A. Common Issues and Executive Summary. Query 1

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1 BEST s replies to the Preliminary Data Gaps (Set-I) of Petition of BEST for Third MYT Control Period for approval of ARR and determination of Tariff for FY to FY under MERC (MYT) Regulations, 2015 along with Final Truing up of FY to FY and Provisional Truing up of FY under MERC (MYT) Regulations, [Case No. 33 of 2016] A. Common Issues and Executive Summary Query 1 BEST should incorporate the impact of any changes that are required on account of these data gaps and replies at the appropriate places in the Petition in all sections and submit the revised Petition including Executive Summary accordingly. Reply 1 BEST submits that, it will incorporate the impact of changes with respect to the data gaps in its Revised MYT Petition along with the Executive Summary in due course. Query 2 BEST, in its MYT Petition for the second Control Period, had proposed to reduce transport deficit to zero by the end of FY However, BEST has proposed multi-fold increase in the transport deficit in the present Petition. In this regard, a. BEST should justify its claim of transport deficit wherein BEST itself had proposed to reduce it to zero by the end of FY b. BEST should submit reasons why it has not been able to control the transport deficit. c. In what new time-frame does BEST envisage that the transport division will become self-sustaining Reply 2 and the transport losses shall not be passed on to the electricity business? BEST submits that every avenue is being explored and every attempt is being made by BEST to ensure self-sufficiency of its Transport Business. In this regard, BEST has introduced various measures to improve the efficiency of operations and maintenance of its Transport Business as mentioned below and submitted in of the petition. BEST has increased the bus fares of its Transport Business to generate additional revenue. BEST is also trying to generate additional revenue for its Transport Business through the mode of advertising on, as well as licensing /renting out of the assets of its Transport Business.

2 Furthermore, the statutory BEST Committee by Resolution No. 38 dated 15 May, 2015, has proposed and resolved to introduce a levy and recovery of Transport Cess, on property tax levied under the Mumbai Municipal Corporation Act, The said matter has been forwarded to MCGM and thereafter will be forwarded to the Government of Maharashtra for making consequential amendment in the Mumbai Municipal Corporation Act, 1888, for such levy and recovery of Transport Cess. The matter of such levy and recovery of Transport Cess, is now pending before MCGM for further necessary action. It is humbly submitted by BEST that all these acts and deeds by or on behalf of BEST have been undertaken to progressively reduce and subsequently to do away with the burden of TDLR charges from the electricity consumers of BEST. However, the expenses has also increased and revenue has decreased over the last few years on several account as highlighted below The Data submitted in Business Plan and Expenditure incurred and Revenue earned by BEST is as follows - (Amt-Cr Rs) Total Summary for the period - FY , FY & FY Particulars Business Plan Actual Diff. Establishment Cost Fuel Cost Depreciation (- ) Property Ins. Fund (-) 9.40 Other Cost Interest Charges (-) Total Cost Total Revenue (-) Total Deficit (-) (-) (-) The total Deficit for FY , FY & FY was estimated to be Rs Crore in Business Plan, as against this the actual deficit has been Rs Crore. That shows there is additional deficit of Rs Crore. The reasons for this additional deficit are mentioned below - 1. Hike in Expenditure by Rs Crore - As per the Business Plan, the total Expenditures estimated for the three years was Rs Crore. However, actual expenditure incurred in this period is Rs Crore, hence an additional expenditure of Rs Crore was incurred.

3 Out of this Rs Crore, major portion of Rs Crore is incurred on Establishment Cost. The main reason for higher expenses on Establishment Cost is increase in D.A. Index. In the beginning of the year the D.A. Index was points, which is flared to points at the end of the year This shows hike of 8254 points which is 35% over the base year. Year Establishment Cost in Rs. Crores Cost of living Index Valuable DA for Basic Minimum Grads in Rs. Transport Department Nos. of Staff Further, from the year onwards the Undertaking had to release the payments on account of arears of Wage agreement, which also resulted in Establishment Cost. severe increase in On the part of administration, efforts were made to control the Establishment Cost by restricting the Staff strength by restructuring the duty schedules with the help of computerized scheduling system. This has helped in reducing staff strength as shown in table above. Another reason for increase in the total expenditures is hike in Fuel Cost. At the beginning of the year the Fuel rates were Rs (for Diesel) and Rs (for CNG). These rates were hiked to Rs & Rs respectively. This hike in Fuel rates caused additional expenditure on Fuel by Rs Crore. Another expense head which has increased, is Other Cost, which includes Material, Taxes, Registration and Misc Expenses. This cost has increased by Rs Crore, in comparison with Business Plan figures. The Expenses on Interest Charges which were mounting high for previous years, are reduced by 13.91% in comparison with Business Plan Figures. The main reason for this change is Rs.150/- Crore Grant received from MCGM in the year Reduction in Revenue by Rs Crore The expected Revenue for this period was Rs Crore. However, BEST could achieve Rs Crore of revenue during the period. Hence, there is a shortfall of Rs Crore. There are multiple reasons for this drop in revenue. One of the reasons is curtailment in fleet. The fleet is reduced by 271 buses in this period. It affected adversely on Bus operation.

4 With less number of buses available for operation as also with increasing traffic congestion in the city, the bus operation has shown reduction of 55,521 kms daily as compared to Business Plan figures. As such, the seat kms have reduced due to this, which has ultimately resulted in drop in revenue. Further, there has been drop in Nos. of passengers due to back to back Fare Hike. In this period the fares were revised on 27 th April 2012 ( ), 1 st April 2013 ( ) & 1 st February 2015 ( ). These back-to-back fare hikes has negative impact on commuters and they have shifted towards other options such as Share-Taxi and Auto in this period. Another reason for drop in passengers is massive increase in no. of personal vehicles i.e. Two Wheelers, Cars, School buses, Private buses, etc. Justification for the demand in 3 rd Control Period- Query 3 As stated above the Undertaking has incurred additional expenditure and could not earn the Revenue as expected in Business Plan. Resultantly, it could not able to reduce transport deficit to zero as proposed in Business Plan earlier. Since, D.A. Index, Fuel Prices, Rent and Taxes are beyond the control of BEST administration, it will take further time to self-sustain the Undertaking s financial position. Hence, the Transport Division requests further assistance from the Supply Division of the Undertaking upto FY BEST should justify its proposal for sharing of transport deficit amongst the other distribution licensees in Mumbai with reference to the relevant provisions of the Electricity Act, 2003 and MERC MYT Regulations, 2015 Reply 3 BEST submits that, Section 51 of the Electricity Act 2003 provides for the following A distribution licensee may, with prior intimation to the Appropriate Commission, engage in any other business for optimum utilization of its assets: Provided that a proportion of the revenues derived from such business shall, as may be specified by the concerned State Commission, be utilized for reducing its charges for wheeling:

5 Provided further that the distribution licensee shall maintain separate accounts for each such business undertaking to ensure that distribution business neither subsidises in any way such business undertaking nor encumbers its distribution assets in any way to support such business. Provided also that nothing contained in this section shall apply to a local authority engaged, before the commencement of this Act, in the business of distribution of electricity. As seen from the above extract it is clear that Distribution Licensee is not supposed to subsidize its business through its other business unless it s a local authority like BEST. Based on the above provision, BEST has been claiming transport deficit which comes under its other business from the consumers of BEST area. However in the recent petition, BEST has proposed that the transport deficit shall be recovered from all distribution licenses of Mumbai area as the transport facility of BEST is being used by all consumers of Mumbai area. BEST has made such a proposal keeping in mind the rational for sharing of transport deficit cost between utilities so that there would not be any unfair burden on the consumers of BEST. Further, if the TDLR charges are shared with all consumers of the distribution licensees operating in Mumbai, it will reduce the requirement for increase in TDLR charges for BEST as shown above. This is also in line with the principle adopted for allowing competition, as the competition should be based on fare sharing of cost between utilities. Query 4 As regards the 'draft calculation' of projected TDLR if TDLR is levied on all consumers of the Mumbai DISCOMs, BEST should: a. Submit the calculations in MS Excel b. Explanation for the calculation c. Submit all assumptions and basis for such assumptions, viz., projected sales of other DISCOMs, calculation of revenue from levy of TDLR for different DISCOMs, etc. d. Clarify whether the Standalone Transport Deficit (first row in table) is being considered as Rs crore in FY increasing to Rs crore in FY e. Verify the calculations once again, as the revenue from TDLR from RInfra-D and TPC-D appear to Reply 4 have been interchanged, and the calculation of revenue from TDLR appear to be incorrect BEST provides for point wise reply as follows a. BEST has already submitted the revised calculations sheet on 18 th February BEST is again attaching the detailed calculations in MS excel as Annexure-Q4. b. BEST has taken standalone transport business deficit for each year of control period and added previous transport deficit to be recovered in phased manner along with the carrying cost. BEST has

6 therefore arrived at total transport recovery for the respective years. After that it has considered sales for Rinfra-D, TPC-D and BEST and applied at a flat TDLR rate of Rs per unit to arrive at estimated revenues from each of the distribution Company. The rate of Rs is derived in such a way that the balance recovery of transport deficit at the end of the Third MYT Control period will be zero. c. It is submitted that the sales projection for TPC-D and RInfra-D is derived by escalating approved sales of FY with an increase over approved sales of FY in the respective MTR order and the same escalation rate has been taken for rest of the control period. d. Inadvertently few figures mentioned at table at section were incorrect. The revised corrected calculation with necessary changes of standalone deficit of transport has been submitted on 18 th February BEST is again attaching the detailed calculation in MS excel as Annexure-Q4. Query 5 BEST has submitted the separate ARR for Distribution Wires and Retail Supply Business in the Formats. In this regard, a. BEST should clarify the basis for allocation of expenses between Distribution Wires and Retail Supply Business b. BEST should submit the separate ARR for the Wires Business and Retail Supply Business for each Year of the third Control Period, in accordance with the MERC MYT Regulations, 2015, as part of its main Petition and Executive Summary also. BEST should propose separate Wheeling Charges and Retail Supply Tariff for each Year of the third Control Period, in accordance with the MERC MYT Regulations, 2015 and Data Formats prescribed by the Commission Reply 5 BEST submits that, it has considered basis for allocation of expenses between Distribution Wires and Retail Supply Business as per the Allocation matrix provided in Regulation 68 of MYT Regulations, The Regulation 68 of the MERC MYT Regulations, 2015 specifies the following Every Distribution Licensee shall maintain separate accounting records for the Distribution Wires Business and Retail Supply Business and shall prepare an Allocation Statement to enable the Commission to determine the Tariff separately for : (a) Distribution Wires Business; (b) Retail Supply of electricity: Provided that in case complete accounting segregation has not been done between the Distribution Wires Business and Retail Supply Business of the Distribution Licensee, the

7 Aggregate Revenue Requirement of the Distribution Licensee shall be apportioned between the Distribution Wires Business and Retail Supply Business in accordance with the following Allocation Matrix As mentioned in the above extract in case the Distribution Licensee does not have complete accounting segregation between the Distribution Wires Business and Retail Supply Business, which is the case with BEST, the segregation has to be done with the help of allocation matrix provided in the Regulations. However under Section 42(3) of the Electricity Act 2003 BEST, being a local Authority has been exempted from offering its network for wheeling of electricity to Open access users. The Distribution Open Access Regulations framed by the Hon ble Commission also exempt BEST from the purview of Distribution Open Access Regulations. BEST clarifies that, it being a Local Authority, is not required to segregate its Wires Business and Supply Business, for determination of wheeling and retail supply charges separately. BEST has submitted the segregation of Wires Business and Supply Business as per Regulation 68 of MERC MYT Regulations, 2015 for submission of formats required for petition only. BEST humbly submits that Hon ble Commission had followed similar approach for determination of Tariff while processing the MYT petition for second MYT Control Period Query 6 BEST should submit the Voltage-wise Cost of Supply for FY , FY and for each Year of the third Control Period, in accordance with the Judgment of Hon'ble APTEL in this regard. Reply 6 BEST submits that it will submit the voltage wise cost of supply considering Judgment dated 26 July, 2012 of Hon ble APTEL. Query 7 BEST should indicate the following for each year of the third Control Period, in its main Petition as well as Executive Summary: a. Average Cost of Supply including TDLR b. Average Cost of Supply including TDLR c. Proposed category-wise increase in tariff. Reply 7 BEST submits that the same will be incorporated in the revised petition.

8 B. Truing up for FY , FY and FY Query 8 As regards the decrease in energy sales during FY and FY compared to energy sales projected in MYT Order, BEST should submit the following: a. Analysis and probable reasons for decrease in energy sales in area of BEST b. Whether decrease in the energy sales in area/cluster/pocket specific or overall decrease is observed? Reply 8 BEST submits that during FY & FY lower Sales have been realised as compared to the sales approved in MYT Order in Case No.26 of 2013 as follows: Approved Sales ( MYT Order) FY FY Actual Sales Difference Approved Sales Actual (MYT Order) sales (MU) Difference a b c=b-a d e f=e-d (406.85) The comparison of category-wise actual sales with respect to the Sales approved in the MYT Order (Case No.26 of 2013) is given below: Sr. No. Consumer Category Sales (MU) FY Sales (MU) FY MYT MYT Actual Diff. Actual Diff. Order Order LT Category a b c=b-a d e f=e-d 1. BPL (0.45) (0.63) 2 LT I (Residential) (40.52) (74.35) 3 LT - II (a) (b) and (c) (365.91) (674.37) LT III,IV A,IVB Industrial LT V, VI LT - VII (a) (b), LT - VIII (15.96) (24.35) (4.73) (15.48) LT - IX (a) & (b) Hospital/Educational Institute (4.96)

9 Sales (MU) FY Sales (MU) FY Sr. Consumer Category No. MYT MYT Actual Diff. Actual Diff. Order Order HT Category HT - I Industry (11.63) (24.70) 8 HT - II Commercial (21.44) (41.49) 9. HT - III Group Housing (1.23) (2.13) 10 HT - IV Temp HT V-(a) Hospitals/ Sub Total H.T Category (3.81) Total (406.85) (797.33) From the above details, it can be seen that, during FY & FY , subsidising consumer categories, LT Commercial categories LT-II (a), LT-II (b), LT-II(c), have mostly contributed for the above lower sales growth, as follows: Tariff category LT Commercial Categories LT II (a), LT II (b) & LT II (c) Sales MYT Order (MU) FY FY Sales Sales Sales (Actual) Difference MYT (Actual) Order Difference A B C=B-A D E F=E-D (365.91) (674.37) BEST submits that in its MYT Petition (case No.26 of 2013), the Sales projections for second MYT period was done in line with the approved Business plan (Case No.124 of 2011).The comparison of Sales projected by BEST in Business Plan Petition (Case No.124 of 2011), MYT Petition and the sales approved in MYT Order (Case No.26 of 2013) is given below: Tariff category LT Comm. Categories LT II (a), LT II (b) & LT II (c) MYT Business Plan (MU) FY FY MYT MYT MYT MYT Actual Business MYT Order Petition Order Petition Plan Actual

10 As can be seen in the above table, the submission of BEST in its petition as regards to sales projection of LT Commercial Categories is quite close to actual sales. Moreover, in the second MYT period it was envisaged that additional sales on account of development in the new areas such as Wadala truck terminal, Dharavi Make-Over and Mill land area will materialise. Further, even though the mill land area development is underway, till now out of total 57 Mill Land Plots only 9 Cases (16 %)have been materialized. Similarly due to slow pace of development at Wadala Truck Terminal the sales envisaged has not materlised. The Dharavi makeover project is yet to be approved by the GoM and hence demand envisaged from this project has not yet picked up. All these factors have led to lower sales growth against MYT order, especially for LT Commercial Categories(LT - II (a)(b) and (c). As such, the lower sales growth can be attributed to lower pace of developments in the new development areas. The justification is also provided in section 7.2 of the petition Demand Assessment and Demand Projection. Query 9 As regards FBSM Bills, BEST has submitted in para that MSLDC has finalized FBSM bills up to September 2012 and in Para 5.3.3, the FBSM bills have been said to be received up to February BEST should clarify the status of FBSM bills received by BEST and considered in Petition Reply 9 As regards FBSM Bills received from MSLDC, BEST submits that it has received final weekly FBSM bills up to 25 February 2013 and also received provisional weekly FBSM bills upto 20 April The correction in the dates will be made in the revised petition. Query 10 BEST should submit the IBSM Statements prepared by MSLDC for FY and FY , highlighting the energy consumed for BEST for FY and FY Reply 10 BEST is submitting herewith a DVD containing soft copy of the FBSM Statements prepared by MSLDC for FY and FY , highlighting the energy consumed for BEST for FY and FY as Annexure- Q10 (submitted in soft copy). BEST submits that: a. MSLDC is yet to finalize weekly FBSM bills for FY , FY and FY therefore, BEST has considered the Transmission Loss of 4.10% for FY , derived by using following method:

11 TPC-G's monthly drawl Statement gives information about BEST's Metered Drawl at T-D Interface. The summation of monthly drawl at T-D Interface is works out to MU for FY For FY , the monthly Intra-State Transmission Loss available on MSLDC's Website while preparing MYT Petition was considered for deriving Grossed up drawl (Energy requirement at G-T Interface). The summation of monthly derived Grossed up drawl is works out to MU's for FY As such, Transmission Loss is worked out to 4.10% for FY [( )/ *100]. For each month of FY , the Pool Imbalance units are derived by deducting Loss Adjusted Drawl from total Power Purchase Quantum (Availability) for that month. As such, the Pool Imbalance units of (280.25) MU's shown for FY is the derived balancing figure and it is summation of monthly derived Pool imbalance units for FY However, these Pool Imbalance Units may change after finalization of FBSM Bills by MSLDC for FY b. MSLDC is yet to finalize weekly FBSM bills for FY , FY & FY therefore, BEST has considered Transmission Loss of 3.90% for FY , derived by using following method: TPC-G's monthly drawl Statement gives information about BEST's Metered Drawl at T-D Interface. The summation of monthly drawl at T-D Interface is works out to MU for FY For FY , the monthly Intra-State Transmission Loss available on MSLDC's Website while preparing MYT Petition was considered for deriving Grossed up drawl (Energy requirement at G-T Interface). The summation of monthly derived Grossed up drawl is works out to MU's for FY As such, Transmission Loss is worked out to 3.90% for FY [( )/ *100]. For each month of FY , the Pool Imbalance units are derived by deducting Loss Adjusted Drawl from total Power Purchase Quantum (Availability) for that month. As such, the Pool Imbalance units of (330.24) MU's shown for FY is the derived balancing figure and it is summation of monthly derived Pool imbalance units for FY However, these Pool Imbalance Units may change after finalization of FBSM Bills by MSLDC for FY

12 Query 11 BEST should submit month-wise details of quantum, rate and total cost for pool imbalance units for FY , FY and FY Reply 11 BEST submits that the month wise details of quantum of pool imbalance units, the rate and total cost for FY is attached as Annexure-Q11. Query 12 BEST should submit the year-wise RPO Compliance status for FY , FY and FY clearly indicating the cumulative shortfall/(surplus) for solar and non-solar RPO separately. Reply 12 BEST is submitting the year-wise RPO Compliance status for FY , FY and FY clearly indicating the cumulative shortfall/(surplus) for solar and non-solar RPO separately. The data attached as Annexure-Q12. Query 13 BEST should submit the documentary evidences for purchase of REC indicating number of certificates purchased and cost of purchase of REC. Reply 13 RE procured Certificate along with copy of the invoice is attached in Annexure- Q13 (submitted in soft copy) for FY to FY Query 14 BEST should provide full details of the Merit Order Despatch (MOD) followed for power purchase by BEST, including details of backing down of TPC-G's Units in FY , FY , and FY , separately for each month, including the tariff considered for the MOD, technical minimum level considered for TPC-G's Units, etc. Reply 14 The said details are attached in the Annexure-Q14 (submitted in soft copy). Query 15 BEST should submit the hourly demand-supply position, i.e., the hourly (for 8760 hours) load and the various sources through which the load has been met, including the deficit/surplus energy for FY , FY , and FY , in soft copy in MS Excel.

13 Reply 15 BEST will submit reply to this query separately as processing of voluminous data is involved. Query 16 As regards the power purchase from TPC-G Unit 6 during FY , BEST should provide the break-up of power purchase quantum and cost under the following situations: Reply 16 a. Unit 6 was run for meeting the increased demand and generation was shared by all three distribution licensees b. Unit 6 was run to meet the contractual obligation of BEST BEST herewith submits the break up of Power Purchased Quantum and Cost of TPC-G Unit-6 during from FY is as follows: Sr. No. a b Particulars Power Purchase Quantum Total Variable Cost Variable Charges MU's Rs. Crore (Rs./kWh) Unit 6 was run for meeting the increased demand and generation was shared by all three distribution licensees Unit 6 was run to meet the contractual obligation of BEST Total Query 17 BEST should provide the details of prior period payment of Rs Crore made to TPC-G in FY indicating the period of bill, etc., along with relevant documentary evidence. Reply 17 BEST herewith submits the details of prior period payment of Rs Crore made to TPC-G in FY as follows: Sr. No. Particulars Rs. Crore 1 2 Revised Supplementary Bill for Aug.11- Oct.11 dtd Revised Supplementary Bill for Nov.11-JAN.12. dtd Total 3.74 Relevant copies of said TPC-G Bills are submitted herewith as Annexure- Q17.

14 Query 18 BEST should submit the source-wise Renewable Energy procured for FY , FY , and FY separately in the format provided below: Source-wise Quantum and Cost of RE power purchase Month Source Genera RE Quant Lande Whee wheeling Cost at Preferential tor techno um d cost ling charges MSETCL tariff name logy for loss Periphery approved by RInfra the -D Commission Rs/ MU kwh % Rs/ kwh Rs/ kwh Rs/ kwh Reply 18 The said details are attached in the Annexure- Q18. Query 19 As regards power purchase from external sources in FY , FY , and FY , a. BEST should clarify whether the same has been procured under Competitive Bidding, and submit the results of the competitive bidding exercises carried out over each respective year. b. BEST should clarify whether short-term power was purchased on RTC basis or for specific hours Reply 19 BEST submits that as regards power purchase from external sources in FY , FY , and FY , a. BEST clarifies that it has procured power from external sources through Competitive Bidding by publishing Expression of Interest (EoI) in news papers. The results of the competitive bidding exercises carried out over each respective year is submitted as Annexure-Q19. b. BEST clarify that short-term power was purchased on RTC basis as well as for specific hours.

15 Query 20 As submitted in the Annexure XXIII on Reconciliation of GFA, the total difference in GFA is Rs Crore, however, the total difference in closing GFA of FY (Rs Crore) and Opening GFA for FY (Rs Crore) is Rs Crore. BEST should clarify the same and submit the revised reconciliation of GFA. Reply 20 BEST submits that from the details in Form No.5.1 of Truing up for FY , it can be seen that the closing GFA is Rs crores and Opening GFA for FY is Rs crores. BEST will make necessary corrections in the True up formats. Query 21 BEST should submit the actual impact of wage revision along with break up for different heads of the employee expenses for FY , FY and FY Reply 21 BEST herewith submits the details of actual impact of wage revision with different heads of the Employee expenses for FY , FY & FY , as under :- FY The actual wage impact for FY is Rs crores, which consist of increase in Basic salary by Rs crores, HRA by Rs.9.74 crores, LTA by Rs.1.66 crores, Medical Allowance by Rs.0.87 crores, Overtime payment by Rs.1.29 crores, PF by Rs.3.97 crores. & Gratuity by Rs.3.51 crores. FY The actual wage impact for FY is Rs crs., which consist of increase in Basic salary by Rs crores, DA by Rs crs., HRA by Rs.6.74 crores, LTA by Rs.0.45 crores, Leave encashment by Rs.3.12 crs., Medical Allowance by Rs.0.35 crores, Overtime payment by Rs.4.69 crores, PF by Rs.4.89 crores & Gratuity by Rs.7.24 crores.

16 FY The actual wage impact for FY is Rs crores, which consist increase in Basic salary by Rs.0.54 crores, DA by Rs crores, HRA by Rs.2.55 crores, LTA by Rs.0.11 crores, Leave encashment by Rs.1.72 crores, Medical Allowance decreased by Rs.0.09 crores, Overtime payment decreased by Rs.4.10 crs., PF increased by Rs.3.08 crores. & Gratuity by Rs.1.38 crores and interim relief / wage settlement (Arrears) of Rs crores. Query 22 As regards actual A&G expenses: a. BEST should submit the details of 'Miscellaneous & general expenses' of Rs crore for FY , Rs Crore for FY and Rs Crore for FY , under 'Other Costs' b. BEST has reduced the 'Security Expenses' from the General Administration expenses allocated to Supply Division. BEST should clarify the reasons for the same. Reply 22 BEST submits the following details: a. The details of Actual Miscellaneous & General Expenses are as under :- Sr.No. Particulars FY FY FY (i) Medical Reimbursement to Staff 3,80, ,99, ,93, (Approved Hospitals) (ii) Medical Reimbursement to Staff 13,35, ,27, ,88, (Non-Approved Hospitals) (iii) Other Expenditure 1,58,08, ,94,83, ,39,83, (iv) Books & Periodical 15, , , (v) Photographic Materials , , (vi) Printer Ribbons 31,18, ,09, ,57, (vii) Contribution to BEST Staff 4,19,11, ,82,54, ,99,01, Amenities (viii) Charges for Collection of Bills 1,33,22, ,00,92, ,00,13, (ix) Fees to Forum Members 6,59, ,68, ,82, (x) MERC Fees and Charges for ARR 10,95, ,36, ,22, approval (xi) Lease Rent for Distribution and 20,91, ,25, ,71, Substation (xii) Employer s Contribution to ESIC ,88, ,97,41, ,60,17, ,60,28,823.00

17 b. The Security Expenses of the General Administration Expenses allocated to Supply Division has been reduced as the said expenses are already shown separately under security arrangement head of A & G Expenses, as it is the payment of Security Expenses of BEST Electricity business. Query 23 BEST should clarify the discrepancy in the actual O&M Expenses for FY reported in the following tables: Reference Actual O&M Expenses (Rs. Crore) Table Table Form 3 of Truing up formats Reply 23 BEST submits that, the actual O&M expenses for FY excluding the impact of wage revision is Rs Crores as mentioned in table 8 and Form 3 of truing up formats. BEST submits that the correction will be incorporated in the revised petition. Query 24 BEST should confirm that depreciation is less than 90% of GFA for all assets, since assets cannot be depreciated beyond 90% of GFA in accordance with the MYT Regulations, Reply 24 BEST confirms that the Depreciation does not exceed 90% of the GFA for all the assets. Query 25 BEST should submit the documentary evidence for the actual interest rate for all actual outstanding loans as on 1st April 2012, 1st April 2013, and 1st April Reply 25 BEST is submitting herewith the documentary evidence for the actual interest rate for all actual outstanding loans as on 1st April 2012, 1st April 2013, and 1st April 2014Is attached as Annexure-Q25

18 Query 26 As regards the funds available from REC under National Electricity Fund, BEST should clarify a. whether any amount has been drawn under this Fund? b. If yes, year-wise amount drawn and for which capital expenditure? c. details of interest subsidy available to BEST and the effective interest rate for such loans. Reply 26 a&b. BEST submits that the it has availed total loan of Rs crores from REC i.e. on Rs crores, & Rs crores (b) This fund is availed against the Capital expenditure of FY & F.Y for the various schemes of the Undertaking approved by the Commission. Considering this fact, the Undertaking has not availed 70% Debt loan for the Capital expenditure for FY (C) The rate of REC loan per annum. Till today, the Undertaking have not availed any subsidy from the REC. Further as per the REC loan policy, the Undertaking will be eligible to claim the subsidy of interest after completion of 1 year loan disbursement. Query 27 BEST should submit the computation of applicable interest rate as per MERC MYT Regulations, 2011 in the following format for FY , FY and FY Source/Bank Outstanding Loan Applicable Interest Weighted Average Name as on April 1 Rate (%) Interest Rate (%) FY Bank 1 Loan 1 Loan Bank FY Bank 1... Loan FY Bank 1... Loan

19 Reply 27 BEST is submitting herewith the computation of applicable interest rate as per MERC MYT Regulations, 2011 in the specified format for FY , FY and FY Term Loan Source/Bank Name Outstanding Loan as on April 1 Rs. Crores Applicable Interest Rate (%) Weighted Average Interest Rate (%) FY DPDC APDRP Vijya Bank BoI FY DPDC APDRP BoI FY DPDC APDRP Dena Bank FY DPDC APDRP Syndicate Bank Working Capital Loan Source/Bank Name Outstanding Loan as on April 1 Rs. Crores Applicable Rate (%) Interest Weighted Average Interest (%) FY Canara Bank Term Loan Canara Bank Shrort Term Rate

20 Source/Bank Name Canara Bank Cash Credit FY Outstanding Loan as on April 1 Rs. Crores Applicable Rate (%) Interest Weighted Average Interest (%) Canara Bank Term Loan Canara Bank Cash Credit MCGM FY Canara Bank Term Loan Canara Bank Cash Credit MCGM FY Canara Bank Term Loan Canara Bank Cash Credit MCGM Rate The proof for interest rate is submitted as Annexure-Q27. BEST submits that some of the interest rates are revised from the figure submitted in the petition. BEST will update the calculation based on these interest rates in the revised petition. Query 28 As regards the temporary advance of Rs Crore availed from MCGM at interest rate of 10%, BEST should confirm whether this temporary advance has been taken to meet transport deficit or deficit of supply business? Reply 28 BEST submits that the total Temporary Advance of Rs crores availed from MCGM has been utilized for payment of outstanding TPC bills. The said details are shown in attached Annexure-Q28. Query 29 As regards the interest on consumer security deposits claimed by BEST for FY , FY and FY , BEST should clarify whether this amount has been actually paid/adjusted against consumers' bills or is it the amount provided for under the Accounts?

21 Reply 29 BEST submits that the Interest on Consumer Security Deposit claimed by BEST for FY , FY & has been actually paid to Consumers. Query 30 As regards the consumer security deposit for FY , FY and FY , BEST should submit the details of consumer security deposit as opening balance, addition during year, closing balance and interest paid in the following format Sr. No. Particulars FY FY FY Opening Balance 2 Addition during the year 3 Closing balance 4 Interest Paid Reply 30 BEST is submitting, the details of consumer security deposit for FY , FY and FY , and interest paid in the specified format Sr. No. Particulars FY FY FY Opening Balance Addition during the year 8.5 (7.24) Closing balance Interest Paid Query 31 BEST should submit the details of Contribution to Contingency reserve for FY , FY and FY in the following format: Sr. No. Particulars FY FY FY Opening Balance of Contingency Reserves 2 Opening Gross Fixed Assets 3 Opening Balance of Contingency Reserves as % of Opening GFA 4 Contribution to Contingency Reserves during the year

22 Sr. No. Particulars FY FY FY Utilisation of Contingency Reserves during the year 6 Closing Balance of Contingency Reserves 7 Closing Balance of Contingency Reserves as % of Opening GFA Reply 31 BEST is submitting the details of Contribution to Contingency reserve for FY , FY and FY in the specified format: Sr. No. Particulars FY FY FY Opening Balance of Contingency Reserves Opening Gross Fixed Assets* Opening Balance of Contingency Reserves 0.25% 0.25% 0.25% 3 as % of Opening GFA Investment made to Contingency Reserves during the year Contribution to Contingency Reserves during the year Utilisation of Contingency Reserves during the year 7 Closing Balance of Contingency Reserves Closing Balance of Contingency Reserves as % of Opening GFA 0.84% 0.96% 0.97% * Excluding Land BEST submits that, the investment is made in next year based on provisions made in current year and hence investment and provision will not match. However, investment till will be more than provision made till The year -wise details is as submitted below.

23 F.Y. Provision Investment Details of Investment % G.O.I. Oil bond dtd Invest transferred to General Invest. Balance available under Investment in Contingency Reserve Interest earned Transferred to Non- Tariff Income % IRFC dtd % APPF dtd. + Int & 5.985% APPPF dtd % TPF Infrastructure Dev.Corporation % Tamil Nadu Power Finance & Infra Development Corporation Ltd % Rajasthan SDLSPL % Rajasthan SDLSPL & & Total : Query 32 As regards Contingency Reserves, BEST should submit a. the opening balance of contingency reserves as on April 1st of each Year from FY , FY , and FY , as well as the different interest rates for the various securities accumulated under the Contingency Reserve. b. documentary evidence showing that such contribution to contingency reserves has been invested in approved securities

24 Reply 32 BEST submits the following details: a. Opening Balance of Contingency Reserve is as under : As on As on As on Rs crs. Rs crs. Rs crs. b. The documentary evidence of Investment is enclosed as Annexure-Q32. Query 33 BEST should submit the reasons for claiming of interest paid to consumer on accumulated FAC of Rs Crore in FY under Other expenses, in view of the Commission s Order dated November 25, 2014 in Case No. 88 of Reply 33 BEST submits that the Hon'ble Commission in Case No.88 of 2014, has in principal Agreed that the retention of negative FAC by BEST from September 2013 onwards is not entirely due to lapses on part of BEST. Considering this fact, BEST has claimed the interest of Rs.9.58 crores paid to consumers on accumulated FAC. Query 34 As regards Non-Tariff Income for FY , FY , and FY : Reply 34 a. BEST should submit the details and sources of Others, which has contributed Rs Crore in FY , Rs Crore in FY , and Rs crore in FY b. Contract charges have been booked as Nil, because total revenue is lower than total expenditure. BEST should clarify where this excess expenditure is booked? BEST submits the following details: a. The details and sources of Others which has contributed Rs.3.20 crores in FY , Rs.3.45 crores in FY & Rs.5.32 crores in FY are as under :-

25 (1) Hire & Repairs to Electrical Appliances (13) Right to Information Act. (2) Miscellaneous & General Charges (14) Load Certificate (3) Revisit Charges (15) Tender Fees (4) Change of Name (16) Demand Draft / Postal Order Charges (5) Statement Charges (17) Dishonoured Cheque Charges (6) Cash Discounts from Parties (18) E-Tender Service Facility Charges (7) Penalty of outside parties (19) Inspection Charges (8) Medical Examination Fees (20) Penal Interest on Let-out Premises (9) Application, Registration and (21) Recovery towards late Delivery of Processing Charges Materials (10 Administrative Charges (22) Discount received on Contingency Reserve Fund Investment (11) Miscellaneous Search Report (23) Other excluding above heads (12) Retention through Pay sheet b. The expenses incurred for Allied Departments are not being considered by the Commission and the same is deducted from the Gross Employee Expenses. As such, the said expenditure is absorbed by the Undertaking Query 35 In the context of the Property Insurance Fund created by BEST through expenses booked under A&G expenses, BEST should i. submit the details of the total balance under this Fund for , FY , and FY ii. the details of the management of this Fund, including documentary evidence for the same iii. Whether the Fund created through expenses booked under A&G expenses is only for the Electricity Business iv. Under which circumstances is the Fund drawn upon? v. Whether the Funds are invested in any securities or bank? vi. If invested, under which head of income is the interest/dividend income considered for FY , FY , and FY ? Reply 35 BEST submits the point wise reply as follows: i. The details of year-wise Property Insurance Fund are as under :- (Rs. in Crores ) F.Y F.Y F.Y

26 The said amount is utilized for Capital Expenditure of Supply Division and not invested in the Bank. ii. The object of this fund is to cover the risk of properties of Undertaking. This fund is created by charging annually to Revenue A/c 0.5% of value of gross fixed assets. As a normal business policy all such assets/properties are required to be adequately covered against various risk by taking out insurance policy with outside business company. Depending up on the value of the asset and risk covered the premium is required to be paid for such insurance cover. However in case of BEST, a policy has been decided to have own property insurance fund instead of paying heavy insurance premium to an outside agency thereby on one side, it is only provision made by charging to Revenue A/c. and there will not be any actual cash flow and as a result the funds will remain with the Undertaking. This policy was approved by BEST Committee vide BCR No. 625(C) dated 17 June 1949 & C.R.No.659 dated 8th August, 1949 and same has been raised from time to time with necessary approval of BEST Committee & Corporation. iii. It is true that the Fund created through expenses booked under A&G expenses is only for the Electricity Business. iv. This fund is created to cover the Assets of Undertaking from the risk of Riot, Strike, earthquake, the circumstances beyond the control the management. Therefore under any of the circumstances mentioned above if there is damage to the property of BEST,this fund is utilized by debiting the fund account and crediting to Bank A/c. v. The fund is not invested in any securities or Bank. The said entry is a book entry based on the policy approved by BEST Committee and Corporation. vi. Since amount is not invested against the Property Insurance Fund, no income is booked. Query 36 BEST has submitted the incentive for Wire and Supply Availability considering the target Wires Availability and target Supply Availability at 95%. In this regard, a. In the MYT Order, the Commission has stipulated the target Wire Availability at 98.42% and target Supply Availability at 100%. Hence, BEST should re-calculate the incentive for Wire Availability and Supply Availability considering the target Wires Availability and target Supply Availability at 98.42% and 100%, respectively. b. BEST should submit the sources of generation capacity considered against 'Base Load contracted capacity' and against 'Peak Load contracted capacity' for FY , FY and FY c. BEST should submit the hourly load curve for FY , FY and FY , to establish the base load and peak load.

27 Reply 36 BEST submits point wise reply as follows: a. The claim has been made as per MYT regulation b. The figures for Load of FY , FY and FY are as shown in table F12 of True-up excel Model and F24 of MYT Model. The said calculation and information are hidden as they do not form the part of formats required by MERC. BEST submits that it will submit the hard copy printout of said calculation as Annexure to revised petition. Further BEST submits that Base load and Peak Load as submitted in section 7.2 of the petition are prepared based on actual load of 15 minutes block for past 7 years. However the Base Load and Peak Load thus estimated is at T<>D interface while the same is grossed up with transmission loss to arrive at Base Load and Peak Load at G<>T interface used for calculation of incentive. Also, there is minor correction in Base Load data of FY and FY as submitted in F12 of excel model and the same will be corrected with Base Load data submitted in section 7.2 of the petition while submitting the revised petition. c. BEST in section 7.2 of the petition has submitted actual monthly maximum and minimum demand for estimation of base and peak load. As submitted in the petition, the same is based on actual load of 15 minutes block for past 7 years. The actual load of 15 minutes block for FY , FY and FY is provided in excel format as an Annexure-Q36.(Soft Copy) Query 37 BEST should submit category-wise consumption in different TOD time-slots for FY , FY and FY Reply 37 BEST herewith submits the category-wise consumption in different TOD time-slots for FY , FY and FY as Annexure-Q37 Query 38 The actual Transport Deficit in FY , FY and FY as submitted by BEST is significantly higher than the Transport Deficit projected by BEST in its MYT Petition and approved by the Commission in the MYT Order, as the actual combined Transport Losses for these three Years have been claimed as Rs crore as against the approved amount of Rs crore. In this regard, BEST should submit the detailed reasons and justification for the increase in the Transport Deficit.

28 Reply 38 Please refer reply to Query No. 2. Query 39 As regards Table 80, BEST should clarify whether TPC-G has levied any carrying cost, since BEST has sought carrying cost on past recovery of TPC-G though the same has been paid to TPC-G in FY itself. Reply 39 BEST submits that as per the Hon ble Commission s directive in Order dated 5 June, 2013 in Case No. 177 of 2011, BEST has made the payment of Rs Crore in 10 equal installments from June, 2013 to March, However, in MYT Order dated 28 August, 2013, the Hon ble Commission has clubbed the amount of Rs Crore with the other revenue gap items and considered the amount in revenue gap at the end of FY instead of considering the same in power purchase expenses for FY and allowed the recovery in 3 years. With the same philosophy, BEST has considered the recovery of revenue gap other than Rs Crore as mentioned in table 76 in three years and the recovery of Rs Crore is considered in the same year as it was actually paid in the same year, with the same philosophy of MYT Order. BEST clarifies that TPC-G has not levied any carrying cost on past recovery of TPC-G of Rs Crore. Query 40 BEST has stated that it has considered the actual energy sales from April to November 2015, however, in Table 115; it has submitted actual sales from April to September, BEST should clarify the same Reply 40 BEST submits that it has considered the actual energy sales from April 2015 to November 2015 and estimated the sales for December 2015 to March BEST adopted this approach to provide a better estimate for energy sales for FY BEST has not changed the format specified by the Hon ble Commission in its MYT Regulations; however the sales reflecting in Form 1 for the months of Oct 2015 and Nov 2015 are actual sales for these months. Query 41 BEST should submit the reason for considering the same growth rate of 3.90% for all categories for projecting the energy sales for remaining period of FY , instead of considering actual growth rate for each category over previous year.