Before the MP Electricity Regulatory Commission 5 TH Floor, "Metro Plaza", E-5, Arera Colony, BHOPAL.

Transcription

1 Before the MP Electricity Regulatory Commission 5 TH Floor, "Metro Plaza", E-5, Arera Colony, BHOPAL. Petition of 2018 In the Matter of - Applicant - Filing of application for True-up of the Transmission Tariff for FY Madhya Pradesh Power Transmission Company Ltd., (MPPTCL), Shakti Bhawan, Jabalpur (MP). Respondents - i. MP Poorva Kshetra Vidyut Vitaran Company Ltd., Shakti Bhawan, Jabalpur. ii. MP Madhya Kshetra Vidyut Vitaran Company Ltd., Govindpura, Bhopal. iii. MP Paschim Kshetra Vidyut Vitaran Company Ltd., Pologround, Indore. iv. MP Audyogik Kendra Vikas Nigam, Indore (SEZ, Pithampur). v. West Central Railways, Jabalpur on its own behalf and on behalf of Zonal Railways, having Traction Sub-stations in the State of Madhya Pradesh. The above named applicant respectfully begs to submit as hereunder; CHAPTER I PREAMBLE - The applicant is a Company registered under Companies Act 1956 on with its head quarter at Jabalpur, for the purpose of undertaking the Intra-State Transmission activities in the State of Madhya Pradesh. The activities of Generation, Transmission and Distribution have been looked after earlier in the State of Madhya Pradesh by an integrated utility i.e. Madhya Pradesh State Electricity Board (MPSEB) constituted under Section 5 of the Electricity (Supply) Act The Government of Madhya Pradesh enacted Madhya Pradesh Vidyut Sudhar Adhiniyam In the spirit of the said Act, the unbundling process of the MPSEB was initiated by registering the following five Companies; (i) Madhya Pradesh Power Generating Co. Ltd., Jabalpur (MPPGCL) (GENCO). (ii). Madhya Pradesh Power Transmission Co. Ltd., Jabalpur (MPPTCL) (TRANSCO). (iii). Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Ltd. Jabalpur (MPPKVVCL) (EAST DISCOM). (iv). Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Ltd. Bhopal. (MPMKVVCL) (CENTRAL DISCOM). (v). Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. Indore (MPPKVVCL) (WEST DISCOM). To look after the Electricity Generation activities in the State of Madhya Pradesh. To look after the Electricity Transmission activities in the State of Madhya Pradesh. To undertake distribution of Electricity in Eastern part of MP (Board s Jabalpur, Sagar and Rewa Regions). To undertake distribution of Electricity in Central part of MP (Board s Bhopal and Gwalior Regions). To undertake distribution of Electricity in Western part of MP (Board s Indore and Ujjain Regions). 1

2 Above mentioned Five Companies, which were registered in November 2001, entered into an Operation Management Agreement with the MPSEB and worked as agents of the MPSEB from July 2002 to May The Companies started independent functioning w.e.f under a Cash Flow Mechanism as per the State Government order dated The MPPTCL has been separated from Cash Flow Mechanism w.e.f A Sixth Company, namely the MP Power Trading Company Ltd., has also been incorporated as per the State Government s notification dated specifying functions of TRADECO for the purchase of Electricity in bulk from Generating Companies / Traders, from within and outside the State and supply Electricity in bulk to the Electricity Distribution Companies in the State of Madhya Pradesh. The Company has now been named as MP Power Management Company Ltd., and entrusted with certain coordinating functions also. 1.1 SUBSEQUENT EVENTS - The important events related to Power Sector in MP, which took place after formation of Companies, are mentioned hereunder; 1.2 ENACTMENT OF ELECTRICITY ACT The Electricity Act 2003 has been enacted on Section-62 of the Act provides for determination of Tariff for Transmission of Electricity by the appropriate Commission. 1.3 TRANSFER SCHEMES - First Transfer Scheme was notified on 1 st October 2003, regulating the transfer and vesting of functions, properties and interests, rights and liabilities of the MPSEB in the State Government and re-transfer and re-vesting thereof by the State Government in the Companies. The first Transfer Scheme has been amended vide notification 4003-FRS , Bhopal, dated 13 th June 2005, providing for the arrangements to discharge Terminal Benefit liabilities. The State Government vide notification 3474/FRS/17/2002 dated 3 rd June 2006 notified Madhya Pradesh Electricity Reforms Transfer Scheme Rules 2006, including Madhya Pradesh Power Trading Company as a transferee and modifying functions and Cash Flow Mechanism accordingly. The Company is now named as MP Power Management Company Limited. 1.4 STATE GOVERNMENT ORDER DATED 31 ST MAY The State Government vide order dated 31 st May 2005, notified the provisional Opening Balance Sheets of the Companies as on The Operation Management Agreement between MPSEB and Companies stood terminated, and Companies started independent functioning w.e.f under a Cash Flow Mechanism. The final Opening Balance Sheet as on has been subsequently notified on 12 th June FINAL OPENING BALANCE SHEET - The Government of Madhya Pradesh notified the final Opening Balance Sheet of MPPTCL and other Companies vide order 4068-FRS XIII Bhopal dated 12 th June 08. A copy of order along with Balance Sheet for MPPTCL is enclosed as Annexure-I. 2

3 The stipulations made in the order dated 12 th June 08 are reproduced hereunder; (a). The final Opening Balance Sheet of the Companies appended to this order shall be final & binding on all the stake holders. (b). The Companies and Residual Madhya Pradesh State Electricity Board shall take necessary steps to appropriately intimate the changes, vis-à-vis the Provisional Opening Balance Sheets notified on 31 st May 2005, to all concerned statutory authorities and other Stake holders. (c). RAO-wise account code-wise details shall be provided to the Companies by Chief (Finance & Accounts), MPSEB. (d). The Guarantees extended by the State Govt. to various lenders, in respect of loans given by them to MPSEB, shall stand transferred in the name of the Company to whom such loans are allocated as per the final Opening Balance Sheets and these guarantees shall continue to be valid on the same terms & conditions, till the final discharge of the loan liability by the Company. (e). The Cash Flow Mechanism among the Residual MPSEB & the successor companies of MPSEB as prevailing on the date of this notification shall continue to operate till further orders. (f). There is no such item as Loan from MPSEB to the Companies in the final Opening Balance Sheets, therefore the directions earlier issued vide Energy Department s letter 300/13/2006 dated 18 th January 2006 stands withdrawn. (g). The assets of SLDC (Block Value ` lakh) are included in the Assets of Madhya Pradesh Power Transmission Company Limited. SLDC is not an Independent Company as yet and no separate Opening Balance Sheet is being notified for SLDC. (h). Loan amounting to ` 119 Crores was sanctioned by PFC under generation scheme for Marikheda HEP and allocated to MPPGCL. Out of this loan, ` 5.53 Crores relates to Transmission works which shall be payable by MPPTCL to MPPGCL on the same terms and conditions. (i). Liabilities towards SLR & PP bonds have been allocated to the Companies. However, the servicing of these liabilities shall continue to be done by MPSEB on behalf of the Companies. For accounting of these liabilities in the books of the companies, the MPSEB would provide all necessary information to the Companies regarding name of investors, amount of investment, the interest to be provided and payments falling due etc. from time to time alongwith intimation of settlement of liabilities as and when the (j). same take place for different investors. Company-wise allocation of Additional Contingent liabilities on account of Govt. of India order dated 4 th November 2004 in respect of bifurcation of assets & liabilities of MPEB between MPSEB & CSEB shall be separately notified by the State Govt. after final orders of the Supreme Court in O.-06/04. (k). The past unfunded pension liabilities of pensioners and employees of MPSEB existing as on 31 st May 2005 are to be assessed by Actuarial valuation and is therefore retained with Residual MPSEB for the time being. The actual pension/ gratuity payment shall be claimed by MP Power Transmission Co. Ltd., in its ARR till requisite fund equivalent to the past unfunded liabilities is built up in the manner provided in Rule 10 & 11 notified earlier vide 4003-FRS dated 13 th June (l). The matters pertaining to administration and accounting among Companies as well as statutory authorities regarding GPF, GTIS, SCLIS etc. shall continue to be looked after by MP Power Transmission Co. Ltd. 3

4 1.6 TRANSMISSION SERVICE AGREEMENT - In compliance to Clause 5 of the State Government order dated , the Five Companies and MPSEB entered into a Transmission Service Agreement on 17 th June 2005, as per the draft approved and forwarded by MPSEB to the State Government. The Transmission Service Agreement dated 17 th June 05 provides The Tariff and terms & conditions for the Transmission services to be rendered by the Transco, shall be as per the Tariff determined by the State Commission from time to time. The MPPTCL has therefore raised the bills of Transmission charges since as per the Tariff determined by the Hon ble Commission from time to time. Hon ble Commission directed to enter into a long term Transmission Service Agreement. Accordingly, the Petitioner MPPTCL has entered into Transmission Service Agreement with the three Distribution Licensees on dates indicated hereunder; (i). East Discom (ii). Central Discom (iii). West Discom An agreement dated also exists between MPSEB and MPAKVN for SEZ, Pithampur which as now stands between MPPTCL and MPAKVN, as per Transfer Scheme. MPAKVN is a Long Term Open Access customer for MPPTCL, for its Special Economic Zone campus at Pithampur, Distt. Dhar. Further, West Central Railways (WCR), on behalf of Indian Railways entered into Bulk Power Transmission Agreement, with MPPTCL on for transmission of power to the Traction Sub-Station (TSS) points of Railways in MP effective from for power schedule. The copies of executed agreements have already been submitted to Hon. MPERC. 1.7 NOTIFICATION OF TARIFF REGULATIONS FOR CURRENT CONTROL PERIOD Hon ble Commission has notified the MPERC (Terms and conditions for Determination of Transmission Tariff) (Revision-III) Regulations, 2016 {RG-28 (III) of 2016} on , which shall remain in force for three years over a period of April 2016 to March The instant True-up application for is governed by this Regulation NOTIFICATION OF REGULATIONS ON TERMINAL BENEFITS Hon ble Commission notified on the MPERC (Terms & Conditions for allowing Pension and Terminal Benefit Liabilities of personnel of the Board and successor Entities) Regulations, 2012 (G-38 of 2012) to prescribe for claim of Terminal Benefits of the Companies. 1.8 TARIFF PETITIONS AND ORDERS - The references of Transmission Tariff Petitions along with other related petitions and orders thereof filed/ ordered during the period are tabulated hereunder; 4

5 Particulars Petition for Determination of Multi Year Transmission Tariff for the control period FY to FY based on the tariff application filed by Madhya Pradesh Power Transmission Company Limited (MPPTCL), Jabalpur under Section 62 and 86(1)(a) of the Electricity Act, Reallocation of Transmission capacity under MYT order for FY to FY on account of allocation of 200MW power to Indian Railways (Deemed License). Petition for True up of Transmission Tariff for year Petition for True up of Transmission Tariff for year Petition Number Date of Filing Date of Order 02 of of of of CONSIDERATION OF FINAL OPENING BALANCE SHEET - On notification of the final Opening Balance Sheet (as on ), on 12 th June 08, all the True-ups up to were based on it. The instant Petition i.e. True up for FY is also in continuation of the same PETITION FOR TRUE-UP FOR FY The instant Petition for True-up for is based on Annual Accounts of the Company for year ********* 5

6 CHAPTER II INTRA-STATE TRANSMISSION CAPACITY 2.1 INTRA-STATE TRANSMISSION SYSTEM - Intra-State Transmission System of MPPTCL comprises of EHV Lines and Substations of various voltages. Position as on and is tabulated hereunder; Voltage Level EHV Lines Ckt. KMs As on As on EHV Sub-Stations Number MVA Capacity EHV Lines Ckt. KMs EHV Sub-Stations Number MVA Capacity KV KV KV KV TOTAL * * Total 345 Nos. S/s is inclusive of 01 upgraded 220 KV S/s. 2.2 TRANSMISSION SYSTEM CAPACITY The Transmission System capacity of Intra-State Transmission System of MPPTCL is allocated to the Long Term Open Access customers including the Distribution Licensees. The Transmission System capacity is therefore determined as per the MPERC (Terms and conditions for Intra-State Open Access in MP) Regulations, The Average Capacity of Intra-State Transmission System is defined as; Average capacity means the average capacity in MW served by the Intra-State Transmission System of the Transmission Licensee in the previous financial year, and shall be the sum of the generating capacities, connected to the Transmission System and contracted capacities of other Long Term transactions handled by the system of Transmission Licensee. The power corresponding to Intra-State Generating capacity is available to Transmission System after deducting the auxiliary consumption. Similarly, power from the Central Sector Generating Stations is available at M.P. periphery after deduction of auxiliary consumption and losses in Inter-State Transmission System. While determining Transmission System capacity for the earlier control period, the above mentioned fact has been taken into consideration. The Transmission System capacity for year has also been subjected to True-up on above mentioned basis. The Regulations provide that the Average Capacity during a year shall be taken as that served in previous year i.e Therefore, the Transmission capacity during the year is worked out taking into consideration the actual generating and contracted capacities connected in the previous financial year is based on the figures provided by the MPPMCL being the Nodal Agency regarding Power/ Energy matters related to the Discoms. 6

7 2.3 STATE GOVERNMENT ORDER FOR CAPACITY ALLOCATION Based on MPPMCL, SEZ & WCR (Indian Railway) contracted capacities, the total Generating Capacity in MW served by Intra-State Transmission System of MPPTCL in the previous financial year i.e is summarized hereunder; S No MP's Power Share from MP Share (MW) Post-Aux. Consumption Share (MW) 1 MP Thermal Generation MP Hydel Generation Inter-state Hydel Projects Joint Venture Hydel Projects Central Sector Additional share From E.R.E.B Additional share From Other Projects From Private Projects MPAKVN SEZ-Pithampur WCR ( Indian Railway) Total Note: In reference to Clause 15 & 19 of Transmission MYT Order for FY to FY regarding Commission s analysis on Transmission capacity & Energy to be handled by MPPTCL the capacity of M/s BLA Power, Gadarwara has not been included, as such the same has not been considered in this Petition also. 2.4 Hon ble Commission in its order dated , has considered a total capacity of MW allocated to the three DISCOMS & SEZ for Subsequently, Hon ble Commission vide its order dated re-allocated the Transmission capacity on account of allocation of 200 MW power to Indian Railways, w.e.f thus revising the same to MW. 2.5 TRANSMISSION CAPACITY FOR FY Transmission capacity for FY is worked out on the basis of Generating capacity allocation served by MPPTCL in the previous financial year Annexure- III attached to this Petition shows total Station-wise Generating capacity allocation to MP as MW. From this, Auxiliary consumption has been reduced from the Generators within the State. For Generating Stations, outside the State, both the Auxiliary consumption as well Inter-State Transmission losses has been reduced. After deductions, net Transmission capacity is worked out as MW for year of which MW is for the 3 Discoms, 200 MW for the Railways and 40MW for SEZ. 7

8 2.6 TRANSMISSION CAPACITY ALLOCATION AMONG DISCOMS, RAILWAYS & SEZ - The capacity allocation to Discoms is proposed on the following basis. (i). The State Government vide notification dated (Annexure-II) has allocated all capacities to Madhya Pradesh Power Management Co. Ltd. and directed MPPMCL to distribute the power capacity in the ratio of energy requirement of three state owned Discoms. Accordingly, MPPMCL based on energy requirement has distributed the capacities same is tabulated hereunder; Particulars Energy input of Discoms % allocation MW Share MP Poorva Kshetra Vidyut Vitaran % Company Ltd. Jabalpur. MP A capacity Madhya Kshetra of 40 MW Vidyut for SEZ Vitaran and 200 MW for WCR is treated as additional % Company Ltd. Bhopal. MP Paschim Kshetra Vidyut Vitaran Company Ltd. Indore % Total % (ii). The capacity for the year for is taken as that on 31 st March (iii). The percentage takes care of Bundelkhand s allocation to East Discom. Based on above, the allocated transmission capacity is tabulated hereunder; 1 2 Distribution Licensee MP Poorva Kshetra Vidyut Vitaran Company Ltd. Jabalpur. MP Madhya Kshetra Vidyut Vitaran Company Ltd. Bhopal. Percentage Allocation Capacity Allocation for (MW) 30.40% % MP Paschim Kshetra Vidyut Vitaran 35.91% Company Ltd. Indore. 4 Total Discoms MPAKVN SEZ-Pithampur WCR on behalf of Railways GRAND TOTAL As per Transmission Tariff Regulations, the Distribution Companies, SEZ and West Central Railways as Long Term Open Access Customers will share the Transmission charges in the ratio of capacity allocated to them. Hon ble Commission has considered percentage allocation of True-Up amount for FY as allocated in the MYT order dated & (for FY ). On the same lines MPPTCL has also proposed the percentage allocation of True-Up amount for FY ******** 8

9 CHAPTER III PERFORMANCE OF INTRA-STATE TRANSMISSION SYSTEM 3.1 TRANSMISSION LOSSES - The Transmission Loss for has been calculated to be 2.75% against a target of 2.82% set by Hon ble Commission i.e. below the limits as fixed by the Hon ble Commission. Transmission losses in Intra-State system have generally reduced gradually during previous years, one of the reasons being execution of Capital Plan. The figures for last three years and during the year are tabulated hereunder; Details Energy Received into System (MUs) Energy sent Out of System (MUs) Energy Lost (MUs) Transmission Loss (%) Target (Loss) (%) As per the directives of the Hon'ble Commission, MPPTCL is computing the Voltagewise Transmission losses. The year-wise details are given hereunder; System Voltage Transmission Losses in % KV 1.01% 0.95% 1.13% 1.02% KV 1.75% 1.72% 1.92% 1.88% KV 0.81% 0.86% 0.44% 0.56% 4 Loss (in %) 2.82% 2.88% 2.71% 2.75% 3.2 TRANSMISSION SYSTEM AVAILABILITY - Hon ble Commission has fixed a target of Transmission System Availability as 98% for year in the MYT Regulations. The Transmission System Availability achieved during the year is higher than the target fixed. This indicates proper maintenance of lines and sub-stations as well as prompt outage management. The achievements are shown hereunder; System Voltage Transmission System Availability in % Target 98.00% 98.00% 98.00% 98.00% 2 Achieved 99.35% 99.16% 98.39% 99.15% 3.3 TRANSFORMER FAILURE - MPPTCL is carrying out the maintenance of transformers periodically as per schedules laid down and as well as use of new technologies which includes latest protective relays. The details for past three years are given below; Period > FY FY FY Nos. % Nos. % Nos. % 1 Auto-Transformers % % 2 Power Transformers % % % 9

10 3.4 INTERFACE POINTS - MPPTCL's network is connected to Inter-State, Generating and Distribution Systems through 1025 Interface points. Details are given hereunder; Metering Status GENCO -TRANSCO CGS/NHPC/NTPC/PGCIL OTHER STATE-TRANSCO OPEN ACCESS (SEZ) TRANSCO-DISCOM (E/Z) TRANSCO-DISCOM (C/Z) TRANSCO-DISCOM (W/Z) TOTAL ABT compliant meters have been installed on Interface points for implementation of Intra-State ABT. 3.5 ELECTRICAL ACCIDENTS - MPPTCL has ensured that its field staff observes safety Regulations to avert the accidents. Accidents occurred during the previous three years are tabulated hereunder; Particulars Fatal Accident to Human Non-fatal Accident to Human Fatal Accident to Animals TOTAL NEW & EMERGING TECHNOLOGIES ADOPTED The Company has strived hard to keep pace with the changing technologies and developed a system for finding and focusing on use of new and emerging technologies and innovative techniques for an enhanced performance. Partial credit in achieving the aforementioned performance indicators can be attributed to the use of such technologies and innovative techniques. ********* 10

11 CHAPTER IV TRANSMISSION PLAN TH FIVE YEAR TRANSMISSION PLAN (FY TO FY ) The 13 th Five Year Plan has been approved in principle by the Hon ble Commission as vide order dated The Plan is being executed with the loan assistance mainly from ADB, JICA, PFC, REC, PSDF Grant etc. and State Government support. The total Plan amount is proposed as ` Crores, with EHV lines addition of Ckt. KMs and MVA capacity addition of MVA. The year-wise Physical and Financial details are tabulated hereunder; [A] PHYSICAL PLAN FY 2017 TO FY 2022 No PARTICULARS YEARWISE PHYSICAL PROGRAMME ( ) A EHV LINES (CKT KMS) - TOTAL 13 th PLAN ( ) KV Lines KV Lines KV Lines TOTAL CKT KMS B EHV SUB-STNS (MVA) KV Sub-stations KV Sub-stations KV Sub-stations TOTAL MVA C EHV SUB-STNS (Nos) KV Sub-stations KV Sub-stations KV Sub-stations TOTAL (Nos) [B] FINANCIAL PLAN FY 2017 TO FY 2022 (` in Lacs) YEARWISE INVESTMENT IN 13 TH PLAN TOTAL PARTICULARS ( ) 13 th PLAN ( ) KV Lines KV Lines KV Lines TOTAL(Lines)

12 YEARWISE INVESTMENT IN 13 TH PLAN TOTAL PARTICULARS ( ) 13 th PLAN ( ) KV Sub-stations KV Sub-stations KV Sub-stations Misc. Works TOTAL (Sub-station) TOTAL (Transmission) The plan is primarily on the basis of projected need and may vary depending upon requirement from time to time. 4.2 PHYSICAL PROGRESS DURING FY The physical progress during FY is tabulated hereunder; Particulars Unit Achievements KV Lines Ckt.-KMs KV Lines Ckt.-KMs KV Lines Ckt.-KMs KV S/s Capacity addition MVA KV S/s Capacity addition MVA KV S/s Capacity addition MVA KV S/s added Nos KV S/s added Nos KV S/s added Nos. 12 Thus, Ckt. KMs of EHV Lines, 14 new EHV Sub-stations and MVA transformation capacity is added to the Transmission System during the year. ******* 12

13 CHAPTER V TRUE UP FOR YEAR MULTIYEAR TARIFF FOR FY TO FY As per the MPERC (Terms & Conditions for determination of Transmission Tariff) (Revision-III) Regulations, 2016 notified on MPPTCL submitted the petition for determination of Transmission charges for the new control period, that is, FY to on Hon'ble Commission determined the Transmission Tariff and approved ARR for the above mentioned MYT period vide order dated Annual Transmission charges as approved by Hon ble Commission are given in the following table; Annual Fixed Cost (Amount ` in Crores) 5.2 PROVISION FOR TRUE-UP - Item 8 (Clause 8.3 to 8.9 & 8.11) of MYT Regulations notified on provides for True-up of tariff every year. The Clauses are reproduced hereunder; 8.3. A Transmission Licensee shall file a petition at the beginning of the Tariff Period. A review shall be undertaken by the Commission to scrutinise and true up the Tariff on the basis of the capital expenditure and additional capital expenditure actually incurred in the Year for which the true up is being requested. However, in such true up, any abnormal and uncontrollable variation can also be considered at the Commission s discretion The Commission shall carry out truing up of tariff of Transmission Licensee based on the performance of the following uncontrollable parameters: (i) Force Majeure; and (ii) Change in Law; Provided that no additional impact of time over-run or cost overrun shall be allowed on account of non-commissioning of the generating station or associated Transmission System by SCOD, as the same should be recovered through Implementation Agreement between the generating company and the Transmission Licensee: Provided also that if 13

14 the Transmission System is not commissioned on SCOD of the generating station, the Transmission Licensee shall arrange the evacuation from the generating station at its own arrangement and cost till the associated Transmission System is commissioned The financial gain by the Transmission Licensee on account of controllable parameters shall be shared between the Transmission Licensee & the Beneficiaries in the ratio of 2:1 respectively on monthly basis with annual reconciliation The financial gains and losses by the Transmission Licensee on account of the uncontrollable parameters shall be passed on to the long term Transmission Customers If the Tariff already recovered is more than the Tariff determined after true-up, the Transmission Licensee shall refund to the Long-term transmission customers the excess amount so recovered as specified in the Regulation 8.9 of these Regulations If the Tariff already recovered is less than the Tariff determined after true-up, the Transmission Licensee shall recover from the Long-term transmission customers, the under recovered amount as specified in the Regulation 8.9 of these Regulations subject to adhering to the timelines specified by the Commission for filing of True-up Application. In case, it is found that the filing of True-up is delayed due to the reasons attributable to the Transmission Licensee, the under recovery shall not bear any interest The amount under-recovered or over-recovered along with simple interest at the rate equal to the Bank rate as on 1 st April of the respective year, shall be recovered or refunded by the Transmission Licensee within six months from the date of the tariff order issued by the Commission The Multi Year Tariff filing in hard and soft copy shall be in accordance with and in the formats prescribed in MPERC (Details to be furnished and fees payable by licensee or generating company for determination of Tariff and manner of making an application) Regulations, 2004 (as amended from time to time) within 60 days of notification of these Regulations The Transmission Licensee shall make an application in hard and soft copy in the same formats prescribed in MPERC (Details to be furnished and fees payable by licensee or generating company for determination of Tariff and manner of making an application) Regulations, 2004 (as amended from time to time)for carrying out truing up exercise by 15 th November each year. Hon ble Commission vide notification dated 19 th December 2008 amended the Formats for submission of Tariff True-up Petitions. The information is therefore furnished in amended Formats attached to this Petition as; (i) TUT - S1 to S3 (ii) TUT A-1 (iii) TUT 1 to 19 (iv) TUT F-1 (v) TUT P1 to P TRUE-UP FOR The instant Petition for True up of Transmission charges for FY is based on Annual Accounts of the Company for year which has been submitted to the Hon ble Commission vide letter CFO/Transco/1375 dated ******* 14

15 CHAPTER VI OPERATION & MAINTENANCE EXPENSES O&M EXPENSES DURING FY Hon'ble Commission has allowed O&M expenses of ` Crores for FY This covers Employee Cost, A&G and Repairs & Maintenance Expenses during the year. It was however mentioned that if progress achieved is more than quantities considered in this order, higher amount of O&M will be allowed. The provision is based on the O&M Norms notified in the Transmission Tariff Regulation. The same is as hereunder; Norms for O&M Expenses Hon ble Commission while allowing O&M Expenses for the year in the above referred order and tabulated in Para 5.1, considered the following average length of EHV Lines and Bays for the period to O&M expenses for year have been allowed as ` Crores, considering following parameters; Particulars O&M Norms ` in Lacs Parameters taken for PROVISION FOR TRUE UP OF O&M EXPENSES - O&M Expenses allowed for (rounded to ` In Lacs) KV Line /100 Ckt-KM Ckt-KM KV Bays KV Line /100 Ckt-KM Ckt-KM KV Bays KV Line (incl. of /100 Ckt-KM Ckt-KM KV) KV Bays TOTAL ` in LACS Item 37 (Clause 37.1 & 37.2) of MYT Regulations notified on provides that true up of O&M expenses will depend on length of Lines and number of Bays. The relevant Clauses are reproduced hereunder; 15

16 37.1 The O&M expenses comprise of employee cost, repairs & maintenance (R&M) cost and administrative & general (A&G) cost. The norms for O&M expenses have been fixed on the basis of circuit kilometers of transmission lines and number of bays in sub-station. These norms exclude pension, terminal benefits, incentive & arrears to be paid to employees, taxes payable to the Government and fee payable to MPERC. The Transmission Licensee shall claim the taxes payable to the Government, fees to be paid to MPERC & any arrears paid to employees separately as actuals. The claim of pension and terminal benefits shall be dealt as per Regulation The total allowable O&M expenses for the Transmission Licensee shall be calculated by multiplying the average number of bays and 100 Ckt-KM of line length for the Year with the applicable norms for O&M expenses per bay and per 100 Ckt-km respectively. In support of its claim for allowable O&M expenses, the Licensee shall submit before the Commission, the actual or projected circuit kilometers of line lengths and number of bays for each voltage level separately for each Year of the Tariff Period as the case may be. 6.3 NETWORK EXPANSION AND O&M EXPENSES FOR FY The average voltage-wise length of line & Bays on the basis of actual progress made during the year and the allowable O&M expenses for FY based on approved norms, is worked out as under; Particulars O&M Norms ` in Lacs Parameters taken for Say ` Crores 6.4 List of Lines and Bays added during is enclosed as Annexure-IV A & B. 6.5 ACTUAL O&M EXPENSES AS PER AUDITED ACCOUNTS O&M Expenses allowed for (rounded to ` In Lacs) KV Line /100 Ckt-KM Ckt-KM KV Bays KV Line /100 Ckt-KM Ckt-KM KV Bays KV Line (incl. of 66 KV) /100 Ckt-KM Ckt-KM KV Bays TOTAL ` in LACS The Regulations provide for claiming O&M Expenses on normative basis on certain heads. The actual O&M Expenses are therefore for information only. The details of O&M Expenses are given in formats TUT-3 to TUT-5 as per details given hereunder; 16

17 (` Crores) Format Gross Less Less SLDC Net Particulars Amount Capitalized Expenses Amount 1 TUT-3 R&M Expenses TUT-4 Employee Cost TUT-5 A&G Expenses (MPERC fee Rs not incl. in Net Amt) 4 TOTAL The provision of arrears of wage revision under 7 th pay commission amounting to ` Crores has been worked out as per Notification MPPTCL/E6/4116 dated The liability under the 7 th pay commission is payable in 36 instalments from January 2018.The actual amount of arrears of Wage Revision under 7 th pay commission paid during FY is ` Crores. 6.6 PROVISION FOR ARREARS - Regarding the Arrears, Para 37.1 of Regulations notified on stipulates the following; 37.1 The O&M Expenses comprise Of Employee Cost, Repairs & Maintenance (R&M) Cost and Administrative & General (A&G) Cost. The norms for O&M Expenses have been fixed on the basis of circuit kilometers of Transmission lines and number of bays in substation. These norms exclude Pension, Terminal Benefits, Incentive and Arrears to be paid to employees, taxes payable to the Government and fee payable to MPERC. The Transmission Licensee shall claim the taxes payable to the Government, fees to be paid to MPERC and any arrears paid to employees separately as actuals. The claim of Pension and Terminal Benefits shall be dealt-with as per Regulation Accordingly ` Crores are being claimed as per actuals over & above the normative O&M claims. 6.7 CLAIM OF O&M EXPENSES TRUE UP - Net True up of O&M Expenses for FY is tabulated hereunder; Amount Particulars (` Crores) 1 O&M claim as per O&M Norms worked out in Para 6.3 above O&M claim for Wage Revision payment as per Para O&M Expenses allowed in Tariff order for FY True up amount of O&M Expenses ((1+2)-3)) Net True up Claim (O&M): (+) ` Crores ****** 17

18 CHAPTER VII TERMINAL BENEFITS EXPENSES TERMINAL BENEFITS ALLOWED FOR FY Hon ble Commission has notified the MPERC (Terms & Conditions for allowing Pension and Terminal Benefits liabilities of personnel of Board and successor Entities) Regulations, 2012 (G-38 of 2012) on 20 th April Clause 1.2 of this Regulation provides; These Regulations shall come into force with immediate effect from the date of their publication in the official Gazette of the Government of Madhya Pradesh. For Tariff determination purposes its provisions will be given effect to in the financial year following the year of its publication. Hon ble Commission therefore in its order dtd ; in para-47 has considered the Terminal Benefit and Pension expenses for FY on provisional basis on Pay as you go principles payable to the extent of ` Crores as allowed in the MYT order. The actual expenses for this period is to be considered during the process of True up of Transmission Tariff for FY TERMINAL BENEFITS AS PER AUDITED ACCOUNTS - The Audited Accounts of MPPTCL, listed out the following expenses against Terminal Benefits for FY as compared to the previous year; TERMINAL BENEFIT COST ` in Crores PARTICULARS AS AT AS AT (A) CASH - Gratuity Pension TOTAL (A) (B) PROVISIONS - Gratuity Pension Provision for employees of MPPMCL TOTAL (B) TOTAL (A+B) TRUE-UP CLAIM FOR TERMINAL BENEFITS - Vide Para 47 of the Order dated , against the head of Pension, Gratuity and EL encashment on retirement (of MPPTCL employees), Hon ble Commission, has determined an amount of ` Crores. The details of Pension & Gratuity of all the Companies are enclosed as Annexure-VIII. 18

19 Against this amount the claim of Terminal Benefits for True-up period of FY is given in the following table; Particulars (Amount ` in Crores) Terminal Benefit Expenses Cash Net Provision of Year TOTAL 1 Pension Gratuity Annuity for addl. family pension (MPPTCL) Provision for employees of MPPMCL TOTAL True-up for FY for Terminal Benefits is worked out hereunder; (Amount ` in Crores) Particulars Cash Provision TOTAL 1 Claim for the year Allowed in MYT order True-up ******* 19

20 CHAPTER VIII DEPRECIATION OPENING BALANCE SHEET - The Government of Madhya Pradesh has notified the final Opening Balance Sheet on 12 th June 2008 in the position of The fixed Assets transferred are shown as hereunder; (i) Opening Gross Block ` Crores (ii) Accumulated Depreciation ` Crores (iii) Net Fixed Assets ` Crores Hon ble Commission had directed the Petitioner to reconcile the Asset Register and work out the Depreciation during the year on the above. The details of this Asset Register was submitted during the Truing-up process of for perusal of the Hon ble Commission. The Opening Gross Blocks and Net Blocks of the Asset Register were reconciled & were of the same value as given in the Final Opening Balance Sheet. There was no change in Assets capitalized after which in turn were the same as submitted earlier and reconciled with the accounts. The Depreciation for FY was also worked out on the basis of this reconciled Asset Register. Continuing with the Asset Register thus submitted, by extending the figures of GFA - Depreciation for the year, Accumulated Depreciation & Net Fixed Assets for has been worked out, as summarized in the following table; (Amount ` in Crores ) Gross Fixed Accumulated Net Fixed Date as on Assets Depreciation Assets REGULATIONS ON DEPRECIATION The Depreciation for the year has been calculated as per Clause 25 of the Regulations as reproduced hereunder; (a) Depreciation shall be computed from the date of commercial operation of a Transmission System including Communication System or element thereof. In case of the Tariff of a Transmission System including Communication System for which a single Tariff needs to be determined, the Depreciation shall be computed from the effective date of commercial Operation of the Transmission System taking into consideration the Depreciation of individual units or elements thereof. Provided that effective date of Commercial Operation shall be worked out by considering the actual date of Commercial Operation and installed capacity or Capital cost of all elements of the Transmission System, for which single Tariff needs to be determined. (b) The value base for the purpose of Depreciation shall be the Capital cost of the Asset admitted by the Commission. In case of multiple elements of Transmission System, weighted average life Transmission System shall be applied. Depreciation shall be chargeable from 20

21 the first year of commercial operation. In case of commercial operation of the asset for part of the year, Depreciation shall be charged on pro rata basis. (c) The approved / accepted cost shall include foreign currency funding converted to equivalent rupee at the exchange rate prevalent on the date of foreign currency actually availed. (d) The salvage value of the Asset shall be considered as 10% and Depreciation shall be allowed up to maximum of 90% of the Capital cost of the Asset. (e) Land other than land held under lease shall not be a depreciable Asset and its cost shall be excluded from the Capital cost while computing depreciable value of the Asset. (f) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in Appendix-II to these Regulations for the Assets of the Transmission System. Provided that, the remaining depreciable value as on 31 st March of the year closing after a period of 12 years from date of Commercial Operation shall be spread over the balance useful life of the Assets. Provided further that the Consumer contribution or capital subsidy/ grant etc. for Asset creation shall be treated as per the Accounting Rules notified and in force from time to time. (g) In case of the existing Projects, the balance depreciable value as on shall be worked out by deducting the Cumulative Depreciation including Advance Against Depreciation as admitted by the Commission up to from the gross depreciable value of the Assets. The rate of Depreciation shall be continued to be charged at the rate specified in Appendix-II till Cumulative Depreciation reaches 70%. Thereafter, the remaining depreciable value shall be spread over the remaining life of the Asset such that the maximum Depreciation does not exceed 90%. (h) Depreciation shall be chargeable from the first Year of commercial operation. In case of commercial operation of the Asset for part of the Year, Depreciation shall be charged on pro-rata basis. (i) In case of de-capitalization of Assets in respect of Transmission System or element thereof, the Cumulative Depreciation shall be adjusted by taking into account the Depreciation recovered in Tariff by the de-capitalized Asset during its useful services. 8.3 ADDITION OF ASSETS DURING FY MPPTCL has adopted IND AS for accounting from FY onwards and accounts for FY has also been prepared accordingly. Assets inclusive of Consumer Contribution & PSDF Grant worth ` Crores have been capitalized during the year and assets of value ` Crores have been withdrawn. The above figure is inclusive of value ` Crores that have been capitalized on account of consumer contributions and also ` Crores against grant portion of PSDF Scheme. Thus, a net addition worth of ` ` ` ` = ` Crores ( net capitalization) have been Capitalized during the year It is also to be submitted that as per the provisions of new IND AS adopted by the Company, this year, leasehold Asset amounting to ` Crores for the Asset pertaining to PPP Project contracted to M/s Kalpataru Satpura Transco Pvt. Ltd. has also been shown in the Company s accounts; however, this amount of ` Crores have not been considered in this Petition. The claim of Unitary Charges has been detailed out in Chapter XII (Para 12.1) of this Petition 21

22 The certificate of Works Completion and Capitalization from the CFO (MPPTCL) along with the list of Assets capitalized during the year is enclosed as Annexure V. 8.4 DEPRECIATION AGAINST CONSUMER S CONTRIBUTION WORKS Hon ble Commission has prescribed the procedure to account for the Depreciation on Assets formed under Consumer s Contribution. Hon ble Commission also mentioned to review this since , the date of Opening Balance Sheet transfer. It is to mention that no such Assets have been capitalized till Such Assets have been capitalized in FY onwards only. The Depreciation on these Assets have been computed as per other Assets. Thereafter, these Assets are tabulated separately in Depreciation Model and Depreciation charged on these has been subtracted from total Depreciation claim. Since the adjustment has been given in Depreciation itself, the amortization is not shown again as other income. 8.5 DEPRECIATION FOR FY As per above procedure, the Depreciation (excluding Depreciation on Assets formed under Consumer s Contribution) for , computed from Asset Register & Software model and comparison from previous year, is given below; (Amount ` in Crores) Gross Fixed Assets Provision For Depreciation Net Fixed Assets FY At the Addition At the Addition At the At the At End At End beginning During beginnin During beginning of End of of Year of Year of Year Year g of Year Year Year Year The category-wise details for FY are given in Format TUT-7 & TRUE-UP OF DEPRECIATION FOR FY (i). Depreciation claim as per Para 8.5 above ` Crores (ii) Depreciation allowed in MYT order dated ` Crores True-up Claim - ******* (+) ` Crores 22

23 CHAPTER IX INTEREST & FINANCE CHARGES SANCTION UNDER TARIFF ORDER FOR FY Hon ble Commission under order dated , allowed following Interest and Finance charges to MPPTCL for year ; (i). Interest & Finance Charges ` Crores (ii) Interest on Working Capital ` Crores TOTAL - ` Crores 9.2 LOANS TRANSFERRED THROUGH OPENING BALANCE SHEET - The Govt. of M.P. has notified the final Opening Balance Sheet on 12 th June 2008, as referred in Chapter 1 of this Petition. Loan liabilities of ` Crores are indicated in the Balance Sheet and a liability of ` 5.53 Crores is indicated in the footnote as loan from MP Power Generating Company Ltd., making a total of ` Crores. Details of these are mentioned hereunder; (Amount ` in Lacs ) Particulars Opening Balance at the beginning of the year Principal Not Due Principal Due Interest overdue TOTAL 1 Loan from PFC - Unsecured Loan from PFC - Secured Loan from Canara Bank Loan from SADA Gwalior Bonds & Debentures MP Genco Direct Loans ADB NABARD General Loans Market Bonds TOTAL A Statement showing the position of the above mentioned liabilities as on FY has been prepared and is a part of Annexure-VI. 9.3 WEIGHTED AVERAGE RATE OF INTEREST - Hon ble Commission has desired that the Rate of Interest for each category of loans such as PFC, ADB, State Govt. etc. should be worked out by considering rate of interest of various loan instalments applicable during the year. It is to submit that State Government Fund for JICA IDP 217 & ADB 3066 related works were based on debt i.e. there was no component of equity given by the State Government. Finance Department (GoMP) considered the request of MP Power Transmission Co., Ltd. to infuse equity in the JICA and 23

24 ADB funded projects in such manner that the loan and equity portion to be kept in the ratio of 70:30. However, it was decided that 70% Loan portion would carry interest rate of 12% with retrospective effect. The same was conveyed to MPPTCL vide Energy Department letter F5-15/2014/13 dated , the same is enclosed as Annexure- XVI. Further, for the FY the Govt. of MP has released ` Crores as equity under ADB-3066 and JICA IDP-217 project, the disbursement of ` Crores has been received as equity. Therefore, the interest on externally aided projects (ADB-3066 & JICA IDP-217) was revised to 12% with retrospective effect. It is also mentioned in the Energy Department letter dated , the same has been done in order to maintain the ratio of 70:30 between Loan and Equity portion of the project so as to make the project financial viable. Further, on lending agreement in respect of JICA and ADB loans for revision of rate of interest between Govt. of India and State Govt.is under process of execution. On receipt of on lending agreement, the Prior Period interest and interest on working capital shall be claimed retrospectively from FY to FY in next true up, which was earlier not considered by Hon ble Commission as per para 33 & 34 of the True Up order dated for FY In view of the position explained above, Hon ble Commission is requested to kindly consider the rate of interest for JICA IDP 217 & ADB 3066 loan as 12 % for FY as per directives of Energy Department (GoMP) vide letter dated The computation of interest for each category for FY is done and enclosed as Annexures numbered IX to XV, details of which are tabulated hereunder; Loan Scheme Weighted Average Rate of Interest Remarks 1 GoMP JICA IDP % Ref. Anx- IX 2 State Govt. - General 16.50% Ref. Anx- X a 3 Market Bonds 8.30% Ref. Anx- X b 4 ADB % Ref. Anx- XI 5 ADB % Ref. Anx- XII a 6 ADB % Ref. Anx- XII b 7 ADB % Ref. Anx- XII c 8 SCSP 16.50% Ref. Anx- XIII a 9 TSP 16.50% Ref. Anx- XIII b 10 Union Bank Of India 8.38% Ref. Anx- XIV 11 KfW(GEC-I) 11.50% Ref. Anx- XV Note: The Weighted Average Rate of Interest worked out in above mentioned Annexures are based on Principal Not Due only, therefore, may differ from actual loan portfolio. 9.4 OVERALL WEIGHTED AVERAGE RATE OF INTEREST FOR Clause 24.5 of the Transmission Tariff Regulations says; The rate of interest shall be the weighted average rate of interest calculated on the basis of the actual loan portfolio after providing appropriate accounting adjustment or interest capitalized. 24