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8 Uttarakhand Power Corporation Limited Annual Revenue Requirement & Tariff Petition For FINANCIAL YEAR (VOLUME I)

9 TABLE OF CONTENTS A1: Summary... 1 A2: Action plan for FY Efficiency Improvement... 4 Distribution System Improvement... 4 Loss Reduction Initiatives... 4 Rural Electrification (RGGVY)... 5 R-APDRP... 8 Progress of Works under R-APDRP (Part-A) LT System Strengthening Segregation of PTW Feeders District Plan Earthing of Transformers CDM Project Commercial Process Improvement Energy Audit & Non-Technical Loss Reduction Metering Strengthening of Distribution System Non-Funded Distribution Investment New Initiatives A3: Truing-up for FY Power Purchase Expenses Operation and Maintenance (O&M) Expenses Interest and Finance Charges Depreciation Provision for Bad & Doubtful Debts Interest on Working Capital Return on Equity Tariff Revenue ARR & Tariff Petition for FY II

10 Non-Tariff Revenue ARR & Revenue for the year A4: Truing-up for FY Power Purchase Expenses Operation and Maintenance (O&M) Expenses Interest and Finance Charges Depreciation Provision for Bad & Doubtful Debts Interest on Working Capital Return on Equity Carrying Cost of Deficit Tariff Revenue Non-Tariff Revenue ARR & Revenue for the year A5: Energy sales estimation for Financial Year RTS-1: Domestic, including Snowbound Areas RTS-2: Non-Domestic RTS-3: Public Lamps RTS-4: Private Tube-Wells RTS-5: Government Irrigation System RTS-6: Public Water Works RTS-7: Industrial Consumers RTS-8: Mixed Load RTS-9: Railway Traction RTS-10: Temporary Supply A6: Energy Sales Forecast for Financial Year A7: Efficiency parameters Distribution Loss ARR & Tariff Petition for FY III

11 Study on reduction of Distribution Losses A8: Availability of Power and Cost for FY Broad Approach Uttarakhand Jal Vidyut Nigam Limited Availability of power from UJVNL Cost of Power from UJVNL NTPC Availability of Power from NTPC Cost of Power from NTPC NHPC Availability of Power from NHPC Cost of Power from NHPC Tehri Hydro Development Corporation Availability of Power from Other THDC Cost of Power from THDC Nuclear Power Corporation Availability of Power from NPC Cost of Power from NPC Satluj Jal Vidyut Nigam Limited Availability of Power from SJVNL Cost of Power from SJVNL % Free Power of Government of Uttarakhand Availability of Power from GoU Cost of Power from GoU IPPs and UREDA PROJECTS Availability of Power from IPPs and UREDA Projects Cost of Power from IPPs and UREDA Projects Banking Losses external to UPCL system Procurement of Deficit Energy Trading / UI Underdrawl ARR & Tariff Petition for FY IV

12 A9: Other Cost Elements Transmission Charges Operations and Maintenance Expenses Investment Plan Fixed Assets and Depreciation Interest and Finance Charges Interest on Working Capital Provision for Bad & Doubtful Debts Return on Equity Non-Tariff Income Annual Revenue Requirement for Financial Year A10: VARIANCE ANALYSIS OF POWER PURCHASE COST A11: POLICY DIRECTIONS ISSUED BY GoU A12: TARIFF PROPOSAL FOR FY Revenue Gap in FY Recovery of past losses & proposed Tariff in FY Category-wise Tariff Design RTS-1: Domestic Category RTS-1A: Snow-bound Category RTS-2: Non-domestic Category RTS-3: Public Lamps Category RTS-4: Private Tube Wells / Pump sets Category RTS-5: Government Irrigation System Category RTS-6: Public Water Works Category RTS-7: LT & HT Industry Category RTS-8: Mixed Load Category RTS-9: Railway Traction Category Revenue at proposed Tariff in FY Cross Subsidy A13: PRAYER A14: Detailed Formats ARR & Tariff Petition for FY V

13 Abbreviations Abbreviation A&G ABC ABT AMR APDRP AREP ARR AT&C ATE ATP BPL BPP BHP CAGR CDM CERC CGS CPSU Commission CRM Crs CSS CTU CWIP DA DDG DT ECS EPF ERP Complete Phrase Administrative & General Expenses Aerial Bunch Conductor Availability Based Tariff Automatic Meter Reading Accelerated Power Development Reform Program Accelerated Rural Electrification Program Annual Revenue Requirement Aggregate Technical & Commercial Appellate Tribunal for Electricity Any Time Payment Below Poverty Line Bulk Purchase Price Brake Horse Power Compounded Annual Growth Rate Clean Development Mechanism Central Electricity Regulatory Commission Central Generating Station Central Public Sector Undertaking Uttarakhand Electricity Regulatory Commission Consumer Relating Management Crore Compact Sub Stations Central Transmission Utility Capital Works in Progress Dearness Allowance Decentralized Distribution Generation Distribution Transformer Electronic Clearing System Employees Provident Fund Enterprises Resource Planning ARR & Tariff Petition for FY VI

14 Abbreviation Complete Phrase FD Fixed Deposit FI Financial Institutions FPA Fuel Price Adjustment FRP Financial Restructuring Plan FY Financial Year FY06 Financial Year FY07 Financial Year FY08 Financial Year FY09 Financial Year FY10 Financial Year Previous Year FY11 Financial Year Current Year FY12 Financial Year or the Ensuring Year GFA Gross Fixed Assets GoI Government of India GoU Government of Uttarakhand GPF General Provident Fund HEP Hydro Electric Plant HT High Tension HVDS High Voltage Distribution System IPP Independent Power Producer IT Information Technology KCC Key Consumer Cell kv Kilo Volt KVAh Kilo Volt Ampere Hour KW Kilo Watt KWh Kilo Watt Hour LC Letter of Credit LDC Load Dispatch Centre LT Low Tension MIS Management Information Systems MNP Minimum Needs Program MOD Merit Order Dispatch ARR & Tariff Petition for FY VII

15 Abbreviation MoP MRI MU MVA MW NEP NFA NGO NHPC NPC NRLDC NTPC PGCIL PLF PMGY PTCUL PTW Complete Phrase Ministry of Power, Government of India Meter Reading Instrument Million Units Mega Volt Ampere Mega Watt National Electricity Policy Net Fixed Assets Non Government Organisation National Hydro Power Corporation Nuclear Power Corporation Northern Regional Load Dispatch Centre National Thermal Power Corporation Power Grid Corporation of India Ltd Plant Load Factor Pradhan Mantri Gramodaya Yojna Power Transmission Corporation of Uttarakhand Limited Private Tube-Wells R-APDRP Restructured Accelerated Power Development Reform Program R&M RE REDB RGGVY RLDC RMU RoE ` SBA SCADA SEB SERC SHEP Repair & Maintenance Rural Electrification Rural Electricity Distribution Backbone Rajiv Gandhi Gramin Vidyutikaran Yojana Regional Load Despatch Centre Ring Main Units Return on Equity Indian Rupees Snow Bound Area Supervisory Control and Data Analysis State Electricity Board State Electricity Regulatory Commission Small Hydro Electric Plant ARR & Tariff Petition for FY VIII

16 Abbreviation SIDCUL STU ToD T&D UERC UJVNL UPCL UPPCL UREDA VC VCB VEI Complete Phrase State Industrial Development Corporation Uttarakhand Limited State Transmission Utility Time of Day Transmission & Distribution Uttarakhand Electricity Regulatory Commission Uttarakhand Jal Vidyut Nigam Limited Uttarakhand Power Corporation Limited Uttar Pradesh Power Corporation Limited Uttarakhand Renewable Energy Development Agency Variable Cost Vacuum Circuit Breakers Village Electrification Infrastructure ARR & Tariff Petition for FY IX

17 A1: SUMMARY BEFORE THE UTTARAKHAND ELECTRICITY REGULATORY COMMISSION, DEHRADUN Filing No. Case No. IN THE MATTER OF Annual Revenue Requirement and Tariff Petition of Uttarakhand Power Corporation Limited for Financial Year And IN THE MATTER OF Uttarakhand Power Corporation Limited, Dehradun...Petitioner 1.1 The Petitioner Uttarakhand Power Corporation Limited (UPCL) respectfully submits to the Hon ble Commission as under: 1.2 Uttarakhand Power Corporation Limited was established under the Companies Act, 1956, on February 12 th, UPCL was entrusted with the business of transmission and distribution in the State of Uttarakhand, and all activities pertaining to transmission, distribution and supply of electricity in the State were transferred to UPCL from November 9, The State Government subsequently created a new company - Power Transmission Corporation of Uttarakhand Limited (PTCUL) to undertake the business of transmission within the State, with effect from June 1, The provisions of Section 64 of the Electricity Act, 2003 require the distribution licensee to file with the appropriate Commission, an application for determination of tariff. In accordance with the above, the Petitioner respectfully submits this application for Annual Revenue Requirement and Retail Tariff for the ensuing year The application has also been made in accordance with Regulation 56 of the Uttarakhand Electricity Regulatory Commission (Conduct of Business) Regulations, 2004, and Regulation 5 of the Uttarakhand Electricity Regulatory Commission (Terms & Conditions for Determination of Distribution Tariff) Regulations, ARR & Tariff Petition for FY

18 1.6 Hon ble Commission has specified the Uttarakhand Electricity Regulatory Commission (Terms & Conditions for Determination of Distribution Tariff) Regulations, 2004, on , which were applicable for a period of 5 years i.e. upto The Hon ble Commission extended the applicability of these regulations as follows: (i) Upto vide order dated (ii) Upto vide order dated (iii) Upto vide order dated (iv) Upto vide order dated The Annual Revenue Requirement of UPCL under various heads for Financial Year is detailed below:- S No. Table 1: Annual Revenue Requirement for FY12 Particulars Amount (` Crore) 1 Power Purchase Expenses 2, Transmission Charges - PGCIL Transmission Charges - PTCUL O&M expenses Interest charges Depreciation Interest on Working Capital Gross Expenditure 3, Other Expenses / Appropriations 9 Provision for Bad & Doubtful Debts Return on Equity Impact of refund to industry - Net Expenditure 3, Less: Non Tariff Income Net Annual Revenue Requirement 3, The revenue gap of the Petitioner in Financial Year existing is shown as below: ARR & Tariff Petition for FY

19 S No. Table 2: Revenue Surplus/Deficit for FY12 Particulars Amount (` Crore) 1 Annual Revenue Requirement 3, Revenues from Existing Tariffs 2, Revenue Surplus/ (Deficit) at Existing Tariff (881.53) 3 Revenues from Proposed Tariffs 3, Revenue Surplus/ (Deficit) at Proposed Tariff (34.25) ARR & Tariff Petition for FY

20 A2: ACTION PLAN FOR FY12 Efficiency Improvement 2.1 The Petitioner humbly submit to the Hon ble Commission that, it realises the importance of improving efficiency in its operations and is committed to implement a number of technical and commercial measures in this direction in financial year The objectives of efficiency improvement program would be to put together a reliable Distribution System and enhance quality of supply of electricity to the State consumers as well as reducing the overall technical and commercial losses of the Corporation within a period of 2-3 years. These measures are discussed in the sub-sections below. Distribution System Improvement 2.2 The action plan proposed by the Petitioner under the project shall involve the following activities: (a) (b) (c) (d) (e) (f) Construction of Ring Mains in towns to improve reliability in supply. Converting single phase lines to three phase lines. High Voltage Distribution System (HVDS) to improve quality of supply. Strengthening the capacity in the Distribution System to be compatible for five years load growth. Distribution Automation - it is envisaged that all 33 KV and 11 KV feeders shall be automated through a Distribution SCADA System (in phases) to monitor automatically the operation of the feeders for overloading, tripping and low frequency. Data Logging - this is aimed at compilation of all technical data in respect of the Distribution System connected to a 33/11 KV sub-station, including the number and durations of tripping, meter readings of all distribution transformers and feeders connected to the sub-stations. Loss Reduction Initiatives 2.3 These initiatives are aimed at reducing the overall technical and commercial losses in the distribution system and commercial functioning of the Corporation. The projects shall involve the following activities: (a) Metering of 98% consumers has been completed. ARR & Tariff Petition for FY

21 (b) (c) (d) (e) (f) (g) Meters have been installed at all 33 KV / 11 KV feeders. The work of installation of meters on Distribution Transformers and calculation of line losses on these feeders is in progress. Monitoring of line losses on 33 KV / 11 KV industrial feeders is being done and corrective action are being taken by identifying the feeders of higher line losses. Target for replacement of 1300 Km LT conductor by arial bunch conductor in District Hardwar and Udhamsingh Nagar has been fixed for reduction in theft of electricity. Raids are being conducted on the premises of the consumers by the Vigilance Team of UPCL for detection of theft of electricity. Cases are being registered against the defaulting persons under section 126 and 135 of the Electricity Act, FIR have been lodged against 883 persons during financial year Billing of 6,582 consumers having load above 25 KW is being done at Corporation Head Quarter. Corporation s approximately 70% revenue is covered by these consumers. The electricity consumption, billing and collection of these consumers is monitored at Corporation Head Quarter on monthly basis. The work of automatic meter reading in respect of these consumers is in progress and expected to be completed by Reading of consumers having load above 25 KW is being done by meter reading instrument. The analysis of MRI in doubtful cases is being done at Corporation Head Quarter. Rural Electrification (RGGVY) 2.4 Government of India launched the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) to electrify all villages and habitations, provide access to electricity to all households and give electricity connection to BPL families free of charge. This programme has been brought under the ambit of Bharat Nirman. The village and household electrification projects under RGGVY was expected to be achieved in 5 years through creation of Rural Electricity Distribution Backbone (REDB), Village Electrification Infrastructure (VEI) in each village / habitation and Decentralized Distribution Generation (DDG) systems, where grid supply is not feasible or cost-effective. ARR & Tariff Petition for FY

22 2.5 These schemes would also cater to the requirement of agriculture and other activities including irrigation pump sets, small and medium industries, khadi and village industries, cold storage chains, healthcare, education and IT to facilitate overall rural development, employment generation and poverty alleviation. 2.6 RGGVY is a Central Government sponsored scheme and ` Crore are sanctioned to be available to UPCL, in the form of 90% capital subsidy. 2.7 Initially, the following targets were fixed in the scheme: (i) No. of un-electrified villages (ii) No. of de-electrified villages (iii) No. of extended villages - 14,105 (iv) No. of Hemlets - 20,381 (v) No. of BPL connections - 2,81,615 (vi) No. of 33/11 KV sub-stations for construction - 05 (vii) No. of 33/11 KV sub-stations for increasing capacity The above targets were revised later on as follows: (i) No. of un-electrified villages (ii) No. of de-electrified villages (iii) No. of extended villages - 13,820 (iv) No. of Hemlets - 12,772 (v) No. of BPL connections - 2,27,579 (vi) No. of 33/11 KV sub-stations for construction - 05 (vii) No. of 33/11 KV sub-stations for increasing capacity However, on the basis of survey made in this matter, the following were the targets: (i) No. of un-electrified villages (ii) No. of de-electrified villages (iii) No. of extended villages - 9,160 (iv) No. of Hemlets - 11,721 (v) No. of BPL connections - 2,37,819 (vi) No. of 33/11 KV sub-stations for construction - 06 (vii) No. of 33/11 KV sub-stations for increasing capacity Electrification of un-electrified Below Poverty Line (BPL) households will be financed with 100% capital ` 1500/- per connection in all rural habitations. The management of rural distribution system is mandated through franchisees. 100% Village electrification including un-electrified & de-electrified villages will be done by March, ARR & Tariff Petition for FY

23 Vill. Tok BPL Intensive Vill. Tok BPL Intensive Vill. Vill. Tok BPL Intensive Vill Vill. Tok BPL Intensive Vill UTTARAKHAND POWER CORPORATION LIMITED Name of District 2.11 The physical progress made in the scheme (upto ) may be shown as given below: Table 3: Physical Progress of RGGVY Scheme Physical Target (As per Revised Sanction Scheme) Physical Target (As per Actual Survey) Progress upto 03/2010 Cumulative Progress upto Dehradun Uttarkashi Pauri Tehri Chamoli Rudraprayag Hardwar Total Garhwal Zone Nainital U.S.Nagar Almora Bageshwar Pithoragarh Champawat Total Kumoun Zone Total Uttarakhand The financial progress made in the scheme (upto ) may be shown as given below: Table 4: Financial Progress of RGGVY Scheme (Figures in ` Crore) Name of District Sanction Cost of Scheme By M/s REC Revised Sanctioned Project Cost Total Amount Received From REC Ltd. Total Expenditure Yr Commulative Expenditure upto Rudraprayag Bageshwar Chamoli Nainital Pauri Uttarkashi Udham Singh Nagar Almora Champawat Haridwar Pithoragarh Dehradun KV S/s Work in Garhwal Zone KV S/s Work in Kumoun Zone Misc. Expenditure Total ARR & Tariff Petition for FY

24 2.13 The details of the schemes are as follows: R-APDRP Table 5: District-wise details sanctioned amount under RGGVY Scheme (Figures in ` Crore) District Expenditure Expenditure Sanctioned incurred upto incurred upto Cost of Project March 31, 2010 October 15, 2010 Chamoli Tehri Garhwal Rudraprayag Bageshwar Nainital Pauri Garhwal Uttarkashi U.Singh Nagar Champawat Pithoragarh Almora Dehradun Haridwar Misc Total Ministry of Power, Govt. of India, has launched the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) in the XI Five year Plan. Power Finance Corporation Limited (PFC) has been designated by GoI as the Nodal Agency for the programme. The programme spans from data acquisition at distribution level till monitoring of results of steps taken to provide an IT backbone and strengthening of the Electricity Distribution system across the Country under the programme. The objective of the programme is reduction of AT&C losses to the extent of 15% in project areas In accordance with R-APDRP programme guidelines, the petitioner identified 31 no. towns for implementation of the scheme and sought approval of the Hon ble Commission for investments in the works related to establishment of base line data, consumer indexing, GIS mapping, IT applications for energy accounting / auditing and IT based consumer services in 31 towns covered under Part-A of R-APDRP programme scheme including specific exclusion works as per the programme guideline prepared by PFC, the nodal agency of the programme. Besides theses works, the petitioner also covered sub- ARR & Tariff Petition for FY

25 divisions in rural areas including industrial consumers, not covered under R-APDRP programme, for implementation of IT based consumer services in these areas. The scheme is proposed to be completed within 3 years from the date of sanction of the loan from PFC in order to be eligible for taking the benefit of conversion of entire loan into grant. Loan has been sanctioned in September, 2009 and accordingly the work is planned to be completed in September, The capital outlay of the proposed works is estimated at ` Crore, the break-up of which is presented in the table given below: Table 6: Details of capital outlay under R-APDRP S. Capital outlay Particulars No. (` Crore) 1 Works covered under R-APDRP programme Specific Exclusion works within R-APDRP programme IT based consumer services in areas not covered under R-APDRP (Non R-APDRP) Total Out of the above proposed capital expenditure, ` Crores has been allocated by the petitioner for R-APDRP works. Against the said amount, a sum of ` Crores has been covered under loan assistance sanctioned by Power Finance Corporation while the balance ` Crores has been earmarked for works mentioned under Specific Exclusion list as per guidelines prepared by PFC. The balance cost of ` 6.91 Crores has been allocated for works in rural areas including industrial consumers, not covered under R-APDRP programme, for implementation of IT based consumer services in these areas The work wise breakup of the cost covered under loan assistance sanctioned by Power Finance Corporation is presented in the table given below: ARR & Tariff Petition for FY

26 Table 7: Work-wise breakup of the cost covered under loan assistance sanctioned by PFC S. Sanctioned Cost Particulars No. (` Crore) 1 IT Consultant Deployment Cost Ring Fencing Cost Project Management Cost Data Centre Cost at Dehradun Disaster Recovery Centre at Haldwani Customer Care Centre Cost at Dehradun Sub-Division Office Cost Other Office Cost GIS Survey Cost System Metering Cost Network Connectivity Charges (1 Yr.) 5.22 Total setup cost Facility Management Charges (1 Yr.) 8.23 Total PFC Cost The area wise breakup of the cost covered under loan assistance sanctioned by Power Finance Corporation is presented in the table given below: Table 8: Area-wise breakup of the cost covered under loan assistance sanctioned by PFC S. Sanctioned Cost Name of Town No. (` Crore) 1 Almora Bazpur Dehradun (Data-Center) Gadarpur Gopeshwar Haldwani (Disaster Recovery Center) Haridwar Jaspur Joshimath Kashipur Khatima Kichha Kotdwara Laksar Landhaura Mangalore Mussoorie Nainital Pauri ARR & Tariff Petition for FY

27 S. Sanctioned Cost Name of Town No. (` Crore) 20 Pithoragarh Ramnagar Ranikhet Rishikesh Roorkee Rudrapur Sitarganj Srinagar Tanakpur Tehri Uttarkashi Vikasnagar Total The cost breakup of the works mentioned under Specific Exclusion list as per guidelines prepared by PFC shall have to be borne by UPCL from its internal resources and the same are presented in Table below: S. No. 1 Table 9: Specific exclusion works under R-APDRP programme Amount Particulars (` Crore) Civil Work for construction of data Centre Building in Dehradun Architectural works for TIER-II+ Data Centre Civil Work for construction of Disaster recovery Centre in Haldwani Architectural works for TIER-II+ Disaster recovery Centre in Haldwani Development of office covered under R-APDRP 8 6 Metering of 11 kv and 33kV Feeders in the 33/11 kv S/s Metering of Distribution Transformers Cost of Network Connectivity Charges to be borne by UPCL (1 Yr.) 5.22 Facility Management Charges to be borne by UPCL (1Yr) 1.13 Total It is also submitted that the petitioner has identified only 31 towns in whole of the State under R-APDRP scheme and number of these towns have rural 3.1 ARR & Tariff Petition for FY

28 areas which are beyond the municipal limits and are not eligible to be covered under the programme. The sub-divisions having towns which have been covered under the scheme as well as those not covered in the scheme shall have the problem of handling works like metering, billing, collection, customer care etc. due to two parallel systems namely-it enabled system developed under R-APDRP and existing system of UPCL and therefore, in order to bring uniformity in the State the Petitioner has included additional 44 sub-divisions and 4 other offices which are not covered under the R-APDRP scheme for carrying out at least works pertaining to consumer services namely metering, billing, collection etc.. However, works pertaining to consumer indexing, GIS mapping, IT applications in energy audit and accounting which are also part of Part-A of R-APDRP programme have not been included for these suburban/rural areas. The cost breakup of the works proposed to be taken by the petitioner for rural/suburban areas including industrial consumers is presented in the table given below: Table 10: Cost break-up of works proposed for rural / sub-urban areas including industrial consumers. S. Amount Particulars No. (` Crore) Hardware Costs for implementation of necessary 1 modules in the Non-R-APDRP offices for designing 5.42 uniform systems 2 Cost of Network Connectivity Charges to be borne by UPCL (1 Yr.) Facility Management Charges to be borne by UPCL (1Yr) 0.60 Total Accordingly, an amount of ` Crores, which is about 20% of the total project cost, shall have to be arranged by the Petitioner from its internal resources/financial Institutions, for implementation of Part-A of the R-APDRP scheme and additional Non-RAPDRP works. Progress of Works under R-APDRP (Part-A) 2.23 The Petitioner appointed M/s Tele Communication Consultants India Ltd. in consortium with M/s Vayam Tech Ltd. as IT Consultant following the guidelines of the scheme on 8th June, Detailed Project Report (DPR) were sanctioned by the Steering Committee, MoP in its 12 th Meeting on 4th September, 2009, the sanction letter issued by M/s Power Finance Corporation Ltd. on 11th September, 2009 vide which Project Cost of ` Cr. were sanctioned consisting of Loan component of ` Cr. to be funded from MoP/GoI through M/s PFC Ltd. ARR & Tariff Petition for FY

29 2.25 Following the R-APDRP Part A guidelines, the petitioner appointed M/s Infinite Computer Solution (India) Ltd. in consortium with M/s Phoenix IT Solution as IT Implementation Agency ITIA, the company started its work from April-2010, and the targeted completion plan for Pilot Town is April, 2011 & all the other identified towns is September, The Petitioner has completed the civil work for Data Center and appointed the Data Center Agency M/s Wipro Ltd. to carry out other infrastructure architectural work of Data Center. Data Center Design Document submitted by ITIA has been approved by the petitioner on 20th September, Civil work for the construction of building of Disaster Recovery Center in Haldwani has been taken up, tendering is in progress Construction of Consumer Care Center building in Dehradun has been completed & other activities to be taken up by ITIA soon. Customer Care Center Design Document submitted by ITIA is under review by the petitioner As-Is Document for all the applications modules has been submitted by ITIA & approved by the petitioner. To-Be document Study has been completed by the ITIA & Module Functionality on Live Data expected soon by ITIA The work of boundary metering has been started at the town levels and the delivery of DLMS Meters by the Meter Manufacture is expected soon. Inspection call has been offered by M/s Secure Meters Ltd and Inspection conducted by the petitioner on Data Migration Activities has been started the ITIA Satellite Imagery of 16 Towns has been received from NRSC. Pilot Town Dehradun Image yet to be received Office Survey work has been started by ITIA and DGPS Survey work for GCP of all towns are on the verge completion to be followed by the Asset & Consumer Indexing in Dehradun Town/Vikas Nagar Town The Investment approval for the other supporting works, to be accomplished by the petitioner has been obtained from the Hon ble Regulatory Commission and the financial closure is in progress Training of the Core / Middle / Senior Level Executive of the petitioner has to be taken up by PFC and ITIA level soon. ARR & Tariff Petition for FY

30 2.36 To carry out SCADA / DMS in Dehradun Town, the petitioner has appointed M/s Kalki Communication Technologies Ltd. as SCADA / DMS consultant as per guidelines of the scheme on 3rd July LT System Strengthening 2.37 The Petitioner has initiated a program with total outlay of ` Crore for LT System Strengthening and Improvement works for the 11 th Plan. During financial year , an outlay of ` Crore is envisaged for LT System Strengthening with installation of Ring Main Units (RMU) and Compact Sub-Stations (CSS) located near to the load centres. Segregation of PTW Feeders 2.38 For the segregation of Private Tube-Well (PTW) Feeders, the Petitioner would start a project with an investment of ` Crore approx., which is to be implemented during the 11 th Plan upto March, This scheme envisages construction of 2727 Km. 11 KV line with conversion of existing 2430 Km. of LT line into HT line and installation of 2831 Nos. 11/0.4 KV Distribution Transformers of 25 KVA & installation of 95 Nos. VCB. During , an expenditure of ` Crore is envisaged for the segregation of PTW feeders in Hardwar and U.S. Nagar Districts. The construction of 980 Km. 11 KV line with conversion of 800 Km. LT line into HT line and installation of 940 Nos. 11/0.4KV Distribution Transformers shall be provided for the segregation of PTW feeders during the year District Plan 2.39 During the year the Petitioner has proposed an investment of ` Crore under the District Plan for augmentation and increasing capacity of Distribution Transformers, installation of additional transformers and LT line strengthening and system improvement. This system will continue in the financial year as well wherein too an outlay of ` Crore is envisaged. Earthing of Transformers 2.40 As per direction issued by Hon ble Commission in its order dated , the petitioner identified division-wise transformers wherein neutral grounding / earthing was not proper. The petitioner also started work of providing proper neutral grounding / earthing as per the direction of the Hon ble Commission. Out of 12,256 no. such identified transformers, the petitioner has completed the work of proper neutral grounding in respect of 4,543 no. transformers and the said work is in progress in respect of the ARR & Tariff Petition for FY

31 remaining transformers. The remaining work of providing proper neutral grounding / earthing is expected to be completed by March, CDM Project 2.41 The Petitioner is implementing a pilot CDM Project in distribution business by replacing existing incandescent bulbs with long life energy efficient compact fluorescent lamps across the grid connected domestic household in the chosen areas of the State. The project is being developed under the Ministry of Power, Government of India initiative called BACHAT LAMP YOJNA which seeks to utilize Clean Development Mechanism of the United Nations Framework of Climate change Convention (UNFCCC) to reduce greenhouse gas emissions globally This project aims at sustainable development leading to social, economics and environmental benefits. It shall contribute to energy efficiency and reducing energy shortages during peak hours. On implementation of the project, there is potential to generate electricity savings of 60Gwh per year to UPCL. It shall lead to reduction in peak hour demand and improve the power supply for other electricity users. Also, savings in terms of additional investments required for setting up similar capacity power plants would accrue. In consideration of the CDM benefits of this pilot Project taken up under BLY, the cost of this Project would be borne completely by the developer of the project and there would be no financial implication on UPCL and the consumers. Commercial Process Improvement 2.43 The Petitioner has been implementing certain immediate commercial improvement measures in all its revenue division(s) / sub-division(s), including suitable modification of its existing processes with possible IT interventions for revenue cycle management, MIS and consumer services enhancement The Petitioner has already initiated a number of commercial measures aimed at improving its revenue performance, as described below: (a) The Petitioner has started MRI based Centralised Billing system for High Value Consumers (>25 kw) contributing to nearly 70% of Revenue Billing and Collection. Besides, the Petitioner has also initiated Automatic Meter Reading (AMR) system for implementation for all such consumers above 25 kw by March, 2011 in phases. It will also facilitate Energy Audit / Accounting through sub-station AMR System. Division-wise Energy Auditing through independent energy ARR & Tariff Petition for FY

32 assessor is planned by the petitioner with phase-wise implementation target as March, (b) ATP machines have been installed for payment of electricity bills at the following places initially at Dehradun: E.C. Road Bindal Bridge Urban Circle Aaraghar Mata Mandir, Saharanpur Road Aaraghar Prem Nagar Rural Circle (c) (d) Meter-reading, Bill Distribution & Disconnection To ensure timely meter reading, bill distribution and effective disconnection, these commercial activities have been outsourced in select divisions, both in Hill districts and Plain areas. This arrangement is showing improvement in billing on metered basis and improved collection and better consumer services by deployment of the outsourced staff in selected Divisions / Sub-Divisions. The meter exception has been reduced from 33.47% in financial year to 26.87% in financial year The target for financial year & have been fixed at 22.87% and 18.87% respectively. Bill Collection The Petitioner has taken several measures to facilitate collections of electricity dues from consumers. Some of these measures are mentioned below (i) (ii) (iii) Drop boxes have been provided in most of the departmental offices / collection centres. Mobile Camps Apart from these new initiatives, the petitioner has been holding regular mobile camps in rural/urban areas for greater accessibility of consumers to collection centres. Collection through Post Offices The Petitioner has entered into an arrangement with the Department of Posts for revenue collection through all the post offices across Uttarakhand. The system is working throughout the State, both in urban and rural areas. ARR & Tariff Petition for FY

33 (e) Consumer Services For the convenience of the consumers, basic minimum facilities such as, shed, sitting arrangement, drinking water, fans, toilets etc. have been provided in urban collection centres in Dehradun and being provided in other major towns The Petitioner, in order to facilitate speedy settlement of disputed electricity arrears in respect of industrial consumers, has constituted a Corporate Level Dispute Settlement Committee in its Head Office. This initiative is aimed at reducing the number of disputed and legal cases without affecting the rights of consumers to seek justice from appropriate courts/forums in the event of non-settlement. Consumers have already started taking benefit of this settlement mechanism. A number of disputed cases has been finalized by the committee and the consumers have made the full payment of settled outstanding arrears against them. Energy Audit & Non-Technical Loss Reduction 2.46 The licensee has been assessing losses at all 33 KV and some 11 KV feeders. Energy audit of all independent feeders is also done. The analysis of energy losses at 11 KV at feeder level and LT voltage at distribution transformer (DT) level through energy audit is under progress through consumer indexing and binder creation of the consumer database in Dehradun (Urban), Roorkee, Rudrapur and Haldwani Circles The Petitioner is putting in place a dedicated a team of officers at the corporate office to continuously analyse the outputs of the energy audit exercise. This will be used to take specific measures on high loss feeders / distribution transformers In order to reduce its non-technical losses, the Petitioner will be taking a number of steps like regularisation of unauthorised connections / load, bringing un-ledgerised consumers to the billing fold, replacement of defective meters, ensuring accurate and complete meter reading and billing The Petitioner has been negotiating with two meter manufacturer to introduce pre-paid metering on pilot basis in one urban sub-division. Based on the results of the pilot work, the same may be rolled out in other urban distribution centres. While the use of pre-paid meters will improve the billing and collection efficiency of UPCL, it will also increase consumer convenience by avoidance of security deposit, bill payment The licensee is also targeting reduction of theft and pilferage of power through vigilance and raid activities. Vigilance and raid teams have been created and targets set for them so as to convert commercial losses into revenue assessment. ARR & Tariff Petition for FY

34 Metering 2.51 Since the formation of the Petitioner Company, the Petitioner has been putting its best efforts to complete metering of all its consumers. The physical progress of metering achieved by the licensee is being submitted regularly for kind information of the Hon ble Commission. The summarised information on metering status as of 30 th June, 2005 is shown in the table below: Table 11: Details of Un-metered Consumers in 2005 Total As on 30 th June 2005 Category % of Metered Un-metered Metered Total Consumers Domestic 805,255 52, % 857,744 Commercial 98,801 1, % 99,952 Public Lamps % 218 Departmental Employees 0 8,153* 0.00% 8,153 Public Inst./ Govt. Bodies 2, % 2,309 State Tube Well % 681 Private Tube Well 2,688 15, % 17,749 Total 909,472 77, % 986,806 *This figure includes all pensioners and employees of UPCL, PTCUL and UJVNL. The summarised information on metering as of 30 th June, 2010 is shown in the table below: Table 12: Details of Un-metered Consumers in 2010 Total As on 30 th June, 2010 Category Metered Un- Metered % of Metered Consumers Total Domestic 12,63,851 22, % 12,86,729 Private Tube Well 18,332 2, % 21,284 Other 1,59, % 1,59,630 Total Consumers 14,41,813 25, % 14,67, The Petitioner is committed and putting its best effort possible to achieve 100% metering of its consumers but the licensee company has been facing stiff resistance from the consumers, particularly from domestic rural and private tube-well consumers categories due to which the petitioner is unable to achieve the desired progress in the matter still the efforts are continuing to achieve the objective All new connections are being released with meters only. ARR & Tariff Petition for FY

35 Strengthening of Distribution System 2.54 UPCL had inherited an old and weak distribution network from Uttar Pradesh Power Corporation Ltd, requiring significant investments in order to provide uninterrupted and reliable power to its consumers In the past, some work has been done to strengthen the distribution system, particularly the HT distribution system through APDRP Scheme of the Government of India (GoI). But, the benefit of the scheme has not resulted in the improvement in the LT system, particularly in rural distribution system The Petitioner is witnessing a considerable growth in demand on account of massive rural electrification program as well as expected growth in demand from industrial consumers. Energy demand in terms of input of energy is expected to grow in financial year in comparison to financial year 2.57 In view of the above, there is a need for significant investments for strengthening as well as expanding the distribution network. Non-Funded Distribution Investment 2.58 Besides the funded capital investment schemes like RGGVY / R-APDRP for select areas, there is still an urgent need for funds for system improvement and augmentation in the other circles / divisions. UPCL has been investing to improve the sub-transmission and distribution network by up-gradation of sub-stations & lines, replacement of poles & conductors, etc. as a part of a continuous process in order to meet the increasing demand in the LT distribution segment. During financial year & , the petitioner proposes to undertake internal system improvement / capital works of ` 89 Crore and ` 92 Crore respectively towards this objective. The details have been laid down below. Table 13: Details of Internal System Improvement Works for FY11 & FY12 Estimated S. Cost Non-Scheme Internal System Improvement Works No (` Crore) FY11 FY12 1 New 33/11 KV Sub-station New 33 KV lines for feeding new 33/11 KV S/S Increasing capacity of 33/11 KV Sub-station Increasing 33 KV lines from existing S/s Renovation of 33 KV Sub-stations New 11 KV Composite Main lines KV lines upgrading/strengthening 8 8 ARR & Tariff Petition for FY

36 S. No New Initiatives Non-Scheme Internal System Improvement Works Estimated Cost (` Crore) FY11 FY12 8 Installation of new 11/0.4 KV Distribution Transformers Increasing capacity of 11/0.4 KV Distribution Transformers Construction of New LT lines Strengthening of LT lines Installation of Meters Installation of Metering cubicals/ct/pt/amrs Ariel Bunch Conductors Civil Works Vehicles, Furniture & Fixtures Office Equipments & Computers Consumer Service Centre MCCB/Capacitor/Insulator Replacement of Poles Misc. Works (System Studies/Network Improvement & Others) 1 2 Total The Petitioner is planning to take some more new initiatives for both shortterm and long-term to improve the distribution system, commercial / billing system, service quality of the present system to improve the overall performance of the Petitioner. The Petitioner is presently in the process of finalizing these initiatives. Upon the finalization of these initiatives, the Petitioner will submit the same to the Hon ble Commission for obtaining approval. The estimated costs of these new initiatives have not been included in the present petition. The Petitioner prays from the Hon ble Commission to allow the costs of the new initiatives in addition to present petition s projected cost upon the submission and approval of these initiatives. ARR & Tariff Petition for FY

37 A3: TRUING-UP FOR FY Hon ble Commission in exercise of power vested with it under section 181 read with sections 61, 62 & 86 of the Electricity Act, 2003 issued the Uttarakhand Electricity Regulatory Commission (Terms and Conditions for Truing up of Tariff) Regulations, 2008 on These Regulations provides for Truing up of approved expenses and revenue on the basis of actuals (provisional / audited) for the same. These Regulations also specify the procedure for Truing up. 3.2 Hon ble Commission vide its Order dated had Trued up the expenses and revenue of the petitioner for the period from financial year to This Turing up exercise was based on audited data for the period upto financial year This Truing up exercise for the financial year & was based on provisional data in the absence of availability of audited data for the said period at that time. 3.3 The annual accounts for the financial year has now been got audited of the petitioner company and on the basis of this audited data, the petitioner requests the Hon ble Commission to True up the expenses and revenue for the financial year which were Trued up by Hon ble Commission vide its order dated on the basis of provisional data. The computations of revenue and expenses under various heads alongwith the relevant records and supporting documents with reasons and justifying such calculations under each head have been made. The head-wise details of costs with justification are enumerated below. Power Purchase Expenses 3.4 Power purchase expenses have been computed on the following basis: (a) (b) (c) (d) Power purchase expenses are computed as per the actual bills received from the generating companies. Energy purchased through U.I. Overdrawl during the year is considered towards State consumption. Energy charges for U.I. Underdrawls have been considered in Power purchase expenses and revenue from such U.I. Underdrawl have been shown separately on the revenue side as non-tariff income. This is in line with the methodology adopted by the Hon ble Commission while Truing up exercise made vide order dated Power purchase expenses on monthly merit order purchase basis is calculated to allocate highest cost towards trading of electricity. ARR & Tariff Petition for FY

38 (e) Transmission charges payable to Power Grid Corporation of India Limited (PGCIL) and Power Transmission Corporation of Uttarakhand Limited are included in total Power purchase cost for the year and are allocated to the State cost in proportion of State consumption. 3.5 The details of power purchase expenses are as follows: Table 14: Power Purchase Expenses for FY06 Details Units Cost (MU) (` Crore) NTPC 1, NHPC NPCIL SJVNL UI Overdrawal UJVNL Main 2, UJVNL SHEP Rajwakti HEP Hanuman Ganga UREDA Total Units Purchased 5, Transmission and Other Costs Total Cost of Units Purchased 5, (+) Excess of Inward Banking (-) U.I. Underdrawl (-) Trading State Consumption 5, State Consumption including UI Underdrawl 5, Variation in power purchase expenses is as follows: Table 15: Variation in Power Purchase Expenses Approved by Actual Variation Particulars UERC (` Crore) (` Crore) (` Crore) Power purchase expense Operation and Maintenance (O&M) Expenses 3.7 Operation and Maintenance expenses include Repairs and Maintenance, Employee Costs and Administration & General Expenses, which are based on actual expenses as shown in audited Annual Accounts for the year. ARR & Tariff Petition for FY

39 3.8 Operation and Maintenance expenses have been calculated in line with the methodology approved by the Hon ble Commission in its Tariff Order dated for Truing up these expenses for the financial year The details of employee costs are as follows: Table 16: Employee cost for FY06 Particulars Cost (` Crore) Employee cost other than terminal benefits Terminal benefits Gross Less: Capitalization Net Cost The details of Repair and Maintenance expenses are as follows: Table 17: Repair and Maintenance expenses for FY06 Particulars Cost (` Crore) Repair and Maintenance expenses The details of Administration and General expenses are as follows: Table 18: Administration and General expenses for FY 06 Particulars Cost (` Crore) Administration and General expenses Less: Capitalization 1.32 Net Cost Variation in O & M expenses is as follows: Table 19: Variation in O & M Expenses Particulars Approved by Actual Variation UERC (` Crore) (` Crore) (` Crore) Operation and Maintenance expense (0.77) Less: Capitalization Net Cost (1.11) ARR & Tariff Petition for FY