AGGREGATE REVENUE REQUIREMENT AND TARIFF PETITION FOR FY *********

Transcription

1 AGGREGATE REVENUE REQUIREMENT AND TARIFF PETITION FOR FY ********* Submitted by: - Madhya Pradesh Power Management Company Limited, Shakti Bhawan, Vidyut Nagar, JABALPUR Madhya Pradesh Poorva Kshetra Vidyut Vitran Company Limited, Block No. 7, Shakti Bhawan, Vidyut Nagar, JABALPUR Madhya Pradesh Paschim Kshetra Vidyut Vitran Company Limited, GPH Compound, Polo Ground, INDORE Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited, Bijlee Nagar Colony, Nishtha Parisar, Govindpura BHOPAL

2 BEFORE THE HON BLE MADHYA PRADESH ELECTRICITY REGULATORY COMMISSION, BHOPAL Petition No. of 2015 (1) Madhya Pradesh Power Management Company Limited (MPPMCL) Shakti Bhawan, Vidyut Nagar, Jabalpur (MP) Petitioner (2) Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPoKVVCL) Shakti Bhawan, Vidyut Nagar, Jabalpur (MP) Petitioner (3) Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited (MPPaKVVCL) GPH, Polo Ground, Indore (MP) Petitioner (4) Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (MPMKVVCL) Nishtha Parisar, Bijlee Nagar, Govindpura, Bhopal (MP) Petitioner IN THE MATTER OF: Filing of ARR application for the distribution and retail supply business for the MYT period FY to FY and tariff proposal petition for FY under tariff principles laid down in "The Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for supply and wheeling of Electricity and Methods and Principles of Fixation of Charges) Regulations, 2015 (RG -35 (II) of 2015)" No MPERC,2015 Dated communicated to MPPMCL vide Commission s letter no dated Dec. 18, 2015 by MPPMCL and MPPoKVVCL, MPPaKVVCL & MPMKVVCL as the Distribution Licensees. The Petitioners above respectfully submit as under:- 1. Madhya Pradesh Power Management Company Ltd., (hereinafter referred to as the 'Petitioner', MPPMCL, 'the Company' or 'the Licensee'), is a Company incorporated under the Companies Act, 1956 (now Companies Act 2013) and having its registered office at Block No.11, Shakti Bhawan, Vidyut Nagar, Jabalpur. 2. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Ltd., (hereinafter referred to as the 'Petitioner', MPPKVVCL, 'the Company' or 'the Licensee' or East Discom ), is a Company incorporated under the Companies Act, 1956 (now Companies Act 2013) and having its registered office at Block No.7, Shakti Bhawan, Vidyut Nagar, Jabalpur. The Petitioner is a deemed licensee under the Fifth Proviso to Section 14 of the Electricity Act, The area of

3 supply of the Petitioner comprises Jabalpur, Rewa, Sagar and Shahdol Commissionary within the State of Madhya Pradesh ('MP'). 3. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd., (hereinafter referred to as the 'Petitioner', MPPaKVVCL, 'the Company' or 'the Licensee' or West Discom ), is a Company incorporated under the Companies Act, 1956 (now Companies Act 2013) and having its registered office at GPH, Polo Ground, Indore. The Petitioner is a deemed licensee under the Fifth Proviso to Section 14 of the Electricity Act, The area of supply of the Petitioner comprises Indore and Ujjain Commissionary within the State of Madhya Pradesh ('MP'). 4. Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Ltd. (MPMKVVCL), (hereinafter referred to as the 'Petitioner', MPMKVVCL, 'the Company' or 'the Licensee' or Central Discom ), is a Company incorporated under the Companies Act, 1956 (now Companies Act 2013) and having its registered office at Nishtha Parisar, Bijlee Nagar Colony, Govindpura, Bhopal. The Petitioner is a deemed licensee under the Fifth Proviso to Section 14 of the Electricity Act, The area of supply of the Petitioner comprises Bhopal, Gwalior, Hoshangabad and Chambal Commissionary within the State of Madhya Pradesh ('MP'). 5. The Government of Madhya Pradesh ('GoMP' or 'State Government'), vide an Order No FRS dated 31st May, 2005, published in the gazette of Madhya Pradesh dated 31st May 2005, have restructured the functions and undertakings of Generation, Transmission, Distribution and Retail Supply of electricity earlier carried out by the Madhya Pradesh State Electricity Board ('MPSEB' or the 'Board') and transferred the same to five Companies to function independently. The five Companies are as under: - a) M.P. Power Generating Company Ltd., Jabalpur (MPPGCL) b) M.P. Power Transmission Company Ltd., Jabalpur (MPPTCL) c) M.P. Poorv Kshetra Vidyut Vitaran Company Ltd., Jabalpur (MPPoKVVCL) d) M.P. Paschim Kshetra Vidyut Vitaran Company Ltd., Indore (MPPaKVVCL) e) M.P. Madhya Kshetra Vidyut Vitaran Company Ltd. Bhopal (MPMKVVCL) 6. With effect from 1st June 2005, the Operation and Management Agreement that existed between Madhya Pradesh State Electricity Board and the Five Companies came to end with the issue of the said Order dated The three Discoms viz. MPPoKVVCL, Jabalpur, MPPaKVVCL, Indore and MPMKVVCL, Bhopal started functioning independently as Distribution Licensees in their respective area of license and from the said date, they are no longer operating as an agent of or on behalf of the Board, subject to Cash Flow Mechanism (CFM) provided in the said Order. 7. On June 3, 2006 GoMP, in exercise of its powers under Section 23 (Sub-section (1), (2) and (3)) and Section 56 (Sub-section (2)) of Madhya Pradesh Vidyut Sudhar Adhiniyam, 2000 read with Section 131 (Sub-sections (1), (2), (5), (6) and (7) of Electricity Act, 2003, effected the transfer of and vesting of the functions, properties, interests, rights and obligations of MPSEB relating to the Bulk Purchase and Bulk Supply of Electricity in the State and simultaneously re-transferred and revested the same to MP Power Trading Company Ltd. ('Tradeco' or 'MP Tradeco'). Since then, MP Tradeco discharged the responsibilities of procurement of power in bulk and supplying to the three Electricity Distribution Companies (DISCOMs), including the Petitioner herein. The transfer was 3

4 affected through "M.P. Electricity Reforms Transfer Scheme Rules 2006 (Transfer Scheme Rules) vide Notification No.3474 /FRS/17/XIII/2002 dtd 3rd June 2006 (Transfer Scheme Rules). 8. In accordance with GoMP decision, the name of MP Power Trading Company Ltd has been changed to MP Power Management Company Ltd. MPPMCL is the holding Company of the three electricity distribution companies (Discoms) of MP State, viz., M. P. Poorv Kshetra Vidyut Vitaran Company Ltd., M. P. Paschim Kshetra Vidyut Vitaran Company Ltd. and M. P. Madhya Kshetra Vidyut Vitaran Company Ltd. The Petitioner (MPPMCL) has been vested with several of functions and powers that were earlier vested with the erstwhile Madhya Pradesh State Electricity Board. The Registrar of Companies MP has issued the Certificate of Incorporation Consequent upon Change of Name on GoMP has entrusted the MPPMCL with the responsibility inter alia of representing the Discoms before the Commission with regard to filing the tariff petition and facilitating all proceedings thereon. The Management and Corporate functions agreement signed by the MPPMCL with the three Discoms of MP also provide for the same. 10. MPPMCL has signed Management and Corporate Functions Agreement on 5th June 2012, with the three Discoms of the State, wherein it has been agreed that the Petitioner shall perform inter alia the following functions of common nature for the Discoms: In consultation with Discoms, undertake long-term/ medium-term/short-term planning and assessment of the power purchase requirements for the three Discoms and explore opportunities for power procurement as per the regulations of MPERC; Allocation of power among the Discoms from the forthcoming projects as per retail tariff order and as per the GoMP notification and further instructions in this regard; Economic, reliable and cost effective power procurement of Short-term, Medium-term and Long-term and sale of surplus power, if any, for the purpose of Banking / maximization of revenue; Exploring opportunities for procurement of power on long-term and medium-term basis, procure power and finalizing Power Purchase Agreements (PPAs); The expenses of MPPMCL have been considered to be included as part of power purchase cost of the Discoms. 11. In the backdrop of the above facts and circumstances, the present application is being made by the MPPMCL along with the three Distribution Companies of MP State under Section 61 and Section 62 (1) (d) of the Electricity Act 2003 for determination of the tariff for distribution and Retail Supply Business for the period FY following the regulations laid down by the Hon ble Commission. 12. While filing the present ARR under the prevailing Regulation, MPPMCL along with the Discoms has endeavored to comply with the various legal and regulatory directions and stipulations 4

5 applicable, including the directions given by the Hon'ble Commission in the Business Rules of the Commission, the Guidelines, previous ARR and Tariff Orders and the Madhya Pradesh Electricity Regulatory Commission (Terms & Conditions for determination of Tariff) Regulation 2015 (hereinafter referred to as the Regulations ). 13. It is submitted that as soon as the retail tariff order becomes applicable, the voltage level and consumer category wise cross subsidy surcharge, additional surcharge, wheeling charges and transmission charges in respect of open access customers should also be notified and made effective from the tariff application date. It is therefore, prayed to kindly issue the approach paper for determination of the voltage level and consumer category wise cross subsidy surcharge, additional surcharge, wheeling charges and transmission charges also along with the retail tariff order for open access customers. 14. It is also submitted that the Petitioners have not separated the consumers, connected load, energy units sold and projected revenue in the Franchisee areas of Sagar, and Ujjain from their sales and revenue model as the consumers in the franchisee area remain to be the consumers of the Distribution Licensee and not the Franchisee. The franchisee is only a collection agent working on behalf of the Distribution Licensee and recovers charges from consumers at the tariff determined by the Hon ble MPERC. The revenue realized by the Distribution Licensee is completely in accordance with the tariff determined by the Hon ble MPERC. The projections of these parameters have been done on the basis of most feasible growth rate out of Compounded Annual Growth Rate (CAGR) for the last 3 and 2 years, YoY growth and corresponding period growth up to September This petition is filed on the basis of normative parameters as provided by Hon ble MPERC in Regulation no: 2256-MPERC.2015 dated 17/12/2015 regarding MPERC (Terms and Conditions for Determination of Tariff for Supply and Wheeling of Electricity and Methods and Principles for Fixation of Charges) Regulations The Regulation does not provide segregation of normative losses for the Distribution Licensees into voltage wise normative losses in respect of technical and commercial losses. Therefore, the Petitioners face difficulty in segregation of normative losses in voltage level wise technical and commercial losses. The Hon ble MPERC in the previous year s order has referred to an Appellate Tribunal for Electricity (APTEL) judgment to determine the voltage level wise Cost of Supply in the state of MP. However, this judgment is to determine the voltage level wise cross subsidy surcharge and not consumer tariff. In the present petition, the Petitioners have proposed consumer category wise tariff on the basis of Average Cost of Supply, which is in line with the National Tariff Policy The Hon ble Commission is requested to determine the voltage level and consumer category wise cross subsidy surcharge on the basis of the available data with the Distribution Licensees in accordance with the methodology suggested by the APTEL and also approved by Hon ble Commission in its Retail Supply Tariff Order for FY Based on the information available, the Petitioners have made sincere efforts to comply with the Regulations of the Hon'ble Commission and discharge its obligations to the best of its ability and resources at its command. However, should any further information of material significance 5

6 becomes available during the process of determination, the petitioners may be permitted to reserve the right to file such additional information and consequently amend/ revise the petition. 17. In consequences of the APTEL s judgement, the Hon ble Commission has approved the balance amount of true- up costs for all the three Discoms for FY The approved true up amount has also been considered while filing the total ARR for FY Further it is submitted that the balance amount of true-up cost for FY , , , , and has not been included as the Hon ble Commission has still not issued any order for balance true-up cost consequent to the judgement of Supreme Court/APTEL regarding true-up for aforementioned years. Further, the true-up cost for the year FY is still under consideration with the Hon ble Commission. Therefore, this cost also has not been included in this petition. It is prayed that after issuing the relevant orders, the Hon ble Commission may include these costs before issuing the final tariff order. 18. The salient features of the ARR for FY are as under:- S.No. ARR Items East Central West Total- State 1 Total ARR (excluding True Up) Rs Crs 9,551 9,656 10,537 29,744 2 Revenue at current tariffs Rs Crs 8,071 8,121 9,114 25,306 3 Gap (excluding true-up) Rs Crs 1,480 1,534 1,423 4,438 4 Average Cost of Supply (excluding true-up) Rs/kWh Impact of True-Up Amounts of Past Years A Impact of True Up for Discoms for FY Rs Crs B Impact of True Up for MPGenco for FY Rs Crs C Impact of True-Up for MPTransco for FY Rs Crs Total ARR (Including True Up) Rs Crs 9,713 9,835 10,740 30,288 6 Total Revenue Gap (including True-up) Rs Crs 1,642 1,714 1,626 4,982 7 Average Cost of Supply (including true-up) Rs/kWh However, despite the various measures taken to improve commercial and technical efficiencies, Discoms are unable to recover the costs incurred, which are compelling the Discoms to propose for an increase in the existing tariff. 20. The petitioners would like to reiterate their proposal to alter the mechanism for deriving Fuel Cost Adjustment (FCA) for recovery/adjustment of uncontrollable costs due to increase or decrease in the cost of fuel in case of coal, oil and gas based generating stations. The petitioners would like to resubmit that the existing mechanism to calculate FCA does not have any provision to recover the incremental power purchase. The petitioners also urge that the average power purchase cost should 6

7 be considered in the formula instead of only variable costs, thus passing on the complete fixed costs on to the consumers as a legitimate cost. 21. Shri F.K. Meshram, Chief General Manager (Revenue Management) of MPPMCL; Shri P.K. Singh, Executive Director (Commercial) of MPPoKVVCL; Shri Pavan Kumar Jain, ASE (Commercial) of MPPaKVVCL and Shri A.R. Verma, General Manager & Superintending Engineer (Commercial) of MPMKVVCL have been authorized to execute and file all the documents on behalf of the respective petitioners in this regard. Accordingly, the current filing is signed and verified by, and backed by the affidavit of respective authorized signatories. 7

8 PRAYER In view of the aforesaid facts and circumstances, the Applicants request that the Hon'ble Commission may be pleased to: (a) (b) (c) (d) (e) (f) (g) Take the accompanying ARR/Tariff petition of the above petitioners on record and treat it as complete; Consider and approve petitioners ARR (including true-up amounts of all companies previous years) amounting to Rs. 9,713 Cr for East Discom, Rs. 9,835 Cr for Central Discom and Rs. 10,740 Cr for West Discom for the year FY ; Considering the aforesaid facts and circumstances the Hon ble Commission may be pleased to allow expenses of MPPMCL as stated to be allowed and include them as a part of power purchase cost of three Discoms, to meet the ends of justice; Consider and approve Petitioners tariff proposal for FY to recover the costs for the ensuing year; Consider and determine the wheeling charges, voltage level and consumer category wise cross subsidy surcharge, additional surcharge and transmission charges for open access customers on the basis of ARR petition for FY and make applicable w.e.f the application date of the revised tariff; Condone any inadvertent omissions/ errors/ shortcomings and permit the petitioners to add/ change/ modify/ alter portion(s) of this filing and make further submissions as may be required at a later stage; and Pass such an order as the Hon'ble Commission deems fit and proper as per the facts and circumstances of the case. Date: - 21 st December 2015 Shri F.K. Meshram, Chief General Manager (Revenue Management) MPPMCL, Jabalpur Shri P.K. Singh, Executive Director (Commercial) MP Poorv Kshetra Vidyut Vitaran Co. Ltd., Jabalpur Shri Pavan Kumar Jain, ASE (Commercial) MP Paschim Kshetra Vidyut Vitaran Co. Ltd., Indore. Shri A.R. Verma, GM & SE (Commercial) MP Madhya Kshetra Vidyut Vitaran Co. Ltd., Bhopal. 8

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10 Table of Contents PRAYER 8 1. Estimation of sales Method adopted for Estimation of Sales Category-wise sales projection LV -1: Domestic LV -2: Non-Domestic LV -3.1: Public Water Works LV -3.2: Street Light LV -4.1: Non- Seasonal Industrial LV -4.2: Seasonal Industrial LV -5.1: Agricultural LV -5.2: Other allied agricultural Use HV -1: Railway Traction HV -2: Coal Mines HV-3: Industrial and Non-Industrial HV -4: Seasonal HV -5 Water Works, Lift Irrigation & Other allied Agricultural use HV -6: Bulk Residential users Energy Requirement at Discom Boundary and Ex-Bus Energy Requirement Conversion of annual sales to monthly sales MPPTCL Losses Distribution Losses Conversion of annual Distribution loss levels to monthly losses Assessment of Availability Details of Generation Capacities allocated to Discoms Availability from MP Discoms allocated stations Details of Generation Capacities allocated to MPPMCL Existing and Capacity Addition for the MYT period FY 17-FY Availability from MPPMCL allocated stations Overall availability Backdown of Power Inter-State Transmission Losses Management of Surplus Energy 75 10

11 3.7. Energy Balance Energy Requirement vis-à-vis Availability and Management of Shortfall Power Purchase Cost Details of Costs for Stations allocated to MP Discoms Merit Order Dispatch (MoD) RPO Cost Estimation of Other Power Purchase Costs Inter-State Transmission Charges Intra-State Transmission Charges MPPTCL fixed costs excluding Terminal Benefits (Cash Outflow) Intra-State Transmission Charges Terminal Benefits (Cash Outflow) to be included in MPPTCL costs MPPMCL Costs Total Power Purchase Costs O&M Expenses - Discoms Employee Costs Administrative & General Expenses Repair and Maintenance Expenses Gist of O&M Expenses Investment Plan Discoms Capital Investment Plan Scheme Wise Capitalization CWIP Fixed Assets Addition Other Costs/ Income Discoms Depreciation Interest and Finance Charges Interest on Project Loans Interest on Working Capital Interest on Consumer Security Deposit Other Income Return on Equity Bad and Doubtful Debts Income/Expenses of MPPMCL

12 8.1 Income Expenses Annual Revenue Requirement Annual Revenue Requirement of MPPMCL Annual Revenue Requirement of Discoms Terminal Benefits (Pension, Gratuity and Leave Encashment) Provision Power Purchase Cost Adjustment (PPCA) Tariff Proposal for FY Salient Features of the Tariff Proposal Merging of tariff slabs of 0 to 50 units and 51 to 100 units as 0 to 100 units in LV 1.2 Domestic Category Removal of optional demand based tariff (only for contract demand above 10 kw and upto 20 kw) in LV 2.1 and LV 2.2 Non Domestic category Merging of LV 3.1 Public Water Works and LV 3.2 Street Light categories Rebate to all LT consumers for online payment of bills Permission to use 10% of connected load/ contracted demand for temporary usage by LT consumers Limiting the sanctioned load/ connected load under LT connection to 75 kw/ 100 HP Merging of HV 3.2 Non Industrial use and HV 3.3 Shopping Mall Merging of HV 5.1 Public Water Works and HV 5.2 Other Allied Agricultural use Addition of apartments/ colonies/ townships in HV 6.2 Bulk Residential Use Rebate on energy charges for incremental load factor for HT consumers Rebate for online bill payment by HT consumers ToD surcharge reduced to 0% for HT consumers Additional Charges for energy for Excess Demand by HT consumers Rebate of 5 paise per unit for all domestic and non-domestic consumers having prepaid meters Voltage-Wise Cost of Supply Commission Directives Voltage-wise Losses Methodology Calculation Determination of Cross-Subsidy Surcharge Compliance on Tariff Order FY

13 Distribution losses Meterization of unmetered connections Capex plan for reduction in technical losses Segregation of rural feeders into agricultural and others Issue of tariff card with first bill based on new tariff Filing of ARR and tariff proposals in Hindi language Accounting of rebates/incentives/surcharge Maintaining uniform accounts Compliance of Regulations Mandatory demand based tariff for all Non-domestic LV consumers having load in excess of 25 HP Assessment of consumption for billing to consumers Technical studies of the Distribution network to ascertain voltage-wise cost of supply TARIFF SCHEDULES 153 Incentive/ Rebate / penalties 192 Other Terms and Conditions for permanent connections:

14 List of tables Table 1: Sales for FY (Revised Estimates) and the MYT Period FY 2017 to FY Table 2: LV-1 Domestic Unit Projection Table 3: LV-2 Non-Domestic Unit Projection Table 4: LV-3.1 PWW Unit Projection Table 5: LV-3.2 Street Light Unit Projection Table 6: LV-4.1 Non-Seasonal Industrial Unit Projection Table 7: LV-4.2 Seasonal Industrial Unit Projection Table 8: LV-5.1 Agriculture Unit Projection Table 9: LV-5.2 Other allied Agriculture Unit Projection Table 10: HV-1 Railway Traction Projection Table 11: HV-2 Coal Mines Projection Table 12: HV-3 Industrial and Non-Industrial Projection Table 13: HV-4 Seasonal Projections Table 14: HV-5 Water Works, Lift Irrigation & Other allied Agricultural use Projections Table 15: HV-6 Bulk Residential user Projections Table 16: Month-Wise Sales Profiles of Discoms Table 17: MPPTCL Losses: Past Data from MP-SLDC Table 18: Loss level targets (%) for Discoms (as per MPERC regulations) Table 19: Monthly energy requirement at State Boundary (MU) for FY 17- FY Table 20: Ex-bus energy purchases to be done during MYT FY Table 21: Stations with MP Share which are allocated to MP Discoms Table 22: Allocation percentage for FY Table 23: Allocation percentage for FY Table 24: Allocation percentage for FY Table 25: Past and Projected ex-bus availability of Stations with MP Share which are allocated to MP Discoms (MU) Table 26: Stations allocated to MPPMCL Existing and Capacity Addition till FY Table 27: Stations allocated to MPPMCL Projected-Ex Bus Availability till FY 19 (MU) Table 28: Overall availability till FY 19 (MU) Table 29: Management of Surplus Energy with Discoms for the MYT period FY 17-FY Table 30: Ex-Bus Purchases by Discoms from Various Sources Table 31: Fixed and Variable Costs of Discom Allocated Stations for MYT FY to FY Table 32: Fixed and Variable Costs of MPPMCL allocated stations Table 33: MoD of station for FY Table 34: Total Fixed Costs and Variable Costs of Discom Allocated Stations Table 35: Total Fixed and Variable Costs of fixed and variable costs of MPPMCL allocated stations 85 Table 36: RPO Obligation for MYT FY 17-FY Table 37: Inter-State Transmission Charges Table 38: Intra-state Costs excluding Terminal Benefits Table 39: Total Intra-State Transmission Costs and Allocation to Discoms (Rs Cr) Table 40: MPPMCL Costs: Details and Discoms Allocation (Rs Cr) Table 41: Total Power Purchase Costs - FY'17 to FY'

15 Table 42: Employee Cost Table 43: Administrative and General Expenses-As per Regulation (Rs. Cr.) Table 44: Repair and Maintenance Expenses-As per Regulation (Rs. Cr.) Table 45: Gist of O&M expenses-as per Regulation (Rs. Crores) Table 46: Capital expenditure Plan (Rs. Crores) Table 47: Scheme Wise Capitalization (Rs. Crores) Table 48: CWIP (Rs. Cr.) Table 49: Fixed Assets Addition (Rs. Cr.) Table 50: Depreciation as per regulation (Rs. Cr.) Table 51: Interest on Project Loans (Rs. Cr.) Table 52: Interest on Working Capital (Rs. Cr.) Table 53: Interest on consumer security deposit as per regulation (Rs. Crores) Table 54: Other Income (Rs. Cr.) Table 55: Return on equity as per regulation (Rs. Crores) Table 56: Bad and Doubtful Debts As per regulation (Rs. Crores) Table 57: Other Income (Rs. Cr.) Table 58: Other Income (Rs. Cr.) Table 59: Other Income (Rs. Cr.) Table 60: Employee particulars Table 61: Employee expenses (Rs. Cr.) Table 62: Summary of ARR for MPPMCL (Rs. Cr.) Table 63: Summary of ARR of Discoms as per the Regulation (Rs. Crores) Table 64: Future Contribution rate of liability on account of Actuary Table 65: Calculation of Terminal Benefits Provisions (Rs. Crores) Table 66: Terminal Benefits Provisions Liability for Discoms (Rs. Cr.) Table 67: Summary of proposed tariff for FY Table 68: Category-wise proposed revenue for FY Table 69: Cost of Supply Calculation for East Discom for FY Table 70: Cost of Supply Calculation for Central Discom for FY Table 71: Cost of Supply Calculation for West Discom for FY Table 72: Cost of Supply Calculation for MP State for FY

16 1. Estimation of sales 1.1 Method adopted for Estimation of Sales For the purpose of projection of sales, the distribution licensees have considered category wise and slab wise actual data of the sale of electricity, number of consumers, connected / contracted load, etc. of the preceding four years i.e. FY , FY , FY and FY and available data of the FY i.e. up to the month of September The licensees, in the previous year s filing for FY , had projected the Sales based on the actual data of FY Since the actual data of FY is now available and it has been observed that the actual sales during FY have deviated significantly from the sales forecasted by the Licensee and those allowed by the Hon ble Commission during the previous filings, the licensees feel that it will be appropriate to revise the sales forecast for FY and thereafter project the sales for FY The sales for FY have been projected on the basis of the actual data of Number of Consumers, Connected Load and Consumption during the last 4 years and on the basis of revised estimate for FY The approach being followed is to analyze 3 year and 2 year Compound Annual Growth Rates (CAGRs) and year on year growth rate of each category and its sub-categories in respect of urban & rural consumers separately. After analysis of the data, appropriate / reasonable growth rates have been assumed for future consumer forecasts from the past CAGRs of the Category/Sub-category by the three Discoms. The past CAGR on sales per consumer / sales per kw and connected load has been applied while forecasting the connected load and sales in each category/sub-category. The use of specific consumption i.e. consumption per consumer and / or consumption per unit load is the basic forecasting variable and is widely used in load and energy sales forecasting. The basic intent in using this model is that, the specific consumption per consumer and / or consumption per unit load captures the trends and variations in the usage of electricity over a growth cycle more precisely. This method has been recommended by the C.E.A. also. The forecast also considers the impact of schemes / plans of licensee such as the RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana and separation of feeders of Agricultural and other categories of consumers and increase in supply hours in rural areas. The projections for each tariff category and the relevant assumptions of the three Discoms have been discussed in the following sections. The overall sales forecast is as follows: 16

17 Table 1: Sales for FY (Revised Estimates) and the MYT Period FY 2017 to FY 2019 East Discom Central Discom West Discom MP State TC Category FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 LV 1 Domestic 3,695 4,294 5,106 6,157 3,512 4,039 4,557 5,275 3,559 3,858 4,241 4,634 10,767 12,192 13,904 16,067 LV 2 Non-Domestic , ,040 1, ,060 2,386 2,660 2,975 3,332 LV 3.1 WW & Street Light ,238 1,404 1,604 1,847 LV 4 LT Industrial ,147 1,247 1,360 1,490 LV 5.1 Agriculture Irrigation Pumps 4,665 4,877 5,106 5,347 4,377 4,940 5,632 6,499 7,119 8,079 8,858 9,727 16,161 17,896 19,597 21,572 LV 5.3 Agriculture related Use Total (LT) 9,985 10,993 12,262 13,816 9,317 10,623 12,096 13,999 12,439 13,835 15,146 16,570 31,741 35,451 39,503 44,385 HV 1 Railway Traction ,039 1,195 1,375 1, ,087 2,301 2,545 2,821 HV 2 Coal Mines HV 3.1 Industrial 2,529 2,826 3,163 3,543 2,140 2,387 2,675 3,010 2,474 2,474 2,474 2,474 6,961 7,494 8,107 8,810 HV 3.2 Non-Industrial ,036 1,089 1,147 HV 3.3 Shopping Mall HV 3.4 Power Intensive industries HV 4 Seasonal HV 5.1 Public Water Works and Irrigation HV 5.2 Other Agricultural HV 6 Bulk Residential Users HV 7 RECS/Start-up Power Total (HT) 4,326 4,736 5,196 5,713 3,947 4,406 4,935 5,543 3,959 3,959 3,959 3,959 12,231 13,101 14,090 15,215 TOTAL LT+HT 14,311 15,730 17,458 19,529 13,264 15,029 17,030 19,542 16,397 17,793 19,105 20,529 43,972 48,552 53,593 59,600 * Digits rounded off to the nearest integer 17

18 1.2 Category-wise sales projection LV -1: Domestic Assumptions for Projecting Unmetered Domestic Sales In the tariff order for FY , Hon ble Commission had revised the benchmark of billing to unmetered domestic connections in rural areas to 75 units per month per connection and had continued the same for FY and ensuing years also. Therefore, the petitioners have considered the same for projecting consumption of unmetered domestic connections. The projections of consumption of un-metered domestic connections in this petition have been considered as NIL for urban areas (since all domestic consumers in urban areas have been metered) RGGVY In addition to the growth rate assumed for domestic category, the impact of implementation of RGGVY has also been taken into account for future consumer/load/consumption projections for Central Discom. The implementation roadmap of RGGVY forms the basis of future projections by the Central Discom. While no consumers and consumption has been estimated for East and West Discoms separately for RGGVY. However, the same has not been projected separately, but has been included in the overall projection for Domestic category. For Central Discom 1.2 lakh consumers and corresponding sales of MUs for FY have been projected. After factoring the growth in consumers the following projections has been arrived at for LV-1 category: 18

19 Table 2: LV-1 Domestic Unit Projection Area Sub Category East Discom Central Discom West Discom MP State FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Urban Metered 1,900 2,057 2,225 2,407 2,508 2,522 2,729 2,953 2,086 2,175 2,268 2,364 6,317 6,754 7,222 7,724 Urban Un-metered Urban Temporary Urban Total 1,919 2,074 2,243 2,425 2,525 2,539 2,746 2,970 2,106 2,196 2,290 2,388 6,373 6,809 7,279 7,783 Rural Metered 1,455 2,058 2,781 3,691 1,029 1,432 1,742 2,302 1,372 1,621 1,910 2,245 3,856 5,110 6,433 8,237 Rural Un-metered Rural Temporary Rural Total 1,777 2,220 2,864 3,733 1,164 1,500 1,811 2,305 1,453 1,662 1,951 2,246 4,394 5,382 6,626 8,284 Total Metered 3,354 4,115 5,006 6,097 3,360 3,954 4,471 5,254 3,458 3,796 4,177 4,609 10,172 11,865 13,655 15,961 Total Un-metered Total Temporary Total Total 3,695 4,294 5,106 6,157 3,512 4,039 4,557 5,275 3,559 3,858 4,241 4,634 10,767 12,192 13,904 16, East Discom The growth percentages assumed for the category for the MYT period are as shown below: Area Category Urban Rural Metered Un-metered Temporary Growth rate Description Growth rate Description Consumer 5.42% 2 year CAGR has been considered 15.00% Nominal growth rate has been considered Average Load (kw) per Consumer 0.00% Current year load from Apr'15 to Sep'15 has been considered 0.00% Current year load from Apr'15 to Sep'15 has been considered Average consumption per consumer per month 2.61% YoY growth rate has been considered 13.83% YoY growth rate has been considered Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered Average Load per Consumer (in kw) 0.00% Current year load from Apr'15 to Sep'15 Current year load from Apr'15 to Sep' % has been considered has been considered Average consumption per consumer per month 0.00% No growth rate has been considered 0.00% No growth rate has been considered Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered Average Load per Consumer (in kw) 0.00% Current year load from Apr'15 to Sep' % Current year load from Apr'15 to Sep'15 19

20 Area Category Urban Rural Average consumption per consumer per month Growth rate Description Growth rate Description has been considered has been considered 0.00% No growth rate has been considered 0.00% No growth rate has been considered Central Discom The growth percentages assumed for the category are as shown below Area Category Urban Rural Growth rate Description Growth rate Description Current year growth rate has been 3 year CAGR has been Consumer 5.96% 9.86% considered considered Average Load (kw) per No growth rate has been No growth rate has been Metered 0.00% 0.00% Consumer considered considered Un-metered Temporary Average consumption per consumer per month 2.11% Current year growth rate has been considered 15.01% Consumer 0.00% 0.00% Average Load per 0.00% All unmetered consumers are Consumer (in kw) expected to be metered by the Average consumption per FY % consumer per month 0.00% 0.00% Consumer 3.43% Average Load per Consumer (in kw) Average consumption per consumer per month YoY growth rate has been considered 41.95% 0.00% No growth rate has been 0.00% 0.00% considered 0.00% 3 year CAGR has been considered All unmetered consumers are expected to be metered by the FY16 3 year CAGR has been considered No growth rate has been considered 20

21 West Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Metered Consumer 4.25% Average Load (kw) per Consumer Average consumption per consumer per month Growth rate Description Growth rate Description 0.00% 2 year CAGR has been considered has been considered Current year load from Apr'15 to Aug'15 has been considered 10.76% 0.00% 0.00% No growth rate has been considered 0.00% YoY growth has been considered has been considered Current year load from Apr'15 to Aug'15 has been considered No growth rate has been considered has been considered Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered Un-metered Temporary Average Load per Consumer (in kw) Average consumption per consumer per month 0.00% Consumer 6.59% Average Load per Consumer (in kw) Average consumption per consumer per month Current year load from Apr'15 to Aug'15 has been considered 0.00% Current year load from Apr'15 to Aug'15 has been considered 0.00% No growth rate has been considered 0.00% No growth rate has been considered 0.00% 2 year CAGR has been considered has been considered Current year load from Apr'15 to Aug'15 has been considered 0.00% No growth rate has been considered 0.00% Current year load from Apr'15 to Aug'15 has been considered 0.00 No growth rate has been considered 0.00 No growth rate has been considered 21

22 LV -2: Non-Domestic The future projections are as below Table 3: LV-2 Non-Domestic Unit Projection Sub Category East Discom Central Discom West Discom MP State FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Metered , , ,021 2,276 2,550 2,863 3,220 Temporary Total , ,040 1, ,060 2,386 2,660 2,975 3, East Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Metered Temporary Consumer 4.07% 2 year CAGR has been considered 8.24% 3 year CAGR has been considered Average Load (kw) per Consumer 3.43% YoY growth rate has been considered 2.72% 3 year CAGR has been considered Average consumption per kw per month 2.52% YoY growth rate has been considered 6.87% YoY growth rate has been considered Consumer 0.00% 0.00% Average Load (kw) per Consumer 0.00% No growth rate has been considered 0.00% Average consumption per consumer per month 0.00% 0.00% No growth rate has been considered 22

23 Central Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Consumer 3.78% Current year growth rate has been considered 3.93% YoY growth has been considered Metered Temporary Average Load (kw) per Consumer 6.91% YoY growth has been considered 4.66% 2 year CAGR has been considered Average consumption per kw per month 5.00% Nominal growth rate has been considered 5.00% Nominal growth rate has been considered Consumer 0.00% No growth rate has been considered 5.00% Nominal growth has been considered Average Load (kw) per Consumer 0.00% 0.00% Average consumption per consumer per No growth rate has been considered 1.48% 3 year CAGR has been considered 0.00% month West Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Metered Temporary Growth rate Description Growth rate Description 2 year CAGR has been considered has been 3 year CAGR has been considered has been Consumer 3.39% 4.00% considered considered Average Load (kw) per Consumer 5.16% Current year growth has been considered 0.00% No growth rate has been considered Average consumption per kw per 2 year CAGR has been considered has been 0.00% No growth rate has been considered 1.46% month considered Consumer 0.00% 0.00% Average Load (kw) per Consumer 0.00% 0.00% No growth rate has been considered Average consumption per consumer per 0.00% 0.00% month No growth rate has been considered 23

24 LV -3.1: Public Water Works Considering the anticipated increase in supply hours, the future projections are as follows: Table 4: LV-3.1 PWW Unit Projection Sub Category East Discom Central Discom West Discom MP State FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Municipal Corp Nagar Panchayat Gram Panchayat Temporary Total ,033 1, East Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Consumer 1.33% YoY growth rate has been considered 0.00% No growth rate has been considered Municipal Corporation Nagar Panchayat Gram Panchayat Average Load (kw) per Consumer 2.77% 3 year CAGR has been considered 9.50% 2 year CAGR has been considered Average consumption per kw per month 0.00% No growth rate has been considered 0.00% No growth rate has been considered Consumer 5.55% Current year growth rate has been considered Average Load (kw) per Consumer 4.33% 2 year CAGR has been considered 3.82% Average consumption per consumer per month 15.53% 3 year CAGR has been considered Current year growth rate has been considered 0.00% No growth rate has been considered 0.00% No growth rate has been considered Consumer 0.00% No growth rate has been considered 6.22% Current year growth rate has been considered Average Load (kw) per Consumer 4.44% 2 year CAGR has been considered 5.31% 2 year CAGR has been considered 24

25 Area Category Urban Rural Temporary Growth rate Description Growth rate Description Average consumption per consumer per month 0.00% No growth rate has been considered 0.00% No growth rate has been considered Consumer 0.00% 0.00% No growth rate has been considered Average Load (kw) per Consumer 0.00% 0.00% No growth rate has been considered Central Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Consumer 0.00% No growth rate has been considered 0.00% Current year growth rate has been Average Load (kw) per Consumer 1.00% 0.00% No growth rate has been Municipal Corporation considered considered Average consumption per kw per month 3.37% 3 year CAGR has been considered 0.00% Nagar Panchayat Consumer 6.80% YoY growth has been considered 0.00% Average Load (kw) per Consumer 0.38% 2 year CAGR has been considered 0.00% Average consumption per consumer per month 4.95% YoY growth has been considered 18.99% Consumer 19.98% 3 year CAGR has been considered 12.62% No growth rate has been considered 3 year CAGR has been considered Gram Panchayat Average Load (kw) per Consumer 3.07% YoY growth has been considered 0.00% Average consumption per consumer per month No growth rate has been considered 8.18% 3 year CAGR has been considered 32.04% YoY growth has been considered Temporary Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered 25

26 Area Category Urban Rural Growth rate Description Growth rate Description Average Load (kw) per Consumer 8.45% 0.00% 3 year CAGR has been considered Average consumption per consumer per 13.88% 0.00% month West Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Consumer 4.60% 2 year CAGR has been considered has been considered 0.00% No growth rate has been considered Municipal Corporation Average Load (kw) per Consumer 5.71% Current year growth has been 2 year CAGR has been considered has 0.05% considered been considered Average consumption per kw per Nominal growth rate has been considered 0.00% No growth rate has been considered 10.00% month has been considered Consumer 6.91% 2 year CAGR has been considered has 0.00% Nagar Panchayat Gram Panchayat Temporary Average Load (kw) per Consumer 1.62% Average consumption per consumer per month been considered Current year growth has been considered 0.00% 0.00% No growth rate has been considered 0.00% No growth rate has been considered 2 year CAGR has been considered has Consumer 2.40% 9.29% Current year growth has been considered been considered Current year growth has been 2 year CAGR has been considered has Average Load (kw) per Consumer 10.12% 0.52% considered been considered Average consumption per consumer 3 year CAGR has been considered has 8.93% 0.00% No growth rate has been considered per month been considered Consumer 0.00% 0.00% Average Load (kw) per Consumer 0.00% 0.00% No growth rate has been considered No growth rate has been considered Average consumption per consumer 0.00% 0.00% per month 26

27 LV -3.2: Street Light Considering the anticipated increase in supply hours, the future projections are as below: Table 5: LV-3.2 Street Light Unit Projection Sub Category East Discom Central Discom West Discom MP State FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19 Municipal Corp Nagar Panchayat Gram Panchayat Total East Discom The growth percentages assumed for the category are as shown below. Area Category Urban Rural Municipal Corporation Nagar Panchayat Gram Panchayat Consumer 8.87% Growth rate Description Growth rate Description Current year growth rate has been considered Average Load (kw) per Consumer 2.36% YoY growth rate has been considered 20.00% 0.00% No growth rate has been considered Nominal growth rate has been considered Average consumption per kw per month 7.93% 3 year CAGR has been considered 0.00% No growth rate has been considered Consumer 4.21% YoY growth rate has been considered 15.07% 3 year CAGR has been considered Average Load (kw) per Consumer 7.83% Average consumption per consumer per month Current year growth rate has been considered 10.92% 2 year CAGR has been considered 0.00% No growth rate has been considered 0.00% No growth rate has been considered Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered Average Load (kw) per Consumer 19.46% 3 year CAGR has been considered 13.49% 3 year CAGR has been considered Average consumption per consumer per month 0.00% No growth rate has been considered 4.14% 2 year CAGR has been considered 27

28 Central Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Growth rate Description Growth rate Description Municipal Corporation Consumer 4.25% Current year growth has been considered 0.00% Average Load (kw) per Consumer 0.02% 2 year CAGR has been considered 0.00% Average consumption per kw per month 4.69% Current year growth has been considered No growth rate has been considered 10.00% Nominal growth has been considered Consumer 6.61% YoY growth has been considered 0.00% No growth rate has been considered Nagar Panchayat Gram Panchayat Average Load (kw) per Consumer 1.10% 2 year CAGR has been considered 6.06% YoY growth has been considered Average consumption per consumer per month 10.10% YoY growth has been considered 4.86% 2 year CAGR has been considered Consumer 32.00% 3 year CAGR has been considered 2.54% Average Load (kw) per Consumer 16.29% Average consumption per consumer per month Current year growth has been considered 4.61% Current year growth has been considered 0.00% No growth has been considered 10.00% Nominal growth has been considered 28

29 West Discom The growth percentages assumed for the category are as shown below: Area Category Urban Rural Municipal Corporation Nagar Panchayat Gram Panchayat Growth rate Description Growth rate Description Consumer 10.96% Current year growth has been considered 0.00% Average Load (kw) per Consumer 0.00% No growth rate has been considered 0.00% No growth rate has been considered Average consumption per kw per month 0.00% No growth rate has been considered 0.00% Consumer 9.85% 3 year CAGR has been considered has been considered 0.00% No growth rate has been considered Average Load (kw) per Consumer 0.64% 2 year CAGR has been considered has 2 year CAGR has been considered has been 5.87% been considered considered Average consumption per consumer Nominal growth rate has been considered 0.00% No growth rate has been considered 2.00% per month has been considered Consumer 0.00% 0.00% Average Load (kw) per Consumer 0.00% 0.00% No growth rate has been considered Average consumption per consumer per month No growth rate has been considered 0.00% 10.00% Nominal growth rate has been considered has been considered 29