlii

Short fall 221.15 118.93 88.27 10.26

% Achievement 36.55% 52.40% 68.64% 96.09%

The overall capital expenditure for FY15 after adjusting the excess

capex towards replacement of failed transformers by new

transformers, is found to be within the capex approved by the

Commission. The Commission directs MESCOM to plan its future capital

expenditure effectively, using the capital expenditure guidelines

issued by the Commission.

The Commission, taking note of the above facts, decides to allow the

actual capital expenditure of Rs.252.07 Crores for FY15.

4.2.8 Prudence check of capital expenditure for FY15:

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

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

b) Prudence check of material procurement process of FY15:

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

The Commission has taken up prudence check of the capital

expenditure incurred by MESCOM for the period FY15 by engaging the

services of M/s. Price Waterhouse Coopers Private Limited, (M/s PWC)

as consultant to evaluate the capital expenditure incurred during FY15

in respect of completed and categorized works.

As per the prudence check report the following are the salient

features:

TABLE – 4.12

Gist of Prudence check findings for FY15

Particulars Numbers Amount in

Rs. Crs

Works costing Rs.6 Lakhs and above considered

as samples 120

27.02

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

Lakhs considered as samples 50

1.96

Works costing below Rs.3 Lakhs considered as

samples 18

0.38

Works not meeting Rs.6 Lakhs and above Nil

xliii

the norms of

prudence

Rs.6 Lakhs and Rs.3 Lakhs Nil

below Rs.3 Lakhs Nil

Total works not meeting the norms of prudence

as stipulated in the guidelines issued by this

Commission

Nil

TABLE – 4.13

Summary of Works having cost overrun

Particulars Within 10% 10-25% Above 25%

Rs.6 Lakhs and above 12 1 -

Rs.6 Lakhs and Rs.3 Lakhs 1 - -

Below Rs.3 Lakhs 1 - -

TABLE – 4.14

Summary of Works having Time overrun

Particulars Within a

month

Between one

and four month

above 4

Months

Rs.6 Lakhs and above 4 11 6

Rs.6 Lakhs and Rs.3 Lakhs 2 4 5

Below Rs.3 Lakhs 2 2 1

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

check to MESCOM.

xliv

b) Prudence check of material procurement process of FY15

The MESCOM has been executing capital works both on turnkey as

well as partial turnkey contracts. In the process, the MESCOM procures

major materials like, distribution transformers, poles and conductor etc.

and issues them to the partial turnkey contractor for carrying out the

labour contract work as per the award. The contractor would also

invest on some of the minor materials associated with the works viz.,

cross arm, bolt & nuts, earthing materials etc., if necessary.

In view of the fact that, a large quantity of major materials are being

procured by the ESCOMs, the Commission had decided to review

material procurement process of major materials as a part of

prudence check carried out, to ensure that, the procurement is carried

out in a cost effective manner without compromising the operational

needs.

Hence, the consultant was directed to look into the procurement

process of the MESCOM, and analyse the process.

The consultant has conducted the material audit and stated that, in

MESCOM, the annual Capital budget is being prepared during the

beginning of the financial year. The capital investment programme

includes turnkey works & departmental execution works. The materials

budget is carved out from the capital budget. 75-80% of the amount

allotted for the works, which are to be taken up departmentally and

on partial turnkey basis is carved out to prepare materials Budget. The

procurement is processed through Tendering as per the Karnataka

Transparency in Public Procurements (KTPP) Act & rules and other

Circulars of both MESCOM and Government of Karnataka (GOK).

Tenders are floated at intervals, duly observing the store stock.

xlv

The material stock statements are collected from all divisional stores

and monitored at corporate office on weekly basis. Usually materials

required for 3 months consumption are kept as buffer stock in each

divisional store. As the jurisdictional area of divisions are different,

accordingly the quantity of work also varies. Hence, in some divisions,

consumption of materials is more. Materials are diverted to needy

divisions from other divisions, where stock is more in view of providing

matching materials for speedy completion of planned works.

MESCOM has maintained on an average 22% of inventory for poles at

the end of FY15 compared to opening stock of average 8%. In

distribution transformers, on an average 13% of inventory was

maintained for transformers at the end of FY15 compared to opening

stock at average 2% of total requirement. Similarly for conductors, on

an average 21% of inventory was maintained for conductors at the

end of FY15 compared to opening stock of average 8% of total

requirement. For insulators also, on an average 28% of inventory was

maintained at the end of FY15 compared to opening stock of average

13% of total requirement.

The Commission considers that overall material procurement by

MESCOM is prudent.

4.2.9 Prudence check of capital expenditure for FY13 &FY14:

The Commission had disallowed interest and depreciation charges on

the capex of six works of MESCOM and one work of KPTCL prudence

attributable to MESCOM for not constructing down streamlines in the

tariff order dated 2nd March, 2015.

MESCOM has submitted to the Commission adequate data to justify

that the works meet the norms of prudence.

xlvi

The Commission after examining the justification given by MESCOM

decides to consider the works as meeting the norms of prudence and

decides that, the disallowance need not be continued.

4.2.10 Interest and Finance Charges:

a) Interest on loan:


MESCOM in its application has claimed an amount of Rs.63.44

Crores towards interest on loans.

Considering the opening balance of loans, new borrowings and

the repayment of loans during FY15, the weighted average rate

of interest on the average loan amount works out to 11.47%.

MESCOM has requested the Commission to allow an amount of

Rs.50.29 Crores for FY15 towards interest on loans.


The Commission has noted the status of opening and closing balances

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

shown below:

TABLE – 4.15

Allowable Interest on Loans – FY15


Particulars FY15

Opening Balance Secured Loans 396.80

Opening Balance Un-secured Loans 20.44

Total opening balance of loans 417.24

Less Short term loans/ Over draft 0.00

Less Interest accrued & dues 0.00

Total Long term secured & unsecured loans 417.24

Add: New Loans 158.22

xlvii

Less: Repayments 115.43

Total loan at the end of the year 460.03

Average Loan 438.63

Allowable Interest on Capital Loans 50.29

Considering the average loan of Rs.438.36 Crores and an amount of

Rs.50.29 Crores incurred towards interest on long term loans, the

weighted average of interest works out to 11.47%. The actual

weighted average rate of interest is comparable with the prevailing

rate of interest for long term loans.

The Commission therefore decides to allow an amount of Rs.50.29

Crores towards interest on loans for FY15.

4.2.11 Interest on Working Capital:


MESCOM in its application has stated that it has borrowed

amounts on short term loans and overdrafts during the year to

meet its day to day expenditure during FY15. As per the audited

accounts, MESCOM has incurred an amount of Rs.25.08 Crores

towards interest on short term loans / overdrafts during FY15.

However, MESCOM in its application under format D9 has

claimed an amount of Rs.34.61 Crores an interest on working

capital.


As per the audited accounts MESCOM has incurred an interest of

Rs.25.08 Crores on short term borrowings during FY15.

xlviii

The present interest rates by commercial banks and financial

institutions are based on the base rate of interest declared by RBI from

time to time. Hence, the Commission would consider base rate plus

certain basis points depending upon the tenure of the loan. As per the

MESCOM’s replies to the Commission’s preliminary observations, it is

stated that short term loans are availed at an interest rate of 10.90%

and overdraft at 11.25% during FY15. Considering the base rate of

interest of 9.30% and a spread of 250 basis points and noting the

downward trend in the rate of interest, the Commission decides to

allow short term loans at a normative interest rate of 11.75% for FY15.

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

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

has computed the allowable interest on working capital for FY15 as

follows:

TABLE – 4.16

Allowable Interest on Working Capital for FY15


Particulars FY15

One-twelfth of the amount of O&M Expenses 25.26

Opening GFA 1871.52

Stores, materials and supplies 1% of Opening balance of GFA 18.72

One-sixth of the Revenue 365.22

Total Working Capital 409.20

Rate of Interest (% p.a.) 11.75

Normative Interest on Working Capital 48.08

Actual interest on WC as per audited accounts for FY15 25.08

Allowable Interest on Working Capital 36.58

The Commission therefore decides to allow an amount of Rs.36.58

Crores towards interest on working capital for FY15.

4.2.12 Interest on Consumer Deposits:


MESCOM in its application has claimed an amount of Rs.33.96

Crores towards payment of interest on consumers’ security

deposits for FY15.

xlix


The Commission notes that, the interest on consumer security deposits

amounting to Rs.33.96 Crores claimed by MESCOM works out to a

weighted average rate of interest of 8.92%. As per the KERC (Interest

on Security Deposit) Regulations, 2005 the interest on consumer

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

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

The weighted average rate of interest claimed by MESCOM is within

the applicable bank rate.


towards interest on consumer security deposits for FY15.

4.2.13 Other Interest and Finance charges:

MESCOM has claimed an amount of Rs.2.19 Crores towards other

interest and finance charges for FY15, which includes charges payable

to banks / financial institutions and guarantee commission payable to

GoK. However, the Commission notes that the claims as per audited

accounts is Rs.2.20 Crores and hence decides to allow the same for

FY15.

4.2.14 Capitalization of Interest and other expenses:

MESCOM in its filing and as per the audited accounts for FY15 has

capitalized interest of Rs.2.30 Crores on funds used during construction

and Rs.0.9968 Crores towards A&G expenses during FY15. The

Commission has considered an amount of Rs. 3.39 Crores towards

capitalization of Interest and other expenses for computation of APR

for FY15.

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

TABLE – 4.17

l

Allowable Interest and Finance Charges


Sl.


1. Interest on Loan capital 50.29

2. Interest on working capital 36.58

3. Interest on consumer deposits 33.96

4. Other interest and finance charges 2.20

5. Less Interest and other expenses capitalized 3.39

6. Total interest and finance charges 119.64

4.2.15 Other Debits:


MESCOM, in its application has claimed credit balance of Rs.6.46

Crores towards other debits for FY15.


The Commission notes that as per the audited accounts, the allowable

other debits excluding the provision for bad and doubtful debts for

FY15 are as detailed below:

TABLE – 4.18

Allowable Other Debits


Sl

No Particulars FY15

1 Small and Low value items written off 0.08

2 Losses relating to fixed assets 0.82

3 Assets decommissioning cost 0.09

4 Miscellaneous losses and write offs 1.11

5 Bad debts written off 0.87

Total 2.97

Thus, the Commission decides to consider an amount of Rs.2.97 Crores

as other debits for FY15.

4.2.16 Net Prior Period Charges:


li

MESCOM has claimed credit balance of Rs.28.62 Crores towards

Net Prior Period income/expenses and losses for FY15.


As per the Audited Accounts for FY15, the prior period debit is Rs.0.73

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

provided depreciation of earlier years. Further the prior period credit

of Rs.5.68 Crores is on account of excess depreciation and other

expenses provided without considering the tariff subsidy relating to

prior period.

Thus, the Commission decides to allow a net prior period credit of

Rs.4.95 Crores for FY15.

4.2.17 Return on Equity:


MESCOM in its application has claimed Return on Equity of

Rs.66.23 Crores for FY15.


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

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

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

reserves and surplus as at the beginning of the year and also factoring

recapitalization of security deposit of Rs.26.00 Crores in compliance

with the Orders of the Hon’ble ATE in appeal No.46/2014 besides

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

as follows:

TABLE – 4.19

Allowable Return on Equity


lii

Particulars FY15

Paid Up Share Capital 216.07

Share deposit 14.00

Reserves and Surplus as on 31.03.2015 71.64

Recapitalization of Consumers’ security

deposit (26.00)

Total Equity 275.71

Allowable RoE @ 15.50% 42.74


as Return on Equity for FY15.

4.2.18 Income tax :

As per the audited accounts, MESCOM has factored Rs.3.43 Crores towards

payment of Income Tax for FY15. Further, as per the profit and loss

statement, credit entitlement of MAT is indicated as Rs.3.43 Crores. Thus, the

allowable taxes to be factored in ARR is nullified. Hence, the Commission

decides not to allow any provision towards Income Tax separately for FY15.

4.2.19 Other Income:



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

fixed deposits, profits on sale of scrap, miscellaneous recoveries and

rent from staff quarters.


As per the audited accounts, the other income is Rs.140.17 Crores for

FY15. As decided in the earlier Tariff Orders to encourage and bring in

financial discipline in timely payment of monthly power purchase bills,

the Commission decides to allow10% of the total incentive amounting

to Rs.1.35 Crores on account of timely payment of power purchase

bills, to be retained by MESCOM for FY15. Thus, after deducting the

incentive amount of Rs.1.35 Crores, the Commission decides to allow

an amount of Rs.138.82 Crores as other income for FY15.

liii

4.2.20 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per year

towards consumer relations / consumer education. MESCOM in its filing has

reported that an amount of Rs.0.05 Crores has been incurred towards

Consumer Relations / Consumer Education for FY15. The Commission

decides to allow the same.

4.3 Abstract of Approved ARR for FY15:

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

consolidated Statement of revised ARR for FY15 is as follows:

liv

TABLE – 4.20

Approved revised ARR for FY15 as per APR


Sl.No. Particulars As per APR

1 Revenue at existing tariff in Rs Crs

2 Revenue from tariff and Misc. Charges

1765.42

3 Revenue Subsidy

425.93

Total Existing Revenue 2191.35

Expenditure in

4 Power Purchase Cost

1467.63

5 Transmission charges of KPTCL

184.41

6 SLDC Charges 6.10


transmission 1658.14

7 Employee Cost

8 Repairs & Maintenance

9 Admin & General Expenses

Total O&M Expenses 303.12




12 Interest on Working capital

36.58

13 Interest on belated payment on PP Cost

0


15 Other Interest & Finance charges

2.20

16 Less interest capitalised 3.39

17 Total Interest & Finance charges 119.64

18 Other Debits

2.97

19 Net Prior Period Debit/Credit

-4.95

20 RoE

42.74

21 Taxation/MAT Credit

0

22


Relations/Consumer Education 0.05

23 Other Income

138.82

Net ARR

2046.83

lv

4.3.1 Gap in Revenue for FY15:

As against an approved ARR of Rs.2312.46 Crores, the Commission,

after the Annual Performance Review of MESCOM, decides to allow a

revised ARR of Rs.2046.83 Crores for FY15. Considering the revenue of

Rs.2191.35 Crores, a surplus of Rs.144.52 Crores is determined for the

year FY15.

The Commission decides to carry forward the surplus of Rs.144.52

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

subsequent Chapter of this Order.

lvi

CHAPTER – 5

ANNUAL REVENUE REQUIREMENT FOR FY17-19

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

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

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

FY17-19 is as follows:

TABLE – 5.1

Proposed ARR for FY17-19

Amount in Rs.Crores

Sl.

No Particulars FY17 FY18 FY19

1 Energy @ Gen Bus (With MSEZ) in MUs 5589.95 5904.27 6236.49

2 Transmission Losses in % 3.80% 3.80% 3.80%

3 Energy @ Interface in MU 5377.54 5679.91 5999.51

4 Distribution Losses in % 11.15% 11.05% 10.95%

Sales in MU

5 Sales to other than IP & BJ/KJ 3479.42 3675.38 3882.55

6 Sales to IP & BJ/KJ 1298.52 1376.90 1460.01

7 Total Sales 4777.94 5052.28 5342.56

Revenue at existing tariff in Rs Crs

8 Revenue from tariff and Misc Charges 2054.00 2166.95 2286.45

10 Tariff Subsidy 553.52 586.91 622.32

11 Total Existing Revenue 2607.52 2753.86 2908.77

Expenditure in Rs Crs

12 Power Purchase Cost 1910.41 2376.29 2530.13

13 Transmission charges of KPTCL 233.90 261.93 252.52

14 SLDC Charges 2.77 2.77 2.77

15


transmission 2147.08 2640.99 2785.42

16 Employee Cost 462.60 507.03 553.40

17 Repairs & Maintenance 44.47 50.16 56.58

18 Admin & General Expenses 75.48 86.61 102.20

19 Total O&M Expenses 582.55 643.80 712.18

20 Depreciation 76.53 85.24 94.94


21 Interest on Loans 90.61 98.26 103.62

22 Interest on Working capital 58.57 62.24 66.17

23 Interest on belated payment on PP Cost 0.00 0.00 0.00

24 Interest on consumer deposits 49.75 55.70 62.02

25 Other Interest & Finance charges 2.19 2.19 2.19

26 Less interest & other expenses capitalised 2.39 2.39 2.39

27 Total Interest & Finance charges 198.73 216.00 231.61

28 Other Debits 6.46 6.46 6.46

lvii

29 Net Prior Period Debit/Credit -4.95 -4.95 -4.95

30 Return on Equity 87.31 100.84 116.47

31


Relations/Consumer Education 0.50 0.50 0.50

32

Other Income (Including income from

MSEZ) 109.16 109.16 109.16

33 ARR 2985.05 3579.72 3833.47

34 Deficit -377.53 -825.86 -924.70

35 Surplus/Deficit for FY15 carried forward -13.22

36 Regulatory asset -92.25

37 Net ARR 3090.52 3579.72 3833.47

MESCOM has requested the Commission to approve the Annual

Revenue Requirement of Rs.3090.52 Crores for FY17, Rs.3579.72 Crores

for FY18 and Rs.3833.47 Crores for FY19. Further, MESCOM has

proposed increase in retail supply tariff by 102 paise per unit in respect

of all the categories of consumers including BJ/KJ and IP set consumers

for FY17, in order to bridge the gap in revenue of Rs.483 Crores.

5.1 Annual Performance Review for FY15& FY16:

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

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

audited accounts furnished by MESCOM. Accordingly, a surplus of

Rs.144.52 Crores of FY15, is required to be carried forward in to the ARR

of FY17.

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

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

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

5.2 Annual Revenue Requirement for FY17-19:

5.2.1 Capital Investments for FY17-19:

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

proposed capex Rs.320.40 Crores, Rs.325.40 Crores and Rs.330.40

Crores or the 4th control period, i.e., FY17, FY18 and FY19 respectively.

Some of the important works proposed for the control period are as

follows:

lviii

a) System Augmentation & Strengthening (including HVDS);

b) DTC metering;

c) Replacement of MNR/DC & Electromechanical meters by Static

meters;

d) Replacement of Faulty distribution transformers;

e) Energisation of IP sets (Providing Infrastructure to regularized UIP

sets);

f) Service connection, Rural Electrification under General/SCSP/TSP

Plan;

g) Civil Engineering Works;

h) 33 KV Sub Station and Line Works;

The details of capex under various heads proposed for FY17 to FY19 are

shown in the following Table:

TABLE – 5.2

Proposed capital investment program by MESCOM for FY17 to FY19

Amount in Rs.Crores

Sl

No Particulars FY-17 FY-18 FY-19

1

Extension & Improvement (Addl. DTCs, Link-Lines, HT/LT

Reconductoring, providing intermediate poles, HVDS,

etc.)

100 100 100

2 DTC Metering 0.25 0.25 0.25

3

Replacement of MNR / DC & Electromagnetic meters

by Static meters and providing SMC meter protection

box wherever required.

5 5 5

4 Nirantara Jyothi Yojana - - -

5 R-APDRP Programme - - -

6 Replacement of faulty DTCs 35 40 45

7 Service Connections 40 40 40

8 Rural Electrification (General)

a. RGGVY (DDG) Programme - - -

b. Electrification of Hamlets 2 2 2

c. Energization of IP sets (including providing

infrastructure of UA IP sets) 75 75 75

d. Kutir Jyothi 0.25 0.25 0.25

9 Tribal Sub Plan

a. Electrification of Tribal Colonies 1.5 1.5 1.5

b. Energization of IP Sets 0.75 0.75 0.75

c. Kutir Jyothi 0.05 0.05 0.05

10 Special Component Plan

a. Electrification of S.C. Colonies 1 1 1

b. Energization of IP sets 1 1 1

c. Kutir Jyothi 0.1 0.1 0.1

11 Tools & Plants and Computers 5 5 5

12 Civil Engineering Works 16 16 16

13 33 kV Sub stations & Line works 37.5 37.5 37.5

lix

GRAND TOTAL: 320.40 325.40 330.40


The Commission had sought necessary justification for the proposed

capex in respect of Extension & Improvement, Link-Lines, HT/LT

Reconductoring, providing intermediate poles, HVDS, etc., at Rs.100

Crores for all the three years and the MESCOM has justified its

projections while furnishing the replies to the preliminary observations.

By submitting the details of capex for FY13, FY14, FY15 and upto

November, 2015, the MESCOM has stated that, these works are of

continuous nature and would remain at same level throughout the

control period. The details furnished are as shown below:

TABLE – 5.3

Physical Progress of E&I works for FY13 onwards

Sl.

No. Particulars 2012-13 2013-14 2014-15

2015-16

(upto

Nov-15)

1 No. of DTC's added 1145 1057 1304 742

2 HT lines in RKms 673.44 528.58 716.99 385.07

3 HT lines reconductoring in

RKms 468.97 191.19 179.07 150.01

4 LT line 139.94 123.08 129.84 84.38

5 LT line reconductoring in

RKms 676.01 607.88 780.55 423.67

It can be observed from the above table that the physical progress in

the E&I works are more or less in the same range and the claim of

MESCOM is justified.

Further, the details of Spill over & new works proposed for upcoming

years are stated as follows:

Sl.

No. Particulars

Physical Amount (Rs. in Lakhs)

Spill

over

New

works Total

Spill

over

New

works Total

a Addl. Transformers: 25 KVA 150 450 600 216.00 648.00 864.00

b Addl. Transformers : 63 KVA 175 525 700 339.50 1018.50 1358.00

c

Conversion of 11kv lines into

UG cable in Shivamogga &

Mangaluru Corporation limits

6.875 20.625 27.5 266.25 798.75 1065.00

lx

d New 11kv feeders &11kv Link-

Lines 87.5 262.5 350 218.75 656.25 875.00

e 33kV Re-conductoring 13 39 52 158.46 475.37 633.83

f HT Re-conductoring 62.5 187.5 250 75.00 225.00 300.00

g LT Re-conductoring 162.5 487.5 650 253.50 760.50 1014.00

h HVDS 65 185 250 375.00 1125.00 1500.00

i Other works (Aerial fuse

board, 127.04 381.11 508.14

j Miscellaneous works 500.00 1500.00 2000.00

2529.49 7588.48 10117.97

In case of Replacement of MNR / DC & Electromagnetic meters by

Static meters and providing SMC meter protection box wherever

required, the MESCOM has indicated Rs.5 Crores each year, up to FY21

and has stated that, it is replacing the MNR meters for an average of

30, 000 meters every year duly furnishing the details of faulty meters

replaced during last 3 years are as follows:

Sl.

No Year MNR meters replaced

1 2012-13 38599

2 2013-14 33181

3 2014-15 30118

4 2015-16 (Upto Nov-15) 31425

In respect of energization of Un-authorised IP sets by creating

infrastructure, the MESCOM has justified its proposal of capex spread of

Rs.75 Crores and furnished the details of new IP sets serviced, UIP sets

regularized and Infrastructure provided to regularized IP sets during last

3 years as follows:

Sl.

No Year

New IP set

serviced

UIP

regularized

Infrastructure

provided

1 2012-13 7965 8137 7645

2 2013-14 9490 - 1761

3 2014-15 2668 14897 2421

4 2015-16 (Upto Nov-

15) 8825 639 809

The MESCOM has stated that, it has taken action to provide

Infrastructure to 7194 number of un-authorised IP sets regularized, as

per the GoK order dated 11.03.2011and a Budget provision of Rs.112.00

Crores was made during 2015-16 and works are under progress. The

scheduled date of completion is October, 2016.

lxi

Also, as per GoK order dated: 14.07.2014, 14134 Nos. of regularized UIP

sets are required to be provided with Infrastructure. For speedy

execution of Infrastructure to the remaining UIP sets, the MESCOM has

proposed to carry out the works on total turnkey basis (Rate Contract)

which may be executed during ensuing MYT period. Accordingly, a

yearly Budget provision of Rs.45 Crores has been provided. Further, an

annual Budget provision of Rs.30 Crores has been made for

energization of new IP sets under general and Ganga Kalyana

schemes. Hence the total Budget provision works out for Rs.75 Crores

per year.

In respect of replacement of faulty transformers, MESCOM has shown a

capex of Rs.35 Crores and an additional Rs.5 Crores every year

thereon. MESCOM should note that, the failed transformers should be

replaced by repaired good transformers only and it should be charged

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

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

accounted under capex. Hence, the proposed capex for replacement

of failed transformer, by new transformers, should be limited to Rs.5

Crores each year instead of proposed amount of Rs.35 Crores, Rs.40

Crores and Rs.45 Crores for FY17, FY18 and FY19 respectively.

In case of NJY, R-APDRP Programme and RGGVY (DDG) Programme,

the MESCOM has not shown any capex from FY17 onwards. It has not

stated as to whether, it is going to complete the entire programme

within FY16 and does not require capex for the future years.

While projecting the capital expenditure, the MESCOM should make

use of the “Capital expenditure guidelines for ESCOMs” issued by the

Commission and should identify the high loss masking feeders, high

loss subdivision, division and circles and prioritize its capex specifically,

to reduce losses and improve reliability of distribution system. The

length of some of the 11kV feeders is stated to be of more than 100 kms

(as per the information furnished to on justify the capex for

reconductoring works). The feeder bifurcation and load segregation

lxii

works have to be taken up on priority basis by MESCOM to reduce

losses and interruptions as well as to improve voltage regulation and

reliability.

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

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

11kV system and 6% for LT distribution system. MESCOM should

formulate plans to bring down the distribution system losses below 10%

by the end of plan period of FY21.

The MESCOM should prepare a detailed perspective plan by

conducting 11kV feeder-wise and DTC wise load flow studies to

ascertain the present and projected loads on each of the feeders and

to arrive at, least cost, techno economically feasible improvement

methods and for reducing the current level of distribution system

energy losses to bring down the present level of losses to less than 10%.

The MESCOM should make efforts to work out the Techo-economic

analysis for the works considered in system strengthening, improvement

and other works for the period from FY-17 to FY-21, so that, the

company would ascertain whether, its proposal of reducing the losses

is supported by the capex proposals.

The MESCOM should take up-system improvement works such as:

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

b) Reconfiguration of distribution lines.

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

d) Drawing express feeders to bifurcate the loads.

e) Establishing new 33kV substations and proposing for

Establishment of new transmission voltage substations by KPTCL.

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

reduce the LT line lengths.

lxiii

In light of the above discussion and keeping in view, the capex

achievement during FY15, the Commission decides to approve the

capex of MESCOM at Rs.288.9 Crores, Rs.289.4 Crores & Rs.289.9

Crores for FY17, FY18 and FY19 respectively after deducting excess

capex proposed for replacement of failed transformers by new ones,

subject to prudence check and directs the MESCOM to approach the

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

capex during the financial year.

5.2.2 Sales Forecast for FY17-19:

I. Category wise estimation of number of installations and sales

by MESCOM for the control period-FY17 to FY19:

1) MESCOM, in its Tariff application, has stated that for the control period

FY17 to FY19, the load forecast has been done based on mixed CAGR

method. It is stated that, the number of installations and energy sales

projections in respect of LT-2, LT-3, LT-4 (other than LT-4a), LT-5, LT-6, LT-7

and HT categories, have been made on the basis of CAGR for the

period from FY09 to FY15 and FY12 to FY15 and for LT-1 and LT-4a

categories, it has been estimated on the basis of specific consumption.

Further, the MESCOM has submitted the forecast prepared by M/s.

PRDCL along with EPS projections which are reproduced below:

PRDC PROJECTIONS

Year Base case Scenario-2 Scenario-3 EPS MESCOM’s

projections.

FY 13 4324.80 4341.41 4429.18 3769.05 3771.88 (*)

FY 14 4613.80 4647.61 4824.26 4116.21 4037.55 (*)

FY 15 4930.64 5006.54 5161.71 4479.94 4146.18 (*)

FY 16 5329.27 5454.67 5589.29 4835.78 4450.22

FY 17 5735.09 5900.57 6025.25 5214.34 4777.94

FY 18 6170.40 6385.41 6498.78 5577.60 5052.28

FY 19 6642.07 6915.06 7014.44 5948.51 5342.56

FY 20 7151.16 7489.55 7575.59 6348.22 5649.79

FY 21 7702.20 8115.95 8185.56 6781.61 5975.05

(*) actuals

The MESCOM has stated that, 43% of its sales have less impact on Gross

Domestic Product of the State and therefore, forecast based on

lxiv

econometrics is of least significance. Hence, MESCOM has stated that

it has prepared the forecast based on CAGR method.

2. The preliminary observations of the Commission on the sales forecast,

for the control period and the replies furnished by the MESCOM are

discussed in the following paragraphs:

i) LT (1) – BJ/KJ category:

The commission had suggested that, the MESCOM has to consider the

midyear figures for calculating specific consumption for FY15 and

multiply the same by midyear number of installations for arriving at

sales estimate or consider the specific consumption based on end year

figures and multiply the same by end year number of installation for

estimating the sales for the control period.

The MESCOM in their replies has stated that it has followed the strategy

adopted in Tariff Order-2015.

The Commission’s approach regarding sales to BJ/KJ, is discussed later

in this chapter.

The Commission’s observation on the sales projections in respect of

other categories are discussed below:

ii) Other categories excluding IP Sets:

a) MESCOM had not proposed any growth in the number of

installations in LT7- temporary power supply and HT3 (a) and (b)

categories. The Commission had suggested that, MESCOM may

revise the estimates for the number of installation in these

categories considering the previous years’ growth rate.

MESCOM has replied that it has retained the same number of

installations for LT-7 and HT-3 categories at the same level for the

lxv

control period, as energy sales to these categories are either very

high or comparatively low in some of the years.

The Commission notes that the growth in installations is not

dependent on energy sales.

b) The Commission had directed MESCOM to analyze the reasons

for very high growth rate in FY15 in respect of HT1 installations at

12.9% compared to normal growth in the range of 7% to 8%.

The MESCOM has stated that for estimation of number of

installations, it has adopted 7.09% growth rate and has not

furnished any reasons for high growth rate in FY15.

c) The Commission had suggested that the MESCOM may revise

the estimates for the number of installations for HT4 category,

considering the negative growth rate in the previous year and

the negative CAGR for the period 2009-10 to 2013-15 and 2010-

12 to 2013-15. The MESCOM in their replies has stated that the

growth rate during the period FY10- FY12 has been considered.

The Commission notes that by not considering the data of FY13

to FY15, the recent trend in the growth rate is not accounted.

d) Regarding the sales growth rate considered for LT5, the MESCOM

has replied that the same is reasonable.

e) The MESCOM had not proposed any growth in sales to LT7

temporary category and therefore it was suggested to revise the

estimates. The MESCOM has stated that energy sale to this

category is either very high or comparatively low in some of the

years. The Commission notes that the sales to this category do not

follow a specific trend.

f) Regarding the lower sales growth rate considered for HT1 and

higher for HT2 (a) with reference previous year growth rate,

lxvi

MESCOM has replied that it has adopted the CAGR for the period

FY-12 to FY-15.

g) Regarding higher sales growth rate considered for HT-4 category,

MESCOM has stated that it has adopted CAGR for the period FY13

to FY15.

h) The Commission had sought clarification as to whether MSEZ has

requested for supply of power for the control period and if so the

quantum of power requested for each of the years and the costs

thereon.

MESCOM in their replies has stated that based on sales approved

for FY-16, it has retained the FY-16 sales for the control period also.

The sales approved for SEZ for the control period are separately dealt

by the Commission in the tariff order of Mangalore SEZ.

II. The Commission’s approach for estimating the number of

installations and sales for Control Period FY17-19:

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

which specify that the Commission shall normally adopt the forecast as

per EPS and can deviate from the EPS while approving ERCs or PPAs

by passing orders after duly giving opportunity to the stakeholders.

For the present control period FY17 to FY19, the estimates as filed by

ESCOMs indicate that, the sales forecast is not in tune with the 18th EPS.

The tariff petition filed by the ESCOMs, which includes the sales

estimates and power purchase quantum, has been made public and

the stakeholders have been heard in the matter. After considering the

views expressed by the stakeholders, the Commission has decided to

adopt the methodology indicated in the following paragraphs which is

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

lxvii

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

supply of electricity is determined by the availability of generation,

which is at present restricted. The last three years data of energy at

the generation bus is shown below, justifies the above stand:

Year

18th EPS

MU

Actual supplied

MU

2013 58513 57046

2014 63001 57725

2015 67833 59969

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

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

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

reduction trajectory fixed by the Commission for the respective

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

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

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

usual scenario and the methodology adopted by the Commission to

estimate the number of installations and sales to categories other than

BJ/KJ and IP sets as discussed below:

1) No. of Installations:

While estimating the number of installations for the control period

(excluding BJ/KJ and IP), the following approach is adopted:

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

validating the revised estimate furnished by the MESCOM in the

current filing and considering the data furnished upto 30.11.2015.

Accordingly, the base year estimates have been revised, which has

an impact on the estimates on the number of installations and sales

for the control period.

lxviii

b. Wherever the number of installations estimated by the MESCOM, for

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

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

estimates of the MESCOM are retained.

c. Wherever the estimated number of installations as per the MESCOM

is lower than the estimates based on the CAGRs for the period FY10

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

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

FY12 - FY15 are considered.

d. Wherever the number of installations estimated by the MESCOM is

higher than the estimates based on the CAGRs for the period FY10

– FY15 and for the period FY12 - FY15, the estimate based on the

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

FY12 - FY15 are considered.

e. For LT 2b, LT-7, HT-2(c), HT-3, HT-4 and HT-5 categories, the estimates

of MESCOM are retained as there is no specific growth pattern in

these categories.

Based on the above approach, the total number of installations

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

the control period is indicated in the table below:

Nos.

FY17 FY18 FY19

Filed Approved Filed Approved Filed Approved

1813858 1798246 1891226 1869285 1973652 1943226

2) Energy Sales:

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

are estimated considering the following approach:

lxix

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

validated duly considering the actual sales upto November,

2015 and modified suitably.

b. Wherever the sales estimated by the MESCOM for the control

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

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

estimates of the MESCOM are retained.

c. Wherever the sales estimated by the MESCOM for the control

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

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

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

for the period FY12 - FY15 are considered.

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

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

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

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

FY15 are considered.

e. For LT-7, HT-2(c), HT-3 and HT-5, the proposal of the MESCOM is

retained as there is no specific growth pattern in these

categories.

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

by the MESCOM regarding the number of installations shifted to

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

Commission has worked out the sales factoring the impact of

the above. The HT-2c sales and open access sales are added to

HT-2a, HT-2(b) and HT-4 correspondingly and overall growth rate

is arrived at for the period FY13 to FY15 for estimating the sales

for FY-16 to FY-19, including open access sales. The overall sales

are then apportioned between HT-2a, HT-2(b) and HT-4 based

on contribution of these categories in FY-15, to overall sales.

lxx

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

estimated by the Commission for the control period is indicated in the

table below:

Figures in MU

FY17 FY18 FY19

Filed Approved Filed Approved Filed Approved

3355.67 3368.88 3551.63 3572.38 3758.78 3787.72

ii) Sales to BJ/KJ :

The break-up of sales to BJ/KJ installations as filed by the MESCOM for

FY-15 is as indicated below:

Particulars No. of

Installations

Consumption in

MU

Specific consumption per

installation per month

(kWh)

Installations consuming

less than or equal to18

units

141293 13.29 7.84

Installations consuming

more than 18 units and

billed under LT2(a)

54050 29.00 44.71

Considering the above specific consumption, the approved sale, for

the in respect of BJ/KJ, is as indicated below:

MU

Particulars FY17 FY18 FY19

Installations consuming less than or

equal to18 units

14.59 15.28 16.01

Installations consuming more than 18

units and billed under LT2(a)

30.79 31.72 32.68

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

lxxi

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

the specific consumption of IP sets as 4,597 units/installation/annum for

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

existence of unauthorized IP sets in the distribution system. The

MESCOM has reported the total sales of 1,086.18 MU against 2,60,399

numbers of IP set installations serviced, which translates into a specific

consumption of 4,280 units / installation / annum for the FY15. It is

observed that the actual specific consumption reported by the

MESCOM for the FY15 is less than the approved figure of 4,597 units /

installation / annum by 317 units /installation/annum. The approved

sales quantity for the FY15 was 1,134.10 MU. This indicates a decrease in

sales to an extent of 47.92 MU to that of approved quantum for the

FY15.

It is noted that the MESCOM has achieved a specific consumption of

4,280 units/installation/annum on the basis of consumption reported for

the FY15. In view of this, the Commission decides to continue the

specific consumption of 4,280 units / installation / annum, achieved by

the MESCOM during the FY15, for projection of IP set consumption for

the FY17 to the FY19 also.

It is noted that the MESCOM has projected the number of IP set

installations as 2,92,860, 3,10,578 and 3,29,368 for FY17, FY18 and FY19

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

has considered the number of IP sets furnished by the MESCOM for the

FY17 to the FY19 without any modifications. Hence, based on the

estimated number of installations for FY17 to FY19, the midyear number

of installations is determined and the sales to IP set consumers are

indicated as below: i)

ii)

Particulars As filed by the MESCOM

As approved by the

Commission

FY16 FY17 FY18 FY19 FY17 FY18 FY19

No of installations 2,76,153 2,92,860 3,10,578 3,29,368 2,92,860 3,10,578 3,29,368

Mid-Year no. of

installations

2,84,507 3,01,719 3,19,973 2,84,507 3,01,719 3,19,973

Specific consumption in 4,513 4,511 4,514 4,280 4,280 4,280

lxxii

units/installation/annum

Sales in MU 1,284.26 1,361.96 1,444.36 1,217.69 1,291.36 1,369.48

Accordingly, the Commission approves 1,217.69 MU, 1,291.36 MU and

1,369.48 MU as energy sales to IP sets as against the MESCOM’s sales

projections of 1,284.26 MU, 1,361.96 MU and 1,444.36 respectively for

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

trued up during the Annual Performance Review, for the FY17, based on

only the energy meter readings in respect of individual IP set

installations.

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

Government of Karnataka would release full subsidy to cover the

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

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

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

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

Order.

Hence, the Commission reiterates that the MESCOM shall consider the

actual readings of IP set installations, wherever metering has been

completed and shall report the actual consumption of IP sets on the

basis of metered data from individual IP set installations every month to

the Commission as this would be an accurate measure of IP set

consumption.

Further, the MESCOM is directed to take up enumeration of IP sets in its

jurisdiction in order to identify defunct/dried up wells and un-

authorized IP sets in the field and take necessary action to arrive at

correct number of IP sets on the basis of enumeration report. The

compliance regarding the same shall be submitted to the Commission

within six months from the date of issue of this order.

lxxiii

Based on the above discussions, the category-wise approved number

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

the MESCOM is indicated below:

TABLE – 5.4

Category wise approved number of installations

Category

FY-17 FY-18 FY-19

MESCOM’s

estimate

Approved MESCOM’s

estimate

Approved MESCOM’s

estimate

Approved

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

LT-2a* 1531562 1516897 1595351 1574344 1663477 1633970

LT-2b 3359 3359 3484 3484 3614 3614

LT-3 199002 198949 207934 207866 217272 217182

LT-4 (b) 187 186 190 191 193 197

LT-4 (c) 3329 3462 3528 3817 3740 4207

LT-5 29515 29515 31519 31478 33665 33571

LT-6 13885 13550 14824 14467 15826 15446

LT-6 18449 17728 19728 18957 21095 20271

LT-7 12802 12802 12802 12802 12802 12802

HT-1 80 80 86 85 92 91

HT-2 (a) 743 771 788 818 836 867

HT-2 (b) 577 577 597 581 618 585

HT2C 277 277 302 302 327 327

HT-3(a)& (b) 24 24 24 24 24 24

HT-4 47 47 49 49 51 51

HT-5 20 20 20 20 20 20

Sub-Total

other than BJ/KJ

and IP sets

Other than BJ/KJ &

IP

1813858 1798246 1891226 1869285 1973652 1943226

BJ/KJ 155065 155065 162446 162446 170178 170178

IP Sets 292860 292860 310578 310578 329368 329368

Sub Total

BJ/KJ and IP sets

447925 447925 473024 473024 499546 499546

Total** 2261783 2246171 2364250 2342309 2473198 2442772

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

** Total excludes KPCL and SEZ

Accordingly, the category- wise approved sales for the control period

vis-à-vis the estimates made by MESCOM is indicated below:

TABLE – 5.5

Category wise approved Energy sales

FY-17 FY-18 FY-19

lxxiv

Category

MESCOM’s

estimate

Approved MESCOM’s

estimate

Approved MESCOM’s

estimate

Approved

MU MU MU MU MU MU

LT-2a* 1383.79 1384.25 1472.96 1473.41 1567.94 1568.35

LT-2b 13.65 12.94 14.89 14.12 16.25 15.42

LT-3 338.89 341.71 357.41 360.38 376.92 380.06

LT-4 (b) 1.35 0.89 1.43 0.86 1.51 0.83

LT-4 (c) 6.15 4.81 6.24 4.87 6.34 4.94

LT-5 137.89 135.89 141.29 137.18 144.79 138.48

LT-6 122.68 118.39 130.97 126.63 139.82 135.43

LT-6 61.47 63.10 63.18 64.86 64.94 66.66

LT-7 19.12 19.12 19.12 19.12 19.12 19.12

HT-1 87.38 87.38 89.47 89.63 91.61 91.94

HT-2 (a) 800.82 805.52 853.59 861.12 909.84 920.56

HT-2 (b) 156.71 168.53 158.15 176.38 159.60 184.60

HT2C 180.37 180.37 197.23 197.23 214.09 214.09

HT-3(a)&

(b)

23.22 23.22 23.22 23.22 23.22 23.22

HT-4 14.98 15.56 15.28 16.18 15.59 16.82

HT-5 7.20 7.20 7.20 7.20 7.20 7.20

Sub-Total

other than

BJ/KJ and

IP sets

Other than

BJ/KJ & IP

3355.67 3368.88 3551.63 3572.38 3758.78 3787.72

BJ/KJ 14.26 14.59 14.94 15.28 15.65 16.01

IP 1284.26 1217.69 1361.96 1291.36 1444.36 1369.48

Sub Total

BJ/KJ and

IP sets

1298.52 1232.28 1376.90 1306.64 1460.01 1385.49

Total** 4654.19 4601.16 4928.53 4879.03 5218.79 5173.21

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

** Excludes sales to KPCL and SEZ

In addition to the above, estimated sale of 10.68 MU per year to KPCL,

for the control period, is also approved.

5.2.3 Distribution Losses for FY17-19:


As per the audited accounts for FY15, the MESCOM has reported

distribution losses of 11.56% as against an approved loss level of 11.50%.

The Commission in its Tariff Order dated 2nd March, 2015 had fixed the

target level of losses for FY16 at 11.25%. MESCOM in its filing has

proposed to achieve the following loss levels during FY17-19:

lxxv

TABLE – 5.6

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

Loss Figures in %


Projected

Distribution losses

11.15 11.05 10.95

Commission’s Analysis and Decisions:

The performance of MESCOMin achieving the loss targets set by the

Commission in the past five years is as follows:

TABLE – 5.7

Approved & Actual Distribution Losses-FY10 to FY16

Loss Figures in %

Particulars FY10 FY11 FY12 FY13 FY14 FY15 FY16

Approved Distribution

losses

12.90 12.50 12.10 12.00 11.75 11.50 11.25

Actual distribution

losses

12.64 13.07 12.09 11.88 11.93 11.56 -

The Commission notes that the loss reduction achieved by MESCOM in

the control period FY11-13 was 0.76 percentage point. In the

preceding years of FY14 & FY15, the loss reduction has been 0.32

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

in the past five years MESCOM has been able to achieve distribution

loss reduction of 1.08 percentage point.

The distribution loss projections indicated by the MESCOM shows

reduction from existing levels of 11.56% in FY15 to 11.15% in FY17 and

further reduction 0.10 percentage point for each of the year in FY18

and FY19. It is observed that, the Commission has been allowing

lxxvi

capital expenditure as incurred by the MESCOM and it has also

allowed the capex as proposed for the ensuing control period. The

majority of the capex like HVDS, E&I works, NJY, DTC metering, RAPDRP

should enable MESCOM not only to strengthen its infrastructure but

also reduce the distribution losses.

Thus, by considering the present loss level, the Commission decides to

fix the following distribution loss targets for FY17-19:

TABLE – 5.8

Approved Distribution Losses for FY16

Loss Figures in %


Upper limit 11.35 11.25 11.15

Average 11.15 11.05 10.95

Lower limit 10.95 10.85 10.75

5.2.4 Power Purchase for FY17-19:

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

the requirement of power purchase for the control period has been

furnished. The consolidated statement showing the energy

requirement year-wise is shown hereunder:

lxxvii

TABLE – 5.9

Requirement of electricity as filed by Licensees

Distribution Utilities Energy (MU) Energy (MU) Energy (MU)

FY17 FY18 FY19

BESCOM 32907.24 34674.06 36540.95

MESCOM 5589.96 5904.27 6236.49

CESC 7214.18 7725.09 8274.48

HESCOM 13738.00 13942.08 14849.40

GESCOM 8559.14 8902.63 9292.18

HRECS 322.87 350.14 372.61

AEQUS 12.98 17.78 22.46

MSEZ 80.49 89.33 113.06

TOTAL 68424.40 72168.78 76161.08

MESCOM’s submission:

The MESCOM has submitted its power purchase requirement for the

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

TABLE – 5.10

Energy Requirement as filed by MESCOM

Particulars As filed by MESCOM

FY 17 FY18 FY19

Sales (MU) 4777.94 5052.28 5342.56

Distribution losses (%) 11.45 11.05 10.95

Energy at IF point (MU) 5395.98 5679.91 5999.51

Transmission Losses (%) 3.47 3.37 3.27

Energy Required to meet the sales of

MESCOM (MU) 5589.95 5878.00 6202.32


The validation of sales and allowable distribution losses, has been

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

approved sales and the allowable distribution losses, the requirement

of Power for the MESCOM, for the control period FY17 to FY19, is

worked out as detailed below:

lxxviii

The quantum of energy allowed by the Commission includes the

requirement of MESCOM - SEZ.

TABLE – 5.11

Power Purchase requirement approved

for the control period FY17 to FY19

Particulars FY 17 FY18 FY19

Sales (MU) 4611.84 4889.71 5183.89

Distribution losses (%) 11.15 11.05 10.95

Energy at IF point (MU) 5190.59 5497.14 5821.33

Transmission Losses (%) 3.47 3.37 3.27

Energy Required to meet

the sales of MESCOM

(MU) 5377.18 5688.86 6018.12

MSEZ Energy 83.38 92.45 116.88

Total Energy (MU) 5460.56 5781.31 6135.00

5.2.5 Sources of Power:

MESCOM’s submission;

MESCOM has submitted that PCKL has made the source wise energy

availability and related cost and the same is considered in its filings.

Commission’s analysis and decisions

The energy requirement of the ESCOMs, including MESCOM, is being

met by Karnataka Power Corporation Limited (KPCL) Generating

stations, Central Generating Stations (CGS), Major Independent Power

producers (IPPs) and Minor Independent Power producers (NCE

sources) through long-term power purchase agreement. The

contingent requirement to meet the deficit is being met through

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

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

quantum of energy and power for the control period FY17 to FY19, the

lxxix

Commission has considered the availability as furnished by KPCL and

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

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

Karnataka, as notified from time to time.

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

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

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

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

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

Karnataka, as per the contracts executed with these generators.

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

an extent of around 1108.80 MU has already been contracted by

ESCOMs till May 2016, the same has been considered towards

availability for FY17.

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

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

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

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

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

Unit 2 and Unit 3, having a total capacity of 2400 MW, are not

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

CoD is yet to be declared.

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

synchronized and supplying power to the grid. As its commissioning

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

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

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

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

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

requirement of ESCOMs, to meet the sales targets.

lxxx

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

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

following Table.

TABLE – 5.12

ABSTRACT OF POWER PURCHASE APPROVED FOR ESCOMS FOR THE

CONTROL PERIOD FY17 TO FY19

SOURCES

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

Energy

in MU

Cost in Rs

Cr

Per unit

Cost

Energy in

MU

Cost in Rs

Cr

Per unit

Cost

Energy in

MU

Cost in Rs

Cr

Per

unit

Cost

in Rs.

KPCL Hydel

Energy 10704.90 1001.38 0.94 12045.33 1099.16 0.91 12045.33 1139.37 0.95

KPCL Thermal

Energy 17646.77 7252.08 4.11 19323.50 8392.29 4.34 20992.89 9198.23 4.38

CGS Energy 21525.17 6980.84 3.24 21525.17 7082.24 3.29 21525.17 7184.17 3.34

UPCL 7462.68 3093.67 4.15 7462.68 3129.03 4.19 7462.68 3165.10 4.24

Renewable

Energy: 6846.71 2790.38 4.08 8394.81 3413.83 4.07 10265.57 4452.20 4.34

Other State

Hydel 144.08 67.73 4.70 144.08 71.64 4.97 144.08 75.78 5.26

Short Term 1108.80 558.84 5.04 0.00 0.00 0.00 0.00

PGCIL &

POSOCO

Charges - 949.21 0.44 958.70 0.45 968.29 0.45

KPTCL

Transmission

& SLDC and

PGCIL

POSOCO

Charges - 3112.76 0.48 3197.08 0.47 3500.45 0.50

TOTAL 65439.11 25806.89 3.94 68895.57 27343.97 3.97 72435.72 29683.58 4.10

5.2.6 MESCOM’s Power Purchase Cost & Transmission Charges:


MESCOM has submitted the Power Purchase cost including the

transmission charges and LDC charges, in D1 format wherein energy to

an extent of 5589.50 MU, 5904.27 MU and 6236.49 MU at a cost of

lxxxi

Rs.2147.08 Crores, Rs.2640.99 Crores and Rs.2785.42 Crores for the

respective years of control period of FY17, FY18 and FY19 respectively.

MESCOM has submitted that, the Power Purchase Cost is considered

as per the details furnished by M/s PCKL.

Commission’s analysis and decisions

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

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

the ARR for the control period.

The basis for computation of power purchase cost for the control

period FY17 to FY19 is as indicated below:

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

and the Hydel Generating Stations exclusive of Muinirabad, MGHE,

Shiva & Shimsha, are reckoned based on the respective PPAs

approved by the Commission.

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

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

computed based on the tariffs determined by the Commission and the

Commission’s norms approved in the PPAs.

The fixed charges and variable charges for the Central Generating

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

the tariffs determined by the CERC and the CERC norms.

The variable charges of all the thermal stations including CGS stations

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

variable components.

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

the FAC exercise / Annual Performance Review of FY17.

lxxxii

Based on the allowed requirement of energy and the power allocation

given by the Government of Karnataka, the Power Purchase quantum

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

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

The consolidated power purchase cost allowed by the Commission vis-

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

period FY17 to FY19 is shown in the following:

TABLE - 5.13

Approved Power Purchase Cost of MESCOM for FY17

Source of Power

Power Purchase Cost as filed by

MESCOM

Power Purchase Cost approved by

the Commission

Energy in

MU

Cost in Rs

Cr

Per Unit

cost in

Rs

Energy in

MU

Cost in Rs

Cr

Per Unit

cost in Rs

KPCL Hydel Energy: 1179.34 75.02 0.636 683.308 71.857 1.052

KPCL Thermal Energy 1794.09 775.86 4.325 1590.036 649.941 4.088

CGS Energy 1386.79 507.78 3.662 1725.969 559.750 3.243

UPCL 391.20 150.01 3.835 598.386 248.062 4.146

Renewable Energy 762.40 300.20 3.938 762.400 293.492 3.850

Others 13.09 5.36 4.095 11.553 5.431 4.701

Short Term 62.59 31.79 5.079 88.908 44.810 5.040

PGCIL & POSOCO

Charges 64.39 0.464 76.111 0.441

KPTCL Transmission,

SLDC & PGCIL/

POSOCO Charges 236.67 0.423 248.540 0.455

TOTAL 5589.500 2147.080 3.841274 5460.559 2197.994 4.0252175

TABLE – 5.14


Source of Power

Power Purchase Cost as filed by

MESCOM

Power Purchase Cost approved

by the Commission

Energy in

MU

Cost in

Rs Cr

Per Unit

cost in

Rs

Energy in

MU

Cost in

Rs Cr

Per Unit

cost in

Rs

KPCL Hydel Energy 817.16 61.93 0.758 986.332 90.005 0.913


CGS Energy 1599.70 619.45 3.872 1762.589 579.929 3.290

UPCL 281.43 124.67 4.430 611.082 256.221 4.193


lxxxiii

Others -18.42 -8.17 4.435 11.798 5.866 4.972

PGCIL & POSOCO Charges 0.00 83.43 0.522 0.000 78.503 0.445

KPTCL Transmission, SLDC

and PGCIL/ POSOCO

Charges 0.00 264.70 0.448 0.000 240.100 0.415

TOTAL 5904.270 2640.990 4.473017 5781.307 2243.916 3.881

TABLE – 5.15


Source of Power

Power Purchase Cost as filed

by MESCOM

Power Purchase Cost

approved by the Commission

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs

Energy

in MU

Cost in

Rs Cr

Per Unit

cost in

Rs

KPCL Hydel Energy 817.16 63.35 0.775 987.161 93.376 0.946


CGS Energy 1772.32 687.80 3.881 1764.070 588.770 3.338

UPCL 281.43 125.93 4.475 611.595 259.392 4.241


Others -71.54 -29.82 4.168 11.808 6.210 5.259

PGCIL & POSOCO Charges 0.00 101.99 0.575 79.355 0.450

KPTCL Transmission and SLDC

& PGCIL POSOCO Charges 0.00 255.29 0.409 253.850 0.414

TOTAL 6236.49 2785.42 4.466 6135.001 2426.750 3.955582

The MESCOM shall regulate the quantum and cost of power as

approved by the Commission. However, since the power purchase

costs are uncontrollable as per MYT Regulations, any excess quantum

or cost will be trued up in Annual Performance Review of the respective

years.

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

term procurement and the same is retained for the year FY17.

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

has come down significantly over the years. With a view to reduce the

lxxxiv

cost of power procurement by avoiding purchase of high cost energy,

the Commission reiterates its earlier directive that, any short-term/

contingent power procurement over and above the approved rate

Rs.4.50 per Kwh, shall be made by the ESCOMs only with the prior

approval of the Commission.

The Commission also reiterates that, any short-term or medium-term

power procurement to be made over and above the approved

quantities, shall be made only through competitive bidding duly

complying with the GoI guidelines issued in the matter from time to

time.

5.2.7 Renewable Purchase Obligation (RPO) target for FY17:

a. Non-Solar RPO:

MESCOM has submitted that it will be able to achieve non-solar RPO of

12.97% as against target of 11% specified by the Commission vide its

(Procurement of Energy from Renewable Sources)(Third Amendment)

Regulations, 2015 for FY17.

The Commission has approved power purchase quantum of 5460.56

MUfor FY17 including the power purchase requirement of Mangalore

SEZ. The Non-solar RPO target would be 600.66 MU. The Commission

has approved purchase of 697.20 MU from RE sources other than Solar.

Thus, MESCOM would be able to meet its non-solar RPO.

In case, there is any need to buy RECs to fully meet the RPO, the cost

thereon would be factored in the APR of FY17.

b. Solar RPO:

As regards compliance of solar RPO, MESCOM has submitted that it will

be able to achieve solar RPO of 1.17% as against target of 0.75% as

specified by the Commission vide its (Procurement of Energy from

Renewable Sources)(Third Amendment) Regulations, 2015 for FY17.

lxxxv

The Commission has approved power purchase quantum of 5460.56

MU for FY17. The Solar RPO target would be 40.95 MU. The Commission

has approved purchase of 65.20 MU of Solar energy. Thus, MESCOM

would be able to meet its solar RPO also.

In case, there is any need to buy RECs to fully meet the RPO, cost

thereon would be factored in the APR of FY17.

5.2.8 O & M Expenses for FY17-19:

MESCOM’s Proposal:

The MESCOM in its application has requested the Commission to

consider the projected O&M expenses based on the employee cost,

R&M Expenses and A&G Expenses made on the following assumptions:

i. Administrative and General Costs are projected based on the past

4 years data.

ii. R&M Expenses are projected considering CAGR of 12.80% based on

past four years data.

iii. Employee-related costs have been projected based on the

following considerations.

Average annual basic pay per employee with reference to the

actual payments made in the year FY 15 and number of

employees working as at the end of March-2015 PLUS 3%

increase in basic pay per employee.

Working employee strength that exists as at the end of

September, 2015 is 3756. The working strength for FY16 and FY17

to FY19 are considered as 5786 and 7190, respectively by

considering the additional employees due to proposed

recruitment and the relevant employee cost has been factored

in the projection of employee expenditure.

lxxxvi

The increase in dearness allowance of 10% has been

considered for each of the years from FY16 (RE) to FY19 as

annual escalation in the in the dearness allowance.

In the year FY15, the other allowances such as house rent

allowance, etc., constitutes 11.55% of the basic pay due to

increase in the rate of HRA, the growth rate of 13.55% has been

considered to project the allowances for each of the years from

FY16 (RE) to FY19.

As per KPTCL / ESCOMs Pension & Gratuity Trust Order, monthly

contribution rates towards pension and gratuity has been

considered as 30% and 6.01%.

Based on the above assumptions, MESCOM has sought the O & M

expenses for FY17-19 as detailed below:

TABLE – 5.16

O&M Expenses for FY17-19-MESCOM’s Proposal

Amount in Rs.Crores


Employee Costs 462.60 507.03 553.40

R&M Expenses 44.47 50.16 56.58

A&G Expenses 75.48 86.61 102.20

Total O&M Expenses 582.55 643.80 712.18

Commission’s analysis &decision:

As per the norms specified under the MYT Regulations, the O & M

expenses are controllable expenses and the distribution licensee is

required to regulate these expenses within the approved values.

The Commission, in its preliminary observations on the increase in

employee cost due to additional recruitment, had sought details of

lxxxvii

cadre-wise additional employee cost projected for FY17. Further,

MESCOM was requested to clarify the reasons for projecting abnormal

employee cost for FY17 by an increase of 62.47% over FY16.

MESCOM in its replies has stated that, about 1400 officers / employees

are proposed to be recruited during FY17 and the additional cost

would be Rs.55.35 Crores. As regards the factoring an abnormal

increase in employee cost for FY17, MESCOM has not furnished any

additional justified reasons.

MESCOM has not informed the status of the recruitment and the

proposed induction of such additional employees. In the absence of

supporting data for claiming such additional employee cost due to

recruitment, the Commission is of the view that such expenses could

be considered for being incurred by the distribution licensee.

However, the Commission is of the view that any increase in the

employee strength should reflect in improved productivity and

efficiency for improved revenues and the betterment of services

rendered by the ESCOMs to its consumers of the Company.

Accordingly, the Commission will look into the issue at the time of

approving the APR for relevant years, instead of loading these costs

upfront, in the present ARR exercise, in the absence of finalization of

such recruitment.

The Commission has computed the O & M expenses for FY17-19, duly

considering the actual O & M expenses of FY15 as per the audited

accounts (being the latest data available as per the audited

accounts) to arrive at the O & M expenses for base year i.e. FY16. The

actual O& M expenses for FY15 were Rs.322.81 Crores. Considering the

Wholesale Price Index (WPI) as per the data available from the Ministry

of Commerce & Industry, Government of India and Consumer Price

Index (CPI) as per the data available from the Labour Bureau,

Government of India and adopting the methodology followed by

lxxxviii

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

escalation rate for FY17 is computed as follows:

TABLE – 5.17

Computation of Inflation Index for FY17

Year WPI CPI Composite

Series Yt/Y1=Rt Ln Rt

Year

(t-1)

Product [(t-

1)* (LnRt)]

2003 92.6 107 104.12

2004 98.72 111.1 108.624 1.04 0.04 1 0.04

2005 103.37 115.8 113.314 1.09 0.08 2 0.17

2006 109.59 122.9 120.238 1.15 0.14 3 0.43

2007 114.94 130.8 127.628 1.23 0.20 4 0.81

2008 124.92 141.7 138.344 1.33 0.28 5 1.42

2009 127.86 157.1 151.252 1.45 0.37 6 2.24

2010 140.08 175.9 168.736 1.62 0.48 7 3.38

2011 153.35 191.5 183.87 1.77 0.57 8 4.55

2012 164.93 209.3 200.426 1.92 0.65 9 5.89

2013 175.35 232.2 220.83 2.12 0.75 10 7.52

2014 182 246.9 233.92 2.25 0.81 11 8.90

A= Sum of the product column 35.36

B= 6 Times of A 212.19

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

D=B/C 0.07

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

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

7.24

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

FY17-19, the Commission has considered the following:

e) The actual O & M expenses incurred as per the audited accounts

for FY15 inclusive of contribution to the Pension and Gratuity Trust to

determine the O & M expenses for the base year FY16.

f) The three year Compounded Annual Growth Rate (CAGR) of the

number of installations considering the actual number of

installations as per the audited accounts up to FY15 and as

projected by the Commission for FY16-FY19.

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

h) Efficiency factor at 1% as considered in the earlier two control

periods.

The above said parameters are computed duly considering the same

methodology as followed in the earlier Tariff Orders of the Commission.

lxxxix

Accordingly, the normative O & M expenses for FY17-19 are as follows:

TABLE – 5.18

Approved O & M expenses for FY17-19

Particulars FY16 FY17 FY18 FY19

No. of Installations 2246171 2342309 2442772

Consumer Growth Index based on 3 Year

CAGR 4.04% 4.13% 4.28%

Weighted Inflation index 7.24% 7.24% 7.24%

Base Year O&M Cost (as per actuals of FY15) 355.27

Total allowable O&M Expenses in Rs.Crores 391.78 432.40 477.89

Since, the base year data of O & M expense for FY16 also includes the

contribution to the P & G Trust, the Commission has not considered

allowing contribution to the P & G Trust separately for the control

period for FY17-19.

Thus, the Commission decides to approve O&M expenses of Rs.391.78

Crores for FY17, Rs.432.40 Crores for FY18 and Rs.477.89 Crores for FY19.

5.2.9 Depreciation:


The MESCOM, in its application has claimed the depreciation for the

control period based on the following assumptions:

1) Depreciation rates as specified by CERC is applied on the Assets for

each year of the control period.

2) Depreciation withdrawn on the assets created on account of

contribution / grants as per Accounting Standard-12 at the same

rate of depreciation as at the end of each year for the control

period.

Accordingly, MESCOM has claimed the depreciation for FY17-19 as

detailed below:

xc

TABLE – 5.19

Depreciation-FY17-19- MESCOM’s Proposal



Depreciation 76.53 85.24 94.94


In accordance with the provisions of the MYT Regulations and

amendments issued thereon, the Commission has determined the

depreciation for FY17-19 considering the following:

a) The actual rate of depreciation of category-wise assets is

determined considering the depreciation and gross block of

opening and closing balance of fixed assets as per the audited

accounts for FY15.

b) This actual rate of depreciation so arrived at is considered to allow

the depreciation on the gross block of fixed assets projected by

MESCOM in its filing for FY17-19 duly considering the projection for

FY16.

c) The depreciation on account of assets created out of consumers

contribution / grants are considered (deducted)based on the

opening and closing balance of such assets duly considering the

addition assets as proposed by the MESCOM at the weighted

average rate of depreciation as per actuals in FY15.

Accordingly, the depreciation for FY17-19 are as follows:

TABLE – 5.20

Approved Depreciation for FY17-19



Buildings 1.16 1.26 1.36

xci

Civil 0.16 0.18 0.20

Other Civil 0.04 0.05 0.06

Plant & M/c 14.80 16.38 17.97

Line, Cable Network 60.90 67.90 75.32

Vehicles 0.08 0.09 0.09

Furniture 0.20 0.22 0.23

Office Equipments 0.04 0.04 0.04

Depreciation 77.38 86.12 95.29

Thus, the Commission decides to approve an amount of Rs.77.38

Crores, Rs.86.12 Crores and Rs.95.29 Crores towards depreciation for

FY17, FY18 and FY19 respectively.

xcii

5.2.10 Interest on Capital Loans:

MESCOM’s proposal:

MESCOM in its application has stated that, the Interest and Finance

charges for the control period are computed based on the following

assumptions:

CAPEX of Rs.353.89 Crores, Rs.320.40 Crores, Rs.325.40 Crores and

Rs.330.40 Crores for the years FY16 (RE), FY17, FY18 and FY19,

respectively and 70% of these investments is considered for loan.

Interest rate in respect of the loans from commercial banks is taken

as 11.50% on opening balance of each year.

Interest rate in respect of the loans from REC is taken as 12.25% on

opening balance of each year.

Interest rate for the RGGVY, PMGY and PFC schemes is considered

as 11.75%, 12.00% and 9.00% respectively on opening balance of

each year.

Interest rate in respect of the loans from GoK is taken as 11.00% on

opening balance of each year.

Based on the above assumptions. MESCOM has requested to approve

interest on loans for FY17-19 as follows:

TABLE – 5.21

Interest on Capital Loans– MESCOM’s Proposal



The Commission has taken note of the capex requirement and the

capital loan proposals of the MESCOM for FY17-19. As discussed earlier,

Particulars FY-17 FY-18 FY-19

Interest on capital loans 90.61 98.26 103.62

xciii

considering the approved capex, the requirement of capital loan on

the basis of 70% of the capex works out to Rs.202.23 Crores, Rs.202.58

Crores and Rs.202.93 Crores for FY17, FY18 and FY19 respectively.

Further, the Commission has considered the repayment of loan at

Rs.163.21 Crores, Rs.184.80 Crores and Rs.209.28 Crores for FY17, FY18

and FY19 respectively, as proposed by MESCOM.

As per the audited accounts and APR of FY15, the MESCOM had

incurred interest on capital loans at a weighted average rate of

interest of 11.47%. This rate of interest is considered for the existing loan

balances for which interest has to be factored during FY17. Further, for

the years FY18 and FY19, the weighted average rate of interest of the

preceding year has been considered on the existing loan balances.

As regards the additional loans during the control period, the

Commission has considered the same in compliance with the debt

equity ratio of 70 : 30. The present interest rates by commercial banks

and financial institutions are charged mainly on the basis of base rate

of interest declared by RBI from time to time plus spread of certain

basis points depending upon the tenure of the loan. Hence, the

Commission would consider the same approach in factoring the

interest on the new capital loan. As per the data furnished by

MESCOM, the interest on new capital loans are proposed at the rates

ranging from 9% to 12.25%. The Commission notes that the interest rates

proposed by MESCOM are comparatively on a higher side. MESCOM

needs to initiate financial prudence measures so as to avail loans at

comparatively lesser interest rates and reduce its interest burden on

consumers. However, considering the base rate of interest with spread

of 200 basis points and considering the downward trend in the interest

rate, the Commission decides to allow capital loans at an interest rate

of 11.75% for FY17-19. It shall be noted that, the rate of interest now

considered by the Commission on the new capital loans for the control

period is subject to review during APR and revision of ARR of the

relevant years of the control period.

xciv

Accordingly, the approved interests on capital loan for FY17-19 are as

follows:

TABLE – 5.22

Approved Interest on capital loan for FY17-19

Amount in Rs.Crores


Opening balance of loans 563.00 602.02 619.80

Add new Loans 202.23 202.58 202.93

Less Repayments 163.21 184.80 209.28

Total loan at the end of the year 602.02 619.80 613.45

Average Loan 582.51 610.91 616.62

Approved Interest on capital loan 67.07 70.33 70.99

Thus, the Commission decides to approve interest on capital loans of

Rs.67.07 Crores, Rs.70.33 Crores and Rs.70.99 Crores for FY17, FY18 and

FY19 respectively.

5.2.11 Interest on Working Capital Loan:


MESCOM has claimed interest on working capital based on the norms

prescribed in the MYT Regulations as follows:

TABLE – 5.23

Interest on Working Capital Loan – MESCOM’s Submission


Particulars FY 17 FY 18 FY 19

1/12th of O&M Expenses 48.55 53.65 59.35

Opening GFA 1535.04 1707.37 1900.03

1% on opening GFA 15.35 17.07 19.00

1/6th of Revenue 434.59 458.98 484.79

Total Working Capital 498.49 529.70 563.14

Rate of Interest (%) [*] 11.75% 11.75% 11.75%

Interest on Working Capital 58.57 62.24 66.17

xcv


As per the norms specified under the MYT Regulations, the Commission

has computed the interest on working capital which consists of one

month’s O & M expenses, 1% of opening GFA and two month’s

revenue.

The present interest rates by commercial banks and financial

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

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

consider base rate plus spread of certain basis points depending upon

the tenure of the loan. As per the MESCOM’s application, it is stated

that short term loans for FY15 and FY16 have been availed at the rate

of interest ranging from 10.35% to 11.25%. The Commission notes that,

the present short term loans availed by MESCOM is comparatively at a

higher rate of interest. MESCOM needs to initiate financial prudence

measures in availing short term loans so that the interest burdens on its

consumers are reduced. However, considering the base rate of interest

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

interest rate, the Commission decides to allow working capital loans at

a normative interest rate of 11.75% for FY17-19.

Accordingly, the approved interest on working capital for FY17-19 are

as follows:

TABLE – 5.24

Approved Interest on Working Capital Loan for FY17-19


Particulars FY 17 FY 18 FY 19

One-twelfth of the amount of O&M Expenses. 32.65 36.03 39.82

Opening Gross Fixed Assets(GFA) 1535.04 1707.37 1900.03

Stores, materials and supplies 1% of Opening

balance of GFA 15.35 17.07 19.00

One-sixth of the Revenue 425.52 451.16 478.30

Total Working Capital 473.52 504.27 537.13

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

xcvi

Interest on Working Capital Loan 55.64 59.25 63.11

Thus, the Commission decides to approve interest on working capital

loan of Rs.55.64 Crores, Rs.59.25 Crores and Rs.63.11 Crores for FY17,

FY18 and FY19 respectively.

5.2.12 Interest on Consumer Security Deposit:


MESCOM has claimed interest on consumer security deposit as follows:

TABLE – 5.25

Interest on Consumer Security Deposits for FY17-19- MESCOM’s Proposal



Opening balance of Consumer Security

Deposit 490.63 552.79 618.86

Proposed addition during the year 62.16 66.07 70.25

Total deposits 552.79 618.86 689.11

Rate of Interest per annum. 9.00% 9.00% 9.00%

Interest on Consumer Security Deposit 49.75 55.70 62.02


In accordance with the KERC (Interest on Security Deposit) Regulations

2005, the interest rate to be allowed is the bank rate prevailing on the

1st of April of the financial year for which interest is due. As per Reserve

Bank of India notification dated 29th September, 2015, the bank rate is

7.75%. This being the latest notified bank rate, the Commission has

considered the same for computation of interest on consumer Security

deposits for FY17-19.

The Commission has considered the deposits as per audited accounts

of FY15 and half yearly accounts of FY16 for onward projection for

FY17-19. The interest on consumer Security deposits for FY17-19 are as

follows:

xcvii

TABLE – 5.26

Approved Interest on Consumer Security Deposits for FY17-19



Opening balance of consumer security

deposits 472.12 514.12 558.12

Rate of Interest at bank rate to be allowed

as per Regulations 7.75% 7.75% 7.75%

Approved interest on consumer security

deposits 38.22 41.55 45.04

Thus, the Commission decides to approve interest on consumer

security deposits of Rs.38.22 Crores, Rs.41.55 Crores and Rs.45.04 Crores

for FY17, FY18 and FY19 respectively.

5.2.13 Other Interest and Finance Charges:

MESCOM has claimed an amount of Rs.2.19 Crores towards other

interest and finance charges for each year of the control period FY17-

19. Considering the expenditure on this item in the earlier years, the

Commission decides to allow an amount of Rs.2.19 Crores towards

interest and finance charges for each of the years during the control

period FY17-19.

5.2.14 Interest and other expenses capitalised:

MESCOM has claimed an amount of Rs.2.39 Crores towards

capitalization of interest and other expenses during each year of the

control period. Considering, the capital expenditure incurred and

capitalized in the previous years, the Commission decides to allow

capitalization of interest and other expenses as proposed by MESCOM

for the control period FY17-19.

5.2.15 Interest on belated payment of power purchase cost:

MESCOM in its application has requested to allow interest on belated

payment of power purchase cost. However, as per format A1

xcviii

MESCOM has not indicated any amount towards interest on belated

payment of power purchase cost for the control period. Since interest

on working capital is being allowed separately as per the norms for

managing the day to day expenditure of the company without any

delay, the Commission decides not to allow interest on belated

payment of power purchase cost separately.

The abstract of approved interest and finance charges for FY17-19 are

as follows:

TABLE – 5.27

Approved Interest and finance charges for FY17-19



Interest on Capital Loan 67.07 70.33 70.99

Interest on Working Capital Loan 55.64 59.25 63.11

Interest on Consumers Security Deposit 38.22 41.55 45.04

Other Interest & Finance Charges 2.19 2.19 2.19

Less: Interest & other expenses capitalized (2.39) (2.39) (2.39)

Total Interest & Finance Charges 160.73 170.93 178.93

5.2.16 Other Debits:


towards other debits for each year of the control period FY17 – 19. The

Commission has not been allowing the projections for other debits for

the reason that, the same cannot be estimated beforehand. The

Commission therefore has not allowed the same in the ARR for the

control period. However the actual expenses would be considered as

per the audited accounts for the relevant years, at the time of APR.

5.2.17 Net Prior Period Credit / Charges:

MESCOM in its application has claimed net prior period credit /

charges of Rs.4.95 Crores for each year of the control period FY17 – 19.

The Commission has not been considering the projections for net prior

period credit / charges for the reason that the same cannot be

xcix

estimated beforehand. The Commission therefore has not allowed the

same in the ARR for the control period. However, such expenses would

be considered as per the audited accounts for the relevant years at

the time of APR.

5.2.18 Return on Equity:


MESCOM in its application has claimed RoE for the control period FY17-

19 based on the opening balances of share capital, share deposit,

reserves and surplus and Return on Equity earned during the previous

years without MAT as detailed below:

TABLE – 5.28

Return on Equity – MESCOM’s Proposal

Amount in Rs.Crores


Paid up Share capital 216.07 216.07 216.07

Share deposit 36.66 36.66 36.66

Reserves and surplus 137.37 197.84 267.68

Previous years RoE

without MAT 60.47 69.84 80.66

Total equity 450.57 520.41 601.07

Return on Equity 87.31 100.84 116.47


The Commission has considered the actual amount of share capital,

share deposits and reserves & surplus as per the audited accounts for

FY15 and the additional share deposit reported in the half yearly

accounts for FY16 for arriving at the allowable equity base for the

control period FY17-19.

The Commission, in accordance with the provisions of the MYT

Regulations has considered 15.5% of Return on Equity duly grossed up

with the applicable Minimum Alternate Tax (MAT) of 21.342%. This

works out to 19.706% per annum. Also an amount of Rs.26.00 Crores of

recapitalized consumer security deposit as networth is considered as

c

per the orders of the Hon’ble Appellate Tribunal for Electricity in

Appeal No.46/2014.

Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing

balances of gross fixed assets along with break-up of equity and loan

component in the Tariff Order henceforth, the details of GFA, debt and

equity (networth) for FY17-19 are as follows:

TABLE – 5.29

Status of Debt Equity Ratio for FY17-19

Amount in Rs.Crores

Year Particulars GFA Debt Equity

(Networth)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age

of

actual

debt

on

GFA

%age

of

actual

equity

on

GFA

FY17 Opening

Balance

1535.04 563.00 363.38 - - - -

Closing

Balance

1707.37 602.02 419.71 1195.16 512.21 35.26% 24.58%

FY18 Opening

Balance

1707.37 602.02 419.71

Closing

Balance

1900.03 619.80 484.76 1330.02 570.01 32.62% 25.51%

FY19 Opening

Balance

1900.03 619.80 484.76

Closing

Balance

2090.96 613.45 559.90 1463.67 627.29 29.34% 26.78%

From the above table it is evident that the debt equity amount lies

within the normative debt equity ratio of 70 : 30 on the closing

balances of GFA for each year of the control period. Further, the

Commission will review the same during the Annual Performance

Review for each year based on the actual data as per the audited

accounts.

Accordingly, the Return on Equity that could be approved for FY17-19

works out as follows:

TABLE – 5.30

Approved Return on Equity for FY17-19


ci


Opening Balance of Paid Up Share Capital 252.73 252.73 252.73

Share Deposit 2.68 2.68 2.68

Reserves and Surplus 133.97 190.30 255.35

Less Recapitalised Security Deposit 26.00 26.00 26.00

Total Equity 363.38 419.71 484.76

Approved Return on Equity with MAT 71.61 82.71 95.53

Thus, the Commission decides to approve Return on Equity of Rs.71.61

Crores, Rs.82.71 Crores and Rs.95.53 Crores for FY17, FY18 and FY19

respectively.

5.2.19 Other Income:


MESCOM has claimed other income for the control period as detailed

below:

TABLE – 5.31

Other Income – MESCOM’s Proposal

Amount in Rs.Crores


Other Income 109.16 109.16 109.16


The other income received by MESCOM mainly includes income from

interest on bank deposits, rent from staff quarters and sale of scrap,

interest on energy balancing dues and miscellaneous recoveries

besides incentives for timely payment of power purchase bills. The

Commission notes that MESCOM also receives income from sale of

power to MSEZ which needs to be factored under other income.

Based on the amount of other income earned by MESCOM in the

previous years, the normal other income works out to Rs.30.00 Crores

per year. Further, considering the expected revenue from sale of

power to MSEZ and normative increase, the other income for the

control period is as follows:

cii

TABLE – 5.32

Approved Other Income for FY17-19

Amount in Rs.Crores


Other Income 73.77 80.54 95.36

ciii

5.2.20 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per

year towards consumer relations / consumer education. This amount

is earmarked to conduct consumer awareness and grievance

redressal meetings periodically and institutionalize a mechanism for

addressing common problems of the consumers. The Commission has

already issued guidelines for consumer education and grievance

redressal activities.

The Commission decides to continue providing an amount of Rs.0.50

Crore for each year of the control period FY17-19 towards meeting the

expenditure on consumer relations / consumer education.

The Commission directs MESCOM to furnish a detailed plan of action

for utilization of this amount and also maintain a separate account of

these funds and furnish the same at the time of APR.

5.3 Treatment of Regulatory Asset:

MESCOM in its application has claimed an amount of Rs. 92.25 Crores

as Regulatory asset to be recovered in the ARR for FY17.

The Commission notes that as per the Tariff Order dated 12th May, 2014

the deficit of Rs.173.72 Crores for FY13 was determined duly factoring

the additional subsidy of Rs.74.85 Crores payable by the Government

of Karnataka. This deficit was included in the ARR for FY15. Further,

while approving the ARR for FY15, an amount of Rs.101.02 Crores was

set aside as regulatory asset to be recovered in the tariff over the next

two years (FY16 & FY17). The Commission had decided to allow

carrying cost at 12% p.a. on the regulatory asset to be assessed at the

time of Annual Performance Review for FY15 and FY16. However, in the

present APR for FY15, as discussed in the previous chapter of this Order,

civ

the revenue earned was more than adequate to meet the expenses

during FY15. In fact, the APR of FY15 indicates a surplus of Rs.144.52

Crores.

Further, the Commission in its Tariff Order dated 2nd March, 2015 had

decided to carry forward a Regulatory asset of Rs.92.25 Crores being

determined as detailed below:

TABLE – 5.33

Treatment of Regulatory Asset

Sl.

No Particulars

Amount in

Rs Crs

1 Regulatory asset as per Commission’s Order dated 12th May, 2014. 101.02

2 Surplus in revenue on APR of FY14 86.00

3 Gap in revenue as per ARR for FY16. 160.49

4 Total Gap for FY16 175.51

5 Additional revenue allowed by revision of tariff in FY16 81.37

6 Balance unfilled gap in revenue 94.14

7 Amount disallowed on imprudent capex (1.89)

8 Regulatory asset to be recovered in FY17 92.25

Hence the Commission decides to include an amount of Rs.92.25

Crores in the ARR for FY17.

5.4 Abstract of ARR for FY17-19:

In the light of the above analysis and decisions of the Commission, the

following is the approved ARR for the control period FY17-19:

TABLE – 5.34

Approved ARR for FY17-19

Amount in Rs.Crores

Sl.


Revenue at existing tariff

1 Revenue from tariff and Misc Charges 2027.71

2 Tariff Subsidy 525.41

3 Total Existing Revenue 2553.12 0.00 0.00

Expenditure in Rs Crs

4 Power Purchase Cost 1949.45 2003.82 2172.91

5 Transmission charges of KPTCL 246.90 238.16 251.83

cv

6 SLDC Charges 1.64 1.94 2.02

7


transmission 2197.99 2243.92 2426.76

8 O&M Expenses 391.78 432.40 477.89

9 Depreciation 77.38 86.12 95.29


10 Interest on Capital Loans 67.07 70.33 70.99

11 Interest on Working capital loans 55.64 59.25 63.11

12 Interest on belated payment on PP Cost 0.00 0.00 0.00

13 Interest on consumer security deposits 38.22 41.55 45.04


15

Less: interest & other expenses

capitalised 2.39 2.39 2.39

16 Total Interest & Finance charges 160.73 170.93 178.93

17 Other Debits 0.00 0.00 0.00

18 Net Prior Period Debit/Credit 0.00 0.00 0.00

19 Return on Equity 71.61 82.71 95.53

20


Relations/Consumer Education 0.50 0.50 0.50

21

Other Income (Including income from

MSEZ) 73.77 80.54 95.36

22 ARR 2826.22 2936.03 3179.54

23 Surplus for FY15 carried forward 144.52

24 Regulatory asset -92.25

25 Net ARR 2773.95 2936.03 3179.54

5.5 Segregation of ARR into ARR for Distribution Business and ARR for Retail

Supply Business:

MESCOM in its application has not proposed any new ratio for

segregation of consolidated ARR into ARR for Distribution Business and

ARR for Retail Supply Business.

Commission’s Analysis and Decisions:

Since no new proposal has been furnished by MESCOM, the

Commission decides to continue with the existing ratio of segregation

of ARR as detailed below:

cvi

TABLE – 5.35

Approved Segregation of ARR – FY17 - 19

Particulars Distribution

Business

Retail Supply

Business

O&M 39% 61%

Depreciation 84% 16%

Interest on Loans 100% 0%

Interest on Consumer Deposits 0% 100%

RoE 78% 22%

GFA 84% 16%

Non-Tariff Income 7% 93%

Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:

TABLE – 5.36 APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY17 - 19

Amount in

Rs.Crores

Sl.


1 O&M Expenses 152.80 168.64 186.38

2 Depreciation 65.00 72.34 80.04

Interest & Finance Charges






8 ROE 55.85 64.51 74.51

9 Other Income 5.16 5.64 6.68

10 ARR 341.87 377.03 412.67

TABLE – 5.37

APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY17 - 19

Amount in Rs.Crores

Sl.


1 Power Purchase 1949.45 2003.82 2172.91

2 Transmission Charges 248.54 240.10 253.85

3 O&M Expenses 238.99 263.77 291.51

4 Depreciation 12.38 13.78 15.25

Interest & Finance Charges


cvii





10 ROE 15.75 18.20 21.02

11 Other Income 68.61 74.90 88.68

12

Fund towards Consumer Relations /

Consumer Education 0.50 0.50 0.50

13 ARR 2484.35 2559.01 2766.86

5.6 Gap in Revenue for FY17:

As discussed above, the Commission decides to approve the Annual

Revenue Requirement (ARR) of MESCOM for its operations in FY17 at

Rs.2773.95 Crores as against MESCOM’s application proposing an ARR

of Rs.3090.52 Crores. This ARR is arrived at after considering the surplus

of Rs. 144.52 Crores of FY15 as discussed in Chapter-4 of this Order.

Based on the existing retail supply tariff, the total realization of revenue

will be Rs.2553.12 Crores which is Rs.220.83 Crores less than the

projected revenue requirement for FY17.

The net ARR and the gap in revenue for FY17 are shown in the following

table:

TABLE – 5.38

Revenue gap for FY17

Particulars FY17

Net ARR including carry forward surplus of FY15 (in Rs. Crores) 2773.95

Approved sales (in MU) 4611.84

Average cost of supply for FY17 (in Rs./unit) 6.01

Revenue at existing tariff (in Rs. Crores) 2553.12

Gap in revenue for FY17 (in Rs. Crores) (220.83)

The determination of revised retail supply tariff on the basis of the

above approved ARR is detailed in the following Chapter.

cviii

5.7 Application for Additional Revenue Requirement for FY17:


The MESCOM, in its application dated 19th March, 2016, filed on 21st

March, 2016, seeking additional ARR for FY 17, has submitted that:

1. The Second Transfer Scheme Rules dated 31.05.2002 were issued by

the GoK, for transfer of assets and liabilities and personnel of KPTCL

to the ESCOMs. According to Rule 4(13) of these Rules, the State

Government is responsible for funding the pension and other

liabilities of the personnel as on the date of Second Transfer i.e.

31.05.2002 and sub-rule 13(2)(b) provides for establishment of a

Pension Trust for managing the fund.

2. The GoK, vide its order dated 19.12.2002, has ordered constitution

of the Pension and Gratuity Trust and also decided to adopt “Pay

as you go” approach, in funding the pension and gratuity

requirement.

3. The GoK vide its letter dated 25.02.2016, has informed that against

the proposed pension and gratuity contribution of 996.39 Crores for

FY17 and the arrears of pension contribution of Rs.2047.84 Crores

payable to KPTCL and ESCOMs, the Finance Department (FD) has

agreed to provide Rs.550 Crore for meeting the pension liability. As

there is difference between the proposed requirement and the

availability as indicated by the FD for FY17, the Pension Trust is

directed to work out the amount of contribution to be recovered

through tariff considering the indicative amount of contribution

available from the Government.

4. It is submitted by MESCOM that, as worked out by the Pension Trust,

an amount of Rs.239.88 Crores (Arrears of Rs.202.25 Crores and

Rs.37.63 Crores for FY17) has to be recovered through tariff.

Accordingly, MESCOM has filed an application claiming an additional

ARR of Rs.239.88 Crores, to be recovered through tariff.

cix

Commission’s views and decision

The Commission proceeds to dispose of the application filed by

MESCOM, as follows:

a) The application for additional ARR has been filed on 16th March,

2016, that is much after completion of the process of calling for

objections on the original tariff application and furnishing replies

thereon. The Commission has also completed the process of public

consultation by holding a public hearing, in respect of MESCOM, on

29th February, 2016.

b) As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution

and Retail Supply Companies) Rules, 2002, notified by the

Government on 31.05.2002, the State Government is liable for

funding the pension and gratuity liability of existing pensioners as on

the effective date of Second Transfer Scheme.

c) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity

requirements of existing pensioners on the effective date of second

transfer Scheme. With this arrangement, the GoK is liable to meet

the pension and gratuity requirement of existing pensioners as

noted above. Hence, this liability cannot be passed on to the

consumers, through tariff.

In view of the above, the Commission is unable to accept the

application for approval of additional ARR towards pension and

gratuity of the said pensioners. Accordingly, the said application

stands disposed of.

cx

CHAPTER – 6

DETERMINATION OF TARIFF FOR FY17

6.0 MESCOM’S Proposal and Commission’s Analysis for FY17:

6.1 Tariff Application

As discussed in the preceding Chapters, MESCOM has projected an

unmet gap in revenue of Rs.483.00 Crores for FY17. In order to bridge

this gap in revenue, MESCOM, in its Tariff Application, has proposed a

tariff increase of 102 paise per unit in respect of all the categories of

consumers.

6.2 Statutory Provisions Guiding Determination of Tariff

As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the

following factors, while, determining the tariff so that,

the distribution and supply of electricity are conducted on

commercial basis;

competition, efficiency, economical use of resources, good

performance, and optimum investment are encouraged;

the tariff progressively reflects the cost of supply of electricity, and

also reduces and eliminates cross subsidies within the period to be

specified by the Commission;

efficiency in performance is to be rewarded; and

a Multi-Year Tariff framework is adopted

Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the

KER Act 1999, empowers the Commission to specify, from time to time,

the methodologies and the procedure to be observed by the licensees

in calculating the Expected Revenue from Charges (ERC). The

Commission determines the Tariff in accordance with the Regulations

and the Orders issued by the Commission from time to time.

6.3 Consideration for Tariff Setting:

cxi

The Commission has considered the following relevant factors for

determination of Retail Supply Tariff:

a) Tariff Philosophy:

As discussed in the earlier tariff Orders, the Commission continues to

fix tariff below the average cost of supply for consumers whose

ability to pay is considered inadequate and fix tariff at or above the

average cost of supply for categories of consumers whose ability to

pay is considered to be higher. As a result, the system of cross

subsidy continues. However, the Commission has taken due care

to progressively bring down the cross subsidy levels as envisaged in

the Tariff Policy of the Government of India dated 6th January, 2006.

b) Average Cost of Supply:

The Commission has been determining the retail supply tariff on the

basis of the average cost of supply. The KERC (Tariff) Regulations,

2000 require the licensees to provide details of embedded cost of

electricity voltage / consumer category- wise. The distribution

network of Karnataka is such that, it is difficult to segregate the

common cost between voltage levels Therefore, the Commission

has decided to continue the average cost of supply approach for

recovery of the ARR. With regard to the indication of voltage- wise

cross subsidy with reference to the voltage wise cost of supply, the

decision of the Commission is noted in the subsequent para of this

Chapter.

c) Differential Tariff:

Beginning with its tariff order dated 25th November, 2009 the

Commission has been determining differential retail supply tariff for

consumers in urban and rural areas. The Commission decides to

continue the same in the present order also.

6.4 New Tariff Proposals by MESCOM

cxii

MESCOM, in its tariff application has made the following new

proposals:

1. Increase in Fixed Charges:

MESCOM has proposed to increase the fixed charges by Rs.10/- Per

HP/KW in respect of LT installations and HT-3 installations and Rs.30 per

HP to HT-4 installations, Rs.40 per HP for HT-5 installations and in respect

of HT-1, HT-2(a), HT-2(b) and HT-2(c) installations, the demand charges

to be brought to Rs.200 per KVA level from the existing rate.

Commission’s Analysis and decisions:

On an analysis of the revenue at existing tariff of MESCOM, the

Commission notes that the total amount of fixed charges to be

recovered on the projected consumers, works out to Rs.197.10 Crores

for FY17. Whereas as per the approved ARR of MESCOM for FY17, the

fixed cost to be incurred in each of the activity in generation,

transmission and distribution is as follows:

Activity Total FC to be

incurred

Generation 421.82

Transmission including

SLDC charges

248.54

Distribution network cost 628.23

Total Fixed cost 1298.59

From the above analysis, the Commission notes that as against total

fixed expenditure of Rs.1298.59 Crores, MESCOM is able to collect the

fixed expenditure only to an extent of Rs.197.10 Crores in the form of

fixed charges at the existing rates. This accounts for recovery of only

15.18% of fixed charges. The remaining 84.82% is being recovered in

the form of energy charges which is not an efficient method of

recovery of fixed expenditure.

As per the Tariff Policy issued by the Ministry of Power, Government of

India, dated 28th January 2016, two-part Tariff featuring separate fixed

and variable charges shall be introduced for all consumer. In order to

ensure their financial viability, it is imperative that the fixed expenditure

cxiii

incurred by the ESCOMs are recovered in the form of fixed charges.

On study of the existing rate of fixed charges levied on the consumers

and the amount collected thereon, it is observed that fixed charges

needs to be increased gradually to meet the above objective. Hence

the Commission hereby decides to provide for collection of additional

fixed charge of Rs.5/- per KW/HP per month from the Domestic and LT

Industrial consumers and RS.10/- per KW /HP/ KVA per month from all

the other categories of consumers. This would enable the MESCOM to

recover an additional fixed charges from the projected consumers

only to the extent of Rs. 26.41 Crores and the projected total recovery

of fixed charges would be Rs.223.51 Crores for FY17 which accounts for

17.21% of the total fixed charges incurred.

2. Billing of auxiliary consumption of KPTCL:

MESCOM in its application has proposed Billing of auxiliary

consumption of KPTCL under LT-3 (Commercial tariff).

The Commission in its letter No. B/07/05/451 dated 23.06.2015

addressed to the MD, BESCOM where in it was suggested to seek

determination of tariff in respect of sale of power to KPTCL in

accordance with the provisions Clause 3.05 of the COS. It is further

informed, that the auxiliary consumption is not a part of transmission

loss but it is a part of the normative operation and maintenance of

KPTCL and the charges for the same are to be borne by KPTCL.

ESCOMs have not taken any action on the above suggestion made by

the Commission. Further, MESCOM has not suggested any new

proposals to bill the auxiliary consumption of KPTCL. Hence, in the

absence of submission of new proposal as required under the

provisions of COS, the Commission is unable to take any decision in the

matter.

3. Other proposals:

MESCOM has made the following proposals:

cxiv

a) Charge higher tariff to Kalyana Mantapas, where lavish wedding

are taking place.

b) Extend Concessional tariff to RO drinking water supply units.

c) Separate tariff category under HT for irrigation IP sets consumers.

The Commission has examined the above proposals and notes that the

new proposals are not properly justified with financial implications and

hence, decides not to except the proposals made.

6.5 Revenue at existing tariff and deficit for FY17:

The Commission in its preceding Chapters has decided to carry

forward the surplus in revenue of Rs.144.52 Crores of FY15 to the ARR of

FY17.The gap in revenue for FY17 is proposed to be filled up by revision

of Retail Supply Tariff as discussed in the following paragraphs of this

Chapter.

Considering the approved ARR for FY17 and the revenue as per the

existing tariff, the gap in revenue for FY17 is as follows:

TABLE – 6.1

Revenue Deficit for FY17

Amount Rs. in Crores

Particulars Amount

Approved Net ARR for FY17 including surplus of

FY15

2773.95

Revenue at existing tariff 2553.12

Deficit for FY17 (220.83)

Additional Revenue to be realised by Revision of

Tariff

220.83

Accordingly, in this Chapter, the Commission has proceeded to

determine the retail supply tariff for FY17. The category-wise tariff as

existing, as proposed by MESCOM and as approved by the

Commission is as follows:

cxv

1. LT-1 Bhagya Jyothi

The existing tariff and the tariff proposed are given below:

Sl.

No

Details Existing as per 2015

Tariff Order

Proposed by MESCOM

1 Energy charges

(including recovery

towards service main

charges)

541 Paise / Unit Subject

to a monthly minimum

of Rs. 30 per installation

per month.

643 Paise / Unit Subject

to a monthly minimum

of Rs. 30 per installation

per month.

Commission’s Views/ Decision

The GoK, as a policy, has extended free power to all BJ/KJ consumers,

whose consumption is not more than 18 units per month. The tariff

payable by these consumers is revised to Rs.6.01 per unit.

Further, the ESCOMs have to claim subsidy for only those consumers

who consume 18 units or less per month per installation. If the

consumption exceeds 18 units per month or any BJ/KJ installation is

found to have more than one out let, it shall be billed as per the Tariff

Schedule LT 2(a).

The Commission determines the tariff (CDT) in respect of BJ / KJ

installations as follows:

cxvi

LT – 1 Approved Tariff for BJ / KJ installations

Commission determined Tariff Retail Supply Tariff

determined by the

Commission

601 paise per unit,

Subject to a monthly minimum of

Rs. 30 per installation per month.

-Nil-

Fully subsidized by GoK

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by these

Consumers is shown as Nil. However, if the GOK does not release the subsidy in

advance, a Tariff of Rs. 6.01 per unit subject to a monthly minimum of Rs. 30/- per

Installation per month shall be demanded and collected from these consumers.

Note: If the consumption exceeds 18 units per month or any BJ/KJ

installation is found to have more than one light point being

used, it shall be billed as per Tariff Schedule LT 2(a).

2. LT 2 - Domestic Consumers:


The details of the existing and proposed tariff under this category are

given in the Table below:

Proposed Tariff for LT-2 (a)

LT-2 a (i) Domestic Consumers Category

Applicable to areas coming under City Municipal Corporations and all

areas under Urban Local Bodies

Det

ails

Existing as per 2015 Tariff

Order

Proposed by MESCOM

Fixed

Charges

per Month

For the first KW Rs.25 For the first KW Rs.25

For every additional KW

Rs.35

For every additional KW Rs.35

Energy

Charges

0-30 units

( life line

Consumpti

on )

0 to 30 units 270 paise/unit 0 to 30 units 372 paise

/unit

Energy

Charges

exceeding

30 Units

per month

31 to 100 units 400 paise/unit 31 to 100 units 502 paise

/ unit

101 to 200 units 540 paise

/unit


/unit

Above 200 units 640 paise

/unit


/unit

LT-2 (a) (ii) Domestic Consumers Category

cxvii

Applicable to Areas under Village Panchayats

Details Existing as per 2015 Tariff Order

Proposed by MESCOM

Fixed charges per

Month

For the first KW Rs.15 For the first KW Rs.15

For every additional KW

Rs.25

For every additional

KW Rs.25

Energy Charges

0-30 units ( life line

Consumption )


/unit


/unit

Energy Charges

exceeding 30 Units

per month


/ unit


/ unit


/unit


/unit


/unit


/unit


The Commission has decided to continue the two tier tariff structure in

respect of the domestic consumers as shown below:

(i) Areas coming under City Municipal Corporations and all Urban

Local Bodies

(ii) Areas under Village Panchayats.

The Commission approves the tariff for this category as follows:

cxviii

Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:

Applicable to Areas coming under City Municipal Corporations and all

areas under Urban Local Bodies

Details Tariff approved by the

Commission

Fixed charges per Month For the first KW Rs.30/-

For every additional KW Rs.40/-

Energy Charges up to 30 Units per

month (0-30 Units)-life line consumption.

Up to 30 units: 300 paise/unit

Energy Charges in case the

Consumption exceeds 30 Units per

month

31 to 100 units: 440 paise/unit


Above 200 units: 690 paise/unit

Approved Tariff for LT-2(a)(ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats

Details Tariff approved by the Commission

Fixed Charges per Month For the first KW Rs.20/-

For every additional KW Rs.30/-

Energy Charges up to 30

Units per month (0-30 Units)-

Lifeline Consumption

Up to 30 units: 290 paise/unit

Energy Charges in case the

Consumption exceeds 30

Units per month




cxix

LT2 (b) Private Professional Educational Institutions & Pvt. Hospitals and

Nursing Homes


The details of the existing and the proposed tariff under this category

are given in the Table below:

LT 2 (b) Private and Professional Educational Institutions & Pvt. Hospitals

and Nursing Homes

LT 2 (b) (i) Applicable to all areas coming under urban Local Bodies

including Municipal Corporations

Details Existing as per 2015 Tariff Order Proposed by MESCOM

Fixed

charges per

Month

Rs.35 Per KW subject to a

minimum of Rs.65 PM


minimum of Rs.65 PM

Energy

Charges

For the first 200 units: 600

paise per unit


paise per unit

For the balance units: 720

paise per unit


paise per unit

LT 2 (b) (ii) Applicable in Areas under Village Panchayats


Fixed

charges per

Month


minimum of Rs.50 PM


minimum of Rs.50 PM

Energy

Charges


paise per unit


paise per unit


paise per unit


paise per unit

cxx


As in the previous Tariff Order, the Commission decides to continue the

two tier tariff structure as below:

(i) Areas coming under Municipal Corporation and all Urban Local

bodies.


Approved Tariff for LT 2 (b) (i) Private Professional and other private

Educational Institutions, Private Hospitals and Nursing Homes

Applicable to areas under City Municipal Corporations and all urban

Local Bodies


Fixed Charges per Month Rs.45 Per KW subject to a minimum of Rs.75 per

Month.

Energy Charges 0-200 units: 625 paise/unit


Approved Tariff for LT 2 (b) (ii) Private Professional and other private

Educational Institutions, Private Hospitals and Nursing Homes

Applicable in Areas under Village Panchayats


Fixed Charges per Month Rs.35 Per KW subject to a minimum of Rs.60 per

Month

Energy Charges 0-200 units: 570 paise/unit


cxxi

3. LT3- Commercial Lighting, Heating and Motive Power.


The existing and proposed tariff are as follows:

LT- 3 (i) Commercial Lighting, Heating and Motive Power

Applicable in areas under all Urban Local Bodies including City Municipal

Corporations

Details Existing as per 2015 Tariff

Order

Proposed by MESCOM

Fixed Charges per

Month

Rs.40 per KW Rs.40 per KW

Energy Charges For the first 50 units: 695

paise per unit


paise per unit


paise per unit


paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW.


Order

Proposed by MESCOM

Fixed

Charges


Energy

Charges

For the first 50 units: 695 paise

per unit

For the first 50 units: 797 paise

per unit


paise per unit


paise per unit

LT-3 (ii) Commercial Lighting, Heating & Motive Power

Applicable in areas under village Panchayats


Tariff Order

Proposed by MESCOM

Fixed Charges

per Month

Rs. 30 per KW Rs.30 per KW


paise per unit


paise per unit

For the balance units:

745 paise per unit


847 paise per unit

cxxii

Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW


Tariff Order

Proposed by MESCOM

Fixed Charges

per Month



paise per unit


paise per unit


745 paise per unit


847 paise per unit

Commission’s Views/ Decision.

As in the previous Tariff Order, the Commission decides to continue the

two tier tariff structure as below:

(i) Areas coming under Municipal Corporations and urban local

bodies.


Approved Tariff for LT- 3 (i) Commercial Lighting, Heating& Motive

Power

Applicable to areas under all urban local bodies including Municipal

Corporations

Details Approved by the Commission

Fixed Charges per Month Rs.50 per KW

Energy Charges For the first 50 units: 715 paise/ unit

For the balance units: 815 paise/unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.65 per KW

Energy Charges For the first 50 units: 715 paise /unit

For the balance units 815 paise/unit

Approved Tariff for LT-3 (ii) Commercial Lighting Heating& Motive Power Applicable to areas under Village Panchayats


Fixed Charges per

Month

Rs.40 per KW

cxxiii

Energy Charges For the first 50 units: 665 paise per unit

For the balance units: 765 paise per unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 Kw


Fixed Charges per

Month

Rs.55 per KW

Energy Charges For the first 50 units: 665 paise per unit

For the balance units: 765 paise per unit

4. LT4-Irrigation Pump Sets:


The existing and proposed tariff for LT4 (a) is as follows:

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets up to and inclusive of 10 HP


Order

Proposed by MESCOM

Fixed Charges per

Month

Nil Free (In case GoK does

not release the subsidy

in advance, CDT of 527

paise per unit will be

demanded and

collected from

Consumers)

Energy Charges CDT 425 paise per unit


The Government of Karnataka has extended free supply of power to

farmers as per Government Order No.EN 55 PSR 2008 dated 04.09.2008.

As per this policy of GoK, the entire cost of supply to IP sets up to and

inclusive of 10 HP is being borne by the GoK through tariff subsidy. In

view of this all the categories under the existing LT-4a tariff are covered

under free supply of power.

Considering the cross subsidy contribution from categories other than

IP Sets & BJ/KJ Categories, the Commission determines the tariff for IP

Set under LT4(a) category as follows:

Approved CDT for IP Sets for FY17

cxxiv

Particulars MESCOM

Approved ARR in Rs Crore 2773.95

Revenue from other than IP & BJ/KJ installations in Rs

Crore 2189.22

Amount to be recovered from IP & BJ/KJ installations

in Rs Crore 584.73

Approved Sales to BJ/KJ installations in MU 14.59

Revenue from BJ/KJ installations at Average Cost of

supply in Rs Crore 8.77

Amount to be recovered from IP Sets category in Rs

Crore 575.96

Approved Sale to IP Sets in MU 1217.69

Commission Determined Tariff (CDT) for IP set

Category for FY17 in Rs/Unit 4.73

Accordingly, the Commission decides to approve tariff of Rs.4.73 per

unit as CDT for FY17 for IP Set category under LT4(a). In case the GoK

does not release the subsidy in advance, a tariff of Rs.4.73 per unit shall

be demanded and collected from these consumers.

Approved by the Commission

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets up to and inclusive of 10 HP


Fixed Charges per Month Free

Energy Charges

CDT (Commission Determined Tariff):

473 paise per unit

* In case the GoK does not release the subsidy in advance, a tariff of

Rs. 4.73 per unit shall be demanded and collected from these

consumers.

PAYMENT OF SUBSIDY BY GOVERNMENT OF KARNATAKA FOR FY17:

Several consumers and stakeholders who participated in the Public

Hearing held by the Commission have expressed that the ESCOMs may

be showing part of their technical losses against IP set consumption by

inflating the number of live pump sets, in order to report technical

losses lower than the actual losses prevailing in the distribution system.

Further, they have also expressed that there are many defunct, non-

working/idle IP sets provided to both open wells and bore wells which

cxxv

have dried up and the same have not been identified / deleted from

the ledger accounts by the ESCOMs and that the ESCOMs, however,

are treating these IP sets as live IP set installations and claiming subsidy

from the Government, which needs to be stopped immediately. They

have requested the Commission to direct the ESCOMs to take up

enumeration of IP sets in their jurisdiction to identify defunct/dried up

wells and un-authorized IP sets in the field and take necessary action to

arrive at the correct number of IP sets in their account on the basis of

the enumeration report. The Commission is also of the view that IP sets

of defunct /dried up wells should be deleted in the accounts of the

ESCOMs in order to reflect exact numbers of live IP sets and its usage

for claiming subsidy from the Government and more importantly to

assess the performance of the ESCOMs.

The Commission has approved in respect of all the ESCOMs, a total

ARR of Rs.31,917.59 Crores for the FY17, which includes estimated

revenue of Rs.8,571.08 Crores against supply of 19,505.96 MU of power

to 25,64,999 number of IP sets (excluding HRECS). The Commission is of

the view that the actual number of IP set installations would be far less

than 25,64,999 approved for the FY17, if proper enumeration is carried

out to ascertain the correct number of IP sets by the ESCOMs.

Therefore, the ESCOMs need to immediately take up enumeration of IP

sets to arrive at the exact number of IP sets in use. The ESCOMs should

note that the quantum of sales to IP sets approved in ARR for FY17 is

subject to APR and the Commission will not accept such sales without

being substantiated in the manner specified by it.

The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level

to enable detection and prevention of commercial losses. In view of

substantial progress in implementation of feeder segregation under

NJY scheme, the ESCOMs were also directed to submit IP set

consumption on the basis of the meter readings of the 11 kV feeders at

the substation level duly deducting the energy losses in 11kV lines,

distribution transformers & LT lines, in order to compute the

cxxvi

consumption of power by IP sets accurately. In this regard, the

Commission has noted that the ESCOMs have complied partly with

these directions and they have initiated measures to achieve full

compliance. The ESCOMs need to ensure full compliance as this has

direct impact on their revenues and tariff payable by other categories

of consumers.

For the forgoing reasons, the Commission directs the ESCOMs as

follows:

1) The ESCOMs shall manage supply of power to the IP sets for the

FY17, so as to ensure that it is within the quantum of subsidy

committed by the GoK. They shall procure power which is

proportional to such supply. In case the ESCOMs opt to supply

power to the IP sets in excess of the quantum corresponding to the

amount of subsidy the GoK has assured to be released for FY17, the

difference in the amount of subsidy relating to such supply shall be

claimed from the GoK. If the difference in subsidy is not paid by the

GoK, the same has to be collected from the IP set consumers.

2) The ESCOMs shall, immediately take up enumeration of IP sets,

11kV feeder wise by capturing the GPS co-ordinates namely

longitude, latitude and altitude of each live IP set in their jurisdiction

and complete this process within six months from the date of this

Order and submit the list of 11 kV feeder-wise IP sets’ census with

GPS co-ordinates to the Commission, on or before 15th October,

2016. The Commission would accordingly revise the number of IP

sets and its consumption for the FY17.

3) The ESCOMs shall compute the specific consumption and total sale

of energy to IP sets considering the month-wise energy input to 11

kV segregated agricultural feeders at the substation duly deducting

the energy losses prevailing in 11 kV lines, DTCs & LT Lines and

submit to the Commission, the monthly DTC wise/ feeder-wise

energy audit reports regularly in the formats prescribed by the

Commission, before 15th of succeeding month.

cxxvii

Pending compliance of the directives contained in (2) and (3) above,

the Commission hereby advises the Government to release only 90% of

the subsidy allocated for FY17. The Commission will advise the

Government, in the last quarter of the financial year to release the

balance 10% of subsidy for the year, on satisfactory compliance of the

above directives.

LT4 (b) Irrigation Pump Sets above 10 HP:

MESCOM’s Proposal

The existing and proposed tariff for LT-4(b) is as follows:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP sets above 10 HP


Order

Proposed by MESCOM

Fixed Charges per

Month

Rs.30 per HP Rs.30 per HP

Energy Charges for

the entire

consumption

240 paise per unit 342 paise per unit

The existing and proposed tariff for LT4(c) is as follows:

LT-4 (c) (i) Irrigation Pump Sets:

Applicable to Private Horticultural Nurseries, Coffee and Tea

plantations up to & inclusive of 10 HP


Order

Proposed by MESCOM

Fixed Charges per

Month


Energy Charges 240 paise per unit 342 paise per unit

LT-4 (c) (ii) Irrigation Pump Sets:

Applicable to Private Horticultural Nurseries, Coffee and Tea

plantations above 10 HP.


Order

Proposed by MESCOM

Fixed Charges per

Month


Energy Charges 240 paise per unit 342 paise per unit

Approved Tariff:

cxxviii

As in the previous Tariff Order dated 02nd March 2015, the Commission

decides to revise the tariff in respect of these categories as shown

below:

LT-4 (b) Irrigation Pump Sets:


Fixed Charges per Month Rs.40 per HP

Energy Charges for the entire

consumption

280 paise/unit

LT4(c) (i) Irrigation Pump Sets:

Applicable to Horticultural Nurseries,

Coffee, Tea & Rubber plantations up to & inclusive of 10 HP


Energy Charges 280 paise / unit

LT4 (c)(ii) Irrigation Pump Sets:

Applicable to Horticultural Nurseries, Coffee, Tea & Rubber

plantations above 10 HP


Energy Charges 280 paise/unit

cxxix

5. LT5 Installations-LT Industries:

MESCOM’s Proposal

The existing and proposed tariffs are given below:

LT-5(a) LT Industries:

Applicable to all areas under Municipal Corporation

i) Fixed charges


ii) Demand based Tariff (optional)

Details Description Existing Tariff as per

2015 Tariff order

Proposed by

MESCOM Fixed Charges per Month

Above 5 HP and

less than 40 HP

Rs.45 per KW of

billing demand

Rs.45 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.60 per KW of

billing demand

Rs. 60 per KW of

billing demand

67 HP and above Rs. 150 per KW of

billing demand

Rs. 150 per KW of

billing demand

iii. Energy Charges


Tariff Order

Proposed by MESCOM

For the first 500 units 475 paise per unit 577 paise/ unit

For the next 500

units

555 paise per unit 657 paise/ unit

Fixed Charges per Month

i)Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5 HP &

below 40 HP

iii) Rs.35 per HP for 40 HP &

above but below 67 HP

iv)Rs.100 per HP for 67 HP &

above

i) Rs.25 per HP for 5 HP &

below

ii) Rs.30 per HP for above 5

HP & below 40 HP

iii) Rs.35 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

cxxx

For the balance

units


LT-5(b) LT Industries:

Applicable to all areas other than those covered under LT-5(a)

i) Fixed charges



Details Description Existing Tariff as per

2015 Tariff order

Proposed by

MESCOM


Above 5 HP and

less than 40 HP

Rs. 45 per KW of

billing demand

Rs. 45 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs. 60 per KW of

billing demand

Rs. 60 per KW of

billing demand

67 HP and above Rs. 150 per KW of

billing demand

Rs. 150 per KW of

billing demand

iii. Energy Charges


Tariff Order

Proposed by MESCOM

For the first 500 units 470 paise per unit 577 paise/ unit

For the next 500

units


For the balance

units



i)Rs. 25 per HP for 5 HP &

below

ii) Rs. 30 per HP for above 5 HP

& below 40 HP

iii) Rs. 35 per HP for 40 HP &


iv)Rs. 100 per HP for 67 HP &

above

i) Rs. 25 per HP for 5 HP &

below

ii) Rs. 30 per HP for above 5

HP & below 40 HP

iii) Rs. 35 per HP for 40 HP &


iv)Rs. 100 per HP for 67 HP &

above

cxxxi

Existing ToD Tariff for LT5 : At the option of the consumers

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy

charges over the normal tariff applicable

22.00 Hrs to 06.00 Hrs (-) 125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit

Proposed TOD Tariff for LT5 : At the option of the consumer

ToD Tariff




06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit

Commission’s Views / Decisions:

Time of the Day Tariff:

The decision of the Commission in its earlier Tariff Orders providing for

mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers

with a contract demand of 500 KVA and above is continued. The

optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)

consumers with contract demand of less than 500 KVA. Further, for LT5

and HT1 consumers, the optional ToD is continued as existing.

The Commission has decided to continue with two tier tariff structure

introduced in the previous Tariff Orders, which are as follows:

i) LT5 (a): For areas falling under Municipal Corporations.

ii) LT5 (b): For areas other than those covered under LT5 (a) above.

Approved tariff:

The Commission approves tariff under LT-5(a) and LT-5(b) as given

below:

cxxxii

Approved Tariff for LT 5 :

Approved Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month

i) Rs.30 per HP for 5 HP & below

ii) Rs.35 per HP for above 5 HP & below 40 HP

iii) Rs.40 per HP for 40 HP & above but below 67 HP

iv) Rs.100 per HP for 67 HP & above

Demand based Tariff (optional)

Fixed

Charges per

Month

Above 5 HP and less than 40

HP

Rs.50 per KW of billing

demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.150 per KW of billing

demand

ii) Energy Charges


For the first 500 units 495 paise/unit

For the next 500 units 585 paise/ unit


cxxxiii

Approved Tariff for LT 5 (b):


i) Fixed charges


Fixed

Charges per

Month

i) Rs. 30 per HP for 5 HP & below

ii) Rs. 35 per HP for above 5 HP & below 40 HP

iii) Rs. 40 per HP for 40 HP & above but below 67 HP

iv) Rs. 100 per HP for 67 HP & above


Fixed

Charges per

Month


HP

Rs. 50 per KW of billing

demand

40 HP and above but less

than 67 HP

Rs. 65 per KW of billing

demand


demand

iii) Energy Charges

Details Approved tariff

For the first 500 units 485 paise/ unit



Approved TOD Tariff for LT5 :At the option of the consumer

TOD Tariff



22.00 Hrs to 06.00 Hrs (-)125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

cxxxiv

6. LT6 Water Supply Installations and Street Lights


The existing and the proposed tariffs are given below:

LT-6(a) : Water Supply


Order

Proposed by MESCOM

Fixed Charges per

Month

Rs. 35/HP/month Rs. 35/HP/month

Energy Charges 340 paise/unit 442 paise/unit

LT-6 (b) : Public Lighting


Order

Proposed by MESCOM

Fixed Charges

per Month

Rs. 50/KW/month Rs. 50/KW/month

Energy Charges

LED Lighting

500 paise/unit

400 paise/unit

602 paise/unit

502 paise/ unit

The Commission approves the tariff for this category as follows:

Tariff Approved by the Commission for LT-6 (a): Water supply

Details Approved Tariff

Fixed Charges per

Month

Rs. 45 /HP/month


Tariff Approved by the Commission for LT-6 (b): Public Lighting


Fixed Charges per

Month

Rs. 60/KW/month


Energy Charges

for LED/ Induction

Lighting

450 paise/unit

7. LT 7- Temporary Installations and Advertising Hoardings:


The existing rate and the rate proposed are given below:

cxxxv

LT-7 (a): Temporary Supply

a) Less than 67

HP:

Energy charge at 900

paise per unit subject

to a weekly minimum

of Rs. 160 per KW of

the sanctioned load.

Energy charge at 1002 paise

per unit subject to a weekly

minimum of Rs. 160 per KW of


LT-7 (b): Temporary Supply

a) Less than 67

HP:

Energy charge at 900

paise per unit subject

to a weekly minimum

of Rs. 40 per KW/

month of the

sanctioned load.

Energy charge at 1002 paise

per unit subject to a weekly

minimum of Rs. 40 per KW/

month of the sanctioned load.

Commission’s Views/Decision

As decided in the previous Tariff Order the tariff specified for

installations with sanctioned load/contract demand above 67 HP shall

be covered under the HT temporary tariff category under HT5.

With this, the Commission decides to approve the tariff for LT-7

category as below.

APPROVED TARIFF SCHEDULE LT-7 (a)

Applicable to temporary Power Supply for all purposes

LT-7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes

Less than 67 HP:

Energy Charges at 950 paise / unit subject

to a weekly minimum of Rs.170 per KW of



Tariff Order

Proposed by MESCOM


Tariff Order

Proposed by MESCOM

cxxxvi

APPROVED TARIFF SCHEDULE LT-7 (b)

Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by the Private Advertising Agencies/firms on

permanent connection basis.

LT-7(b) Details Approved Tariff

Power Supply on

Permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.50 per KW / month &

Energy Charges at 950 paise / unit

H.T. Categories:

Time of the Tariff (ToD)

The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a), HT2 (b) and HT2 (c) consumers with a contract demand of

500 KVA and above. Further, the optional ToD will continue as existing

for HT2 (a), HT2 (b) and HT 2(c) consumers with contract demand of

less than 500 KVA. The details of ToD tariff are indicated under the

respective tariff category.

8. HT1 Water Supply & Sewerage


The Existing and the Proposed tariff are as given below:

Sl.

No.

Details Existing tariff as per 2015

Tariff Order

Proposed tariff

1 Demand

Charges

Rs. 180 / kVA of billing

Demand / month

Rs. 180 / kVA for billing

Demand / month

2 Energy Charges 410 paise per unit 512 paise per unit

Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations

at the option of the consumer

Time of day Increase (+) / reduction (-) in the energy


cxxxvii

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit

Proposed ToD Tariff to HT-1



22.00 Hrs to 06.00 Hrs next day (- ) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Commission’s Views/Decision:

The Commission approves the tariff for HT 1 Water Supply and Sewerage category as below:

Approved Tariff for HT 1


Demand

Charges

Rs190 / kVA of billing demand / month

Energy Charges Rs 450 paise/ unit

Approved ToD tariff to HT-1 tariff to Water Supply &

Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-)125 paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

9. HT2 (a) – HT Industries & HT 2 (b) – HT Commercial


The existing and proposed tariff are as given below:

HT – 2 (a) - HT Industries - applicable to all areas of MESCOM

Details Existing tariff as per

Tariff Order 2015

Proposed by MESCOM

Demand Charges Rs.170 / kVA of billing

demand / month

Rs.170 / kVA of billing

demand / month

Energy Charges

(iii) For the first one

lakh units

(iv) For the

585 paise per unit

615 paise per unit

687 paise per unit

717 paise per unit



cxxxviii

balance units

Railway traction and Effluent Plants

Details Existing tariff as per Tariff

Order 2015

Proposed by MESCOM

Demand Charges Rs.180 / kVA at billing

demand / month


demand / month

Energy Charges 555 paise per unit for all the

units

657 paise per unit for all

the units

Existing ToD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(a)




06.00 Hrs to 18.00 Hrs 0


Commission’s Decisions:

Approved Tariff for HT – 2 (a)

The Commission approves the tariff for HT 2(a) category as below:

Applicable to all areas of MESCOM


Demand Charges Rs.180/ kVA of billing demand / month

Energy Charges

For the first one lakh units 620 paise/ unit

For the balance units 660 paise/ unit

Railway Traction & Effluent Treatment Plants


Demand Charges Rs.190 / kVA of billing demand / month

Energy Charges Rs.590 paise / unit for all the units

cxxxix

10. HT-2 (b) HT Commercial


Existing and proposed tariff are as given below:

HT – 2 (b)-HT Commercial - Applicable to all areas of MESCOM


Order 2015

Proposed by MESCOM


demand / month


demand / month

Energy Charges

(i) For the first two

lakh units

735 paise per unit

837paise per unit

(ii)For the balance

units

765 paise per unit 867 paise per unit

Commission’s Decision

The Commission approves the following tariff for HT 2 (b) consumers:

Approved tariff for HT – 2 (b) - HT Commercial



Demand Charges Rs. 200 / kVA of billing demand / month

Energy Charges

(i) For the first two lakh units 785 paise per unit

(ii) For the balance units 815 paise per unit

Note: The above tariff under HT2 (b) is not applicable for construction of new

industries. Such power supply shall be availed under the temporary

category HT5.

11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:

Existing and proposed Tariff are given below:

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HT – 2 (c) (i) Applicable to Government Hospitals & Hospitals run by

Charitable Institutions & ESI Hospitals

and

Universities, Educational Institutions belonging to Government, Local

Bodies and Aided Institutions and Hostels of all Educational Institutions

Details Existing Tariff as per

Tariff Order 2015

Proposed by

MESCOM


demand / month


demand / month

Energy Charges

(i) For the first one lakh units 560 paise per unit 662 paise per unit

(ii) For the balance units 610 paise per unit 712 paise per unit

Existing and proposed tariff for HT – 2 (c) (ii)

Applicable to Hospitals/Educational Institutions

other than those covered under HT2(c) (i)

Details Existing Tariff as per Tariff

Order 2015

Proposed by MESCOM


demand / month


demand / month

Energy Charges

(i) For the first one lakh units 660 paise per unit 762 paise per unit

(ii) For the balance units 710 paise per unit 812 paise per unit

Commission’s Decision:

The Commission approves the following tariff for HT2(c) consumers.

Approved tariff for HT – 2 (c) (i) Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI

Hospitals:

and

Universities and Educational Institutions belonging to Government and Local Bodies,

Aided Educational Institutions, and Hostels of all Educational Institutions


Demand Charges Rs. 180 / kVA of billing demand / month

Energy Charges

(i) For the first one lakh units 600 paise per unit


Approved tariff for HT – 2 (c) (ii) - Applicable to Hospitals and Educational Institutions

other than those covered under HT2(c) (i)

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Demand Charges Rs.180 / kVA of billing demand / month

Energy Charges

(i) For the first one lakh units 700 paise per unit


Time of the Day Tariff:

Approved TOD Tariff to HT-2(a), HT- 2(b) and HT2(c)




06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 Paise per unit

12. HT-3(a) Lift Irrigation Schemes under Government Departments /

Government owned Corporations/ Lift Irrigation Schemes under Private

/Societies:


The existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes

are given below

HT 3(a) (i) Applicable to LI Schemes under Government Departments /

Government owned Corporations

Details Existing charges as per Tariff

Order 2015

Proposed charges by

MESCOM

Energy

Charges/

minimum

Charges

170 paise / unit

Subject to an annual minimum

of Rs.1000 per HP / annum

272 paise / unit

Subject to an annual

minimum of Rs. 1000

per HP / annum

HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies fed

through

Express / Urban feeders


Order 2015

Proposed by MESCOM

Fixed charges Rs.30 / HP / Month of

sanctioned load

Rs.30 / HP / Month of

sanctioned load

Energy charges 170 paise / unit 272 paise / unit

HT 3(a) (iii) Applicable to Private LI Schemes and Lift Irrigation Societies

other than those covered under HT-3 (a) (ii)

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Order 2015

Proposed by MESCOM

Fixed Charges Rs.10 / HP / Month of

sanctioned load

Rs.10 / HP / Month of

sanctioned load

Energy Charges 170 paise / unit 272 paise / unit

Commission’s decision:

The Commission approves the following Tariff for HT-3(a) consumers:

Approved tariff for HT 3 (a) (i)

Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations

Energy Charges /

Minimum Charges

200 paise/ unit

subject to an annual minimum of Rs.1120

per HP / annum

Approved tariff for HT 3 (a) (ii)

Applicable to Private Lift Irrigation Schemes and Lift Irrigation Societies fed

through express / urban feeders

Fixed Charges Rs.40 / HP / Month of sanctioned load


Approved tariff for HT 3 (a) (iii)

Applicable to Private Lift Irrigation and Lift Irrigation Societies

other than those fed through express/ urban feeders

Fixed Charges Rs.20 / HP / Month of sanctioned load


13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, tea, Coconut & Arecanut

Plantations:


The existing and the proposed tariff are given below:

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms, Private

Horticulture Nurseries, Coffee, tea, Coconut & Areca nut Plantations:


Order 2015

Proposed tariff by

MESCOM

Energy Charges / 370 paise / unit 472 paise / unit

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Minimum

Charges

subject to an annual

minimum of Rs. 1000 per HP

of sanctioned load

subject to an annual

minimum of Rs. 1000 per

HP of sanctioned load

Commission’s decision:

The Commission approves the tariff as indicated below:

Approved Tariff

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, tea, Rubber, Coconut & Arecanut

Plantations:


Energy Charges /

Minimum Charges

400 paise / unit

subject to an annual minimum

of Rs.1120 per HP of sanctioned

load

14. HT4- Residential Apartments/ Colonies:


The existing and proposed tariff for this category are given below:

Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies



Order 2015

Proposed tariff by MESCOM


demand


demand

Energy Charges 550 paise per unit 652 Paise/ unit

Commission’s decision

The Commission approves the tariff for this category as indicated

below:

Approved tariff

HT – 4 Residential Apartments/ Colonies Applicable to all areas of

MESCOM

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Demand Charges Rs. 110 / kVA of billing demand

Energy Charges 585 Paise/ unit

15. TARIFF SCHEDULE HT-5


The existing and proposed tariff for this category are given below:

HT – 5 – Temporary supply

67 HP and above: Existing as per Tariff Order

2015

Proposed

Fixed Charges /

Demand Charges

Rs.210/HP/month for the

entire sanction load /

contract demand

Rs.210/HP/month for the

entire sanction load /

contract demand

Energy Charge 900 paise / unit (weekly

minimum of Rs.160/- per

KW is not applicable)

1002 paise / unit (weekly

minimum of Rs. 160/- per

KW is not applicable)

Commission’s Decisions:

TARIFF SCHEDULE HT-5

As approved in the Commission’s Tariff Order, dated 02nd March 2015,

this tariff is applicable to 67 HP and above hoardings and

advertisement boards and construction power for industries but

excluding those category of consumers covered under HT2(b) Tariff

schedule availing power supply for construction power for irrigation,

power projects and Konkan railway projects and also applicable to

power supply availed on temporary basis with the contract demand of

67 HP and above of all categories.

Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff

Fixed Charges /

Demand Charges

Rs. 220 /HP/month for the entire sanction load /

contract demand


The Approved Tariff schedule for FY17 is enclosed in Annex IV of this

Order.

6.6 Other Issues

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6.6.1 Tariff for Green Power:

In order to encourage generation and use of green power in the State,

the Commission decides to continue the existing Green Tariff of 50

paise per unit as the additional tariff over and above the normal tariff

to be paid by HT-consumers, who opt for supply of green power from

out of the renewable energy procured by distribution utilities over and

above their Renewable Purchase Obligation (RPO).

6.6.2 Determination of wheeling charges for FY17:

MESCOM in their tariff petition have proposed Wheeling charges in

cash for HT network at 33 paise/unit and for LT network at 76 paise/unit

in addition to HT network technical loss at 4.36% and LT network

technical loss at 5.61%.

Further, MESCOM has requested the Commission not to allow banking

during the summer months, as the State is facing acute shortage of

energy and peak and that purchase of peak power costs 5 to 6 times

the average cost. As such MESCOM has proposed that excess energy

available for banking could be paid at 85% of the generic tariff or at

the cost determined by the Commission.

The Commission in its preliminary observations had requested MESCOM

to furnish necessary data in support of its proposal.

MESCOM in its replies has furnished the wheeled energy data pertaining to

few installations that have wheeled energy. The Commission notes that

MESCOM has only furnished data of wheeled energy and has not justified its

stand to show that banking has affected them financially or there are

technical constraints during summer months. As such the request of

MESCOM is not considered.

The approach of the Commission regarding wheeling & banking

charges is discussed in the following paragraphs:

cxlvi

The Commission has considered the approved ARR pertaining to

distribution wires business and has proceeded determining the

wheeling charges as detailed below:

6.6.3 Wheeling within MESCOM Area:

The allocation of the distribution network costs to HT and LT networks for

determining wheeling charges is done in the ratio of 30:70, as was

being done earlier. Based on the approved ARR for distribution

business, the wheeling charges to each voltage level is worked out as

under:

TABLE – 6.2

Wheeling Charges

Distribution ARR-Rs. Crs 341.87

Sales-MU 4611.84

Wheeling charges- paise/unit 74.13

Paise/unit

HT-network 22.24

LT-network 51.89

In addition to the above, the following technical losses are applicable

to all open access/wheeling transactions:

Loss allocation % loss

HT 4.36

LT 5.61 Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow

diagram furnished by MESCOM.

The actual wheeling charges payable (after rounding off) will depend

upon the point of injection & point of drawal as under:

paise/unit

Injection point

Drawal point

HT LT

HT 22[4.36%] 74[9.97%]

LT 74[9.97%] 52[5.61%]

Note: Figures in brackets are applicable loss

The wheeling charges as determined above are applicable to all the

open access or wheeling transactions for using the MESCOM network,

cxlvii

except for energy transmitted or wheeled from Renewable sources to

the consumers in the State.

6.6.4 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF

MORE THAN ONE LICENSEE

In case the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or

network of more than one licensee, the charges shall be as indicated

below:

i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the

Transmission Licensee.

ii. If the Transmission network and the ESCOMs’ network are used,

Transmission Charges shall be payable to the Transmission

Licensee. Wheeling Charges of the ESCOM where the power is

drawn shall be shared equally among the ESCOMs whose

networks are used.

Illustration:

If a transaction involves transmission network &MESCOM’s network and

100 units is injected, then at the drawal point the consumer is entitled

for 86.90 units, after accounting for Transmission loss of 3.47%

&MESCOM technical loss of 9.97%.

The Transmission charge in cash as determined in the Transmission Tariff

order shall be payable to KPTCL & Wheeling charge of 74 paise per

unit shall be payable to MESCOM. In case more than one ESCOM is

involved the above 74 paise shall be shared by all ESCOMs involved.

iii. If ESCOMs’ network only is used, the Wheeling Charges of the

ESCOM where the power is drawn is payable and shall be

shared equally among the ESCOMs whose networks are used.

Illustration:

cxlviii

If a transaction involves injection to BESCOM’s network & drawal at

MESCOM’s network, and 100 units is injected, then at the drawal point

the consumer is entitled for 90.03 units, after accounting MESCOM’s

technical loss of 9.97%.

The Wheeling charge of 74 paise per unit applicable to MESCOM shall

be equally shared between MESCOM & BESCOM.

6.6.5 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE

) TO CONSUMERS IN THE STATE

The separate orders issued by the Commission from time to time in the

matter of wheeling and banking charges for RE sources (non-rec route

) wheeling energy to consumers in the State shall be applicable.

6.6.6 CHARGES FOR WHEELING ENERGY BY RE SOURCS WHEELING ENERGY

FROM THE STATE TO A CONSUMER/OTHERS OUTSIDE THE STATE AND FOR

THOSE OPTING FOR RENEWABLE ENERGY CERTIFICATE[REC]

In case the renewable energy is wheeled from the State to a consumer

or others outside the State, the normal wheeling charges as

determined in para 6.6.1 and 6.6.2 of this order shall be applicable. For

Captive RE generators including solar power projects opting for RECs,

the wheeling and banking charges as specified in the orders issued by

the Commission from time to time shall be applicable.

6.7 Other tariff related issues:

i) Cross subsidy surcharge:

MESCOM in its tariff petition has stated that based on the methodology

adopted by the Commission in the Tariff Order, 2015 it has worked out

the CSS as indicated below:

cxlix

Paise/unit

Voltage

Level

HT-1 HT-2a HT-2b HT-4

66KV &

above

20 181 310 114

HT level-

11KV/33KV

2 162 291 95

The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs:-

The Commission in its MYT Regulations has specified the methodology

for calculating the cross subsidy surcharge. Based on the above

methodology, the category wise cross subsidy will be as indicated

below:

Particulars

HT-1

Water

Supply

HT-2a

Industries

HT-2b

Commercial

HT-2

(C)

HT3 (a)

Lift

Irrigation

HT3 (b)

Irrigation &

Agricultural

Farms

HT-4

Residential

Apartments

HT5

Temporary

Average Tariff-

Paise/unit 498.81 721.70 902.87 735.25 181.60 398.01 625.67 1509.97

Cost of supply

at 5% margin

@ 66 kV and

above level

565.04 565.04 565.04 565.04 565.04 565.04 565.04 565.04

Cross subsidy

surcharge

paise/unit @ 66

kV & above

level

-66.23 156.66 337.83 170.21 -383.44 -167.03 60.63 944.93

Cost of supply

at 5% margin

@ HT level

607.04 607.04 607.04 607.04 607.04 607.04 607.04 607.04

Cross subsidy

surcharge

paise/unit @ HT

level

-108.22 114.66 295.83 128.21 -425.44 -209.03 18.63 902.94

For the categories where the surcharge is negative, the surcharge is

made zero at the respective voltage level. For the remaining

categories, the Commission decides to determine the surcharge at

75% (instead of the 80% considered in its tariff order dated 02.03.2015)

of the cross subsidy amount as worked out above, as the cross subsidy

cl

surcharge has to be gradually reduced. Thus, the cross subsidy

surcharge is determined as under rounding off to nearest paise:

Paise/unit

Voltage

level

HT-1 HT-2a HT-2b HT-2c HT-3a HT-3b HT-4 HT-5

66 kV &

above

0 118 253 128 0 0 45 709

HT level-11

kV/33kV

0 86 222 96 0 0 14 677

The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area

coming under MESCOM. However, the above CSS shall not be

applicable to captive generating plant for carrying electricity to the

destination of his own use and for those renewable energy generators

who have been exempted from CSS by the specific orders of the

Commission.

The Commission directs the Licensees to account the transactions

under open access separately. Further, the Commission directs the

Licensees to carry forward the amount realized under Open

Access/wheeling to the next ERC, as it is an additional income to the

Licensees.

ii) Rebate for use of Solar Water Heater

The Commission has decided to retain the existing rebate of 50 paise

per unit subject to a maximum of Rs.50 per installation per month for

use of solar water heaters.

iii) Prompt payment incentive:

The Commission had approved a prompt payment incentive (i) in all

cases of payment through ECS and (ii) in the case of monthly bill

exceeding Rs.1,00,000/- (Rs. One lakh). The earlier rate of incentive was

0.25 % of the bill amount. The Commission decides to continue the

same.

cli

iv) Relief to Sick Industries:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, had accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. However, in view of issue of the G.O No.CI2 BIF 2010,

dated 21.10.2010, the Commission has accorded approval to the

ESCOMs for implementation of the reliefs extended to sick industrial

units for their revival / rehabilitation on the basis of the orders issued by

the Commissioner for Industrial Development and Director of Industries

& Commerce, Government of Karnataka.

v) Power Factor:

The Commission in its previous order had retained the PF threshold limit

and surcharge, both for LT and HT installations at the levels existing as in

the Tariff Order 2005. The Commission has decided to continue the

same in the present order as indicated below:

LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive power

is involved): 0.85

HT Category: 0.90

vi) Rounding off of KW / HP:

In the Tariff Order 2005, the Commission had approved rounding off of

fractions of KW / HP to the nearest quarter KW / HP for the purpose of

billing and the minimum billing being for 1 KW / 1HP in respect of all the

categories of LT installations including IP sets. This shall continue to be

followed. In the case of street light installations, fractions of KW shall be

clii

rounded off to the nearest quarter KW for the purpose of billing and

the minimum billing shall be for a quarter KW.

vii) Interest on delayed payment of bills by consumers:

The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission decides

to continue the same in this Order also.

viii)Security Deposit (3 MMD/ 2 MMD):

The Commission had issued K.E.R.C. (Security Deposit) Regulations,

2007 on 01.10.2007 and the same has been notified in the Official

Gazette on 11.10.2007. The payment of security deposit shall be

regulated accordingly, pending orders of the Hon’ble High Court in

WP Nos18215/2007.

ix) Mode of Payment by consumers:

The Commission, in its previous Order had approved revenue payment

in cash/cheque/ DD of amounts up to and inclusive of Rs.10,000/-,

and payment of amounts above Rs.10,000 to be made only through

cheque. The consumers can also make payment of power bills

through Electronic Clearing System((ECS)/ Credit card/ online E-

payment up to the limit prescribed by the RBI.

BESCOM in its application had proposed to consider the collection of

power supply bills above one lakh rupees, through RTGS/NEFT. The

Commission has examined the request of BESCOM, and decides to

approve the payment of power supply bills above one lakh rupees,

through RTGS/NEFT, at the option of the Consumer for all ESCOMs.

6.8 Cross Subsidy Levels for FY17:

The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated 8th

October, 2014, in Appeal No.42 of 2014, has directed the Commission

to clearly indicate the variation of anticipated category wise average

cliii

revenue realization with respect to overall average cost of supply in

order to implement the requirement of the Tariff Policy that tariffs are

within ±20% of the average cost of supply, is met in the tariff orders

being passed in the future. It has further directed the Commission to

also indicate category-wise cross subsidy with reference to voltage

wise cost of supply so as to show the cross subsidies transparently.

In the light of the above directions, the variations of the anticipated

category-wise average realization with respect to the overall average

cost of supply and also with respect to the voltage-wise cost of supply

of MESCOM and the cross subsidy thereon, is Indicated in ANNEXURE -

III of this Order. It is the Commission’s endeavour to reduce the cross

subsidies gradually as per the Tariff policy.

6.9 Effect of Revised Tariff:

As per the KERC (Tariff) Regulations 2000, read with the MYT Regulations

2006, the ESCOMs have to file their applications for ERC/Tariff before

120 days of the close of each financial year in the control period. The

Commission observes that the ESCOMs have filed their applications for

revision of tariff on 15th December, 2015 (within the time extended by

the Commission). As the tariff revision is effective from 1st April, 2016

onwards, ESCOMs would be recovering revenue for eleven months of

the Financial Year.

A statement indicating the proposed revenue and approved revenue

is enclosed vide Annexure – III and detailed tariff schedule is enclosed

vide Annexure – IV

6.10 Summary of the Tariff Order:

The Commission has approved an ARR of Rs.2773.95 Crores for FY17

which includes the surplus for FY15 of Rs.144.52 Crores and the

Regulatory Asset of Rs.92.25 Crores, with a total gap in revenue of

cliv

Rs.220.83 Crores (as against MESCOM’s proposed ARR of Rs.3090.52

Crores).

The Commission has allowed recovery of entire gap in revenue with

additional revenue of Rs.220.83 Crores on Tariff Revision as against

the additional revenue of Rs.483.00 Crores proposed by MESCOM for

FY17.

MESCOM had proposed an increase of 102 paise per unit for all

categories of consumers resulting in average increase in retail supply

tariff by 18.52%. The Commission has approved an average increase

of 48 paise per unit in the tariff. The average increase in retail supply

tariff of all the consumers for FY17 is 9%.

The Commission has allowed for recovery of additional

revenue partly by increase in fixed charges ranging from Rs.5

per KW/HP/KVA to Rs.10 per KW/HP/KVA.

The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the range

of 15 paise per unit to 50 paise per unit.

The increase in energy charge for commercial category is 20

paise per unit, for LT Industries category is in the range of 15

paise per unit to 30 paise per unit and for other categories is in

the range of 20 paise per unit to 50 paise per unit.

Time of the day tariff which was made mandatory in the previous

Tariff Order for installations under HT2 (a), HT2(b) and HT2(c) with

contract demand of 500KVA and above is continued in this Order.

clv

Green tariff of additional 50 paise per unit over and above

the normal tariff which was introduced in the previous Tariff

Order for HT industries and HT commercial consumers at their

option, to promote purchase of renewable energy from

ESCOMs, is continued in this Order.

As in the previous Orders, the Commission has continued to

provide a separate fund for facilitating better Consumer

Relations /Consumer Education Programmes.

The cap on cost of short-term power purchase to meet

shortfall in supply is continued at Rs.4.50 per unit

clvi

6.11 Commission’s Order

1. In exercise of the powers conferred on the Commission under

Sections 62, 64 and other provisions of the Electricity Act, 2003, the

Commission hereby determines and notifies the retail supply tariff of

MESCOM for FY17 as stated in Chapter-6 of this Order.

2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling on or

after 1st April, 2016.

3. This Order is signed dated and issued by the Karnataka Electricity

Regulatory Commission at Bengaluru this day, the 30th March, 2016.

Sd/-

(M.K.Shankaralinge Gowda)

Chairman

Sd/-

(H.D.Arun Kumar)

Member

Sd/-

(D.B.Manival Raju)

Member

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APPENDIX

ISSUE OF NEW DIRECTIVES AND

REVIEW OF COMPLIANCE OF DIRECTIVES ISSUED BY THE

COMMISSION

1. The following new directive is issued by the Commission

Directive on Energy Conservation:

In view of the increase in cost of electricity and the constraints in

capacity additions to generate additional power to meet the

increase in demand, it is imperative that all the consumers use

energy efficient equipment and adopt energy conservation

measures, in their daily activities to conserve electricity. To

achieve this, the Commission has notified the Demand Side

Management Regulations, 2015, on 28.07.2015. As per these

Regulations, the ESCOMs have to implement Demand Side

Management (DSM) and Energy Efficiency (EE) programmes in

their jurisdiction, to mitigate peak and energy shortages by

adoption of conservation technologies for more efficient use of

electricity. The objective is to flatten the load curve by reducing

the loads in their respective areas leading to reduction in system

peak load.

The Commission has noted that the ESCOMs have already

initiated the DELP (Domestic Efficient Lighting programme) for

supplying/distributing 9 watts capacity LED bulbs to the

consumers at a subsidised price. This initiative will certainly help

clviii

conserve substantial quantum of energy used for domestic

lighting, provided all the consumers accept and adopt it.

In addition to the above initiative, the Commission notes that

there is a scope for energy conservation in use of equipment like

Air Conditioners, Fans, Refrigerators etc., in domestic/

commercial and industrial installations. Also, use of LED

lamps/energy efficient lamps like induction lamps in all the

streetlight installations including high mast street light installations

should be considered so as to make energy conservation

measures more broad based across wider range of consumers.

Therefore, the Commission hereby directs the ESCOMs to service

all the new installations only after ensuring that the BEE *****

(Bureau of Energy Efficiency five star rating) rated Air

Conditioners, Fans, Refrigerators, etc., are being installed in the

applicant consumers’ premises.

Similarly, all new streetlight/high mast installations including

extensions made to the existing streetlight circuits shall be

serviced only with LED lamps/energy efficient lamps like

induction lamps.

Further, the Commission directs the ESCOMs to take up

programmes to educate all the existing domestic, commercial

and industrial consumers, through media and distribution of

pamphlets along with monthly bills, regarding the benefits of

using five star rated equipment certified by the Bureau of Energy

Efficiency in reduction of their monthly electricity bills and

conservation of precious energy.

clix

2. Review of Compliance of Existing Directives:

The Commission had in its earlier Tariff Orders and other communications

issued several directives for compliance by the MESCOM. While

reproducing such directives, the compliance of the directives as reported

by the MESCOM is analysed in this Section.

i. Directive on implementation of Standards of Performance (SoP):

The Directive was:

“The MESCOM is directed to strictly implement the specified Standards

of Performance while rendering services related to supply of power as

per the KERC (Licensee’s Standards of Performance) Regulations, 2004.

Further, the MESCOM is directed to display prominently in Kannada the

details of various critical services such as replacing the failed

transformers, attending to fuse off calls / line breakdown complaints,

arranging new services, change of faulty energy meters, reconnection

of power supply, etc., rendered by it as per Schedule-1 of the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and

Annexure-1 of the KERC (Consumer Complaints Handling Procedure)

Regulations, 2004, on the notice boards in all the O & M sections and O

& M sub-divisions in its jurisdiction for the information of consumers as

per the following format.

Nature of

Service

Standards of

performance

(indicative

minimum time

limit for

rendering

services)

Primary

responsibility

centres where

to lodge

complaint

Next higher

Authority

Amount

payable to

affected

consumer

The MESCOM shall implement the above directive within one month

from the date of the order and report compliance to the Commission

regarding the implementation of the directives.”

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Compliance by the MESCOM:

As per the directive, the MESCOM has implemented the specified

Standards of Performance while rendering the services related to

supply of power as per the KERC (Licensee’s Standard of Performance)

Regulations, 2004. The MESCOM has taken initiative for display of the

details in Kannada of various critical services such as replacing the

failed transformers, attending to fuse off call/line breakdown

complaints, arranging new services, change of faulty meters,

reconnection of power supply etc., rendered as per the Schedule-1 of

the KERC(Licensee’s Standards of Performance) Regulations, 2004, and

Annexure-1 of the KERC(Consumer Complaints Handling Procedure)

Regulations, 2004, on the notice boards in all the 199 O&M sections

and 52 sub-divisions.

The MESCOM has been furnishing quarterly reports to the Commission

at the end of every quarter as per the directive.

Commission’s Views

The Commission notes that the MESCOM has complied with the

directive by displaying the details of specified Standards of

Performance on the notice boards in all its O & M section and

subdivision offices for the information of the consumers and public. The

Commission directs the MESCOM to adhere to the specified standards

of performance while rendering services to ensure that consumer

complaints are attended to in a time bound manner.

The Commission reiterates its directive to the MESCOM to continue to

strictly implement the specified Standards of Performance while

rendering services related to supply of power as per the KERC

(Licensee’s Standards of Performance) Regulations, 2004.

ii. Directive on use of safety gear by linemen:

clxi

The Directive issued was:

“The Commission directs the MESCOM to ensure that all the linemen in

its jurisdiction are provided with proper and adequate safety gear and

also ensure that the linemen use such safety gear provided while

working on the network. The MESCOM should sensitise the linemen

about the need for adoption of safety aspects in their work through

suitably designed training and awareness programmes. The MESCOM is

also directed to device suitable reporting system on the use of safety

gear and mandate supervisory/higher officers to regularly cross check

the compliance by the linemen and take disciplinary action on the

concerned if violations are noticed. The MESCOM shall implement this

directive within one month from the date of this order and submit

compliance report to the Commission.”

clxii


As per the Directive, the MESCOM has provided adequate safety

gears to all the line maintenance staff duly procuring necessary safety

materials/equipment like Earthing rods, Helmets, Hand gloves, Rain

coats, Safety belts, etc., and strict instructions were issued to field

officers to regularly cross check the compliance by the linemen and to

take disciplinary action on the concerned if violations are noticed. The

MESCOM has also taken measures to sensitize the linemen about the

need for adoption of safety aspects in their work through suitably

designed training and awareness programmes through the HRD

regularly.

As regards putting in place a suitable reporting system on the use of

safety gear and to mandate supervisory/higher officers to regularly

cross check the compliance by linemen and to take disciplinary action

on the concerned if violations are noticed, the MESCOM has been

issuing suitable directions to the field officers.


The Commission notes that the MESCOM has provided safety gadgets

to its linemen . The MESCOM shall also take action to provide additional

safety tools to linemen to facilitate them to carry out their work safely. It

is important that the MESCOM should continue to focus on safety

aspects to reduce the electrical accidents occurring due to negligence

on the part of the field staff and also non-adherence of safety

procedures by them while working on the network. It is also important

that the frequency of imparting training to linemen should be increased

so that adherence to safety aspects becomes part their routine.

The Commission reiterates its directive that the MESCOM shall ensure

that all the linemen in its jurisdiction are provided with proper and

adequate safety gear and the linemen use such safety gear provided

clxiii

to them while working on the network. The compliance in this regard

shall be submitted once in a quarter to the Commission regularly.

iii. Directive on providing Timer Switches to Streetlights by the

ESCOMs

The Commission directs the MESCOM to install timer switches using own

funds to all the streetlight installations in its jurisdiction wherever the

local bodies have not provided the same and later recover the cost

from them. The MESCOM shall also take up periodical inspection of

timer switches installed and ensure that they are in working conditions.

They shall undertake necessary repairs / replacement work, if required

and later recover the cost from local bodies. The compliance

regarding the progress of installation of timer switches to streetlight

installations shall be reported to the Commission.


The MESCOM has issued directions to field officers to provide timer

switches for streetlight installations with due concurrence of the local

bodies. In this regard, concerned field officers have requested the

local bodies seeking their concurrence to bear the cost of providing

timer switches and repair /replacement of switches under

maintenance. Further, letters have been addressed to the Urban

Development Department and Rural Development & Panchayatraj

Department to bear the cost of replacement of timer switches in their

jurisdiction. The concurrence from these departments is awaited. After

receiving the concurrence from these departments, the work of

installing the timer switches will be taken up by the MESCOM.


The Commission notes that the MESCOM so far has not installed timer

switches to streetlight installations in its jurisdiction. The MESCOM needs

to take up installation of timer switches in its jurisdiction for ensuring

clxiv

prompt control by switching “ON” & “OFF” at scheduled time and

avoidance of wastage of electricity.

The Commission reiterates that the streetlight installations should be

provided with timer switches for enabling them to be automatically

switched on only during the scheduled time. This measure would not

only save significant quantum of energy that is currently wasted

because of inefficient and unreliable manual operation of the switches

which allow them to be lit unnecessarily even during day time, but also

ensure that streetlights are lit during the scheduled dark hours when

the general public require them. As directed earlier the MESCOM

should install the timer switches at their cost and later recover it from

the local bodies. Persuading the local bodies to fix timer switches at

their own cost availing funds / grants received from Government and

other agencies for such programmes / works should also be explored

seriously.

Further, providing timer switches to streetlight installations in the

MESCOM also under “Nagara Jyothi” programme through M/s EESL

needs to be earnestly pursued on the lines of the BESCOM, to ensure

covering of all street light installations in its jurisdiction. The progress

/status in this regard shall be reported to the Commission on a quarterly

basis regularly.

The Commission reiterates its directive to the MESCOM that the

streetlight installations should be provided with timer switches for

ensuring prompt control and avoidance of wastage of electricity.

The Commission further directs the MESCOM that henceforth, the new

streetlight installations and any extension/modification to be carried

out to the existing streetlight installations shall be serviced only with

timer switches.

iv. Directive on load shedding:

clxv

The Commission had directed that:

1. Load shedding required for planned maintenance of transmission /

distribution networks should be notified in daily newspapers at least

24 hours in advance for the information of consumers.

2. The ESCOMs shall on a daily basis estimate the hourly requirement

of power for each sub-station in their jurisdiction based on the

seasonal conditions and other factors affecting demand.

3. Any likelihood of shortfall in the availability during the course of the

day should be anticipated and the quantum of load shedding

should be estimated in advance. Specific sub-stations and feeders

should be identified for load shedding for the minimum required

period with due intimation to the concerned sub-divisions and sub-

stations.

4. The likelihood of interruption in power supply with time and duration

of such interruption may be intimated to consumers through SMS

and other means.

5. Where load shedding has to be resorted to due to unforeseen

reduction in the availability of power, or for other reasons,

consumers may be informed of the likely time of restoration of

supply through SMS and other means.

6. Load shedding should be carried out in different sub-stations /

feeders to avoid frequent load shedding affecting the same sub-

stations / feeders.

7. The ESCOMs should review the availability of power with respect to

the projected demand for every month in the last week of the

previous month and forecast any unavoidable load shedding after

consulting other ESCOMs in the State about the possibility of inter-

ESCOM load adjustment during the month.

8. The ESCOMs shall submit to KERC their projections of availability and

demand for power and any unavoidable load shedding for every

succeeding month in the last week of the preceding month for

approval.

clxvi

9. The ESCOMs shall also propose specific measures for minimizing

load shedding by spot purchase of power in the power exchanges

or bridging the gap by other means.

10. The ESCOMs shall submit to the Commission sub-station wise and

feeder wise data on interruptions in power supply every month

before the 5th day of the succeeding month.

The Commission had directed that the ESCOMs shall make every effort

to minimize inconvenience to consumers strictly complying with the

above directions. The Commission had indicated to review the

compliance of directions on a monthly basis for appropriate orders.


It is submitted that, in the MESCOM, before imposing scheduled load

shedding for planned maintenance of distribution network, prior

notification is being given in daily newspapers for the information of

the consumers power supply on three phase and single phase is being

arranged in all the districts of the MESCOM as per the Government

Order. However, unscheduled load shedding is resorted to only when

the power supply demand and the availability mismatches due to loss

of generation or major outages of transmission lines and also as per the

instructions of State Load Dispatch Centre to maintain grid security and

frequency.

Commission’s Views:

The Commission observes that the MESCOM is not submitting its

projections of availability and demand for power and any

unavoidable load shedding for every succeeding month in the last

week of the preceding month to the Commission regularly. The

MESCOM shall henceforth submit the same regularly to the

Commission. The Commission also notes that the MESCOM has not

taken any action for providing information to the consumers through

SMSes regarding the time and duration of interruptions due to any

clxvii

reasons. This has to be expedited as the consumers need to be

informed through SMSes in addition to notification in news-papers

media regarding load shedding due to reasons such as system

constraints, breakdown of lines/equipment, maintenance etc. This

would address significantly the consumers’ dissatisfaction on this issue.

Further, it is also necessary to avoid load shedding involving the same

sub-stations/feeders; the same should be carried out on rotation basis

to avoid inconvenience to consumers/public.

The Commission reiterates that the MESCOM shall comply with the

directive on load shedding and submit monthly compliance reports to

the Commission regularly.

v. Directive on Establishing a 24x7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:

The directive was as below:

“ The MESCOM is directed to put in place a 24x7 fully equipped

Centralized Consumer Service Center at its Headquarters with

state of the art facility /system for receiving consumer complaints

and monitoring their redressal so that electricity consumers in its area of

supply are able to seek and obtain timely and efficient services /

redressal in the matter of their grievances. Such a Service Center shall

have adequate number of desk operators in each shift so that

consumers across the jurisdiction of MESCOM are able to lodge their

complaints directly with this Centre.

Every complaint shall be received on a helpline telephone number by

the desk operator and registered with a docket number which shall be

intimated to the Consumer. Thereafter, the complaints shall be

transferred online / communicated to the concerned field staff for

resolving the same. The concerned O&M / local service station staff

shall visit the complainant’s premises / fault location at the earliest to

clxviii

attend to the complaints and then inform the Centralized Service

Centre that the complaint is attended. In turn, the call centre shall call

the complainant and confirm with him whether the complaint has

been attended to. The complaints shall be closed only after

receiving consumer’s / complainant’s confirmation. Such a system

should also generate daily reports indicating the number / nature of

complaints received, complaints attended, complaints pending and

reasons for not attending to the complaints.

The MESCOM shall publish the details of the complaint handling

procedure / Mechanism with contact numbers in the local media

periodically for the information of the consumers. The compliance of

the action taken in the matter shall be submitted to the Commission

within two months from the date of this Order.

Further, the Commission directs the MESCOM to establish/strengthen

24x7 service stations, equipping them with separate vehicles &

adequate line crew, safety kits and maintenance materials at all its

sub-divisions including rural areas for effective redressal of consumer

complaints.

The Commission also directs the MESCOM to hold Consumer

Interaction Meetings in each O&M sub-division once every two

months according to a published schedule and invite consumers in

advance to participate in such meetings to sort out their grievances.

Such meetings shall be chaired by officers of the level of

Superintending Engineers and attended by the concerned divisional

and sub-divisional Engineers. The MESCOM shall submit compliance

of the same to the Commission once in a quarter.”


The MESCOM has established a 24X7 Centralized Consumer Service

Centre at Mangaluru and the complaints are being received from all

the consumers of MESCOM at this Customer Care Centre only.

clxix

The consumers are dialing short code number “1912” to lodge their

complaints related to electricity. For better utilization of services of

Customer Care Centre and resolve the consumers’ complaints, the

MESCOM has taken appropriate measures to popularize the same

through local newspapers and local TV channels. The MESCOM has

been focusing on improving the consumer services by reducing the

consumer complaint downtime. In this regard, suitable instructions are

being issued to the field officers to attend to the complaints efficiently

in order to avoid deliberate or unreasonable delay.

Consumer interaction meetings are being regularly conducted at

subdivision levels under the chairmanship of the Superintending

Engineer of respective O&M Circle. Also, wide publicity is being given

in advance on conduction of consumer interaction meetings through

leading newspapers and local announcements. The MESCOM has

conducted 66 consumer interaction meetings at the subdivisions

during the period from April to November, 2015.

The MESCOM also has conducted interaction meetings with HT

consumers and Independent Power Producers during the month of

November, 2015, to resolve the grievances of HT

consumers/Generators.

Further, the MESCOM has already established 32 service stations and

provided all the infrastructural requirements along with men, material

and vehicle to redress the consumer complaints. The MESCOM has

sanctioned service stations with men, material and vehicles to the

balance 24 subdivisions. Providing manpower and hiring of vehicles is

in progress for extending better services to the consumers.


The Commission notes that the MESCOM has taken certain measures

for effective redressal of consumer complaints. The MESCOM is

clxx

directed to continue to focus on improving the consumer services and

further reduce the consumer complaint downtime to ensure prompt

services to them. The MESCOM should ensure prompt response by its

officials to consumer complaints about interruptions in power supply

due to breakdown of lines/equipment, replacement of faulty

transformers etc. The MESCOM should sensitize its field staff in this

regard.

The MESCOM shall continue to ensure that the higher officers are

present in such interaction meetings at the subdivisions to effectively

redress the grievances of the consumers. The MESCOM shall also direct

sub-division officers to extend personal invitation in writing or through

telephone to some select consumers/consumer groups to every such

meeting so that more number of them participate and resolve their

grievances.

Further, the Commission also notes that the MESCOM has not complied

with the direction of video graphing the proceedings of interaction

meetings and hence, directs that all such meetings shall be video

graphed and the same also to be uploaded on its website for the

information consumers.

The Commission reiterates its directive to the MESCOM to publish the

complaint handling procedures / contact number of the Centralized

Consumer Service Centre regularly in the local media and other

modes periodically for the information of public and ensure that all the

complaints of consumers are registered only through the centralized

consumer service centre for proper monitoring of complaints

registered. The MESCOM is also directed to expedite establishing of

service centers in the balance 24 subdivisions at the earliest to

effectively deal with consumer complaints. The compliance of the

same shall be submitted to the Commission once in a quarter regularly.

clxxi

vi. Directive on Energy Audit:

The Commission had directed the MESCOM to prepare a metering

plan for energy audit to measure the energy received in each of the

interface points and to account for the energy sales. The Commission

had also directed the MESCOM to conduct energy audit and chalk

out an action plan to reduce distribution losses to a maximum of 15

per cent wherever it was above this level in towns/ cities having a

population of over 50,000.

The Commission had earlier directed all the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this

regard, ESCOMs were required to furnish to the Commission the

following information on a monthly basis:

a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.

c) Number of DTCs yet to be metered.

d) Time bound monthly programme for completion of work.


As a part of the Company strategy to reduce technical and

commercial losses, the MESCOM is undertaking energy audit at division

level and feeder level. Earlier DTC wise energy audit was also carried

out for selected towns. However, the same could not be continued

due to the introduction of R-APDRP project where the issues such as

GIS mapping and consumer indexing are yet to be resolved, as GIS

survey of 6 towns is in progress and yet to be completed.

Adding to the above, the MESCOM has also issued work award for

metering of about 27,300 unmetered DTCs with automatic meter

reading protocols. The implementation time line as per the awarded

contact is one year. Hence, the MESCOM is emphasizing the metering

clxxii

of DTCs for the feeders which are having the loss levels above 15 per

cent consistently to take up the energy audit on top priority and in

phased manner.

Further, intensive energy audit is also being conducted at the

selected cities / towns. As per the directions of the Commission, the

distribution losses in respect of the selected six cities namely

Mangalore, Udupi, Shivamogga, Bhadravathi, Sagar and Chikmagalur

are being continuously monitored. In the FY15, the loss levels in six

cities are within 10 per cent.

Further, for rigorous energy auditing, the MESCOM has selected 16

major taluk head quarter towns. Of the total 22 towns, the energy

audit is taken up, Loss levels in 19 towns has been brought within 10 per

cent.

Status of distribution loss in the selected cities / towns in the FY15 and

up to July, 2015, is as below:

Sl.No. City/Town FY15 FY 16 (up to

July15)

1 Mangalore 4.36 4.80

2 Udupi 5.45 3.76

3 Shivamogga 7.57 8.33

4 Bhadravathi 7.76 8.88

5 Sagar 9.35 8.63

6 Chikmagaluru 10.63 9.47

7 Puttur 5.25 4.96

8 Bantwal 12.43 13.05

9 Shikaripura 7.18 12.99

10 Kadur 10.74 9.33

11 Tarikere 7.92 5.80

12 Beltangady 4.36 4.06

13 Sullia 3.62 2.17

14 Kundapura 5.67 6.46

15 Karkala 5.68 5.67

16 Soraba 6.86 11.50

17 Hosnagar 6.17 6.15

18 Thirthahalli 5.59 6.02

19 Mudigere 3.48 5.95

20 Koppa 4.58 4.46

21 Sringeri 4.05 5.00

22 NR Pura 4.71 4.33

clxxiii


The Commission notes that the MESCOM is not submitting regularly the

monthly analysis of energy audit conducted in cities / towns. The

MESCOM is directed to submit the energy audit reports regularly to the

Commission. The MESCOM shall initiate measures to bring down the

loss levels further downwards in respect of Bantwal, Shikaripur, Soraba

and Kadur towns where the losses are reported as more than 10 per

cent and compliance regarding the specific remedial measures

initiated to reduce the losses shall be submitted to the Commission

every month regularly.

Further, the Commission notes that the MESCOM has not taken up DTC

wise energy audit in spite of providing meters to significant number of

DTCs. Hence, the MESCOM is directed to take up energy audit of DTCs

for which meters have already been installed and also initiate

remedial measures for reducing distribution losses wherever they are

above the targeted level.

The MESCOM shall also expedite metering of balance DTCs and

complete it early so as to take up DTC wise energy audit and to initiate

remedial measures for reducing distribution losses wherever they are

above the targeted level. The compliance in respect of DTC wise

energy audit conducted with analysis and the remedial action

initiated to reduce loss levels shall be submitted every month regularly

to the Commission.

Further, the MESCOM is directed to submit to the Commission the

consolidated energy audit report for the FY16, as per the formats

prescribed by the Commission vide its letter No: KERC/D/137/14/91

dated 20.04.2015, before 15th May 2016.

vii. Directive on Implementation of HVDS:

clxxiv

In view of the obvious benefits in the introduction of HVDS in reducing

distribution losses, the Commission had directed MESCOM to

implement High Voltage Distribution System in at least one O&M

division in a rural area in its jurisdiction by utilizing the capex provision

allowed in the ARR for the year.


As per the directive of the Commission and in accordance with the

GoK Order No: EN 53 PSR 2013, Bangalore, dated: 03.10.2013, Kasaba

Hobli in Kadur sub-division was selected for implementation of HVDS. It

is proposed to replace each 63 KVA DTC by 2 numbers of 25 KVA DTCs

and each 100 KVA DTC by 5 numbers of 25 KVA DTCs. Hence, the

proposal covers replacement of 249 numbers of 63 KVA and 79

numbers of 100KVA DTCs by 1,142 numbers of 25 KVA DTCs involving 6

feeders at a cost of Rs.26 Crores.

As regards submission of feedback to the Commission on viability of

implementation of HVDS scheme, the MESCOM has conducted the

Techno Economical Analysis and it was observed that cost of the

project works out to be on the higher side.

Further, as a practice of adoption of high voltage distribution system,

higher capacity distribution transformers are being replaced by smaller

capacity transformers duly ensuring proper load balancing which also

results in improving HT/LT ratio.

The physical progress achieved in respect of replacement of

transformers during 2014-15 and 2015-16 (up to December, 15) is given

below:

clxxv


The Commission notes that there is no progress in implementation of

HVDS in in Kasaba Hobli of Kadur subdivision except replacement of

some 100 /63 kVA transformers by 25 kVA transformers. Further, the

Commission with a view to minimize the cost has issued revised

guidelines for implementation of HVDS in sub-divisions/feeders having

highest distribution losses, so that a higher loss reduction could be

achieved on implementation of HVDS at a reasonable cost.

The MESCOM is directed to get the cost estimates prepared keeping in

view the objective of bringing down the overall costs in

implementation of the project and also get them thoroughly examined

and thereafter seek separate approval from the Commission before

taking up the proposed work.

The MESCOM needs to expedite implementation of HVDS in its

jurisdiction by drawing up an action plan for timely completion and to

derive the envisaged benefits on implementation of the scheme.

The Commission directs the MESCOM to follow the revised guidelines

issued by the Commission and implement HVDS programme in Kadur

subdivision and submit the progress/compliance thereon once in a

quarter to the Commission regularly.

viii. Directive on Niranthara Jyothi Feeder Separation:

Sl.

No. Year

250KVA

replaced

250KVA to 100 KVA

replaced

100KVA to

100 63 25 63 25

1 2014-15 20 17 41 0 36 43 41

2 2015-16

(up to Dec15) 16 12 29 0 20 23 11

clxxvi

The ESCOMs were directed to furnish to the Commission, the

programme of implementing 11 KV taluk wise feeders’ segregation

with the following details

a) Number of 11 KV feeders considered for segregation.

b) Month wise time schedule for completion of envisaged work.

c) Improvement achieved in supply after segregation of feeders.


The core objective of separation of feeders is to provide regulated

supply to agricultural consumers and continuous power supply to non-

agricultural consumers in rural areas separately through dedicated

feeders. In this regard, DPRs have been prepared at a cost of Rs. 227

crore for segregation of agricultural loads involving 98 and 113 feeders

in Shivamogga and Chikkamagaluru districts respectively. Further, as

per the guidelines under Deen Dayal Upadhyay Grameen Jyothi

Yojana (DDUGJY), the proposal for feeder segregation has been

submitted to the REC with an updated cost of Rs. 289 crore. Approval

for the same has been communicated by the REC and the action will

be taken to call tender duly following the guidelines. As per the

guidelines, all projects under DDUGJY shall have to be completed

within a period of 24 months from the date of issue of Letter of Award.


The Commission, notes that the feeders’ segregation proposal

submitted to the REC under Deen Dayal Upadhyay Grameen Jyothi

Yojana (DDUGJY) scheme has been approved as reported by the

MESCOM. Therefore, the MESCOM is directed to take immediate

necessary steps to expedite implementation of feeder segregation

scheme in its jurisdiction without any further delay, so as to derive the

clxxvii

envisaged benefits set out in the DPR. The MESCOM is directed to

submit progress/compliance thereon to the Commission regarding the

time bound schedule to complete the targeted works, regularly once

in a quarter.

Further, after commissioning of the feeders under DDUGJY in its

jurisdiction, the MESCOM needs to compute the IP set consumption on

the basis of energy meter readings available in the exclusive

agricultural feeders at the substations. However, till the feeder

segregation scheme is implemented fully and feeders are segregated,

the MESCOM shall furnish the consumption of IP sets on the basis of

energy meter readings of individual IP sets only, instead of assessing

the consumption of IP sets on the basis of energy meters fixed to DTCs

feeding predominant IP set loads. The MESCOM shall consider the

actual meter readings of IP sets wherever the meters have been

provided and report the actual consumption of IP sets on the basis of

data from IP set energy meters every month to the Commission,

regularly.

ix. Directive on Demand Side Management in Agriculture:

In view of the urgent need for conserving energy for the benefit of the

consumers in the State, the Commission had directed the MESCOM to

take up replacement of inefficient pumps with energy efficient pumps

approved by the Bureau of Energy Efficiency, at least in one sub-

division in its jurisdiction.


The MESCOM has initiated action to promote DSM measures in

agricultural sector by selecting two rural feeders viz., Kabaka in Puttur

division and Manai in Udupi division on a pilot basis. In order to

measure the input energy before and after installation of energy

efficient pumps, 261 IP sets connected to the Kabaka feeder and 294

clxxviii

IP sets connected to Manai feeder have already been provided with

new electro-static meters by replacing the existing electro-mechanical

meters during March, 2013 itself. The base line data such as meter

readings and monthly consumption of these IP sets have been carried

out, but providing energy efficient motors to the IP sets could not be

taken up immediately.


The Commission notes that there is no progress in implementation of

DSM measures by the MESCOM; in fact the status is same as that of the

previous year only. The Commission observes that the MESCOM has not

taken any action to take forward the implementation of DSM measures

in its jurisdiction seriously beyond replacement of existing

electromechanical meters by static meters. The MESCOM is directed to

initiate further necessary action required to implement DSM measures.

Further, the Commission is of the opinion that there is a huge potential

for energy saving in the agricultural sector which needs to be tapped

and therefore, much emphasis should be given for implementation of

DSM measures to conserve energy and also precious water for the

benefit of farmers.

The Commission during its review meetings with the ESCOMs held in the

Commission has been directing them to initiate DSM measures in any

one sub-division/taluk in order to assess the results of such measures

before scaling up in whole of its jurisdiction.

The MESCOM is directed to expedite the implementation of DSM

measures in 11kV Kabaka feeder in Puttur division and Manai feeder in

Udupi division and report compliance thereon to the Commission within

three months from the date of this order.

clxxix

x. Directive on Lifeline Supply to Un-Electrified Households:

The Commission had directed the ESCOMs to prepare a detailed and

time bound action plan to provide electricity to all the un-electrified

villages, hamlets and habitations in every taluk and to every household

therein. The action plan shall spell out the details of additional

requirement of power, infrastructure and manpower along with the

shortest possible time frame (not exceeding three years) for achieving

the target in every taluk and district. The Commission had directed

that the data of un-electrified households could be obtained from the

concerned Gram Panchayaths and the action plan be prepared

based on the data of un-electrified households.


The works taken up for electrification of un-electrified households under

RGGVY XI plan 1st phase, in Shivamogga and Chikkamagaluru districts

have been completed during March 2012. The MESCOM has achieved

electrification of a 33,290 rural households including BPL households in

Dakshina Kannada and Udupi districts under RGGVY scheme and

1,351 BJ/KJ households under the MESCOM budgetary works during

the FY15. Further, 29,923 BPL households are proposed for electrification

under DDUGJY scheme, for which the sanction is awaited.

Similarly, in Udupi and Dakshina Kannada districts, the RGGVY works

taken up under 2nd phase have been completed during March 2015.

The details of progress are as below:

clxxx

Particulars

District

Udupi Dakshina Kannada

Target as

per survey Progress

Target as

per survey Progress

Intensive electrification

of villages (Nos.) 252 252 356 356

Electrification of

Habitations(Nos.) 50 50 98 94

Electrification of rural

households including

BPL households (Nos.)

10284 10500 23938 22790

Electrification of BPL

households (Nos.) 5657 7004 14614 14427

New proposals:

a. Decentralized Distributed Generation (DDG):

The MESCOM has submitted 25 number of revised DPRs under DDG

project (which includes electrification of 3 un-electrified villages

also) at a cost of Rs.23 crore as per the directions of the REC. Action

will be taken after sanction by the REC.

b. Rajeev Gandhi Grameena Vidyuthikarana Yojana (RGGVY) XII

plan:

The MESCOM has taken up preparation of DPRs for electrification of

households as soon as the RGGVY XII plan was launched. The work

of survey and preparation of DPRs for Shivamogga and

Chikkamagaluru districts has been entrusted to M/s. REC PDCL as

per the directions of the GoK. Accordingly, the same has been

prepared, validated and uploaded to the REC website for

according sanction, which includes electrification of 65,828 rural

households (including 27,712 BPL households) at a cost of Rs. 37

crore.

Further, Government of India has undertaken Deen Dayal

Upadhyaya Gram Jyoti Yojana (DDUGJY) for electrification of rural

clxxxi

households and it has been directed to include this RE component

in the DDUGJY scheme only. Hence, the proposal at a cost Rs.43

crores has been uploaded to DDUGJY, but the REC has sanctioned

only Rs.3.43 crore for Shivamogga and Chikkamagaluru districts.

Revised allocation has been requested for taking up the rural

electrification work as per the survey.

However, the MESCOM is continuously taking up the rural

electrification works under budgetary works including electrification of

hamlets and households. As per guidelines of DDUGJY, all projects

under DDUGJY shall be completed within a period of 24 months from

the date of issue of Letter of Award.

A brief progress is as below:

YEAR

Electrification of Hamlet/Colonies Electrification of Household (BJKJ)

Special

Component

Plan

Tribal

Sub

Plan

General

Special

Component

Plan

Tribal

Sub

Plan

General

2013-14 13 4 43 198 30 264

2014-15 8 10 12 106 37 1208

2015-16

(up to

September15)

2 4 9 24 11 291

clxxxii


The Commission notes that still a vast number of households in the

remote areas remain un-electrified in the jurisdiction of the MESCOM.

The MESCOM needs to expedite electrification of these households with

the seriousness this matter deserves. The electrification of un-electrified

households is an important programme which should be implemented

within in a time frame to ensure that the people are provided with basic

need of electricity. The Commission, while reviewing, the status of

compliance of its directives during the ESCOMs’ Review meetings, has

been stressing upon the ESCOMs to initiate necessary action to provide

electricity to the un-electrified households with funding arrangement by

RGGVY or any other source.

The MESCOM shall come out with an action plan to implement the

directive of the Commission for providing electricity to the un-electrified

households in its jurisdiction and submit compliance/progress achieved

monthly to the Commission.

Further, the Commission concerned with the slow pace of progress of

this programme, in its previous Tariff Order had directed the MESCOM

to cover electrification of 5 per cent of the total identified un-

electrified households every month beginning from April 2015 so as to

complete this programme in about twenty months. There is not much

progress in these aspects. The MESCOM is directed to expedite action

to provide electricity to the un-electrified households covering all the

remaining households within the targeted time and report compliance

to the Commission regarding the monthly progress achieved from May,

2016 onwards. In the event of non-compliance, the Commission may

be constrained to initiate penalty proceedings under section 142 of

the Electricity Act, 2003.

xi. Directive on sub-division as Strategic Business Units (SBU):

clxxxiii

The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented to maintenance of power supply

without a corresponding emphasis on realization of revenue. This has

resulted in a serious mismatch between the power supplied,

expenditure incurred and the revenue realized in many cases. The

continued viability of the ESCOMs urgently calls for a change of

approach in this regard, so that the field level functionaries are made

accountable for ensuring realization of revenues corresponding to the

energy supplied in their jurisdiction.

The Commission has directed the MESCOM to introduce the system of

Cost-Revenue Centre Oriented sub-divisions at least in two divisions in

its operational area and report results of the experiment to the

Commission.


It is submitted that, Puttur and Shivamogga divisions have been

identified for introduction of SBU concept in the MESCOM. However,

the concept and modalities adopted in the above divisions need to

be refined including distribution of input energy into various accounts.

This requires further study at feeder / DTC / consumer levels for

accountability of energy consumed. In this regard, providing energy

meters to DTCs is in progress. Efforts are being made to achieve study

of energy audit reports and revenue at subdivision level.

With regard to implementation of strategic action plan and conversion

of division/subdivision into Strategic Business Units (SBU), M/s. iDeEK,

Bangalore, has approached the MESCOM with a proposal, which is

under review.


The Commission notes that, the ESCOMs have expressed their difficulty

in introduction of SBU concept in their O & M divisions / sub divisions due

clxxxiv

to implementation issues in the field. The Commission recognizes the

problems associated with implementation of SBU concept. As an

alternative, the Commission had instituted a study to make field

formations of the ESCOMs financially accountable without any

modification in their existing administrative set up. The Commission has

forwarded a report prepared by the consultants M/s PWC regarding

implementation on Financial Management Framework for distribution

utilities to take further action to implement a model suggested by the

consultant, in their jurisdiction to bring in accountability on the

performance of the divisions / sub-divisions in relation to the quantum of

energy received, sold and its cost so that they conduct their business on

commercial principles.

The MESCOM is therefore, directed to implement this financial

management framework model and report compliance thereon within

three months from the date of issue of this Order.

xii. Directive on Prevention of Electrical Accidents:

The directive was as follows:

“The Commission has reviewed the electrical accidents that have

taken place in the State during the year 2014-15 and with regret noted

that as many as 564 people and 514 animals have died due to these

accidents.

[

From the analysis, it is seen that the major causes of these accidents

are due to snapping of LT/HT lines, accidental contact with live

LT/HT/EHT lines, hanging live wires around the electric poles

/transformers etc., in the Streets posing great danger to human lives.

Having considered the above matter, the Commission hereby directs

to prepare an action plan to effect improvements in the distribution

network and implement safety measures to prevent electrical

accidents. Detailed division wise action plans shall be submitted by

the MESCOM to the Commission.”

clxxxv


As per the directive, the MESCOM has made concerted efforts for

identification of hazardous installations in the distribution system. Also,

the MESCOM has given priority for rectification of hazardous

installations in densely populated areas and public areas. Further, the

local bodies were sensitized about rectification of hazardous streetlight

installations under their control.

The MESCOM is taking necessary measures to rectify the hazardous

locations/installations and providing LT protections to distribution

transformers to prevent and reduce the number of fatal electrical

accidents.

All the linemen of the MESCOM have been provided with safety

equipment such as high voltage line detectors, Earthing rods, safety

kits, etc., apart from educating them regarding safety rules and

regulations. Periodical training is being imparted to them on safety

measures conducting mock tests and various field demonstrations

through trained professionals. Also, wide publicity is being given in daily

newspapers for creating awareness about safety aspects.

The details of number of hazardous installations identified, rectified and

the details of improvements carried out on the distribution system

during the FY16 (up to November, 2015) are as mentioned below:

Month

No. of

hazardous

installations

(both HT&

LT)identified

during the

month

No. of hazardous

installations

rectified during

the month

No. of hazardous

installations yet to

be rectified

Apr-15 673 474 199

May-15 518 500 217

Jun-15 480 422 275

Jul-15 373 410 238

clxxxvi

Aug-15 159 147 250

Sep-15 242 238 254

Oct-15 104 321 37

Nov-15 148 153 32

Further, suitable instructions have been issued to all the field officers to

adhere to the standard construction practices while construction/

expansion of distribution network.


The Commission observes that in spite of various remedial measures

initiated including rectification of hazardous installations in its network

by the MESCOM, the number of fatal electrical accidents involving

both human and livestock has only increased which is of a serious

concern. The MESCOM should take immediate remedial measures to

bring down the number of electrical accidents occurring in the

distribution system. The MESCOM should make more concerted efforts

for identification and rectification of all the hazardous installations

prevailing in the distribution system particularly in densely populated

areas and public places, where the electrical safety clearance

between the structures and the overhead HT/LT lines is usually

inadequate. The MESCOM also needs to take up with the concerned

local bodies for rectification of the hazardous streetlight installations

and other electrical works under their control to ensure safety of the

public.

The MESCOM needs to create awareness through visual/print media

continuously about safety aspects among public to ensure that the

attention on safety aspects is maintained.

The Commission, during the Review meetings held with the ESCOMs

has been prompting the ESCOMs to take up periodical preventive

maintenance works, install LT protection to distribution transformers,

conduct regular awareness program for public on electrical safety

clxxxvii

aspects in use of electricity and also about ensure use of safety tools

and tackles by their field staff besides imparting necessary training to

the field staff at regular intervals. The MESCOM shall take effective

steps to achieve these.

Further, the MESCOM shall adhere to the best construction practices as

per the standards on construction/expansion of the distribution

network so that no maintenance is required for such network for a

reasonably long period of time. The MESCOM shall also conduct safety

audit and carryout preventive maintenance works as per schedule to

keep the distribution equipment in healthy condition.

The Commission has already forwarded the Safety Technical Manual

prepared by a sub-Committee comprising of experts from the Advisory

Committee, constituted by the Commission which should serve as a

useful guide for the field engineers to record all the technical

deficiencies prevalent in the distribution network and enable them to

take remedial action on the basis of the audit. In the Safety Technical

Manual, a detailed account of the steps to be taken on each element

of the distribution system is enumerated which would help the field

engineer in attending to the defects. The ESCOMs are required to

circulate the Safety Technical Manual among their field staff for

necessary guidance and also to continuously monitor the

implementation of the suggestions/ recommendations contained in

the reports.

The Commission therefore, reiterates its directive that the MESCOM shall

continue to take necessary measures to identify and rectify all the

hazardous locations/installations prevalent in its distribution system and

to provide LT protection to distribution transformers under an action

plan to prevent and reduce the number of fatal electrical accidents

occurring in the distribution system. The compliance regarding the same

shall be submitted to the Commission every month regularly.

clxxxviii

Appendix-1

Objections related to Tariff Issues:- MESCOM

Sl

No. Objections Replies by Licensee

1 MESCOM has submitted details of power

purchase during 2014-15 based on actuals

stating that, it has incurred an average rate

of Rs.5.31/kWh towards short term/medium

term power purchase. The Commission in

the Tariff Order for 2014-15 dated 12.05.2014

had approved an average short-

term/medium term power purchase rate of

Rs.5.216/kWh in FY15. The short

term/medium term power over and above

the quantum approved in tariff order and

purchased at rates exceeding the ceiling

rate approved by the Commission to the

tune of Rs.33.82 Crores needs to be

disallowed.

In the Tariff Order dated 02-03-2015, the

Commission had approved short /Medium

term purchases at Rs.5.25 per Unit. M/s PCKL

which is the nodal agency for managing the

power procurement on behalf of ESCOMs,

has obtained approval from the Commission

whenever the cost exceeded the cap of

Rs.4.50 per unit. However, the Commission

has accepted the application of MESCOM

and is in the process of validating the same to

ensure the prudence of various costs

proposed by the MESCOM.

Commission's Views: The MESCOM’s reply is acceptable.

2 The approach adopted by the MESCOM to

consider the capacity charges from the

petitions filed by various CGS stations

before the CERC for 2014-19 tariff period is

contrary to CERC (Terms and Conditions of

Tariff) Regulations 2014. MESCOM has

considered power purchase cost at an

average increase (over 2 year period i.e.

FY15 to FY17) in the range of 13.57% to

24.62% in respect of KPCL and CGS stations.

The yearly increase considered by

MESCOM is high. Hence, a strict prudence

check is necessary while approving the

The MESCOM has incurred the power

purchase cost during FY15 with reference to

the tariff approved by the CERC / KERC in

respect of different power generators. The

basis of projection for future years is also

based on the present tariff being paid by the

MESCOM.

clxxxix

power purchase costs.

Commission's Views: MESCOM’s reply is acceptable.

3 The actual employee expenses is 70% of the

total O&M expenses and R&M and A&G

expenses are 30% of the total O&M

expenses during 2014-15 and the allowable

weighted average inflation index is 7.14%

for 2014-15 and 7.15% for 2016-17.

Considering the actual O & M expenses for

2013-14 without contribution to Pension and

Gratuity Trust, the three year compounded

annual growth rate (CAGR) of the number

of installations, actual number of

installations as per audited accounts for the

period FY12 to FY15, the weighted inflation

factor and efficiency factor of 2%, the

normative O&M expenses for 2014-15 and

2016-17 will be Rs.265.70 Crores and

Rs.2903.08 Crores respectively. Out of

Rs.38.80 Crores booked as expenses

towards pension and gratuity contributions,

Rs.36.34 Crores remains unpaid. Against

Rs.38.80 Crores claimed as pension and

gratuity contributions, there was a cash

outgo of only Rs.2.46 Crores. Hence, the

uncontrollable O&M expenses on account

of pension and gratuity may be limited to

Rs.2.46 Crores in 2014-15. The interest

earned on Pension and Gratuity fund

investments have to be accounted for in

the ARR/APR. Thus, the allowable O&M

expenses will be Rs.268.16 Crores as against

Rs.321.77 Crores claimed for 2014-15 and

Rs.293.08 Crores as against Rs.582.55 Crores

The proposal of Annual Performance Review

and Annual Revenue Requirement along with

tariff revision is in line with KERC (Tariff)

Regulations and KERC (Terms & Conditions for

Determination of Tariff for Distribution and

Retail Sale of Electricity) Regulations, 2006

and the Commission is in the process of

validating the same.

cxc

projected in 2016-17.

Commission's Views. The O & M expenses are being allowed as per the MYT norms. The

same has been dealt with suitably in the Tariff Order.

4 MESCOM has considered a constant

interest during construction ("IDC") period

(interest capitalized) on adhoc basis for

2014-15 onwards. The interest capitalized as

well as expenses capitalized ought to be

linked with the capital expenditure of works

being undertaken

No comments offered by MESCOM

Commission's Views: While approving the ARR, the amount of interest capitalized is only an

estimate. The actual interest capitalized is considered during the Annual Performance

Review based on the audited accounts.

5 MESCOM has claimed interest on working

capital at Rs.34.61 Crores and Rs.58.57

Crores during 2014-15 and 2016-17

respectively. The consumer security

deposits are Rs.432.11 Crores in 2014-15 as

per audited accounts, but projected as

Rs.490.63 Crores in 2016-17 owing to

increase in connected load. MESCOM is

double charging the consumers by

claiming interest on working capital without

accounting for the consumer security

deposits which have been utilized as

working capital. Hence, it is requested to

reduce the security deposits from the

working capital being allowed to MESCOM

for computing the interest on working

capital or to approve a notional interest

income @ 9% on the security deposits.

MESCOM has claimed the interest on

security deposits during 2016-17 at a rate,

which is not in consonance with the clause

MESCOM has considered the Regulations of

Commission in computation of working

capital. MESCOM has continued the present

rate of interest for projection of interest on

consumer security deposit.

cxci

3.1 of the KERC (Interest on Security

Deposit) Regulations, 2005. The current Bank

Rate is 7.75% which has been published by

the Reserve Bank of India and the same

should be considered for FY17.

Commission's Views: These aspects have been suitably dealt with in the Tariff Order.

6 MESCOM has claimed an expense of

Rs.6.46 Crores during 2014-15 and 2016-17

towards Losses relating to Fixed Assets,

which is not proper.

No comments are offered by MESCOM

Commission's Views: This has been suitably dealt with in the Tariff Order.

7 MESCOM has claimed the ROE for 2014-15

and 2016-17 based on the paid up share

capital, share deposit and reserves and

surplus. MESCOM has considered incorrect

values of reserves and surplus (profit and

loss account) during 2014-15 and 2016-17.

The eligible return on equity will be Rs.58.46

Crores and Rs.65.55 Crores during 2014-15

and 2016-17 respectively.

MESCOM has detailed the basis of projection

of RoE in its application.

Commission's Views: This has been suitably dealt with in the Tariff Order, in terms of the MYT

Regulations.

8 MESCOM has projected a recovery of

Rs.553.52 Crores from the BJ/KJ and IP sets

consumers during 2016-17. The additional

subsidy requirement to meet the sales

projection of 1298.52 MUs during 2016-17

should be borne by GoK.


Commission's Views: The differential subsidy claims have to be met by the GoK and is not

being passed on to the other consumers.

cxcii

9 The Tariff Policy read with Section 61(g) of

the Act, provides that the State Commission

is required to ensure that the cross subsidies

are to be progressively reduced and that

tariff for each category is within ±20% of the

overall average cost of supply latest by the

year 2010-11. Hence, any benefit which

MESCOM wants to confer to the subsidized

category beyond the maximum of ±20%

should be recovered through Government

subsidy and cannot be loaded to the

subsidizing consumers.

The Commission may take a view in the

matter

Commission's Views: This has been dealt with appropriately in the Tariff Order.

10 MESCOM has made contrary submissions

with respect to the proposal for increase in

demand charges. At page 140 of the

Petition, MESCOM has stated that it has

proposed revision of fixed / demand

charges by Rs.10/ kW for all LT categories

and Rs.200/kVA for HT-1 and HT-2

categories. However, in the proposed rate

schedule as well as in the notification

published in the various newspapers,

MESCOM has not indicated any increase in

the demand charges. Recovery of demand

charges has been projected at Rs.212.66

Crores in Form D-21- Revenue from Existing

Tariff Rates and Revenue from Proposed

Tariff Rate for 2016-17 thereby confirming

that there is no proposal for increase in

demand charges.


matter

Commission's Views: This has been dealt with appropriately in the Tariff Order.

11 The ARR and tariff proposal of MESCOM fails

in providing any concrete plan towards No comments are offered by MESCOM

cxciii

agricultural DSM and focuses solely on

industrial DSM.

Commission's Views: The Commission has issued DSM Regulations in 2015 and it would take

some time to implement the same. Nevertheless, ESCOMs should take up agricultural DSM

immediately to conserve energy.

12 In the ARR filed by MESCOM, there are no

separate estimates provided for technical

and commercial losses. The Commission

may either require the Licensee to carry out

proper loss estimation studies for assessment

of technical and commercial losses under

its supervision, or initiate a study itself.


matter.

Commission's Views: The computation of distribution losses at 11 KV feeder level and DTC

levels has already been initiated by the ESCOMs as directed by the Commission. This

enables determination of technical losses. Further energy auditing at DTC levels as directed

by the Commission, enables computation of DTC level losses, which includes commercial

losses and technical losses. This mechanism of DTC wise energy audit, after its full

implementation, would enable complete segregation of technical and commercial losses

in the distribution system. The Commission is monitoring the implementation of these

measures.

13 Complete metering of agricultural pump

sets is necessary for proper consumption

estimate. For this an appropriate roadmap

for 100% metering should be approved by

the Commission and a realistic time frame

should be laid. The road map should

provide for disincentives in case of

slippages / non compliance by the

Licensee the targets set for metering


Commission's Views: The Government has been paying subsidy towards power supplied to

the irrigation pump sets based on the assessed consumption with reference to DTC

metering of the predominantly agricultural feeders. With the proposed segregation of

agricultural and non-agricultural feeders and also DTC metering, it would be possible to

assess the IP sets consumption with substantial accuracy till complete metering of all IP Sets

cxciv

installations is achieved.

14 As per the Article 80, Article 89(i), Article

89(iii), Article 95(q) and Article 97(b) of the

Articles of Association of MESCOM, read

with Section 54 of the Companies Act, 1956

and Regulation 3(5) of the Karnataka

Electricity Regulatory Commission (Tariff)

Regulations, 2000, the Executive Engineer

(El.) (RA), cannot legally file the

applications or sign the papers to be filed

before the Commission, in the absence of a

duly executed Power of Attorney. Since the

impugned application is filed by an

unauthorized person, the same is defective,

not legal, not maintainable and liable to be

rejected.

As per Clause 17 of the G&C of Proceedings

Regulations, a representation or petition and

affidavit may be made before the

Commission through an authorized

employee. The authorization given to the

Superintending Engineer (Ele), (C&RP), is

approved by the Board of Directors. On the

basis of the authorization given, the

authorized signatory has filed the ERC etc.,

Hence, it is valid, maintainable.

Commission's Views: Reply furnished by MESCOM is acceptable.

15 The information and accounts submitted by

the MESCOM, for APR and for justification

for the revision of Tariff are unreliable, not

genuine and not authenticated. The

accounts submitted does not comply the

orders passed by the Hon’ble APTEL

judgments in Appeals 46/2014 and 42/2014.

MESCOM has detailed all the assumptions

and calculations considered in the petition

and furnished the additional details /

clarifications to the Commission in the replies

to the preliminary observations. The

Commission is validating the same.

Commission's Views: Reply furnished by MESCOM is acceptable. The Commission ensures

that the relevant orders of the Hon’ble APTEL are complied with.

16 As per the judgment in Appeal 42/2014,

MESCOM is only entitled to charge for the

supply of electricity within ±20% of the

average cost of supply. Hence, the tariff

proposal has to be in conformity with the

direction of the Hon’ble APTEL.

The implementation of “Cost to Serve” model

would mean introduction of differential tariff

among the ESCOMs and the differential tariff

would be a policy matter of the Government

because of its far-reaching implications on

the consumers in the state.

Commission's Views: The Hon’ble APTEL has ordered to indicate the cross subsidy against

voltage wise sales. The Commission has followed the direction the Tariff Order.

cxcv

17 PPAs of High Cost of Energy have been

assigned to MESCOM and BESCOM, which

results in higher power procurement cost.

This prejudicially affects the consumers of

MESCOM and BESCOM. As per the

judgment in Appeal 42/2014, GoK has no

authority to modify the original power

allocation and the subsequent power

purchases made by the ESCOMS through

PCKL. Hence, the power purchase costs

incurred by PCKL should be apportioned

among the ESCOMS at the proportionate

cost of procurement.

PPAs have been allocated by the

Government and being a Government

Company, MESCOM has to follow its order.


18 MESCOM has not followed the principle

stated in Appeal 42/2014 for determination

of cross subsidy. Under Regulation 4(5)(vi) of

the KERC Tariff Regulations, 2000, MESCOM

has not furnished the statement of

proposed cross subsidy including the

amount of such subsidy to the affected

consumer category and the source to

offset this subsidy, as per Regulation 4(5)(ix)

of the KERC (Tariff) Regulations, 2000,

MESCOM is required to furnish a statement

of any subsidy committed by the Govt. of

Karnataka, the consumers to whom it is

directed, and the way in which such

subsidy is proposed to be reflected in the

proposed tariffs applicable to these

consumers. MESCOM has not furnished the

details.

MESCOM has proposed for an uniform

increase in tariff across all categories and in

the replies to the preliminary observations

MESCOM has indicated the absolute cross

subsidy amount against each category.

The GoK is extending tariff subsidy in respect

of the energy consumption of IP sets up to 10

HP load (excluding Pvt. Horticultural Nursery,

Coffee, Tea, Rubber Plantations) and in

respect of BJ/KJ installations up to the

consumption limit of 18 units. This has been

indicated in Form-24 of the tariff petition.


cxcvi

19 MESCOM has not furnished Form No. D-

18A. There are several inconsistencies in

data filed by MESCOM relating to

consumer security deposit and the same

needs thorough scrutiny. Though Rs.49.03

Crores of consumer deposit was

capitalized, the amount is still outstanding in

the consumers’ ledger account. But the

meter security deposit as per accounts was

reduced to that extent in the accounts of

the Company, leading to difference

between the balance as per consumer’s

ledger account maintained at Divisions and

as per accounts of the Corporate Office.

MESCOM is claiming interest on consumer

security deposit amount (reduced to the

extent of Rs.49.03 Crores) as per the

accounts of the company maintained in

the corporate office and the interest is

being paid to the consumers as per the

accounts maintained in the Divisions (which

include Rs.49.03 Crores capitalized). If

interest at the rate of 8.75% is calculated,

the actual outgo of interest on the

capitalized amount of Rs.49.03 Crores

(Rs.4.29 Crores) is being paid to the

consumer, but not claimed by MESCOM as

pass through.

A portion of consumer security deposit was

capitalized as per the Government directions

and MESCOM is claiming the interest paid on

consumer security deposit as per the

provisions of MYT regulations. However,

regarding the quantum of security deposit in

the equity of MESCOM, the necessary details

have been submitted to the Commission

while replying to the preliminary observations.

Commission's Views: The interest on Consumers’ security deposit is computed as per he

audited accounts, while approving the ARR under APR. For the Control period, the deposits

are based on estimates, which would get trued up during ARR for the relevant years.

cxcvii

20 The Commission had, from time to time

emphasized that the revision of tariff could

not be separated from the implementation

of the directives. Since, MESCOM has totally

failed to improve the efficiency of its

operations by implementing the directions

issued by the Commission, the hike in tariffs

sought is not justifiable.

MESCOM is making all efforts for compliance

of the directives of the Commission, which is a

continuous process. The Commission is also

reviewing the reports of MESCOM

periodically.

Commission's Views: The status of compliance of Directives is dealt with suitably in the Tariff

Order.

21 The Transmission tariff proposals of KPTCL

were not opposed by MESCOM, as the

Managing Director of KPTCL is the

Chairman of ESCOMs including MESCOM

and all the employees are on deputation

from KPTCL.

The Commission will decide the proposals

submitted by KPTCL judiciously.

Commission's Views: The Commission decides the transmission tariff based on the MYT

Regulations, irrespective of opposition or support by MESCOM to the Tariff application of

KPTCL.

22 Although MESCOM has achieved 97.78%

metering at the end of FY15 (page 11 of the

Annual Report for FY15) the calculations of

consumptions on IP Set and Bhagya Jyothi

installations are not made on the basis of

meter readings. MESCOM has not disclosed

the number of non-functioning or defunct

IP Sets, the number of IP Sets connected to

open wells, number of I. P. Sets connected

to bore wells etc. The estimation made with

regard to I. P. Set consumptions are without

identifying the average power

consumptions for open wells and bore

wells. MESCOM has (in Form D-18) claimed

that out of 2,63,543 number of IP

In respect of BJ/KJ installations the

consumption is taken as per DCB, which is the

billed consumption to consumers. In case of

IP sets the bills are being issued considering

the meter reading. Where the billed

consumption is abnormal compared to the

consumption recorded in the sample DTC

meter in the IP sets predominant areas, such

consumption is considered to ensure correct

billing to IP sets. Based on these data the

subsidy is being claimed.

cxcviii

installations, 1,68,342 number of IP

Installations were read, which means meter

readings of 63.87% of IP Sets are being

taken and 36.13% of IP Sets were

considered as unmetered. In Form No. D18,

the total number of LT4 (a) installations is

shown as 2,63,543, whereas, in Form D-21,

the same was shown as 2,60,399. The

estimation of IP Set consumption at 4280

units per IP set in FY 15, without indicating

the average HP of each IP Set and

estimation of IP Set consumption based on

DTC metering is faulty. Hence, instead of

relying on DTC metering, for estimating IP

Set consumption, relying on actual

consumption recorded in 63.87 % of IP sets

for estimating the remaining 36.13% IP Sets is

accurate and reliable. The unrealistic

estimate is made to claim higher subsidy

from the Government.

Commission's Views: This issue has been dealt with in the Tariff Order.

23 As the application is not submitted within

120 days before the commencement of

financial year, the application is not

maintainable.

The Commission had granted extension of

time till 15.12.2015 to file the petition.


24 MESCOM has not indicated any steps to

improve its efficiency to transfer the benefit

of efficiency gains to the consumers and in

the absence of any specific gains the

application is not maintainable. The

MESCOM has failed to improve efficiency

and has not complied with all directives.

Hence, the commission has to reverse the

The Commission will compute the efficiency

gains to be transferred to the consumers

while approving the APR.

cxcix

earlier increased tariff instead of revising it

further.

Commission's Views: Sharing of gains and losses has been suitably dealt with in the Tariff

Order in the relevant chapters.

25 As per section 23 of the Act, MESCOM

should have taken approval of the

Commission for load shedding, but, is

resorting to unscheduled load shedding on

its own which is adversely affecting the

industries.

Scheduled load shedding is notified in

advance. Unscheduled load shedding is

resorted to only when there is a mismatch in

demand and availability of power due to

sudden fall in generation.


26 MESCOM has not made available details of

slab wise sanctioned load, fixed charges,

energy charges and consumption and GIS

mapping of at least one feeder with

transformer centers as directed by the

Commission.

MESCOM has provided the slab wise

sanctioned load, fixed charges energy

charges and consumption in the Format D-21.

Commission's Views: Reply furnished by MESCOM is acceptable. The Commission notes that

furnishing slab-wise details within a tariff category is not practicable, as the consumption

and load factor keeps changing month on month.

27

MESCOM has not complied with the

directions of the Commission to install timer

switches to street lights.

Maintenance of the street lights is the

responsibility of local bodies. Hence, action

has to be taken duly obtaining concurrence

of the respective local bodies as the cost of

timer switches has to be borne by them.

Commission's Views: The compliance to directives has been separately dealt with in the

Tariff Order.

28 The Regulatory asset of Rs.92.25 Crores

pertaining to FY13 should not be carried

forward to FY17. The deficit of Rs.13.22

Crores of FY15 should not be considered

while truing up.

The Regulatory Asset is the portion of

legitimate cost created by the Commission

which is in the nature of deferred expenditure

and required to be recovered from

consumers in future. This has been done to

cc

avoid sudden increase in tariff in a particular

year.

Commission's Views This issue has been dealt with in the Tariff Order.

29 KERC is approving Tariff to MESCOM such

that, it will not make losses and MESCOM

has made a profit of Rs.12.60 Crores during

2013, Rs.20.17 Lakhs in 2014 and Rs.13.92

Crores in 2015. But, MESCOM has stated

that, with the existing Tariff it will be making

a loss of Rs.483 Crores by FY16 and is

seeking a revision of 102 paise per unit,

which is not substantiated.

The revision of tariff is needed due to increase

in the cost of generation, distribution and

maintenance of lines and related costs due

to inflation. MESCOM has estimated loss in

revenue as explained in the tariff petition.

Commission's Views: The Commission considers the application in terms of the MYT

Regulations and the facts and figures based on the audited accounts of the base year. The

projection of figures/losses in the tariff application is subject to review by the Commission

and the Commission has taken a fair view on the tariff application, keeping the interest of

the consumers as well the ESCOM, as uppermost.

30 The outstanding amount on the power

purchase dues payable from other ESCOMs

is about Rs.900 Crores and has resulted in

delay in payment to the generators by

MESCOM leading to an accrued interest of

Rs.85.43 Crores. The burden should not be

passed on to the consumers.

Based on actual consumption by ESCOMs

reconciliation is carried out and steps are

taken to collect the payments from other

ESCOMs. Interest payment is inevitable due to

delay in cash flows.

Commission's Views: The Commission is not allowing the interest payable/ paid on power

purchase dues.

31

MESCOM is estimating the consumption of

BJ/KJ and IP set consumptions and claiming

a huge subsidy from government without

considering the meter readings

MESCOM has estimated the IP set

consumption based on the meters installed to

the transformers. Due to increase in the

number of unauthorized IP sets and removal

of meters by consumers in some areas, the

meter readings of IP sets are not accurate.

BJ/KJ installations are billed as per meter

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readings.

Commission's Views: This issue has been suitably dealt with in the tariff order.

32 Even though the Commission had rejected

the money spent on employees Bonus,

welfare fund and advertisement, MESCOM

is accounting it in the tariff petition.

MESCOM has submitted its Tariff petition by

taking into consideration all the expenses

incurred by it and the Commission will pass

appropriate orders.

Commission's Views: The O & M expenses are being allowed as per MYT norms irrespective

of the actual expenses incurred by the ESCOMs.

33 As per D2 format furnished by MESCOM, it

has proposed to recover Rs.5.27 per unit for

IP Set sales instead of the cost of Rs.6 per

unit. For BJ/KJ it has sought Rs.6.43 per unit

and there is a vast difference. If the actual

cost of power is collected from the GoK for

supply to IP Sets and BJ/KJ, the revenue

collection will be more than Rs.825.78

Crores.

The tariff in respect of BJ/KJ category is at the

level of average cost of supply whereas the

tariff in respect of IP category is after

factoring the cross subsidy from other cross

subsidizing categories. However, the

Commission may take a view.

Commission's Views: The issue of specific consumption of IP sets and the subsidy payable

by the GoK, is dealt with in the Tariff Order.

34

The projected employee cost for FY16 is

increased by Rs.58.32 Crores and the same

is further increased by Rs.236.19 Crores in

FY17 and Rs.280.62 Crores in FY18 as

compared to the actual payments made in

FY15

In FY 16, MESCOM has recruited about 2000

Junior Linemen and has contemplated to

recruit 60 AEs, 112 JEs, 40 AAOs, 122 Assistants,

74 Jr. Assistants and 996 ALMs in the year

2016-17. This will add to the cost to a

considerable extent along with other factors

of escalation like increase in dearness

allowance, contributory pension fund etc.

Commission's Views: This has been suitably dealt with in the Tariff Order.

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35 MESCOM has projected the average

power purchase prices at Rs.3.43 per unit

for FY15, Rs.3.76 per unit for FY16 and Rs.3.84

per unit for FY17 from various sources of

power in 2016- 17 which, do not correspond

to the recent decreasing trends in fuel

prices. MESCOM has considered a linear

increase in the power purchase cost

without considering the distinct nature of

fixed (capacity) charges and variable

(energy) charges.

MESCOM has incurred the power purchase

cost during FY15 with reference to the tariff

approved by CERC / KERC in respect of

different power generators. The basis of

projection for future years is also based on

the present tariff being paid by MESCOM.

Commission's Views: The basis of projections of power purchase quantum and cost and

their correctness is discussed in the Tariff Order.

36 There is a lot of variation in the total number

of IP Sets as reported to CEA (2218469) and

as stated in the APR(2134409) by ESCOMs

and the Commission has to consider this

aspect.

MESCOM has submitted correct statistics as

per records.

Commission's Views: The data of CEA and the ESCOMs normally relate to different periods

and hence do not match. The Commission would consider the figures furnished by the

ESCOMs, based on the audited accounts.

37 In Form A1 total revenue is shown as

Rs.2,229.97 Crores as against Rs.2259.33

Crores shown in Audited accounts. In the

audited accounts, Depreciation and

amortization expenses are shown as

Rs.63.9542 Crores as against Rs.63.68 Crores

shown in Form A1. In the audited accounts

- Finance Costs is shown as Rs.194.569

Crores as against Rs.134.20 Crores shown in

Form A1.

No comments are offered by MESCOM.

Commission's Views: The Commission considers the figures as per the audited accounts,

and not the figures furnished in other statements which may differ in respect of some items.

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38 MESCOM has not disclosed any plan for the

introduction of pre-paid meters as per

Section 47(5) of the Act.

No comments are offered by the MESCOM.

Commission's Views: The Conditions of Supply provide for installation of prepaid meters to

all the temporary installations and the ESCOMs are expected to follow the Regulations. The

Commission would review the compliance of the Regulation.

39 MESCOM is claiming interest on belated

payment of power purchase bills to the

extent of Rs.85.43 Crores in FY 15, even

though, the same was included in the

audited accounts, even after taking into

account the said amount, MESCOM was

able to generate a net profit of Rs.13.9262

Crores. In the APR, even after excluding

the said amount of Rs.85.43 Crores in FY 15,

MESCOM has shown Rs.13.22 Crores deficit.

Hence, the said amount of Rs.85.43 Crores

should not be passed on to the consumers.

The Commission is consistently disallowing the

claims of MESCOM on the interest of belated

payment of power purchase bills. However,

MESCOM has reiterated its claims to consider

the same as a pass through in the tariff as it is

inevitable for MESCOM to bear the same.

Commission's Views: The Commission is not allowing the interest payable/ paid on power

purchase dues.

40

MESCOM has claimed Section 11 purchases

cost for 33.42 MU at Rs.18.24 Crores (Form

D1) at average cost of Rs.5.4578 per unit.

GoK should be asked to meet the power

purchase cost in excess of average cost of

realization.

Section 11(1) empowers the State

Government to order procurement of power

under the circumstances given in the Act.

Section 11(2) empowers the State

Commission to determine the compensation

payable to the generators from whom power

under section 11(1) is ordered for purchase.

The section does not mention that the

compensation is payable by the State

Government. It is on equity that the person

who has derived the benefits has to pay for

the same.

Commission's Views: MESCOM’s reply is acceptable

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41 MESCOM has claimed 19.377% Rate of

Return on the capital employed to the

electricity business. RoE should be

aggregate of 19.337 % of Rs.243.912 Crores

and 11.75% of Rs.48.85 Crores i.e. Rs.47.17

Crores and Rs.5.74 Crores i.e., Rs.52.91

Crores instead of Rs.66.23 Crores claimed

by MESCOM in Form D-4

MESCOM has submitted necessary RoE

computation details to the Commission while

replying to the preliminary observations.

Commission's Views: This issue has been suitably dealt with in the Tariff Order.

42 The Cost of Supply should be determined to

each class of consumers depending upon

geographical area, load patterns, voltage

levels etc. as held by the Hon’ble APTEL in

its judgment dated 08-10-2014 in Appeal

No. 42 of 2014.

As per prevailing norms, MESCOM has

submitted detailed calculations considered in

the petition and the Commission is validating

the same.

Commission's Views: The determination of tariff to different class of consumers is in terms of

the Electricity Act and the Regulations framed by the Commission. The Hon’ble APTEL has

not find fault with existing methodology.

43 No charges are being collected from IP Sets

below 10 HP since August 2008. The interest

on Security Deposit on such IP Sets is

accumulating since then. Since, there is no

existing provision to pay the said interest to

the IP Set consumers in cash or adjust the

same to the bills of other installations of the

same consumer, the consumers are

effectively deprived of the benefit of the

interest on the Security deposit. Hence, it is

requested to adjust the accrued interest as

well as future interest on security deposit

maintained for the IP Set installations below

10 HP to the bills of other installations of the

same consumer or his family members

nominated by the IP Set consumer.

The accrued interest on the deposit can be

adjusted for the relevant installations for

which the deposit was paid.

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Commission's Views: It is incorrect to state that no charges are being collected from the IP

set consumers. The State Government is paying the charges on behalf of the IP set

consumers. The payment of interest on security deposit is regulated as per the provisions of

law, irrespective of the category of consumers.

44 MESCOM has claimed a sum of Rs.37.30

Crores in FY -15, towards payment made to

UPCL (Form D1). Since, KERC has not

approved the power purchase from UPCL

after due publication and inviting

objections from the general public, the

power purchase cost claimed towards

UPCL should not be allowed as pass

through.

The PPA between UPCL and ESCOMs has

already been brought to the notice of the

Commission and the Commission has

informed that, after the determination of the

rates by CERC, the same shall be brought to

the notice of the Commission. Hence, the

Commission is aware of the facts of purchase

of energy from UPCL and this has been

approved by the Commission in its earlier

tariff orders.

Commission's Views: : The MESCOM’s reply is acceptable.

45 MESCOM has claimed bad debts to the

extent of Rs.6.46 cores, for FY -15 and

subsequent years (Form A1). Under the

relevant regulations, MESCOM should not

supply power for more than 60 days in

aggregate after the start of a billing period,

in case of non-payment of power bills. If,

MESCOM has not disconnected any power

supply beyond 60 days, and if it recovers

the power charges beyond the 60 days

period, cost of such lapses should not be

passed on to the consumers, in the name of

bad debts.

Bad debts are also a part of operating

consequences in the sector, as MESCOM

cannot ensure 100% recovery of the dues

while dealing with lakhs of consumers.


46 In Form D1, MESCOM has claimed SLDC

Charges of Rs.6.10 Crores as against Rs.2.05

Crores approved in Tariff Order 2015. There

is no explanation for this 66.39% increase in

SLDC Charges, when power purchase


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quantity is lesser to an extent of 46 MU in FY

-14. Similarly, there is no explanation for

transmission Charges by Rs.3.89 Crores.

Commission's Views: The SLDC charges/ transmission charges are fixed charges incurred

irrespective of the quantum of power handled. Hence these expenses have to be passed

on to the consumers as per actuals.

47 At page 17 of the application, MESCOM

has stated that it has incurred Rs.11.94

Crores interest on working capital and an

additional Rs.22.67 Crores, which is 50% of

approved amount of Rs.45.34 Crores. As per

the MYT Regulations, MESCOM is entitled to

Rs.28.64 Crores as interest on working

capital as against Rs.34.61 Crores claimed.



48 MESCOM has spent only Rs.5 Lakhs out of

Rs.50 lakhs earmarked for consumer

awareness and meetings. As the consumer

participation is less, the Commission should

discontinue the said allocation, in the

interest of consumers.


Commission's Views: The Commission has been issuing appropriate directions for creating

consumer awareness, in this regard and would like to reiterate them. This is being separately

addressed.

49 MESCOM is illegally treating certain

generators who are incorporated under the

Companies Act, 1956, as captive

generating plants, based on the

consumption of their respective

shareholders. This approach is illegal and

results in loss of surcharge.

MESCOM is following the orders of the

Commission in collecting surcharge from the

consumers who are under open access.

Commission's Views: The Rules governing the captive generation which extend certain

concessions to the consumer shareholders are issued by the Government of India under the

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Electricity Act and the SERCs are bound to follow them.

Objections related to Quality of Service:

50 MESCOM has to introduce toll free number

for lodging complaints by consumers.

MESCOM has introduced toll free telephone

number 1912 to enable consumers to lodge

complaints.

Commission's Views: The reply of MESCOM is acceptable.

51 MESCOM is not adhering to Standards of

Performance (SoP) in replacement of failed

transformers.

MESCOM is taking immediate measures to

repair the failed transformers on priority basis.

Due to non-availability of transformers, delay

might have occurred.

Commission's Views: MESCOM’s reply is acceptable.

52 MESCOM has been sanctioning regular

power supply to multistoried buildings which

do not have occupancy certificate or NOC

issued from the local authorities, under the

appropriate categories, even though, It is

required to sanction power on temporary

basis only.

Power supply is being sanctioned to MS

buildings as per the Conditions of Supply of

Electricity of Distribution Licensees in the State

of Karnataka.

Commission's Views: The reply of MESCOM is acceptable

53 The Superintending Engineer Ele (Technical)

of MESCOM has issued a letter dated 24-5-

2014 and permitted to sanction power to IP

Sets within Bantwal, Sullia and Belthangadi

Taluks, with certain arbitrary conditions

contrary to the KERC (Electricity) Supply

Code and the CoS.

The consumers of MESCOM can avail power

supply to their IP sets as per the provisions

stipulated in Conditions of Supply of Electricity

of Distribution Licensees in The State of

Karnataka.

Commission's Views: This is not a tariff matter. Complaints of any irregularity in the matter

should be dealt separately if supported by facts and evidences.

54 The GoK has issued a Circular bearing No.

EN 41 VSC 2014/P1 dated 14-07-2014 and

instructed all ESCOMS to collect a sum of

Rs.10,000/- from the consumers of IP Sets

To provide necessary infrastructure to IP set

installation a sum of Rs.10,000/- is being

collected from consumers as per the Govt.

direction.

ccviii

seeking power sanction, irrespective of

sanctioned load with retrospective effect

from 31-07-2012 and the same is contrary to

the Recovery of Expenditure Regulations.

Commission's Views This is not a tariff matter.

55 During 2015, the monsoon has failed and

has resulted in lesser hours of power supply

to the IP Sets of farmers. Even though

reconductoring of lines and installation of

new transformers are taken up, there is no

improvement in supply of power to rural

areas.

MESCOM has not supplied continuous

power to the small scale industries,

Agricultural and domestic consumers in

rural areas. MESCOM has to replace the old

and deteriorated conductors, trim the tree

branches and replace broken poles to

improve quality of supply.

Although it is a fact that monsoon has failed

resulting in loss to farmers, it has also caused

reduction in generation of power. However,

MESCOM has tried to make optimum use of

the available power and supplied the same

to consumers. MESCOM has undertaken

works like reconductoring of cables,

installation of new transformers, etc. to

improve the quality of power supply. It has

recruited linemen and provided training to

them for efficient service.

Based on the availability and as per the

policy of Government, the MESCOM is

supplying power to the consumers of rural

areas. MESCOM is taking up maintenance

works on regular basis.


56 MESCOM has not indicated details of

installations yet to be serviced with solar

water heating system

Installing Solar water heaters is optional for

Rural Domestic consumers.

Commission's Views: MESCOM’s reply is not relevant.

57 MESCOM has not educated the consumers

on prevention of accidents. The Number of

Fatal and Non fatal accidents are not

furnished.

MESCOM is periodically identifying the

hazardous installations and system improving

programs are being suitably made to rectify

the hazardous installations in order to prevent

the electrical accidents.


58 MESCOM has not furnished annual No comments are offered by MESCOM

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abstract of reliability index and the number

of IP sets after enumeration.

Commission's Views This issue has been suitably dealt with in the Tariff Order.

59 MESCOM has not quantified the benefits of

NJY scheme and improvement of power

supply to the Rural feeders after

implementation of NJY. MESCOM has not

taken up HVDS implementation as per the

directions of the Commission.

MESCOM has included the Niranthara Jyothi

and HVDS schemes under Deen Dayal

Upadhyaya Gram Jyothi Yojana (DDUGJY) as

per guidelines of REC and the proposal is in

the process of obtaining approval from the

competent authority.


60 The progress of DSM in agriculture i.e.,

replacement of inefficient IP sets by

efficient IP sets progress is very slow.

MESCOM has not offered any comments.

Commission's Views: The Commission has recently issued DSM Regulations and would be

reviewing regularly the implementation of DSM programmes taken up by the MESCOM.

61 MESCOM is required to provide 7 hrs. of 3

phase power supply to IP sets. However, it is

providing only 4-5 hrs. supply. Sometimes,

voltage will be as low as 250-300 volts and

the IP Sets cannot function due to low

voltage.

MESCOM is providing power supply as per the

directives of the Government and taking up

maintenance works on regular basis.

Commission's Views: The Commission is monitoring the performance of the MESCOM in

supply of quality power to all consumers and has been issuing appropriate directions

whenever deficiencies are noticed.

Specific Requests:

62 The demand based tariff is existing only for

LT3 and LT5. The demand based tariff

should be extended to other LT categories

such as) LT2 (b), LT4, LT6 and LT7. The

consumer will not have any unnecessary

interference like meter testing and

vigilance raids. The exact load on

The Commission may take a view on the

requests.

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transformer can be calculated and large

capacity transformers can be avoided.

Commission's Views: The Commission considers that currently it is not feasible to extend

demand based tariff to other consumers as requested.

63 MSEZ has requested that, a separate

category has to be created and Tariff fixed

for power purchased by MSEZ from

MESCOM. MESCOM has proposed uniform

increase of Rs.1.02 per unit across all

categories of consumers, including MSEZ,

without considering the distinctive status of

MSEZ as a developer of Special Economic

Zone. The distribution loss of MESCOM

should not be levied on MSEZ as it has

power supply at 110kV. The tariff for MSEZ

should be in the range of Rs.5.10 /unit to

Rs.5.50 /unit and the Regulatory asset of

MESCOM for FY15 should not be burdened

on MSEZ.

MESCOM has proposed a hike of Rs.1.02 per

unit across all the categories of consumers in

order to make good the deficit estimated by

MESCOM for FY 17. It is mandatory for

MESCOM to meet the social obligation

programs such as providing infrastructure to IP

sets, electrification of hamlets & BJ&KJ

installations. In the event of power deficit

MESCOM has to procure high cost energy.

There is increase in cost of dependent factors.

As such, the hike proposed by MESCOM is

commensurate with the increased cost of

supply.

Commission's Views: The issue relating the MSEZ, which is a deemed licensee, is being

addressed in a separate Order.

64

ToD should be made optional as industries

are facing difficulties due to compulsory

implementation of ToD.

The rationale behind the ToD tariff is to

incentivize the usage during off-peak hours

and disincentivize at peak hours. The

Commission has introduced the ToD tariff

considering the overall load curve at the

State level.

Commission's Views: There is no proper justification to withdraw the ToD in the evening peak

hours. This has been introduced in the overall interest of the consumers and the Grid.

65 Independent feeders should be provided

for the industries to reduce interruptions.

On specific application from the individual

industries the feasibility of providing

independent feeders will be examined.


ccxi

66 Due to high cost of fertilizers, shortage of

labour and volatile prices for the Coffee,

coffee growers are facing hardship and

any increase in existing tariff would increase

the burden on the Coffee growers. The

Coffee plantations use IP sets for a period

of 6 weeks in a year during February and

March and only as back up when rains fail.

Hence, coffee plantations have to be

considered as a seasonal industry with tariff

concession.


requests.


67

LT4 (c) (i) and (ii) consumers should be

clubbed to one category considering the

paying capacity of Coffee growers while

determining the tariff as against the existing

basis of below 10 HP and above 10 HP in

the LT4 (c) (i) and (ii) categories.

Coffee planters should be treated on par

with other agriculturists and levied charges

without discrimination.

The classification of consumers across

categories was extensively dealt at length by

the Commission in its previous tariff orders and

MESCOM has continued the same in the

present proposal.

Commission's Views: Coffee plantations have been given a special status as compared to

other agricultural lands and therefore coffee planters cannot be treated on par with other

agriculturists. Further, extending any subsidy to coffee plantations has to be decided by the

State Government.

68 Uninterrupted power supply needs to be

provided during November to February

from 3 pm to 8 pm to enable the coffee

growers to process coffee.

No Comments offered by MESCOM

Commission's Views This is not a tariff matter and the consumers concerned should

approach the appropriate authorities in MESCOM in the matter.

69 SMS alert and Email should be introduced

to inform consumers about the power cuts.

It is a progressive thinking and MESCOM has

noted the same.

Commission's Views: The Commission has directed all ESCOMs to provide advance

ccxii

information to the consumers about scheduled load shedding and would monitor certain

initiatives taken by ESCOMs to achieve this.

70 Schools/ colleges /educational institutions

run by the State / Central Government

/Local Bodies are classified under LT 2 (a)

category, but Schools/ colleges

/educational institutions run by private

parties including aided and unaided

institutions are covered under LT 2 (b). This is

not proper as the Government of India has

passed Right of Children to Free and

Compulsory Education Act, 2008, under

which every child of the age of six to

fourteen years shall have a right to free and

compulsory education in a neighborhood

school till completion of elementary

education.


requests.

Commission's Views: The Current classification of consumers is reasonable.

71 ESCOMs are using the provisions of Section

126 of the Act for provisional assessment

even in case of alleged theft of electricity,

in the absence of method of assessment of

the electricity charges payable in the case

of theft of electricity, pending adjudication

by the appropriate court. In the absence of

provisions for provisional assessment in the

case of alleged theft cases, the consumers

are facing great hardship and

inconvenience. Hence, the CoS needs to

be amended suitably.

For theft of electricity, the method of

assessment is available in clause 42.06 of

Conditions of Supply of Electricity of

Distribution Licensees.

Commission's Views: This is not a tariff matter and the aggrieved consumer may file a

suitable petition seeking amendments to the CoS.

72 Under HT 2(a) category, MESCOM is

empowered to supply power to “Industrial

Mangalore SEZ has submitted tariff petition

and the Commission is validating the same.

ccxiii

Estates” in a single point. Since MSEZ is also

an “Industrial Estate” a separate tariff for

MSEZ is not required.

Commission's Views: The MSEZ is a deemed licensee under the Notification issued by the

Government of India. It is not a industrial consumer as stated by the objector and hence a

separate tariff for MSEZ is required to be determined.

73 The Coffee plantations should be

exempted from payment of reintroduced

Electricity tax of 10 paise per unit on

captive generators

No Comments are offered by MESCOM

Commission's Views: This levy does not come in the purview of the Commission.

74 3 Phase power supply should be given

during the day time to IP Sets, instead of

during night to avoid difficulties to farmers.

MESCOM is providing 3 Phase power supply

during the day time to IP Sets.

Commission's Views: The reply of the MESCOM is acceptable.

75 The facilities and concessions made

available to seasonal industries should be

extended to the ice plants and cold

storage industries as in the neighboring

States and also a separate tariff fixed.

MESCOM will abide by the orders of the

Commission.


76

The rate proposed for the HT consumers of

MSEZ should be competitive so that, their

products are viable in the global market.

Like any other commodities, cost of electricity

procured & supplied by MESCOM is also

influenced by several associated factors and

the proposal for increase in tariff is

commensurate with the increased cost of

supply. However, the Commission may take

a view on the statements of the objector

while determining the tariff for MSEZ.

Commission's Views: The Commission has dealt with this matter in a separate Order.

77 The functioning of consumer advocacy in

the Commission should be restarted.


matter.

Commission's Views: This is not a tariff related issue.

ccxiv

78 The Industries certified by the Department

of Industries and Commerce should be

brought under LT5 Category without

insisting on their manufacturing status.

MESCOM will resolve the issue on case to

case basis with due reference to the

classifications enumerated in the tariff order.

Commission's Views: The reply furnished by the MESCOM is in order.

79 The monthly energy bill should mention the

number of hours of power supply and

corresponding amount of Fixed charges

should be deducted for the duration of non

availability of power supply.

The contention for linking of the fixed charges

to duration of power availability cannot be

accepted since the ESCOMs have to

maintain its power supply network even in

case of no supply.

Commission's Views: The reply furnished by the MESCOM is reasonable.

80 The rebate of ToD facility should be

extended from 20.00 Hrs. to 8.00 hrs. instead

of 20.00 hrs to 6.00 Hrs.

The rationale behind the ToD tariff is to

incentivize the usage during off-peak hours

and disincentivize at peak hours.

Commission's Views: The reply furnished by the MESCOM is in order.

81 The LT power sanction limit should be

increased from 67 HP to 100 HP as being

done in neighbouring States.

MESCOM will follow the regulations of the

Commission.

Commission's Views: There is no justification for review of the current arrangement.

82 MESCOM should establish a service station

at Baikampadi industrial area to provide

quick service.

No comments offered by MESCOM

Commission's Views: This is not a tariff matter.

83 MESCOM has to provide Mobile escalators

for the service staff to avoid accidents

while climbing the poles /transformer

centers.

MESCOM will consider the suggestion

depending upon the essentiality with

reference to the field conditions.


84 MESCOM should introduce online payment

facility for payment of monthly bills.

MESCOM will deliberate in detail the issues

involved in receiving payment through NEFT

and RTGS.

Commission's Views: The reply of the MESCOM is acceptable.

85 Solar rebate should be extended to all LT 2

(a) consumers who don’t have any heat

Rebates are being extended to the

consumers as per the Tariff Orders.

ccxv

load or who have installed water heaters

using bio fuels also.

Commission's Views: As a policy, the solar rebate is to encourage use of solar energy and

not for other kinds of fuels.

86 The Additional Director General of Police,

Administration, Bengaluru, has requested to

include police stations under LT2 (a)

category instead of LT3 category

considering the nature of service rendered

by the Police to the citizens.

MESCOM will abide by the orders of the

Commission.

Commission's Views: The Police stations are office establishments like any other office. The

usage of power in the police station is not for domestic purposes. Hence, the request to

charge police station at LT2a, is not reasonable.

The gist of the submissions made during the Public Hearing, held on

27.02.2016.

1 Telecom towers are to be brought under

ToD tariff and AMR facility is to be

extended to installations consuming more

than 500 units.

MESCOM has replied orally to the points

raised by the public.

2 The tariff increase should be linked to the

performance of the ESCOM, as MESCOM’s

performance is better compared to other

ESCOMs, differential tariff should be fixed to

consumers of MESCOM.

3 Even though MPM owes an amount of

Rs.94 Crores, MESCOM has not

disconnected power to the company.

4 The Consumer interaction meetings are not

being conducted by MESCOM at

subdivision level.

5 Insulators on Agumbe-Thirthahalli line have

failed soon after charging and the

responsibility has to be fixed on the

ccxvi

concerned officer.

6 MESCOM is not attending to consumer

complaints during night times

7 IP set arrears pertaining to the period

before 2008 is being shown as arrears in the

bills and the same should be waived.

8 Rebate should be given for advance

payment of bills by consumers. ATPs should

be installed at Section offices.

9 IP set bills should indicate the details of the

subsidy.

10 Low voltage problem in Sullia area should

be attended. MESCOM should keep ready

at least 10 transformers per subdivision

/taluk.

10 MESCOM is not informing the status to

consumers after attending complaints

lodged through 1912.

11 The Commission should advise the

Government to increase the PLF of KPCL’s

Thermal stations.

12 Solar IP Sets should be encouraged. Energy

conservation measures should be taken up

and awareness about the same needs to

be created.

13 Concessional tariff should be fixed for

regional science centres which are now

charged under commercial tariff.

14 Vigilance has raided KMC college and

imposed penalty, but the same has not

been collected and the power supply is

continued.

Commission's Views: The Commission has considered the tariff related points raised by the

public / stakeholders and the replies given by MESCOM, while passing this Tariff Order.

ccxvii

ANNEXURE-1

ESCOMS’ TOTAL APPROVED POWER PURCHASE FOR FY17

NAME OF THE GENERATING STATION

ENERGY

ALLOWE

D (MU)

CAPACIT

Y

CHARGES

(RS Cr)

ENERGY

CHARG

ES (RS

Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210) 7538.53 619.64 2327.80 2947.44 3.91

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250) 1510.85 211.06 454.42 665.49 4.40

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500) 2823.10 295.60 1035.95 1331.55 4.72



TOTAL KPCL THERMAL 17646.77 1570.36 5681.72 7252.08 4.11

CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 3246.74 197.69 739.53 937.23 2.89

N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 192.48 267.76 3.27

NTPC-Talcher (4X500MW) 2765.03 213.25 400.36 613.61 2.22

Simhadri Unit -1 &2 (2X500MW) 1490.74 226.09 363.15 589.24 3.95

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS Stage I

&2 &3 (3X500MW) 1081.78 174.91 222.18 397.09 3.67

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW) 950.35 68.49 228.93 297.41 3.13

Neyveli Lignite Corporation_NLC TPS-II STAGE 2 (4X210MW) 1280.64 105.25 308.49 413.73 3.23

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW) 731.33 90.16 182.73 272.90 3.73

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW) 865.82 111.21 199.16 310.37 3.58

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN) (2X500MW) 1442.76 185.27 371.08 556.34 3.86

MAPS (2X220MW) 249.31 0.00 49.86 49.86 2.00

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 274.89 274.89 2.98

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 298.54 298.54 2.98

NPCIL-Kudan Kulam Atomic Power Generating Station (KKNPP)

(1X1000MW) 1527.09 0.00 455.07 455.07 2.98

DVC-Unit-1 &2 Meja TPS (2x500MW) 1574.83 274.91 360.39 635.30 4.03

DVC-Unit-7 & 8-KODERMA TPS (2x500MW) 1574.83 261.62 349.87 611.49 3.88

TOTAL CGS 21525.17 1984.13 4996.71 6980.84 3.24

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION LIMITED_UPCL (2x600) 7462.68 1325.73 1767.94 3093.67 4.15

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5) 4203.20 20.49 182.11 202.60 0.48

MAHATMA GANDHI HYDRO ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2) 180.68 2.32 17.79 20.11 1.11

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60) 527.47 24.38 55.93 80.30 1.52

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135) 2923.95 19.16 229.11 248.27 0.85

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5) 1087.86 11.82 129.40 141.22 1.30

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55) 523.72 27.51 80.48 107.99 2.06

ccxviii

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6)) 65.15 1.14 29.76 30.90 4.74

KADRA POWER HOUSE_KPH (3x50) 355.25 19.15 47.57 66.72 1.88

KODASALLI DAM POWER HOUSE_KDPH (3x40) 325.56 12.00 34.43 46.42 1.43

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16) 91.67 1.96 14.77 16.74 1.83

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6) HYDRO

STATIONS_SHIVA & SHIMSHA 310.76 3.54 27.46 31.00 1.00

MUNIRABAD POWER HOUSE (2x9+1x10) 109.63 0.43 8.68 9.11 0.83

TOTAL KPCL HYDRO 10704.90 143.90 857.48 1001.38 0.94

OTHERS

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39) 111.61 65.09 0.00 65.09 5.83

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9) 32.47 2.64 0.00 2.64 0.81

TOTAL OTHER HYDRO 144.08 67.73 0.00 67.73 4.70

SHORT TERM POWER

SHORT TERM POWER 1108.80 0.00 558.84 558.84 5.04

NON-CONVENTIONAL ENERGY SOURCES

WIND-IPPS 3826.75 0.00 1368.74 1368.74 3.58

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1344.12 0.00 450.45 450.45 3.35

CO-GEN/CAPTIVE 172.09 0.00 65.02 65.02 3.78

BIOMASS 196.60 0.00 97.72 97.72 4.97

SOLAR-IPP 1261.40 0.00 784.50 784.50 6.22

SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)

(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

TOTAL NCE 6846.71 0.00 2790.38 2790.38 4.08

TRANSMISSION CHARGES

PGCIL CHARGES 949.21 949.21 0.44

KPTCL CHARGES 3092.77 3092.77 0.47

SLDC & POSOCO CHARGES 19.99 19.99 0.003

TOTAL INCLUDING TRANSMISSION & LDC CHARGES 65439.11 5091.87 20715.0

2

25806.8

9 3.94



ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGES

(RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)







ccxix


CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 196.33 271.61 3.31

NTPC-Talcher (4X500MW) 2765.03 213.25 408.37 621.62 2.25



&2 &3 (3X500MW) 1081.78 176.33 226.63 402.96 3.72






MAPS (2X220MW) 249.31 0.00 50.86 50.86 2.04

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 280.39 280.39 3.04

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 304.51 304.51 3.04


(1X1000MW) 1527.09 0.00 464.17 464.17 3.04



TOTAL CGS 21525.17 1985.60 5096.64 7082.24 3.29

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



(4x21.6+4x13.2) 195.03 2.32 20.00 22.32 1.14






((1x2+2x12)+(1x7.2+1x6)) 63.36 1.14 30.59 31.73 5.01





STATIONS. 330.66 3.54 30.45 33.99 1.03


TOTAL KPCL HYDRO 12045.33 142.53 956.63 1099.16 0.91

OTHER HYDRO


ccxx


TOTAL OTHER HYDRO 144.08 71.64 0.00 71.64 4.97


WIND-IPPS 3981.63 0.00 1424.99 1424.99 3.58

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1344.81 0.00 450.68 450.68 3.35

CO-GEN/CAPTIVE 172.09 0.00 64.12 64.12 3.73

BIOMASS 262.15 0.00 135.15 135.15 5.16

SOLAR-IPP 2588.38 0.00 1314.95 1314.95 5.08


(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

TOTAL NCE 8394.81 0.00 3413.83 3413.83 4.07


PGCIL CHARGES 958.70 958.70 0.45

KPTCL CHARGES 3171.28 3171.28 0.46


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 68895.57 5569.41 21774.55 27343.96 3.97



ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGES

(RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)







YERMARUS THERMAL POWER STATION_YTPS (2x800) 1547.46 204.23 413.13 617.36 3.99


CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 819.69 75.28 200.26 275.54 3.36

NTPC-Talcher (4X500MW) 2765.03 213.25 416.53 629.79 2.28



&2 &3 (3X500MW) 1081.78 176.33 231.16 407.49 3.77


ccxxi





MAPS (2X220MW) 249.31 0.00 51.88 51.88 2.08

Kaiga Unit 1&2 (2X220MW) 922.44 0.00 285.99 285.99 3.10

Kaiga Unit 3 &4 (2X200MW) 1001.80 0.00 310.60 310.60 3.10


(1X1000MW) 1527.09 0.00 473.46 473.46 3.10



TOTAL CGS 21525.17 1985.60 5198.58 7184.17 3.34

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



(4x21.6+4x13.2) 195.03 2.32 20.83 23.16 1.19






((1x2+2x12)+(1x7.2+1x6)) 63.36 1.14 32.33 33.47 5.28





STATIONS_SHIVA & SHIMSHA 330.66 3.54 31.75 35.29 1.07


TOTAL KPCL HYDRO 12045.33 138.20 1001.17 1139.37 0.95

OTHERS



TOTAL OTHERS 144.08 75.78 0.00 75.78 5.26


WIND-IPPS 4649.94 0.00 1669.14 1669.14 3.59

KPCL-WIND (9x0.225+10x0.230) 12.86 0.00 4.32 4.32 3.36

MINI HYDEL-IPPS 1443.36 0.00 483.69 483.69 3.35

CO-GEN/CAPTIVE 172.09 0.00 64.12 64.12 3.73

BIOMASS 262.15 0.00 135.15 135.15 5.16

SOLAR-IPP 3692.28 0.00 2076.14 2076.14 5.62

ccxxii


(3x1+3x1+1x3x1x5) 32.89 0.00 19.63 19.63 5.97

NTPC- SOLAR 0.00 0.00 0.00 0.00 0.00

TOTAL NCE 10265.57 0.00 4452.20 4452.20 4.34


PGCIL CHARGES 968.29 968.29 0.45

KPTCL CHARGES 3472.60 3472.60 0.48


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 72435.72 5795.47 23888.11 29683.58 4.10

ccxxiii

ANNEXURE-II

APPROVED POWER PURCHASE FOR MESCOM’S - FY17

NAME OF THE GENERATING STATION % SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)


RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210) 10.340 779.519 64.073 240.705 304.779 3.910

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250) 8.018 121.146 16.924 36.437 53.361 4.405

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500) 8.018 226.367 23.702 83.066 106.768 4.717



TOTAL KPCL THERMAL 9.010 1590.036 140.306 509.635 649.941 4.088

CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 8.018 260.336 15.852 59.299 75.150 2.887

N.T.P.C-RSTP-III (1X500MW) 8.018 65.725 6.036 15.434 21.470 3.267

NTPC-Talcher (4X500MW) 8.018 221.711 17.099 32.102 49.202 2.219

Simhadri Unit -1 &2 (2X500MW) 8.018 119.533 18.129 29.119 47.248 3.953

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur

TPS Stage I &2 &3 (3X500MW)

8.018 86.741 14.025 17.816 31.840 3.671

Neyveli Lignite Corporation_NLC TPS-II STAGE I

(3X210MW)

8.018 76.202 5.491 18.356 23.848 3.130

Neyveli Lignite Corporation_NLC TPS-II STAGE 2

(4X210MW)

8.018 102.686 8.439 24.736 33.175 3.231

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW) 8.018 58.641 7.230 14.652 21.882 3.732

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW) 8.018 69.425 8.917 15.969 24.887 3.585

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN)

(2X500MW)

8.018 115.686 14.855 29.754 44.610 3.856

MAPS (2X220MW) 8.018 19.991 0.000 3.998 3.998 2.000

Kaiga Unit 1&2 (2X220MW) 8.018 73.965 0.000 22.042 22.042 2.980

Kaiga Unit 3 &4 (2X200MW) 8.018 80.328 0.000 23.938 23.938 2.980

NPCIL-Kudan Kulam Atomic Power Generating Station

(KKNPP) (1X1000MW)

8.018 122.447 0.000 36.489 36.489 2.980

DVC-Unit-1 &2 Meja TPS (2x500MW) 8.018 126.276 22.043 28.898 50.941 4.034

DVC-Unit-7 & 8-KODERMA TPS (2x500MW) 8.018 126.276 20.978 28.054 49.032 3.883

TOTAL CGS 8.018 1725.969 159.095 400.655 559.750 3.243

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION LIMITED_UPCL (2x600) 8.018 598.386 106.302 141.760 248.062 4.146

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5) 3.854 161.977 0.790 7.018 7.807 0.482

MAHATMA GANDHI HYDRO ELECTRIC POWER

HOUSE_MGHE (4x21.6+4x13.2)

8.018 14.488 0.186 1.427 1.613 1.113

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60) 8.018 42.295 1.955 4.484 6.439 1.522

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135) 8.018 234.453 1.536 18.371 19.907 0.849

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5) 8.018 87.229 0.948 10.376 11.323 1.298

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55) 8.018 41.994 2.206 6.453 8.659 2.062


(1x2+2x12)+(1x7.2+1x6)

8.018 5.224 0.091 2.386 2.478 4.743

KADRA POWER HOUSE_KPH (3x50) 8.018 28.485 1.535 3.814 5.350 1.878

KODASALLI DAM POWER HOUSE_KDPH (3x40) 8.018 26.105 0.962 2.760 3.722 1.426

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16) 8.018 7.350 0.157 1.185 1.342 1.826

ccxxiv

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6)

HYDRO STATIONS_SHIVA & SHIMSHA

8.018 24.918 0.284 2.202 2.486 0.998

MUNIRABAD POWER HOUSE (2x9+1x10) 8.018 8.791 0.035 0.696 0.731 0.831

TOTAL KPCL HYDRO 6.383 683.308 10.685 61.172 71.857 1.052

OTHERS

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION

(6x39)

8.018 8.950 5.219 0.000 5.219 5.832

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9) 8.018 2.604 0.212 0.000 0.212 0.813

TOTAL OTHERS 8.018 11.553 5.431 0.000 5.431 4.701

SHORT TERM POWER 8.018 88.908 0.000 44.810 44.810 5.040

RENEWABLE SOURCES

WIND-IPPS 288.300 0.000 102.923 102.923 3.570

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 407.040 0.000 136.358 136.358 3.350

CO-GEN/CAPTIVE 1.860 0.000 0.480 0.480 2.581

BIOMASS 0.000 0.000 0.000 0.000 0.000

SOLAR-IPP 65.200 0.000 53.730 53.730 8.241


(3x1+3x1+1x3x1x5)

0.000 0.000 0.000 0.000 0.000

TOTAL RENEWABLE SOURCES 762.400 0.000 293.492 293.492 3.850


PGCIL CHARGES 76.111 76.111 0.441

KPTCL CHARGES 246.900 246.900 0.452


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 8.018 5460.559 421.820 1776.174 2197.994 4.025

APPROVED POWER PURCHASE FOR MESCOM’S FOR FY18


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)








CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 8.189 67.120 6.164 16.077 22.241 3.314

ccxxv

NTPC-Talcher (4X500MW) 8.189 226.415 17.462 33.439 50.901 2.248



TPS Stage I &2 &3 (3X500MW) 8.189 88.582 14.439 18.557 32.996 3.725


(3X210MW) 8.189 77.819 5.608 19.120 24.728 3.178


(4X210MW) 8.189 104.865 8.618 25.766 34.384 3.279




(2X500MW) 8.189 118.141 15.171 30.993 46.164 3.908

MAPS (2X220MW) 8.189 20.415 0.000 4.165 4.165 2.040

Kaiga Unit 1&2 (2X220MW) 8.189 75.534 0.000 22.959 22.959 3.040

Kaiga Unit 3 &4 (2X200MW) 8.189 82.032 0.000 24.934 24.934 3.040


(KKNPP) (1X1000MW) 8.189 125.045 0.000 38.009 38.009 3.040



TOTAL CGS 8.189 1762.589 162.591 417.339 579.929 3.290

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



HOUSE_MGHE (4x21.6+4x13.2) 8.189 15.970 0.190 1.638 1.828 1.144






((1x2+2x12)+(1x7.2+1x6)) 8.189 5.188 0.093 2.505 2.598 5.008





HYDRO STATIONS_SHIVA & SHIMSHA 8.189 27.076 0.290 2.493 2.783 1.028


TOTAL KPCL HYDRO 8.189 986.332 11.671 78.333 90.005 0.913

OTHERS


(6x39) 8.189 9.139 5.650 0.000 5.650 6.182


TOTAL OTHERS 8.189 11.798 5.866 0.000 5.866 4.972

RENEWABLE SOURCES

WIND-IPPS 288.300 0.000 103.211 103.211 3.580

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 407.040 0.000 136.358 136.358 3.350

CO-GEN/CAPTIVE 1.860 0.000 0.480 0.480 2.581

ccxxvi

BIOMASS 0.000 0.000 0.000 0.000 0.000

SOLAR-IPP 130.000 0.000 66.040 66.040 5.080


3x1+3x1+1x3x1x5 0.000 0.000 0.000 0.000 0.000



PGCIL CHARGES 78.503 78.503 0.445

KPTCL CHARGES 238.160 238.160 0.412


TOTAL INCLUDING TRANSMISSION & LDC CHARGES 8.188 5781.307 456.052 1787.865 2243.916 3.881

APPROVED POWER PURCHASE FOR MESCOM’S FOR FY19 NAME OF THE GENERATING STATION % SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACI

TY

CHARGE

S (RS Cr)

ENERGY

CHARGE

S (RS Cr)

TOTAL

COST

(RS Cr)

PER UNIT

RATE

(RS/

Kwh)







YERMARUS THERMAL POWER STATION_YTPS (2x800) 8.195 126.820 16.737 33.858 50.595 3.989


CGS SOURCES


N.T.P.C-RSTP-III (1X500MW) 8.195 67.176 6.169 16.412 22.581 3.362

NTPC-Talcher (4X500MW) 8.195 226.605 17.477 34.137 51.613 2.278



TPS Stage I &2 &3 (3X500MW) 8.195 88.656 14.451 18.944 33.395 3.767


(3X210MW) 8.195 77.884 5.613 19.519 25.132 3.227


(4X210MW) 8.195 104.953 8.625 26.303 34.928 3.328




(2X500MW) 8.195 118.240 15.183 31.640 46.823 3.960

MAPS (2X220MW) 8.195 20.432 0.000 4.251 4.251 2.081

Kaiga Unit 1&2 (2X220MW) 8.195 75.598 0.000 23.438 23.438 3.100

ccxxvii

Kaiga Unit 3 &4 (2X200MW) 8.195 82.101 0.000 25.455 25.455 3.100


(KKNPP) (1X1000MW) 8.195 125.150 0.000 38.802 38.802 3.100



TOTAL CGS 8.195 1764.070 162.727 426.043 588.770 3.338

TOTAL MAJOR IPPS


KPCL HYDEL STATIONS



HOUSE_MGHE (4x21.6+4x13.2) 8.195 15.983 0.190 1.707 1.898 1.187






((1x2+2x12)+(1x7.2+1x6)) 8.195 5.193 0.093 2.650 2.743 5.283





HYDRO STATIONS_SHIVA & SHIMSHA 8.195 27.099 0.290 2.602 2.892 1.067


TOTAL KPCL HYDRO 8.195 987.161 11.326 82.049 93.376 0.946

OTHERS


(6x39) 8.195 9.147 5.994 0.000 5.994 6.552


TOTAL OTHERS 8.195 11.808 6.210 0.000 6.210 5.259

RENEWABLE SOURCES

WIND-IPPS 333.850 0.000 119.852 119.852 3.590

KPCL-WIND (9x0.225+10x0.230) 0.000 0.000 0.000 0.000 0.000

MINI HYDEL-IPPS 497.710 0.000 166.733 166.733 3.350

CO-GEN/CAPTIVE 1.860 0.000 0.480 0.480 2.581

BIOMASS 0.000 0.000 0.000 0.000 0.000

SOLAR-IPP 206.500 0.000 104.902 104.902 5.080


(3x1+3x1+1x3x1x5) 0.000 0.000 0.000 0.000 0.000



PGCIL CHARGES 79.355 79.355 0.450

KPTCL CHARGES 251.830 251.830 0.410


TOTAL INCLUDING, TRANSMISSION & LDC CHARGES 8.195 6135.001 474.961 1951.789 2426.750 3.956

ccxxviii

With ref. to

ACS

Approved as per RST

Sales-M U Revenue

Rs. crores

Sales-M U Revenue

Rs. crores

1

LT-1[fully subsidised

by GoK]*

Bhagya Jyothi/Kutir Jyothi

14.26 9.17 14.59 8.77 6.01 0.00 -2.42

2

LT-2(a)(i) Dom. / AEH - Applicable to City

Municipal Corporations areas and

all area under Urban Local 729.42 430.03 729.51 391.94 5.37 -10.61 -12.78

3

LT-2(a)(ii) Dom. / AEH - Applicable to areas

under Village Panchayats 654.37 323.95 654.74 283.76 4.33 -27.89 -29.64

4

LT-2(b)(i) Pvt. Educational Institutions

Applicable to all areas of Local

Bodies including City Corporations 8.88 7.54 8.60 6.27 7.29 21.27 18.32

5

LT-2(b)(ii) Pvt. Educational Institutions

Applicable to areas under Village

Panchayats 4.77 3.77 4.34 2.93 6.75 12.40 9.66

6

LT-3(i) Commercial - Applicable in areas

under all ULBs including City

Corporations. 228.66 212.18 230.65 193.73 8.40 39.75 36.35

7

LT-3(ii) Commercial - Applicable to areas

under Village Panchayats 110.23 93.06 111.06 85.62 7.71 28.28 25.16

8 LT-4(a)* IP<=10HP 1284.26 676.81 1217.69 575.97 4.73 -21.30 -23.21

9 LT-4(b) IP>10HP 1.35 0.64 0.89 0.46 5.17 -14.00 -16.10

10

LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of

10 HP & below 2.43 1.21 1.92 0.96 5.00 -16.98 -19.00

11

LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of

above 10 HP 3.72 1.96 2.89 1.70 5.88 -1.99 -4.37

12 LT-5 (a) LT Industrial 137.89 103.46 54.35 40.53 7.46 24.09 21.06

LT-5 (b) LT Industrial 0.00 0.00 81.53 56.92 6.98 16.17 13.34

13 LT-6 Water supply 122.68 57.32 118.39 50.25 4.24 -29.38 -31.10

14 LT-6 Public lighting 61.47 42.42 63.10 37.04 5.87 -2.33 -4.71

15 LT-7 Temporary supply 19.12 27.07 19.12 27.96 14.62 143.32 137.39

3383.51 1990.59 3313.37 1764.81 5.33 -11.38 -13.53

1 HT-1 Water supply & sew erage 87.38 49.47 87.38 43.20 4.94 -17.73 -13.41 -9.11

2 HT-2(a) Industrial - 800.82 621.85 805.52 583.21 7.24 20.47 26.80 33.09

3 HT-2(b) Commercial 156.71 147.94 168.53 148.41 8.81 46.53 54.23 61.88

4 HT-2 ( c)(i)

Govt./ Aided Hospitals &

Educational Institutions 59.47 44.93 59.52 39.05 6.56 9.15 14.89 20.59

5 HT-2 ( c)(ii)

Hospitals and Educational

Institutions other than covered

under HT-2( c) (i) 120.90 102.10 120.85 92.70 7.67 27.64 34.35 41.01

6

HT-3(a)(i) Lift Irrigation - Applicable to lif t

irrigation schemes under Govt

Dept, / Govt. ow ned Corporations 22.90 11.71 22.83 4.57 2.00 -66.69 -64.94 -63.20

7

HT-3(a)(ii) Lift Irrigation - Applicable to

Private lif t irrigation schemes Lift

Irrigaton societies on

urban/express feeders 0.07 0.02 0.07 0.01 0.00 0.00 0.00 0.00

8HT-3(a)(iii) LI schemes other than those

covered under HT 3(a)(ii) 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00

9

HT - 3b Irrigation & Agriculture

Farms,Govt. Horticultural Farms,

Pvt.Horticulture Nurseries,

Coffee, Tea,Cocanut & Arecanut

Plantations 0.25 0.16 0.32 0.13 4.06 -32.40 -28.85 -25.32

10 HT-4 Residential Apartments -Colonies 14.98 10.31 15.56 9.69 6.23 3.67 9.12 14.53

11 HT-5 Temporary supply 7.20 7.82 7.20 7.72 10.72 78.30 87.67 96.98

1270.68 996.31 1287.79 928.69 7.21 19.99 26.30 32.57

4654.19 2986.90 4601.16 2693.50 5.85 -2.60

52.93 80.44

42.91 10.68

80.84 50.69

4777.94 3090.52 4611.84 2773.95 6.01 0.00

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance,MESCOM

shall raise demand & collect CDT of Rs.6.01 unit by BJ/KJ & Rs.4.73/unit from IP set Consumers.

* Voltage w ise cost of supply per unit to: LT Rs: 6.16, HT Rs.5.71 & EHT- Rs.5.44 Page - 218

PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-17 OF MESCOM

Annexure- III

KPC/ Wheeled

Description

Grand Total

Proposed Supply to MSEZ

Misc. Revenue

Level o f

C ro ss Subsidy

in %

LT - TOTAL

HT - TOTAL

With ref. to voltage wise

COS*

Level of

Cross

Subsidy in %

(EHT)

TOTAL

Average

Realisation

in Rs. Per

Kwh

Proposed by M ESCOM

Sl No Category

Level of

Cross

Subsidy in

% (LT&HT)

ccxxix

ANNEX - IV

ELECTRICITY TARIFF - 2017

K.E.R.C. ORDER DATED: 30th March 2016

Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2016

Mangalore

Electricity Supply Company Ltd.,

ccxxx

ELECTRICITY TARIFF-2017

GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)

1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed

deposits and compliance of terms and conditions as stipulated

in the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka and Regulations issued

under Electricity Act 2003 at the time of supply and continuation

of power supply is subject to compliance of the said Conditions

of Supply / Regulations as amended from time to time.

2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.

3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The

minimum charge is the power supply charges in accordance

with the tariff in force from time to time. This shall be payable by

the Consumer until power supply agreement is terminated,

irrespective of the installation being in service or under

disconnection.

4. The tariffs in the schedule are applicable to power supply within

the Karnataka State.

5. The tariffs are subject to levy of Tax and Surcharges thereon as

may be decided by the State Government from time to time.

6. For the purpose of these tariffs, the following conversion table would

be used:

1 HP=0.746 KW. 1HP=0.878 KVA.

7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill

amount of 50 Paise and above will be rounded off to the next higher

Rupee and the amount less than 50 Paise will be ignored.

8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales

promotions etc., is limited to sanctioned load at the applicable

permanent power supply tariff rates. Temporary tariff rates will be

applicable in case the load exceeds sanctioned load as per the

Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka.

9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations

ccxxxi

serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for

supply of Electricity) Regulations, 2004 and its amendments from time

to time. The applicant is however at liberty to avail HT supply for lesser

loads. The minimum contract demand for HT supply shall be 25 KVA or

as amended from time to time by the Licensee with the approval of

KERC.

10. The Consumer shall not resell electricity purchased from the Licensee

to a third party except -

(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,

(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.

11. Non-receipt of the bill by the Consumer is not a valid reason for non-

payment. The Consumer shall notify the office of issue of the bill if the

same is not received within 7 days from the meter reading date.

Otherwise, it will be deemed that the bills have reached the Consumer

in due time.

12. The Licensee will levy the following charges for non-realization of each

Cheque

1 Cheque amount upto

Rs. 10,000/-

5% of the amount subject to a

minimum of Rs100/-

2 Cheque amount of

Rs. 10,001/- and upto

Rs. 1,00,000/-


minimum of Rs500/-

3 Cheque amount above

Rs. 1 Lakh:


minimum of Rs3000/-

13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the

Consumer has to collect the same.

14. In case of any belated payment, simple interest at the rate of 1 % per

month will be levied on the actual No. of days of delay subject to a

minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No

interest is however levied for arrears of Rs.10/- and less.

15. All LT Consumers, except Bhagya Jyothi and Kutir Jyothi Consumers,

shall provide current limiter/Circuit Breakers of capacity prescribed by

the Licensee depending upon the sanctioned load.

16. All payments made by the Consumer will be adjusted in the following

order of priority: -

(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax

(c) Arrears of Interest on Electricity charges

(d) Arrears of Electricity charges

(e) Current month’s dues

17. For the purpose of billing,

(i) the higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector

meter.

ccxxxii

(ii) sanctioned load or MD recorded, whichever is higher, in respect

of installations provided with static meters or Electronic Tri-Vector

meter will be considered.

Penalty and other clauses shall apply if sanctioned load is

exceeded.

18. The bill amount shall be paid within 15 days from the date of presentation

of the bill failing which the interest becomes payable.

19. For individual installations, more than one meter shall not be provided

under the same tariff. Wherever two or more meters are existing for

individual installation, the sum of the consumption recorded by the meters

shall be taken for billing, till they are merged.

20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.

21. Reconnection charges: The following reconnection charges shall be

levied in case of disconnection and included in the monthly bill.

For reconnection of:

a Single Phase Domestic installations

under Tariff schedule LT 1 & LT2 (a)

Rs. 20 /- per

installation

b Three Phase Domestic installations

under Tariff schedule LT2 (a) and

Single Phase Commercial & Power

installations.

Rs. 50/- per

installation

c All LT installations with 3 Phase supply

other than LT2 (a)

Rs. 100/- per

installation

d All HT& EHT installations Rs.500/- per

Installation.

22. Revenue payments up to and inclusive of Rs.10, 000/- shall be made by

cash or cheque or D.D and payments above Rs.10, 000/- shall be made

by cheque or D.D only. Payments under other heads of account shall be

made by cash or D.D up to and inclusive of Rs.10, 000/- and

payment above Rs.10, 000/-shall be by D.D only.

Note: The Consumers can avail the facility of payment of monthly power

supply bill through Electronic clearing system (ECS)/ Credit cards /

on line E-Payment @ www.billjunction.com at counters wherever

such facility is provided by the Licensee in respect of revenue

payments up to the limit prescribed by the RBI.

23. For the types of installations not covered under any Tariff schedules, the

Licensee is permitted to classify such installations under appropriate Tariff

schedule under intimation to the K.E.R.C.

24. Seasonal Industries

Applicable to all Seasonal Industries

i) The industries that intend to avail this benefit shall have Electronic Tri-

Vector Meter fitted to their installations.

ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the

concerned O&M Division of the Licensee as per the request of the

Consumer and will continue from year to year unless otherwise

ccxxxiii

altered. The Consumer shall give a clear one month’s notice in

case he intends to change his ‘ working season’.

iii) The consumption during any month of the declared off-season shall

not be more than 25% of the average consumption of the previous

working season.

iv) The ‘Working season’ months and ‘off-season’ months shall be full–

calendar months. If the power availed during a month exceeds

the allotment for the ‘off-season’ month, it shall be taken for

calculating the billing demand as if the month is the ‘working

season’ month.

v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During

the ‘off-season period, the Consumer may use power for

administrative offices etc., and for overhauling and repairing plant

and machinery.

25 Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the

production of certificate Form-12 A from the Income Tax

department.

26 Time of the Tariff (ToD)

The Commission as decides in the earlier tariff order, decide to

continue compulsory Time of Day Tariff for HT2 (a) and HT2 (b) and

HT2(c) consumers with a contract demand of 500 KVA and above.

Further, the optional ToD would continue as existing earlier for HT2(a),

HT2(b) and HT2(c) consumers with contract demand of less than 500

KVA. Also the ToD for HT1 consumers on optional basis would continue

as existing earlier. Details of ToD tariff are indicated under the

respective tariff category.

27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis of the orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

ccxxxiv

28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by way

of adjustment in the subsequent month’s bill:

(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/-

(Rs. one lakh), if the payment is made 10 days in

advance of the due date.

(iii) Advance Payment exceeding Rs.1000/- made by the

Consumers towards monthly bills

29. Conditions of Supply of Electricity of the Distribution Licensees in the State

of Karnataka and amendments issued thereon from time to time and

Regulations issued under Electricity Act 2003 will prevail over the extract

given in this tariff book in the event of any discrepancy.

30. Self-Reading of Meters:

The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the

Licensee shall take the reading at least once in six months and

reconcile the difference, if any and raise the bills accordingly. This

procedure may be implemented by the Licensee as stipulated under

Section 26.01 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

---0---


PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply of Voltages

at 11KV (including 2.3/4.6 KV) and above at

Standard High Voltage or Extra High Voltages

when the Contract Demand is 50 KW / 67 HP

and above.

ccxxxv


PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply at Voltages of 11KV (including

2.3/4.6 KV) and above at Standard High Voltage or Extra High

Voltages when the Contract Demand is 50 KW / 67 HP and above.

CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:

1. Billing Demand

A) The billing demand during unrestricted period shall be the

maximum demand recorded during the month or 75% of the

CD, whichever is higher.

B) When the Licensee has imposed demand cut of 25% or less, the

conditions stipulated in (A) shall apply.

C) When the demand cut is in excess of 25%, the billing demand

shall be the maximum demand recorded or 75% of the

restricted demand, whichever is higher.

D) If at any time the maximum demand recorded exceeds the CD

or the demand entitlement, or opted demand entitlement

during the period of restrictions, if any, the Consumer shall pay

for the quantum of excess demand at two times the normal rate

per KVA per month as deterrent charges as per Section 126(6)

of Electricity Act 2003. For over drawal during the billing period,

the penalty shall be two times the normal rate.

E) During the periods of disconnection, the billing demand shall be

75% of CD, or 75% of the demand entitlement that would have

been applicable, had the installation been in service, whichever

is less. This provision is applicable only, if the installation is under

disconnection for the entire billing month.

F) During the period of energy cut, the Consumer may get his

demand entitlement lowered, but not below the percentage of

energy entitlement, (For example, In case the energy

entitlement is 40% and the demand entitlement is 80%, the re-

fixation of demand entitlement cannot be lower than 40% of the

CD). The benefit of lower demand entitlement will be given

effect to from the meter reading date of the same month, if the

option is exercised on or before 15th of the month. If the option is

exercised on or after 16th of the month, the benefit will be given

effect to from the next meter reading date. The Consumer shall

ccxxxvi

register such option by paying processing fee of Rs.100/- at the

Jurisdictional sub-division office.

(i) The billing demand in such cases, shall be the “Revised

(Opted) Demand Entitlement” or, the recorded demand,

whichever is higher. Such option for reduction of demand

entitlement, is allowed only once during the entire span

of that particular “Energy Cut Period”. The Consumer,

can however opt for a higher demand entitlement up to

the level permissible under the demand cut notification,

and the benefit will be given effect to from the next

meter reading date. Once the Consumer opts for

enhancement of demand, which has been reduced

under Clause (F), no further revision is permitted during

that particular energy cut period.

(ii) The opted reduced demand entitlement will

automatically cease to be effective, when the energy

cut is revised. The facility for reduction and enhancement

can however be exercised afresh by the Consumer as

indicated in the previous paras.

G) For the purpose of billing, the billing demand of 0.5 KVA and

above will be rounded off to the next higher KVA, and billing

demand of less than 0.5 KVA shall be ignored.

2. Power factor (PF)

It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF of

not less than 0.90.

(i) The specified P.F. is 0.90. If the power factor goes below 0.90

Lag, a surcharge of 3 Paise per unit consumed will be levied for

every reduction of P.F. by 0.01 below 0.90 Lag.

(ii) The power factor when computed as the ratio of KWh / KVAh

will be determined up to 3 decimals (ignoring figures in the other

decimal places), and then rounded off to the nearest second

decimal as illustrated below:

(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90

In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the

same is not available, the ratio of KWh to KVAh consumed in the billing

month shall be considered.

3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will

be entitled to a rebate as indicated below:

Supply Voltage: Rebate

A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed

C) 220 KV 5 Paise/unit of energy consumed

ccxxxvii

The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also

for installations converted from 13.2 KV and below to 33 KV and above

and also for installations converted from 33/66 KV to 110/220 KV, from

the next meter reading date after conversion / service / date of

notification of this Tariff order, as the case may be. The above rebate is

applicable only on the normal energy consumed by the Consumer,

including the consumption under TOD Tariff, and is not applicable on

any other energy allotted and consumed, if any, viz.,

i) Wheeled Energy.

ii) Any energy, including the special energy allotted over and above

normal entitlement.

iii) Energy drawal under special incentive scheme, if any.

The above rebate is not applicable for Railway Traction.

4. In respect of Residential Quarters/ Colonies availing Bulk power supply

by tapping the main HT supply, the energy consumed by such Colony

loads, metered at single point, shall be billed under HT-4 tariff schedule.

No reduction in demand recorded in the main HT meter will be

allowed.

5. Energy supplied may be utilized for all purposes associated with the

working of the installations, such as, Office, Stores, Canteens, Yard

Lighting, Water Supply and Advertisements within the premises.

6. Energy can also be used for construction, modification and expansion

purposes within the premises.

7. Power supply under HT-4 tariff schedule may be used for Commercial

and other purposes inside the colony, for installations such as Canteen,

Club, Shop, Auditorium etc., provided, this load is less than 10% of the

CD.

8. In respect of Residential Apartments availing HT Power supply under HT-

4 tariff schedule, the supply availed for Commercial and other

purposes like Shops, Hotels, etc., will be billed under appropriate tariff

schedule, (Only Energy charges) duly deducting such consumption in

the main HT supply bill. No reduction in the recorded demand of the

main HT meter is allowed. Common areas shall be billed at Tariff

applicable to that of the predominant Consumer category. [

9. Seasonal Industries

a. The industries, which intend to utilize seasonal industry benefit,

shall conform to the conditionalities under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT &

LT).

b. The industries that intend to avail this benefit, shall have

Electronic Tri-Vector Meter fitted to the installation.

c. Monthly charges during the working season shall be the

demand charges on 75% of the contract demand or the

recorded maximum demand during the month, whichever is

higher, plus the energy charges

d. Monthly charges during the off season, shall be demand

charges on the maximum demand recorded during the month,

or 50% of the CD whichever is higher plus the energy charges.

ccxxxviii

TARIFF SCHEDULE HT 1

Applicable to Water Supply, Drainage / Sewerage water treatment plant and

Sewerage Pumping installations, belonging to Karnataka Urban Water Supply

and Sewerage Board, other local bodies, State and Central Government.

RATE SCHEDULE

Demand charges Rs.190/-KVA of billing demand/month

Energy charges 450 paise/unit

TOD Tariff at the option of the Consumer Time of Day Increase + / reduction (-) in energy



06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs + 100 paise per unit

Note: Energy supplied to residential quarters availing bulk supply by

the above category of Consumer, shall be metered separately

at a single point, and the energy consumed shall be billed at HT-

4 Tariff. No reduction in the demand recorded in the main HT

meter will be allowed.

TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research &

Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova

Mills, Roller Flour Mills, News Papers, Printing Press, Railway

Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,

Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water

Supply Installations of KIADB and other industries, all Defence

Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green

House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone

Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore

Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,

Developing and Recording Theaters, Tissue Culture, Aqua Culture,

Prawn Culture, Information Technology Industries engaged in

development of Hardware & Software, Information Technology (IT)

enabled Services / Start-ups (As defined in GOI notification dated

17.04.2015)/ Animation / Gaming / Computer Graphics as certified by

the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.

Units, Tyre retreading units, Nuclear Power Projects, Stadiums

maintained by Government and local bodies, also Railway Traction,

Effluent treatment plants and Drainage water treatment plants owned

other than by the local bodies, LPG bottling plants, petroleum pipeline

projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw

ccxxxix

Mills, Toy/wood industries, Satellite communication centers, and

Mineral water processing plants / drinking water bottling plants.

RATE SCHEDULE

HT-2(a): Applicable to all areas of MESCOM.

.Demand charges Rs.180/kVA of billing demand/month

Energy charges

For the first one lakh units 620 paise per unit

For the balance units 660 paise per unit

Railway Traction and Effluent Treatment Plants

Demand charges Rs.190/kVA of billing demand/month

Energy Charges 590 paise per unit for all the units

TARIFF SCHEDULE HT-2(b) Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging, Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V. Station, All India Radio, Railway Stations, Air Port, KSRTC bus stations, All offices, Banks, Commercial Multi-storied buildings. APMC Yards, Stadiums other than those maintained by Government and Local Bodies, Construction power for irrigation, Power Projects and Konkan Railway Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription centers, telecom, call centers, BPO/KPO.

RATE SCHEDULE

HT-2 (b): Applicable to all areas of MESCOM

Energy charges

For the first two lakh units 785 paise per unit


TARIFF SCHEDULE HT-2(c)

RATE SCHEDULE

HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable

Institutions, ESI hospitals, Universities and Educational Institutions belonging

to Government and Local bodies, Aided Educational Institutions and Hostels

of all Educational Institutions. Demand charges Rs.180/kVA of billing demand /month

Energy charges



RATE SCHEDULE

HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than

those covered under HT-2 (c)(i).

Demand charges Rs.180 /kVA of billing demand/month

Energy charges



Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.

Demand charges Rs.200 /kVA of billing demand/month

ccxl

1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,

canteens, yard lighting, water pumping and

advertisement within the premises.

2. Energy can be used for construction, modification and

expansion purposes within the premises.

TOD Tariff applicable to HT-2(a), HT-2(b) and HT-2(c) category.

Time of Day Increase + / reduction (-) in energy charges

over the normal tariff applicable


06.00 Hrs to 18.00 Hrs 0


TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,

RATE SCHEDULE

HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.

owned Corporations

Energy charges/ Minimum Charges 200 paise per unit subject to an

annual minimum of Rs.1120 per

HP/Annum

HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:

Connected to Urban/Express feeders

Fixed Charges Rs.40 /HP/ per month of sanctioned

load


HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

other than those covered under HT-3 (a)(ii)

Fixed Charges Rs.20 /HP/ per month of sanctioned

load


TARIFF SCHEDULE HT-3 (b)

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,

Rubber, Coconut & Arecanut Plantations. RATE SCHEDULE

Energy charges / Minimum Charges 400 paise per unit subject to an

annual minimum of Rs.1120/- per HP

of sanctioned load.

Note: These installations are to be billed on quarter yearly basis.

TARIFF SCHEDULE HT-4

Applicable to Residential apartments and colonies (whether situated outside

or inside the premises of the main HT Installation) availing power supply

independently or by tapping the main H.T. line. Power supply can be used for

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residences, theatres, shopping facility, club, hospital, guest house, yard/street

lighting, canteen located within the colony.

RATE SCHEDULE

Applicable to all areas

Demand charges Rs.110/- per KVA of billing demand/

month


NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads

metered at a single point, is to be billed at the above energy

rate. No reduction in the recorded demand of the main H.T.

supply is allowed.

(2) Energy under this tariff may be used for commercial and other

purposes inside the colonies for installations such as, Canteens,

Clubs, Shops, Auditorium etc., provided, this commercial load is

less than 10% of the Contract demand. [

(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and

other purposes like Shops, Hotels, etc., will be billed under

appropriate tariff schedule (Only Energy charges), duly deducting

such consumption in the main HT supply bill. No reduction in the

recorded demand of the main HT meter is allowed. Common

areas shall be billed at Tariff applicable to the predominant

Consumer category. TARIFF SCHEDULE HT-5

Tariff applicable to sanctioned load of 67 HP and above for

hoardings and advertisement boards and construction power for

industries excluding those category of consumers covered under

HT2(b) Tariff schedule availing power supply for construction

power for irrigation, power projects and Konkan Railway Projects

and also applicable to power supply availed on temporary basis

with the contract demand of 67 HP and above of all categories.

HT – 5 – Temporary supply

RATE SCHEDULE

67 HP and above:

Fixed charges /

Demand Charges

Rs220/HP/month for the entire sanction load /

contract demand


Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having license for duration

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 the Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka shall be complied with before service.

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------

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ELECTRICITY TARIFF-2017

PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

MESCOM


PART-II

LOW TENSION SUPPLY (400 Volts Three Phase and

230Volts Single Phase Supply) CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:

1. In case of LT Industrial / Commercial Consumers, Demand based Tariff at

the option of the Consumer, can be adopted. The Consumer is permitted

to have more connected load than the sanctioned load. The billing

demand will be the sanctioned load, or Maximum Demand recorded in the

Tri-Vector Meter during the month, whichever is higher. If the Maximum

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Demand recorded is more than the sanctioned load, penal charges at two

times the normal rate shall apply.

2. Use of power within the Consumer premises for bonafide temporary

purpose is permitted subject to the conditions that, total load of the

installation on the system does not exceed the sanctioned load.

3. Where it is intended to use power supply temporarily, for floor polishing and

such other portable equipments, in a premises having permanent power

supply, such equipments shall be provided with earth leakage circuit

breakers of adequate capacity.

4. The laboratory installations in educational institutions are allowed to install

connected machineries up to 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

5.Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,

Refrigerators and other household appliances, including domestic water

pumps and air conditioners, provided, they are under single meter

connection. If a separate meter is provided for Air-conditioner load, the

Consumer shall be served with a notice to merge this load and to have a

single meter for the entire load. Till such time, the air conditioner load will be

billed under Commercial Tariff.

6. Bulk LT supply

If power supply for lighting / combined lighting & heating {LT 2(a)}, is availed

through a bulk Meter for group of houses belonging to one Consumer, (ie,

Where bulk LT supply is availed), the billing for energy shall be done at the

slab rate for energy charges matching the consumption obtained by

dividing the bulk consumption by number of houses. In addition, fixed

charges for the entire sanctioned load shall be charged as per Tariff

schedule.

7. A rebate of 25 paise per unit will be given for the House/ School/Hostels

meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation

Centres under Tariff schedule LT 2(a).

8. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed subject

to a maximum of Rs. 50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the capacity

of Solar Water Heater in such apartment / group housing shall be a

minimum capacity of 100 Ltr. per household.

9. A rebate of 20% on fixed charges and energy charges will be allowed in

the monthly bill in respect of public Telephone booths having STD/ISD/ FAX

facility run by handicapped people, under Tariff schedule LT 3.

10. A rebate of 2 paise per unit will be allowed if capacitors are installed as

per Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka in respect of all metered IP Set

Installations.

11. Power Factor (PF):

Capacitors of appropriate capacity shall be installed in accordance with

Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees

in the State of Karnataka, in case of installations covered under Tariff

category LT 3, LT4, LT 5, & LT 6, where motive power is involved.

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(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a

surcharge of 2 paise per unit consumed will be levied for every

reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,

however, this is subject to a maximum surcharge of 30 paise per unit.

(ii) The power factor when computed as the ratio of KWh/KVAh will be

determined up to 3 decimals (ignoring figures in the other decimal

places) and then rounded off to the nearest second decimal as

illustrated below:

(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85

(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.

(iv) During inspection, if the capacity of capacitors provided is found to be

less than what is stipulated in Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka, a surcharge of 30

Paise/unit will be levied in the case of installations covered under Tariff

categories LT 3, LT 5, & LT 6 where motive power is involved.

(v) In the case of installations without electronic Tri-vector meters even

after providing capacitors as recommended in Clause 23.01 and 23.03

of Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka, if during any periodical or other testing / rating of

the installation by the Licensee, the PF of the installation is found to be

lesser than 0.85, a surcharge determined as above shall be levied from

the billing month following the expiry of Three months’ notice given by

the Licensee, till such time, the additional capacitors are installed and

informed to the Licensee in writing by the Consumer. This is also

applicable for LT installations provided with electronic Tri-vector meters.

12. All new IP set applicants shall fix capacitors of adequate capacity in

accordance with Clause 23 of Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka before taking service. [

13. All the existing IP set Consumers shall also fix capacitors of adequate

capacity in accordance with Clause 23 of Conditions of Supply of

Electricity of the Distribution Licensees in the State of Karnataka, failing

which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If the

capacitors are found to be removed / not installed, a penalty at the same

rate as above (Rs. 60/-per HP / Year) shall be levied.

14.The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and licence of not less than one year, will be billed

under commercial tariff schedule i.e., LT 3.

15.Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of cinematography

films, and also outdoor shooting units, will be billed under Temporary Tariff

schedule i.e., LT 7. 16.The Consumers under IP set tariff schedule, shall use the energy only for

pumping water to irrigate their own land as stated in the IP set application / water right certificate and for bonafide agriculture use. Otherwise, such installations shall be billed under appropriate Industrial / Commercial tariff, based on the recorded consumption if available, or on the consumption computed as per the

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Table given under Clause 42.06 of the Conditions of Supply of Electricity of the Distribution Licensees in the State of Karnataka.

17. The water pumped for agricultural purposes may also be used by the

Consumer for his bonafide drinking purposes and for supplying water to

animals, birds, Poultry farms, Dairy farms and fish farms maintained by the

Consumer in addition to agriculture.

18. The motor of IP set installations can be used with an alternative drive for

other agricultural operations like sugar cane crusher, coffee pulping, etc.,

with the approval of the Licensee. The energy used for such operation,

shall be metered separately by providing alternate switch and charged at

LT Industrial Tariff (Only Energy charges) during the period of alternative

use. However, if the energy used both for IP Set and alternate operation is

measured together by one energy meter, the energy used for alternate

drive shall be estimated by deducting the average IP Set consumption for

that month as per the IP sample meter readings for the sub division, as

certified by the sub divisional Officer.

19. The IP Consumer is permitted to use energy for lighting the pump house

and well limited to two lighting points of 40 Watts each.

20. Billing shall be made at least once in a quarter year for all IP sets.

21. In case of welding transformers, the connected load shall be taken as:

a) Half the maximum capacity in KVA as per the nameplate specified

under IS: 1851

OR

b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.

22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating and

Air-conditioning, Yard-Lighting, water supply in the premises of

Commercial / Industrial Units respectively.

23. Fluorescent fittings shall be provided by the Licensee for the Streetlights in

the case of villages covered under the Licensee’s electrification

programme for initial installation.

In all other cases, the entire cost of fittings including Brackets, Clamps,

etc., and labour for replacement, additions and modifications shall be met

by the organizations making such a request. Labour charges shall be paid

at the standard rates fixed by the Licensee for each type of fitting.

24. Lamps, fittings and replacements for defective components of fittings shall

be supplied by the concerned Village Panchayaths, Town Panchayaths or

Municipalities for replacement.

25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP for

purpose of billing and the minimum billing being for 1 KW / 1HP in respect

of all categories of LT installations including I.P. sets. In the case of street

lighting installations, fraction of KW shall be rounded off to nearest quarter

KW for the purpose of billing and the minimum billing shall be quarter KW.

26. Seasonal Industries.

a) The industries who intend to utilize seasonal industry benefit, shall

comply with the conditionalities under Para no. 24 of the General

terms and conditions of tariff (applicable to both HT & LT).

b) The industries that intend to avail this benefit, shall have Electronic

Tri-Vector Meter fitted to their installation.

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c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal

months, shall be the energy charges plus 50% of the fixed charges.

TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira

Jyothi (BJ/KJ) schemes.

RATE SCHEDULE

Energy charges

(including recovery towards

service main charges)

Nil*

Fully subsidized by the GOK

Commission Determined Tariff for the above category i.e., LT-1 is Rs.6.01 per unit.

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by

these Consumers is shown as Nil. However, if the GOK does not release the

subsidy in advance, a Tariff of Rs.6.01 per unit subject to monthly minimum of Rs.

30/- per Installation per month shall be demanded and collected from these

Consumers.

Note: If the consumption exceeds 18 units per month or any BJ/KJ installation

is found to have more than one out let, it shall be billed as per Tariff

Schedule LT 2(a).

TARIFF SCHEDULE LT-2(a)

Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a portion is

used by the occupant for (a) Handloom weaving (b) Silk rearing and reeling

and artisans using motors up to 200 watts (c) Consultancy in (i) Engineering

(ii) Architecture

(iii) Medicine (iv) Astrology (v) Legal matters (vi) Income tax (vii) Chartered

Accountants (d) Job typing (e) Tailoring (f) Post Office (g) Gold

smithy

(h) Chawki rearing (i) Paying guests/Home stay guests (j) personal Computers

(k) Dhobis (l) Hand operated printing press (m) Beauty Parlours (n) Water

Supply installations, Lift which is independently serviced for bonafide use of

residential complexes/residence, (o) Farm Houses and yard lighting limiting to

120 Watts, (p) Fodder Choppers & Milking Machines with a connected load

up to 1 HP.

Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centers run by State/Central Govt. and local bodies. (ii) Houses, schools and

Hostels meant for handicapped, aged destitute and orphans (iii)

Rehabilitation Centres run by charitable institutions, AIDS and drug addicts

Rehabilitation Centres (iv) Railway staff Quarters with single meter (v) fire

service stations.

It is also applicable to the installations of (a) Temples, Mosques, Churches,

Gurudwaras, Ashrams, Mutts and religious/Charitable institutions (b) Hospitals,

Dispensaries and Health Centres run by Charitable institutions including X-ray

units (c) Jails and Prisons (d) Schools, Colleges, Educational institutions run by

State/Central Govt.,/Local Bodies (e) Seminaries (f) Hostels run by the

Government, Educational Institutions, Cultural, Scientific and Charitable

Institutions (g) Guest Houses/Travelers Bungalows run in Government buildings

or by State/Central Govt./Religious/Charitable institutions (h) Public libraries

ccxlviii

(i) Silk rearing (j) Museums (k) Installations of Historical Monuments of

Archeology Departments(l) Public Telephone Booths without STD/ISD/FAX

facility run by handicapped people (m) Sulabh / Nirmal Souchalayas (n)

Viswa Sheds having Lighting Loads only.

RATE SCHEDULE

LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations

and all other urban local bodies

Fixed charges per month For the first KW Rs.30/- per KW

For every additional KW Rs.40/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

300 paise/unit

31 to 100 units 440 paise /unit

101 to 200 units 590 paise/unit

Above 200 units 690 paise/unit

LT-2(a)(ii): Applicable to Areas under Village Panchayats

Fixed charges per month For the first KW Rs.20/- per KW

For every additional KW Rs.30/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

290 paise/unit



Above 200 units 640 paise /unit

TARIFF SCHEDULE LT-2(b)

Applicable to the installations of Private Professional and other Private

Educational Institutions including aided, unaided institutions, Nursing

Homes and Private Hospitals having only lighting or combined lighting

& heating, and motive power. [[[[[

RATE SCHEDULE

LT 2 (b) (i): Applicable to City Municipal Corporations and all other urban

local bodies

Fixed charges Rs.45 Per KW subject to a minimum of Rs.75 per

month

Energy charges



LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.35 per KW subject to a minimum of Rs.60 per

month

Energy charges



Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.

1 A rebate of 25 paise. Per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,

Rehabilitation Centres run by Charitable Institutions.

2 (a) Use of power within the consumer’s premises for temporary purposes

for bonafide use is permitted subject to the condition that, the total

load of the installation on the system does not exceed the

sanctioned load.

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(b) Where it is intended to use floor polishing and such other portable

equipment temporarily, in the premises having permanent supply,

such equipment shall be provided with an earth leakage circuit

breaker of adequate capacity.

3 The laboratory installations in educational institutions are allowed to

install connected machinery up to 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

4. Besides lighting and heating, electricity supply under this schedule can be

used for fans, Televisions, Radios, Refrigerators and other house-hold

appliances including domestic water pump and air conditioners,

provided, they are under single meter connection. If a separate meter is

provided for Air conditioner Load, the consumption shall be under

commercial tariff till it is merged with the main meter.

5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a

maximum of Rs.50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the

capacity of Solar Water Heater in such apartment / group housing shall

be a minimum capacity of 100 Ltr, per household.


Applicable to Commercial Lighting, Heating and Motive Power installations of

Clinics, Diagnostic Centers, X Ray units, Shops, Stores,

Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest Houses,

Mess, Clubs, Kalyan Mantaps / Choultry, permanent Cinemas/ Semi

Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage

Plants, Service Stations/ Garages, Banks, Telephone Exchanges. T.V.Stations,

Microwave Stations, All India Radio, Dish Antenna, Public Telephone Booths/

STD, ISD, FAX Communication Centers, Stud Farms, Race Course, Ice Cream

Parlours, Computer Centres, Photo Studio / colour Laboratory, Xerox Copiers,

Railway Installation excepting Railway workshop, KSRTC Bus Stations

excepting Workshop, All offices, Police Stations, Commercial Complexes, Lifts

of Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres,

Post Offices, Bakery shops, Beauty Parlours, Stadiums other than those

maintained by Govt. and Local Bodies. It is also applicable to water supply

pumps and street lights not covered under LT 6, Cyber cafés, Internet surfing

cafés, Call centers, I.T. based medical transcription centers, Private Hostels

not covered under LT -2 (a), Paying guests accommodation provided in an

independent / exclusive premises.

RATE SCHEDULE

LT-3 (i): Applicable to City Municipal Corporations and all other urban local

bodies.

Fixed charges Rs.50 per KW per month

Energy charges

For 0 - 50 units 715 paise /unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.65 per KW

Energy charges As above

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RATE SCHEDULE

LT-3 (ii): Applicable in Areas under Village Panchayats


Energy charges For 0 - 50 units 665 paise /unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW


Energy charges As above

Note: 1. Besides Lighting, Heating and Motive power, Electricity supply under

this Tariff can also be used for Yard lighting/ air Conditioning/water

supply in the premises.

2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for a duration of not

less than one year.

3. Touring Cinemas having an outfit comprising Cinema apparatus

and accessories taken from place to place for exhibition of

cinematography film and also outdoor shooting units shall be billed

under LT- 7 Tariff.

4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths having

STD / ISD/FAX facility run by handicapped people.

5. Demand based Tariff at the option of the Consumer can be

adopted as per Para 1 of the conditions applicable to LT

installations.

TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets

used in (i) Nurseries of forest and Horticultural Departments (ii) Grass Farms

and Gardens (iii) Plantations other than Coffee, Tea, Rubber and Private

Horticulture Nurseries

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TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets up to and inclusive of 10 HP

RATE SCHEDULE

Fixed charges Free

Energy charges

Commission Determined Tariff (CDT) for LT4 (a) category is 473 paise per

unit. In case the GOK does not release the subsidy in advance in the

manner specified by the Commission in K.E.R.C. (Manner of Payment of

subsidy) Regulations, 2008, CDT of 473 paise per unit shall be demanded

and collected from these Consumers.

Note: This Tariff is applicable for Coconut and Areca nut plantations

also.

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TARIFF SCHEDULE LT-4 (b):


RATE SCHEDULE

Fixed charges Rs.40 per HP per month.

Energy charges 280 paise per unit

TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load up to and inclusive of 10 HP.

RATE SCHEDULE



TARIFF SCHEDULE LT-4 (c)(ii):

Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber

plantations of sanctioned load above 10 HP.

RATE SCHEDULE



Note: 1) The energy supplied under this tariff shall be used by the consumers only for

pumping water to irrigate their own land as stated in the I.P. Set application / water right certificate and for bonafide agriculture use. Otherwise, such installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the recorded consumption if available, or on the consumption computed as per the Table given under Clause 42.06 of the Conditions of Supply of Electricity of the Distribution Licensees in the State of Karnataka.

2) The motor of IP set installations can be used with an alternative drive for other agricultural operations like sugar cane crusher, coffee pulping, etc., with the approval of the Licensee. The energy used for such operation shall be metered separately by providing alternate switch and charged at LT Industrial Tariff (Only Energy charges) during the period of alternative use. If the energy used both for IP Set and alternate operation, is however measured together by one energy meter, the energy used for alternate drive shall be estimated by deducting the average IP Set consumption for that month as per the IP sample meter readings for the sub division as certified by the sub divisional Officer.

3) The Consumer is permitted to use the energy for lighting the pump house and well limited to 2 lighting points of 40 W each.

4) The water pumped for agricultural purposes may also be used by the Consumer for his bonafide drinking purposes and for supplying water to animals, birds, Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition to agriculture.

5) Billing shall be made at least once in a quarter year for all IP sets. 6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per Clause

23 of Conditions of Supply of Electricity of the Distribution Licensees in the State of Karnataka in respect of all metered IP Set Installations.

7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and

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LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or not.


Applicable to Heating & Motive power (including lighting) installations of

industrial Units, Workshops, Poultry Farms, Sugarcane Crushers, Coffee Pulping,

Cardamom drying, Mushroom raising installations, Flour, Huller & Rice Mills,

Wet Grinders, Milk dairies, Ironing, Dry Cleaners and Laundries having

washing, Drying, Ironing etc., Exclusive Tailoring shop , Bulk Ice Cream and

Ice manufacturing Units, Coffee Roasting and Grinding Works, Cold Storage

Plants, Bakery Product Mfg. Units, KSRTC workshops/Depots, Railway

workshops, Drug manufacturing units and Testing laboratories, Printing Presses,

Garment manufacturing units, Bulk Milk vending Booths, Swimming Pools of

local Bodies, Tyre retreading units, Stone crushers, Stone cutting, Chilly

Grinders, Phova Mills, pulverizing Mills, Decorticators, Iron & Red-Oxide

crushing units, crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood

industries, Viswa Sheds with mixed load sanctioned under Viswa Scheme,

Cinematic activities such as Processing, Printing, Developing, Recording

theatres, Dubbing Theatres and film studios, Agarbathi manufacturing unit.,

Water supply installations of KIADB & industrial units, Gem & Diamond cutting

Units, Floriculture, Green House, Biotech Labs., Hybrid seed processing units.

Information Technology industries engaged in development of hardware &

Software, Information Technology (IT) enabled Services / Start-ups (As defined

in GOI notification dated 17.04.2015)/ Animation / Gaming / Computer

Graphics as certified by the IT & BT Department of GOK/GOI, Silk filature units,

Aqua Culture, Prawn Culture, Brick manufacturing units, Silk / Cotton colour

dying, Stadiums maintained by Govt. and local bodies, Fire service stations,

Gold / Silver ornament manufacturing units, Effluent treatment plants,

Drainage water treatment plants, LPG bottling plants and petroleum pipeline

projects, Piggery farms, Analytical Lab. for analysis of ore metals, Satellite

communication centers, Mineral water processing plants / drinking water

bottling plants and soda fountain units.

Tariff for LT 5 :

Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month




iv) Rs.100 per HP for 67 HP & above

Demand based Tariff (optional)

Fixed

Charges per


HP


demand

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Month 40 HP and above but less

than 67 HP


demand


demand

ii) Energy Charges


For the first 500 units 495 paise/unit



Tariff for LT 5 (b):


i. Fixed charges

Fixed Charges

per Month




iv)Rs.100 per HP for 67 HP & above

ii. Demand based Tariff (optional)

Fixed

Charges

per Month

Above 5 HP and less than 40 HP Rs.50 per KW of billing demand

40 HP and above but less than

67 HP

Rs.65 per KW of billing demand

67 HP and above Rs.150 per KW of billing demand

iii. Energy Charges



Above 1000 units 600 paise/unit

TOD Tariff applicable to LT-5: At the option of the Consumer

Time of Day Increase+ / reduction (-) in energy



06.00 Hrs to 18.00 Hrs 0


NOTE:

1. DEMAND BASED TARIFF

In the case of LT Industrial Consumers, Demand based Tariff at the option of

the Consumer can be adopted. The Consumer is permitted to have more

connected load than the sanctioned load. The billing demand will be the

sanctioned load or Maximum Demand recorded in the Tri-Vector Meter

during the month whichever is higher. If the Maximum Demand recorded is

more than the sanctioned load, penal charges at two times the normal rate

shall apply.

cclv

2. Seasonal Industries: The industries which intend to utilize seasonal industry

benefit shall comply with the conditionalities under para no. 24 of general

terms and conditions applicable to LT.

3. Electricity can also be used for lighting, heating, and air-conditioning in the

premises.

4. In the case of welding transformers, the connected load shall be taken as

(a) Half the maximum capacity in KVA as per the name plate specified

under-IS1851 or (b) Half the maximum capacity in KVA as recorded during

rating by the Licensee, whichever is higher.


Applicable to water supply and sewerage pumping installations and also

applicable to water purifying plants maintained by Government and Urban

Local Bodies/ Grama Panchayats for supplying pure drinking water to

residential areas, Public Street lights/Park lights of village Panchayat, Town

Panchayat, Town Municipalities, City Municipalities / Corporations / State and

Central Govt. / APMC, Traffic signals, Surveillance Cameras at traffic locations

belonging to Government Department, subways, water fountains of local

bodies. Also applicable to Streetlights of residential Campus of universities,

other educational institutions, housing colonies approved by local

bodies/development authority, religious institutions, organizations run on

charitable basis, industrial area / estate and notified areas, also Applicable to

water supply installations in residential Layouts, Street lights along with signal

lights and associated load of the gateman hut provided at the Railway level

crossing.

RATE SCHEDULE

Water Supply- LT-6 (a)

Fixed charges Rs.45/HP/month


Public lighting- LT-6 (b)

Fixed charges Rs.60/KW/month


Energy Charges for LED/ Induction

Lighting

450 paise/unit


Temporary Supply and Permanent Supply to Advertising Hoardings

TARIFF SCHEDULE LT-7(a)

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 950 paise / unit

subject to a weekly minimum of Rs.170

per KW of the sanctioned load.

TARIFF SCHEDULE LT-7(b)

Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

cclvi

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs 50 per KW/month

& Energy charges at 950 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the provisions

of Clause 12 of the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.2. This Tariff is also applicable to touring

cinemas having licence for duration less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 of the Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka shall be complied with before service.

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mescom - karnataka orders/court...1.0 mangalore electricity supply company ltd., - mescom 3 1.1...

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