PETITION FOR ANNUAL REVENUE REQUIREMENT FOR THE FINANCIAL YEARS TO

Transcription

1 PETITION FOR ANNUAL REVENUE REQUIREMENT FOR THE FINANCIAL YEARS TO And TARIFF PROPOSAL FOR THE FINANCIAL YEAR Submission of Text and Affidavit To Assam Electricity Regulatory Commission By Central Assam Electricity Distribution Company Limited Bijulee Bhawan, Paltanbazar Guwahati

2 BEFORE THE ASSAM STATE ELECTRICITY REGULATORY COMMISSION, GUWAHATI. Petition No. Case No. (to be filed by the Office) IN THE MATTER OF Filing of Annual Revenue Requirement Proposal for the years to AND Petition for Determination of Tariff For the year AND IN THE MATTER OF Central Assam Electricity Distribution Company Limited Bijulee Bhawan, Paltanbazar, Guwahati Petitioner I, Shri Bijoy Bose son of Late Asit Bose aged 59 years residing at Guwahati do solemnly affirm and say as follows: I am the Chief General Manager of Central Assam Electricity Distribution Company Limited, the petitioner in the above matter and am duly authorized to make this affidavit for and on behalf of the Central Assam Electricity Distribution Company Limited. The Statement made in the Petition based on information received from official records and I believe them to reflect truly and no material has been concealed from the statements so made or documents or supporting data etc. attached. Solemnly affirm at Guwahati on 28 th day of February 2007 that the contents of this affidavit are true to the best of my knowledge, no part of it is false or no material has been concealed therefore and misleading material included therein. Place: Guwahati Deponent Date By order of the Commission Secretary of the Commission Central Assam Electricity Distribution Company Limited Page 2 of 154

3 Table of Contents 1. Legal and Regulatory Framework Review of performance in FY Operations Financial Position Review of performance in FY Operations Allocation of assets, liabilities and expenses to different stations Income and Expenditure estimation Assumption Repairs & Maintenance Employees expense Administration & General expense Other income Depreciation AAD Interest & financing charges Profit & Loss account Tariff comparison Projected ARR for FY to FY Multi- year framework Income and Expenditure Sales forecast Assumptions Loss trajectory Operations Repairs & Maintenance Employee expenses Administration & General expenses Depreciation Interest & financing charges Other income Profit & Loss at existing tariff rates Projected ARR for Retail Supply & Distribution wires Tariff proposal Cost to Serve and existing recovery Proposed tariff increases - categorywise Comparison of revenues Existing and Proposed Profit & Loss at revised tariff rates Incentives Efficiency Improvement Initiatives Energy accounting Installation of electronic meters at 11KV feeders Efforts for controlling 11 KV Interruption Loss Management Cost Benefit Analysis Customer Care Processes Implementation of inventory management and inventory accounting for LAEDCL, UAEDCL, CAEDCL Business Plan FY 07 to FY Assumptions...47 Central Assam Electricity Distribution Company Limited Page 3 of 154

4 6.2. Profit & Loss account Balance sheet Proposed Revision in Tariffs Power factor Penalty and Rebate LT Category-I: Jeevan Dhara LT Category-II: Domestic A LT Category-III: Domestic B LT Category-IV: LT Commercial LT Category-V: LT General Purpose Supply LT Category-VI: Public Lighting LT Category-VII : Agriculture LT Category-VIII: Small Industries LT Category-IX: Temporary Supply HT Category-I: HT Domestic HT Category-II: HT Commercial HT Category-III: Public Water Works HT Category-IV: Bulk Supply HT Category V(A): HT Small Industries HT Category V(B): HT I Industries HT Category V (C): HT II Industries HT Category VI: Tea, Coffee and Rubber: Seasonal (April to November) HT Category VII : Oil and Coal HT Category VIII : HT Irrigation Directives of AERC Annual Statement of Accounts for FY Investment Plan between FY to FY Accelerated Power Development and Reform Program (APDRP) Non Lapsable Central Pool of Resources (NLCPR) Rural Electrification Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) Tribal Sub Plan (TSP) Scheduled Caste Component Plan (SCCP) ADB Financed Schemes STATE PLAN FUND Distribution Line and Sub Station Augmentation...66 Central Assam Electricity Distribution Company Limited Page 4 of 154

5 List of Table Table 1: Profit and Loss Account - FY Table 2: Sales in MU for FY Table 3: Allocation of Equity, Assets, Expenses...15 Table 4: Assumptions for various heads I...16 Table 5: Assumptions for various heads II...17 Table 6: Assumptions for various heads III...17 Table 7: Repairs and Maintenance...18 Table 8 : Employee expenses for FY Table 9 : Administration & General Expense...19 Table 10 : Other Income...19 Table 11 : Depreciation...19 Table 12: AAD for FY Table 13: Interest & financing charges...20 Table 14: Interest on Normative working capital...21 Table 15: Profit and Loss Account FY Table 16: FY 07 Position as compared to Tariff Order...22 Table 17: Sales by Category MUs...24 Table 18: Assumptions for FY to FY I...25 Table 19: Assumptions for FY to FY II...26 Table 20: Assumptions for FY to FY II...26 Table 21: Loss trajectory...26 Table 22: Trading of energy and Income...27 Table 23: Repairs & Maintenance for FY 08 to FY Table 24: Employees Expenses for FY 08 to FY Table 25: Administration and General Expenses for FY 08 to FY Table 26: Depreciation for FY 08 to FY Table 27: Interest charges...28 Table 27A: Interest on Normative working capital per AERC...29 Table 28: Other Income...29 Table 29: AAD...29 Table 30: Profit and Loss Account for FY 08 to FY 10 at existing Tariff order FY 07 rate...30 Table 31: ARR for Retail & Wires FY Table 31 A: ARR for Retail & Wires FY Table 32: ARR for Retail & Wires FY Table 33: Cost to serve and Cost recovery at existing tariffs...32 Table 34: Proposed Tariff per category Table 34 A: Comparison of revenues Existing and Proposed...34 Table 35: Uniform BST and Surplus/ (deficit) for FY 08 to FY Table 35A: Differential BST and Surplus / (deficit) for FY to Table 36: Feeder Metering Status...37 Table 37: Sales Projections in MU...47 Table 38: Assumption for FY 07 FY 12 I...48 Table 39: Assumption for FY 07 FY 12 II...48 Table 41: Loss trajectory...49 Table 42: Trading Mu and Income...49 Table 43: Profit and Loss account for FY 07 to FY Table 44: Balance Sheet for FY 07 to FY Table 45: Proposed Plan Outlay for CAEDCL under APDRP...62 Table 46: NLCPR SCHEMES FOR CAEDCL FOR THE YEAR Table 47: Electrification of proposed virgin villages...65 Central Assam Electricity Distribution Company Limited Page 5 of 154

6 List of Annexure Annexure I: Investment Plan...62 Annexure II: Report on Cost to Serve...71 Annexure III: Status of Hon ble Commission s formats...95 Annexure IV: Details of actual funding of terminal liabilities Annexure V: Annual Statement of Accounts for FY Central Assam Electricity Distribution Company Limited Page 6 of 154

7 Glossary Acronym Full form A&G Administrative and General AAD Advance Against Depreciation ABC Aerial Bunched Conductors ABT Availability Based Tariff ADB Asian Development Bank AEGCL Assam Electricity Grid Corporation Limited AERC Assam Electricity Regulatory Commission AMR Automated Meter Reading APDRP Accelerated Power Development and Reforms Program APERC Andhra Pradesh Electricity Regulatory Commission APGCL Assam Power Generation Corporation Limited APTRANSCO Andhra Pradesh Transmission Company ARR Annual Revenue Requirement ASEB Assam State Electricity Board AT&C Aggregate Technical and Commercial BST Bulk Supply Tariff CAEDCL Central Assam Electricity Distribution Company Limited CAGR Compounded Annual Growth Rate CEO Chief Executive Officer CMRI Common Meter Reading Instrument CT/PT Current Transformer/Potential Transformer DPS Delayed Payment Surcharge DTRs Distribution Transformers EE Executive Engineer FAS Fuel Adjustment Surcharge FY Financial Year between April 1 to March 31 GEC Guwahati Electrical Circle GoA Government of Assam GoI Government of India GPRS General Packet Radio Service GSM Global System for Mobile Communication HHM Hand Held Machines HT High Tension HVDS High Voltage Distribution System IAS Import Adjustment Surcharge IRCA Industrial Revenue Collection Area KV Kilo Volt KVA Kilo Volt Ampere KW Kilo Watt KWH Kilo Watt Hour LAEDCL Lower Assam Electricity Distribution Company Limited LT Low Tension MCAGR Modified Compounded Annual Growth Rate MCBS Miniature Circuit Breaker MIS Management Information Systems MMSCMD Measured Million Standard Cubic Meter per day MOU Memorandum of Understanding MRI Meter Reading Instruments Central Assam Electricity Distribution Company Limited Page 7 of 154

8 Acronym MU NERLDC NLCPR O/H PGCIL ph PIS PLC PLF PMGY PSTN R&M RE MNP RGGVY Rs RST RTU SBM SC SCCP SDE SEBs SMEC ST T&D T.C. TCS TOU TSP UAEDCL UoM US V YOY Full form Million Unit North East Region Load Despatch Centre Non-Lapsable Central Pool of resources Over Heads Power Grid Corporation of India Limited Phase Performance Incentive Scheme Power Line Carriers Plant Load Factor Prime Minister Gramudyog Yojana Public Switch Telephone Network Repairs and Maintenance Rural Electrification Minimum Needs Program Rajiv Gandhi Graneen Vidyutikaran Yojana Rupees Retail Supply Tariff Remote Terminal Unit Spot Billing Machine Scheduled Caste Scheduled Caste Component Plan Sub-Divisional Engineer State Electricity Boards Snowy Mountains Engineering Corporation Limited Scheduled Tribe Transmission and Distribution Transportation Cost Tata Consultancy Services Limited Time of Use Tribal Sub-Plan Upper Assam Electricity Distribution Company Limited Unit of Measurement United States Volt Year-on-Year Central Assam Electricity Distribution Company Limited Page 8 of 154

9 BEFORE THE HON BLE ASSAM ELECTRICITY REGULATORY COMMISSION IN THE MATTER OF: IN THE MATTER OF: FILING NO... CASE NO.. A Petition for the approval of the Annual Revenue Requirement for the period for FY to and for the approval of the proposal for revision of the retail supply tariffs for the Central Assam Electricity Distribution Company Limited (CAEDCL) for FY AND Central Assam Electricity Distribution Company Limited incorporated under the provisions of the Companies Act, 1956 and having its registered office in the State of Assam THE HUMBLE APPLICANT ABOVE NAMED MOST RESPECTFULLY SHEWETH: 1 That the Central Assam Electricity Distribution Company Limited, hereinafter named as CAEDCL, is a successor corporate entity, formed in pursuant to the notification of the Government of Assam, notified under sub-sections (1), (2), (5), (6) and (7) of Section 131 and Section 133 of the Electricity Act 2003 (Central Act 36 of 2003), for the purpose of transfer and vesting of functions, properties, interests, rights, obligations and liabilities, along with the transfer of Personnel of the Board to the successor corporate entities. 2 That the Central Assam Electricity Distribution Company Limited, is a company incorporated with the main object of undertaking electricity distribution and retail supply in the areas of Tezpur, Nagaon, Kanch and Cachar circles of the State. 3 That the Central Assam Electricity Distribution Company Limited is a deemed licensee under the provisions laid down in Section 14 Proviso 5, read with Section 131 (2) of the Electricity Act That the licensee is now filing the petition for the approval of its Annual Revenue Requirement for the financial years to and proposal for the revision of the retail supply tariffs for (PETITIONER) Central Assam Electricity Distribution Company Limited Page 9 of 154

10 NOTES: In this petition: Previous Year is defined as the Financial Year (FY) Current Year is defined as the Financial Year (FY) Ensuing Years are defined as the Financial Year (FY) to Central Assam Electricity Distribution Company Limited Page 10 of 154

11 1. Legal and Regulatory Framework 1.1 Under the provisions of the Electricity Act, 2003 the Assam Electricity Reforms First Transfer Scheme, 2004 (hereafter Transfer Scheme) was notified by Government of Assam on 10th December Under Section 5 (3) of the transfer scheme the functions and undertakings as set out in schedule-c of the transfer scheme stands transferred to Central Assam Electricity Distribution Company Limited (CAEDCL). 1.2 Section 131 (1) and (2) of the Electricity Act 2003 mandates that any property, interest in property, rights and liabilities vested with the Board will be re-vested in a Government company or companies. Also Section 14 provides Provided that any person engaged in the business of transmission or supply of electricity under the provisions of the repealed laws or any Act specified in the Schedule on or before the appointed date shall be deemed to be a licensee under this Act Hence, CAEDCL is the deemed licensee to distribute power in the above specified area. 1.3 Section 62 of the Electricity Act 2003 requires the licensee to furnish details as may be specified by the Commission for determination of tariff. 1.4 Section 5, 6 & 7 of A. E. R. C. (Terms and conditions for determination of Tariff) Regulations 2006 lays down the following: Periodicity of tariff determination Subject to other provisions of these Regulations, the expenses allowed to be recouped for any financial year, shall be subject to adjustments in any tariff to be fixed for the subsequent period, if the Commission is satisfied, that such adjustments for the excess amount or shortfall in the amount actually realized or expenses incurred is necessary and the same is not on account of any reason attributable to the licensee 5.3 In accordance with the principle of multi-year tariffs, the Commission shall define the periodicity for tariff determination that will apply for a number of years during a control period as follows Function Control Period Generation 5 years from 1 April 2006 Transmission 3 years from 1 April 2006 Distribution 3 years from 1 April 2006 Note: For example if the Tariff determination period is , the Control Period shall be , and Petition for determination of tariff 6.1 The licensee and generating company may file a tariff petition annually with the Commission to determine changes to the current tariff by not later than 1st December unless an extension is granted by the Commission upon application 7. Petition for determination of MYT. 7.2 The licensee and generating company shall also submit financial information for the previous year and forecasts for current year, ensuing year and the years upto the end of the control period a sgiven below: Central Assam Electricity Distribution Company Limited Page 11 of 154

12 (a) Actual audited data of the last financial year (e.g if year one of control period is ) and if the same is not audited the audited data of the latest financial year accompanied by unaudited data of the subsequent years. (b) Current Year s estimates (c) Projections for the control period years e.g and , CAEDCL has come into being on 10th December The petitioner has now prepared the ARR for FY to FY and Tariff proposal for FY and submits the same to AERC. 1.6 The Annual Accounts of ASEB and five successor companies have been prepared based on the numbers of updated Opening Balance Sheet (as on ) in terms of 5(c) of the Transfer Scheme of GOA vide order No. PEL/151/2003/Pt/349 Dtd. 16th August, The provisional Annual Accounts of ASEB and its five successor companies are to be furnished. In terms of Final Transfer Scheme approved by GOA the Final Opening Balance Sheet of the Successor Companies would be as on April 01, Further, Clause 5(c) of GOA notification No. PEL/151/2003/Pt/349 Dtd. 16th August, 2005 states that "The Opening Balance Sheet (OBS) as per Schedule I to VI to this order have been prepared based on the approved accounts of Assam State Electricity Board as on 31st March, 2004 and such opening balance sheets shall all be subject to all consequential adjustments on the update, finalization and audit of accounts of ASEB as on 31st March, 2005." The Annual Accounts of ASEB for the year was finalized, and considered/approved by the Board vide Resolution No. 12 dated The statements of Accounts have subsequently been audited and audit report and audit certificate has been obtained from C & A.G. The OBS as notified in final transfer scheme have been updated for the transaction related to the financial year with the help of ADB consultant. The Board vide resolution No. 5 dated have approved the updated OBS of ASEB and its successor entities as on and approved the following:- "The OBS of the 5(Five) ASEB successor entities and the BS of the Residual ASEB as on 1st April,2005 in terms of the Board Resolution No. 1 of The said OBS be forwarded to Government of Assam for approval and notification. The OBS shall be accompanied by a copy of the Agenda Note in order to explain the methodology and principles followed in this respect" Accordingly the OBS of ASEB and its successor companies as on are forwarded to the Government of Assam for approval and notification. 1.7 The status of the various data formats and forms, as required by the Hon ble Commission, is furnished in Annexure III. Central Assam Electricity Distribution Company Limited Page 12 of 154

13 2. Review of performance in FY Operations The company was able achieve the sales of ~630 Mu and earned a revenue of ~Rs 240 crores, which compares well with the tariff order expectation of ~Rs 255 crores. As the company had to maintain the hours of supply, meet the increasing demand and higher losses the power purchase had to be increased by ~ 100 Mu as compared to the tariff order Financial Position The company has prepared its provisional accounts for the year FY and has adjusted certain numbers based on the final transfer scheme. These accounts are being presented to the statutory auditors and the audited numbers would be filed with the AERC in due course. The AERC has proposed a two stage corrections to the companies as the tariff orders are notified ahead of actual numbers. The first correction is usually based on the provisional numbers and the second correction is to be based on the final audited numbers. Hence the company proposes to await the final audited numbers prior to asking for Regulatory true up of its operations. Table 1: Profit and Loss Account - FY 06 Rs crore Power Purchase Energy Available at interface point (MU) Sale of Power (MU) Loss % 35.28% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense 5.12 Employee Expenses A&G Expense 3.18 Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised - Other Debits 3.20 Extraordinary Items - Other (Misc.)-net prior period credit (0.01) Total ROE - Other Income Provision for taxes 2.50 Annual Revenue Requirement Surplus(+) / Shortfall(-) (25.92) As explained above the volume variance and the related costs in power purchase is one of the main reasons of loss. Further, the depreciation charge booked by the Company according to applicable rates is higher than that considered by the AERC. The interest charge is different from the tariff order as the accounts don t carry the debit for the normative working capital. Central Assam Electricity Distribution Company Limited Page 13 of 154

14 3. Review of performance in FY Operations Sales for the past 8 months i.e. April to November 06, have been considered at actual and the balance 4 months have been carefully projected after taking into account the a) growth based on the past trend b) current economic trend and c) best estimates of the management. As the tariff order has carved out new category like Jeevan Dhara, it was not possible to make a clear trend analysis for this category. Further there were certain anomalies in the data base regarding the connected load, installations etc which differ with that assumed by AERC in preparation of its previous tariff order. Further, due to internal database inconsistencies, certain categories were returning negative growth or very high growth. In these cases, management exercised its discretion and have corrected these using the Delphi system of projections. The estimated sales for the year in MU are presented below. Table 2: Sales in MU for FY 07 Cat No Category Energy sales FY 07 LT GROUP 1 Jeevan Dhara 0.5 kw & 1kwh/day Domestic: A -above.5 to 5 KW First 4kwh/day Next 4 kwh/day Balance Domestic-B above 5 kw to 20kw Commercial Load above 0.5 to 20kw General Load upto 20 kw Public Lighting Agriculture upto 7.5hp Small Industries Rural upto 20kw Small Industries Urban 7.48 LT TOTAL HT GROUP 1 HT Domestic 20kw and above HT commercial 20kw & above Public Water works Bulk supply 20kw and above _Govt. Edu 6.06 Bulk supply 20kw and above _Others HT Small Industries upto 50 kw HT Industries-1 50kw to 150 kw HT Industries-II above 150 kw Tea Coff & Rub Oil & Coal HT Irrigation Load above 7.5 hp 6.34 HT Total All Total Overall, the sales reflect a growth of ~9%, which is considered very healthy in a distribution system. Major thrust is from the HT segment, especially from HT-II industries and Bulk Supply (others) categories. The company has initiated measures to reduce losses in the system including that of commercial losses. Given the size and nature of the problem, the company has estimated the impact of the Central Assam Electricity Distribution Company Limited Page 14 of 154

15 current measures and expects to end the current year at a level of loss of 29.05%. This level means a reduction of ~6.2% from that of the previous level and also attempts to close the gap with that allowed by AERC in the last tariff order. Given he above two, the power purchase is expected to reach a level of ~969 Mu this year. This has been calculated at the applicable differential BST for the year from ASEB. The company request the AERC to reflect the fully allocated cost for each distribution company and move towards a differential retail supply rates over a period. The Cost to Serve study, currently carried out by the company on the lines as prescribed by the AERC clearly shows the differential fully allocated costs in reaching the service to consumers. In fact, in the recent past, Karnataka Electricity Regulatory Commission had circulated a concept note on differentiating the retail supply rate. Any other commodity is based on that principle and electricity, as argued by economists is no different. Fully allocated costs should be the starting point for the commission to recognise the variations that occur to the network configurations and other infrastructure that go in meeting the demand of the consumers. Further, the report also clearly points out the class of categories of consumer who cause the costs during the peak demand. If the class of retail consumers have not been differentiated across the states (used to be the principle in the erstwhile the Electricity (Supply) Act, 1948, which allows differentiation based on different types of consumption and voltages), it is not proper to differentiate the costs to bulk buyers at similar voltages viz the Distribution companies. AERC can prescribe some other mechanism of cross-subsidy elimination pool to adjust the cash trappings of different distribution companies but should avoid the differential BST to do so. This creation of pool would be a transparent mechanism (as to the contributors/ withdrawals) and can be wound down over a period of time Allocation of assets, liabilities and expenses to different stations As required by the AERC and also necessitated by the CoS study (report is attached to this petition in Annexure II), the company had carried out a study which includes division of its assets, liabilities and expenses across various voltages and Retail business. The Balance sheet and the Profit and Loss of FY 06 has been used to assets, liabilities, expenses etc across the retail business and different voltages of 33 kv, 11 kv and LT. A brief summary is attached for outlining the broad allocation: Table 3: Allocation of Equity, Assets, Expenses Rs crores FY 06 Retail Wires 33 kv 11 kv LT Share Capital % 92% 9% 29% 53% Reserves & Surplus % 92% 9% 29% 53% Total Loan Funds: Individual Loan allocated Gross Block Individual assets categories Receivables Against Sale Of Power % 0% 0% 0% 0% Security Deposit From Consumers % 0% 0% 0% 0% Power Purchase % 0% 0% 0% 0% R&M Expense % 92% 9% 29% 53% Employee Expenses % 71% 7% 22% 41% A&G Expense % 81% 8% 26% 47% Central Assam Electricity Distribution Company Limited Page 15 of 154

16 3.3. Income and Expenditure estimation The income and expenditure for the company has been derived from the following assumptions. Income has been based on the expected sales (as detailed above) and is based on the actual position of actual sales upto November 06 and the projections for the subsequent four months. While calculating the revenue from the sales, the rates upto August3, 06 were based on the FY 06 tariff order (according to the billing cycle, this is taken upto end of August 5 months sales) and for the balance 7 months, the rates as per tariff order FY 07 were used. In case of expenses, the actual expenditure for the first 6 months was collected and for the balance 6 months, these were extrapolated using the certain key assumptions. Other debits include the Provision for bad and doubtful debts as allowed by the AERC Assumption Table 4: Assumptions for various heads I Inflation ST PLR - SBI as of April 1, % R&M Expense 20% Employee Expenses 10% A&G Expense 6% ROE 16% Other Income 1% Provision for taxes 33.67% Security Deposit From Consumers 5% Interest on Security deposit payable 5% Current Assets - per Company O&M expenses Of the annual expense 8.33% Maintenance spares 1% of GFA and subseq 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% Curr Liabilities - PP payable 8.33% Provision for bad and doubtful debts % of revenue 1% Current Assets - per AERC O&M expenses Of the annual expense 8.33% Maintenance spares 1% of GFA and subseq 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% Power Purchase Payable 4.11% Depreciation Rates applicable for Average Rates Land & Rights 0.00% Building 1.80% Hydraulic 2.57% Other Civil Works 1.80% Plant & Machinery 3.60% Lines & Cable Net work 3.60% Vehicles 18.00% Furniture& Fixtures 6.00% Office Equipment 6.00% Capital Spares at Generating Stations 0.00% Cap of Asset Value 90% Central Assam Electricity Distribution Company Limited Page 16 of 154

17 Table 5: Assumptions for various heads II Loan Rates Institution 10.50% Rates of interest State Government 8.37% PFC 8% REC LIC/ ADB 10.50% Public Bonds 11.50% Collection Efficiency 98% Loan Repayments (as per Resources Plan) Govt Loan 10% Public Bond LIC REC PFC Interest rate for Investment income 6.5% Table 6: Assumptions for various heads III Rs Crores Investments Retail Consumer Metering Computerised Billing 1.19 Other Projects kv System System Improvement System Augmentation 0.68 Rural Electrification kv System System Improvement System Augmentation - Rural Electrification LT System System Improvement System Augmentation - Rural Electrification Total Loans Grant Equity - The following tables highlights the individual details of each expense based on the assumptions set above. Central Assam Electricity Distribution Company Limited Page 17 of 154

18 Repairs & Maintenance Table 7: Repairs and Maintenance Rs crore Plant & Machinery Buildings Civil Works Hydraulic Works Lines, Cable Networks Vehicles Furniture & Fixture Office Equipment Total : The above head includes a provision for insurance of assets, which is currently being evaluated Employees expense Table 8 : Employee expenses for FY 07 Rs crore Salaries Overtime Dearness Allowance Other Allowances Bonus Medical Expenses Reimbursement - - Leave Travel Concession Earned Leave Encashment Workmen Compensatory Payment Other Staff Cost Staf Welfare Expenses Terminal Benefits Sub Total : Less : Capitalisation - - Total : Current year increase in employees costs are due to merger of DA into Basic pay effected during December 06 as well as normal hike due to pay increases etc. estimation includes terminal liabilities to be funded. Details of actual funding of terminal liabilities are depicted in Annexure IV. Central Assam Electricity Distribution Company Limited Page 18 of 154

19 Administration & General expense Table 9 : Administration & General Expense Rs crore Rent, Rates & Taxes Insurance Telephone Charges Postage & Telegram Others Legal Charges Consultancy Charges Other Professional Charges Technical fees - - Other Professional Charges Conveyance and Travel Other Expenses (Fees & subcriptions, Books & pe Freight, Other Purchase related expenses & Reve Sub Total : Less : capitalised - - Total : Administration and General expense (based on the past trend) is expected to increase by 6% for the year over the base for FY Other income Table 10 : Other Income Rs crore Other Income Interest on Staff Loans and advances Income from Investment Interest on Loan & advances to licenses Delayed Payment Surcharge Income from Trading (0.16) (0.16) Miscellaneous receipts Miscellaneous Recoveries (Transformer etc) Total : Other income includes interest on investments parked by the company at an average rate of 6.5% only Depreciation Table 11 : Depreciation Rs crore Land & Rights - - Building Hydraulic Other Civil Works Plant & Machinery Lines & Cable Net work Vehicles Furniture& Fixtures Office Equipment Total Central Assam Electricity Distribution Company Limited Page 19 of 154

20 Depreciation has been calculated using the schedule as prescribed by the AERC (attached to the AERC Terms and Conditions for determination of tariff 2006). Analysis of the trial balance under each function head has been carried out and the weighted average rate has been calculated and used for calculations. Depreciation on assets commissioned in a year is charged at the average balance for the year (since they could be commissioned at different dates). Detailed assessment has been carried out on the opening loan balances, interest payable on them as well as the principle repayments associated with them. Interest on loans borrowed for capital investment is capitalised till the assets are put to use. Interest also includes a component for the normative working capital as set out the AERC. The interest has been computed at the assumed Short Term PLR rate of SBI at beginning of the financial year. In case of years, where the depreciation charge is not adequate for debt servicing, then advance Against Depreciation ( AAD ) has been calculated and added to the depreciation rate. Should this also prove inadequate, then a separate cash charge has been requested to ensure that the Company has adequate funds for debt servicing. AAD calculations In case of years, where the depreciation charge is not adequate for debt servicing, then Advance Against Depreciation ( AAD ) has been calculated and added to the depreciation charge. Should this also prove inadequate, then a separate cash charge has been requested to ensure that the Company has adequate funds for debt servicing AAD Table 12: AAD for FY 07 Rs crore Original depreciation AAD - Additional for debt servicing - Total Interest & financing charges Table 13: Interest & financing charges Rs crores Interest & financing charges Esiting Loans 0.64 New Loans 3.44 Other financing charges 7.45 Interest on consumers security deposit 1.33 Interest on working capital per AERC 7.50 Sub total Less: Interest capitalised 0.86 Total Central Assam Electricity Distribution Company Limited Page 20 of 154

21 Table 14: Interest on Normative working capital Rs crores Working Capital as per AERC One month fuel cost - One month approved O&M cost 7.49 Maintenance Spares-1% of GFA 8.14 Two month Receivables Total Interest charges include on consumers security deposit (based on the circular issued by the company) and is comparable to the previous year rate. Based on the above details, the current position of the company for the year ending FY 07 is presented below Profit & Loss account Table 15: Profit and Loss Account FY 07 Rs crores Profit & Loss Account Power Purchase Energy Available at interface point (MU) Sale of Power (MU) Loss % 35.28% 29.05% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense Employee Expenses A&G Expense Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised Other Debits (incl. Prov for Bad debts & workin Extraordinary Items - - Other (Misc.)-net prior period credit (0.01) - Total ROE Other Income Provision for taxes Annual Revenue Requirement Surplus(+) / Shortfall(-) (23.66) (11.23) The income for the current year is based on the quantity generated at the rates as approved in the Tariff Order for FY 07. The company is has bettered its performance as compared to the previous year due to higher sales realisation as well as reducing losses. The following table sets out the position of the company vis-à-vis the approved numbers as per the Tariff Order for FY 07. Central Assam Electricity Distribution Company Limited Page 21 of 154

22 Tariff comparison Table 16: FY 07 Position as compared to Tariff Order Tariff order Rs crores Profit & Loss Account Power Purchase Energy Available at interface point (MU) Sale of Power (MU) Loss % 30.52% 29.05% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense Employee Expenses A&G Expense Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised 0.20 Other Debits (incl. Prov for Bad debts & workin Extraordinary Items - Other (Misc.)-net prior period credit - Total ROE Other Income Provision for taxes Annual Revenue Requirement Surplus(+) / Shortfall(-) 0.01 (11.23) The company s realisation is comparable to the tariff order and the company has been able to manage the losses and better the tariff order numbers. With higher sales realisation and other income, it has been able to absorb the power purchase cost, employee costs and interest costs increase. The company incurs higher repairs and maintenance charges, as the legacy network is old and the demand on the network is regularly increasing. This is reflected in the interruptions, poor voltage at tail ends, higher line losses as well as overloading of transformers. The historical base is low and the company is unable to manage with a lower amount. Hence AERC is requested to consider a higher base and increase the charge, so that the company can offer better service to the consumers. The other components of loss contributors had been the employee expense and provision for bad and doubtful debts. The employee expense is based on estimated actual payout and especially with the recent merger of DA into basic pay, the company expects to incur higher payroll expenses. Interest out flow is also on account of interest outflow estimated with more recent data inputs. Further, the interest includes the interest on the normative working capital and other debits include the provision for bad and doubtful debts. These are allowable as pass through in tariff and hence included to reflect the true revenue requirement for the company. Central Assam Electricity Distribution Company Limited Page 22 of 154

23 As can be seen from the above, the lower sale realisation, interest outflow, increased power purchase costs are all beyond the control of the company and hence should be allowed to be passed through in tariff and recovered in subsequent ARR. 4. Projected ARR for FY to FY Multi- year framework As per the Terms and conditions for filing this ARR, AERC has introduced (following the National Tariff Policy) of introducing multi-year regime of tariff fixation principles. Under this regime, we understand that certain expenses would be deemed to controllable by the company and hence negative deviation would be to the loss of the company. Similarly, the positive effect can be retained largely with the company (as propounded in the National Tariff Policy) and the spill over would be to the gain of the consumer. However, under the Terms and conditions of the Tariff regulations 2006, the company is to file for the review of tariff every year. In a current situation like the one facing the company (high power purchase costs caused by fluctuating price of gas, hydro-thermal mix changes, costly imports/ trades) annual tariff fixation would be of great help in ensuring that the costs are recovered without time delays. It may be worthwhile for the AERC to also propose a shorter duration mechanism of allowing for power purchase quantum variation (caused by the change in thermal-hydel mix) as well as the fluctuations in the fuel price. Every quarter/ half year (as AERC may decide) Variation in power purchase due to bad monsoon/ gas shortages, additional imports etc to be calculated and compared with the approved quantum in the tariff order Based on the above calculation, the costs would be compared with the approved costs of the tariff order The difference is the power purchase adjustment to be recovered from the tariff (for generators this is a fuel price adjustment, whereas for trader this is a power purchase adjustment) in say monthly instalments from then on and to be disclosed separately as such. Even as per the National Tariff Policy, such uncontrollable items should be allowed to be recovered within very short term so as to ensure that the financial viability of the company is not harmed Income and Expenditure Sales projections, as described earlier has been based on careful evaluation of the past 5 year trend and management estimates. Wherever, the trend line show a negative growth (due to inconsistencies within the database), anomalies in the categorisation/ reclassification on tariff order basis etc have been ignored and a nominal increase has been allotted to that category to reflect a sustained growth. The overall growth for the company shows a healthy trend and the company expects that this can be managed, provided the major underlying economic growth indicators hold. Though technically sales is controllable this is not true, as the consumptions (excluding cases of theft and pilferage) especially in the HT category are economy driven and the this in turns affects the average household income and hence their capability to pay. Central Assam Electricity Distribution Company Limited Page 23 of 154

24 Forecasting is also made tricky due to inconsistencies pointed out above. In this situation (unlike the advanced countries concept) sales forecasting should be treated cautiously and variations say ± 10% in any category should be adjusted. The expected sales, by category for the MYT period is in the table below: 4.3. Sales forecast Cat No Table 17: Sales by Category MUs Category Energy sales FY 08 Energy sales FY 09 Energy sales FY 10 LT GROUP 1 Jeevan Dhara 0.5 kw & 1kwh/day Domestic: A -above.5 to 5 KW First 4kwh/day Next 4 kwh/day Balance Domestic-B above 5 kw to 20kw Commercial Load above 0.5 to 20kw General Load upto 20 kw Public Lighting Agriculture upto 7.5hp Small Industries Rural upto 20kw Small Industries Urban LT TOTAL HT GROUP 1 HT Domestic 20kw and above HT commercial 20kw & above Public Water works Bulk supply 20kw and above _Govt. Edu Bulk supply 20kw and above _Others HT Small Industries upto 50 kw HT Industries-1 50kw to 150 kw HT Industries-II above 150 kw Tea Coff & Rub Oil & Coal HT Irrigation Load above 7.5 hp HT Total All Total Similar assumptions, as listed for the year FY 07, ARR for FY to FY (the three years for which ARR is requested to be presented) are used on a rolling base of the previous year. This ensures that the inflationary trend is adjusted and the company is not adversely affected. The detailed assumptions are listed below. In case of employee expenses, it is expected that by the year FY there would be a pay revision and hence an expected 30% increase has been considered for that year. Central Assam Electricity Distribution Company Limited Page 24 of 154

25 4.4. Assumptions Table 18: Assumptions for FY to FY I Inflation 6% 6% 6% ST PLR - SBI as of April 1, % 9.50% 9.50% R&M Expense 6% 6% 6% Employee Expenses 10% 30% 10% A&G Expense 6% 6% 6% ROE 16% 16% 16% Other Income 1% 1% 1% Provision for taxes 33.67% 33.67% 33.67% Security Deposit From Consumers 5% 5% 5% Interest on Security deposit payable 5% 5% 5% Current Assets - per Company O&M expenses Of the annual expense 8.33% 8.33% 8.33% Maintenance spares 1% of GFA and subseq 6% 6% 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% 16.67% 16.67% Curr Liabilities - PP payable 8.33% 8.33% 8.33% Provision for bad and doubtful debts % of revenue 1% 1% 1% Current Assets - per AERC O&M expenses Of the annual expense 8.33% 8.33% 8.33% Maintenance spares 1% of GFA and subseq 6% 6% 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% 16.67% 16.67% Power Purchase Payable 16.67% 16.67% 16.67% Depreciation Rates applicable for Average Rates Land & Rights 0.00% Building 1.80% Hydraulic 2.57% Other Civil Works 1.80% Plant & Machinery 3.60% Lines & Cable Net work 3.60% Vehicles 18.00% Furniture& Fixtures 6.00% Office Equipment 6.00% Capital Spares at Generating Stations 0.00% Cap of Asset Value 90% Central Assam Electricity Distribution Company Limited Page 25 of 154

26 Table 19: Assumptions for FY to FY II Loan Rates Institution 10.50% 10.50% 10.50% Rates of interest State Government 8.37% PFC 8% REC LIC/ ADB 10.50% Public Bonds 11.50% Collection Efficiency % % % Loan Repayments (as per Resources Plan) Govt Loan 10% 10% 10% Public Bond LIC 0 REC 0 PFC Interest rate for Investment income 6.5% 6.5% 6.5% 4.5. Loss trajectory Table 20: Assumptions for FY to FY II Rs Crores Investments Retail Consumer Metering Computerised Billing Other Projects kv System System Improvement System Augmentation Rural Electrification kv System System Improvement System Augmentation Rural Electrification LT System System Improvement System Augmentation Rural Electrification Total Loans Grant Equity Table 21: Loss trajectory FY 08 FY 09 FY 10 Loss Level 26.55% 23.80% 21.55% % of reduction 2.50% 2.75% 2.25% Based on the expected investment and also measures initiated by the company and improvement in energy accounting, the company expects the losses to reduce by a faster clip and reach a level of 21.55% by FY 10. Central Assam Electricity Distribution Company Limited Page 26 of 154

27 4.6. Operations Table 22: Trading of energy and Income Trading Mu Rs Crores Detailed investment plan for the period is shown in Annexure I During the 3 year period, if there are cash shortages, then such shortages are met through short term cash borrowings. It will be repaid on adequate availability of cash. The interest component on this is not included in the ARR and hence to the account of Company Repairs & Maintenance Table 23: Repairs & Maintenance for FY 08 to FY 10 Rs crore Plant & Machinery Buildings Civil Works Hydraulic Works Lines, Cable Networks Vehicles Furniture & Fixture Office Equipment Total : The above head includes a provision for insurance of assets, which is currently being evaluated Employee expenses Table 24: Employees Expenses for FY 08 to FY 10 Rs crore Salaries Overtime Dearness Allowance Other Allowances Bonus Medical Expenses Reimbursement Leave Travel Concession Earned Leave Encashment Workmen Compensatory Payment Other Staff Cost Staf Welfare Expenses Terminal Benefits Sub Total : Less : Capitalisation Total : During employee expenses are expected to rise due to the expected effect of pay revision. Central Assam Electricity Distribution Company Limited Page 27 of 154

28 4.9. Administration & General expenses Table 25: Administration and General Expenses for FY 08 to FY 10 Rs crore Rent, Rates & Taxes Insurance Telephone Charges Postage & Telegram Others Legal Charges Consultancy Charges Other Professional Charges Technical fees Other Professional Charges Conveyance and Travel Other Expenses (Fees & subcriptions, Books & pe Freight, Other Purchase related expenses & Reve Sub Total : Less : capitalised Total : Depreciation Table 26: Depreciation for FY 08 to FY 10 Rs crore Land & Rights Building Hydraulic Other Civil Works Plant & Machinery Lines & Cable Net work Vehicles Furniture& Fixtures Office Equipment Total Interest & financing charges Table 27: Interest charges Rs crores Interest & financing charges Esiting Loans New Loans Other financing charges Interest on consumers security deposit Interest on working capital per AERC Sub total Less: Interest capitalised Total Central Assam Electricity Distribution Company Limited Page 28 of 154

29 Table 27A: Interest on Normative working capital per AERC Rs crore Working Capital as per AERC One month fuel cost One month approved O&M cost Maintenance Spares-1% of GFA Two month Receivables Total Other income Table 28: Other Income Rs crores Working Capital as per AERC One month fuel cost One month approved O&M cost Maintenance Spares-1% of GFA Two month Receivables Total Other income includes the miscellaneous recoveries from consumers such as meter rentals, service charges etc. The following table sets out the financial projections for the 3 years and the expected tariff to be realised. Table 29: AAD Rs crore Original depreciation AAD Additional for debt servicing Total Central Assam Electricity Distribution Company Limited Page 29 of 154

30 4.13. Profit & Loss at existing tariff rates Table 30: Profit and Loss Account for FY 08 to FY 10 at existing Tariff order FY 07 rate Rs crore Power Purchase Energy Available at interface point (MU) 1, , , Sale of Power (MU) , Loss % 26.55% 23.80% 21.55% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense Employee Expenses A&G Expense Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised Other Debits Extraordinary Items Other (Misc.)-net prior period credit Total ROE Other Income Provision for taxes Annual Revenue Requirement Surplus(+) / Shortfall(-) (103.27) (123.53) (150.88) Other income includes the trading income being share of the energy traded by the company. With a large growth in the expected power purchase costs, employee expenses, interest charges the company is expected to return losses and hence proposes for tariff revisions to cover the deficits in the subsequent tables, setting out the detailed ARR flows and the tariff proposals Projected ARR for Retail Supply & Distribution wires Table 31: ARR for Retail & Wires FY kv 11 kv LT Retail Total Operations & Maintenance Employees cost Repairs & maintenance Administrative & General Expenses Depreciation Provision for doubtful debts Interest and Financing Charges Return on Equity Taxes on Income TOTAL Less: Other Income ARR of Wires & Retail Central Assam Electricity Distribution Company Limited Page 30 of 154

31 Table 31 A: ARR for Retail & Wires FY kv 11 kv LT Retail Total Operations & Maintenance Employees cost Repairs & maintenance Administrative & General Expenses Depreciation Provision for doubtful debts Interest and Financing Charges Return on Equity Taxes on Income TOTAL Less: Other Income ARR of Wires & Retail Table 32: ARR for Retail & Wires FY kv 11 kv LT Retail Total Operations & Maintenance Employees cost Repairs & maintenance Administrative & General Expenses Depreciation Provision for doubtful debts Interest and Financing Charges Return on Equity Taxes on Income TOTAL Less: Other Income ARR of Wires & Retail Tariff proposal Based on the ARR requirement as set out and taking into account the deficits as shown above, the company proposes the following tariff proposal. The tariff proposal is premised on the CoS as developed and certain principles in terms of gradual increase of cost recovery from LT category especially the low consumption categories of Jeevan Dhara and Domestic First slab. At the same time, the need for costs are balanced by keeping increases in other categories at certain level, which may show a higher cross subsidy from these categories in monetary terms. However, as cross-subsidies are legacy issues and the company looks forward to the crosssubsidisation reduction path from the commission. As proposed by ASEB, costs of first correction for FY 07, if not recovered from the current increases, should be recovered in say 2 to 3 years (depending on the surplus available). In calculating the recovery from fixed costs for each category, the company followed the approach taken by the AERC, as there are certain inconsistencies in the database. These inconsistencies are being reviewed for corrections. Central Assam Electricity Distribution Company Limited Page 31 of 154

32 4.16. Cost to Serve and existing recovery Table 33: Cost to serve and Cost recovery at existing tariffs Tariff order 06-07Rates Fixed Rate Energy chargexisting ReaCost to ServCostCoverg Rs/ kw or CoRs/kWh Rs/ kwh Jeevan Dhara (0.5 kw & 1 kwh/day) % Domestic A First 4kwh/day % Next 4kwh/day % Balance % Domestic B (above 5 kw to 20 kw) % Commercial (upto 20 kw) % General Purpose (upto 20 kw) % Public Lighting (upto 5 kw) % Agriculture (upto 7.5 hp) % Small Industries (Rural)-upto 20 kw % Small Industries (Urban) % Total LT Domestic % Commercial % Public Water Works % Bulk Supply(Govt.Educ) % Bulk Supply(Others) % HT Small Industries % HT-I Industries % HT-II Industries % Tea, Coffee & Rubber % Oil & Coal % HT Irrigation % Total 11 kv HT Covered under respective HT consumers -33 KV - Ind % HT consumers -33 KV - Oil % HT consumers -33 KV - Cofee % HT consumers -66 KV - Bulk % HT consumers -132 KV HT consumers -220 KV HT Others Total HT Total Grand Total 4.43 Central Assam Electricity Distribution Company Limited Page 32 of 154

33 4.17. Proposed tariff increases - categorywise Table 34: Proposed Tariff per category Tariff order 06-07Rates New Proposed Tariff for Fixed Rate Energy chargexisting ReaCost to ServRealisation Fixed Energy Rs/ kw or CoRs/kWh Rs/ kwh Rs/kWh Rs/ kw or Co Rs/kWh Jeevan Dhara (0.5 kw & 1 kwh/day) Domestic A First 4kwh/day Next 4kwh/day Balance Domestic B (above 5 kw to 20 kw) Commercial (upto 20 kw) General Purpose (upto 20 kw) Public Lighting (upto 5 kw) Agriculture (upto 7.5 hp) Small Industries (Rural)-upto 20 kw Small Industries (Urban) Total LT Domestic Commercial Public Water Works Bulk Supply(Govt.Educ) Bulk Supply(Others) HT Small Industries HT-I Industries HT-II Industries Tea, Coffee & Rubber Oil & Coal HT Irrigation Total 11 kv HT Covered under respective HT consumers -33 KV - Ind HT consumers -33 KV - Oil HT consumers -33 KV - Cofee HT consumers -66 KV - Bulk HT consumers -132 KV HT consumers -220 KV HT Others Total HT Total Grand Total Central Assam Electricity Distribution Company Limited Page 33 of 154

34 4.18. Comparison of revenues Existing and Proposed Table 34 A: Comparison of revenues Existing and Proposed Revenues Rs crores Existing Proposed Jeevan Dhara (0.5 kw & 1 kwh/day) Domestic A First 4kwh/day Next 4kwh/day Balance Domestic B (above 5 kw to 20 kw) Commercial (upto 20 kw) General Purpose (upto 20 kw) Public Lighting (upto 5 kw) Agriculture (upto 7.5 hp) Small Industries (Rural)-upto 20 kw Small Industries (Urban) Total LT Domestic Commercial Public Water Works Bulk Supply(Govt.Educ) Bulk Supply(Others) HT Small Industries HT-I Industries HT-II Industries Tea, Coffee & Rubber Oil & Coal HT Irrigation Total 11 kv HT Covered under respective HT consumers -33 KV - Ind Revenues merged HT consumers -33 KV - Oil in respective HT consumers -33 KV - Cofee categories HT consumers -66 KV - Bulk HT consumers -132 KV HT consumers -220 KV HT Others Total - Grand Total Central Assam Electricity Distribution Company Limited Page 34 of 154

35 4.19. Profit & Loss at revised tariff rates Table 35: Uniform BST and Surplus/ (deficit) for FY 08 to FY 10 Rs crores Profit & Loss Account Power Purchase Energy Available at interface point (MU) 1, , , Sale of Power (MU) , Loss % 26.55% 23.80% 21.55% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense Employee Expenses A&G Expense Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised Other Debits (incl. Prov for Bad debts & workin Extraordinary Items Other (Misc.)-net prior period credit Total ROE Other Income Provision for taxes Annual Revenue Requirement Surplus(+) / Shortfall(-) (15.06) Considering the approach taken by AERC in the past tariff order, the impact of equalizing the profitability across the three distribution companies is considered for the tariff periods FY to FY This approach can be revisited, once the companies start making profits. However in equalizing the overall profits/ losses, the approach followed is that all the companies will make equal profit or loss based on the weights of input energy. Table 35A: Differential BST and Surplus / (deficit) for FY to Readjustment of BST based on AERC Tariff Order proportions Rs crores proportions Units Rate Income Power purchase Costs Other Costs Surplus/ Shortfall (15.06) Add: Interest on other working capital (Non- ARR element) Revised Shortfall/ Surplus (9.63) The company wishes to request AERC consider introducing Time of Day ( ToD ) metering aspect for the various shopping malls. This is because by their nature of business and structure, they use large air conditioning loads along with the time of operations which is coincidental with the Central Assam Electricity Distribution Company Limited Page 35 of 154

36 maximum peak demand. In order to bring in certain Demand side management and also to send efficient tariff signals, the company wishes that ToD be introduced for these malls, so as to improve their efficiency in load management. Further, to promote Hotels, whose connected load is above say 250 KVA, should be categorise separately under HT II, possibly as HT II (Hotels) to avail of the tariff structure therein. This would also meet to a certain extent the demand from such hotels. The company is presently working on such data and a supplementary petition in the above regard would be made to the AERC. Further, company wishes to propose a change in the way the power factor is incentivised to the consumers. As the penalty has slabs and starts to accelerate as the power factor slips, the reverse is not true i.e. there is no acceleration of incentive/ rebate and this may not be motive enough for change to better and efficient management of energy. However, it is recognised that the upside has a small spectrum and hence it may not be possible to have symmetrical incentive/ dis-incentive structure. Given this, it is proposed that for the purposes of power factor rebate, there would be three slabs and the incentive would be graded as follows: Average power factor is more than 85% but less than 90% - 1% rebate Average power factor is more than 90% but less than 95% - 2% rebate Average power factor is more than 95% - 3% rebate on the unit consumption would be applicable. Apart from the above, the company wishes to present the following processing fee for all consumers seeking to apply for connections of more than 25 KVA. The company proposes to introduce Processing Fees for load sanction upto submission of final estimate which includes the following procedure:- (1) On receipt of the application by the Sub-Division, a survey is to be done by one of the official and then the feasibility report is to be prepared which are to be scrutinized at different levels and approved by the competent authority. (2) After approval of the feasibility report, the cost estimate is to be prepared and sent to the competent authority for approval. After completion of the work, the final estimate is to be prepared and agreement is to be made by the competent authority with the party by routing the same through different offices. In the entire process from preparation of feasibility report till the release of the load, different officers & employees are involved at different levels thereby consuming a substantial time and so the man hour. The Board vide its Order No.ASEB/Secy/35/02/4 dated had stipulated the following Clauses for delegation of power and administrative & financial procedure for deposit works which are reproduced below:- Clause-7 : The Addl.Chief Engineer is to examine the consistency of the scheme with the ASEB Grid and confirmed its feasibility on expected benefit to the Board, indicating the implementing agency and the anticipated cost for preparation of techno-economic estimates as per completion schedule as above. Clause-8 : On receipt of the approval, sanction will be accorded as per the revised delegation of power and the customer shall be asked to deposit the amount determined for preparation of techo-economic estimates. Central Assam Electricity Distribution Company Limited Page 36 of 154

37 Clause-11: Preparation of techno-economic estimates at the level of EE / SE /ACE (Zone) shall be as per revised delegation of power. The cost of preparation of estimates shall be an integral part of the scheme and shall be borne by the consumer. Although this Circular was issued by the Board, but no rate has been fixed and amount realized from the consumers for last 5(five) years as a result of which the Board has lost quite a substantial amount. On the line of the above Circular and ever increasing load demand in the urban areas thereby consuming substantial number of working hours of the officers & employees. It is proposed by UAEDCL to introduce Processing Fees of applications for preparation of feasibility report, preparation of provisional cost estimate, preparation of final estimate on completion of the work and also agreement before release of the load as follows:- (1) From 25 KVA to 100 KVA - Rs.15,000/- (2) From 101 KVA to 500 KVA - Rs.30,000/- (3) From 501 KVA to 1000 KVA - Rs.50,000/- (4) From 1000 KVA and above - Rs.1,00,000/ Incentives The company accepts that the incentives proposed in the Terms and Conditions for tariff filing viz. cap on the Return on Equity to be adequate. 5. Efficiency Improvement Initiatives Energy accounting Installation of electronic meters at 11KV feeders In the CAEDCL, there are a total of KV feeders. CAEDCL has taken initiatives in installing electro static meters at 11 KV feeders for proper energy accounting. To supplement these efforts, the existing electronic meters are being checked for accuracy and information content. Accurate estimates for Technical and Commercial losses are the initial steps for loss reduction. With the electronic meters in place in all the feeders, accurate estimates for energy losses in the system can be made. CAEDCL has done 100% feeder metering. Table 36: Feeder Metering Status CAEDCL No of 11KV feeders in the With electronic Without Electronic Circle meters meters Tezpur Nagaon Kanch Cachar Total Efforts for controlling 11 KV Interruption Interruptions in the distribution feeders particularly to that of Industrial consumers cause revenue loss to the utility. These consumers are being billed above the average cost of supply and hence it is mandated that these consumers are given proper quality of power. The objective behind reforms is not limited to financial viability of the sector and the licensees only, but also in providing quality power at affordable prices. This is also envisaged in the Power Policy 2003 for Assam. The interruptions at 11 KV feeders of the CAEDCL are mainly triggered by grid mismanagement or by breakdowns incumbent on the feeders. It is crucial that such interruptions should exclude industrial feeders. Industrial consumers invariably cite frequent interruptions of Central Assam Electricity Distribution Company Limited Page 37 of 154

38 power as the major reason that force them to move to their own captive generation. The licensee is convinced that it is essential to ensure uninterrupted and quality power to these high value consumers and in doing so, would not only be fulfilling its obligations under the license condition, but would also increase its revenue without any significant investments. As an initial step towards fulfilling this objective, CAEDCL is monitoring and analyzing all feeder trippings in its system Loss Management While high distribution, metering and pilferage losses are general malaise of power distribution systems; the problems need to be dealt with in a systematic, prioritized and phased manner. This will ensure that the low hanging fruits can be picked and concrete results are achieved at the earliest. The objective is to analyse the relative impact of specific loss reduction initiatives on the loss numbers, lessons learnt and be able to arrive at detailed cost-benefit estimates for the eventual rollout of selected loss reduction initiatives across ASEB. There are number of loss reduction steps to be tried out in the selected sub-division, few of them are as follows: i. Introduce a rotation procedure for meter readers to reduce the possibility of connivance with the consumers: CAEDCL has already introduced this system. ii. Implement procedure for validation or sample checks of meter readings: This is also being implemented by CAEDCL. iii.replacement of electro-mechanical meters by electronic meters is an ongoing program: These meters, in conjunction with CMRI (Common Meter Reading Instruments), are significant tools to reduce commercial loss due to theft. Increasing appreciation of the full potential of the data that can be downloaded from electronic meters. This will need to be supported by a focused and well-structured training program, the details of which may be worked out in consultation with relevant officials of ASEB and the meter suppliers. Proper analysis of the data downloaded to unearth information about the consumer that may not be obvious at first glance. Active participation of the IRCA concerned will be required to determine the various business rules and algorithms that can be used in this respect. This is particularly important in analyzing the possible tampering efforts made by the industrial consumer, as interpreted by the electronic meter. Standardization of meter reading instruments and software with a view to demonstrating the following benefits of the same: a. Data capture b. Ease of data download c. Uniformity of data download d. Consequential ease of analysis e. Capacity building f. Pilferage detection g. Reduction of time required for metering, billing and collection (billing cycle) h. Reduction in Aggregate Technical & Commercial (AT&C) losses Central Assam Electricity Distribution Company Limited Page 38 of 154

39 CAEDCL is replacing conventional electromechanical meters with Static Programmable meters, funded under various APDRP and ADB schemes. In addition to improving the accuracy and facilitating direct meter reading for the purpose of billing, these meters can be used to analyze the consumption patterns of the consumers, CT/PT reversal, monitoring quality of supply and most significantly, detect any tampers. These meters, in conjunction with Meter Reading Instruments (MRI), are an important tool to reduce commercial loss on account of theft. CAEDCL expects to roll out the process of MRI downloads and its analysis for HT consumers in its entire area of supply in a phased manner. Through this initiative it expects not only to reduce commercial loss but also improve efficiency in distribution processes, thus providing better service to its customers. iv. The load on distribution transformers should not exceed 80% of the transformer capacity to provide a safe operating margin: In case it is exceeded, the load should be transferred to adjacent distribution transformers that are under-loaded. If it is not possible, then either a new transformer near the load centre of higher capacity should be installed or the capacity of existing transformer should be augmented to meet the existing and future load demand. Therefore, regular checking of load on the distribution transformer is a must in order to reduce the incidence of burnt-out distribution transformers. CAEDCL is taking care of these problems being faced by the field staff. v. Maintain and adhere to a regular schedule for transformer oil test, oil filtration and top-up, and overall maintenance of distribution transformers: Preventive maintenance and augmentation of Distribution Transformers (DTRs) is critical to provide quality supply to the consumers. CAEDCL has approximately 6,999 DTRs and their failure and subsequent maintenance leads to not only additional repair expenses, but also, more significantly, potential revenue loss. The major tasks that are to be carried are outlined below: a) Identify the various classes of distribution transformers. b) Define a scientific asset numbering scheme that will be used to identify uniquely every asset. c) The distribution transformers need to be checked for inspection and maintenance purposes at suitable intervals: Oil level and condition Temperature rise of oil / winding Breather s silica gel especially after the rains Cooling system Supports Earth resistance Horn gaps cleaning and surface checking Condition of lightning arrestors d) Prepare a Maintenance History Register showing the following details in respect of asset: Asset identification number (in line with a pre-determined asset numbering scheme. Until the asset numbering scheme is not finalized, this may be left blank) Date of acquisition of the asset Date when Maintenance Task 1 was last carried out Date when Maintenance Task 1 is due to be carried out next Date when Maintenance Task n was last carried out Date when Maintenance Task n is due to be carried out next Probable causes of failure of distribution transformers Central Assam Electricity Distribution Company Limited Page 39 of 154

40 Cause Overload Low oil level Dirty oil Short circuited core Metallic part ungrounded, loose connection Lightning Dirty bushing Suggested remedy Reduce load; or take permanent measures to augment capacity if continuous overloading is involved Fill to proper level Filter oil to remove dirt, sludge or carbon; or replace dirty oil with fresh oil. Clean core, coils and terminal board with filtered oil Test for exciting current and no load loss; if high, inspect core, remove and repair; check core bolts, clamps and tighten; check insulation between laminations; if welded together, send to repair shop for repair or replacement Check clamps, core and other parts normally grounded for loose or broken connection bolts fallen out etc., tighten loose clamps, bolts, and nuts; replace missing ones. Check lightning protection; arrestors, connecting lugs, earthings etc. Clean porcelain; check source of dirt Preventive maintenance of 36 nos. of Distribution Transformers having capacity 250 KVA and more including best practice of earthing system of 211 nos. of DTRs having capacity below 250 KVA in Mirza Electrical Sub-Division are being implemented. After its successful implementation, this activity will be rolled out in other Sub-Divisions of Discoms. vi. Standardization of metering system & prevention of pilferage of electricity The scope of work under this pilot project includes to prevent prevailing theft of electricity at the premises of HT (11KV) industrial consumers by means of installing standardized meters and MRI and changing the layout of service lines as well as meter position. Order placed for 6 nos. (3 nos. 33KV & 3 nos. 11KV) resin cast CT/PT sets of 0.5 class accuracy along with steel metering cubicle has been procured by ASEB in the month of December,06. Materials will be dispatched to the proposed site in the month of February, 07 and thereafter installation of metering cubicle shall be done by the end of March, 07. vii. Improve quality of repaired transformers by ensuring that vendors have proper equipment and tools required for quality repair and testing: This is being done by CAEDCL. viii. Upgrade/modify distribution network to LT-less distribution network: As per the present practice consumers of various categories are by and large fed by LT distribution network at 400/230 V level. Overtime with the growth of power system the major investments were made in power generation and then in transmission system, with the result the distribution network became weak and archive. The poor quality of electricity supply, low voltage and breakdown etc has become the day to day problem of power utility. To get rid from this problem, revamping of distribution network is imperative. In order to supply quality electricity to consumers with proper voltage and frequency, as well as to reduce distribution loss and prevent theft of electricity, High Voltage Distribution System (HVDS) is eventually required to be adopted. By this method, the incidence of burnt out transformers shall be reduced, proper voltage will be maintained and the Central Assam Electricity Distribution Company Limited Page 40 of 154

41 unscrupulous consumers cannot tap or take illegal connections from overhead LT Lines, thereby reducing theft of electricity. The implementation plan has been prepared for HVDS with no LT overhead lines fed from Distribution Transformers (DTRs) installed at 11 KV Rupahi feeder of 33 KV Rupahi Substation under Samaguri Electrical Sub-division. Keeping in view this aspect, numbers of small capacity DTRs ranging from 5,10 and 16 KVA (1 phase) and 25, 50 and 63 KVA (3 phase) ratings have been proposed in the pockets of concentrated load density along with Aerial Bunched Conductor (ABC) for giving connections to domestic, commercial and industrial consumers through different ratings of Distribution boxes. While deciding the capacity of DTR, Power factor has been assumed as 0.8 and diversity factor as Energy accounting and auditing are the primary tools for controlling and lowering commercial and technical losses and improving financial performance of the Utility. The objective is to prepare an energy account so as to establish the energy input and quantum of energy consumed by/billed to various categories of consumers. Survey of 11 KV Rupahi feeder along with DTRs (19 Discom DTRs and 4 Dedicated DTRs) installed on this feeder and LT lines emanating from these DTRs has been carried out by SMEC and CAEDCL personnel and also in consortium with PRDC consultants. As a result of the survey, the following technical and commercial details are illustrated below: Location details DISCOM Central Assam Electricity Distribution Company Limited (CAEDCL) CIRCLE Nagaon DIVISION Nagaon division 2 Sub station details Name of the Sub station: Rupahi 33/11KV Station capacity: 1X5 MVA Number of 11kV feeders: 3 Energy Audit in the month of August, 06: As per the Energy Conservation Act, 2001, Energy Audit is defined as the verification, monitoring and analysis of use of energy including submission of technical report containing recommendations for improving energy efficiency with cost benefit analysis and an action plan to reduce energy consumption. The following data in respect of AT&C loss, technical and commercial loss for the month of August, 06 is depicted below: Sl.No. Description Unit Value 1 Energy input KWh Energy sales KWh AT & C loss (1-2) KWh kV line loss KWh DTR loss KWh LT loss KWh Misc loss (2% of 1) KWh Technical loss ( ) KWh Commercial loss (3-8) KWh % AT & C loss % Technical loss % Commercial loss Central Assam Electricity Distribution Company Limited Page 41 of 154

42 From the above figures, it is seen that the AT&C loss up to billing on 11KV Rupahi feeder varies from 41 to 44 % from May to August, 06. Low loss figures shown in the month of June and July, 06 is due to the damage in winding of 2.5 MVA, 33/11 KV Power Transformer during that period at 33 KV Rupahi Substation. The transformer has been replaced with 5 MVA, 33/11 KV Power Transformer during August, 06. The distribution loss (Technical loss and Commercial loss up to meter reading) in the month of August, 06 occurred in the distribution network of 11 KV Rupahi Feeder has been found to be % as detailed below. Voltage regulation on HT before and after HVDS is within permissible limit. However, voltage regulation on LT before HVDS has been found to be more than the permissible limit but after the implementation of HVDS voltage regulation on LT will be within the permissible limit. Sl. No. Particulars Before HVDS After HVDS 1. Technical loss % Commercial loss % Voltage Regulation on HT % 4. Voltage Regulation on LT % 60 (max) at DTR no (max) at DTR no Design, engineering and methodology for implementation of HVDS on 11 KV Rupahi feeder emanating from 33 KV Rupahi S/S has been done. Estimated fund requirement for implementation has been worked out Cost Benefit Analysis A rational attempt has been made to find out how the investment will pay off in long run. The new proposed system of HVDS is a time tested method practiced at various places. Apart from loss reduction the number of quantifiable and non-quantifiable benefits will also be available which is mentioned below: The registered customers will feel ownership and take responsibility and not allow others to meddle with the L.T. ABC network. The maintenance costs of existing system are high, where as the maintenance costs of proposed HVDS will be low compared to present system. With introduction of HVDS system, the pilferage of electricity will be almost negligible. With the new system, the voltage fluctuations will be minimized. The voltages will be maintained as per I.E. (Indian Electricity Act) Rules i.e. consumers will get good quality of supply. The consumers will be satisfied since number of trippings in the power supply will be reduced with introduction of HVDS. Failure will be minimal because of no over loading and no meddling of L.T ABC network. In the event of transformer failure, only few customers will get affected instead of large number of consumers in original system. Since losses are reduced considerably, power can be supplied to additional loads without any further investment on infrastructure. Due to better supply position, the area will be more commercialized with new connections etc. No additional generation capacity needed for giving new loads due to reduction in power drawals. While calculating the pay back period, the reduction in technical as well as commercial losses has to be taken in to account. It is necessary to take into consideration the material saved out of Central Assam Electricity Distribution Company Limited Page 42 of 154

43 HVDS implementation such as the cost of the Transformers and line materials etc. Considering the above facts the pay back period has been assessed as 4.89 years, taking into account saving in technical as well as commercial losses. Implementation plan of HVDS on 11 KV Rupahi feeder emanating from 33 KV Rupahi S/S has been prepared. xi. Prioritise disconnection based on amount and/or age of arrears: Different kinds of disconnection notices are as follows; a. Normal disconnection notice. These notices are sent to the consumer, regardless of the overdue outstanding amount, as a matter of routine if the records show that the previous month s bill has not been paid within the prescribed due date. As neither the amount involved is too high nor the age too old, do these notices have the lowest priority in terms of active follow-up by the utility. b. Cut-off month disconnection notice. These notices are sent by the utility to all consumers, regardless of the overdue outstanding amount, whose oldest outstanding bill relates to an accounting month that is older than a pre-determined cut-off month. c. Special notices. These notices are sent by the utility to all consumers, who satisfy either or both of two criteria the aggregate overdue outstanding dues are in excess of a specific threshold figure (say Rs 5,000) or whose oldest outstanding bill is prior to a specified month say March In view of the large amounts involved and/or the age of the outstanding bills, these notices are accorded the highest priority in terms of active follow-up by the utility. d. Stay Order from court against disconnection notice. Sometimes, it is found that the large and high value consumer obtain stay from court of law against the disconnection notices, with the results heavy amount of arrears (in lacs of Rs) are kept mounting on them and the SEB has to face revenue loss. Such types of consumer may be dealt keeping in view the legal aspects if the stay is for the disputed bill of particular month or till the settlement with ASEB is accomplished or stay vacated by the ASEB. e. One-time Settlement: It is generally seen that due to some reason or other the high value consumer could not make the payment of the bill, in that case the payment schedule may be made in installment (2 or 3, depending upon the value) with the approvals from the Management of company. In some cases, they should be exempted from payment of surcharge arrears. CAEDCL is attempting to apply the aforesaid guidelines in order to rollout the same across respective areas. x. Ensure that the meter capacity is commensurate with the contracted load to reduce the possibility of erroneous meter registration: As is well understood, electro-mechanical meters tend to not record the consumer s energy consumption in full if the current passing through the meter at any point of time is substantially less than rated capacity of the meter. For example, if a current of 2 Amperes is being drawn through a 25 Ampere meter, it is likely that the meter will not register any advance at all thereby leading to a significant under-registration on the meter if a similar pattern continues for significant periods of time. a) Identify those consumers whose supply appears to be controlled by meters of unduly large current carrying capacity. In case of consumers whose consumption is recorded through electro-mechanical meters, this is proposed to be done by using the consumer s load factor [monthly energy consumption / (contract load * number of hours in the month)] as a surrogate indicator for the actual drawal of current. Central Assam Electricity Distribution Company Limited Page 43 of 154

44 In case of consumers whose consumption is recorded through electronic meters, this is proposed to be done based on the consumer s actual drawal of power as recorded by the meter itself. However, if this data is not made available for analysis due to whatever reason (incomplete download of data from the meter, software incompatibility between the meter and the meter reading instrument, inability of the receiving application to read/analyse the consumer s consumption pattern etc.), the method outlined in the previous paragraph will be adopted. b) Prepare look-up tables for different categories of consumers defining what size or capacity of meter should be installed for what range of connected / contract load, as the case may be. Different look-up tables will be required for different consumer categories as not all consumer categories have similar consumption patterns. However, it needs to be understood by all concerned that this table is only an indicative guide and in exceptional cases, individual judgment and discretion will continue to be required. In this connection, it needs to be mentioned that different look-up tables will need to be prepared in respect of electro-mechanical and electronic meters as the operating boundaries for meters of a similar rated capacity will be appreciably different. CAEDCL is seriously thinking to implement this type of approach to eradicate the possibility of erroneous registration. xi. Introduce spot billing for domestic, commercial and small & medium industrial consumers In this system, Hand Held Machines (HHM) is used to record the consumption of energy consumed through the individual s energy meters. The bill is generated then and there by HHM and handed over to the respective consumer for payment through cheque and if not possible, then by cash at the collection centre within say, 7 days. The recorded meter reading is subsequently downloaded at the respective computerized billing centre. Plagued with the problem of staff shortage engaged in revenue collection, spot billing needs to be carefully implemented to reduce the risk of failure due to undue complications and technical problems in the system. Spot billing system is basically being proposed to be introduced to eliminate differences between the consumption registered on the meter and that reflected in the consumer s bill, whatever is the reason. Advantages of HHM Reduction of revenue cycle time by combining many activities into one Eliminating paper work except the bill to the consumer Meter reading, bill generation, bill delivery, cheque collection and cash receipt combined into a simple transaction Digital record of bill distribution Complete consumer database built anew after survey New route mapping incorporated into the database Database updated daily Few HHMs have been purchased by the respective Distribution Companies on a trial basis and this system is being introduced gradually in the selected Sub Divisions. xii. Replace conductors by Aerial Bunched Conductors (ABC): Most of the faults in overhead power supply systems occur due to failure in transmission lines, whether these are HT or LT, resulting in immense loss and inconvenience to consumers. The main weakness of overhead lines are that its power carrying conductors are bare. To overcome the above deficiency, ABC systems have been introduced at many places for both HT and LT systems. Principally, the system is a compromise between insulated power cable systems and bare overhead conductor systems. As far as basic construction goes, there are three or four Central Assam Electricity Distribution Company Limited Page 44 of 154

45 power carrying conductors suitably insulated and laid around a bare or insulated weightcarrying conductor, which also serves as earth/neutral conductor. ABC is a novel concept for O/H Power distribution. When compared to the conventional bare conductor over head distribution system, ABC provides higher safety and reliability, lower power losses and ultimate system economy by reducing installation, maintenance and operative cost. This system is ideal for rural distribution and is especially attractive for installation in difficult terrains such as hilly areas, forest areas, coastal areas etc. ABC is also considered to be the best choice for power distribution in congested urban areas with narrow lanes and by-lanes. In developing urban complex, ABC is the better choice because of flexibility for rerouting as demanded by changes in urban development plan. xiii. Introduce Automated Meter Reading to reduce metering errors: Automated Meter Reading (AMR) is the remote collection of consumption data from the consumer s power utility meter over telephones lines, radio systems or power line carriers (PLC). For example, Singapore Power uses a telephone line or GSM mobile telephone interface with a Remote Terminal Unit (RTU) that reads the meter (it records and stores pulses generated by the electricity meter) each day. Colorado Springs Utilities deploys AMR using wireless radio transmitter through which the customer meters are read and data transferred into the billing system. AMR helps to: Improve billing efficiency Eliminate the need for estimating meter readings Shorten the revenue cycle time from consumption to billing and collection Improve load management Check tampering and other leakages before it becomes a major problem Increase the return on investment on a meter Provide remote flexible tariff Provide capacity to remotely connect or disconnect the power connection AMR comprises the following three elements: Automated reading of meters A communication link between the meters and the centralized (or decentralized) billing system A centralized (or decentralized) data store in respect of consumption patterns AMR software can have added value function such as supervision of the meters, operational conditions, detection of fraud attempts, consumer load profiles as per standard: IEC DATA exchange for meter reading, tariff and local control. Distribution Company is planning to introduce AMR system as a pilot project during FY Customer Care Processes CAEDCL recognizes that it needs to strengthen the customer orientation and provide better services to its customers. It is crucial to its commercial success as industry reform continues and customer choice is introduced. The Hon ble Commission has already issued the Guidelines for Redressal of Consumer Grievances. This provides the licensee with the Commission s expectations for ASEB/successor entities with regard to the processing, monitoring and escalation of complaints/disputes with consumers. In view of the above, CAEDCL has already started review and redesign of its processes (facilities like drop boxes for payment through cheque have been initiated in some areas). Some of the key processes that are under review and redesign; handling applications for new connections, handling customer grievances that will satisfy the Commission s requirements; and Central Assam Electricity Distribution Company Limited Page 45 of 154

46 improvements to the current payment receiving facilities. It also plans to improve the infrastructure capabilities to better respond to customer complaints and put up a system in place to capture the data requirements and to regularly monitor the complaints as per AERC guidelines Implementation of inventory management and inventory accounting for LAEDCL, UAEDCL, CAEDCL Efficient inventory management is very critical element of the overall financial management function as it influences the working capital management and financing costs. Methodology has been prepared on Inventory Management and Inventory Accounting system which is planned to be integrated with the Material Codification System. In the first step, it is planned that the current processes will be spruced up / revamped through implementation of the systems and processes for inventory management and accounting as discussed in the action plan report. The report lays down the IT perspective through a software specification requirement which explains the integrated functioning of the Inventory Management and Inventory Accounting Modules. Central Assam Electricity Distribution Company Limited Page 46 of 154

47 6. Business Plan FY 07 to FY Assumptions As per AERC s directives, the five year s business plan between FY to FY has also been included in this petition. These are the best estimates that are based on the current expectation of the possible scenario. We would like to caution that there could be large macro-economic factors and natural factors (like bad hydrology, severe floods or drought) can drastically change these projections. Assumptions, as taken for FY 07 to FY 10 are taken for the business plan and extended for two years more years. Cat No Category Table 37: Sales Projections in MU Energy sales FY 08 Energy sales FY 09 Energy sales FY 10 Energy sales FY 11 Energy sales FY 12 LT GROUP 1 Jeevan Dhara 0.5 kw & 1kwh/day Domestic: A -above.5 to 5 KW First 4kwh/day Next 4 kwh/day Balance Domestic-B above 5 kw to 20kw Commercial Load above 0.5 to 20kw General Load upto 20 kw Public Lighting Agriculture upto 7.5hp Small Industries Rural upto 20kw Small Industries Urban LT TOTAL HT GROUP 1 HT Domestic 20kw and above HT commercial 20kw & above Public Water works Bulk supply 20kw and above _Govt. Edu Bulk supply 20kw and above _Others HT Small Industries upto 50 kw HT Industries-1 50kw to 150 kw HT Industries-II above 150 kw Tea Coff & Rub Oil & Coal HT Irrigation Load above 7.5 hp HT Total All Total Central Assam Electricity Distribution Company Limited Page 47 of 154

48 Table 38: Assumption for FY 07 FY 12 I Inflation 6% 6% 6% 6% 6% ST PLR - SBI as of April 1, % 9.50% 9.50% 9.50% 9.50% R&M Expense 6% 6% 6% 6% 6% Employee Expenses 10% 30% 10% 10% 10% A&G Expense 6% 6% 6% 6% 6% ROE 16% 16% 16% 16% 16% Other Income 1% 1% 1% 2% 2% Provision for taxes 33.67% 33.67% 33.67% 33.67% 33.67% Security Deposit From Consumers 5% 5% 5% 5% 5% Interest on Security deposit payable 5% 5% 5% 5% 5% Current Assets - per Company O&M expenses Of the annual expense 8.33% 8.33% 8.33% 8.33% 8.33% Maintenance spares 1% of GFA and subseq 6% 6% 6% 6% 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% 16.67% 16.67% 16.67% 16.67% Curr Liabilities - PP payable 8.33% 8.33% 8.33% 8.33% 8.33% Provision for bad and doubtful debts % of revenue 1% 1% 1% 1% 1% Current Assets - per AERC O&M expenses Of the annual expense 8.33% 8.33% 8.33% 8.33% 8.33% Maintenance spares 1% of GFA and subseq 6% 6% 6% 6% 6% Receivables Against Sale Of Power Of the annual Revenue 16.67% 16.67% 16.67% 16.67% 16.67% Power Purchase Payable 16.67% 16.67% 16.67% 16.67% 16.67% Depreciation Rates applicable for Average Rates Land & Rights 0.00% Building 1.80% Hydraulic 2.57% Other Civil Works 1.80% Plant & Machinery 3.60% Lines & Cable Net work 3.60% Vehicles 18.00% Furniture& Fixtures 6.00% Office Equipment 6.00% Capital Spares at Generating Stations 0.00% Cap of Asset Value 90% Table 39: Assumption for FY 07 FY 12 II Loan Rates Institution 10.50% 10.50% 10.50% 10.50% 10.50% Rates of interest State Government 8.37% PFC 8% REC LIC/ ADB 10.50% Public Bonds 11.50% Collection Efficiency % % % % % Loan Repayments (as per Resources Plan) Govt Loan 10% 10% 10% 10% 10% Public Bond LIC 0 REC 0 PFC Interest rate for Investment income 6.5% 6.5% 6.5% 6.5% 6.5% Central Assam Electricity Distribution Company Limited Page 48 of 154

49 Table 40: Assumption for FY 07 FY 12 III Rs Crores Investments Retail Consumer Metering Computerised Billing Other Projects kv System System Improvement System Augmentation Rural Electrification kv System System Improvement System Augmentation Rural Electrification LT System System Improvement System Augmentation Rural Electrification Total Loans Grant Equity Table 41: Loss trajectory FY 08 FY 09 FY 10 FY 11 FY 12 Loss Level 26.55% 23.80% 21.55% 20.55% 19.30% % of reduction 2.50% 2.75% 2.25% 1.00% 1.25% Table 42: Trading Mu and Income Trading Mu Rs Crores Profit & Loss account Table 43: Profit and Loss account for FY 07 to FY 12 Rs crores Profit & Loss Account Power Purchase Energy Available at interface point (MU) 1, , , , , Sale of Power (MU) , , , Loss % 26.55% 23.80% 21.55% 20.55% 19.30% INCOME Revenue from tariffs & Miscell. Charges EXPENDITURE Power Purchase R&M Expense Employee Expenses A&G Expense Depreciation Interest & Finance Charges Less: Interest & other expenses capitalised Other Debits (incl. Prov for Bad debts & workin Extraordinary Items Other (Misc.)-net prior period credit Total ROE Other Income Provision for taxes Annual Revenue Requirement Surplus(+) / Shortfall(-) (15.06) Central Assam Electricity Distribution Company Limited Page 49 of 154

50 6.3. Balance sheet Table 44: Balance Sheet for FY 07 to FY 12 Rs Crores Balance Sheet Shareholder'S Funds: Share Capital Reserves & Surplus Total Loan Funds: Loans From State Govt Loans From Others- Secured Loans From Others- Unsecured Total Contributions, Grants & Subsidies Towards Cost O Grand Total , , , Application Of Funds: Net Fixed Assets: A) Gross Block , , , B) Less:Accumulated Depreciation (217.43) (247.38) (285.14) (330.17) (380.84) C) Net Fixed Assets D) Capital Work In Progress E) Assets Not In Use F) Deferred Costs G) Intangible Assets Total Of ( C) To (G) Investments Subsidy Receivable From Govt Net Current Assets: A. Current Assets, Loans & Advances A) Inventories B) Receivables Against Sale Of Power C) Cash & Bank Balances D) Loans & Advances E) Sundry Receivables Total Of A B. Current Liabilities And Provisions: A) Security Deposit From Consumers B) Borrowings For Working Capital C) Payments Due On Capital Liabilities D) Other Current Liabilities Total Of B Net Current Assets (A - B) (7.15) Grand Total , , , Central Assam Electricity Distribution Company Limited Page 50 of 154

51 7. Proposed Revision in Tariffs Based on the details set out above, the revision in each category is set out below. Except for categories in HT class, the fixed charges have been retained same in the current proposal. This has been mainly carried out since the energy charges have risen and these are variable in nature and hence to reflect more in the energy charges Power factor Penalty and Rebate This is applicable to the following categories, where the power factor is recorded electronically (categories as per the current Schedule of Tariffs) LT categories IV, V and VII HT categories I, II, III, IV, V(A), V(B), V(C), VI and VII In all these cases, the following is proposed Power factor (applicable only in cases where power factor is recorded electronically) Power factor penalty Power Rebate No change on unit consumption Existing More tha 85% and less tha 95% 1% Proposed Above 95% 2% More than 85% and less than 90% 1% Between 90% to 95% 2% Above 95% 3% LT Category-I: Jeevan Dhara Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ Installation/ month Rs/ Installation/ month Jeevan Dhara (0.5 kw & 1 kwh/day) LT Category-II: Domestic A Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Domestic A First 4kwh/day Next 4kwh/day Balance Central Assam Electricity Distribution Company Limited Page 51 of 154

52 LT Category-III: Domestic B Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Domestic B (above 5 kw to 20 kw) LT Category-IV: LT Commercial Fixed charge No change. Continues at existing rates Energy charge Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Commercial (upto 20 kw) LT Category-V: LT General Purpose Supply Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month General Purpose (upto 20 kw) LT Category-VI: Public Lighting Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Public Lighting (upto 5 kw) LT Category-VII : Agriculture Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Agriculture (upto 7.5 hp) Central Assam Electricity Distribution Company Limited Page 52 of 154

53 LT Category-VIII: Small Industries Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Small Industries (Rural)-upto 20 kw Small Industries (Urban) LT Category-IX: Temporary Supply Domestic - From the existing rate of Rs 75/kW/day or Rs 5.5 / kwh, which ever is higher is increased to Rs 75 / kw/ day or Rs 5.8 / kwh, which ever is higher to reflect the increase in the energy costs Non-Domestic From the existing rate of Rs 120/kW/day or Rs 6.5 / kwh, which ever is higher is increased to Rs 75 / kw/ day or Rs 6.8 / kwh, which ever is higher to reflect the increase in the energy costs HT Category-I: HT Domestic Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Domestic HT Category-II: HT Commercial Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Commercial HT Category-III: Public Water Works Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Public Water Works HT Category-IV: Bulk Supply Fixed charge No change. Continues at existing rates Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Bulk Supply(Govt.Educ) Central Assam Electricity Distribution Company Limited Page 53 of 154

54 Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Bulk Supply(Others) HT Category V(A): HT Small Industries Fixed charge Changed from existing Rs 40/ KVA/ month to Rs 50/ KVA/ month Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month HT Small Industries HT Category V(B): HT I Industries Fixed charge Changed from existing Rs 100/ KVA/ month to Rs 120/ KVA/ month Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month HT-I Industries TOD Tariff for HT I Industries Description Energy Charge Time Existing Proposed 0600 Hrs to 1700 Hrs (Normal) Hrs Hrs (Nigth) HT Category V (C): HT II Industries Option 1 Fixed charge Changed from existing Rs 140/ KVA/ month to Rs 150/ KVA/ month Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month HT-II Industries Option 2 Existing New Fixed Charges Per/ KVA/ month Energy Charges Per kwh Central Assam Electricity Distribution Company Limited Page 54 of 154

55 TOD tariff for HT II Industries Description Energy Charge Time Existing Proposed 0600 Hrs to 1700 Hrs (Normal) Hrs Hrs (Nigth) HT Category VI: Tea, Coffee and Rubber: Seasonal (April to November) Fixed charge Changed from existing Rs 230/ KVA/ month to Rs 240/ KVA/ month Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Tea, Coffee & Rubber TOD Tariff for HT VI Description Energy Charge Time Existing Proposed 0600 Hrs to 1700 Hrs (Normal) Hrs Hrs (Nigth) Off-Season Tariff Fixed charge No change proposed i.e. existing rate of 40% contracted demand would continue Energy charges Increased from Rs 3.95 to Rs HT Category VII : Oil and Coal Fixed charge Changed from existing Rs 270/ KVA/ month to Rs 280/ KVA/ month Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month Oil & Coal TOD Tariff for HT VI Description Energy Charge Time Existing Proposed 0600 Hrs to 1700 Hrs (Normal) Hrs Hrs (Nigth) HT Category VIII : HT Irrigation Fixed charge No change. Continues at existing rates. Energy charges Existing Proposed Fixed Charge Energy charges Fixed Charge Energy charges Rs/kWh Rs/kWh Rs/ KW/ month Rs/ KW/ month HT Irrigation Central Assam Electricity Distribution Company Limited Page 55 of 154

56 8. Directives of AERC Directives of the Commission in its TO for FY Sl. Commission's Directions No. 1 The Commission directs the entities to complete the schemes under the Development Fund within the original or, extended date of completion, as applicable. In case the entities fail to fully implement the schemes in time, the amount by which they fall short of the approved amount of the scheme will be deducted from the ARR of next year. 2 As such, the Commission directs the entities to furnish detailed cost break-up of the schemes shown under CWIP along with expected date of completion within two month of issue of this tariff order and, on a quarterly basis there after. 3 The Commission directs the DISCOMs to furnish details of 'interest on Security Deposit' refunded to the consumers within one month of this order, without fail. 4 The Commission directs the DISCOMs to submit details of the bad debt written-off in FY within one month of this order, without fail. 5 The DISCOMS need to separate the sales at each operation circle/district category wise effective from FY and the sales forecast in the filing for FY and beyond shall be circle-wise. The DISCOMs shall file the information for every month in the format that will be prescribed and communicated for this purpose. 6 The Commission directs that each Discom must set up a separate Load Research Cell which will undertake load survey, consumer profiling and separation of cost more precisely as per requirements of the model within two months of the coming into effect of this tariff Order. 7 Considering all aspects, the Commission decided that for seasonal consumer Tea, coffee & Rubber Category, the stipulated range of contracted demand shall be at 65% to 105% of connected load in KVA during seasonal period and at 40% of seasonal demand for off-season periods. The Commission is in favour of further reviewing the matter based of data of actual demand created by this category during different seasons in the future. The proposed load research cell of each Discom will monitor the actual demand created by this category of consumers at least from representative samples and submit the same to the Commission in form of a quarterly report. 8 At present under HT group, domestic, commercial, public water works, HT I 206 Small industries and HT Irrigation are not covered under TOD rate. No Page No of TO Table L on 36 and 37 and 241 Action taken To Date or To be Taken Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Procurement of materials and Implementation of Scheme being done. 177 Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt /256 An amount of Rs crores allowed to be written off from the A/c of ASEB during This has been considered in Tariff Petition. 197 LRC has been set up. 204 Being done by LRC. 206 Being done by LRC. Central Assam Electricity Distribution Company Limited Page 56 of 154

57 Sl. Commission's Directions No. separate data is available for consumption during different periods of day by different categories under TOD tariff. The Commission expects that the proposed Load Research Cell under Discoms will collect data from such consumers and submit to the Commission for a Data Base on TOD consumption. Since the data regarding TOD Consumption is not made available at present, the Commission decided not to go for extension of TOD tariff to other categories in this Tariff Order. 9 The Commission directs the Load Research Cell of Discoms to collect information regarding use of solar water heating systems in their respective areas and total amount of rebate allowed and submit reports of the same along with the next tariff petitions. 10 The Commission believes that there is a need to do thorough scrutiny of capital works in progress (CWIP) due to the reason that huge amounts have been shown against this head. DISCOMs are to furnish detailed cost break-up of the schemes shown under CWIP along with expected date of completion within two month of issue of this tariff order and, on a quarterly basis there after. 11 Each DISCOM must set up a separate Load Research Cell which will undertake load survey, consumer profiling and separation of cost more precisely ~per requirements of the cost of supply model within two months of the coming into effect of this tariff Order. The Load Research Cells shall also take up the following works. a) Monitor the actual demand created by the Tea category of consumers at least from representative samples, and submit the same to the Commission in a) Monitor the actual demand created by the Tea category of consumers at least from representative samples, and submit the same to the Commission in b) Collect data from different categories of consumers under TOD Tariff and submit the same to the Commission for a Database on TOD consumption. c) Collect information regarding use of solar water heating systems in their respective areas, and the total amount of rebate allowed and submit reports along with the next tariff petitions. 12 DISCOMs are to submit the quarterly report on action taken on complaints /grievances raised by consumers in different forums like Consumer Grievance Cell, Consumer Grievance Forum etc. to the Commission. 13 DISCOMs are to keep 10% of total distribution transformers capacity in a Circle as reserve stock for the subdivisions under the Circle to avoid any long outage due to damage of transformers etc. for better service to consumers as stipulated in the AERC Page No of TO Action taken To Date or To be Taken 212 Being done by LRC. 255 Reply sent vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt LRC has been set up. 256 Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Being followed. Central Assam Electricity Distribution Company Limited Page 57 of 154

58 Sl. Commission's Directions No. Distribution Licensees' Standard of Performance Regulations, Though AERC has fixed T &D loss target for different years in earlier tariff orders it is observed that the DISCOMs could not achieve the targets in the previous years. The T &D losses in the UAEDCL are higher than that of other two DISCOMs even though there are large numbers ofht consumers like the tea gardens under UAEDCL. All the DISCOMs including UAEDCL should make all out efforts to reduce T &D losses so as to achieve the targets fixed by the Commission in this tariff order. The DISCOMs should take stem administrative and legal actions against theft of power. 15 The APDRP and the Rural Electrification works are to be implemented by all the DISCOMs as per schedule so that the benefits can be reaped by the consumers. Computerization of billing in all the DISCOMs should be completed as per schedule so that errors in the billing can be eliminated and harassment to consumers may be reduced. 16 It is observed that a good number of domestic consumers are using their connections for commercial and other purposes. DISCOMs should take actions against such consumers to avoid revenue loss and submit quarterly report to the Commission. 17 DISCOMs are to announce the schedule of load shedding in various media well ahead to avoid inconvenience to the consumers as far as practicable. 18 A report on the status of electronic meters on all the 33KV feeders is to be submitted by the DISCOMs within two months of issue of this order. 19 All the DISCOMs are to publish quarterly reports on energy audit of the33kv and 11KV feeders undertaken by them and also the subsequent corrective actions taken by them for information to the consumers. 20 The list of high value defaulting consumers along with their arrear dues should be published half yearly by the DISCOMs in the print medium with intimation to the Commission. 21 All the DISCOMs are to publish the latest audited balance sheet and profit & loss account each year at the time of submission of tariff petition. 22 All the Discoms are to furnish details of 'interest on Security Deposit' refunded to the consumers within one month of this order, without fail. Page No of TO Action taken To Date or To be Taken 256 Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Directions issued to field units for taking necessary action 257 Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Being done. 257 Being done. 257 Included in Tariff Petition. 257 Replied vide CGM,CAEDCL Letter No.CGM/CAEDCL/AERC-1/1/Pt- 1/06-07/51 Dt Central Assam Electricity Distribution Company Limited Page 58 of 154

59 Further Directives of AERC in our response to their and Directives. Sl Direction No. of I order and further No. Directions in No Order 1 Clause 11.5 of Order Business plan has to be submitted by as the future generation and improvement/deterioration in operational efficiency will have direct impact on the Multi year tariff proposal. 2 Clause 8.l(a) of Order No target has been given for completion of feederwise metering andsubstation metering under APDRP which may be intimated within three months from issue of this order. Reduction of losses in the three circles, namely Guwahati-II, Jorhat and Dibrugarh consequent to APDRP works may be assessed and intimated to the Commission within three months from issue of the Tariff order. 3 Clause 8.l(b) of Order The quarterly report on the Billing Efficiency achieved with effect from July indicating the action taken in respect of the units (Circles/Divisions/Sub-divisions) where the Billing Efficiency is lower not submitted. The quarterly reports are to be submitted with effect from July, Clause 8.l( c) of Order The quarterly report on the Collection Efficiency achieved with effect from July 2005 indicating action taken in respect of units where the Collection Efficiency is lower is not submitted. The quarterly reports are to be submitted with effect from July, Clause 8.4(C) of Order A status report on the refund of interests on security deposits for the year not submitted before the Commission. The status report for is to be submitted within three months from issue of this order. 6 Clause 11.5 of Order The Business plans for each of the Discoms are to be submitted by 7 Clause 11.10(a) of Order Report of pilot projects on Energy Auditing and Distribution losses are to be submitted by Clause 11.10(b) of Order It was directed by the Chairperson in the meeting to review the implementation of Directives of the Tariff order held on that MOUs between Chairman/MD and CEO's, CEO's & EE's of respective Divisions under them, between EE's and AEE's and between AEE's and JEs will be submitted to the Commission by October 2005 and the Page No Action 238 Done 246 Being done. 246 Billing Efficiency achieved. Refer Annexure A. 248 Collection Efficiency achieved. Refer Annexure A. 249 Done 249 Business Plan submitted. 250 Mentioned in Tariff Petition 250 Done. Central Assam Electricity Distribution Company Limited Page 59 of 154

60 Sl Direction No. of I order and further No. Directions in No Order monitoring of performance indicators of the MOUs was to be also reported to the Commission. The profit and loss accounts submitted by CEOs are also to be shared with the Commission. The above are not yet submitted/reported to the Commission which are to be submitted within three months from issue of order. 9 Clause of Order Projections on future level of Distribution losses upto next 3 years are to be submitted along with next Tariff Petition. 10 Clause of Order The status report of the Computerized Billing and MIS being followed by each of the Discoms is to be submitted within three months from issue of this order. 11 Clause 8.1 of Order A report on the status of meters installed at offices and premises of the Discoms are to be submitted within three months from issue of this order. 12 Clause 8.6 of Order Progress Report on action taken on Insurance Cover of Assets is to be submitted along with Tariff Petition for next Year. 13 Clause 8.8 of Order The Additional Chief Engineer (Com-Tariff), ASEB vide his petition dated had 'given a activity schedule for procurement of energy meters against un metered consumers under ADB funded schemes. As per the schedule the installation, testing and commissioning of the meters are scheduled to start from and end on Quarterly report on the progress of the work is to be submitted from July, 2006 onwards. 14 Clause 8.12 of Order In this order, the Commission directs that each DISCOM must set up a separate Load Research Cell which will undertake load survey, consumer profiling and separation of cost more precisely as per requirements of the cost of supply model within two months of the coming into effect of this tariff Order. It is expected that the proposed Management Consultancy Cell will do the works suggested for the Load Research Cell. 15 Clause 8.13 of Order Commission staff has collected MRI downloads for few selected industries from MTI Wing of ASEB. It is directed that a brief monthly report on MRI downloads and analysis of all HT consumers on the heads as suggested in the tariff order for will be sent to the Commission by 25th of following month starting from July, Clause 8.18 of Order The expected time to be taken to build the asset Page No Action 251 Mentioned in Tariff Petition. 251 Computerized Billing is being done. 252 Being Done. 252 Included in the R & M Budget of Tariff Petition. 252 Being Done. 253 LRC already setup. 254 Being Done. 254 Will be completed by September,07. Central Assam Electricity Distribution Company Limited Page 60 of 154

61 Sl Direction No. of I order and further No. Directions in No Order register is not yet informed. The Commission desires that the asset register for all the Discoms duly completed for all assets of Discoms be completed before the submission ofthe next tariff petition. 17 Clause 8.20 of Order As TOD" is an effective tool to rationalize demand, the Commission has introduced a three tier TOD charges for a few categories of consumers in tariff' order in place of two tier TOD in tariff order. Commission, directs that the information on actual consumption under TOD by different consumers will be made available by the Discoms to the Commission within three months of the issue of the order so that the effectiveness of TOD charges can be assessed and the facility can be extended to other categories in the next year's tariff. Page No Action 255 Being Done. 9. Annual Statement of Accounts for FY Unaudited actual Annual Statement of Accounts for the FY for CAEDCL is furnished in Annexure-V. Central Assam Electricity Distribution Company Limited Page 61 of 154

62 Invest ment Plan Petition for Approval of ARR for FY to and Revision of Tariff for FY Investment Plan between FY to FY Annexure I: CAEDCL is making critical and urgently needed investments in its distribution network to strengthen an overloaded system and to enhance its reliability to meet contingencies. This proposal for approval of the Annual Revenue Requirement for FY also envisages recovery of these planned and on-going investments. The following section deals in detail with the various capital investment programmes ongoing at CAEDCL and those proposed for the Ensuing Year FY Accelerated Power Development and Reform Program (APDRP) The APDRP scheme was introduced by Govt. of India to achieve reduction of T&D loss, improve reliability and quality of power and to increase net power availability. It aims at strengthening and improving the sub-transmission and distribution network by setting up of new 33/11 KV sub-stations, augmentation of Distribution transformers, replacement of conductors, up-gradation of feeders, system metering, 100% consumer metering and computerization of billing, capacity building etc. The APDRP project is designed to address to the above mentioned issues with the ultimate objective of reducing losses and improving quality of power supply. Improvements of Sub- Transmission & Distribution System will emphasize on Reducing Losses and bringing viability to CAEDCL 100% metering & energy audit Improvement in the quality of supply Application of Information Technology in Revenue & Operation Outsourcing of Distribution Activities Government of Assam, Ministry of Power has allotted fund to Assam in a very generous manner. They provide 100% fund (of which 90% is grant and 10% loan) for whole of APDRP schemes. Works under the schemes cover 14 Electrical circles of Assam. An amount of Rs crores under APDRP program is earmarked as the outlay for all the Distribution companies. Out of the total outlay an amount of Rs crores have been earmarked for CAEDCL. Out of this outlay, an amount of Rs crores shall be utilized by March, 07 and balance Rs crores shall be required during FY Table-42 below provides a snapshot of the proposed APDRP funding in CAEDCL. Table 45: Proposed Plan Outlay for CAEDCL under APDRP Sl. No. Discoms Circle Cost of Approved Scheme (Rs.in crores) Total fund Utilisation upto Mar'07 (Rs. in Crores) Total fund Requirement for ( Rs. in crores) 1. Nagaon Tezpur CAEDCL 3. Kanch Cachar Total Central Assam Electricity Distribution Company Limited Page 62 of 154

63 Non Lapsable Central Pool of Resources (NLCPR) The NLCPR fund outlay is being used for critical augmentation of the 33/11 KV Sub Stations, construction of 33 KV lines, and for construction and augmentation of distribution Sub Stations. For the FY , an amount of Rs crores is envisaged for CAEDCL shown in the Table- 43 below: Table 46: NLCPR SCHEMES FOR CAEDCL FOR THE YEAR Sl. No Name Of Circle Nagaon Elect. Circle KANCH Elect. Circle Cachar Elect. Circle Cachar Elect. Circle Name of works Approx. cost of Scheme (Rs. in Cr.) Priority status Construction of 33 KV Double Circuit tower line from Samaguri to Nagaon. Line length 24 Km st Construction of 33 KV line from Haflong to Damcherra with 20 nos. tower for arrangement of alternate source of power supply from Barak Valley for N.C. Hills District and 8 Nos. 33 KV/ 0.43 KV Sub-Station with LT lines. Line length 69 Km nd Construction of 14 Km. long 33 KV line with 1.08 Raccoon conductor from Kabuganj to 3rd Dargakona Construction of 33 KV line with double steel tubular pole structure from Srikona Sub-Station th to Hailakandi. Line length 30 Km. Total Rural Electrification As per 2001 census, there are 25,124 numbers of villages in the State of Assam, out of which 21,587 numbers of villages (85.9 %) have been electrified as on December, 05. This leaves 3,537 numbers of villages yet to be electrified. Rural electrification plan for CAEDCL w.e.f. FY to FY is depicted in Table below: Central Assam Electricity Distribution Company Limited Page 63 of 154

64 Scheme Rural Electrification (Minimum 1 needs Program) Prime Minister Gramudyog 2 Yojana (PMGY) Rural Electrification - Plan Central Assam Electricity Distribution Company Ltd. FY Approved FY Proposed FY Proposed FY Proposed FY Proposed Grant Loan Grant Loan Grant Loan Grant Loan Grant Loan Grant Loan Closed Closed Rupees in Lacs FY Proposed Rajiv Gandhi Grameen 3 Vidyutikaran Yojana (RGGVY 2, , , , , Works will be executed by PGCIL 4 Tribal Sub Plan (TSP) Scheduled Caste Component Plan (SCCP) ADB Financed Scheme Other Total 8, , , , , Central Assam Electricity Distribution Company Limited Page 64 of 154

65 From the above table it may be seen that by and large, Rural Electrification under Minimum Needs Program (MNP) and Prime Minister Gramudyog Yojana (PMGY) has been completed Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) The RGGVY scheme provides electric connections to BPL consumers only. As per rural electrification policy under RGGVY scheme, all projected BPL service connections are to be completed with in the year 2009 including all RGGVY projects. As per tariff order , the connected load for Jeevan Dhara category is < 0.5 KW and as per BPL service criteria in RGGVY schemes, the connected load per service connection is 0.06 KW. Consequently an average connected load of 0.1 KW per service for Jeevan Dhara has been considered in the projections. The average connected load for Domestic A & Commercial (LT) categories is considered as 1.0 KW per service connection. For small industry category (mainly rice mills), an average connected load of 10 HP ( 7.5 KW) per service connection and for agriculture LT (mainly PTW), an average pump capacity of 7.5 HP (5 KW) per service connection have been considered. However, agriculture (STW) connections shall depend on the availability of ground water reserve. Details of electrification of proposed virgin villages and intensification villages for CAEDCL is shown in Table 44 below: Table 47: Electrification of proposed virgin villages Category Numbers to be electrified Cost in Rs Lacs Virgin Villages 250 Intensification Villages ,481 Total 3865 An outlay of Rs crores has been proposed to be earmarked for village electrification under RGGVY, out of which Rs crores as grant and Rs crores as loan has been approved for FY Details of proposed outlay for FY and FY for CAEDCL has been shown in above Table including grant and loan amount Tribal Sub Plan (TSP) The approved allocation for TSP during FY is Rs crores as a grant for all the Distribution companies put together for electrification of Scheduled Tribe (ST) villages in whole Assam as shown in Table - above, out of which Rs crores has been earmarked for electrification of ST villages in CAEDCL Scheduled Caste Component Plan (SCCP) The approved allocation under the SCCP during FY is Rs crores as a grant for all the Distribution companies in the State as shown in table above, out of which Rs crores has been earmarked for electrification of SC villages in CAEDCL ADB Financed Schemes The total approved allocation of loan for ADB for FY is Rs crores for Distribution Schemes. Out of which, an amount of Rs 3.87 crores has been allocated for CAEDCL for 33/11 KV substation augmentation, and for putting in place metering and communication systems. Central Assam Electricity Distribution Company Limited Page 65 of 154

66 10.2. STATE PLAN FUND Distribution Line and Sub Station Augmentation The Central Assam Electricity Distribution Company Limited (CAEDCL) is a new successor company of the Assam State Electricity Board (ASEB), which has been unbundled in course of its reform and restructure in pursuance of the Electricity Act The Company was incorporated under the Company s Act 1956 in the year It started functioning after issue of the transfer notification by the Govt. of Assam on the 10 th of December The main function of the CAEDCL is to supply electricity to the end users through the power distribution system owned by it. It receives power in bulk in its 33 KV network from ASEB and the Assam Power Generation Corporation Ltd. through the grid network of the Assam Electricity Grid Corporation Ltd. and sells the power to its consumers, both urban and rural, spread across the Central Assam Districts, viz. Cachar, Karimganj, Hailakandi, Nagaon, Sonitpur, Morigaon, N.C.Hills & Karbi Anglong. The company caters to a peak power demand of about 210 MW coming from around 4.2 Lakhs consumers having a total connected load of approximately 720 MW. There remains, however, a shortfall ranging from 6 MW to a maximum of 53 MW. The shortfall occurs mainly due to low generation in the power generating stations in the state sector as well as in the CPSUs situated in the region. The annual energy consumption under the company is to the tune of 210 MU. The company s 33 KV system network comprises 55 nos. of 33/11 KV sub-stations with a total capacity of around MVA and 58 nos. of 33 KV lines having a total line length of about 1600 Ckt km. In the 11 KV category, there are around 244 nos. feeders having a total length of about Ckt. km. The company supplies power to its consumers through nearly 6740 nos. of distribution transformers of 11/0.4 KV category of various capacities ranging from 16 KVA to 1000 KVA. 10 th Five year Plan and Annual Plan : CAEDCL being a new company, it had an allocation of only Rs.14.0 Lacs under Tenth Five-year plan for system development works and it is expected that the works would be completed by 31 st March/07. Proposals for the 11 th Five year Plan and Annual Plan : An amount of Rs Lacs is proposed for the 11 th Five year plan by the CAEDCL for implementation of various distribution schemes under its jurisdiction covered by the four Circles of the Company. The schemes are of voltage level 33 KV and below and these are all new schemes. Out of the 11 th plan proposal, the amount proposed for the Annual Plan is Rs Lacs. Schemes proposed for both the 11 th Five year plan Annual Plan are grouped under two major categories - Normal Development Schemes and System Improvement Schemes. These are discussed below in detail: A. Normal Development Schemes: The Company meets up the power requirement of around 5 Lacs consumers spread across the Central Assam Districts by supplying power at the Consumers doorsteps through its system network of 33KV, 11KV and LT distribution lines and Sub-stations. There is a day-to-day increase in consumers number and connected load, which necessitates a regular up gradation and extension of the System capacities. For this purpose, works are taken up under Normal Development Scheme. Major schemes taken up under Normal Development are:- 1. Construction of new 33 / 11 KV Sub-stations 2. Construction of new 33 KV lines 3. Construction of new 11 KV lines 4. Construction of new LT lines 5. Installation of new 11 / 0.4 KV Sub-stations (Distribution Transformers) A.1. Construction of new 33 / 11 KV Sub-stations: Central Assam Electricity Distribution Company Limited Page 66 of 154

67 Many of the existing 33/11 KV sub-stations are already fully loaded and the system is in constant demand of new sub-stations due to the ever-increasing demand of load from new, as well as from the existing consumers. During the 11 th Five year plan, 19 nos. of new 33/11 KV sub-stations with a total capacity addition of MVA is proposed to be constructed with an estimated cost of Rs Lacs. Out of this, an amount of Rs Lacs is proposed for Annual Plan for construction of 6 nos. of 33/11 KV sub-stations with a total capacity of 52.5 MVA. A.2. Construction of new 33 KV lines: The Sub-transmission network under CAEDCl presently comprises a total length of around 1600 Km of 33 KV lines interconnecting the 33/11 KV sub-stations as well as connecting these sub-stations to the 132/33 KV Grid Sub-stations under AEGCL. Some of these lines are also used to supply power to high voltage bulk consumers. Construction of new 33 KV lines is essential to feed the new 33/11 KV sub-stations and also to evacuate power from the new 132/33 KV Grid sub-stations coming up in the state. A total length of 618 km of new 33 KV lines is proposed to be constructed with an estimated amount of Rs Lacs during the 11 th Five year plan. For Annual Plan , an amount of Rs Lacs is proposed for construction of 174 km of 33 KV lines. A.3. Construction of new 11 KV lines: There are at present about KM of 11 KV lines originating from the 33/11 KV sub-stations to feed the 11/0.4 KV Distribution transformers as well as to supply power to high voltage consumers under CAEDCL. During the 11 th Five year plan, a total length of Km of 11 KV lines is proposed to be constructed with an estimated cost of Rs Lacs. Out of this, an amount of Rs Lacs is proposed for Annual Plan for construction of 210 km of new 11 KV lines. A.4. Construction of new LT lines: LT lines are the lowest voltage level distribution lines at 440 Volt, originating from the 11/0.4 KV distribution transformers and supplying power to the consumers doorsteps. Every year new demands for electricity connections are coming up from new developed areas both in the urban and rural sector. This necessitates construction of new LT lines to feed power to these new consumers. A total length of 695 Km of new LT lines is proposed to be constructed with an estimated amount of Rs Lacs during the 11 th Five year plan. For Annual Plan , an amount of Rs Lacs is proposed for construction of 97 km of LT lines. A.5. Installation of new 11 / 0.4 KV Sub-stations (Distribution Transformers): The 11/0.4 KV Distribution Transformers or DTRs are the backbone of the distribution system for supplying electricity to the end users. Number of DTRs need to be increased constantly to meet up new load demand. As on the beginning of the current financial year, there were around 6750 DTRs under CAEDCL most of which are already operating on full load. For the 11 th Five year plan, installation of 1666 nos. of new DTRs is proposed with an estimated cost of Rs Lacs. Out of this, an amount of Rs Lacs is proposed for Annual Plan for installation of 348 nos of DTRs. B. System Improvement Schemes: Improvement of the distribution system through its up-gradation and strengthening is a must for improving the power supply quality and for reduction of technical losses associated with an ageing system. Works taken up under System Improvement scheme are:- 1. Revamping of 33/11 KV sub-stations 2. Renovation of 33 KV lines 3. Reconductoring of 11 KV lines 4. Reconductoring of LT lines 5. Conversion of LT lines 6. Augmentation of DTR 7. Civil works of new office building, boundary walls, Consumer Care Centre etc. 8. Replacement of poles B.1. Revamping of 33/11 KV sub-stations: Central Assam Electricity Distribution Company Limited Page 67 of 154

68 Due to growth of load in the areas covered by any particular 33/11 KV sub-station, the sub-station capacity needs to be augmented to avoid overloading of the transformers. A total 19 nos. of 33/11 KV sub-stations is proposed to be augmented and revamped with an estimated cost of Rs Lacs during the 11 th Five year plan. For Annual Plan , an amount of Rs Lacs is proposed for revamping of 8 nos. of 33/11 KV sub-stations. B.2. Renovation of 33 KV lines: With time and aging, the current carrying capacity of conductors gets reduced. This results in access heating of the conductor leading to a high transmission loss. An increase in the load demand aggravates the problem. As such, a periodic renovation of all power lines by way of replacement of the old conductors is most essential. A total length of 511 Kms of old 33 KV lines are proposed to be renovated by reconductoring and replacement of other essential accessories during the 11 th Five year plan at an estimated cost of Rs Lacs. For Annual Plan , an amount of Rs Lacs is proposed for renovation of 160 km of 33 KV line. B.3. Reconductoring of 11 KV lines: For replacement of aged and worn out conductors of existing 11 KV feeders in order to increase their load bearing capacities, an amount of Rs Lacs is proposed for a total length of 2303 km during the 11 th Five year plan. For Annual Plan , an amount of Rs Lacs is proposed for reconductoring of Km of 11 KV line. B.4. Reconductoring of LT lines: An amount of Rs Lacs is proposed for reconductoring of 592 Km of existing line during the 11 th Five year plan. For Annual Plan , 130 Km of LT line is proposed to be renovated by replacement of the aged conductors at a cost of Rs Lacs. B.5. Conversion of LT lines: In areas of sparse population, initially single-phase LT lines are installed with two conductors. In course of time, with new settlers coming in to these areas, load on the single-phase lines increases resulting in an overloading of line and an unbalanced loading of the three phase DTR from which such lines originate. In order to avoid these problems, such single-phase lines need to be converted to three phase four wire lines in a phased manner. During the 11 th Five year plan, a total length of 2143 Km of single phase LT lines is proposed to be converted to three phase lines at an estimated cost of Rs Lacs. Out of this, an amount of Rs Lacs is proposed for Annual Plan for conversion of 354 Km of LT lines. B. 6. Augmentation of DTR: DTRs get overloaded after a certain period of time due to increase in the connected load. Instead of installing a new DTR to cater to the increased demand, the existing DTR can be replaced by a higher capacity DTR. This saves both money and time, as except for the transformer and fuse switches, almost the whole substation structure remains unaltered. A total of 120 nos. of DTRs are proposed to be augmented during the 11 th Five year plan at an estimated cost of Rs Lacs. For the Annual Plan , an amount of Rs Lacs is proposed for augmentation of 31 nos. of DTRs. B.7. Civil works for new office building, boundary wall, earth filling, Customer Care Centres etc.: A total amount of Rs Lacs is proposed in the 11 th Five year plan for execution of various civil works including construction of new office buildings, boundary walls and earth fillings for sub-station yards and office complexes, construction of Customer Care Centers etc. under CAEDCL. Amount proposed for this purpose in the Annual Plan is Rs Lacs for completion of the civil works in a phased manner. B.8. Replacement of Poles : Many a poles have been damaged in different lines and those need immediate replacement in order to avoid any major disaster. For this purpose an amount of Rs Lacs has been earmarked in the 11 th Five Year Plan and the amount earmarked in the plan in Rs Lacs. Central Assam Electricity Distribution Company Limited Page 68 of 154

69 Physical Targets and Achievements ANNEXURE - II Sl. No A A.1 Tenth Plan Target Annual Plans ( to ) Actual Achievement Annual Plan Anticipated Achievemnt Eleventh Plan Target Annual Plan Target Normal Development Construction of new 33/11KV Sub-Station no. A.2 Construction of new 33 KV Lines km A.3 Construction of new 11 KV Lines km A.4 Construction of new LT Lines km A.5 Installation of new 11/0.4 KV S/S no. A.6 Item Installation of new 33 KV UG Cable Lines B. System Improvement Unit B.1 Revamping of 33/11KV S/S no. B.2 Renovation of 33 KV Line km B.3 Reconductoring of 11KV Lines km B.4 Reconductoring of LT lines km B.5 Conversion of LT Line km B.6 Augmmentation of DTR no. B.7 Replacement of poles no. Tenth Five Year Plan ( ) Tenth Plan Anticipated Achievement (col 4+5) km Eleventh Five Year Plan ( ) Remarks CAEDCL being a new company, it had no allocation under Tenth Five year plan and as such, there is no 10th plan Target or achievement. However, it has an allocation of Rs Lakh under Annual Plan , against which, the anticipated physical achive Central Assam Electricity Distribution Company Limited Page 69 of 154

70 Sl. No. A A.1 Implementing Agency Total ANNEXURE - I (Contd.) (Rs. in Lakhs) Eleventh Five Year Plan Proposed Outlay (at prices) Eleventh Plan( ) Annual Plan ( ) Continuing Schemes New Schemes Total Continuing Schemes Normal Development Central Assam Electricity Construction of new 33/11KV Sub- Distribution Co, Ltd. (Public Station Sector Enterprises) New Schemes A.2 Construction of new 33 KV Lines do A.3 Construction of new 11 KV Lines do A.4 Construction of new LT Lines do A.5 Installation of new 11/0.4 KV S/S do A.6 Major Heads/ Minor Heads of Development (Scheme wise) Installation of new 33 KV UG Cable Lines do Total Normal Development B. System Improvement 0 0 B.1 Revamping of 33/11KV S/S do B.2 Renovation of 33 KV Line do B.3 Reconductoring of 11KV Lines do B.4 Reconductoring of LT lines do B.5 Conversion of LT Line do B.6 Augmmentation of DTR do B.7 Replacement of poles do B.8 Civil works for new office building, Boundary wall, Earth filing, Customer Care Centre etc. State Government/ Public Sector Enterprises/ Local Bodies do Total System Impovement GRAND TOTAL Central Assam Electricity Distribution Company Limited Page 70 of 154

71 Annexure II: Report on Cost to Serve Report on Cost to serve for Upper Assam, Central Assam and Lower Assam Distribution Companies For the purposes of filing Tariff Proposal for FY Introduction Electricity Act 2003 ( EA03 ) requires Electricity Regulatory Commissions, under section 61(g), to ensure that the tariff progressively reflects the cost of supply ( CoS ) of electricity, and also reduces and eliminates cross-subsidies within the period to be specified by the Appropriate Commission. Thus CoS is required for identification of cross-subsidy and develop tariff structures that progressively addresses the question of cross-subsidy. Assam Electricity Regulatory Commission while passing the tariff orders for FY 07 has fixed the tariffs for each consumer category based on the cost of service model. Besides, the commission has directed the discoms to file their tariff applications henceforth on the basis of cost of service for each consumer category. The tariff application now made by the discoms for FY-08, considers the cost of service for each category. Following methodology was adopted by the discoms for arriving at the Cost of service for each category. 2. Conceptual framework 2.1 What is Cost to Serve? Cost of service study is the basis for systematic allocation of costs to various category/class of consumers. It distributes costs to different category of consumers based on how the consumers cause the costs. It also shows how costs are recovered from consumers with in each consumer category. CoS Model is developed to carryout comparative cost/revenue analysis that would enable utilities to develop various rate alternatives. This model does not dictate the revenue requirement as there as many other socioeconomic considerations in determining tariffs. 2.2 Why costs vary by class? Location of the consumer-point where he takes service How he uses electricity Demand/energy relationship Time of use of electricity Socio-economic factors 2.3 Approaches to Cost to Serve Demand based approach - Single coincident peak method - Seasonal peak method - Sum of 12 monthly coincident peak method - Multiple coincident peak method - NCP method Energy based approach Customer cost allocation approach Time differentiated approach etc. Central Assam Electricity Distribution Company Limited Page 71 of 154

72 2.4 Methodology Embedded cost: Evaluates costs based the facilities already in place from the oldest to the most recent to make up the revenue requirement of the utility. Marginal cost: Evaluates costs based on those associated with serving an additional load on the system. Typically marginal cost methodology is followed in power surplus scenario & where Time of the day (ToD) tariff is in place. Generally, in CoS study, historical costs are used. This suffers from the lacunae of not accounting for the inflation and also true economic cost of the electricity delivered to consumer. Marginal costing would be a better approach. However, given the current tariff structure and low head rooms in tariffs to levy and collect, marginal pricing could only lead to loss booking in the Discom s accounts. Hence for the purpose of cost to serve exercise, historical costs/arr numbers are used. 3. CoS processes CoS study requires the following processes: Functionalisation of costs - Generation costs - Transmission costs - Distribution costs Classification of costs - Demand related - Energy related - Customer related costs Allocation of costs - Domestic - Commercial - Industrial - Agriculture etc., The various processes involved in developing the CoS model are captured here below: Processes involved in a typical Cost to Serve Study ERC Functionalise Assets Generation Transmission Classify Assets Demand Energy System data Distribution Customer Allocate Assets Domestic Industrial Commercial Agriculture Tariff design Technical data Functionalise costs Generation Transmission Distribution Classify costs Demand Energy Customer Allocate costs Domestic Industrial Commercial Agriculture Other data Data gathering Step-1 Step-2 Step-3 Results Central Assam Electricity Distribution Company Limited Page 72 of 154

73 4. Detailing function wise Fixed assets & costs Cost to serve exercise involves collection of detailed assets & costs for each of the function in value chain viz. Generation/ power purchase, load dispatch, transmission wires, distribution wires, customer service etc. More collection of parameters across each function would ensure better understanding of the cost-volume relationship. This would lead to better rationale for allocating the costs. In the absence of details for fixed assets for 33 KV, 11 KV, LT net work and retail supply, fuctionalization of assets for each discom has been made on the basis of quantitative data viz., length of line, connected load etc by considering appropriate weightages. Segregation of fixed assets for Transmission as well as distribution companies is made as follows: Technical data - HT LT line Cost in lakhs/km of line Conversion factor Notional Length after applying CF for fixed Transco AEGCL UAEDCL CAEDCL LAEDCL Discoms (25% of Fixed Assets under Land, Buildings, P&M, Office equipments, Vehicles & F&F is considered as retail supply assets and rest HT line ( in KMs) is allocated for distribution wires business) 400 KV KV , KV ,394 1, KV , KV ,480 1,584 1, KV ,229 10,293 9,749 LT line (in Kms) LT line ,526 13,982 15,000 Discoms 2,960 3,168 2, KV 8,121 9,058 8, KV 14,526 13,982 15,000 LT net work Weightage % (To the overall assets) 50% 50% 50% 50% Technical data - Sub- stations No. of sub-sations Cost in lakhs/sub-stn and /MVA of Transformer capacity Conversion factor Notional Length after applying CF for fixed assets cost allocation AEGCL UAEDCL CAEDCL LAEDCL 400 KV 7, KV 3, KV KV KV No. of Power Transformers KV KV KV KV KV Transformers capacity in MVA KV KV , KV , KV KV Connected load (KW)* HT 33 KV & above HT 11 KV LT HT 33 KV HT 11 KV LT Weightage % 50.00% 50% 50% 50% Central Assam Electricity Distribution Company Limited Page 73 of 154

74 On the above apportionment logic, the assets have been segregated voltage class-wise as follows:- Glossary for Asset codes Code Description 10.1 Land & Rights 10.2 Building 10.3 Hydraulic 10.4 Other Civil Works 10.5 Plant & Machinery 10.6 Lines & Cable Network 10.7 Vehicles 10.8 Furniture & Fixtures 10.9 Office Equipment Transco -Apportionment based on length of line and Transformers capacity Asset Group Abstract ( Rs. In Crs.) 400 KV 220 KV 132 KV 66 KV Total Gross fixed assets as at Total Percentage 0% 31% 55% 13% 100% Upper Assam Apportionment based on length of line and Connected load Asset Group Abstract ( Rs. In Crs.) 33 KV 11KV LT network Retail supply Gross fixed assets as at Total Percentage 7% 32% 52% 8% 100% Total % with in wires 8% 35% 57% Central Assam Electricity Distribution Company Limited Page 74 of 154

75 Central Assam Asset Group Apportionment based on length of line and Connected load Abstract ( Rs. In Crs.) Gross fixed assets as at KV 11KV LT network Retail supply Total Total Percentage 9% 29% 53% 8% 100% % with in wires 10% 32% 58% Lower Assam Asset Group Apportionment based on length of line and Connected load Abstract ( Rs. In Crs.) Gross fixed assets as at KV 11KV LT network Retail supply Total Total Percentage 6% 26% 58% 9% 100% % with in wires 7% 29% 64% Functionalization of costs has been made on the basis of the following apportionment logic. a) Repairs and Maintenance-on the basis of Fixed Asset % applicable to each voltage class b) Employee costs on the basis of broad analysis of employees effort in % terms for each voltage c) A&G expenses partly on the basis of fixed assets allocation and partly on the basis of employee costs allocation i.e.50% cost on Assets% & 50% employees cost basis. d) Depreciation on the basis of % allocation of fixed assets e) Interest and Finance charges on the basis of percentage of fixed assets allocated to each voltage category. f) Interest on working capital on the assumption that 100% is towards to retail supply business. g) Interest on consumer security deposit on the assumption that 100% is related to retail supply business h) Other debits on the assumption that 50% of costs are allocated at wires ratio and balance as supply related. Central Assam Electricity Distribution Company Limited Page 75 of 154

76 5. System data Following table shows the peak demand and the availability for the Assam State as a whole for the last few years. Peak Power demand and availability growth: Peak Year Date hour Demand(MW) Peak Availability(MW) %Growth in Demand %Growth in Availability : /12/ : % -5.85% /03/ : % 8.82% * 14/10/ : % 8.70% (upto ) Based on the growth of system peak demand over the years, the likely peak demand for the years and have been estimated for the State as a whole. Thereafter based on the energy consumption of each discom, and the load factor for the state as a whole, the peak demand for each discom has been worked out. Details are as under:- System data MW Unrestricted/projected unrestricted peak Recorded/projected peak System load factor 69.06% 66.29% 69.18% Coincident Peak Demand of each DISCOM UAEDCL CAEDCL LAEDCL Total demand of discoms Others Inter State Supplies Wheeling Grand Total (MW) Transmission Losses(MW) Total system peak Development of demand and energy profile of consumers In developing the profile, the following activities are required to be considered. Category wise load profile identification of typical load curves for each consumer category across the State. For this sample, load survey meters need to be fixed and monitored over a period of time. This would present better load curves, duration and consumption pattern, which can then be extrapolated to the population. As this approach would require long lead time (since such load research capabilities need to be developed in discoms) and hence may not be pragmatic in the time frame envisaged, it was decided to capture the sample feeders data from the predominant feeders of each category of consumers. Since most of the feeders would serve multiple categories, feeders which serve a predominant category (say 50%) would be labeled accordingly. Example. A feeder serving largely domestic load was called as domestic feeder and so on for the purpose of categorization. Central Assam Electricity Distribution Company Limited Page 76 of 154

77 Based on such categorization, load curves, load duration and consumption of particular feeder was collected over the following days for the FY and analyzed to arrive at a profile of a particular consumer category. Festival days Holidays Working days Hourly data was collected and analyzed for 38 feeders. Category-wise and discom-wise details are furnished below: Category Total No. of feeders UAEDCL CAEDCL LAEDCL Domestic Commercial Industrial Water works Coffee, Tea General Bulk Supply Total Results of sample feeders are shown. Analysis of voltage wise losses The difference between energy input and sales (metered + assessed) are the total loss in the system. The difference between the technical loss and the total loss is treated as commercial loss and is added to the category wise sales, to arrive at consumption. Since, the break up technical and commercial losses are not available, for the purpose of this exercise, the voltage class wise commercial losses considered (out of the total losses at that voltage level) are noted below:- Voltage level % of commercial losses considered (out of the total losses in that voltage) 33 KV 0% 11 KV 20% LT net work 50% Central Assam Electricity Distribution Company Limited Page 77 of 154

78 Discom-wise, voltage class wise loss details have been considered as follows: UAEDCL CAEDCL LAEDCL Discom ,202 1,060 1,614 Input to Discom (a) Input at 33 kv (MU) 1, , , (b) Sales at 33 kv (MU) (c) Loss at 33 kv (MU) (d) % loss 3.42% 3.20% 2.61% (e) Technical loss (MU) (f) Commercial loss (MU) (g) Technical loss % (e/a) 3.42% 3.20% 2.61% (h) Commercial loss % (f/a) 0.00% 0.00% 0.00% (a) Input at 11 kv (MU) 1, , (b) Sales at 11 kv (MU) (c) Loss at 11 kv (MU) (d) % loss 10.00% 9.40% 7.27% (e) Technical loss (MU) (f) Commercial loss (MU) (g) Technical loss % (e/a) 8.00% 7.52% 5.82% (h) Commercial loss % (f/a) 2.00% 1.88% 1.45% Input at LT net work (MU) , Sales (MU) LT Loss (MU) (d) % loss 22.49% 21.11% 17.39% (e) Technical loss (MU) (f) Commercial loss (MU) (g) Technical loss % (e/a) 11% 11% 9% (h) Commercial loss % (f/a) 11% 11% 9% Overall Discom loss Input (MU) 1,202 1,060 1,614 Sales (MU) ,265 Total losses (MU) Loss % 28.35% 26.55% 21.60% Technical loss(mu) Commercial loss (MU) % Technical loss 18.61% 17.43% 14.18% % Commercial loss 9.74% 9.12% 7.42% Determination of coincident peak demands for various categories: This is a method wherein the coincidence of the consumer category peak demand to that of the state/discom is measured to allocate the costs. This measure, in typical system planning method, shows the marginal cost that a utility incurs when a category causes the peak to increase. This is that peaking generation that needs to be dispatched to meet the additional demand. However, the issues that always exercise planners are:- o Is the measure of a single peak correct (which could have been caused by variety of factors) or a better curve-fitting of all half-hour peaks over a year or so should be considered? o Should any time peak demand of various categories should be integrated to understand the base capacity contracted? o What is the marginal station in the system that will be dispatched to meet the demand? Central Assam Electricity Distribution Company Limited Page 78 of 154

79 o What is the effect of restrictions that distort the demand? For example, it s always argued is some States that have predominantly agriculture loads, that the hours of supply determine that the agriculture load is off-peak and hence finds a lower share in peak demand. However, some of the field analysis point out that agriculturists use converters to tap the single-phase supply itself to draw power during other hours including peak, in which case determination of coincidence will prove to be tricky. However, for the purpose of this exercise, based on the sample feeder s data and the results, the consumer category peak demand to that of the state/discom has been arrived at to allocate the costs. We have considered the single CP and NCP methods for allocation of cost. 7. Results of load profiles Based on the load profiles as per sample feeders, the CP and NCP for each category has been worked out. Since the certain minor corrections have made to the CF of certain categories to match the aggregate of all load profiles to the CP of each discom. Details of calculation details are shown. Central Assam Electricity Distribution Company Limited Page 79 of 154

80 Load Factors & Coincident Factors (LF_CF) UAEDCL Tariff Category Consumer category Load factor (as per sample feeders) LLF CF NCP MW+ Loss CP-MW LT SUPPLY - 400/230 V LT Jeevan Dhara 66% 50% 84% LT Domestic A 66% 50% 87% LT Domestic B 66% 50% 87% 3 2 LT Commercial 57% 39% 78% LT General Purpose 52% 34% 100% LT Public lighting 52% 34% 100% 1 1 LT Agriculture 65% 49% 39% 0 0 LT Industries (Rural) 51% 33% 51% 4 2 LT Industries (Urban) 51% 33% 51% 3 1 LT TOTAL HT SUPPLY 11KV HT Domestic 66% 50% 87% 5 5 HT Commercial 57% 39% 78% 4 3 HT Water works 65% 49% 77% 1 1 HT Bulk Supply(Govt.Educ) 40% 23% 34% 2 1 HT Bulk Supply(Others) 51% 33% 48% 15 7 HT HT Small Industries 51% 33% 51% 3 2 HT HT-I Industries 51% 33% 51% 2 1 HT HT-II Industries 51% 33% 51% 7 3 HT Tea, Coffee & Rubber 62% 45% 86% HT Oil & Coal 51% 33% 51% 9 4 HT HT Irrigation 65% 49% 39% 0 0 HT TOTAL HT SUPPLY -Others HT HT consumers -33 KV 63% 47% 73% HT HT consumers -66 KV 63% 47% 73% 2 2 HT HT consumers -132 KV 63% 47% 73% 0 0 HT HT consumers -220 KV 63% 47% 73% 0 0 HT HT consumers KV 63% 47% 73% HT OTHERS TOTAL HT +EHT TOTAL Grand Total Central Assam Electricity Distribution Company Limited Page 80 of 154

81 Load Factors & Coincident Factors (LF_CF) CAEDCL Tariff Category Consumer category Load factor (as per sample feeders) LLF CF NCP MW+ Loss CP-MW LT SUPPLY - 400/230 V LT Jeevan Dhara 66% 50% 84% 9 7 LT Domestic A 66% 50% 92% LT Domestic B 66% 50% 92% 1 1 LT Commercial 57% 39% 86% LT General Purpose 52% 34% 100% 9 9 LT Public lighting 52% 34% 100% 1 1 LT Agriculture 65% 49% 39% 2 1 LT Industries (Rural) 51% 33% 51% 5 3 LT Industries (Urban) 51% 33% 51% 4 2 LT TOTAL HT SUPPLY 11KV HT Domestic 66% 50% 87% 0 0 HT Commercial 57% 39% 78% 3 3 HT Water works 65% 49% 77% 4 3 HT Bulk Supply(Govt.Educ) 40% 23% 34% 2 1 HT Bulk Supply(Others) 51% 33% 53% HT HT Small Industries 51% 33% 51% 1 1 HT HT-I Industries 51% 33% 51% 2 1 HT HT-II Industries 51% 33% 51% HT Tea, Coffee & Rubber 62% 45% 86% HT Oil & Coal 51% 33% 51% 0 0 HT HT Irrigation 65% 49% 39% HT TOTAL HT SUPPLY -Others HT HT consumers -33 KV 63% 47% 73% 13 9 HT HT consumers -66 KV 63% 47% 73% 0 0 HT HT consumers -132 KV 63% 47% 73% 5 3 HT HT consumers -220 KV 63% 47% 73% 0 0 HT HT consumers KV 63% 47% 73% HT OTHERS TOTAL HT +EHT TOTAL Grand Total Central Assam Electricity Distribution Company Limited Page 81 of 154

82 Load Factors & Coincident Factors (LF_CF) LAEDCL Tariff Category Consumer category Load factor (as per sample feeders) LLF CF NCP MW+ Loss CP-MW LT SUPPLY - 400/230 V LT Jeevan Dhara 66% 50% 84% 3 3 LT Domestic A 66% 50% 77% LT Domestic B 66% 50% 77% LT Commercial 57% 39% 78% LT General Purpose 52% 34% 100% LT Public lighting 52% 34% 100% 2 2 LT Agriculture 65% 49% 39% 0 0 LT Industries (Rural) 51% 33% 51% 7 3 LT Industries (Urban) 51% 33% 51% 5 3 LT TOTAL HT SUPPLY 11KV HT Domestic 66% 50% 84% 2 2 HT Commercial 57% 39% 78% HT Water works 65% 49% 77% 4 3 HT Bulk Supply(Govt.Educ) 40% 23% 34% 13 4 HT Bulk Supply(Others) 51% 33% 49% HT HT Small Industries 51% 33% 51% 3 1 HT HT-I Industries 51% 33% 51% 9 5 HT HT-II Industries 51% 33% 51% HT Tea, Coffee & Rubber 62% 45% 86% 5 4 HT Oil & Coal 51% 33% 51% 1 0 HT HT Irrigation 65% 49% 39% 2 1 HT TOTAL HT SUPPLY -Others HT HT consumers -33 KV 63% 47% 73% 7 5 HT HT consumers -66 KV 63% 47% 73% 0 0 HT HT consumers -132 KV 63% 47% 73% 7 5 HT HT consumers -220 KV 63% 47% 73% 0 0 HT HT consumers KV 63% 47% 73% - - HT OTHERS TOTAL HT +EHT TOTAL Grand Total Central Assam Electricity Distribution Company Limited Page 82 of 154

83 8. Classification of Fixed Assets and costs (a) Classification of fixed assets:- Classification of fixed assets towards demand, energy and customer related activities have been on the basis of judgment. While applying the judgment, the classification methodology followed by other states has been considered. UAEDCL Distribution A/C Group Classification methodology Distribut ion- 33 KV Distribution- 11 KV Distributio n-lt wires Distrib ution- Retail Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Land & 10.1 Based on100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Rights judgement Buildings do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% Hydraulic works do- 100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Civil works do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% P&M do- 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% Lines, do- 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% cables, networks Vehicles do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% F&F do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% Office do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% equipment Less Grants & 100% 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% subsidies demand related Consumer contributio ns 100% demand related 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% Total asset base with adjustments 81% 0% 19% 77% 0% 23% 74% 0% 26% 51% 0% 49% CAEDCL Distribution A/C Group Classification methodology Distribut ion- 33 KV Distribution- 11 KV Distributio n-lt wires Distrib ution- Retail Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Land & 10.1 Based on Rights judgement 100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Buildings do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% Hydraulic doworks 100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Civil works do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% P&M do- 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% Lines, docables, networks 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% Vehicles do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% F&F do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% Office doequipment 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% Less Grants & 100% subsidies demand related 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% Central Assam Electricity Distribution Company Limited Page 83 of 154

84 Consumer contributio ns 100% demand related 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% Total asset base with adjustments 85% 0% 15% 81% 0% 19% 76% 0% 24% 56% 0% 44% LAEDCL Distribution A/C Group Classification methodology Distribut ion- 33 KV Distribution- 11 KV Distributio n-lt wires Distrib ution- Retail Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Demand Energy Cus. Land & 10.1 Based on Rights judgement 100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Buildings do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% Hydraulic doworks 100% 0% 0% 100% 0% 0% 100% 0% 0% 40% 0% 60% Civil works do- 50% 0% 50% 50% 0% 50% 50% 0% 50% 40% 0% 60% P&M do- 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% Lines, docables, networks 90% 0% 10% 85% 0% 15% 80% 0% 20% 60% 0% 40% Vehicles do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% F&F do- 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% Office doequipment 40% 0% 60% 30% 0% 70% 20% 0% 80% 20% 0% 80% Less Grants & 100% subsidies demand related 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% Consumer contributio ns 100% demand related 100% 0% 0% 100% 0% 0% 100% 0% 0% 100% 0% 0% Total asset base with adjustments 86% 0% 14% 82% 0% 18% 78% 0% 22% 56% 0% 44% (a) Classification of costs:- Structured formats have been developed to capture the costs so that the cost-volume relationship can be established. As there are no set or prescribed rules for functionalisation and classification of costs, it depends on the experience and judgement of the utility to classify costs in the best manner possible. The cost classifications generally used in cost allocation studies are indicated below: Sl. NO Function Typical cost classification 1 Generation or Power Demand related Purchase cost Energy related 2 Transmission cost Predominantly demand related 3 Distribution cost Demand related Energy related Customer related Power purchase cost generally will have two elements i.e., fixed cost and variable cost. The fixed cost include costs associated with the plant capacity i.e. depreciation, interest relating to capital investment for the plant, income tax, rate of return etc. They are treated as demand related. Fuel cost, fuel related costs & interest on working capital are treated as variable or energy related costs. Central Assam Electricity Distribution Company Limited Page 84 of 154

85 The transmission system is designed to handle certain peak demand and as such majority of the costs except the interest on working capital are fixed in nature & as such they can be treated as demand related. The distribution system will have costs associated with all the three components. Demand related costs include, deprecation, interest on capital borrowings, income tax, RoR. Interest on working capital is considered as energy related. Customer related costs generally include R&M expenses, Employee costs & other debits that are directly attributable to consumers. Unless a detailed study of each these costs and their relation to demand, energy and customer functions are identified, true classification of costs may not possible. However, for the purpose this study, given the constraints, an effort has been made to properly functionalise and classify the costs. A classification matrix has been developed for each discom. Classification methodology used for one discom is shown here below: 9. Allocation of costs Costs, as collected/classified above, are allocated to various consumers using demand & energy profile. This approach is used to eliminate biases that could creep in allotting either only on demand or energy basis. Modules capture the allocation of costs made to each class of consumer of respective discoms. The revenue requirement classification for each distribution company is shown below:- Central Assam Electricity Distribution Company Limited Page 85 of 154