TABLE OF CONTENTS. S. No. PARTICULARS Page No. I TRUE UP TARIFF PETITION FOR FY II PRAYER 09 III AFFIDAVIT IV AUTHORIZATION 12

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2 TABLE OF CONTENTS S. No. PARTICULARS Page No. I TRUE UP TARIFF PETITION FOR FY II PRAYER 09 III AFFIDAVIT IV AUTHORIZATION 12 V SUB INDEX OF TRUE UP TARIFF PROPOSAL 1 CAPACITY PERFORMANCE PARAMETERS & OPERATING NORMS ENERGY CHARGES (VARIABLE CHARGES) 26 4 FIXED COST:- 4.1 O & M EXPENSES OTHER CHARGES ADDITIONAL CAPITALIZATION / DE- CAPITALIZATION & FUNDING THEREOF ASSETS & DEPRECIATION INTEREST & FINANCE CHARGES INTEREST ON WORKING CAPITAL RETURN ON EQUITY SECONDARY OIL COST NON TARIFF INCOME TRANSFER OF ASSETS TOWARDS SETTLEMENT OF WATER CHARGES WITH WRD, GoMP REQUIREMENT FOR TRUE UP FY VI ANNEXURE MPERC FEE PAYMENT DETAILS 124 VII FORMS - INDEX 125 2

3 BEFORE THE M.P. ELECTRICITY REGULATORY COMMISSION BHOPAL IN THE MATTER OF Petition No. of 2015 Trueup of Generation Tariff of Power Stations of MPPGCL for FY determined by MP Electricity Regulatory Commission vide Multi Year Tariff order dated : Petitioner M.P. Power Generating Company Ltd, Jabalpur. 1. M.P. Power Management Company Ltd., Jabalpur. Vs 2. M.P. Power Transmission Co. Ltd., Jabalpur. 3. Rajasthan Rajya Vidyut Prasaran Nigam Ltd., Jaipur. 4. Uttar Pradesh Power Corporation Ltd., Lucknow. 5. MSEB (Holding Co) & Maharashtra State Transmission Co. Ltd, Mumbai : Respondents The above named petitioner M.P. Power Generating Company Ltd. respectfully submits as under:- 1. The petitioner is wholly owned company of Government of M.P engaged in generation of electricity in the State of Madhya Pradesh. It is a successor entity of erstwhile Madhya Pradesh State Electricity Board (MPSEB). 2. The Company has been incorporated as part of implementation of the power sector reform in M.P. initiated by the Government of MP. The Company has taken over the generation activities of MPSEB. The company while operating and maintaining its existing Units is also constructing new power plants for increase in generating capacity in the State of Madhya Pradesh. The Company is registered under Companies Act 1956 and was incorporated on Its registered office is at Shakti Bhawan, Rampur, Jabalpur. 3. The activities of Generation, Transmission and Distribution have been looked after earlier in the State of M.P. by the integrated utility i.e. MPSEB constituted under Section 5 of Electricity (Supply) Act The Government of MP 3

4 enacted M.P. Vidyut Sudhar Adhiniyam 2000 and in the spirit of said Act the unbundling process of the MPSEB was initiated by registering the following five Companies:- (i) (ii). (iii). (iv). (v). Madhya Pradesh Power Generating Co. Ltd., Jabalpur (MPPGCL) (GENCO). Madhya Pradesh Power Transmission Co. Ltd., Jabalpur (MPPTCL) (TRANSCO). Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Ltd. Jabalpur (MPPKVVCL) (EAST DISCOM). Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Ltd. Bhopal. (MPMKVVCL) (CENTRAL DISCOM). Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. Indore (MPPKVVCL) (WEST DISCOM). 4. The above mentioned five companies which were registered in November 2001 entered into Operation & Management Agreement with erstwhile MPSEB, they worked as agent of MPSEB from July 2002 to May The companies started independent functioning w.e.f under Cash flow mechanism as per State Government order dated A Sixth Company, namely the MP Power Trading Company Ltd. was incorporated as per the State Government Notification dated specifying functions of TRADECO for purchase of electricity in bulk from Generating Companies / Traders, from within & outside the State and supply electricity in bulk to the Electricity Distribution Companies in the State of Madhya Pradesh. 6. GoMP vide letter No. 6074/13/12/02 dated has changed the name of MP Power Trading Company Ltd to MP Power Management Company Ltd and it has been made the holding company for all the DISCOMS of MP. Further, GoMP vide its notification dated has merged M.P. State Electricity Board with MP Power Management Company Ltd. 7. MPPMCL and the three DISCOMS of MP have entered into a management and corporate functions agreement on , whereby the three DISCOMS have engaged MPPMCL to represent them in all the proceedings relating to power procurement and tariff petitions filed or to be defended before CERC, MPERC 4

5 and other regulatory authorities, Appellate Tribunals, High Courts, Supreme Court and CEA etc.. Therefore the three DISCOMS have not been made as respondents, separately. 8. Rajasthan Rajya Vidyut Prasaran Nigam (RRVPNL), Jaipur, (hereinafter referred as Respondent No. 3) have 40% share in the PH-1 of STPS Sarni and 50% share in Gandhi Sagar Hydro Power Station operated by MPPGCL. At the same time,mppgcl has 50% share in the Ranapratap Sagar Hydro Power Station and Jawahar Sagar Hydro Power Station operated by the Respondent No. 3. Similarly Uttar Pradesh Power Corporation Ltd (UPPCL), Lucknow (hereinafter referred as Respondent No. 4) and MSEB (Holding Co) & Maharashtra State Transmission Co. Ltd, Mumbai (hereinafter referred as Respondent No. 5) have 50% share in Rajghat Hydro Power Station and 33.3% share in Pench Hydro Power Station operated by MPPGCL, respectively. 9. GoMP vide its notification dated has provided that MP Tradeco now MP Power Management Company Ltd shall purchase entire power from the Genco at the tariff to be determined by MPERC. 10. MPPGCL entered into Power Purchase Agreement (PPA) with MP Tradeco (now M.P.P.M.C.L.) on The PPA provides that the tariff payable by Tradeco to Genco and terms & conditions related thereto shall be as determined by the State Commission. MPPGCL has therefore raised the bills of energy sold to Tradeco since as per the tariff determined by Hon ble Commission from time to time. 11. Hon ble Commission notified MPERC (Terms & Conditions for determination of Generation Tariff) (Revision-II) Regulations, 2012 {RG-26 (II) of 2012} on This regulation was based on multiyear tariff principles and incorporated norms of operation for control period FY to FY In the instant True up petitions, MPPGCL has proposed true up for FY in respect of existing stations whose tariff was determined by Hon ble Commission vide Multi Year Tariff order dated MPPGCL is submitting the True up petition for FY based on Audited Annual Statements of Accounts for FY under section 62 & 64 of the Electricity Act 2003 read with proviso 8.4 of MPERC Generation Tariff Regulation,

6 14. The Petitioner has adopted following approach for Trueup of Generation Tariff:- a) The Energy Charges (Variable Charges) has been billed in accordance to Proviso 41 of MPERC (Terms & Condition for determination of Generation Tariff) (Revision-II) Regulation, Therefore no truing up of Energy Charges has been considered. b) Other Charges comprising of MPERC Fees, Water Charges, Rent, Rates& taxes, Entry Tax on R&M, Cost of Chemical & Consumable, Publication expenses and SLDC Charges have been claimed on actual basis based on Audited Accounts of FY c) The expenses shown in Audited Annual Statements of Accounts for FY are of MPPGCL s share. The expenses as extracted from Audited Annual Statements of Accounts for FY for the shared portion have been factored to represent 100% capacity operated by MPPGCL to match with MPERC s Multi Year Tariff Order dated d) The expenses of Rana Pratap Sagar and Jawahar Sagar indicated in the Annual Statements of Accounts for FY of MPPGCL have not been considered in this True up Petition since Hon'ble Commission has not considered these projects in Tariff order, being operated by Rajasthan authorities. e) The True up in respect Bansagar PH-4 Small Hydro Project (Jhinna) is not considered in the instant True up petition as MPPGCL is filing separate petition for determination of Final Tariff for this station along with its Trueup up to FY-14. f) As per the Regulation 26.5, the expenditure towards actual Pension & Terminal benefits is to be claimed by Transmission Licensee; hence MPPGCL has not claimed these expenses in its tariff petition. g) The Hon ble Commission vide Order in Petition No. 56 of 2012 dated , at para No. 14 (d) has directed that in case the main comprehensive R&M proposal for Unit No. 6,7,8&9 of STPS Sarni is not filed by MPPGCL within 24 months from the date of said order, the approval of subject capital expenditure for need based R&M shall be limited to eligibility of availing Special Allowance by MPPGCL for aforesaid units for this period under regulation 18.4 & 18.5 of Tariff Regulation,2009 and its amendments, at the rate specified in the regulations for each year of control periods. MPPGCL has decided not to undertake the Comprehensive R&M works at STPS, Sarni at Unit No. 6, 7, 8 & 9 and informed the same to Hon ble 6

7 Commission vide letter No /CS-MPPGCL/MPERC/Pt.56 of 2012/410 dated Accordingly, the Special Allowance on the rates specified by Hon ble Commission in Regulations, 2012 for FY has been considered in the instant petition. h) The Unit No.1 of STPS PH-1 has been decommissioned on , Unit No.2 of STPS PH-1 has been decommissioned on and Unit No.4 of STPS PH-1 has been decommissioned on by Central Electricity Authority, New Delhi. Accordingly the Assets of Unit No. 1, 2 & 4 of STPS PH-1 have been reduced from the Gross Block of STPS PH-1 as per the Audited Books of Accounts for FY The difference between element wise Annual Fixed Charges approved by the Hon ble Commission for FY in its order dated vis-à-vis the true up requirement after applying Actual Availability on fixed cost elements of Thermal power stations and actual Availability applicable on Capacity charges for Hydro Power Stations based on 100% capacity of the plants operated by MPPGCL and detailed in subsequent chapters of instant petition, works out as under:- Particulars Fixed Cost Elements True Up Requirement for FY Elements Amount in Rs. Crores Annual Fixed Cost FY As per MPERC Orders MPPGCL as per norms Diff. Reference Chapter No. Page No. O & M Expenses Compensation Allowance Special Allowance Interest on Loan+ Exc. Equity Interest on W/C Depreciation RoE Cost of Sec Oil (Normative) Less Non Tariff Income Total

8 16. Other Charges comprising of MPERC Fees, Water Charges, Rent, Rates& taxes, Entry Tax on R&M, Cost of Chemical & Consumable, Publication expenses and SLDC Charges incurred by MPPGCL and as per audited Annual Statement of Accounts for FY on 100% basis as detailed in Chapter 4.2 at page-35 are as hereunder:- Amount in Rs. Crores S. No. Particulars Total 1 Rent, Rates & Taxes Entry Tax Water Charges Cost of Chemicals Cost of Consumables + Publications MPERC Fee SLDC Charges 0.61 Total The Power station wise break up of true up amount after applying actual Availability on fixed cost elements of thermal power stations and actual Availability on capacity charges for Hydro Power Stations is worked out as under:- Amount in Rs. Crores S.No. Station As per MPERC MPPGCL as per Diff. Orders norms 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Hydro Total In addition to above, kindly permit additional Depreciation, RoE and Interest on Excess Equity amounting to Rs Crores at Bansagar PH- 1, 2&3 for FY- 06(10M) to FY , on account transfer of assets towards settlement water charges with WRD, GoMP. 8

9 PRAYER In view of the above, the petitioner respectfully prays that Hon ble Commission may kindly:- (a) Approve Annual Fixed Charges and Other charges for FY and permit recovery of True up amount as per para 15, 16 & 17 in six equal monthly installments. (b) (c) (d) (e) (f) (g) Allow additional capitalization as per audited Annual Statements of Accounts for FY Kindly permit Special Allowance for Unit No. 6, 7, 8 & 9 of PH-2&3 of STPS, Sarni. Kindly permit additional Depreciation, RoE and Interest on excess equity at Bansagar PH- 1, 2&3 on account transfer of assets towards settlement water charges with WRD, GoMP. Condone delay in filing the petition. Condone any inadvertent omissions/ errors/ short comings and permit the applicant to add/ change/modify/ alter this filing and make further submissions as may be required at later stages. Pass such orders as Hon ble MPERC may deem fit and proper and necessary in the facts and circumstances of the case, to grant relief to petitioner. Date: 25/04/2015 Place: Jabalpur (Sanjay Kumar Tripathi) Officer-in-Charge For and on behalf of MP Power Generating Co. Ltd Jabalpur 9

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13 Hydro Power Stations Thermal Power Stations Capacity 1.1 Installed Generation Capacity of MPPGCL (Existing) The installed capacity of the MPPGCL share, as on is MW (including its share in bilateral interstate projects), consisting of 4320 MW Thermal and MW Hydro power. The plant wise details are as under. Table Amarkantak Power Station Thermal Power Station (Chachai) Satpura Thermal Power Station (Sarni) Sanjay Gandhi Thermal Power (Birsinghpur) Station Sri Singaji Thermal Power Project (Khandwa) Details of Power Plants Installed Capacity (MW) Total MPPGCL Share PH 2 2 x 120 = % 240 PH 3 1 x 210 = % 210 Complex % 450 PH = % 410 PH 3 2 x 210 = % 420 PH 4 2x250= % 500 Complex % 1330 PH 1 2 x 210 = % 420 PH 2 2 x 210 = % 420 PH 3 1 x 500 = % 500 Complex % 1340 PH 1 2 x 600= % 1200 Complex % Total Thermal Generation % Chambal HPS Gandhi Sagar 5 x 23 = % 57.5 R.P. Sagar 4 x 43 = % 86 Jawahar Sagar 3 x 33 = 99 50% 49.5 Complex % Pench Totladoh HPS 2 x 80 = % Bansagar HPS Tons 3 x 105 = % 315 Silpara 2 x 15 = % 30 Devlond 3 x 20 = % 60 Jhinna (SHP) 2 x 10= % 20 Complex % Birsinghpur HPS 1 x 20 = % 20 5 Bargi HPS 2 x 45 = % 90 6 Rajghat HPS 3 x 15 = 45 50% Madhikheda HPS 3 x 20= % 60 8 Total Hydro Generation Total Generation

14 1.2 Generation Capacity Operated by MPPGCL As on , MPPGCL is operating 5235 MW, consisting of 4320 MW thermal and MW Hydro power. Out of this MW capacity belong to other States. The plant wise details are as under:- Table Generation Capacity Operated by MPPGCL MW Station Installed Capacity MP Share Other State s Share MW % State s Name ATPS Chachai STPS Sarni PH 2,3& SGTPS Birsinghpur SSTPP Khandwa Total Thermal Gandhi Sagar % Rajasthan Pench % Maharashtra Bansagar Complex Birsinghpur Madhikheda Bargi Rajghat % Uttar Pradesh Total Hydro Total Capacity Share of MPPGCL in Generation Capacity installed in other States Similarly, MPPGCL also has a share of MW in hydro generation capacity installed in neighboring States, as under:- Table Generation Capacity installed in other States MW Station Installed Capacity MPPGCL Share Other MW % State s Name Rana Pratap Sagar % Rajasthan Jawahar Sagar % Rajasthan Total

15 1.4 Decommissioning of Units. After obtaining approvals, all the five units of Power House-1 at Satpura Thermal Power Stations have been decommissioned / retired :- Power House 1 STPS Sarni. Date of Unit Capacity retirement Unit # MW 7-Jan-14 Unit # MW 5-Dec-13 Unit # MW 1-Oct-12 Unit # MW 5-Dec-13 Unit # MW 1-Feb-13 The decommissioning of Unit No. 1, 2 and 4 falling in the financial period have considered in this petition in subsequent chapters. The copy of documents in this regard is annexed as Annexure-1 in the additional supporting documents being submitted before Hon ble Commission separately. 1.5 Annual Statement of Accounts The Annual Statement of Accounts of MPPGCL is prepared for the portion actually owned by MPPGCL and not for the capacity operated by MPPGCL. Therefore, the expenses as extracted from the Annual Statement of Accounts of MPPGCL for the shared portion have been factored to represent 100% capacity operated by MPPGCL to match with MPERC s Order. The copy of Annual Statement of Accounts of MPPGCL for FY is annexed as Annexure-2 in the additional supporting documents being submitted before Hon ble Commission separately. 1.6 Capacity Addition and Future Plan On-going Projects:- 2x660 MW Shri Singaji TPP (Stage-II) District Khandwa (MP) Administrative approval accorded in January PPA signed with Tradeco/ MPPMCL on The environmental clearance has been 15

16 granted by Ministry of Environment & Forest vide letter dated The letters of award of works issued to M/s Larson & Tubro on The estimated cost of the project is Rs. 6,500 Crores. 16

17 2. PERFORMANCE PARAMETERS AND OPERATING NORMS 2.1 Thermal Power Stations Gross Generation The actual Gross generation in MU of Thermal Power Stations for the year is shown in the table below: Actual Gross Generation (MU) for FY Table Name of TPS in MU Actual Gross Generation ATPS Chachai PH ATPS Chachai PH STPS Sarni PH-1, 2 & SGTPS Birsinghpur PH-1 & SGTPS Birsinghpur PH Total Plant Availability Factor The comparison between NAPAF as approved in Regulations, 2012 vis-à-vis the actual PAF for the year is shown in the table below: Approved V/s Actual NAPAF (%) for FY Table in % Name of TPS As per MPERC Regulation,2012 MPPGCL Actuals Difference ATPS Chachai PH % 60.1% -4.9% ATPS Chachai PH % 95.7% 10.7% STPS Sarni PH-1, 2 & 3* 75.7% 54.9% -20.8% SGTPS Birsinghpur PH-1 & % 74.9% -5.1% SGTPS Birsinghpur PH % 97.8% 12.8% *Elaborated in section 2.2 (Revised operating norms of STP, Sarni) 17

18 2.1.3 Auxiliary Consumption MPPGCL is submitting the comparison between auxiliary consumption as approved in Regulations, 2012 vis-à-vis the actual consumption levels of its stations. Approved V/s Actual Auxiliary Consumption (%) for FY Table in % Name of TPS As per MPERC Regulation,2012 MPPGCL Actuals Difference ATPS Chachai PH % 9.82% -0.18% ATPS Chachai PH % 9.87% 0.87% STPS Sarni PH-1, 2 & % 11.44% 1.59% SGTPS Birsinghpur PH-1 & % 10.72% 2.72% SGTPS Birsinghpur PH % 5.03% -0.97% *Elaborated in section 2.2 (Revised operating norms of STPS, Sarni) Station Heat Rate The comparison of approved SHR as approved in Regulations, 2012 actual SHR for FY is shown in table below: vis-a-vis Approved V/s Actual Station Heat Rates for FY Table Name of TPS As per MPERC Regulation,2012 in kcal/kwh MPPGCL Actuals Difference ATPS Chachai PH ATPS Chachai PH STPS Sarni PH-1, 2 & SGTPS Birsinghpur PH-1 & SGTPS Birsinghpur PH *Elaborated in section 2.2 (Revised operating norms of STPS, Sarni) 18

19 2.1.5 Transit Losses The comparison of approved Transit Losses as approved in Regulations, 2012 vis-a-vis actual Transit Losses for FY is shown in table below: Approved V/s Actual Transit & Handling Losses for FY Table in % Name of TPS As per MPERC Regulation,2012 MPPGCL Actuals Difference ATPS Chachai PH % 0.18% -0.02% ATPS Chachai PH % 0.78% -0.02% STPS Sarni PH-1, 2 & % 1.87% 1.07% SGTPS Birsinghpur PH-1 & % 1.84% 1.04% SGTPS Birsinghpur PH % 1.84% 1.04% Specific Oil Consumption In the table below targets of specific oil consumption as approved in Regulations, 2012 vis-à-vis the actual achieved by MPPGCL during FY have been elaborated. Approved V/s Actual Specific Oil Consumption Table Name of TPS As per MPERC Regulation,2012 in ml/kwh MPPGCL Actuals Difference ATPS Chachai PH ATPS Chachai PH STPS Sarni PH-1, 2 & SGTPS Birsinghpur PH-1 & SGTPS Birsinghpur PH *Elaborated in section 2.2 (Revised operating norms of STP, Sarni) 19

20 2.2 Revised Operating Norms of STPS Sarni. The Hon ble Commission vide Regulations, 2012 proviso 35 Norms of Operation has specified the operating norms of MPPGCL Thermal Power Stations for the Control Period FY-14 to FY-16. Wherein the norms for STPS Complex were derived based on the installed capacity of MW. Subsequently, the unit No. 3 &5 were decommissioned in FY Further, the Unit No.1 of STPS PH-1 has been decommissioned on , Unit No.2 of STPS PH-1 has been decommissioned on and Unit No.4 of STPS PH-1 has been decommissioned on by Central Electricity Authority, New Delhi. Accordingly the weighted average operating norms for STPS Complex have been reworked out considering the actual days in operation of units of STPS PH-1. The detailed working in this regard is annexed as Annexure-3 in the additional supporting documents being submitted before Hon ble Commission separately. The gist of revised operating norms for STPS Complex is tabulated hereunder:- Table Sl. No. Revised Parameter STPS Complex Unit Value 1 NAPAF % 75.69% 2 Gross Station Heat Rate Kcal/kWh Sp. Fuel Oil Consumption. ml/kwh Aux. Consumption % 9.85% 2.3 Hydro Stations The generation from Hydro power stations depends upon the rains in catchments area of dams of respective power stations. The actual Gross generation in MU of Hydro Power Stations for the year is shown in the table below: 20

21 Actual Gross Generation (MU) for FY Table S. No. Hydro Power Station / Units in MU Actual Gross Generation 1 Gandhi Sagar HPS Pench HPS Rajghat HPS 62 4 Bargi HPS Bansagar 1,2&3 HPS Birsinghpur HPS 48 7 Madhikheda HPS 136 The Plant Availability Factor of Hydro plants stations as approved in Regulations,2012 vis-a-vis actual achieved by MPPGCL during FY have been elaborated below. Normative V/s Actual Plant Availability Factor Table in % S. No. Hydro Power Station / Units As per MPERC Regulation,2012 MPPGCL Actuals Difference 1 Gandhi Sagar HPS 85.00% 92.75% 7.75% 2 Pench HPS 85.00% 86.74% 1.74% 3 Rajghat HPS 85.00% 19.37% % 4 Bargi HPS 85.00% 90.07% 5.07% 5 Bansagar 1,2&3 HPS 85.37% 81.72% -3.65% 6 Birsinghpur HPS 85.00% 85.48% 0.48% 7 Madhikheda HPS 85.00% 59.07% % The Hydro Power Station wise major constraints which affect Availability and recovery of Capacity Charges, even when units are available, are detailed as under: 21

22 (i) Gandhi Sagar HPS, Gandhisagar - Gandhi Sagar HPS is an interstate project of M.P. & Rajasthan where dam is controlled by Water Resources Department (WRD) of Rajasthan. Water stored in the reservoir is used for irrigation purpose and generation of electricity. WRD Rajasthan decides water releases for generation purpose. In the downstream of Gandhi Sagar HPS, there are Rana Pratap Sagar HPS and Jawahar Sagar HPS of Rajasthan. The water release from Gandhi Sagar and generation thereof is dependent on requirement of water by RPS & JS HPS and also Kota barrage. There is no control of MPPGCL on Authorities of WRD Rajasthan who decides water releases from these reservoirs resulting in under recovery of capacity charges from Gandhi Sagar HPS despite availability of machine. (ii) Pench HPS, Totladoh - Pench HPS is Inter State Project of MP and Maharashtra where dam is controlled by Soil & Water Management, Maharashtra as the water discharge is regulated by them. In the downstream of Pench HPS Totladoh, there is Navegaon-Kheri Reservoir from where water supply of Khapar Kheda TPS and requirement of irrigation / drinking water of Nagpur Distt. is met. The release of water is controlled as per downstream requirement. It is evident that there is no control of MPPGCL on authorities of Soil & Water Management, Maharashtra, who decides water releases from these reservoirs resulting in under recovery of capacity charges from Pench HPS despite availability of machines. (iii) Rajghat HPS Chanderi - Rajghat HPS is an Inter State Multipurpose Project of Government of MP and Government of UP, where dam is controlled by Betwa River Board. Being a multipurpose project, the water releases from Rajghat reservoir is controlled by Betwa River Board, Jhansi, a Central Govt. Organization. 22

23 Generally, the Reservoir Level reaches to Minimal Drop Down Level (MDDL) in the month of December / January every year due to requirement of water for irrigation purposes, as such no generation is possible beyond this month. It is evident that there is no control of MPPGCL on authorities of Betwa River Board, Jhansi, who decides water releases from these reservoirs resulting in under recovery of capacity charges from Rajghat HPS despite of availability of machines. (iv) Bansagar Complex - Bansagar Project is multipurpose Inter State Project of MP, UP & Bihar. The water stored in Bansagar Dam is shared in ratio of 2 : 1 : 1 in MP, Bihar & UP State. The share of UP is also being used by MP because of non readiness of their canals. The share of Bihar State is released through Bansagar III HPS Devlond after generation in to the downstream of the river. The share of MP is used in generation through Bansagar IV HPS Jhinna, Bansagar II Silpara & Bansagar-I (Tons) HPS Sirmour and for irrigation and drinking water supply of Rewa, Satna, Shahdol and adjoining area. The Bansagar Complex consists of following H P Stations: (a) Bansagar-1 (Tons) HPS :- This Power House uses water from Behar Barrage and Tons Barrage during rainy season. After that water from Bansagar Dam is used for generation of electricity. The release of water from Bansagar Dam is regulated by WRD Govt. of MP. (b) Bansagar-2 (Silpara) HPS :- This Power House is canal based power house. The release of water from Bansagar Dam to this canal (Common Water Carrier CWC) is regulated by WRD Govt. of MP. 23

24 (c) Bansagar 3 (Devlond) HPS :- The release of water is regulated by WRD Govt. of MP as per the requirement of Bihar State. Thus the generation of electricity from this power House is governed by releases of water as per the requirement of Bihar State. Accordingly this power station runs for on an average 4 months in a Financial Year depending on quantum of water required by Bihar State as per their share. (d) Bansagar 4 (Jhinna) Small Hydro Project(SHP) :- The release of water from Bansagar Dam is regulated by WRD Govt. of MP. The MDDL for the machines is Mtr. which reaches in the month of December / January every year as such this power house practically runs for a period of about four months. Therefore release of water in Bansagar Complex is not in the hands of the company. As such though the machines remain available for generation the company suffers from under recovery of capacity charges. (v) Bargi HPS, Bargi Nagar - Release of water for generation is being regulated by RABL Sagar LBM Dam section of WRD, Govt. of MP. There is no control of MPPGCL on authorities of RABL Sagar LBM Dam section of WRD, Govt. of MP who decides water releases from this reservoir resulting in under recovery of capacity charges from Bargi HPS despite of availability of machines. (vi) Birsinghpur HPS - The reservoir at Birsinghpur is constructed to meet out the requirement of cooling water for Sanjay Gandhi Thermal Power Station (PH-I, II & III) and for its natural cooling by circulating the water back into the 24

25 reservoir. The Birsinghpur HPS (1x20MW) was constructed for running the power house mainly during rainy season only utilizing spill off water and to feed power for BLACK START of SGTPS Birsinghpur during grid collapse situation. Considering requirement of water for SGTPS, the Birsinghpur HPS is run upto November / December every year. For rest of period, inspite of availability of unit there is no recovery of capacity charges. In view of the above facts & constrains, MPPGCL humbly request Hon ble Commission to kindly allow recovery of full Capacity Charges for Hydro stations of MPPGCL without applying actual availability factor. 25

26 3. Energy Charges (Variable Charges) The Energy Charges (Variable Charges) has been billed in accordance to proviso 41 of MPERC (Terms & Condition for determination of Generation Tariff) (Revision-II) Regulation, Therefore no truing up of Energy Charges has been considered in this petition. However, the copy of month wise State Energy Accounts and Final Bill raised by MPPGCL for FY are annexed as Annexure 4 & 5 respectively in Additional Supporting Documents being submitted before Hon ble Commission separately. 26

27 4. Fixed Cost 4.1 O&M Expenses In MPERC (Terms and conditions for determination of Generation Tariff) (Revision-II) Regulations, 2012, MPERC has prescribed norms for O & M expenses as a function of the capacity of the plant. The O&M expenses as per provision 36.1 & 50.1 of the MPERC Tariff Regulations, 2012 comprises of Employee cost, Repair & Maintenance (R&M) Cost and Administrative & General (A&G) Cost. For the year FY , O&M Charges in Rs. Lakh /MW specified by the Commission for various Thermal & Hydro power station of MPPGCL are tabulated below:- Table No Amount in L Rs/ MW/ Year. Approved by Thermal Station MPERC for FY ATPS PH PH PH STPS PH PH PH SGTPS PH PH All Hydro Stations The Hon ble Commission, in Trueup Tariff order for FY has considered the O&M expenses as per norms specified under clause 36.1 of 27

28 MPERC s Regulations, In this Trueup petition, same strategy has been followed to work out the O&M expenses. The Unit No.1 of STPS PH-1 has been decommissioned on , Unit No.2 of STPS PH-1 has been decommissioned on and Unit No.4 of STPS PH-1 has been decommissioned on by Central Electricity Authority, New Delhi. The O&M expenditure for STPS PH-1 i.e. Unit No. 1, 2 & 4 has been worked out on total number of days in operation, as these Units were decommissioned during the financial year Accordingly, the O&M expenditure based on norms for STPS PH-1 and STPS PH- 2&3 works out and detailed in the table below. The Unit wise month wise detailed working of O&M expenses claimed for STPS PH-1 is annexed as Annexure-6 in the additional supporting documents being submitted before Hon ble Commission separately. Table No in Rs. Crores S.No. Station O&M as per MPERC order O&M as considered by MPPGCL on Norms Diff. 1 STPS PH STPS PH-2& Total Comparison of O&M expenditure as per Hon ble Commission s Tariff order for FY and as considered by MPPGCL on norms before applying Actual Availability is tabulated below: 28

29 Table No S.No. Station Order for Petition No. Page No. As per MPERC order in Rs. Crores As considered by MPPGCL on Norms Diff. 1 ATPS PH-2 02/ ATPS PH-3 02/ STPS 02/ SGTPS PH-1&2 02/ SGTPS PH-3 02/ Total Thermal Gandhi Sagar 02/ Pench 02/ Rajghat 02/ Bargi 02/ Bansagar 1,2&3 02/ Birsinghpur 02/ Madhikheda 02/ Total Hydro Total Comparison of O&M expenditure as per Hon ble Commission s MYT order and as considered by MPPGCL on norms, after applying Actual Availability is tabulated below: S. No. Table No Station Order for Petition No. Page No. As per MPERC Order in Rs. Crores As considered by MPPGCL on Actual Availability Diff. Rs. Crores. 1 ATPS PH-2 02/ ATPS PH-3 02/ STPS 02/ SGTPS PH-1&2 02/ SGTPS PH-3 02/ Total Thermal

30 S. No. Station Order for Petition No. Page No. As per MPERC Order As considered by MPPGCL on Actual Availability Diff. Rs. Crores. 7 Gandhi Sagar 02/ Pench 02/ Rajghat 02/ Bargi 02/ Bansagar 1,2&3 02/ Birsinghpur 02/ Madhikheda 02/ Total Hydro Total COMPENSATION ALLOWANCE The Hon ble Commission in proviso 36.2 of the Regulation RG-26(II) of 2012 has also permitted Compensation Allowances to the Thermal Generating stations depending upon their age to meet the requirement of capital nature of minor assets. Accordingly, Compensation Allowance for various Thermal Power Stations of MPPGCL has been worked out as described below: ATPS, Chachai :- The units of ATPS PH-2 are older than 25 years therefore the compensation allowance for the plants have been considered based on the norms permitted by the Hon ble Commission under proviso 36.2 of the Regulation RG-26(II) of 0.84 Lakhs/MW/Year. STPS Sarni :- All the units of PH - 2 &3 are above 25 years and therefore compensation 0.84 Lakhs/MW/Year basis has been considered. As per proviso 36.2 of the Regulation RG-26(II) of 2012, the Compensation Allowance for PH-1 has not been considered as 30

31 MPPGCL is claiming Special Allowance in lieu of R&M for this power house. SGTPS Birsinghpur :- The units No. 1 & 2 are older than 15 years therefore the compensation 0.44 Lakhs/MW/Year has been considered. The age of the Unit No. 3 & 4 will be in the age group of 11 to 15 years therefore compensation has been 0.19 Lakhs/MW/Year. Table No Amount in Rs. Crores Power House Capacity in MW Age of PH as on Rate in Lakhs/MW Total ATPS-PH > ATPS PH STPS PH > STPS PH (2&3) > STPS Total > SGTPS PH SGTPS PH SGTPS PH Thermal (100%) The total amount of Compensation Allowance worked out before applying Actual Availability is elaborated in the table below:- 31

32 Thermal Thermal Compensation Allowance FY Table No S. No Particulars As per MPERC Regulation for FY 14 Amount in Rs. Crores As considered by MPPGCL on Norms Diff. 1 ATPS ATPS ATPS STPS STPS STPS STPS SGTPS SGTPS SGTPS SGTPS Total The total amount of Compensation Allowance worked out after applying Actual Availability is elaborated in the table below:- Compensation Allowance FY Table No S. No Particulars As per MPERC Regulation for FY 14 Amount in Rs. Crores As considered by MPPGCL on Actual Availability Diff. 1 ATPS ATPS ATPS STPS STPS STPS STPS SGTPS SGTPS SGTPS SGTPS Total Thermal

33 4.1.3 Special Allowance:- The Hon ble Commission in proviso 18.5 of the Regulation RG-26(II) of 2012 for Renovation & Modernization has provided that in case of thermal generating stations, the Generating Company may by its discretion can avail a special allowance either for a unit or a group of units as compensation for meeting the requirement of expenses including Renovation & Modernization works beyond the useful life of the generating stations. Units of STPS, Sarni PH-1 are planned for their closure, soon after the commencement of 2x250 MW Units of STPS, Sarni. MPPGCL has opted to avail this special allowance for these five units. Accordingly the same has been included in the Annual Fixed cost of the Station. The Unit No.1 of STPS PH-1 has been decommissioned on , Unit No.2 of STPS PH-1 has been decommissioned on and Unit No.4 of STPS PH-1 has been decommissioned on by Central Electricity Authority, New Delhi. The Unit wise month wise detailed working of Special Allowance claimed for STPS PH-1 is annexed as Annexure-7 in the additional supporting documents being submitted before Hon ble Commission separately. Further, the Hon ble Commission vide Order in Petition No. 56 of 2012 dated , at para No. 14 (d) has directed that in case the main comprehensive R&M proposal for Unit No. 6,7,8&9 of STPS Sarni is not filed by MPPGCL within 24 months from the date of said order, the approval of subject capital expenditure for need based R&M shall be limited to eligibility of availing Special Allowance by MPPGCL for aforesaid units for this period under regulation 18.4 & 18.5 of Tariff Regulation,2009 and its amendments, at the rate specified in the regulations for each year of control period. MPPGCL has decided not to undertake the Comprehensive R&M works at STPS, Sarni at Unit No. 6, 7, 8 & 9 and informed the same to Hon ble Commission vide letter No /CS-MPPGCL/MPERC/Pt.56 of 2012/410 dated Accordingly, the Special Allowance on the rates specified by Hon ble Commission in Regulations, 2012 for FY i.e Rs. 7.5 Lakhs/MW has been considered calculating the Special Allowance for Unit No. 6,7,8&9 of 33

34 STPS Sarni. The total amount of Special Allowance worked out before applying Actual Availability is elaborated in the table below:- Table No S. No Particulars Special Allowance FY As per MPERC Order for FY 14 Amount in Rs. Crores. MPPGCL as per Norms Diff. 1 STPS PH STPS PH 2& Total The total amount of Special Allowance worked out after applying Actual Availability is elaborated in the table below:- Table No S. No Particulars As per MPERC Order for FY 14 Amount in Rs. Crores. MPPGCL as per actual Availability Diff. 1 STPS PH STPS PH 2& Total MPPGCL humbly request Hon ble Commission to kindly consider the O&M expenses, Compensation Allowance and Special Allowances as elaborated above. 34

35 4.2 Other Charges Other Charges comprises of Rent, Rates & Taxes, MPERC Fees, Entry Tax on R&M, Water Charges, Cost of Chemical, Cost of Consumable, Publication Charges & SLDC charges. Water Charges which are payable to Government have been paid based on rates specified by GoMP. Rent, Rates and Taxes for power stations has been taken on actual. SLDC charges have claimed in accordance with Regulation 39 allocated to Thermal Power Stations on MW capacity basis. The detailed workings in regard to Other Charges are annexed as Annexure-8 respectively in Additional Supporting Documents being submitted before Hon ble Commission separately. As per the Regulation 26.5, the expenditure towards actual Pension & Terminal benefits shall be claimed by Transmission Licensee, accordingly MPPGCL had not claimed these expenses in this Trueup tariff petition MPERC Fees MPERC Generation Tariff Regulation 2012 provides claim of MPERC Fee as actual. The details of Fees actually paid to MPERC in FY are shown in Table below: Table No S.No. Power Station in Rs. Crores MPERC Fee 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro Total

36 4.2.2 Cost of Chemicals The Regulation 36.1 provides for claiming Cost of Chemicals separately on actual, accordingly the cost of Chemicals as captured in audited Books of accounts for FY at point No. 23.2, Sl. No. 2 page 40, factored to represent 100% capacity operated by MPPGCL has been worked out. The Power station wise details of Cost of Chemicals in FY are shown in Table below:- Table No in Rs. Crores S.No. Power Station Cost of Chemicals 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro 0.00 Total

37 4.2.3 Water Charges Water Charges are payable to Government on rates specified by GoMP. The Regulation 42 & 58 provides for claiming Water Charges separately on actual, accordingly the Water Charges as captured in audited Books of accounts for FY at point No. 23.2, Sl.No.1 on page 40, factored to represent 100% capacity operated by MPPGCL has been worked out. The Power station wise details of Water Charges paid in FY are shown in Table below:- Table No in Rs. Crores S.No. Power Station Water Charges 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro Total Rent, Rates & Taxes Rent, Rates and Taxes for power stations of MPPGCL has been taken on actual basis. The Regulation 36.1 provides for claiming Rent, Rate & Taxes separately on actual, accordingly the Rent, Rate & Taxes as captured in audited Books of 37

38 accounts for FY at point No. 27.1, Sl. No. (a) & (c) page 47, factored to represent 100% capacity operated by MPPGCL has been worked out. The Power station wise details Rent, Rate & Taxes in FY are shown in Table below: Table No S.No. Power Station in Rs. Crores Rent, Rates & Taxes 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro 0.15 Total Entry Tax on Repair & Maintenance. Entry Tax on Repair & Maintenance of power stations of MPPGCL has been taken on actual basis. The Regulation 36.1 provides for claiming Entry Tax on Repair & Maintenance separately on actual, accordingly the Entry Tax on Repair & Maintenance as captured in audited Books of accounts for FY at point No. 27.6, Sl. No. 7 page 48, factored to represent 100% capacity operated by 38

39 MPPGCL has been worked out. The Power station wise details Entry Tax on Repair & Maintenance in FY are shown in Table below: Table No in Rs. Crores S.No. Power Station Entry Tax 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro 0.05 Total Cost of Consumables and Publication Expenses The Regulation 36.1 provides for claiming Cost of Consumables separately on actual, similarly Regulation 30 provides for claiming expenses incurred towards publication of Notice for Tariff/ Trueup petitions. accordingly the Cost of Consumables as captured in audited Books of accounts for FY at point No. 23.2, Sl.No.3 page 40, factored to represent 100% capacity operated by MPPGCL has been worked out. Similarly the Publication expenses incurred by MPPGCL during FY has worked out and parked at Bargi HPS for simplicity. 39

40 The Power station wise details of Cost of Chemicals and Publication Expenses in FY are shown in Table below:- Table No in Rs. Crores S.No. Power Station Cost of Consumables + Publications 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro 0.64 Total SLDC Charges SLDC charges have claimed in accordance with Regulation 39 of Terms & Conditions for determination of Generation Tariff, Regulation-2012 and allocated to Thermal Power Stations on MW capacity basis. These charges were determined & demanded by SLDC as per the Regulation 12.5 of MPERC (Levy and Collection of Fee and Charges by State Load Despatch Centre) Regulation, 2004 (Revision-1, 2006). Accordingly the same is being paid by MPPGCL towards Revision of Declared Capacity (DC) of Thermal Power Station of MPPGCL under ABT 40

41 regime and is reflected in Annual Statement of Accounts for FY of MPPGCL in Point No Sl. No. (h) Page 47. The Power Station wise details of SLDC Charges paid by MPPGCL in FY are shown in Table below: Table No in Rs. Crores S.No. Power Station SLDC Charges 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro 0.00 Total Overall Other Charges Considering the above elements, the overall Other Charges work out to be Rs Crores and MPPGCL humbly prays before Hon ble Commission to permit same:- 41

42 Table No in Rs. Crores S.No. Power Station Rent, Rates & Taxes Entry Tax Water Charges Cost of Chemicals Cost of Consumables + Publications MPERC Fee SLDC Charges Total 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar HPS Pench HPS Rajghat HPS Bargi HPS Bansagar PH-1,2&3 HPS Birsinghpur HPS Madhikheda HPS Total Hydro Total

43 4.3 Additional Capitalization/ De-capitalization and Funding thereof- ATPS 2x120MW PH The Renovation and Modernization scheme at ATPS PH-2(2x120 MW) was approved by the Board of erstwhile MPSEB on amounting to Rs Crores. The said R&M scheme was financed through PFC loan No amounting to Rs Crores, GoMP Loan amounting to Rs Crores and balance through equity/internal resources of the Company. The copy of Board s resolution along with loan documents, in this regard, were already submitted to Hon ble Commission vide this office letter dated In the matter, it is to mention that the additional Capitalization under the said scheme at ATPS PH-2 was previously approved by Hon ble Commission in the True Up orders for FY , FY & FY In the True up petition for FY , MPPGCL has claimed additional capitalization of Rs.4.04 Crores under the said scheme In the instant financial year under consideration for True up, the S. No. additional asset capitalized under said scheme as per the Audited books of Accounts for FY amounts to Rs.0.75 Crores. The details of asset capitalized under said scheme is as follows:- Table No Account Code Details of Asset Capitalized In Rs. Crores Switchgears including cable connections Refrigerators & water coolers Computers Total A list detailing the R&M works including copy of orders, accounting vouchers etc are enclosed as Annexure-9 as additional supporting 43

44 documents being submitted separately. The funding for the above assets has been made through PFC Loan No and GoMP Loan. The details of funding in respect of additional capitalization carried out at ATPS PH-2 are as under:- Table No Particulars PFC Loan No in Rs. Crores. GoMP Total Loan 1 Total Drawls till Approved by MPERC in upto True Up Order for FY 12 in proportion to Addl. Capitalization allowed by MPERC Loan drawls Claimed in FY 13( in proportion to Addl. Capitalization) Balance Amount (1-2-3) Drawls in FY Total receipts to be claimed(3+4) Additional Capitalization in FY 14 at ATPS PH The year wise details of Loan drawl in respect of PFC Loan No and GoMP Loan Nos. F-5/17/09/13 dated and F-5/17/09/13 dated is detailed below: Table No Financial Year PFC Loan No in Rs. Crores. GoMP Loan No. (i) F-5/17/09/13 dtd 22/01/2010 (ii)f-5/17/09/13 dtd 27/03/2010 Drawl up to FY 06 (10M) FY FY FY FY FY FY FY Subtotal up to FY FY Total

45 ATPS 210MW PH The extension Unit No.5 210MW ATPS was commissioned on , accordingly MPPGCL had filed petition for determination of Final generation Tariff on for the period FY to FY on actual basis and for FY on projected basis. The Hon ble Commission vide order dated has determined the final generation for FY & FY on actual basis and FY on projected basis. Further vide True up order for FY dated , the Hon ble Commission has approved the additional Capitalization during FY amounting to Rs Crores. In the True up petition for FY , MPPGCL has claimed additional capitalization of Rs Crores In the instant financial year under consideration for True up, the additional asset capitalized at ATPS PH-3(210MW) as per the Audited books of Accounts for FY amounts to Rs.7.28 Crores as detailed hereunder: Table No Sl. No. Account Code Details of Asset Capitalized Amount in Rs. Crores Cost of tree plantation for tree cut down Boiler Plant & Equipments Turbine-generator Steam power generation Ash handling plant Coal Conveyer & crusher Coal handling plant & handling equipments Instrumentation & Controls Refrigerators & water coolers Meter Testing Laboratory Tools & Equipments Equipments in hospitals/clinics Computers Capital Spares at Generating Stations 0.76 Total

46 The ATPS Extn. Unit No.5 210MW project was on EPC Turnkey basis awarded to M/s BHEL, New Delhi. The Order copies of major Supply/Works orders along with copy of accounting vouchers through which the additional capitalization of assets have been carried out are annexed as Annexure-10 in additional information being submitted separately as supporting documents. The additional capitalization carried out are within the original scope of cost estimate of Rs Crores approved by GoMP vide letter No. 282/13/2011 dated (copy annexed as Annexure-11 in additional information being submitted separately as supporting documents The details of funding (Debt + Equity) in respect of additional capitalization carried out at ATPS PH-3 in FY is detailed below:- Table No in Rs. Crores Particulars PFC Loan No & GoMP Equity Internal resources/ Equity Total 1 Total Drawls till Approved by MPERC in upto True Up Order for FY 12 in proportion to Addl. Capitalization allowed by MPERC Less: Adjustment towards FY 14 (assets Transferred to CWIP) Drawls Claimed in FY 13( in proportion to Addl. Capitalization & adjustment of outstanding Liability) Net amount Balance Amount (1-2-3) Drawls in FY Total receipts to be claimed(4+5) Additional Capitalization in FY 13 at ATPS PH

47 The year wise drawls from PFC Loans and GoMP Equity is detailed hereunder:- Table No in Rs. Crores Financial Year PFC Loan No PFC Loan No GoMP Equity Internal resources/e quity Total Up to FY FY FY FY FY FY FY FY Subtotal up to FY FY Total It is further to submit that the Hon ble Commission in the Final Tariff Order for ATPS PH-3 210MW para has excluded the amount of Rs Crores towards Liquidated damages from BHEL while determining the project cost. As per the Standard Accounting Principles the Assets are recorded in books of accounts at the original value without deduction. The amount of LD etc remains withheld till the final settlement is made with the contractor, thereafter necessary entries with adjustments are made in the books of accounts. Till date final settlement has not been made with the contractor as such the final amount LD etc cannot be ascertained. Once the final settlement is made the same shall be suitably informed to the Hon ble Commission. Accordingly MPPGCL has considered the project cost as capitalized in the books of accounts for the purpose of calculating depreciation 47

48 STPS PH The Hon ble Commission in Regulation RG-26(I) of 2009 Proviso 18 for Renovation & Modernization provides that the generating company may at its discretion can avail a Special Allowance either for a Unit or group of Units as compensation for making requirement of expenses including R&M works beyond the useful life of generating station. Since the Units of STPS PH-1 are planned for closure soon after the commencement of 2x250MW Units of STPS Sarni, MPPGCL has opted for Special Allowance for the five Units of STPS PH-1 (5x62.5MW) Accordingly, MPPGCL is not claiming any additional capitalization on these Units from FY onwards. Hence Opening Gross Block as on is considered for the purpose of claiming deprecation The Unit No.3 of STPS PH-1 was decommissioned on vide Central Electricity Authority, New Delhi letter dated Similarly, the Unit No. 5 of STPS PH-1 was decommissioned on vide Central Electricity Authority, New Delhi letter dated Accordingly the Assets of Unit No.3 & 5 of STPS PH-1 have been reduced from the Gross Block of STPS PH-1 in the True up petition for FY as per the Audited Books of Accounts for FY In the Financial Year , the unit No.2&4 of STPS PH-1 was Sl. No. decommissioned on and unit No.1 was decommissioned on The assets towards common services at STPS Sarni pertaining to PH-1 remains part of Gross Block. Accordingly the Assets of Unit No.1,2&4 of STPS PH-1 have been reduced from the Gross Block of STPS PH-1 in the instant True up petition as per the Audited Books of Accounts for FY The details of assets deleted from Gross Block of STPS PH- 1 are detailed here under: Table No Account Code Details of Asset Capitalized in Rs. Crores Amount Buildings Containing Thermo Elec. Gen. Plant Buildings Containing Transmission Installations Building Containing Dist. Installations Office Buildings Other Buildings Cooling Water System

49 Sl. Account No. Code Details of Asset Capitalized Amount Cooling Towers Boiler Plant & Equipments Furnace/Burners Turbine-Generator-Steam Power Generation Plant Foundations for Steam Power Plant Ash Handling Plant Auxiliaries in Steam Power Plant Coal Handling Plant & Handling Equipments Instrumentation and Controls Hydel Power Generation Plants Plant Foundation for Hydel Power Generating Plant Transmission Plant-Transformers 100 KVA & Above Other Transformers of Power House Others Trans. Plant Transformer, Kiosks, Subs Equip Apprat Substation Transformer & Kiosks 100 KV & Above Substation Transformer & Kiosks Below 100 KV Line Transformer Below 100 KVA Switchgears Including Cable Connections Static Machine Tools & Equipments Air-Conditioning Plant Static Air-Conditioning Plant-Portable Refrigerators and Water Coolers Tools and Tackles Other Misc. Equip. Including. Fire Protection System Overhead Lines on Steel Support At Vol.Bt.13.2 & Overhead Lines on R.C. Support Underground Cables Including.Jt. Boxes & Disconnect. Box Underground Cables - Cable Duct System Metering Equipments Miscellaneous Equipments Furniture & Fixtures Calculators Typewriters Others Computers Total The assets not considered for removal as the same was added during FY 10 to FY 12 and the addition after onwards was not considered as special allowance was availed by MPPGCL for STPS PH-1 Total

50 It is to mention that the loan Balance as on towards STPS PH-1 amount to Nil. Further the amount of equity allocated to STPS PH-1 has been readjusted in proportion to assets removed from the Gross Block of STPS PH-1. The same is dealt in subsequent chapters of the instant petition. The equity balance/ withdrawn is detailed as under: Table No in Rs. Crores Particulars Amount 1 Gross Block of STPS as on Normative Equity of STPS as on Assets decommissioned during FY Normative Equity in Proportion to assets decommissioned (2/1x3) Balance Equity to be considered for RoE towards retained assets (2-4) STPS PH-2& The Hon ble Commission in its order for petition No. 56 of 2012 dated has accorded approval of capital expenditure amounting to Rs Crores towards need based R&M works in Unit No. 6, 7, 8 & 9 of PH-2&3, STPS Sarni Further, The Hon ble Commission in said order para No. 14 (d) has directed that in case the main comprehensive R&M proposal for Unit No. 6,7,8&9 of STPS Sarni is not filed by MPPGCL within 24 months from the date of said order the approval of subject capital expenditure for need based R&M shall be limited to eligibility of availing Special Allowance by MPPGCL for aforesaid units for this period under regulation 18.4 & 18.5 of Tariff Regulation,2009 and its amendments at the rate specified in extant regulations for each year of control period The Hon ble Commission vide True up order for FY dated has not allowed the additional capitalization at STPS PH-2&3 amounting to Rs Crores towards need based R&M works in Unit No. 6, 7, 8 & 9 of PH-2&3, STPS Sarni as MPPGCL has not fulfilled the 50

51 condition of filing the main comprehensive R&M proposal for Unit No. 6, 7, 8 & 9 of STPS Sarni till the date of issue of True up Order In accordance with the procedure adopted by Hon ble Commission, MPPGCL in the True Up petition for FY has not claimed any additional capitalization during FY at STPS PH-2 & 3 towards need based R&M works along with its funding through Loan & equity In the aforesaid issue MPPGCL has now opted for Special Allowance from FY onwards the same is dealt in the Chapter of O&M expenses for FY

52 SGTPS PH-1& Minor addition in assets of SGTPS PH-1&2 were made during FY S.No 13 towards procurement of Computers, Furniture & office Equipments. The said procurement was made from the internal resource/equity of MPPGCL. The details are as hereunder:- Table No Account Code Details in Rs. Crores Amount Other Transformers of power House Refrigerators and water coolers Equipments in Hospitals/clinics Furniture & Fixture Others office equipments Computers 0.02 Total The funding details are hereunder:- Table No Particulars Loan Equity/ Internal resources in Rs. Crore Total 1 Additional capitalization in FY Drawls in FY SGTPS PH The extension Unit No MW SGTPS was commissioned on , accordingly MPPGCL had filed petition for determination of Final generation Tariff on for the period to on actual basis and for FY-12 on projected basis. Hon ble Commission vide order dated has determined the Final Generation Tariff for FY , FY & FY on actual basis and FY on projected basis. 52

53 Further vide True up order for FY dated , the Hon ble Commission has approved the additional Capitalization during FY amounting to Rs Crores. In the True up petition for FY , MPPGCL has claimed additional capitalization of Rs Crores In the instant financial year under consideration for True up, the additional asset capitalized at SGTPS PH-3(500MW) as per the Audited books of Accounts for FY amounts to Rs Crores as detailed hereunder: Table No in Rs. Crore Sl. No. Account Code Details of Asset Capitalized Amount Cost of Land Development on Leasehold Land Cost of Tree Plant. for Tree Cut Down (Provisional) Office Buildings Pucca Roads Boiler Plant & Equipments Turbine-Generator-Steam Power Generation Ash Handling Plant Auxiliaries in Steam Power Plant Coal Handling Plant & Handling Equipments Instrumentation and Controls Internal Wiring Including Fittings & Fixtures Others Computers Capital Spares 1.17 Total The SGTPS Extension Unit No.5 (500MW) project was on EPC Turnkey basis awarded to M/s BHEL, New Delhi. The major order copies in this regard along with copy of accounting vouchers through which the additional capitalization of assets have been carried out are annexed as Annexure-12 in additional information being submitted separately as 53

54 supporting documents.. The aforesaid additional capitalization carried out were within the original scope of cost estimate of Rs Crores approved by GoMP vide letter No. 3193/13/2007 dated (copy annexed as Annexure-13 in additional information being submitted separately as supporting documents The details of funding (Debt + Equity) in respect of additional capitalization carried out at SGTPS PH-3 in FY is detailed below: Table No Particulars PFC Loan No in Rs. Crore Equity Total 1 Total Drawls till Approved by MPERC in upto True Up Order for FY 12 in proportion to Addl. Capitalization allowed by MPERC Less: Adjustment towards FY 14 (w.r.t. assets Transferred to CWIP Rs 28.70Crs, assets transferred from SGTPS to STPS PH-4 Rs.0.20Crs) Net amount Loan drawls Claimed in FY 13( in proportion to Addl. Capitalization) Balance Amount (1-2-3) Drawls in FY Total receipts to be claimed(4+5) Additional Capitalization in FY 13 at SGTPS PH-3(500MW)

55 The year wise drawls from PFC Loans and deployment of GoMP-Equity is detailed hereunder:- Table No Financial Year PFC Loan No in Rs. Crores GoMP Total Equity Up to FY FY FY FY FY FY FY FY Subtotal up to FY FY Total The Gross Block of SGTPS PH-3 (500 MW) as on CoD dated amounted to Rs Crores. The Hon ble Commission in the final tariff order of SGTPS PH-3 (500 MW) has considered Gross block of Rs Crores after deduction of Rs Crores towards Liquidated damages and Rs towards Exchange Rate variation. The total deduction comes to Rs.Rs Crores. In the Financial year the amount of LD has been settled with BHEL which amounts to Rs Crores and the amount of Exchange Rate variation remains unaltered i.e Crores. The amount of LD retained as a result of settlement has been reflected under the head Non Tariff Income and accordingly deducted from Fixed Cost In view of the above the depreciation of SGTPS PH-3 (500 MW) needs to be revised from FY 09 to FY 13 on account of adjustment of LD/ERV and further adjustment/deductions carried out in FY14 with retrospective effect. The same is considered separately in the chapter of Assets & depreciation. 55

56 Bansagar PH-1, 2 & 3 : The additional capitalization as captured in the Annual Statement of Accounts of MPPGCL for FY at Bansagar PH-1, 2 & 3 Hydro Power Station amounts to Rs Crores. The account code details of assets capitalized is as under:- Table No in Rs. Crores S.No Account Code Details Amount Land held under lease Other Misc. Equipments inc. Fire Protection system Computers 0.02 Total The assets capitalized are mainly towards compensation paid for land and procurement of computers. The accounting vouchers & relevant documents towards the same are annexed as Annexure-14 in additional information being submitted separately as supporting documents The aforesaid expenditure towards additional capitalization was funded through the internal resources / equity of MPPGCL as detailed in the table below:- Table No S. No. Power Stations Assets capitalized in Rs. Crores Loan Equity/ Internal Resources 1 Bansagar PH 1, 2 & Total Gandhi Sagar HPS The additional capitalization as captured in the Annual Statement of Accounts of MPPGCL for FY at Gandhi Sagar Hydro Power Station amounts to Rs.0.09 Crores. The account code wise details of assets capitalized are as under: 56

57 Table No Account S.No Code Details Amount Furniture & Fixture Computers Total The aforesaid capitalization is on account of procurement furniture peripherals and computer peripherals. The said expenses are met from the internal resources of the company. The accounting vouchers in this regard are annexed as Annexure-15 in additional information being submitted to Hon ble Commission separately as supporting documents The funding details are as under: Table No in Rs. Crores S. No. Power Stations Assets capitalized Loan Equity/ Internal Resources 1 Gandhi Sagar Pench HPS The additional capitalization as captured in the Annual Statement of Accounts of MPPGCL for FY at Pench Hydro Power Station amounts to Rs Crores. The account code details of assets capitalized is as under:- Table No in Rs. Crores S.No Account Code Details Amount Auxiliaries in Hydro power Stations 1.87 Total The assets capitalized is towards procurement of Electro Hydraulic governor under RGMO scheme of Hon ble CERC at Pench HPS The 57

58 accounting vouchers & relevant documents towards the same are annexed as Annexure-16 separately as supporting documents. in additional information being submitted The aforesaid expenditure towards additional capitalization was funded through the internal resources / equity of MPPGCL as detailed in the table below:- Table No S. No. Power Stations Assets capitalized in Rs. Crores Loan Equity/ Internal Resources 1 Pench Total Head Quarter MPPGCL wish to submit that in its earlier petitions, the company has proposed the minor assets capitalized at Head Quarter to be treated as part of assets of the nearest power station i.e. Bargi HPS and accordingly claimed depreciation, Interest Charges and RoE. However the Hon ble Commission has not given cognizance to the same. MPPGCL in the instant Trueup petition has again claimed the total capitalization for the period FY (10M) upto FY as per the Audited books of accounts. The account code wise details of Asset capitalized at Head Quarter (HQ) is as under:- Table No in Rs. Crores A/c Code Details FY06 (10M) FY07 FY08 FY09 FY10 FY11 FY12 FY 13 FY 14 Total AIR CONDITIONER REFRIGERATORS & WATER COOLERS TOOLS AND TACKLES MISCELLANEOUS EQUIPMENTS FURNITURE AND FIXTURES OTHERS COMPUTERS Total

59 The accounting vouchers along with the statement detailing the nature of works etc. are annexed as Annexure-17 in additional information being submitted to Hon ble Commission separately as supporting documents The details of funding in respect of aforesaid assets capitalized at HQ is detailed below:- Table No Particulars GoMP Loan in Rs. Crores Equity/ internal resources Total 1 Receipts upto Approved by MPERC in the earlier True Up Orders Balance Amount(1-2) Drawls in FY Total receipts Claimed(3+4) Additional Capitalization from FY 06 to FY Additional Capitalization for FY Total Additional capitalization claimed from FY 06 to FY 14(6+7) The year wise details of drawl made from loan and internal resources towards funding of additional capitalization is as under:- Table No Financial Year Asset Added GoMP Loan No. F-5/41/2007/13 dated in Rs. Crore Equity/ internal resources FY FY FY FY FY FY FY FY FY Total MPPGCL humbly request Hon ble Commission to kindly allow the additional capitalization at HQ. 59

60 Considering the above power station wise additional capitalization the total amount of Loans & Equities/Internal resources claimed in the instant petition works out as under:- LOAN RECEIPTS Table No in Rs. Crores S.No. Stations Receipts upto Receipts in FY 14 Total 1 ATPS PH ATPS PH SGTPS PH Total Thermal HQ Total Note:- *Loan receipt / drawl not cognized by Hon'ble Commission EQUITY / INTERNAL RESOURCES Table No in Rs. Crores S.No. Stations Receipts upto Receipts in FY 14 Total 1 SGTPS PH Total Thermal Gandhi Sagar Pench Bansagar PH 1,2& Total Hydel HQ & S&I Total Note:- * Equity Receipt / drawl not cognized by Hon'ble Commission Accordingly the power station wise asset capitalization and funding details are summarized as below:- 60

61 Table No in Rs. Crores S.No. Stations Addl. Capitalization FY 14 Loan Equity 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Bansagar PH 1,2& Total Hydro HQ & S&I* Total *Asset addition for HQ from FY 06 to FY 14 has been considered MPPGCL humbly request the Hon ble Commission to permit the additional Capitalization at Thermal & Hydro power Stations along with funding thereof. 61

62 Details of Asset Write off/adjustments etc: (1) ATPS PH-2 During FY following assets were written off at ATPS PH-2 as per Audited Books of Accounts for FY : Table No Sl. No. Account Code Details of Asset Written off in Rs. Crores Amount Refrigerators and water coolers Furniture & Fixture Computers Total The aforesaid assets are reduced from the Gross Block of ATPS PH-2 in the chapter of Assets & depreciation for the purpose of claiming depreciation for FY (2) ATPS PH-3: In FY MPPGCL has paid additional capitalization of Rs Crores and the same was permitted by Hon ble Commission. In the Financial year FY , asset (sewerage line) amounting to Rs Crore out of said capitalization has been transferred back to CWIP ( Capital Work in Progress) and the same was reflected in the Audited books of Account for FY13-14.The Account Code wide details is as under: Table No Sl. No. Account Code Details of Asset transferred to CWIP in Rs. Crores Amount Building containing Thermo Gen Plant 1.02 Total 1.02 The depreciation earlier claimed on such asset during FY and FY has been reversed separately in the chapter Assets & Depreciation. As the asset was earlier funded through Loan component, the Loan Balance of ATPS PH-3 has also been reduced to the extent of amount of aforesaid Asset. 62

63 (3) STPS PH 2 &3: In FY MPPGCL has claimed asset addition amounting to Rs Crores and the same was permitted by Hon ble Commission. The said capitalization includes an asset of Rs Crores which is transferred to STPS PH-4 in FY and the same was reflected in the Audited books of Account for FY The Account Code wide details are as under: Table No Sl. No. Account Code in Rs. Crores Details of Asset transferred to STPS PH-4 Amount Other Buildings 5.15 Total 5.15 The depreciation earlier claimed on such asset during FY and FY has been reversed separately in the chapter Assets & Depreciation. The asset was earlier funded through Loan component, however the Loan Balance of STPS PH-2&3 as on is Nil, accordingly no reduction is made. (4) SGTPS PH 1&2: During FY , following assets were written off at SGTPS PH-1&2 as per Audited Books of Accounts for FY : Sl. No. Table No Account Code Details of Asset Written off in Rs. Crores Amount Batteries including charging equipments 0.28 Total 0.28 The aforesaid asset is reduced from the Gross Block of SGTPS PH-2 in the chapter of Assets & depreciation for the purpose of claiming depreciation for FY (5) SGTPS PH-3 The Gross Block of SGTPS PH-3 (500 MW) as on COD dated amounting to Rs Crores. The Hon ble Commission in the final tariff order of SGTPS PH-3 (500 MW) has considered Gross block of Rs

64 Crores after deduction of Rs Crores towards Liquidated damages and Rs towards Exchange Rate variation. The total deduction comes to Rs.Rs Crores. In the Financial year the amount of LD has been settled with BHEL which amounts to Rs Crores and the amount of Exchange Rate variation remains unaltered i.e Crores. The amount of LD retained as a result of settlement same has been reflected under the head Non Tariff Income. Further reduction of Rs Crores towards ERV is made in the amount of assets of SGTPS PH-3 as per Audited Book of Accounts of MPPGCL. The Account Code wide details of Asset amount reduced due to Exchange rate variation are as under: Sl. No. Table No Account Code Details of Asset amount reduced due to Exchange rate variation in Rs. Crores Amount Boiler plant & equipments Turbine Generator-Steam Power generation Instrumentation & controls Other Transformer of Power House Switchgears including cable connections 0.03 Total In addition to above, during FY 12, MPPGCL has claimed asset addition amounting to Rs.61.13, out of which asset amounting to Rs.0.20 Crores (In- Motion Weigh Bridge) was transferred to STPS PH-4. Similarly, during FY 13, MPPGCL has claimed asset addition amounting to Rs Crores, out of which asset amounting to Rs Crores (Ash Handling Plant) was transferred to CWIP. The Account Code wide details of said Assets are as under: Sl. No. Table No Account Code Details of Asset transferred in Rs. Crores Amount Ash Handling Plant Capital Spares 0.20 Total Considering above the amount of depreciation claimed at SGTPSPH-3 (500MW) has been revised from retrospective effect in the chapter Assets & Depreciation. 64

65 The reduced/transferred assets from funded loan component, accordingly loan Balance of SGTPS PH-3 has also been reduced to the extent of amount of aforesaid Assets. (6) Bansagar PH-1,2&3: During FY following assets were written off at Bansagar PH-1, 2 & 3 as per Audited Books of Accounts for FY : Table No Sl. No. Account Code Details of Asset Written off in Rs. Crores Amount Hydel works, RCC pipes, Surge tanks, valves etc Hydel power Generation Plant Total The aforesaid assets are reduced from the Gross Block of Bansagar PH-1,2&3 in the chapter of Assets & depreciation for the purpose of claiming depreciation for FY (7) Gandhi Sagar HPS During FY following assets were written off at Bansagar PH-1,2&3 as per Audited Books of Accounts for FY : Table No Sl. No. Account Code Details of Asset Written off in Rs. Crores Amount Trucks, Tempos, Truckers Buses including Mini Buses Jeeps & Motor Cars Total The aforesaid assets are reduced from the Gross Block of Gandhi Sagar HPS in the chapter of Assets & depreciation for the purpose of claiming depreciation for FY

66 (8) Bargi HPS During FY following assets were written off at Bansagar PH-1, 2 & 3 as per Audited Books of Accounts for FY : Table No Sl. No. Account Code Details of Asset Written off in Rs. Crores Amount Type writers Total The aforesaid assets are reduced from the Gross Block of Bargi HPS in the chapter of Assets & depreciation for the purpose of claiming depreciation for FY

67 4.4 Assets & Depreciation The Power Station wise break up of Fixed Assets as reflected in the Audited books of account FY along with asset additions and adjustment/deductions are tabulated below:- Gross Block details for FY Table No Power Station Op.bal as on Gross Block Asset not in use Additions in FY 14 in Rs. Crores Adjustments /write-off / decommiss ioning of Assets Cl.bal as on Asset not in use Gross Block 1 ATPS Chachai STPS Sarni SGTPS (Thermal & Hydro) Bansagar HPS (Complex) SSTPP Bargi HPS Gandhi Sagar HPS J. Sagar HPS COG &HS Madhikheda HPS Pench HPS R.P. Sagar HPS Rajghat HPS HQ & S&I COGHS Total MPPGCL As per Balance Sheet

68 The Power house wise details of Opening Gross Block for FY considered in the instant petition is tabulated below:- Opening Gross Block as on Table No in Rs. Crores S.No. Power Stations Amount 1 ATPS PH ATPS PH ATPS Total STPS PH STPS PH-2& STPS Total SGTPS PH-1& SGTPS PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ 1.57 Total

69 The comparative table indicating the difference between the Gross Block as per Balance Sheet and as considered in instant petition as on is detailed hereunder: Comparison of Opening Gross Block as on Table No in Rs. Crores Power Stations As per Balance Sheet As considered in this petition Diff. Remarks 1 ATPS Chachai STPS Sarni Difference on account of Asset additions at STPS PH-1,2&3 which were not claimed as Special allowance opted. 3 SGTPS Birsinghpur SSTPP Khandwa Considered in Separate tariff petition 5 Total Thermal Gandhi Sagar Jawahar Sagar Operated by other State 8 RP Sagar Operated by other State 9 Pench Rajghat Bargi Bansagar Difference on account of project cost of Bansagar IV (Jhinna) considered in Separate Final tariff petition) 13 Madhikheda Birsinghpur Total Hydro HQ Total

70 The Power Station wise Accumulated depreciation as on is as under:- Accumulated Depreciation as on Table No in Rs. Crores as % of S. Power Stations Amount Opening No. GB 1 ATPS PH % 2 ATPS PH % 3 ATPS Chachai % 4 STPS PH % 5 STPS PH-2& % 6 STPS Total % 7 SGTPS PH-1& % 8 SGTPS-PH % 9 SGTPS Total % 10 Total Thermal % 11 Gandhi Sagar % 12 Pench % 13 Rajghat % 14 Bargi % 15 Bansagar PH-1,2& % 16 Madhikheda % 17 Birsinghpur % 18 Total Hydro % 19 HQ % Total % 70

71 During FY asset capitalization was carried out at the existing stations as well as in the new projects The details of Assets capitalized and funding was elaborated in the Chapter-4.3 Additional Capitalization / de-capitalization and Funding thereof. The power station wise summary of Asset additions made as per Audited Books of account for FY is detailed here under: Table No Asset Additions during FY in Rs. Crores S.No. Stations Amount 1 ATPS PH ATPS PH ATPS Chachai STPS PH-1-5 STPS PH-2&3-6 STPS Total SGTPS PH-1& SGTPS-PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat - 14 Bargi - 15 Bansagar PH-1,2 & Madhikheda - 17 Birsinghpur - 18 Total Hydro HQ 0.23 Total *The Addition during FY 14 at STPS PH-2&3 towards need based R&M is not considered as special allowance opted for it. 71

72 S.No The Write off /adjustments/transfer/ decommissioning of Assets was made in the Gross Block of Fixed assets of the various power stations. These adjustments were reflected in the Audited Books of Accounts of MPPGCL for FY The power station wise detail of such adjustment/deductions was elaborated in the Chapter-4.3 Additional Capitalization / decapitalization and Funding thereof the power station wise summary is detailed here under: Table No Asset Stations Amount Acc. Dep amount in Rs. Crores 1 ATPS PH Assets Written off Remarks 2 ATPS PH Assets Capitalized transferred back to CWIP 3 ATPS Total STPS PH Assets decommissioned towards of retirement of units 5 STPS PH-2& Assets transferred to STPS PH-4 6 ATPS Total SGTPS PH-1& Assets Written off 8 SGTPS PH Asset earlier booked as capital Spares now Transferred to 10.XXX Code Asset earlier booked as capital Spares now Transferred to 10.XXX Code Assets transferred to STPS PH Asset adjustment on account of ERV Sub Total SGTPS PH SGTPS Total Total Thermal Bargi Assets wrongly Capitalized transferred back to CWIP Rs assets Written off and assets of Rs re-appropriated to Madhikheda HPS from Bargi HPS. 12 Gandhi Sagar Assets Written off Re-appropriated to Madhikheda HPS from Bargi 13 Madhikheda HPS 14 Bansagar PH-1,2& Assets Written off 15 Total Hydro Total

73 The supporting documents in respect to above i.e. Survey reports & Accounting Vouchers are annexed as Annexure-18 in Additional Supporting Documents being submitted before Hon ble Commission separately The Power House wise Asset Cum Depreciation Registers of Thermal & Hydro Power Stations have been updated after considering the above mentioned Assets Addition & deduction/adjustments and are annexed as Annexure-19 respectively in Additional Supporting Documents being submitted before Hon ble Commission separately In the instant petition the depreciation on the Gross Block has been computed based on the following:- The rates for depreciation are considered as approved by Hon ble Commission in Appendix-II of Regulation G-26(II) of The salvage value of assets is considered as 10% i.e. none of the assets are depreciated more than 90% of the gross value. As per proviso 24.1 (f) of MPERC regulation 2009 specifies that the rate of depreciation continued to be charged at the rate specified in Appendix-II till cumulative depreciation reaches 70%. Thereafter the remaining depreciable value is spread over the remaining life of the asset such that the maximum depreciation does not exceed 90%. Certain plants of MPPGCL i.e. ATPS PH-2, STPS Sarni and Gandhi Sagar HPS, has already completed their useful life. For such power stations the depreciation is calculated based on the estimated useful life i.e. 08 years in case of ATPS PH-2 & 04 years in case of STPS & Gandhi Sagar. This philosophy was adopted by MPPGCL from FY onwards. In case of asset addition made during the year, the depreciation is charged on prorata basis based on the commercial operation of the assets for part of the year. The Assets additions at STPS PH-1,2&3 is not considered as special allowance is opted for these units. The assets in the records of MPPGCL are only for its own share hence depreciation is computed for MPPGCL share only. The Asset Capitalization at STPS PH-4 and SSTPP Unit 1 are being dealt through separate Tariff Petitions. 73

74 Considering the above principles, the depreciation on various power stations has been worked out and is tabulated below:- S.No. Table No Station Depreciation computation for FY Op. Balance as on Dep. Asset GB Acc. Dep For FY 14 Cl. Balance as on Asset GB in Rs. Crores Acc. Dep. Closing Acc. Dep. as % of GB 1 ATPS PH % 2 ATPS PH % 3 ATPS Chachai % 4 STPS PH % 5 STPS PH-2& % 6 STPS Total % 7 SGTPS PH-1& % 8 SGTPS PH % 9 SGTPS Total % Total Thermal % 10 Gandhi Sagar % 11 Pench % 12 Rajghat % 14 Bargi % 15 Bansagar PH-1,2& % 16 Madhikheda % 17 Birsinghpur % 18 Total Hydro % 19 HQ % Total % 74

75 The depreciation on the assets of HQ is nominal as such the same has been linked to the nearest power station i.e. Bargi HPS for simplicity The Hon ble Commission has permitted depreciation for FY in the MYT order for FY 14 to FY 16 read with tariff order dated towards segregation of tariff of STPS Complex amounting to Rs Crores. The power Station wise break up is detailed as under: Depreciation allowed in Multi Year Tariff Order Table No S.No. Station in Rs. Crores As per MYT order 1 ATPS PH ATPS PH ATPS Chachai STPS PH STPS PH-2& STPS Total SGTPS PH-1& SGTPS-PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total

76 Depreciation Adjustments: The Power station wise adjustments in depreciation amount to be reversed/claimed is detailed hereunder: ATPS PH-3: In FY MPPGCL has made additional capitalization of Rs Crores and the same was permitted by Hon ble Commission. In the Financial year FY asset amounting to Rs Crores (Sewerage Plant) out of said capitalization has been transferred back to CWIP (Capital Work in Progress) and the same was reflected in the audited books of account of FY Accordingly the depreciation earlier claimed on such asset during FY and FY needs to be reversed. The same is worked out as under:- Table No ATPS PH-3 Rs. Crores Particulars FY 12 FY 13 Total Amount of asset transferred to CWIP Wt. Av Rate of Depreciation* (as permitted by MPERC) 4.62% 4.53% Amount of Depreciation *For FY 13 Wt. Average is considered as per asset cum depreciation register for FY 13 already submitted before Hon'ble Commission. SGTPS PH-3 : The Gross Block of SGTPS PH-3 (500 MW) as on COD dated amounting to Rs Crores. The Hon ble Commission in the final tariff order of SGTPS PH-3 (500 MW) has considered Gross block of Rs Crores after deduction of Rs Crores towards Liquidated damages and Rs towards Exchange Rate variation. The total deduction comes to Rs.Rs Crores. In the Financial year the amount of LD has been settled with BHEL which amounts to Rs Crores and the amount of Exchange Rate variation remains unaltered i.e Crores. The amount of LD retained as a result of settlement same has been reflected under the head Non Tariff Income and deducted from Fixed Cost. 76

77 In light of above, the depreciation of SGTPS PH-3 (500 MW) needs to be revised from FY 09 to FY 13 on account of adjustment of LD/ERV and further adjustment/deductions carried out in FY14 with retrospective effect. The same is worked out as under:- Table No SGTPS PH-3 Rs Crores Particulars FY 09 (from CoD FY 10 FY 11 FY 12 FY 13 Total onwards) Opening Gross Block (without deduction of LD/ERV) Assets Added Adjustments Assets deduction (now considered) Closing Gross Block Average Gross Block Wt. Av Rate of Depreciation (as permitted by MPERC) 3.58% 5.13% 5.17% 5.17% 5.08% Days in operation Amount of Depreciation(A) Depreciation allowed by MPERC(B)** Balance (A-B) *For FY 13 Wt. Av rate and depreciation claimed is considered as per asset cum depreciation register for FY 13 already submitted before Hon'ble Commission STPS PH-2 & 3 : In FY MPPGCL has claimed asset addition amounting to Rs Crores and the same was permitted by Hon ble Commission. The said capitalization includes an asset of Rs Crores which is transferred to STPS PH-4 in FY and the same was reflected in the audited books of account for FY Accordingly the depreciation on said assets needs to be reversed for FY11, FY12 & FY13. The same is worked out as under: 77

78 Table No STPS PH-2&3 Rs Crores Particulars FY 11 FY 12 FY 13 Total Amount of asset transferred to STPS PH Wt. Av Rate of Depreciation (as permitted by MPERC) 4.84% 5.33% 5.50% 0.16 Amount of Depreciation *For FY 13 Wt. Avg. rate is considered as per asset cum depreciation register for FY 13 already submitted before Hon'ble Commission Balance Depreciation of STPS Sarni: In the earlier True up petitions the depreciation was claimed by the MPPGCL was on the pro-rata basis considering the days of commercial operation of assets during the year. However, the Hon ble Commission in its orders for such petitions has permitted depreciation on the average of Opening and Closing Gross Block of the Fixed Assets for the respective years. Considering Wt. Average rate of Depreciation. Accordingly this difference between the accumulated depreciation of MPPGCL and permitted by Hon ble Commission. In case of STPS Sarni the accumulated depreciation as per MPPGCL has reached upto 90% of Gross Block and accordingly no depreciation remain to be claimed as on However considering the Accumulated depreciation as per as True up order for FY 12 dated the balance depreciation of STPS works out as under: Table No Particulars STPS Total Rs. Crores STPS PH-1 STPS PH- 2&3 A Accumulated Dep. as on as per True up order for FY B Gross Block as on C % of Accumulated Depreciation (A/B) 83.85% 83.85% 83.85% D Assets of unit 3&5 of STPS-1 decommissioned in FY

79 Particulars STPS Total STPS PH-1 STPS PH- 2&3 E Accumulated Dep. amount of unit 3&5 of STPS-1 decommissioned in FY F Depreciation for FY 13 as claimed in True up petition for FY 13 G Gross Block as on (B+D) H Accumulated Depreciation as on (A+E+F) I % of Accumulated Depreciation (H/G) 88.77% 86.76% 88.87% J 90% of Gross Block (G x 90%) K Balance Depreciation (J-H) Considering the above, the adjusted depreciation for FY works out as under:- Table No S.No. Station Depreciation for FY 13 Rs. Crores Depreciation adjustments Total & balance depreciation 1 ATPS PH ATPS PH ATPS Chachai STPS PH STPS PH-2& STPS Total SGTPS PH-1& SGTPS-PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ Total

80 The depreciation claimed in the instant True up petition before applying Normative Annual Plant Availability Factor (NAPAF) works out as Rs Crores. Accordingly the True up amount on account of Depreciation works out as Rs.5.36 Crores, the same is detailed as under:- S.No. Depreciation Claimed for FY (before applying NAPAF) Table No Station As per MYT order in Rs. Crores MPPGCL as per norms Diff. 1 ATPS PH ATPS PH ATPS Chachai STPS PH STPS PH-2& STPS Total SGTPS PH-1& SGTPS-PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total

81 The True up amount on account of depreciation after applying NAPAF works out as under:- Depreciation Claimed for FY (at Actual Availability) Table No in Rs. Crores S. No. Station As per MYT order MPPGCL as per norms Diff. 1 ATPS PH ATPS PH ATPS Chachai STPS PH STPS PH-2& STPS Total SGTPS PH-1& SGTPS-PH SGTPS Total Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total MPPGCL humbly request the Hon ble Commission to kindly permit the same. 81

82 4.5 Interest and Finance Charges The Normative Power Station wise opening loan balances as on are tabulated as under:- Table No in Rs. Crores S.No. Stations Opening Bal Receipts Claimed in FY 13 in proportion to assets capitalized Repayment (Dep. FY 13) Opening Bal ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Bansagar 1,2& Madhikheda HPS Total Hydro Total On account of assets deduction made at various power stations as detailed in Chapter-Addl. Capitalization/de-capitalization & funding thereof, the loan balances are proportionately reduced. The power station wise detail of reduction made in loan balances are detailed hereunder: Table No in Rs. Crores S.No. Stations FY 14 1 ATPS PH SGTPS PH Total

83 Accordingly the Adjusted Normative loan Balance as on works out as under: Table No S.No. Stations Opening Bal in Rs. Crores Loan Adjustment Adjusted Opening Bal. as on ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Bansagar 1,2& Madhikheda HPS Total Hydro Total S.No During FY 13 Loan drawls were made in existing as well as in new projects. The details of Power Station wise loan drawls in existing / new projects claimed in the instant petition is detailed in the Chapter 4.3 Additional Capitalization/ de-capitalization & Funding thereof. The same is summarized as under : Table No Stations Loan Receipts Receipts upto * Receipts in FY 14 in Rs. Crores Total 1 ATPS PH ATPS PH SGTPS PH Total Thermal HQ *Not cognized by Hon ble Commission Total

84 Considering above, the Power station wise Closing and Average balances of loan considering the repayment equal to depreciation charged during FY as per proviso 23.3 of MPERC Regulation 2014 are indicated below:- Power Station wise Closing & Average Balances Table No in Rs. Crores. Stations Adjusted Opening Bal Loan Receipts Claimed Principal repayment (Dep) Closing Bal Av Bal ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Bansagar PH-1,2& Madhikheda Total Hydro HQ Total Note: Principal repayment restricted to Opening Balance & receipts during the year Station wise weighted average rate of Interest for FY are indicated below:- Table No Rate of Interest of Loans FY Particulars PFC LIC REC HUDCO GoMP Working Capital Loan Total 1 ATPS PH % 14.50% 16.50% 12.99% 2 ATPS PH % 16.50% 11.81% 3 STPS Sarni 12.97% 12.50% 16.50% 16.50% 13.10% 84

85 Rate of Interest of Loans FY Particulars PFC LIC REC HUDCO GoMP Working Capital Loan Total 4 SGTPS PH 1& % 8.50% 14.50% 16.50% 10.48% 5 SGTPS PH % 16.50% 12.11% 6 SSTTP PH % 12.96% 7 Total Thermal 12.73% 8.50% 0.00% 12.50% 16.24% 16.50% 12.74% 8 Gandhi Sagar 0.00% 16.50% 16.50% 9 R.P. Sagar 0.00% 0.00% 10 J Sagar 0.00% 0.00% 11 Pench 0.00% 16.50% 16.50% 12 Rajghat 0.00% 16.50% 16.50% 13 Bargi 12.06% 16.50% 16.45% 14 Bansagar 12.10% 8.50% 10.50% 16.50% 12.15% 15 Madhikheda 10.45% 10.50% 16.50% 10.84% 16 Birsinghpur 0.00% 16.50% 16.50% 17 Total Hydro 10.79% 0.00% 8.50% 0.00% 10.50% 16.50% 12.39% 18 HQ 10.50% 10.50% Total 12.72% 8.50% 8.50% 12.50% 15.87% 16.50% 12.73% The detailed Calculation in respect of Weighted Average Rate of Interest along with supporting documents is annexed as Annexure-20 in Additional Supporting Documents being submitted before Hon ble Commission separately The details in respect of actual loans balances as per Audited Books of Accounts of MPPGCL for FY (i.e. Opening Balance, Drawls, Repayments & Closing Balance) indicating the loans under running projects & CWIP is annexed as Annexure-21 as Additional Supporting Documents being submitted before Hon ble Commission separately. 85

86 Considering above the Power station wise Interest charges for FY worked out in accordance to the proviso 23 of the Generation Tariff Regulations, 2012 by applying weighted average rate of interest on loans are indicated below:- Station wise Interest on Loans Table No in Rs. Crores. Stations Av Bal Wt. Av.Rate of Intt. Interest Amount ATPS PH % 5.56 ATPS PH % STPS Total % 0.00 SGTPS PH-1& % 0.00 SGTPS PH % Total Thermal Bansagar PH-1,2& % 0.68 Madhikheda % 6.77 Total Hydro HQ % 0.05 Total Interest Adjustments The Power station wise adjustments in Interest amount to be reversed/claimed is detailed hereunder ATPS PH-3: In FY , MPPGCL has claimed additional capitalization of Rs Crores and the same was permitted by Hon ble Commission. In the Financial year FY asset amounting to Rs Crores out of said capitalization has been transferred back to CWIP (Capital Work in Progress) and the same was reflected in the audited books of account of 86

87 FY As such asset was funded through loan component the interest earlier claimed on during FY 2012 and FY 2013 needs to be reversed. The same is worked out as under:- Table No Rs. Crores Particulars FY 12 FY 13 Total Amount of loan reduction 1.02 Wt.Av Rate of Interest* (as permitted by MPERC) 11.53% 11.57% Amount of Interest *For FY 13 Wt. Average rate of interest is considered as submitted in True Up Petition for FY 13. SGTPS PH-3: In FY , MPPGCL has claimed asset addition amounting to Rs.61.13, and the same was permitted by Hon ble Commission. In the Financial year FY asset amounting to Rs Crores out of said capitalization has been transferred back to STPS PH-4 and the same was reflected in the audited books of account of FY As such asset was funded through loan component the interest earlier claimed on during FY and FY needs to be reversed. The same is worked out as under:- Table No Rs. Crores Particulars FY 12 FY 13 Total Amount of loan reduction 0.20 Wt.Av Rate of Interest* (as permitted by MPERC) 9.92% 11.35% Amount of Interest *For FY 13 Wt.Av. rate of interest is considered as submitted in True Up Petition for FY 13. Similarly, in the True up petition for FY , MPPGCL has claimed additional capitalization of Rs Crores being funded from loan component. In the Financial year FY asset amounting to Rs Crores out of said capitalization has been transferred back to CWIP (Capital Work in Progress) and the same was reflected in the audited 87

88 books of account of FY As such asset was funded through loan component the interest earlier claimed on during FY needs to be reversed. The same is worked out as under:- Table No Rs. Crores Particulars FY 13 Amount of loan reduction Wt.Av Rate of Interest* (as permitted by MPERC) 11.35% Amount of Interest 3.28 *For FY 13 Wt.Av Rate of interest is considered as submitted in True Up Petition for FY Considering the above prior period adjustments, the adjusted Interest on loan for FY works out as under: Table No Stations Interest amount for FY 14 Interest adjustments Rs. Crores Total ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Bansagar PH-1,2& Madhikheda Total Hydro HQ Total

89 Interest on Excess Equity: The Proviso 21.2 of MPERC Generation Tariff Regulation 2014 provides that where Equity actually employed is in excess of 30%, the amount of Equity for the purpose of tariff shall be limited to 30% and the balance amount shall be considered as loan. Accordingly the Normative excess equity balance as on is tabulated hereunder: Excess Equity as on Table No in Rs. Crores. Station Excess Equity as on (Op. Bal) 1 ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2 & Madhikheda Birsinghpur Total Hydro HQ 0.00 Total

90 The additions made to excess Equity on account of additional Table No Power Stations capitalization during FY is worked out as under: Asset Added Loan Funding Equity/ Internal Resources A B C Max. Equity 30% of Gross Block D= (Ax30%) in Rs. Crores Normative Equity E= C or D (W.E.L)# Balance excess equity Equity F= C - E 1 ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Bansagar PH-1, Total Hydel HQ & S&I* Total *Asset addition from FY-06(10M) to FY-13 has been considered. # W.E.L. Which ever less. # Power station wise Closing and Average balances of excess equity Table No Station considering the repayment equal to balance depreciation charged during FY12 under proviso 23.3 of M.P. Regulation 2014 are indicated below: Excess Equity as on (Op.Bal) Excess Equity addition due to Assets addition Repayment equal to balance dep. For FY 14 Excess Equity as on (Cl. Bal) in Rs. Crores Average Equity 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal

91 Station Excess Equity as on (Op.Bal) Excess Equity addition due to Assets addition Repayment equal to balance dep. For FY 14 Excess Equity as on (Cl. Bal) Average Equity 7 Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2 & Madhikheda Birsinghpur Total Hydro HQ Total Accordingly power station wise Average excess Equity and interest thereon after applying the overall weighted average Rate of Interest (as indicated in table ) works out as under: Intt.on Excess Equity Table No in Rs. Crores Station Average Equity Intt. On Excess 12.73% 1 ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2 &

92 Station Average Equity Intt. On Excess 12.73% 12 Madhikheda Birsinghpur Total Hydro HQ Total The total amount of interest on loan and interest on equity works out as under: Table No Station Intt. on Loan + Intt. on Excess equity Intt on Loan Intt.on Excess Equity in Rs. Crores Total 1 ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2 & Madhikheda Birsinghpur Total Hydro HQ Total

93 The Hon ble Commission vide MYT order for FY 14 to FY 16 read with tariff Order dated for Segregation of tariff of STPS Complex has determined the interest & Finance Charges (including Intt. on excess equity) as Rs Crores. Same is tabulated as under: Interest Charges as per MYT order Table No S.No. Station in Rs. Crores As per MYT Order 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ 0.00 Total

94 The interest charges of HQ is nominal as such has been linked to the nearest power station i.e. Bargi HPS for simplicity Considering above, the interest charges(including Intt. on excess equity) in accordance to the proviso 23 of the Generation Tariff Regulation 2012 worked by MPPGCL amounts to Rs Crores (including Intt. on excess Equity) and the True Up amount on account of interest charges (including Intt. on excess equity) works out as Rs. Crores before applying Normative Plant availability factor (NAPAF). Same is tabulated hereunder: Table No S.No. True Up Amount (before applying NAPAF) Station As per MYT Order in Rs. Crores MPPGCL as per norms Diff True up Amt 1 ATPS PH ATPS PH STPS Total(PH1,2&3) SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total

95 After applying availability Factor the true up amount towards interest and finance charges (including Intt. on excess equity) works out as under: Table No S.No. True Up Amount (at Actual Availability) Station As per MYT Order in Rs. Crores. MPPGCL as per norms Diff True up Amt 1 ATPS PH ATPS PH STPS Total(PH1,2&3) SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total MPPGCL humbly requests to kindly permit the same. 95

96 4.6 Interest on Working Capital The Working capital has been calculated in Hon ble Commissions order dated in accordance to clause 37 & 51 of Principal Tariff Regulations, Accordingly cost of 45 days/2 months cost of coal, 2 Months cost of secondary oil, O&M expenditure for 1 month, 20% of Normative O&M Expenses as maintenance spares for thermal and 15% of Normative O&M Expenses as maintenance spares for Hydro and 2 months receivables has been considered for calculating interest on Working Capital The Power Station wise Working Capital approved by MPERC vide Tariff order dated at page 62 to 65 is detailed in the table below:- Table No in Rs. Crores S.No. Station Working Capital for FY-14 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Total Hydro Total

97 The Normative Interest on Working Capital as approved by Hon ble Commission in the Tariff order is reproduced below before applying Actual Availability:- Table S.No. Station As per MPERC Order As considered by MPPGCL on Norms in Rs. Crores Diff. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Total Hydro Total

98 Normative Interest on Working Capital as approved by Hon ble Commission after applying Actual Availability works out as under:- Table in Rs. Crores S.No. Station As per MPERC Order As considered by MPPGCL on Norms Diff. Rs. Crores. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Total Hydro Total MPPGCL humbly request Hon ble Commission to kindly permit the same. 98

99 4.7 RETURN ON EQUITY: The proviso 21 of MPERC (Terms and Conditions for determination of Generation Tariff) Regulations, 2012 {RG-26(II) of 2012} specifies debt Equity ratio of 70:30 of capital cost for the purpose of determination of Return on Equity In accordance with above, the normative Equity as on is detailed as under:- Table No Normative Equity as on Station ( in Rs. Crores) Normative Equity balance for ROE as on ATPS PH ATPS PH STPS PH STPS PH-2& SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total

100 On account of Asset additions at the existing stations as well as new projects, there is infusion of Equity during FY The details regarding asset additions and funding thereof during FY were already provided in the Chapter-4.3 Additional Capitalization/decapitalization and funding thereof. The table indicating the source of funding towards additional capitalization along with the calculation of normative Equity addition during FY is detailed as follows:- Table No Power Stations Normative Equity addition during FY Asset Added Funding Equity/ Loan Internal Resources A B C ( in Rs. Crores) Max. Equity 30% of Gross Block D= (Ax30%) Normative Equity E= C or D (W.E.L)# Balance excess Equity F= C - E 1 ATPS PH ATPS PH STPS Total SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Bansagar PH-1, Total Hydel HQ & S&I* Total * Addition capitalization from FY 06 to FY 14 has been claimed. # W.E.L. Which ever less. 100

101 In the Financial Year , the unit No.2&4 of STPS PH-1was decommissioned on and unit No.1 was decommissioned on The assets towards common services at STPS Sarni pertaining to PH-1 remains part of Gross Block. Accordingly the Assets of Unit No.1,2 & 4 of STPS PH-1 have been reduced from the Gross Block of STPS PH-1 in the instant True up petition as per the Audited Books of Accounts for FY The same is detailed in Chapter of Additional capitalization/decapitalization & funding thereof. In reference to above, the amount of Equity allocated to STPS PH-1 has been adjusted in proportion to assets removed from the Gross Block of STPS PH-1. The same is detailed as under: Table No Particulars ( in Rs. Crores) Amount 1 Gross Block of STPS as on Normative Equity of STPS as on Assets decommissioned during FY Normative Equity in Proportion to assets decommissioned (2/1x3) Balance Equity to be considered for RoE towards retained assets (2-4) Taking cognizance of above, the normative Equity as on along Station with the average Equity works out as under:- Table No Normativ e Equity for RoE as on Equity Adjusted after Decomm. of 3 units of STPS PH-1 Normative Equity Addition due to Asset Addition ( in Rs. Crores) Total Normative Equity for RoE as on Average Equity 1 ATPS PH ATPS PH STPS PH STPS Ph-2& SGTPS PH-1& SGTPS PH Total Thermal

102 Station Normativ e Equity for RoE as on Equity Adjusted after Decomm. of 3 units of STPS PH-1 Normative Equity Addition due to Asset Addition Total Normative Equity for RoE as on Average Equity 8 Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ Total As per proviso 21 of MPERC (Terms and Conditions for determination of Generation Tariff) Regulations, 2012 {RG-26(I) of 2012} the Return on Equity is to be computed at a base rate of 15.5% which is to be grossed up by the tax rate. Since MPPGCL has not paid any Corporate tax during FY-14, MPPGCL has worked out the Return on Equity on pre tax basis at a base rate of 15.5% as tabulated below:- Return on Equity for FY Table No ( in Rs. Crores) Station Average Equity 15.5% 1 ATPS PH ATPS PH STPS PH STPS Ph-2& SGTPS PH-1& SGTPS PH Total Thermal

103 Station Average Equity 15.5% 8 Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ Total The Hon ble Commission has permitted Return on Equity in the MYT order for FY 14 to FY 16 read with tariff order dated for segregation of tariff of STPS Complex amounting to Rs Crores. The power Station wise break up is as under: Table No ( in Rs. Crores) S.No. Station As per MYT order 1 ATPS PH ATPS PH STPS PH STPS PH-2& SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro HQ Total

104 The Equity allocated to HQ is nominal and as such has been linked to nearest power station i.e. Bargi HPS for simplicity The actual Return on Equity for FY amounting to Rs Crores and the True up amount on account of Return on Equity works out as Rs Crores before applying Normative Plant Availability Factor (NAFAF). The power station wise break up of same is as under:- RoE (before applying NAPAF) Table No ( in Rs. Crores) S.No. Station As per MYT order MPPGCL as per norms Diff True up Amt 1 ATPS PH ATPS PH STPS PH STPS PH-2& SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total

105 S.No After applying the Availability factor the return on Equity works out as under: Table No Station RoE(at Actual Availability) As per MYT order ( in Rs. Crores) MPPGCL as per norms Diff True up Amt 1 ATPS PH ATPS PH STPS PH STPS PH-2& SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar PH-1,2& Madhikheda Birsinghpur Total Hydro Total MPPGCL humbly requests the Hon ble Commission to kindly permit the same. 105

106 4.8 Secondary Fuel Oil Cost: The Secondary Fuel Oil consumption is to be considered as per the norms specified proviso 38 of the MPERC (Terms and conditions for determination of Generation Tariff) (Revision-II) Regulations, The prices of Furnace Oil/ HSD/LDO are decided by Ministry of Petroleum, GoI as such MPPGCL has no control over it. The Govt. of MP imposes Entry 10% on Furnace Oil and LDO when bought from outside the state. HSD is presently exempted from Entry Tax. The power station wise details of Secondary Oil comprising of Furnace oil and LDO/HSD purchased in various months of FY is elaborated below:- ATPS Chachai Table No ATPS CHACHAI (FY ) MONTH Quantity (KL) FURNACE OIL L.D.O SECONDARY OIL RATE Rs./KL Amount in Rs. Lakhs Quantity (KL) RATE Rs./KL Amount in Rs. Lakhs Quantity (KL) RATE Rs./KL Apr May Jun Jul Aug Amount in Rs. Lakhs Sep Oct Nov Dec Jan Feb Mar Entry Tax TOTAL Note:- The Secondary Fuel Oil (F.O. + LDO) has been procured in the month of Sept 13 only. 106

107 It can be seen that the Secondary Fuel oil (Furnace Oil + LDO) at ATPS Chachai, are not being regularly procured on monthly basis. The Secondary Oil at ATPS was procured only in the month of Sept 13 in FY based on its requirement as Oil companies do not supply part racks. MONTH STPS Sarni Table No Quantity (KL) STPS Sarni (FY ) FURNACE OIL H.S.D. SECONDARY OIL RATE Rs./KL Amount in Rs. Lakhs Quantity (KL) RATE Rs./KL Amount in Rs. Lakhs Quantity (KL) RATE Rs./KL Amount in Rs. Lakhs Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Entry Tax Inclusive Not Appl TOTAL Note: - The Furnace Oil has not been procured in the month of Sept 13, Jan 14 & Mar 14, similarly HSD has not been procured in the months of Jan 14, Feb 14 & Mar 14. The Furnace Oil for STPS Sarni has not been procured in the month of Sep 13, Jan 14 & Mar 14, similarly the HSD Oil has not been purchased for the month of Jan 14, Feb 14 & Mar 14. However there is an adjustment entry in cost towards payment of Entry Tax for Furnace oil in Jan 14 and in quantity in Mar

108 Accordingly the weighted Average landed price of Secondary Fuel Oil has been calculated. MONTH SGTPS Birsinghpur Table No Quantity (KL) SGTPS BIRSINGHPUR (FY ) FURNACE OIL L.D.O. SECONDARY OIL Amount Amount RATE in Quantity RATE in Quantity RATE Rs./KL Rs. (KL) Rs./KL Rs. (KL) Rs./KL Lakhs Lakhs Apr May Jun Amount in Rs. Lakhs Jul Aug Sep Oct Nov Dec Jan Feb Mar Entry Tax TOTAL Note:- The Secondary Fuel Oil (F.O. + LDO) has been procured in the month of Jul 13, Oct 13 and Jan 14 only. The Secondary Fuel Oil for SGTPS Birsinghpur has not been procured in the month of Apr 13, May 13, Jun 13, Aug 13, Sep 13, Nov 13, Dec 13, Feb 14 and Mar 14. Accordingly the weighted Average landed price of Secondary Fuel Oil has been calculated. 108

109 Accordingly the power station wise actual weighted average landed Table No price and rate of Secondary Fuel Oil for the Trued up period is detailed below:- Particulars ATPS Chachai STPS Sarni SGTPS Birsinghpur 1 Cost of Furnace Oil Rs. Lakhs Secondary LDO / HSD Rs. Lakhs Oil Total Rs. Lakhs Furnace Oil kl Purchased Quantity LDO / HSD kl Total kl Rate of Furnace Oil Rs/kL Secondary LDO / HSD Rs/kL Oil FY- 14 Total Rs/kL The rates of Secondary Fuel Oil for FY , as approved by Hon ble Commission for the thermal power stations of MPPGCL through tariff order are detailed below:- Table No Name of Thermal Power Stations Ref. Order in Petition No. Page No. Rates approved by MPERC in Rs./kL ATPS PH-2 Chachai 02/ ATPS PH-3 Chachai 02/ STPS Sarni 02/ SGTPS PH-1&2 Birsinghpur 02/ SGTPS PH-3 Birsinghpur 02/

110 The power station wise details of actual weighted average rate of Secondary Fuel Oil vis-à-vis the approved rate as mentioned above:- Table No Rate in Rs./kL Name of Thermal Power Stations As per MPERC Order As per Actual Diff. ATPS PH-2 Chachai ATPS PH-3 Chachai STPS Sarni SGTPS PH-1&2 Birsinghpur SGTPS PH-3 Birsinghpur The documentary evidence in respect of Secondary Oil procured during FY at Thermal Power Stations is annexed as Annexure-22 as Additional Supporting Documents being submitted before Hon ble Commission separately The calorific value of secondary oil is practically constant, about Kcal/Litre and therefore contribution of each ml of specific secondary oil consumption in heat rate is considered as 10 Kcal/Unit. After considering the decommissioning of Unit No. 1,2 & 4 of STPS PH-1 during the year and based on the Wt. Average Rate of Secondary Fuel Oil as indicated in the table above, the power station wise cost of Secondary fuel Oil (normative) works out be :- 110

111 Table No ATPS PH-2, Chachai FY Particulars Unit As per MPERC Order MPPGCL as per Norms & Actual Rate Installed Capacity MW NAPAF % 65.00% 65.00% Gross Gen. MU Sp. Oil Consumption Normative ml/kwh Quantity of Oil required KL Wt. Avg. Price of Sec. fuel Rs Cost of Secondary Fuel Oil Rs. Crores Diff. Table No ATPS PH-3, Chachai FY Particulars Unit As per MPERC Order MPPGCL as per Norms & Actual Rate Installed Capacity MW NAPAF % 85.00% 85.00% Gross Gen. MU Sp. Oil Consumption - Normative ml/kwh Quantity of Oil required KL Diff. Wt. Avg. Price of Sec. fuel Rs Cost of Secondary Fuel Oil Rs. Crores Table No STPS Complex, Sarni FY Particulars Unit MPPGCL as As per per Norms MPERC & Actual Order Rate Installed Capacity MW NAPAF % 76.37% 70.01% Gross Gen. MU Sp. Oil Consumption - Normative ml/kwh Quantity of Oil required KL Wt. Avg. Price of Sec. fuel Rs Cost of Secondary Fuel Oil Rs. Crores Diff. 111

112 Table No SGTPS PH-1&2, Birsinghpur FY Particulars Unit As per MPERC Order MPPGCL as per Norms & Actual Rate Installed Capacity MW NAPAF % 80.00% 80.00% Gross Gen. MU Sp. Oil Consumption - Normative ml/kwh Quantity of Oil required KL Wt. Avg. Price of Sec. fuel Rs Cost of Secondary Fuel Oil Rs. Crores Diff. Table No SGTPS PH-3, Birsinghpur FY Particulars Unit As per MPERC Order MPPGCL as per Norms & Actual Rate Installed Capacity MW NAPAF % 85.00% 85.00% Gross Gen. MU Sp. Oil Consumption ml/kwh Quantity of Oil required KL Diff. Wt. Avg. Price of Sec. Fuel Rs Sec. Oil Cost Rs. Crores Based on the actual weighted average rate of Secondary Fuel Oil, the power station wise true up amount before applying Actual Availability works out to be:- 112

113 Table No in Rs. Crores S. No. Station As per MPERC Order As considered by MPPGCL on Norms Diff. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal The power station wise true up amount Secondary Fuel Oil after applying Actual Availability works out as under:- Table No in Rs. Crores S.No. Station As per MPERC Order As considered by MPPGCL on Norms Diff. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal MPPGCL humbly request Hon ble Commission to permit the same. 113

114 4.9 Non Tariff Income The Hon ble Commission in (Terms and conditions for determination of Generation Tariff) (Revision-II) Regulations, 2012, MPERC has prescribed for Non- Tariff Income, as per proviso 31(a) & 31 (b) Any income being incidental to the business of the Generating Company derived from sources other than income from sale of energy shall constitute the non tariff income The Power Station wise Non Tariff Income as per the audited books of accounts for FY factored to 100% for the elements mentioned in proviso 31 (a) have been worked out and detailed in the table below:- Table No in Rs. Crores S.No. Station Non Tariff Income 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Total Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Total Hydro 6.13 Total The above Non-Tariff Income includes amount towards Liquidity Damages (LD) deducted at SGTPS PH-3 (500MW) amounting to Rs Crores The detailed working in this regard is annexed as Annexure-23 as Additional Supporting Documents being submitted before Hon ble Commission separately. 114

115 4.10 Transfer of Assets towards settlement of water Charges with WRD, GoMP The matter relating to payment of water charges to WRD, GoMP was long pending since period of erstwhile MPEB i.e. before bifurcation of the state of Madhya Pradesh, for want of the methodology on which water consumption shall be measured, the applicable rates & other various reconciliations.due to the above issues, the agreement for use of water could not be settled and signed between the two Organizations MPPGCL took initiative to get the above bottlenecks/ issues resolved & formalized the mechanism of the use of water & payment of charges thereof to WRD, GoMP. In this process, various round of meetings at various level took place & following important decision related to subject queries were involved :- a) Various works of the Bansagar Project were undertaken both by WRD-GoMP and MPPGCL (erstwhile MPEB / MPSEB) and accordingly the expenditures were incurred by each of the Organizations during the span of years. The original Project Cost of the works jointly undertaken was rupees Rs Crores. This cost got subsequently revised to Rs Crores in March The expenditures on these works were to be shared in proportion in accordance with various predefined Ratios. b) However, both the organizations were making expenditures as per requirement of the works and excess spend by any of two organization was recoverable from the other based on reconciliation. c) The process of reconciliation could not take place in past, therefore erstwhile MPEB has regularly capitalized the works done by it in the Bansagar project in its Books of Account. d) MPPGCL took initiative to resolve the aforesaid issues and get the reconciliation done. In this process a high level meeting was held with WRD officials on at Rewa, MP. The copy of minutes of said meeting is enclosed herewith for kind reference 115

116 pleases (Annexure-24) submitted separately as additional supporting documents. In this meeting, both the Organization had reconciled there figures & raised their claims so as to defend their interest. It was also agreed that the final numbers can be decided when a final view is taken by Government of MP in the matter. The following fact are to be kindly noted:- i. MPPGCL started its independent functioning w.e.f and the figures of excess expenditure made by erstwhile MPEB/MPSEB were available on the Year End basis, therefore the figures of March 2005 were considered as the Base figures of excess expenditure amounting to Rs Crores. ii. Thus, MPPGCL (erstwhile MPEB/MPSEB) had spent Rs Crores in excess to its share. The statement of this reconciliation has been signed by both the parties is annexed as Annexure-25 submitted separately as additional supporting documents. e) It is obvious that erstwhile MPSEB had capitalized the excess amount in the project due to non availability of the reconciliation at that point of time. Due to this, the asset amounting of Rs Crores has been de-capitalized by MPPGCL from its Books of Account with effect from The asset amounting of Rs Crores was therefore transferred WRD-GoMP. f) In the subsequent years, the expenditure on the project was being done primarily by WRD and till March 2013, they had spent Rs Crores on the behalf of MPPGCL. After setting off Rs Crores from Rs Crores, the net payable amount of Rs Crores still remained payable by WRD to MPPGCL. The expenditure was done by WRD on capital account and has been shown in their books accordingly. 116

117 g) Thus, it is obvious that MPPGCL has undercapitalized Rs Crores in its Books of Accounts and therefore the same was to be capitalized in the Books of Accounts w.e.f , accordingly. h) Considering these reconciliations, final decision in the matter was taken in the very high level meeting held between Principal Secretary (WRD), GoMP and Principal Secretary (Energy), GoMP on The copy of the minutes of said meeting is enclosed as Annexure-26 submitted separately as additional supporting documents Based on the above, it was agreed that the excess amount paid by MPPGCL amounts to Rs Crores as on Following clarification in this regard is to be made:- a) Total Asset value as on of Bansagar PH-1,2&3 transferred through Final Opening Balance Sheet and admitted by Hon ble Commission vide MPERC True up order for FY dated was Rs Crores. b) The funding towards the same was considered as : Pariculars Amount (Rs.Crores) Remarks i Equity allocated to As per MPERC True Up Bansagar PH-1,2 & 3. Order dated ii PFC Loan Loan No iii PFC Loan Loan No iv REC Loan Allocated through Final Opening Balance Sheet v Total (Rs Crores vi Un-bridged Gap Rs Crores) c) It may be seen that an un-bridged amount of Rs Crores was funded by erstwhile MPEB/MPSEB from its own resources and had contributed the expenditure part on 117

118 behalf of WRD, GoMP. Thus, now the excess amount of Rs Crores spent by erstwhile MPEB/MPSEB is to be considered as part of this unabridged gap funding by its own resources. The Hon ble Commission is humbly requested not to adjust any part of Rs Crores from the Equity of MPPGCL. As such, the Depreciation permitted by Hon ble Commission from FY 06(10M) to FY for these assets amounting to Rs Crores needs to be withdrawn from Bansagar PH-1, 2 & 3. The same has been worked out based on MPERC s Rates of Depreciation as per MPERC s Regulations, 2005 and Regulations, 2009 & 2012 as Rs Crores. The detailed working in this regard is annexed as Annexure-27 being submitted separately as additional supporting documents. d) It is pertinent to mention here that the portion of Assets added subsequently at Bansagar PH-1,2 &3 amounting to Rs Crores has been made from own resources i.e. against receivables from WRD-GoMP. The Depreciation on these assets from FY 06(10M) to FY based on MPERC s Rates of Depreciation as per MPERC s Regulations,2005, Regulations,2009 & Regulation 2012 as Rs Crores. The detailed working in this regard is annexed as Annexure-28 being submitted separately as additional supporting documents. e) Further, the Return on Equity & Interest on Excess Equity in reference to said addition been funded from internal resources has also been worked out in accordance to MPERC s Regulations,2005,Regulations,2009 & Regulation 2012 as Rs Crores &Rs Crores respectively. The detailed working in this regard is annexed as Annexure-29 being submitted separately as additional supporting documents Considering above the total amount of Depreciation, RoE & Interest on excess Equity from FY 06 to FY 13 is tabulated hereunder: 118

119 Table No Rs. Crores Particulars Amount 1 Depreciation (a) to be reversed (b) to be claimed Net amount Return on Equity Interest on Excess Equity Total Regarding adjustment of dues, it is here to mention that after settlement MPPGCL would pay to WRD Rs Crores in 24 equal installments w.e.f The above decision settles and resolves all pending claims, liabilities and Bills etc. of WRD and power companies of Government of MP as on The detailed working of dues amounting to Rs Crores is annexed as Annexure-30 being submitted separately as additional supporting documents The copies of signed Agreement for supply of water to Thermal Power Stations are annexed as Annexure-31 being submitted separately as additional supporting documents It is humbly prayed before Hon ble Commission to kindly permit Rs Crores separately towards Additional Depreciation, RoE and Interest on Excess Equity in view of settlement of assets of Bansagar PH- 1, 2 & 3 between WRD-GoMP for the period FY-06(10M) to FY

120 5. Requirement for True up FY : The instant true up is based on the Annual Statement of Audited accounts for FY The Power Station wise breakup of the elements of Profit & Loss Account of MPPGCL is annexed as Annexure-32 in Additional Supporting Documents being submitted before Hon ble Commission separately. The Element wise breakup of difference in amount as per MPERC orders v/s Norms is given below. Table No (Amount in Rs. Crores) Particulars Fixed Cost Elements Elements Annual Fixed Cost FY As per MPERC Orders MPPGCL as per norms Diff. O & M Expenses Compensation Allowance Special Allowance Interest on Loan + Exc. Equity Interest on W/C Depreciation RoE Cost of Sec Oil (Normative) Less Non Tariff Income Total Charges comprising of MPERC Fees, Water Charges, Rent, Rates& taxes, Entry Tax on R&M, Cost of Chemical & Consumable, Publication expenses and SLDC Charges incurred by MPPGCL and as per audited Annual Statement of Accounts for FY on 100% basis as detailed as hereunder:- Table No Amount in Rs. Crores S. No. Particulars Total 1 Rent, Rates & Taxes Entry Tax Water Charges Cost of Chemicals Cost of Consumables + Publications MPERC Fee SLDC Charges 0.61 Total

121 Station wise breakup of difference in amount as per MPERC orders v/s Norms is given below:- Table No Amount in Rs. Crores S.No. Station As per MPERC Orders MPPGCL as per norms Diff. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Hydro Total The difference between Annual Fixed Charges approved by the Hon ble Commission for FY in its MPERC orders vis-à-vis the true up requirement after applying Actual Availability on fixed cost elements of thermal power stations and actual Availability applicable on capacity charges for Hydro Power Stations based on 100% capacity of the plants operated by MPPGCL worked out is tabulated below:- 121

122 Table No Particulars Fixed Cost Elements True Up Requirement for FY Elements Amount in Rs. Crores Annual Fixed Cost FY As per MPERC Orders MPPGCL as per norms Diff. O & M Expenses Compensation Allowance Special Allowance Interest on Loan + Exc. Equity Interest on W/C Depreciation RoE Cost of Sec Oil (Normative) Less Non Tariff Income Total Other Charges comprising of MPERC Fees, Water Charges, Rent, Rates& taxes, Entry Tax on R&M, Cost of Chemical & Consumable, Publication expenses and SLDC Charges incurred by MPPGCL and as per audited Annual Statement of Accounts for FY on 100% basis as detailed as hereunder:- Table No Amount in Rs. Crores S. No. Particulars Total 1 Rent, Rates & Taxes Entry Tax Water Charges Cost of Chemicals Cost of Consumables + Publications MPERC Fee SLDC Charges 0.61 Total

123 The Power station wise break up of true up amount after applying actual Availability on fixed cost elements of thermal power stations and actual Availability on capacity charges for Hydro Power Stations and considering Other Charges incurred by the petitioner is worked out as under:- Table No S.No. True Up Requirement for FY Station As per MPERC Orders Amount in Rs. Crores MPPGCL as per norms Diff. 1 ATPS PH ATPS PH STPS SGTPS PH-1& SGTPS PH Thermal Gandhi Sagar Pench Rajghat Bargi Bansagar 1,2& Birsinghpur Madhikheda Hydro Total

124 ANNEXURE COPY OF DEMAND DRAFT TOWARDS MPERC FEE FOR TRUEUP FY14 124