bihar state power holding company limited (bsphcl… tariff-order... · 4.17 interest on working...
TRANSCRIPT
BIHAR ELECTRICITY REGULATORY COMMISSION
Order onTruing up of FY 2012-13
For
BIHAR STATE POWER HOLDING COMPANY LIMITED(BSPHCL)
Case No. 21 of 2013
28th February, 2014
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page i
CONTENTSORDER ........................................................................................................................................ 11. Introduction ............................................................................................................................ 5
1.1 Bihar Electricity Regulatory Commission (BERC) .................................................................... 51.2 Functions of BERC................................................................................................................... 51.3 Background and Brief History................................................................................................. 61.4 Commission’s Orders issued earlier........................................................................................ 71.5 Admission of Current Petition and Public Hearing Process..................................................101.6 Approach of this order...........................................................................................................121.7 Contents of this order............................................................................................................13
2. Summary of Petition filed by BSPHCL for True up for FY 2012-13............................................. 142.1 Summary of ARR approved in FY 2012-13 (RE) ....................................................................142.2 Request to the Commission..................................................................................................15
3. Stakeholder’s Objections/Suggestions, Petitioner’s response and Commission’s observation .. 163.1 Introduction:.........................................................................................................................163.2 Issue-wise Stakeholder’s Objections/Suggestions, BSPHCL’s Response and Commission’sobservations......................................................................................................................................16
4. Truing-up for FY 2012-13........................................................................................................ 324.1 Background...........................................................................................................................324.2 Truing-up of ARR for FY 2012-13 ..........................................................................................334.3 Category wise energy sales...................................................................................................334.4 Transmission and Distribution Losses ..................................................................................374.5 BSEB’s Own Generation.........................................................................................................394.6 Power Purchase ....................................................................................................................404.7 Energy Balance .....................................................................................................................424.8 Power Purchase Cost ............................................................................................................454.9 Disincentive for non-achievement of T&D loss reduction target.........................................484.10 Employee cost.......................................................................................................................514.11 Repairs and Maintenance (R&M) Expenses .........................................................................524.12 Administrative & General (A&G) Expenses ..........................................................................544.13 Operation and Maintenance (O&M) Costs...........................................................................564.14 Capital Expenditure ..............................................................................................................564.15 Depreciation .........................................................................................................................604.16 Interest and Finance Charges ...............................................................................................634.17 Interest on working Capital ..................................................................................................724.18 Interest on Security Deposit .................................................................................................734.19 Return on Equity...................................................................................................................744.20 Non-Tariff Income .................................................................................................................774.21 Net Prior Period Credits / Charges .......................................................................................804.22 Revenue from Sale of Power at existing Tariff for FY 2012-13.............................................884.23 Resource gap funding received from the State Government for FY 2012-13 ......................894.24 Approved ARR and Revenue Gap for FY 2012-13.................................................................914.25 Past Recoveries.....................................................................................................................93
ANNEXURE-I.............................................................................................................................. 96ANNEXURE-II............................................................................................................................101
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page ii
LIST OF TABLES 1
Table 2.1: ARR approved in Tariff Order for FY 2012-13, in review and now claimed in True up for FY2012-13 .................................................................................................................................................14Table 4.1: Category-wise actual energy sales proposed for FY 2012-13 ............................................. 34Table 4.2: Summary of Category-wise energy sales approved for FY 2012-13.................................... 37Table 4.3: T&D Losses proposed for FY 2012-13.................................................................................. 38Table 4.4: Approved T&D Losses for FY 2012-13 ................................................................................. 39Table 4.5: Power Purchase proposed for FY 2012-13 .......................................................................... 40Table 4.6: Source-wise Power Purchase quantum approved for FY 2012-13...................................... 41Table 4.7 : Energy Balance proposed for FY 2012-13........................................................................... 42Table 4.8: Energy Balance approved for FY 2012-13 ........................................................................... 44Table 4.9: Proposed Power Purchase Cost for FY 2012-13 .................................................................. 45Table 4.10: Approved Power Purchase Cost for FY 2012-13................................................................ 47Table 4.11: Disallowed Power Purchase proposed for FY 2012-13 ..................................................... 49Table 4.12: Cost of Disallowed Power Purchase proposed for FY 2012-13 ......................................... 50Table 4.13: Disincentive for Non-achievement of T&D loss reduction target for FY 2012-13............. 50Table 4.14: Employee cost proposed for FY 2012-13........................................................................... 51Table 4.15: Employee Cost approved for FY 2012-13 .......................................................................... 52Table 4.16: Repairs and Maintenance Expenses proposed for FY 2012-13......................................... 53Table 4.17: Summary of approved R&M expenses for FY 2012-13 ..................................................... 53Table 4.18: A&G expenses proposed for FY 2012-13........................................................................... 54Table 4.19: Summary of approved A&G expenses for FY 2012-13 ...................................................... 55Table 4.20: Summary of approved O&M expenses for FY 2012-13..................................................... 56Table 4.21 Details of Capital works in progress proposed by the Petitioner....................................... 57Table 4.22: Estimation of CWIP............................................................................................................ 58Table 4.23: Gross Fixed Assets for FY 2012-13..................................................................................... 59Table 4.24: Net depreciation proposed for FY 2012-13....................................................................... 60Table 4.25: Depreciation approved in the truing-up for FY 2012-13 62Table 4.26: Interest and finance charges claimed in the truing up for FY 2012-13 64Table 4.27: Computation of effective rate of interest for FY 2012-13................................................. 68Table 4.28: Approved interest and finance charges for FY 2012-13 68Table 4.29 Other interest and finance charges for FY 2012-13.......................................................... 69Table 4.30: Other Interest and Finance Charges for FY 2012-13 ......................................................... 69Table 4.31: Approved interest and finance charges for FY 2012-13.................................................... 71Table 4.32: Proposed Interest on Working Capital for FY 2012-13...................................................... 72Table 4.33: Summary of Interest on working capital approved for FY 2012-13 .................................. 73Table 4.34: Interest on Consumers Security Deposit for FY 2012-13 .................................................. 74Table 4.35: Proposed Return on Equity for FY 2012-13....................................................................... 75Table 4.36: Return on equity approved for FY 2012-13....................................................................... 77Table 4.37 Non-tariff income proposed for FY 2012-13 ...................................................................... 77Table 4.38: Funding of DPS .................................................................................................................. 79Table 4.39: Non-tariff Income approved for FY 2012-13 ..................................................................... 79Table 4.40 Net prior period charges proposed for FY 2012-13............................................................ 80Table 4.41: Prior period charges as per annual accounts for FY 2012-13............................................ 84Table 4.42 Revenue from sale of power for FY 2012-13...................................................................... 88Table 4.43: Estimated Revenue from Sale of Power for FY 2012-13 ................................................... 89Table 4.44: Actual Revenue received as per the audited Annual Accounts for FY 2012-13 ................ 89Table 4.45: Details of Subsidy and Grant received during FY 2012-13 ................................................ 90Table 4.46: Allocation of Resource Gap for FY 2012-13....................................................................... 90
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page iii
Table 4.47: Details of State Government Resource Gap Assistance/Subsidy for FY 2012-13 ............. 91Table 4.48: Summary of Trued-up ARR and Revenue gap/surplus for FY 2012-13 ............................. 92Table 4.49: Summary of the interest on revenue surplus of FY 2012-13 permitted to be carriedforward to ARR of FY 2014-15 ..............................................................................................................93Table 4:50: Approved Revenue Gap/ (Surplus) based on true-up to end of FY 2012-13..................... 95
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page iv
ABBREVIATONSA&G Administration and General ExpensesACT Electricity Act. 2003ARR Aggregate Revenue RequirementBERC Bihar Electricity Regulatory CommissionBSHPS Bihar State Hydro Power StationBSEB Bihar State Electricity BoardBSPHCL Bihar State Power (Holding) Company LimitedBSPTC Bihar State Power Transmission Corporation LimitedBTPS Barauni Thermal Power StationCAGR Compounded Annual Growth RateCAPEX Capital ExpenditureCEA Central Electricity AuthorityCERC Central Electricity Regulatory CommissionCGS Central Generating StationCTU Central Transmission UtilityDISCOM Distribution CompanyDPS Delayed Payment SurchargeDS Domestic ServiceDSM Demand Side ManagementDT Distribution TransformerERLDC Eastern Region Load Despatch CentreERPC Eastern Region Power CommitteeFC Fixed ChargesFPPCA Fuel and Power Purchase Cost AdjustmentFY Financial YearGFA Gross Fixed AssetHT High TensionHTSS High Tension Specified ServiceKBUNL Kanti Bijlee Utpadan Nigam LimitedKJ Kutir JyotiKVA Kilo Volt AmpereKVAH Kilo Volt Ampere HourKWH Kilo Watt HourLT Low TensionMMC Monthly Minimum ChargeMoP Ministry of PowerMU Million UnitMVA Mega Volt AmpereMW Mega WattMYT Multi-Year TariffNBPDCL North Bihar Power Distribution Company LimitedNDS Non Domestic ServiceNEP National Electricity Policy
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page v
NFA Net Fixed AssetNHPC National Hydro Power CorporationNTPC National Thermal Power CorporationO&M Operation and MaintenancePGCIL Power Grid Corporation of India LimitedPLF Plant Load FactorPTC Power Trading CorporationPWW Public Water WorksR&M Repair and MaintenanceRE Revised EstimatesREA Regional Energy AccountingRGGVY Rajiv Gandhi Grameen Vidyutikaran YojnaRLDC Regional Load Despatch CentreRoE Return on EquitySAC State Advisory CommitteeSBPDCL South Bihar Power Distribution Company LimitedSERC State Electricity Regulatory CommissionSS Sub-stationT&D Transmission and DistributionToD Time of DayTPS Thermal Power StationUI Unscheduled Interchange
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 1
Bihar Electricity Regulatory CommissionGround Floor, Vidyut Bhawan – II
Jawahar Lal Nehru Marg, Patna – 800 021
Case No. - 21 of 2013
In the matter of:
True-up of Aggregate Revenue Requirement (ARR) for the Financial Year 2012-13 for
Bihar State Power Holding Company Limited.
And
Bihar State Power Holding Company Limited……………..…………..…… Petitioner
Present:
U.N. Panjiar - Chairman
S.C. Jha - Member
ORDER
(Passed 28th Day of February, 2014)
The erstwhile Bihar State Electricity Board (BSEB) is restructured on functional basis
with affect from 1st November, 2012 into five successor companies under Bihar State
Electricity Reforms Transfer Scheme, 2012 vide notification no. 17 dated 30-10-2012
issued by Energy Department, Government of Bihar, namely;
1. Bihar State Power Holding Company Limited (BSPHCL)
2. Bihar State Power Generation Company Limited (BSPGCL)
3. Bihar State Power Transmission Company Limited (BSPTCL)
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 2
4. North Bihar Power Distribution Company Limited (NBPDCL)
5. South Bihar Power Distribution Company Limited (SBPDCL)
BSPHCL, the holding company, has earlier filed the Multi Year Tariff (MYT) petition
on behalf of successor generation, transmission and two distribution companies on
14th November, 2012 for true up of ARR of FY 2011-12, Review of ARR for FY 2012-13
and determination of ARR for generation and transmission companies separately
and combined petition for two distribution companies for the control period from
FY 2013-14 to FY 2015-16. The Commission taking into consideration all the facts
brought before it and issued the order of true-up of the ARR for FY 2011-12 for
erstwhile BSEB, reviewed the ARR and revenue for FY 2012-13 of erstwhile BSEB and
its successor companies and also approved the ARR for the years FY 2013-14 to
2015-16 for BSPGCL, BSPTCL separately and combined ARR for the two distribution
companies viz. NBPDCL and SBPDCL in the order dated 15th March, 2013.
BSPHCL has now filed the petition for true-up of ARR of FY 2012-13 on behalf of the
erstwhile BSEB from 1.4.2012 to 31.10.2012 and the four successor companies
BSPGCL, BSPTCL, NBPDCL and SBPDCL on 11th November, 2013.
In exercise of the powers vested to Bihar Electricity Regulatory Commission under
section 62(1)(d) read with Section 62(3) and Section 64 (3)(a) of the Electricity Act,
2003 and Bihar Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff) Regulations 2007 (hereinafter referred to as 'Tariff
Regulations, 2007') and other enabling provisions in this behalf, the Commission
issues this order, truing up of the Aggregate Revenue Requirement (ARR) for
financial year (FY) 2012-13, based on the Petition filed by Bihar State Power Holding
Company Limited on behalf of erstwhile Bihar State Electricity Board and its
successor companies.
Regulation 22 of the Tariff Regulations, 2007 provides that the Commission shall
undertake a review along with next Tariff Order, of the expenses and revenue
approved by the Commission in the current year’s Tariff Order. After audited
accounts of the year are made available, the Commission shall undertake a similar
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 3
exercise based on the final actual figures as per the audited accounts. Accordingly
BSPHCL has submitted petition for truing up of ARR and revenue for FY 2012-13
based on the audited annual accounts on behalf of erstwhile BSEB on the unbundled
entities.
As per Regulation 6(5) of the Tariff Regulation and for providing adequate
opportunities to all stakeholders and general public for making
suggestions/objections on the true up petition as mandated under section 64(3) of
the Electricity Act, 2003, the Commission directed BSPHCL vide letter no. 1566 dated
30.11.2013 to publish the True-up petition for FY 2012-13 in abridged form as public
notice in newspapers having wide circulation in the State inviting
suggestions/objections on the True-up petition. Accordingly BSPHCL published the
tariff petition in the abridged form as public notice in various newspapers. The last
date of submission of detailed suggestions/objections was fixed as 3rd January, 2014.
However, on request from stakeholders, the Commission extended the last date of
submission up to 31st January 2014.
The Commission, to ensure transparency in the process of finalization true up
petition for FY 2012-13 and for providing proper opportunity to all stakeholders and
general public for making suggestions/objections on the tariff petition hold the
public hearing at BERC Court Room, BERC office at Patna on 11th January 2014.
The true-up petition for FY 2012-13 was also placed before the State Advisory
Committee on 23rd January 2014 and the various aspects were discussed by the
Committee.
The Commission took into consideration the facts presented by the BSPHCL in the
true up petition and subsequent various filings, the suggestion/objections received
from stakeholders, consumer organizations, general public and State Advisory
Committee and response of the Bihar State Power Holding Company Limited on the
suggestions/objections and passed the trued-up order on the ARR and revenue for
FY 2012-13, of erstwhile BSEB and its successor companies.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 4
The State Government has been giving resource gap grant to erstwhile BSEB which
has been used for reducing the revenue gap of erstwhile BSEB. This treatment of
resource gap has the effect of reducing the average tariff of all categories of
consumers across the state till FY 2011-12. The State Government vide letter No.
4208 dated 19th September, 2011 has clarified that the resource gap grant being
provided to the BSEB is meant for first compensating BSEB for the financial loss
incurred by BSEB on account of additional power purchase due to difference in the
actual T&D loss and the T&D losses as approved by the Commission and the balance
amount of resource gap grant will be used to subsidize the agricultural and rural
consumers. Accordingly in truing-up of ARR for FY 2012-13 the resource gap grant
received during FY 2012-13 to erstwhile BSEB and its successor companies has been
used to first compensate for the financial losses caused on account of additional
power purchase due to difference in the actual T&D losses and the T&D losses
approved by the Commission and the remaining portion of the grant has been used
to subsidize the agriculture and rural consumers.
The BSPHCL in its true-up petition for FY 2012-13 has claimed Rs. 228.86 crore
revenue gap and prayed the Commission to carry forward the above gap with a
carrying cost of Rs. 33.07 crore in the ARR for FY 2014-15. Against the above revenue
gap, the Commission after proper scrutiny of data and facts, brought out a surplus of
Rs. 1273.24 crore including the carrying cost for one and half year for FY 2014-15
which is carried forward for adjustment, in the ARR of FY 2014-15 of the Distribution
Companies.
Sd/- Sd/-
(S. C. Jha) (U. N. Panjiar)Member Chairman
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 5
1. Introduction
1.1 Bihar Electricity Regulatory Commission (BERC)
The Bihar Electricity Regulatory Commission (hereinafter referred to as
“Commission” or “BERC”) was constituted by the Government of Bihar under
Section 17 of the Electricity Regulatory Commission Act, 1998 vide Government of
Bihar notification No. 1284 dated 1 5 t h A p r i l 2002. The Electricity Regulatory
Commission Act, 1998 along with Indian Electricity Act, 1910 and Electricity
(Supply) Act, 1948 was repealed by Section 185 (1) of the Electricity Act, 2003
(hereinafter referred to as the “Act”). The first proviso of Section 82 (1) has ensured
continuity of the Bihar Electricity Regulatory Commission by laying down that the
S t a t e Electricity Regulatory Commission established by the State Government
under Section 17 of Electricity Regulatory Commission Act, 1998 and functioning as
such, immediately before the appointed date, shall be the State Electricity
Regulatory Commission for the purpose of the Act.
1.2 Functions of BERC
1.2.1 As per Section 86 of the Electricity Act 2003, the State Commission shall discharge
the following functions, namely,
a) determine the tariff for generation, supply, transmission and wheeling of
electricity, wholesale, bulk or retail, as the case may be, within the State:
Provided that where open access has been permitted to a category of
consumers under section 42, the State Commission shall determine only
the wheeling charges and surcharge thereon, if any, for the said category of
consumers;
b) regulate electricity purchase and procurement process of distribution licensees
including the price at which electricity shall be procured from the generating
companies or licensees or from other sources through agreements for
purchase of power for distribution and supply within the State;
c) facilitate intra-state transmission and wheeling of electricity;
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 6
d) issue licenses to persons seeking to act as transmission licensees, distribution
licensees and electricity traders with respect to their operations within the
State;
e) promote co-generation and generation of electricity from renewable sources of
energy by providing suitable measures for connectivity with the grid and sale of
electricity to any person, and also specify, for purchase of electricity from
such sources, a percentage of the total consumption of electricity in the
area of a distribution licensee;
f) adjudicate upon the disputes between the licensees, and generating
companies and to refer any dispute for arbitration;
g) levy fee for the purposes of this Act;
h) specify State Grid Code consistent with the Indian Electricity Grid Code
specified with regard to grid standards;
i) specify or enforce standards with respect to quality, continuity and reliability
of service by licensees;
j) fix the trading margin in the intra-state trading of electricity, if
considered, necessary; and
k) discharge such other functions as may be assigned to it under this Act.
1.3 Background and Brief History
1.3.1 Bihar State Power Holding Company Limited
The Government of Bihar under the provision of Bihar Electricity Reforms Transfer
Scheme 2012 notified vide Notification No. 17 dated 30.10.2012 of the Energy
Department, Govt. of Bihar restructured the Bihar State Electricity Board with
effect from 1st November, 2012. The Generation, Transmission and Distribution
Businesses of the erstwhile Bihar State Electricity Board are transferred to four
successor companies with one Holding Company as listed below:
1) Bihar State Power Holding Company Limited (BSPHCL)
2) Bihar State Power Generation Company Limited (BSPGCL)
3) Bihar State Power Transmission Company Limited (BSPTCL)
4) North Bihar Power Distribution Company Limited (NBPDCL)
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 7
5) South Bihar Power Distribution Company Limited (SBPDCL)
Bihar State Power (Holding) Company Limited (BSPHCL) is a holding company
responsible for purchase of electricity from various sources and supply of
electricity to Distribution companies and other activities including trading of
electricity. The BSPHCL has filed the Petition for truing up of FY 2012-13 on behalf
of erstwhile BSEB for the period from 1st March, 2012 to 31st October, 2012 and on
behalf of BSPGCL, BSPTCL, NBPDCL and SBPDCL for the period 1st November, 2012
to 31st March, 2013.
The Government of Bihar vide notification dated 30th October, 2012, notified the
provisional opening Balance Sheet of the transferee companies as on 1st April, 2011.
The value of assets and liabilities stand transferred from the erstwhile Bihar State
Electricity Board to the transferee companies, including the Bihar State Power
(Holding) Company Limited. Assets and liabilities (gross block, loans and equity), as
on the date mentioned in the notification, have been considered by the
Commission in line with the Financial Restructuring Plan (FRP) as approved by the
Government of Bihar.
1.3.2 Background
The Bihar State Power (Holding) Company Limited (herein after referred to as
BSPHCL or Petitioner) has filed its Petition on behalf of erstwhile Bihar State
Electricity Board (BSEB) and four unbundled entities for True up of FY 2012-13
based on Audited Accounts for FY 2012-13 on 11th November, 2013 under
Section 62 of the Electricity Act, 2003, read with Bihar Electricity Regulatory
Commission (Terms and Conditions for Determination of Tariff) Regulations,
2007 (hereinafter referred as 'BERC Tariff Regulations, 2007').
1.4 Commission’s Orders issued earlier
The chronology of the filing of tariff petitions and issue of Tariff Orders from
FY 2006-07 are listed below:
The BSEB had submitted its first Aggregate Revenue Requirement (hereinafter
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 8
referred to as “ARR”) and tariff petition for the FY 2006-07 on 10th April, 2006.
The Commission passed the Tariff Order on that petition on 29th November, 2006.
The BSEB submitted its ARR and tariff petition for FY 2007-08 on 18th December,
2007. As the tariff petition for FY 2007-08 was filed very late, the Commission vide
letter no. BERC.Tariff-9/07-03 dated 2nd January 2008 directed the BSEB to file the
ARR and tariff petition for FY 2008-09 along with data as specified by the
Commission in the BERC (Terms and Conditions for Determination of Tariff)
Regulations, 2007 by 31st January 2008.
The BSEB submitted its ARR and tariff petition for FY 2008-09 on 14th February,
2008. The Tariff Order for FY 2008-09 was passed by the Commission on
26th August, 2008. The Commission also undertook the “Review” of ARR for
FY 2006-07 along with Tariff Order for FY 2008-09.
The BSEB filed on 9th October 2009 the petition for determination of ARR and
approval of retail tariff for FY 2009-10. However, due to delay in filing of the
ARR/ tariff petition for FY 2009-10, the Commission directed the BSEB to file the
ARR and tariff petition for the FY 2010-11. In view of the same, there was no
approval of the ARR for FY 2009-10.
The BSEB submitted its ARR and tariff petition for FY 2010-11 before the
Commission on 3rd February, 2010. The Commission passed the Tariff Order for
FY 2010-11 on 6th December, 2010. The Commission also undertook the
“Review” of ARR for FY 2008-09 along with the Tariff Order for FY 2010-11.
The BSEB submitted its ARR and tariff petition for FY 2011-12 before the
Commission on 17th February, 2011. The Commission passed the Tariff Order for
FY 2011-12 on 1st June, 2011, effective from 1st May 2011.
The True-up petition for FY 2006-07, FY 2007-08 and FY 2008-09, based on the
audited annual accounts of BSEB, was filed by the BSEB on 01st September 2011.
The addendum to this True-up petition was filed by BSEB on 17th October 2011. The
Commission passed its first truing up order for FY 2006-07, FY 2007-08 and
FY 2008-09 on 4th January 2012.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 9
Subsequently, the BSEB filed the Truing up petition for FY 2009-10 on 13th October,
2011. The truing up order for FY 2009-10 was issued by the Commission on
27th January 2012.
BSEB also submitted a petition on 13th October, 2011 vide letter No. Com/ FPPCA-
136/2011-1659 for the review of ARR for FY 2010-11 based on their Audited Annual
Accounts. The Commission vide its Order dated 3rd November, 2011 directed BSEB
to submit its petition for review of the expenses and revenues for the FY 2010-11
along with tariff petition for FY 2012-13. Commission also directed BSEB that, if the
final audited accounts for the FY 2010-11 are made available to the Commission
along with the petition or during the hearing of tariff petition for FY 2012-13, a
final true up of the expenses and revenues for the FY 2010-11 shall be considered by
the Commission.
The Board filed its ARR and tariff petition for FY 2012-13 on 15th November 2011.
In this petition the Board also carried out review exercise for FY 2011-12 projecting
the revised estimates for FY 2011-12 based on the provisional annual accounts of
BSEB for FY 2010-11. A Supplementary petition for determination of ARR & retail
tariff petition for FY 2012-13 was subsequently filed by the Board vide letter no.
Com/ Tariff-152/ 2011-(Part-I) -017 on 2nd January 2012.
BSEB vide letter No. Com/ Tar-132/ 2011-392 dated 2nd March, 2012 submitted the
audited annual accounts for FY 2010-11 along with the audit certificate issued by
CAG to the Commission. Subsequently, BSEB vide letter No. Com/ Tar-132/ 2011-
451 dated 16th March, 2012 submitted the truing up petition of BSEB for FY 2010-
11 based on the audited annual accounts for FY 2010-11.
The BSEB filed petition for truing up for FY 2010-11, Performance Review for
FY 2011-12 and determination of ARR and Tariff for FY 2012-13. The
Commission issued the Tariff Order on 30th March, 2012 effective from 1st April,
2012.
The BSPHCL filed the Petition on behalf of Generation, Transmission and
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 10
Distribution Companies for provisional truing up of FY 2011-12 along with
provisional Annual Accounts for FY 2011-12, Performance Review for FY 2012-13
and MYT Petition for determination of ARR for FY 2013-14 to FY 2015-16 and
determination of tariff for FY 2013-14 on 14th November, 2012 vide their letter No.
Com/Tariff petition- 160/2012/2857 dated 12.11.2012.
Subsequently the Petitioner filed revised True up Petition for FY 2011-12 along with
Audited Accounts on 24.12.2012. The Commission issued the Tariff Order for
FY 2013-14 along with true-up of ARR for FY 2011-12 and APR of FY 2012-13 on
15th march, 2013 effective from 1st April, 2013.
1.5 Admission of Current Petition and Public Hearing Process
BSPHCL has filed the Petition for Truing up of FY 2012-13 on behalf of erstwhile
BSEB for the period 1st March, 2012 to 31st October, 2012 and on behalf of BSPGCL,
BSPTCL, NBPDCL and SBPDCL for the period 1st November, 2012 to 31st March,
2013 on the 11th November, 2013.
On preliminary verification of the Petition, the Commission has admitted the
Petition (Case No. 21/2013) on 12th November, 2013 and in accordance with
section 64 of the Electricity Act, 2003 and sub clause 6(5) of BERC (Terms and
Conditions of Determination of Tariff) Regulations, 2007, the Commission directed
the BSPHCL to publish the Petition in the abridged form in at least two daily
newspapers, one in English and the other in Hindi, having wide circulation in
the State inviting objections and suggestions from its stakeholders on the ARR and
Tariff Petition filed by it.
The public notices were published in the following newspapers as given below:
Sl. No. Name of the news paper Language Date of firstpublication
Date of secondpublication
1 Dainik Jagran Hindi 14.12.2013 -2 Prabhat Khabar Hindi - 19.12.20133 Hindustan Times English 14.12.2013 19.12.2013
The tariff petition was also placed on the website of BSPHCL for inviting objections/
suggestions on the petition and copies of the petition along with Annexure were
also made available for sale in the office of the Chief Engineer (Commercial),
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 11
BSPHCL.
The interested parties / stakeholders were asked to file their objections /
suggestions on the Petition on or before 3rd January, 2014. However, on request of
some stakeholder’s, the Commission extended the last date of submission up to
31st January 2014.
The proposal of BSPHCL was also placed before the State Advisory Committee
(SAC) in its meeting held on 23rd January 2014 and various aspects of the petition
was discussed by the Committee. The Commission took the advice of the State
Advisory Committee on the True up Petition filed by BSPHCL during the meeting of
the Committee. The minutes of the meeting are given in Annexure-I.
BSPHCL was also directed to publish the schedule for Public Hearings along with the
public notice inviting objections/suggestions.
The Commission received four (4) written objections / suggestions from consumers/
consumer organizations. The Commission directed Petitioners to submit the replies/
response to the suggestions/ objections to the Commission vide letter No. as
mentioned below:
BERC Letter No. DateNo. of
objection/suggestionsent to BSPHCL
Date of submissionof reply by BSPHCL
108 23/1/2014 Four (4) 31/01/201411/02/2014
Separate communications were sent to the objectors to take part in the public
hearing process for presenting their views in person before the Commission.
The public hearing was conducted at BERC Office on 11th January, 2014.
The names of consumers / consumer organizations who filed their objections and
the list of objectors participated in the public hearing for presenting their
objections / suggestions are given in Annexure-II.
A note on the main issues raised by the objectors in the written submissions and
also in the public hearing in respect of the petitions, along with the response of
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 12
BSPHCL and the Commission’s views on the response, are given in Chapter-3.
1.6 Approach of this order
The BERC (Terms and Conditions for Determination of Tariff) Regulations, 2007
provides for truing up of previous year (FY 2012-13).
The BSPHCL has now approached the Commission with the present Petition
on behalf of erstwhile BSEB for the period 1st April, 2012 to 31st October, 2012
and other unbundled entities from 1st November 2012 to 31st March, 2013 for
truing up of FY 2012-13 based on Audited Annual Accounts for FY 2012-13.
The Commission has examined the Petition and observed that certain additional
data / information and clarifications are required for taking up detailed analysis of
the Petition. The Commission directed Petitioners to submit the additional data /
information and clarifications through various letters. In response, the
Petit ioner has submitted their rep l ies. The status of the Commission’s
letters and the Petit ioners replies are as follows:
Commission’seven letter no. Date Petitioner’s
even letter no. Date
1565 29/11/2013 18 03/01/201496 21/01/2014
191 25/01/201499 22/01/201470 11/01/2014
199 27/01/2014101 22/01/2014122 23/01/2014 247 01/02/2014138 31/01/2014 257 05/02/2014
The Commission has undertaken ‘truing up’ of the FY 2012-13 based on Audited
Annual Accounts.
While considering the truing up of the ARR for FY 2012-13, the Commission has
been primarily guided by the following principles:
1. Controllable parameters have been considered at the level approved under
the Tariff Order for FY 2012-13 unless the Commission considers there are
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 13
valid reasons for revising the same.
2. Uncontrollable parameters have been revised, based on the actual
performance observed.
The truing up for the FY 2012-13 has been considered based on the BERC (Terms
and Conditions for Determination of Tariff) Regulations, 2007.
1.7 Contents of this order
The order is divided into Four (4) chapters as detailed below:
1. The First Chapter provides a background of BSPHCL, Commission’s Orders in
earlier years, the Petition, details of public hearing process, and the
approach adopted for this order.
2. The Second Chapter contains a summary of True up Petition of BSPHCL.
3. The Third Chapter provides a brief Account of the public hearing process,
including the objections raised by stakeholders, Petitioner’s response and
Commission’s views on the same.
4. The Fourth Chapter deals with the Truing up for the FY 2012-13 filed by BSPHCL.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 14
2. Summary of Petition filed by BSPHCL for True up for FY 2012-13
2.1 Summary of ARR approved in FY 2012-13 (RE)
The summary of Aggregate Revenue Requirement (ARR) approved in Review for FY
2012-13 in the Tariff Order dated 15th March, 2013 and now claimed by BSPHCL in
True up for FY 2012-13 is as given in the Table below:
Table 2.1: ARR approved in Tariff Order for FY 2012-13, in review and now claimed in True
up for FY 2012-13
(Rs. Crore)
SI .No Item of Expenditure
Approved inreview
(FY12-13)Apr-Oct
2013(BSEB)
Claimed in True upNovember 2012 to March 2013 Total
BSPGCL BSPTCL NBPDCL SBPDCL
1 Cost of Power Purchase 4167.07 2546.37 - - 588.3 1017.76 4152.43
2 PGCIL Transmission Charge 180 111.48 - - 91.03 15748 359.99
3 BSPTCL Transmission Charge - - - - 19.66 34.01 53.66
4 Employee costs (Net) 470.05 265.99 - 33.93 62.03 456.93
5 R&M Expenses 90.99 37.89 - 5.7 15.16 15.43 74.18
6 Admin &General Expenses 49.4 43.47 - 4.12 12.95 8.03 68.57
7 Depreciation 83.04 61.59 - 6.6 22.87 37.18 128.25
8 Interest &Financial Charges 144.5 149.22 - 4.31 38.47 44.44 236.44
9 Interest on working Capital 93.28 - - - - - 159.52
10 Return on Equity 85.05 - - - 95.83 124.91 220.74
11 Interest on Security Deposits - 7.02 - - 3.35 4.22 14.6
12 Total Revenue Requirement 5363.38 3223.02 - 54.67 949.65 1538.44 5925.31
13Add: Prior PeriodCharges(net)/Other debits - 594.5 - 0.01 66.89 84.48 745.88
14Less: Expenditure Disallowed dueto higher T&D Losses 1020.17 - - - - - 1025.22
15 Less: Non Tariff income 72.76 75.55 - 1.02 24.72 36.61 137.9
16Net Revenue Requirement (12+13-14-15) 4270.45 3741.97 - 53.66 991.82 1586.31 5508.07
17 Revenue from Existing Tariff 2930.08 1723.01 - - 357.96 796.2 2877.17
18Revenue from Gen/Trans TransTariff - - 53.66 - - 53.66
19Revenue from sale of power toNepal 430.98 137.83 - - 129.88 - 267.71
20 Revenue from sale of power to UI 155.87 - - 2.24 162.28
21 Gap / (Surplus) 909.39 1725.26 - 0 501.74 785.94 2147.25
22Additional Revenue Subsidy fromGovt 1859.83 - 1918.39
23 Net Gap/ (Surplus) (950.44) - 228.86
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 15
2.2 Request to the Commission
BSPHCL has requested the Commission to:
1. Admit the Petition;
2. Examine the proposal submitted by the Petitioner in the Petition for a favourable
dispensation;
3. Allow the Truing up for FY 2012-13 to be carried out on a consolidated basis and
pass on the revenue gap/(surplus) in the respective Petitions of NBPDCL and
SBPDCL as per the agreed principles;
4. Pass suitable orders with respective to approval for (surplus)/deficit in the True up
for FY 2012-13 amounting to Rs. 261.92 Cr for erstwhile BSEB and unbundled
entities on consolidated basis;
5. Pass separate order for the Petitioners against the present Petition;
6. BSPHCL may also be permitted to propose suitable changes to the respective
ARRs, prior to the final approval by the Commission. The BSPHCL believes that
such an approach would go a long way towards providing a fair treatment to all
the stakeholders and may eliminate the need for a review or clarification.
7. Condone any inadvertent omissions/errors/shortcomings and permit BSPHCL to
add/change/modify/alter this filing and make further submissions as may be
required at a future date.
8. Pass such Order, as the Commission may deem fit, appropriate keeping in view
the facts and circumstances of the case.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 16
3. Stakeholder’s Objections/Suggestions, Petitioner’sresponse and Commission’s observation
3.1 Introduction:
In response to the public notice inviting objections/suggestions of the stakeholders
on the Tariff Petition filed by BSPHCL, the Commission has received four (4) written
objections from the following consumers/consumer organizations:
1) Bihar Industries Association, Patna
2) Balamukund Concast Limited, Patna
3) Bihar Chamber of Commerce & Industries, Patna
4) Kalyanpur Cements Limited, Patna
The public hearing, as scheduled was held in court room of BERC office, Patna on
11th January 2014 wherein the representatives of the above objectors have put forth
their comments and suggestions before the Commission in the presence of the
Petitioner i.e. BSPHCL.
The Commission has examined the issues and concerns voiced by the
representatives of the above mentioned objectors and in their written comments as
well as those made in the public hearing and also the response of the Petitioner
thereon. The comments/ suggestions submitted by the stakeholder in response to
the ARR petition, the replies given by the Petitioner and the views of the Commission
have been summarized under various sub-heads as given below:
3.2 Issue-wise Stakeholder’s Objections/Suggestions, BSPHCL’s Response and
Commission’s observations.
Issue – 1: Prior period Employees’ cost:
M/s. Bihar Industries Association, M/s Balamukund Concast Limited, M/s Bihar
Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited have
submitted that the State Government in its Transfer Scheme dated 30.12.2012 has
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 17
committed to fund the entire prior period expenses related to Employees’ cost and
requested the Commission to disallow in truing up order.
M/s Balamukund Concast Limited has stated that there should not be any prior
period credit/charges as the truing up exercise for FY 2011-12 has already been
completed on the basis of audited annual accounts for FY 2011-12 It is not
understood as to how Rs. 575.46 Crore has been claimed as prior period employee
cost.
Petitioners’ submission:
It is submitted that the expenses booked under prior period are those expenses
which were not booked in that particular year to which they relate to due to non
availability of actual details while finalizing the accounts of that particular year and
represent actual expenses incurred and to be recovered from the consumers
through tariffs.
The State government has committed to fund the employee cost up to a particular
date. As, the transfer scheme is yet to be finalized by the State Government and till
date substantial amount is to be received, therefore, claimed in truing up. However,
on finalization of transfer scheme and receiving the amount from Government, the
Commission may adjust the cost accordingly in the ARR of the respective year.
Commissions’ observations:
The Commission has examined the prior period employee cost which has been
provided/accounted towards terminal benefits of employees as on the effective date
of transfer scheme i.e. 1st November 2012. As per the transfer scheme the State
Government shall fund the liability. Accordingly, the Commission has not considered
the prior period employees cost. The Commission has aptly discussed the issue
under Employee cost (Para 4.10) and also under Net Prior Period Credits / Charges
(Para 4.21) of truing up order.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 18
Issue – 2: Prior period Consumer dues:
M/s Bihar Industries Association, Patna has submitted that any adjustment of
consumer dues should not be allowed as this will amount to double accounting.
Petitioners’ submission:
The expenses payable to the consumers not accounted earlier were claimed as prior
period expenses and are not double accounted.
Commissions’ observations:
The Commission has examined other prior period expenditure and income and
accordingly, the net income is considered in the true up.
Issue – 3: Prior Period Power Purchase Cost
M/s Bihar Industries Association, M/s Bihar Chamber of Commerce & Industries and
M/s Kalyanpur Cements Limited have submitted that prior period Power Purchase
cost claimed by successor distribution companies is erroneous accounting as the
petition filed is a consolidated petition of the erstwhile BSEB and its four successor
companies and such prior period expenses have also resulted in revenue in BSEB and
both have nullifying effect.
Petitioners’ submission:
It is submitted that true up petition is filed for all the successor companies as a
whole. The prior period power purchase expenses relates to FY 2004-05 to FY 2011-
12 which represents supplementary bills received from Central Generating Stations
and PGCIL at a later date and are legitimate expenses incurred by the companies and
need to be passed onto the consumers.
Commissions’ observations:
As stated by the Petitioner these are supplemental power purchase bills received
during FY 2012-13. Further, the bills pertaining to the period of BSEB i.e. up to 31st
October 2012 received by the DISCOMs were accounted as prior period expenses,
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 19
since these DISCOMs came into existence w.e.f.1st November 2012. However, the
Commission has considered the prior period power purchase cost based on detailed
verification of the bills as discussed at relevant paragraphs.
Issue – 4: Return on Equity:
M/s Bihar Industries Association and M/s Balamukund Concast Limited have
submitted that equity capital has been increased from Rs.1551.14 Crore to Rs.
6965.66 crore. Neither authorized capital, paid up capital has been increased not
fresh equity capital infused. As per transfer scheme dated 30.10.2012 “on expiry of
one year from the effective date, the transfer scheme shall become final”. The
increase in equity capital has not been notified before 1.11.2012, it cannot be given
effect now and has become invalid and in fructuous.
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited
have submitted that no claims can be accepted on the basis of
anticipation/expectation of higher equity capital to be provided by the State
Government. RoE has to be determined with a prospective date and not with a
retrospective date and requested the Commission not to allow the RoE claimed by
the Petitioner.
Petitioners’ submissions:
It is submitted that the opening equity balances for the segregated entities were
considered as per revised submission made by M/s PFC, which is at Rs.6965.66 crore
as against the equity capital of Rs.1974.88 crore appearing in the audited annual
accounts of the segregated entities for FY 2012-13. Further, it is submitted that
Section 131(3) of the Electricity Act, 2003 specifies that “notwithstanding anything
contained in this section, where (b) a transaction of any description is effected in
pursuance of a transfer scheme, it shall be binding on all persons including third
parties and even if such persons or third parties have not consented to it”.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 20
Commissions’ observations:
The Commission has examined the issue and considered RoE on the equity capital
considered in the MYT order. This issue is discussed appropriately in the relevant
para 4.19 in this order.
Issue – 5: Gross Fixed Assets (GFA):
M/s Bihar Industries Association, M/s Balamukund Concast Limited, Patna have
submitted that the GFA has been inflated from Rs. 6965.66 crore to Rs.11393 crore
and requested to disallow the consequential depreciation claim and other heads.
Petitioners’ submissions:
It is submitted that the opening and closing GFA for FY 2012-13 for erstwhile BSEB
and segregated entities is as per adopted annual accounts and is exclusive of
revaluation /re-classification of Land and Land Rights carried out in
restructuring/transfer scheme process.
Further it is submitted they have provided the total opening & closing GFA of new
entities only as the balance from erstwhile BSEB would have been allocated in these
companies. The depreciation claimed in audited accounts is actual and not
computed on hypothetical/assumption basis. Further, whenever the life of the asset
gets over, the value of such assets were reduced from the GFA and accumulated
depreciation.
Commissions’ observations:
The Commission has not considered the revalued value of the land to the extent
revalued included in the GFA by the Petitioner. The Commission has considered
depreciation as per Regulation 73(2)(a) of BERC (Terms and Conditions for
Determination of Tariff) Regulations, 2007. This issue is elaborated appropriately in
the relevant para 4.15 in this order.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 21
Issue – 6: CTU Losses:
M/s Balamukund Concast Limited has submitted that the total power purchase of
13657 MU has been claimed for FY 2012-13 and has indicated 446 MU of losses in
CTU which works out to 3.36% at 400KV which is very high and requested the
Commission to scrutinize the complete data of source wise power purchase and
losses. The power injected by BSPHC, Sugar Mill, etc. should not be considered for
working out the loss in Central Sector. The power purchase from NTPC, NHPC, PTC
works out to 11114 MU and the loss of 446 comes to about 4%. The transmission
loss of 446 MU is erroneous and requires proper validation and justification.
Petitioners’ response
The CTU losses presented in the Audited annual accounts are actual CTU losses and
the percentage (%) worked out considering CTU losses and long term purchases. The
CTU losses are applicable for the power injected by generating stations outside the
State of Bihar and no CTU losses are applicable on power injected by state
generating stations/co-generating stations within the State. The energy inputs are
verified by the State Load Dispatch Centre (SLDC) and accordingly the same are
considered by Distribution Companies. It was stated in the petition that the
petitioner has considered the inter-state transmission loss or regional loss as per
adopted annual accounts of erstwhile BSEB, NBPDCL and SBPDCL for FY 2012-13.
Hence, the actual CTU losses as per audited accounts need to be considered and
approved by the Commission as the same are out of purview and control of
DISCOMs.
Commissions’ observations
The Commission has considered the CTU losses at 2.75% for FY 2012-13 as per the
information available in the ERPC website.
Issue – 7: Energy Balance and Transmission and Distribution losses:
M/s Balamukund Concast Limited, M/s Bihar Chamber of Commerce & Industries
and M/s Kalyanpur Cements Limited have submitted that the Transmission and
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 22
Distribution losses were shown at 6054 MU (CTU regional loss-446 MU, State
transmission loss–519 MU & Distribution loss–5089 MU) which comes to about 46%
on total power purchase of 13267 MU. If the sales to Nepal and UI are excluded
from power purchase, the loss comes to about 50%. It is prayed that the
Commission to examine in detail before allowing the T&D losses.
M/s Bihar Chamber of Commerce & Industries, Patna and M/s Kalyanpur Cements
Limited, Patna have submitted that the disallowance of cost of power due to higher
T&D loss adjusted against the State Government Grants could not be effected as
penalty on the licensee for non-adherence of directives of the Commission and also
the observations of the APTEL in T&D loss related appeals No.126/2008 and
128/2008 (Bihar Industries Association Vs BERC & others). It is requested not to
adjust the disallowed cost of power against Government grants and the total amount
of grants be treated as subsidy payable u/s.65 of the Electricity Act, 2003.
Petitioners’ response
It is submitted that various capital works are taken up viz. re-conductoring of
dilapidated conductor, replacement of old transformers with star rated distribution
transformers, system metering and consumer metering for proper accounting of
energy and reduction in wastage, proper metering, billing, anti theft measures, etc.
for reduction of losses in the system. However, the burden of higher T&D loss is not
passed on to the consumers, but is borne by the DISCOM’s from the State
Government Grants.
Commissions’ observations
The objections and response are noted by the Commission. The Commission has
considered the distribution losses as per the trajectory approved in the Tariff Order
for FY 2012-13 and accordingly computed the energy balance.
Issue – 8: Power purchase cost:
M/s Balamukund Concast Limited has submitted that the total power purchase in
FY 2012-13 is 13267 MU at a total cost of Rs.4152.43 crore (average cost
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 23
Rs.3.13/unit). The power purchased from DVC, Adani and NVVNL is at a higher cost
i.e. average cost of Rs.4.29/unit. If these sources cost is reduced from the total
purchases and cost thereon, the average cost works out to Rs.2.85/unit. It is stated
that they object the power purchase from DVC, Adani and NVVNL at a higher rate
than Rs.2.85/unit and the losses on this account should not be passed on to the
consumers and the state Government should compensate this amount through
resource gap grant.
M/s Bihar Chamber of Commerce & Industries, Patna and M/s Kalyanpur Cements
Limited, Patna have submitted that there has been a decrease in the average cost of
power purchased during FY 2012-13 and requested the Commission to determine
the FPPCA rate for FY 2012-13.
Petitioners’ response
The power purchased by BSPHCL in FY 2012-13 includes DVC, Adani and NVVNL as
per PPA and power allocation. All the sources from where power is being procured
have been approved by the Commission in Tariff Order dated 15th March 2013.
It is submitted that the matter of FPPCA formula and its implementation is well
settled by the Commission in its various FPPCA order and hence no comments.
Commissions’ observations
The Power Purchase quantum and cost from various sources is approved by the
Commission after prudence check and verification of bills at random.
Issue – 9: Disallowed Power purchase:
M/s Balamukund Concast Limited has submitted that the disallowed power has been
calculated including UI sales and sales to Nepal and accordingly, the cost of power
purchase of disallowed power is adjusted against Government resource gap. The
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 24
power purchased from DVC, Adani and NVVNL at higher rate should be disallowed
and the cost should be adjusted from resource gap grant.
Petitioners’ response
It is submitted that methodology of computation of disallowance of power purchase
is in line with that approved by the Commission in previous tariff orders i.e. average
power purchase cost including PGCIL transmission charges, which is adopted for
FY 2012-13.
Commissions’ observations
The additional power purchase due to excess T&D loss than that approved by the
Commission in the Tariff Order for FY 2012-13 is computed after prudence check and
the same is disallowed while arriving at the net power purchase cost.
Issue – 10: Depreciation:
M/s Balamukund Concast Limited has submitted that BSPHCL has claimed Rs.128.76
crore as depreciation for FY 2012-13 on the basis of closing GFA of Rs.11392.74
crore. It is stated that the Commission has considered closing GFA of Rs.5049.28
crore in truing up exercise for FY 2011-12 and it translate in to addition of Rs.6343.46
crore in its GFA, which appears to be erroneous and requires proper scrutiny of GFA.
Besides above the accumulated depreciation on the closing GFA of FY 2011-12 has
also to be looked in as some of the assets would have been fully depreciated.
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited,
have submitted that the petitioner has claimed higher depreciation of Rs.92.16 crore
in a single year over the actual depreciation for FY 2011-12 which was only Rs.36.60
crore. Depreciation details are not given in Schedule 11 of the respective company
accounts. Depreciation claimed seem to be unrealistic and requested the
Commission not allow.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 25
Petitioners’ response
It is submitted that depreciation amount claimed in truing up for FY 2011-12 is on
actual basis on GFA as per relevant provisions of BERC Tariff Regulations/Companies
Act. Further it is submitted that only land is revalued and no other assets are re-
valued in transfer scheme. No depreciation is claimed on land and the computation
of depreciation is correct. The value of fully depreciated assets is reduced from the
value of GFA along with accumulated depreciation.
The details of depreciation are given in Schedule 19 of the annual accounts of the
erstwhile BSEB and segregated entities.
Commissions’ observations
The Commission has considered the depreciation as per the Regulation 73(2) (a) of
BERC (Terms and Conditions for Determination of Tariff) Regulations, 2007. The issue
of value of GFA and Depreciation is elaborately discussed in para 4.15 of this order.
Issue – 11: Interest and Finance charges:
M/s Balamukund Concast Limited has submitted that BSPHCL have erroneously
claimed interest and finance charges. The interest charges on REC loan (RMPN and
RGGVY) is claimed, whereas, the amount sanctioned by Central Government under
these schemes contain 90% grant and 10% loan. As such the amount claimed is
erroneous and requires proper validation of the data and requested the Commission
to call for all details scheme-wise indicating the loan amount used for creation of
assets.
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited
have submitted that the amount claimed by the petitioner is wrong as the same is
not prepared on the laid down guidelines by the Commission. Rs.46.51 crore is
shown as interest capitalised as shown in the accounts of BSEB. No interest has been
capitalised during November’12 to March’13 by any of the four companies.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 26
Petitioners’ response
It is submitted that all details were provided in the petition along with annual
accounts, however, there are certain errors in the table 16 of the true up petition
which is due to linking/formula error. The REC loans are at Rs.56.21 crore as against
Rs.92.15 crore depicted in the table 16 of the petition. Further it is stated that
interest is calculated on 10% loan amount only and same interest is by State
Government on behalf of the Company.
It is submitted that alternate method of computation of interest charges is not
followed. Post restructuring, it is unadvisable that corporate entities adopt such
method for computation of interest charges. Interest of Rs.46.51 crore capitalised by
BSPGCL and Rs.0.39 crore by BSPTCL and for DISCOMs it is nil as no interest amount
has been taken related to old loans.
Commissions’ observations
The Commission has computed the interest and finance charges as per the BERC
(Terms and Conditions for determination of Tariff) Regulations, 2007 and considered
the same in the truing up order. This issue is aptly discussed at para 4.16 (A) of this
order.
Issue – 12: Other Interest and Finance charges:
M/s Balamukund Concast Limited, M/s Bihar Chamber of Commerce & Industries
and M/s Kalyanpur Cements Limited have submitted that considerable increase has
been claimed under other interest and finance charges. It is requested that the
Commission to scrutinize the interest claimed under the head other interest and
finance charges.
Petitioners’ response
The other interest and finance charges include the following:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 27
It is submitted that the interest on General Provident Fund (Sl.No.5 of table above)
shall be borne by the State Government.
Commissions’ observations
The Commission has considered the amounts, except Sl.No.5 and 6 of the table
above, as per the BERC Tariff Regulations, 2007 and Tariff Principles, Design and
Tariff Schedule of the Tariff order for FY 2012-13. This issue is aptly discussed at para
4.16 of this order.
Issue – 13: Interest on working capital:
M/s Balamukund Concast Limited, M/s Bihar Chamber of Commerce & Industries
and M/s Kalyanpur Cements Limited have submitted that working capital is
erroneously calculated. The GFA requires to be substantiated for allowing
maintenance spares and payment made by State Government to NTPC is not
considered.
Petitioners’ response
It is submitted that resource gap funding of approx. Rs.200 crore has been paid to
NTPC on behalf of BSEB by State Government out of resource gap to be paid to BSEB.
As such there would be no impact on proposed working capital computations.
Sl.No. Particulars Amount
(Rs. crore)
1Discount to consumers for timelypayment of bills (Rebate) 17.90
2 Power factor Rebate 37.163 Interest on Fixed Deposits (0.02)4 Interest on Group saving Scheme 0.015 Interest on Contributory Provident fund 23.82
6Late payment Surcharge to powersuppliers 4.47
7 Other Misc. and Bank charges 2.628 Total 85.96
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 28
Commissions’ observations
The Commission has noted the objection and the reply of the petitioner. The
Commission has observed that the petitioner does not have to arrange working
capital for payment to NTPC in view of the payment made by State Government
directly against power purchase bills to NTPC. The cost of power purchase forms
part of receivables and is one of the components of working capital. Hence, the
amount paid to NTPC shall not be included in the receivables and shall be reduced
from the working capital requirement. Accordingly, the Commission has deducted
the amount equivalent to two months of bill amount paid to NTPC from the working
capital.
The Commission has scrutinized all revenue and expenses/cost component of the
truing up petition vis-à-vis the revenue and expenses reported in the audited annual
accounts of BSEB and segregated companies in consonance with the BERC (Terms
and Conditions for Determination of Tariff) Regulations, 2007 and approved after
prudence check. The interest on working capital computations are influenced by the
cost components and accordingly, the Commission has considered the interest on
working capital for truing up.
Issue – 14: Interest on Security Deposit:
M/s Balamukund Concast Limited, Patna has submitted that BSPHCL has claimed
interest on security deposit. The consumer category wise amount of security deposit
held and interest paid were not provided. Security Deposit is used by BSPHCL as
working capital, so claiming interest on working capital and interest on security
deposit is not proper and justified. BSPHCL is not allowing adjustment of interest on
security deposit to LT category of consumers and requested the Commission not to
allow in truing up.
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited
have submitted that the licensees retain huge amount of money of the consumers in
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 29
the form of Security Deposit and as per provision of BESC 2007 interest is payable at
Bank Rate. It is further stated that licensee has been taking short term/overdraft
from commercial banks at higher rate and interest paid on SD to the consumers is at
bank rate. The net gain due to difference in interest on borrowed funds vis-à-vis the
interest paid on SD to consumers should have been passed on to the consumers.
The Petitioner has sought to recover the amount of interest on SD from the
consumers. There seems to be no rationale or logic for such proposal and requested
the Commission to reject the proposal.
Petitioners’ response
It is submitted that interest on security deposit is promptly being paid to all the HT
consumers and stated that they are in the process of collating and updating the
information on security deposits paid by the LT consumers. It is further stated that
after full information is collected and configured, necessary action for adjustment of
interest on security deposit will be taken.
Commissions’ observations
The Commission has not considered the interest and security deposit claimed by the
Petitioner. This issue is aptly discussed in para 4.18 of this order.
Issue – 15: Revenue Income:
M/s Balamukund Concast Limited, Patna has submitted that in review for FY 2012-13
(RE) in the Tariff order dated 15th March 2013, the power purchase is considered at
9568 MU. The revenue is considered at Rs.2930.08 crore from sale of power in the
State and Rs.430.98 crore from sale to Nepal and surplus/additional power. In truing
up the power purchase is indicated at 13267 MU, whereas the revenue is indicated
at Rs.3360.82 crore which is same level which the Commission has approved on
power purchase of 9568 MU. It is stated that it is evident from the facts stated
above, the revenue income has been kept minimum to increase the revenue gap and
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 30
to mis-utilise the State Government Grant. The workings of the revenue income are
objected to and requested the Commission to rework this.
Petitioners’ response
It is submitted that the revenue income considered in the truing up is actual and
audited revenue for FY 2012-13 and gap resulted in true up is outcome of these
workings.
Commissions’ observations
The Commission has scrutinized the sale of energy and revenue realised vis-à-vis the
approved level of T&D losses in MYT order and revenue considered in this truing up
order.
Issue – 16: Revenue Gap / Surplus of earlier years:
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited
have submitted that the cumulative effect of truing up of past five years (FY 2006-07
to FY 2010-11) would be only Rs.148.06 crore (surplus), which was not considered in
the review of ARR for FY 2012-13 (RE). Had this amount being taken, the surplus of
Rs.950.44 crore would have a surplus of Rs.1098.50 crore (Rs.950.44 crore +
Rs.148.06 crore) during FY 2012-13 (March 2013). The petitioner in the truing up
exercise for FY 2012-13 has not taken into account the surplus of Rs.148.06 crore in
its submission and requested the Commission to correct the same.
Petitioners’ response
It is submitted that the surplus of Rs.170 crore for FY 2011-12 has been considered in
the petitions of NBPDCL and SBPDCL for ARR & Tariff for FY 2013-14 & FY 2014-15.
The Revenue Gap for FY 2013-14 reflects past gap/surplus for FY 2011-12 as well as
FY 2012-13.
Commissions’ observations
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 31
The Commission has considered the accumulated surplus and adjusted against the
ARR for FY 2012-13 in the Tariff Order for FY 2012-13. The accumulated surplus to
end of FY 2012-13 considered by the Commission based on truing up orders upto FY
2012-13 is aptly discussed at para 4.25 of this truing up order for FY 2012-13.
Issue – 17: Administration and General Expenses:
M/s Bihar Chamber of Commerce & Industries and M/s Kalyanpur Cements Limited
have submitted that the administration and general expenses have increased by Rs.
20.72 crore over FY 2011-12 and no explanation for such huge rise in the expenses
has been given. As per standard norms, the annual growth should be 10% and the
consumers could not be loaded and requested the Commission to make appropriate
deduction in the A&G expenses.
Petitioners’ response
It is submitted that increase in A&G expenses is due to payment of registration
charges for new companies, restructuring expenses, own consumption of electricity
brought to books for the first time, etc. All these A&G expenses are actually
incurred and to be considered for truing up for FY 2012-13.
Commissions’ observations
The Commission has noted the objection and the reply of the petitioner. The
Commission on prudence check has allowed the A&G expenses in truing up.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 32
4. Truing-up for FY 2012-13
4.1 Background
The Commission issued the Tariff Order for FY 2012-13 dated 30th March 2012,
determining the Annual Revenue Requirement (ARR) and Retail Supply Tariff for
FY 2012-13 for the erstwhile BSEB. The Commission carried out the ‘Review’ exercise
for FY 2012-13 in the Tariff Order for FY 2013-14 dated 15th March 2013, based on
the revised estimates submitted by BSPHCL on behalf of the erstwhile BSEB.
The Bihar State Power Holding Company Limited (BSPHCL) has submitted the
petition for truing-up for FY 2012-13 on 11th November 2013, along with Audited
Annual Accounts for FY 2012-13, on behalf of the erstwhile BSEB.
BSPHCL has submitted that since unbundling is effective from 1st November 2012,
consolidated Audited Annual Accounts are available for erstwhile BSEB up to
31st October 2012 and segregated Audited Annual Accounts for the unbundled
entities for the period from 1st November 2012 to 31st March 2013. BHPHCL has
requested to allow the truing up for FY 2012-13 to be carried out on a consolidated
basis and pass on the revenue gap / (surplus) in the respective petitions of NBPDCL
and SBPDCL as per the agreed principles.
Truing up for FY 2012-13 is to be done according to the Regulation 22 (1) & 2 of the
BERC (Terms and Conditions for Determination of Tariff) Regulations, 2007 which is
reproduced below:
“The Commission shall undertake a review along with next Tariff Order of the
expenses and revenues approved by the Commission in the current year Tariff Order.
While doing so, the Commission shall consider variations between approvals and
revised estimates / pre-actuals of the sale of electricity, income and expenditure for
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 33
the relevant year and permit necessary adjustments / changes in case such variations
are for adequate and justifiable reasons. Such an exercise shall be called Review.”
“After audited accounts of the year are made available, the Commission shall
undertake a similar exercise as in sub-clause (1) above based on the final actual
figures as per the audited accounts. This exercise based on the audited accounts shall
be called ‘Truing-up’. The Truing-up exercise for any year shall not ordinarily be
considered after more than one year gap after “Review”.
Accordingly, the “Truing-up” exercise for FY 2012-13 has been undertaken by the
Commission on the basis of audited annual accounts for FY 2012-13 and BERC (Terms
and Conditions for determination of Tariff) Regulations 2007. However, wherever
deemed necessary, the Commission has considered expenses based on prudence
check and after taking into account efficiency parameters like T&D losses, generating
stations plant operating parameters, etc.
4.2 Truing-up of ARR for FY 2012-13
The BSPHCL, in its petition for truing-up for FY 2012-13, has furnished the actual
energy sales, revenue and expenditure for FY 2012-13 based on the audited annual
accounts for FY 2012-13. Accordingly the revised ARR, revenue and consequent gap
for FY 2012-13, have been claimed by the Petitioner. The Commission has analyzed
the components of actual energy sales, revenue, expenses and gap projected by the
Petitioner under truing-up for FY 2012-13 in the subsequent paragraphs.
4.3 Category wise energy sales
Petitioner’s submission:
The BSPHCL in Format – 1 of its petition, has submitted the actual energy sales of
7212.57 MU for FY 2012-13 on the basis of audited annual accounts as given in the
Table below:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 34
Table 4.1: Category-wise actual energy sales proposed for FY 2012-13
(MU)
Sl.No
CategoryApproved in
review inTariff Orderdated 15th
March 2013
Actuals during FY 2012-13BSEB(from
Apr – Oct2012)
NBPDCL(Nov 2012-Mar 2013)
SBPDCL(Nov 2012-Mar 2013)
Total Salesduring
FY 2012-13
a b c d e F g = d+e+f1 Kutir Jyoti (Rural)- Unmetered 341.00 317.75 130.31 67.13 515.192 Kutir Jyoti (Rural)- Metered3 Kutir Jyoti (Urban)4 Domestic - I 551.00 493.51 217.13 118.02 828.665 Domestic - II 1556.00 918.41 221.36 373.57 1513.346 Domestic - III 1.00 0.38 0.39 0.07 0.847 NDS-I (Rural) 15.00 12.91 6.12 2.57 21.608 NDS-II (Urban) 725.00 423.11 105.59 178.15 706.859 NDS-III (Temples, etc.) 2.00 1.04 0.22 0.72 1.98
10 Irrigation IAS-I (Private) 272.00 102.83 5.51 83.88 192.2211 Irrigation IAS-I I (Government) 144.00 83.77 33.53 27.01 144.3112 LT Industrial LT IS-I 143.00 82.96 24.27 39.42 146.6513 LT Industrial LT IS-II 97.00 55.39 16.76 32.32 104.4714 Public water works (PWW) 54.00 30.69 8.81 13.80 53.3015 Street Light - I (Metered) 8.00 5.26 2.04 1.97 9.2716 Street Light - II (Un-Metered) 43.00 24.20 3.35 19.53 47.0817 Street Light – III - - - - -18 High Tension HTS-I 628.00 378.36 75.54 162.82 616.7219 High Tension HTS-II 184.00 130.60 22.53 61.96 215.0920 High Tension HTS-III 162.00 41.72 6.36 17.59 65.6721 HTSS (Induction furnace) 440.00 282.74 30.89 193.65 507.2822 Railway Traction RTS-I 287.00
240.76 5.14 202.74 448.6423 Railway Traction RTS-II 206.0024 Sales from additional power - - - - -
Total Sales within State 5859.00 3626.39 915.85 1596.92 6139.1625 Sales to Nepal 555.00 305.25 276.19 - 581.4426 UI Sales 468.00 456.24 12.50 23.23 491.97
Grand Total 6882.00 4387.88 1204.54 1620.15 7212.57
Commission’s analysis:
The Commission, in the Tariff Order dated 30th March 2012 for FY 2012-13, had
approved the energy sales of 8626 MU for FY 2012-13. In the Tariff Order dated 15th
March 2013, the Commission had approved the revised estimated sales of 6882 MU
for FY 2012-13 in the review for FY 2012-13.
The actual total sales of Kutir Jyoti for FY 2012-13 have been shown by the Petitioner
as 515.19 MU, which on an average works out to 32 units/month/connection.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 35
While approving the consumption for Kutir Jyoti category for FY 2012-13, the
Commission has taken into consideration the verification report submitted by the
consultant appointed by the Commission for the purpose, which has substantiated
consumption pattern of 18 units per month per service connection for Kutir Jyoti
rural consumers. Though the Kutir Jyoti consumers in urban areas are metered, the
erstwhile BSEB has not furnished the consumption based on meter readings. Hence,
the Commission has assessed the consumption for this category at 30 units per
month per service connection.
The Commission in paragraphs 4.3 and 5.2 of the Tariff Order dated 15th March 2013
has elaborated the procedure followed for estimating the Kutir Jyoti consumption.
Further, the Commission, while reviewing the performance for FY 2012-13 (RE) in
Tariff Order for FY 2013-14 and approving the energy sales of Kutir Jyoti , has
adopted a norm of 18 units / month for Kutir Jyoti (Rural) and 30 units / month for
Kutir Jyoti (Urban).
The Commission, in the "TARIFF SCHEDULE FOR RETAIL TARIFF RATES AND TERMS
AND CONDITIONS OF SUPPLY FOR FY 2012-13" given at Appendix -1 of the Tariff
Order for FY 2012-13, had defined Kutir Jyoti connection based on the connected
load norm for Kutir Jyoti consumer and had also directed that, “in case it is detected
that norms prescribed for consumption are violated, the Kutir Jyoti tariff shall
immediately become inoperative and rates applicable to DS-I and DS-II category as
the case may be, with appropriate charge shall apply in such cases."
In view of the above direction, the Commission has no reason to change the
consumption norm of 18 units per month for Kutir Jyoti (Rural) and 30 units per
month for Kutir Jyoti (Urban) consumers. Based on the already approved norm of 18
units / month and 30 units / month for Rural and Urban Kutir Jyoti connections
respectively, the total Kutir Jyoti consumption works out to 319.52 MU as detailed
below:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 36
Category Number ofconsumers
Consumption normkWh/month/
connection
Sales for fullyear (MU)
Kutir Jyoti (Rural) 1124885 18 242.98Kutir Jyoti (Urban) 212608 30 76.54Total 1337493 319.52
For irrigation and agriculture, the sales approved for FY 2012-13 in the tariff order
dated 30th March 2012 and now projected by the Petitioner based on audited annual
accounts for FY 2012-13 are as given below:
Category Approved in Tariff order dated30th March 2013
Now projected as per audited annualaccounts for FY 2012-13
No. ofConsumers
Connectedload (kW)
Sales(MU)
No. ofConsumers
Connectedload (kW)
Sales(MU)
IAS - I 51663 182916 272 54175 125097 192.22IAS - II 5810 87598 317 2496 59903 144.31Total 57473 270514 589 56671 185000 336.53
Number of connections and connected load were taken from audited annualaccounts of NBPDCL and SBPDCL for FY 2012-13.Total connected load given for IAS-I and IAS-II in the annual accounts issegregated to IAS-I and IAS-II considering the ratio approved in tariff order.
The details of number of connections and connected load for IAS-I and IAS-II are
captured from the annual accounts of NBPDCL and SBPDCL for FY 2012-13. Since the
total connected load (kW) for IAS-I and IAS-II are indicated in the annual accounts of
NBPDCL and SBPDCL, the same is segregated to IAS-I and IAS-II in pro-rata of the
connected load approved in the Tariff Order 30th March 2012. The sales of 192.22
MU projected for IAS-I and 144.31 MU projected for IAS-II by the Petitioner are
observed to be within the norms approved by the Commission.
For other categories, the actual energy sales furnished as per the audited accounts
are considered reasonable and accepted.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 37
Table 4.2: Summary of Category-wise energy sales approved for FY 2012-13
(MU)
Sl.No. Category
Approved inTariff Order
forFY 2012-13
Approved inreview forFY 2012-13(RE) in T.O.dated 15th
March 2013
Actual energysales for
FY 2012-13 asper audited
accounts
Nowapproved forFY 2012-13 in
truing-up
1 Kutir Jyoti 457.40 341.00 515.19 319.522 Domestic - I 1047.74 551.00 828.66 828.663 Domestic - II 1424.91 1556.00 1513.34 1513.344 Domestic - III 0.99 1.00 0.84 0.845 NDS-I (Rural) 22.15 15.00 21.60 21.606 NDS-II (Urban) 581.79 725.00 706.85 706.857 NDS-III (Temples, etc.) 18.08 2.00 1.98 1.988 Irrigation IAS-I (Private) 271.63 272.00 192.22 192.229 Irrigation IAS-I I (Government) 317.17 144.00 144.31 144.3110 LT Industrial LT IS-I 196.62 143.00 146.65 146.6511 LT Industrial LT IS-II 126.66 97.00 104.47 104.4712 Public water works (PWW) 160.32 54.00 53.30 53.313 Street Light - I (Metered) 6.98 8.00 9.27 9.2714 Street Light - II (Un-Metered) 34.30 43.00 47.08 47.0815 High Tension HTS-I 966.94 628.00 616.72 616.7216 High Tension HTS-II 425.52 184.00 215.09 215.0917 High Tension HTS-III 221.30 162.00 65.67 65.6718 HTSS (Induction furnace) 446.52 440.00 507.28 507.2819 Railway Traction RTS-I & II 784.77 493.00 448.64 448.6420 Sales from additional power 266.00
Total Sales within State 7777.79 5859.00 6139.16 5943.4921 Sales to Nepal 555.00 555.00 581.44 581.4422 UI Sales 293.00 468.00 491.97 491.97
Grand Total 8625.79 6882.00 7212.57 7016.90
The Commission approves the category-wise energy sales for FY 2012-13 at
7016.90 MU in the truing up. The same would be used for approving the power
procurement cost.
4.4 Transmission and Distribution Losses
Petitioner’s submission:
The BSPHCL in Format – 5 of its petition has shown the T&D Losses for FY 2012-13 at
45.49%.
The Table below summarizes the overall T&D loss levels, as proposed by the
Petitioner, for FY 2012-13.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 38
Table 4.3: T&D Losses proposed for FY 2012-13
(MU)Particulars Approved
in TariffOrder for
FY 2012-13
Actuals as perAnnual
Accounts forBSEB (Apr -12 to
Oct-12)
Actuals asper Annual
accounts forNBPDCL
(Nov – Mar2013)
Actuals asper Annual
accounts forSBPDCL
(Nov – Mar2013)
Total forFY 2012-13
T & D Losses 27.50% 45.83% 35.85% 50.30% 45.49%
The BSPHCL submitted that the losses have increased due to extensive investment in
rural areas and supply to BPL categories. Both distribution companies are in the
process of putting in place better administration in high leakage areas to control
losses. It is submitted that substantial KJ connections are released during FY 2012-13
and average power supply in rural areas has also increased.
Commission’s analysis:
The Commission has fixed the T&D loss trajectory for FY 2012-13 at 27.50%. In the
petition for true-up of FY 2012-13, BSPHCL has claimed T&D loss for FY 2012-13,
as per annual accounts, at 45.49%.
The Commission has observed that the erstwhile BSEB and the unbundled utilities
i.e. NBPDCL and SBPDCL have not been able to meet the loss reduction target set
by the Commission. The audited accounts of erstwhile BSEB and the unbundled
DISCOMs are also reflecting increasing trend of T&D loss.
BSPHCL submitted that the losses have increased due to extensive investment in
rural areas and providing connections to BPL categories, which is not justifiable.
The Commission has noted that Central Government sponsored scheme such as
APDRP, R-APDRP and strengthening of transmission and distribution network of
the erstwhile BSEB should have reduced the overall T&D loss of the erstwhile
BSEB. In addition, the State Government has also provided plan funds for 100%
metering and replacement of old conductors. All these schemes should have
helped erstwhile BSEB to reduce T&D loss rather than increasing it. Hence, rural
electrification cannot be held responsible for high T&D loss in Bihar where funds
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 39
are flowing for network and distribution system improvement through Central
Government and multilateral funding agencies such as ADB, PFC etc.
Considering all the above aspects, the Commission has fixed the T&D loss
trajectory for FY 2012-13 at 27.50% in the Tariff Order for FY 2012-13 and in the
MYT order dated 15th March, 2013.
The Commission is of the view that the T&D loss is a controllable parameter and it
is the responsibility of the Distribution licensees to take appropriate steps to bring
down the T&D loss level. In this connection, the Commission has given number of
directives to improve the performance of the distribution licensees, which if
implemented in true spirit, should have brought down the T&D loss level
considerably.
The Commission cannot allow the burden of higher T&D loss due to non
achievement of T&D loss reduction trajectory as approved by the Commission, to
be passed on to the consumers.
Accordingly, the Commission confirms the T&D loss at 27.50% for truing up
purpose for FY 2012-13. The same has been considered for computation of the
power purchase cost of FY 2012-13 in truing up.
The T&D loss level target set by the Commission, T&D losses as per audited annual
accounts of segregated entities of BSPHCL and the level approved by the Commission
in the truing-up for FY 2012-13 is summarized in the Table below.
Table 4.4: Approved T&D Losses for FY 2012-13
Particulars Approved in TariffOrder forFY 2012-13
Approved inreview forFY 2012-13 inTariff Order dated15th March 2013
As per Auditedannual accountsfor FY 2012-13
Now approvedin truing up forFY 2012-13
T&D losses 27.50% 27.50% 45.49% 27.50%
4.5 BSEB’s Own Generation
Petitioner’s submission:
The erstwhile BSEB owned only one power generating station (Thermal), i.e. Barauni
Power Station (BTPS), located at Barauni with two units (Unit 6 and 7) of 110 MW
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 40
each which are under Renovation and Modernisation and therefore, no generation
has been recorded for the year 2012-13.
4.6 Power Purchase
Petitioner’s submission:
The erstwhile BSEB has firm allocations of power from thermal power plants of
NTPC, hydel Power plants of NHPC, hydel plants at Chukka and Tala through PTC and
hydel plants of BSHPC. In addition to these, there are power purchase agreements
with DVC, Adani, NVVNL & Sugar Mills and other plants.
The BSPHCL has submitted the gross power purchase of 13267 MU from all sources
in its Truing-up petition for FY 2012-13. BSPHCL has submitted that it has purchased
entire available energy from long-term sources and also purchased short-term
energy as per requirement of DISCOMs. BSPHCL has requested the Commission to
approve the net power purchase of 12821 MU for the FY 2012-13, which is as per the
audited annual accounts, as given in the Table below:
Table 4.5: Power Purchase proposed for FY 2012-13
(MU)
Sl.No. Particulars
Approved inreview forFY 2012-13
Actuals during for FY 2012-13BSEB(Apr-
Oct 12)
NBPDCL(Nov-
Mar 13)
SBPDCL(Nov-
Mar 13)
Total forFY 2012-13
NTPC1 Farakka 2834 1639 532 921 30922 Talcher 2585 1462 430 744 26353 Kahalgaon 2662 1590 465 804 28594 KBUNL - - - - -5 NVVNL - 693 - - 693
Total - NTPC 8081 5383 1427 2469 9279NHPC
6 Rangit 137 83 10 18 1117 Teesta 726 403 25 43 470
Total - NHPC 863 486 35 60 581PTC
8 Chukka 580 404 22 37 4639 Tala 1122 737 20 34 791
Total - PTC 1702 1142 41 71 1254Others
10 Nepal - - - - -11 BSHPCL 57 37 4 6 4712 New Swadeshi Sugar Mill 54 28 37 64 12913 RE Purchase Solar - - - - -14 RE Purchase Other - - - - -15 Medium Term / UI - 35 12 21 68
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 41
16 DVC 100 137 125 217 48017 Adani 1254 768 242 418 142818 NEA+ Short Term 1518 1 - - 1
Total Others 2982 1007 420 726 2153Grand Total 13629 8018 1923 3326 13267
19 Less UI Sale (1069) - - - -20 CTU(Transmission) Losses - 304 52 90 446
Net Purchase after CTULosses 12559 7714 1871 3236 12821
Commission’s analysis:
The Commission recognizes the sources of power purchase, as outlined by BSPHCL
based on the audited annual accounts for FY 2012-13. However, the quantum of
power purchase and the cost associated with the same would be approved after
taking into cognizance the approved energy sales and the T&D loss trajectory
approved by the Commission.
The Commission intends to use the same methodology for approval of the quantum
of power purchase and cost associated with the same, based on the information
available in the audited annual accounts for FY 2012-13. Commission approves the
quantum of power purchase on the same principles, as was done earlier during the
truing-up for FY 2006-07 to FY 2011-12.
The Summary of the approved power purchase quantum from various sources for
FY 2012-13 is given in the Table below:
Table 4.6: Source-wise Power Purchase quantum approved for FY 2012-13
(MU)
Sl.No. Particulars
Approved inTariff Orderfor FY 2012-13
Approved inreview for FY2012-13 in TariffOrder dated 15th
March 2013
Actuals as perannualaccounts forFY 2012-13
Now approvedin truing-upfor FY 2012-13
NTPC1 Farakka 2889 2834 3092 30922 Talcher 2449 2585 2635 26353 Kahalgaon 2670 2662 2859 2859
Total - NTPC 8008 8081 8586 8586NHPC
4 Rangit 119 137 111 1115 Teesta 549 726 470 470
Total - NHPC 668 863 581 581PTC
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 42
6 Chukka 543 580 463 4637 Tala 909 1122 791 791
Total - PTC 1452 1702 1254 1254Others
8 KBUNL 321 - - -9 NVVNL - - 693 693
10 BSHPCL 30 57 47 4711 Sugar Mill 29 54 129 12912 DVC - 100* 480 48013 Adani - 1254 1428 142814 NEA+Short
term 3355 1518 1 115 Medium
term/UI - (1069) 68 6816 Renewable
Energy 278 - - -17 Total Others 4013 1914 2846 284618 Grand Total 14142 12559** 13267 13267
* Kept blank by oversight in T.O. dated 15th March 2013**Wrongly typed as 12459 in T.O. dated 15th March 2013
The Commission approves the total quantum of power purchase at 13267 MU for
the purpose of working out the energy balance and computation of the power
purchase cost as part of the truing-up exercise for FY 2012-13.
4.7 Energy Balance
Petitioner’s submission:
The BSPHCL submitted the energy balance for FY 2012-13 based on the actual energy
Sales and T&D losses as given in Table below:
Table 4.7: Energy Balance proposed for FY 2012-13
Sl.No. Particulars Unit
Approvedin review
forFY 2012-13
Actuals during FY 2012-13
BSEB(Apr-
Oct 12)
NBPDCL(Nov-
Mar 13)
SBPDCL(Nov-
Mar 13)
Total for(FY 2012-
13)Total Power Purchases
1 Own Generation MU2 Total Power Purchase
from Long Term Sources MU 9576 8018 1923 3326 13267
3 Transmission Loss inRegional transmissionsystem
%2.73% 3.79% 2.70% 2.70% * 3.36%
4 Transmission Loss inRegional transmissionsystem
MU261 304 52 90 446
5 Power available at State MU 9315 7714 1871 3236 12821
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 43
Periphery6 State Transmission Loss % 4.05% 4.05% 4.05% 4.05% 4.05%7 State Transmission Loss MU 377 312 76 131 5198 Power available at
DISCOMs peripheryMU 8938 7401 1795 3105 12302
Total Sales9 Energy Sales within state MU 5859 3626 916 1597 6139
10 Energy sale outside state(Nepal)
MU 555 305 276 - 581
11 Sale in bilateral trade / UI MU 468 456 12 23 49212 Total Energy Sales MU 6882 4388 1205 1620 721313 Distribution Losses MU 2056 3013 590 1485 508914 Distribution Losses % 24.27% 43.39% 33.13% 48.19% 43.09%
*% derived based on actual CTU Loss and considering total power purchase as per BERC methodology
The BSPHCL has requested to consider the energy balance as shown above for
FY 2012-13 and accordingly approve the power purchase cost.
Commission’s analysis:
From the energy balance proposed by the Petitioner in the above Table, the
Commission has noted that the CTU losses proposed in the Eastern Region System
are 446 MU which when considered on the power purchased from the sources
outside the state works out to 3.62% against 2.73% approved for FY 2012-13 (RE).
On verification from the ERPC website, the average pooled transmission loss in
Eastern Region Transmission System during FY 2012-13 was 2.75%; hence the
Commission considers the Regional Transmission System loss at 2.75% which works
out to 339 MU on power purchased of 12329 MU from sources outside the state for
FY 2012-13 in truing up.
For estimating the additional power purchase to be disallowed due to excess
distribution loss, the total purchases from the various sources has been worked out
considering the impact of average regional transmission loss
(2.56%= 339/13267*100) applicable on the total power purchase. The reason for
applying the average regional transmission loss is that the power purchase quantum
also includes sources of power on which the regional transmission losses are not
applicable i.e. Nepal, BSPHC, Sugar mills etc. Accordingly, the gross power purchase
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 44
required to be done in FY 2012-13 is 9741 MU with the regional transmission loss of
249 MU ((9741 = 9492/(1-2.56%)).
The Commission approves the energy requirement of the Petitioner at the state
periphery based on the actual sales and T&D losses. The T&D losses have not been
considered on sales in bilateral trade/UI.
The energy balance for FY 2012-13 has been computed based on the approved sales
in true up during the year, considering the approved level of T&D losses, CTU losses
and the power purchased to meet the demand from the consumers.
The details of energy requirement and energy availability during FY 2012-13 are as
given in Table below:
Table 4.8: Energy Balance approved for FY 2012-13
(MU)
Sl.No. Particulars Unit
Approvedin Tariff
Order forFY 2012-13
Approved inReview for FY
2012-13 inTariff Order
Dated15th March 13
Actuals asper AnnualAccounts
forFY 2012-13
Approvedin truing-
up forFY 2012-13
A Energy Requirement1 Energy sales MU 7778 5859 6139.16 5943.492 Sales outside state (Nepal) MU 555 555 581.44 581.443 Sale in bilateral trade / (UI) MU 293 468 491.99 491.994 Total Energy Sales MU 8626 6882 7212.57 7016.905 T & D Losses % 27.50% 27.50% 45.49% 27.50%6 T&D Losses MU 3161 2433 5608 24757 Energy Requirement MU 11784 9315 12821 9492
8Regional transmissionsystem loss % 2.51% 2.73% * 3.36% 2.56%
9 Regional transmission loss MU 296 261 446 24910 Total energy requirement MU 12082 9568 13267 9741B Energy Availability11 Own Generation MU 279 - - -12 Power Purchases MU 14142 12459 13267 13267
13Total Energy available fromall sources MU 14421 12459 13267 13267
14 Surplus / (Deficit) (13-10) MU 2338 2891 - 3526* % based on actual Regional transmission losses considering total power purchase
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 45
The approved total power purchase requirement (Net) based on the approved sales
to consumers and approved T&D losses is 9741 MU. As against this, the availability
of energy from all sources is 13627 MU. Thus the additional power purchase from
long term sources over and above requirement is 3526 MU. Accordingly, the
Commission disallows power purchase quantum of 3526 MU for FY 2012-13. The
power purchase cost corresponding to the same would be adjusted in the total
power purchase cost approved for the year.
The Commission disallows the power purchase quantum equivalent to 3526 MU
for the FY 2012-13 as part of truing-up process, based on the principle that excess
power purchase on account of higher T&D losses, i.e., over and above the
approved losses, shall not be permitted.
4.8 Power Purchase Cost
Petitioner’s submission:
The BSPHCL has submitted the gross power purchase cost at Rs. 4566.08 crore from
all sources including intra-state and PGCIL transmission charges for FY 2012-13 in
truing-up.
The BSPHCL has claimed the transmission charges (PGCIL charges) of Rs. 359.99 crore
for the purchased from outside the State during FY 2012-13.
The BSPHCL has submitted the source–wise break-up of total power purchase cost
and unit, as given in Table below:
Table 4.9: Proposed Power Purchase Cost for FY 2012-13
Sl.No.
GeneratingStations
Approved in review in TariffOrder dated 15th March 2013
Claimed in the True up forFY 2012-13
MUs Rs. Cr Rs / kWh MUs Rs. Cr Rs / kWh1 Farakka 2834 1125 3.97 3092 1046.87 3.392 Talchar 2585 639 2.47 2635 614.18 2.333 Kahalgaon 2662 868 3.26 2859 901.04 3.15
Total (NTPC) 8081 2631 3.25 8586 2562.08 2.984 Rangit 137 51 3.69 111 33.68 3.035 Teesta 726 146 2.01 470 125.64 2.67
Total (NHPC) 863 196 2.28 581 159.31 2.746 Chukka 580 115 1.99 463 76.01 1.647 Tala 1122 263 2.34 791 162.38 2.05
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 46
Sl.No.
GeneratingStations
Approved in review in TariffOrder dated 15th March 2013
Claimed in the True up forFY 2012-13
MUs Rs. Cr Rs / kWh MUs Rs. Cr Rs / kWhTotal (PTC) 1702 378 2.22 1254 238.40 1.90Others
8 BSPHC 57 15 2.57 47 11.66 2.499 New Swadeshi
sugar Mill54 22 4.18 129 57.39 4.46
10 Medium Term /UI
- - - 68 8.15 1.20
11 DVC 100 38 3.83 480 195.71 4.0812 Adani 1254 542 4.32 1428 620.20 4.3413 NEA + Short term 1518 650 4.28 1 0.57 8.6814 NVVNL - - 693 298.95 4.31
Total Others 2982 1267 4.25 2846 1192.63 4.19Grand Total 13629 4473 3.28 13267 4152.43 3.13
15 Less UI Sale 1069 349 - - -16 Net Total 12559 4124 3.28 13267 4152.43 3.1317 Arrears – NHPC
(Rangit)- 43 - -
18 Power Purchasecost
12559 4167 3.32 13267 4152.43 3.13
19 Add: PGCILCharges
- 180 - 359.99 -
20 Add: BSPTCLcharges
- - - 53.66 -
21 Power PurchaseCost
12559 4347 3.46 13267 4566.08 3.44
The BSPHCL has requested to approve total power purchase cost of Rs. 4566.08
crore as per Audited Annual Accounts for FY 2012-13 in truing up.
Commission’s analysis:
The Commission has approved the power purchase cost of Rs. 5182 crore for
purchase of 14142 MU for FY 2012-13 in the Tariff Order dated 30th March 2012 and
revised the power purchase cost to Rs. 4347 crore for purchase of 12559 MU for
FY 2012-13 in the “Review” in the Tariff order dated 15th March 2013, as per the
revised estimate submitted by the erstwhile BSEB in the Tariff Petition for
FY 2013-14.
The Commission noted that according to audited annual accounts, BSPHCL has
incurred total power purchase cost of Rs. 4566.11 crore which include intra-state
transmission charges and PGCIL charges for purchase of 13266.65 MU which is in line
with that claimed in true up for FY 2012-13.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 47
The Commission also noted that the actual PGCIL charges paid during FY 2012-13 as
per audited annual accounts are Rs.359.99 crore (which includes supplementary bill
amount of Rs. 63.67 crore) as against Rs.180 crore approved for FY 2012-13 (RE).
The details furnished by BSPHCL are as given below:
1) PGCIL Charges = Rs. 269.60 Crore
2) ULDC charges = Rs. 8.36 Crore
3) POSOCO charges = Rs. 4.41 crore
4) ERLDC (DVC) = Rs.13.96 crore
5) Arrears = Rs. 63.67 crore
6) Total = Rs. 360.00 crore
While approving the PGCIL charges for FY 2012-13 (RE) in the Tariff Order dated
15th March 2013, the Commission relied on the information furnished by BSPHCL in
its petition vide Table 5.6 (Tariff Order dated 15th March 2013) that the PGCIL
charges paid from April 2012 to September 2012 are Rs. 90.4 crore; hence the
Commission has considered Rs.190 crore for the full year of FY 2012-13.
The Commission has observed that due to new pricing methodology of transmission
charges i.e. point of connection charges, the PGCIL charges are on higher side than
that approved by the Commission.
The source-wise power purchase cost from different sources, intra-state
transmission charges and PGCIL transmission charges approved for FY 2012-13 based
on the actual power purchase cost as per audited annual accounts is given in the
Table below:
Table 4.10: Approved Power Purchase Cost for FY 2012-13
Sl. No. Generating Stations Approved in Truing up for FY 2012-13MUs Rs. Crore Rs / kWh
1 Farakka 3092.30 1046.87 3.392 Talchar 2635.10 614.18 2.333 Kahalgaon 2858.59 901.04 3.15
Total (NTPC) 8585.99 2562.08 2.984 Rangit 111.10 33.68 3.035 Teesta 470.11 125.64 2.67
Total (NHPC) 581.21 159.31 2.746 Chukka 463.32 76.01 1.647 Tala 790.53 162.38 2.05
Total (PTC) 1253.85 238.40 1.90
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 48
Sl. No. Generating Stations Approved in Truing up for FY 2012-13MUs Rs. Crore Rs / kWh
Others8 BSPHC 46.83 11.66 2.499 New Swadeshi sugar Mill 128.81 57.39 4.4610 Medium Term / UI 68.14 8.15 1.2011 DVC 479.81 195.71 4.0812 Adani 1428.22 620.20 4.3413 NEA + Short term 0.66 0.57 8.6814 NVVNL 693.07 298.95 4.31
Total Others 2845.60 1192.63 4.1915 Grand Total 13266.65 4152.43 3.1316 Less UI Sale - -17 Net Total 13266.65 4152.43 3.1318 Add: PGCIL Charges - 359.99 -19 Sub-Total - 4512.42 3.4020 Add: BSPTCL charges - 53.66 -21 Total Power Purchase
Cost13266.65
OrSay 13267
4566.08 3.44
The Commission approves the power purchase cost at Rs. 4566.08 crore including
transmission charges for purchase of 13267 MU for FY 2012-13 in truing-up.
4.9 Disincentive for non-achievement of T&D loss reduction target
Petitioner’s Submission
The Commission while determining ARR of erstwhile BSEB has fixed the T&D loss
achievement target for each financial year while actual losses of the erstwhile BSEB
have always remained much higher than the prescribed T&D trajectory of losses due
to various reasons including the fact that large number of consumers is unmetered
or having defective meters. Further dilapidated distribution network of erstwhile
BSEB has contributed to higher T&D losses of erstwhile BSEB. Any increase in the
quantum of power purchase also has led to enhanced T&D losses for erstwhile BSEB.
Massive and large scale electrification of villages under RGGVY scheme leading to
expansion of rural distribution network too has contributed to the T&D losses of
erstwhile BSEB to a great extent.
Through the erstwhile BSEB had taken up re-conductoring of old and dilapidated
conductors and large scale metering of unmetered consumers as mission items in a
time bound manner, even then actual T&D loss of erstwhile BSEB is much higher
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 49
than the prescribed T&D loss trajectory of erstwhile BSEB for the period of
FY 2012-13.
The difference in the actual power purchase and the power purchase requirement
approved by the Commission is disallowed at the average power purchase rate and is
treated as “Disincentive for non-achievement of T&D loss targets”.
The Petitioner is proposing that since intra-state transmission loss pertains to
Transmission Company, only Distribution loss should be compared with the target.
However, in the present petition, the Petitioner is considering target set at 27.50%
for the purpose of computing disincentive for non-achievement of T&D loss target.
Table 4.11: Disallowed Power Purchase proposed for FY 2012-13
Based on the above computed disallowed quantum, the cost of power purchase for
disallowance is worked out by BSPHCL as given in the Table below:
Sl.No. Particulars Unit
Approved inreview forFY 2012-13
in T.O.dated 15th
March 2013
Actuals asper Annual
Accounts forFY 2012-13
Normativeas proposedby BSPHCL
forFY 2012-13
1 Energy sales within state MU 5859 6139 61392 Energy outside state (Nepal) MU 555 581 5813 Sale in bilateral trade (UI) MU 468 492 4924 Total sales MU 6882 7213 72135 Distribution loss % 24.27% 43.09% 24.27%6 Distribution losses MU 2056 5089 25497 Energy requirement at DISCOM
peripheryMU 8938 12302 9366
8 State Transmission losses % 4.05% 4.05% 4.05%9 State Transmission losses MU 377 519 39510 Total energy requirement MU 9315 12821 9762
Energy availability11 Own generation MU - - -12 Total Power purchases MU 9568 13267 1010113 Average Regional transmission
losses% 2.73% 3.36% 3.36%
14 Average Regional transmissionlosses
MU 261 446 339
15 Net power availability MU 9307 12821 976216 Disallowed power purchase MU 2891 3165
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 50
Table 4.12: Cost of Disallowed Power Purchase proposed for FY 2012-13
Sl.No. Particulars Unit
PowerPurchase
disallowed forFY 2012-13 inTariff Order.
Claimed byBSPHCL intrue up forFY 2012-13
1 Net power purchase disallowed – (a) MU 2957 31652 Average regional transmission loss – (b) % 2.73% 3.36%3 Average power purchase cost – (c) Rs/kWh 3.45 3.134 Grossed up average PP cost – (d) = c/(1-b) Rs/kWh 3.24
5Value of power purchase disallowede=d*a/10 Rs. Cr 1020.17 1025.22
The BSPHCL has submitted that though the Petitioner computed cost of disallowance
power purchase, the Petitioner requests the Commission to consider the actual T&D
Loss position and re-consider such disallowances.
Commission’s analysis:
The difference in the actual power purchase and the power purchase requirement
approved the Commission is disallowed at the average power purchase rate and is
treated as “Dis-incentive for Non-Achievement of T&D loss target.
As per the trajectory, the maximum permissible T&D loss level for FY 2012-13 was
set at 27.50%, which the Petitioner was not able to achieve. The Commission, while
computing the Energy Balance has noted that 3526 MU of energy (gross) was
additionally purchased due to not achieving the T&D Loss trajectory of 27.50 %
approved for FY 2012-13. Accordingly, the Commission has computed the
disincentive for non-achievement of T&D loss reduction target at Rs. 1198.84 crore,
for FY 2012-13, considering the average power purchase rate at Rs. 3.40 per kWh as
arrived in the Table 4.10.
Table 4.13: Disincentive for Non-achievement of T&D loss reduction target for FY 2012-13
Sl. No. Particulars Unit FY 2012-13
1 Gross Power Purchase Disallowed MU 35262 Average Power Purchase cost Rs/kWh 3.403 Cost of Power Purchase Disallowed Rs. crore 1198.84
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 51
4.10 Employee cost
Petitioner’s submission:
The BSPHCL has submitted that the employee expenses comprise of salaries,
dearness allowance, contribution towards pension & gratuity, leave encashment and
other staff welfare expenses. The Petitioner submitted that the employee expenses,
as per audited annual accounts of BSEB (from 1st April 2012 to 30th October 2012)
and unbundled entities of BSPGCL, BSPTCL, NBPDCL and SBPDCL (from 1st November
2012 to 31st March 2013) for FY 2012-13, were Rs.456.93 crore (net of capitalization
of Rs. 12.32 crore by BSPGCL) and requested to allow the employee cost of
Rs. 456.93 crore, as per the audited annual accounts for FY 2012-13.
The employee expenses claimed in the true up for FY 2012-13 are given in the table
below:Table 4.14: Employee cost proposed for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Approvedin review
for FY2012-13
T.O. dated15thMarch
2013
Actuals as per Annual Accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDISCOM(Nov'12-Mar'13)
SouthDISCOM(Nov'12-Mar'13)
Total forFY
2012-13
1Salary andAllowances 451.10 236.64 10.87 30.18 54.51 83.27 415.47
2 Leave encashment 27.94 0.54 1.80 3.14 5.25 38.67
3
Terminal Benefitsfor workingemployees 8.95 0.89 1.93 4.28 6.41 13.51
4
Terminal Benefitsfor retiredemployees 663.88 663.88
5 Others 10.00 1.40 0.01 0.02 0.11 0.05 1.596 Sub-total 470.05 929.86 12.31 33.93 62.04 94.98 1133.12
7
Less: StateGovernmentsupport forterminal benefitsfor Retiredemployees 663.88 663.88
8 Total Employee cost 470.05 265.98 12.31 33.93 62.04 94.98 469.24
9Less: Employee costcapitalised 12.31 12.31
10 Net Employee cost 470.05 265.98 0.00 33.93 62.04 94.98 456.93
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 52
Commission’s analysis:
The Commission had approved the employee cost for FY 2012-13 at Rs.735.37 crore
in the Tariff Order dated 30th March 2012. The Commission in the review for
FY 2012-13 (RE) has approved Rs. 470.05 crore in the Tariff Order dated 15th March
2013. The Commission has noted that Rs. 10.73 crore and Rs. 13.51 crore towards
contribution to leave encashment and terminal benefits respectively have been
claimed by the segregated entities post unbundling and these costs represent the
company contributions after the date of unbundling and the same is considered by
the Commission.
Accordingly, the Commission approves the net employee cost at Rs. 456.93 crore as
claimed by the BSPHCL for FY 2012-13 as per the audited annual accounts for
FY 2012-12, which are within the approved level for FY 2012-13 (RE) in Tariff Order
dated 15th March’13 for FY 2013-14 as indicated in the Table below:-
Table 4.15: Employee Cost approved for FY 2012-13
(Rs. crore)
Particulars
Approved inTariff Orderfor FY 2012-
13
Approved inreview for FY
2012-13 inT.O. dated 15th
March 2013
Claimed inthe truing-up
forFY 2012-13
Approvedin truing-up for FY2012-13
Employee cost 735.37 470.05 456.93 456.93
The Commission approves the employee cost at Rs. 456.93 Crore for FY 2012-13 in
the truing-up.
4.11 Repairs and Maintenance (R&M) Expenses
Petitioner’s submission:
The BSPHCL has submitted that the repairs and maintenance expenses go towards
day-to-day upkeep of generation, transmission and distribution functions of the
erstwhile BSEB and segregated entities and form an integral part of the Company’s
efforts towards providing reliable and quality power supply to its consumers and
reduction of losses in its system.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 53
BSPHCL has requested the Commission to allow the actual R & M expenses of
Rs. 74.18 crore (net of capitalization of Rs.0.84 crore by BSPGCL) for FY 2012-13 as
per audited.
The details of R&M expenses claimed by BSPHCL are given in the Table below:
Table 4.16: Repairs and Maintenance Expenses proposed for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Approvedin review
for FY 2012-13 in T.O.dated 15th
March 2013
Actuals as per Annual Accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDISCOM(Nov'12-Mar'13)
SouthDISCOM(Nov'12-Mar'13)
Totalfor FY
2012-13
1 Repairs andMaintenanceExpenses 90.99 37.89 0.84 5.70 15.16 15.43 75.02
2 Less:Capitalized 0.84 0.84
3 Net R & MExpenses 90.99 37.89 0.00 5.70 15.16 15.43 74.18
Commission’s analysis:
The Commission approves the Repairs and Maintenance expenses claimed by
BSPHCL for FY 2012-13 as per the audited annual accounts, which are within the
approved level.
The summary of the R&M expenses claimed as per audited annual accounts and now
approved for FY 2012-13 in truing-up are as given in Table below:
Table 4.17: Summary of approved R&M expenses for FY 2012-13
(Rs. crore)
ParticularsApproved inTariff Order
for FY 2012-13
Approved in reviewfor FY 2012-13 inT.O. dated 15th
March 2013
Claimed inthe truing-
up forFY 2012-13
Approved intruing-up forFY 2012-13
Repairs &Maintenance
Expenses 110.27 90.99 74.18 74.18
The Commission approves the R&M expenses at Rs.74.18 crore for the FY 2012-13
in the truing-up.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 54
4.12 Administrative & General (A&G) Expenses
Petitioner’s submission:
The BSPHCL has submitted that the Administrative and General expenses mainly
comprise of: rents, telephone and other communication expenses, professional
charges, conveyance and traveling allowances, and other debits.
BSPHCL has requested to allow the A&G expenses of Rs. 68.57 crore for FY 2012-13,
as per audited annual accounts of the erstwhile BSEB and segregated entities.
The details of A&G expenses claimed by BSPHCL are given in the Table below:
Table 4.18: A&G expenses proposed for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Approvedin review
for FY2012-13
T.O. dated15th March
2013
Actuals as per Annual Accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDiscom
(Nov'12-Mar'13)
SouthDiscom
(Nov'12-Mar'13)
Total forFY
2012-13
1
Administrationand GeneralExpenses 49.40 40.43 4.47 4.12 9.70 6.98 65.70
2
Add:Metering,Billing &CollectionExpenses 3.04 3.25 1.05 7.34
3
TotalAdministration& GeneralExpenses 49.40 43.47 4.47 4.12 12.95 8.03 73.04
4Less:Capitalised 4.47 4.47
5
NetAdministration& GeneralExpenses 49.40 43.47 0.00 4.12 12.95 8.03 68.57
Commission’s analysis:
The Commission has analyzed the expenditure and noted that huge expenditure has
been incurred towards Electricity Charges (15.79 crore) and Fees and Subscription
(Rs.14.04 crore) in FY 2012-13 over and above the approved expenditure. The
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 55
Commission sought the additional information with regard to period to which the
expenditure pertains and to whom it’s paid etc. The Petitioner has furnished the
details of expenditure. As per the details, the fees and subscription includes the
registration charges of Rs. 10.01 Crore paid to the Registrar of Companies (ROC) for
registration of new companies i.e. BSPGCL, BSPTCL, NBPDCL and SBPDCL under the
companies’ act 1956 and Rs. 3.28 Crore to meet restructuring expenses. As such the
Commission has considered the expenditure actually paid/incurred by the entities in
FY 2012-13 for truing-up.
The Electricity charges represents the electricity consumption of own offices which
was brought to accounts for the first time duly charging electricity charges and
crediting revenue from sale of power up to the date of unbundling including the past
period taken into the books of BSEB. Post unbundling, the electricity consumption by
the own offices is being regularly taken into by the respective utilities.
The summary of the A&G expenses claimed as per audited annual accounts for
FY 2012-13 and now approved in truing-up are shown in Table below:
Table 4.19: Summary of approved A&G expenses for FY 2012-13
(Rs. crore)
ParticularsApproved in
Tariff Order forFY 2012-13
Approved inreview for
FY 2012-13 inT.O. dated15th March
2013
Claimed inthe truing-
up forFY 2012-13
Approved intruing-up forFY 2012-13
Rent Rates and Taxes 0.55 0.37 0.42 0.42Insurance 0.28 0.65 0.65Telephones 1.08 0.72 0.73 0.73Legal 1.07 1.14 0.95 0.95Audit fee 3.56 3.58 2.51 2.51Consultancy 0.01 0.57 0.57Technical fee 0.01Other prof. Charges 0.20 2.17 2.17Conveyance & Travel 5.47 6.42 5.74 5.74Others 36.43Fees & Subscription 3.77 14.04 14.04Books & Periodicals 0.07 0.05 0.05Print & Stationery 0.74 0.89 0.89Advertisements 1.38 1.33 1.33Water charges 0.02Electricity Charges 1.81 15.79 15.79
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 56
Entertainment 0.20 0.24 0.24Computer billing 11.59 8.88 8.88Meter reading, billing,collection, etc 28.17 3.03 7.35 7.35Home guard/Security 4.59 3.20 3.20Franchisee commission 6.04 1.60 1.60Franchisee incentive 1.35 1.06 1.06ATP machine exp 0.11Misc. exp 1.93 4.66 4.66Freight 0.19 0.05 0.21 0.21Total 76.53 49.40 73.04 73.04Less: Capitalised 1.75 4.47 4.47Net Administration andGeneral expenses 74.78 49.40 68.57 68.57
The Commission approves the A&G expenses at Rs.68.57 crore, as reflected in the
audited annual accounts for FY 2012-13, in the truing-up.
4.13 Operation and Maintenance (O&M) Costs
Based on the above approvals, the summary of the total O&M costs approved by the
Commission for FY 2012-13, as part of the Truing-up process, is outlined in Table
below:
Table 4.20: Summary of approved O&M expenses for FY 2012-13
(Rs. crore)
ParticularsApproved inTariff Order
for FY 2012-13
Approved inreview forFY 2012-13
in T.O.dated 15th
March 2013
Claimed inthe truing-
up forFY 2012-13
Approvedin truing-up
forFY 2012-13
Employee cost 735.37 470.05 456.93 456.93Repairs and Maintenance(R&M) Expenses 110.27 90.99 74.18 74.18Administration andGeneral (A&G) Expenses 74.78 49.40 68.57 68.57Total O&M Cost 920.42 610.44 599.68 599.68
4.14 Capital Expenditure
BSPHCL has claimed that it has incurred a capital expenditure of Rs.2742.11 crore in
the truing up for FY 2012-13 against Rs.3055 crore approved in the Tariff Order for
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 57
FY 2012-13 and Rs.3183 crore approved in the RE for FY 2012-13 in the Tariff Order
dated 15th March 2013 for FY 2013-14. BSPHCL has furnished the details of opening
and closing CWIP, along with new investment and capitalization of assets of
erstwhile BSEB and segregated entities as per audited accounts for FY 2012-13 as
shown in the table below:
Table 4.21 Details of Capital works in progress proposed by the Petitioner
(Rs. Crore)
Sl.No. Particulars
Approvedin MYTTariff
Order forFY 2012-13 (RE)
Actuals as per Annual Accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDISCOM(Nov'12-Mar'13)
SouthDISCOM(Nov'12-Mar'13)
Total forFY
2012-13
1 OpeningCWIP 3865.00 3865.49 1218.03 312.66 1860.45 541.77
2 Add: NewInvestment 3183.00 1914.20 698.17 72.79 19.46 37.49 2742.11
3 Total 7048.00 5779.69 1916.20 385.45 1879.91 579.264 Less:
Investmentcapitalised 1889.00 1857.85 6.51 700.09 38.00 2602.45
5 ClosingCWIP 5159.00 3921.84 1916.20 378.94 1179.82 541.26 4016.21
The Petitioner has stated that they have provided the total of opening and closing
CWIP of new entities only as the balance from erstwhile BSEB would have been
allocated in these segregated companies
Commission’s analysis:
As mentioned by the Commission during the truing-up for the FY 2010-11, the
Capital Expenditure undertaken by the erstwhile BSEB was a very critical aspect of its
business as it supported the growth of business and helped the distribution licensee
in sustaining its operational performance.
As per para 51 of Chapter 5 of BERC (Grant of License for Distribution of electricity)
Regulations, 2007, the Petitioner is required to seek prior approval of the
Commission for making investment in the licensed business. In the absence of the
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 58
prior approval by the Commission, the Commission may disallow corresponding
depreciation and interest cost. As can be seen, the availability of capital expenditure
related information was a basic requirement for grant of the distribution license to
the erstwhile BSEB.
BSPHCL, in its Truing-up Petition for FY 2012-13, has not submitted any information
regarding the actual capital expenditure undertaken by it during the year and the
capitalisation of assets on account of projects/schemes getting commissioned during
the year.
The information relating to the capital works in progress provided by BSPHCL in the
formats (Format-11) submitted along with the true up petition also is not in a clear
and unambiguous manner for the Commission to utilize for necessary decision-
making. However, the capital works in progress was shown at Rs 4016.21 crore in the
audited annual accounts of all the segregated entities as at 31st March’13.
Accordingly, based on the limited information available with the Commission from
the audited annual accounts, the Commission has considered the actual capital
expenditure incurred by the segregated entities in FY 2012-13. The same is outlined
in the Table below:
Table 4.22: Estimation of CWIP
(Rs. crore)
Sl.No. Particulars
Approved in TariffOrder for
FY 2012-13
Proposed bythe Petitionerfor FY 2012-13
Approved intruing-up forFY 2012-13
1 Opening CWIP 3865.00 3865.49 3865.492 Add: Investment during the year 3183.00 2742.11 2742.113 Total 7048.00 6607.60 6607.604 Less: Investment capitalized
during the year1889.00 2602.45 2602.45
5 Closing balance – CWIP 5159.00 4005.15 4005.15
As can be seen from the above, the net investment capitalised during the FY 2012-13
is Rs. 2602.45 crore. The same is computed based on the other information, which is
available in the audited annual accounts, e.g., Opening and Closing CWIP and the
assets capitalised during the year.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 59
The Commission directs BSPHCL to ensure that the information like capital
expenditure and the related capitalisation of assets, etc., should be available with it
as it is basic information required by the Commission to approve expenditure related
to funding costs incurred. In the absence of such information, the Commission will
be constrained to adopt normative capital expenditure related costs and may also
not allow such expenditure at all, since such expenditure cannot be passed on to the
consumers without proper prudence check.
Based on the information available in the audited annual accounts, the capital assets
to the tune of Rs. 2602.45 crore have been capitalised in the FY 2012-13. The
Commission now approves the same for computation of the interest expenses and
depreciation charges.
BSPHCL, while segregating and transferring the assets and liabilities as per the
audited annual accounts of BSEB for FY 2012-13 (up to 30-10-2012), the closing GFA
value is at Rs.6907.12 crore (excluding revaluation of land by Rs.4793.20 crore),
whereas the opening balances adopted in the books of Segregated entities of
BSPGCL, BSPTCL, NBPDCL and SBPDCL shows a balance of Rs.6880.72 crore
(excluding revaluation). As such it is assumed that, while segregating and
transferring the assets and liabilities to the segregated entities, BSPHCL had retained
the differential value GFA of Rs 26.40 crore. The position of the Gross Fixed Assets at
the end of FY 2012-13 is as shown in Table below:
Table 4.23: Gross Fixed Assets for FY 2012-13
(Rs. crore)Sl.
No. Particulars Approved in Truing up for FY2012-13
1 Opening GFA 5049.282 Additions to GFA during the year 2602.453 Less: GFA retained in BSPHCL 26.40
4 Deductions to GFA during the year (assetsretired) 63.03
5 Closing GFA (as at 31st March 2013) 7562.30
Note: - The GFA does not include the value of land and Land Rights revalued.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 60
4.15 Depreciation
Petitioner’s submission:
The BSPHCL has submitted that the actual depreciation as per audited annual
accounts of segregated entities for FY 2012-13 is Rs. 223.05 crore. However, the
depreciation on the assets created out of ’grants towards cost of capital assets ‘has
been deducted to arrive at the net depreciation charge for the purpose of truing up.
The Petitioner has submitted that the depreciation on assets created out of grants,
where grant is received, is shown as “Deferred Income” in Non-tariff income and
hence the same is excluded from Non-tariff income.
BSPHCL had requested the Commission to approve the depreciation for FY 2012-13
as per the computation furnished in the Table below:
Table 4.24: Net depreciation proposed for FY 2012-13
(Rs. Crore)
Sl.No. Particulars
Approvedin Tariff
Order forFY 12-13
Actuals as per Annual accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDISCOM(Nov'12-Mar'13)
SouthDISCOM(Nov'12-Mar'13)
Totalfor FY
2012-13
1 Closing GFA 11700.32 397.67 3513.07 3474.00 4007.99
2
Depreciation forthe year(as per Accounts) 105.69 3.91 16.25 49.82 47.39 223.05
3Grants andcontributions 4881.92 345.63 1622.44 1681.83 1287.14
4
Depreciation. onassets created outof grants 44.10 3.40 9.64 26.94 10.21 94.29
5Net Depreciation(2 – 4) 83.04 61.59 0.51 6.60 22.87 37.18 128.76
Commission’s analysis:
The GFA adopted by the Petitioner for computation of depreciation includes the
Revaluation of value of Land and Land Rights of Rs. 4793.20 crore. Regulation 73(2)
(a) (i) of the BERC (Terms and conditions for determination of Tariff) Regulations
2007, specifies that the value base for the purpose of depreciation shall be the
historical cost of the asset. Hence, the GFA values of segregated entities were
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 61
realigned to their original values duly reducing the value of revaluation of assets
(land).
Further, the closing GFA as on 31.10.2012 is at Rs. 11700.33 crore as per audited
annual accounts of BSEB as given here under;
(Rs. crore)
Particulars BSEB (Apr'12-Oct'12)
Opening GFA as on 1.4.2012 5049.28
Additions from Apr’12 to Oct’12 1857.85
GFA as on 31.10.2012 6907.13
Add: Revaluation of land 4793.20
Closing GFA as on 31.10.2012 11700.33
As per the audited annual accounts of the segregated entities, the opening GFA as on
1.11.2012 adopted by the segregated entities is Rs. 10711.17 crore. The assets
revalued (land) of Rs. 4793.20 crore against which Rs. 3830.44 crore has been
included in the opening GFA of segregated entities. The differential amount of
revaluation of assets (land) Rs. 962.76 crore (Rs. 4793.20 crore – Rs. 3830.44 Crore)
in addition to Rs. 26.40 crore assets are retained by BSPHCL.
The opening GFA as on 1.11.2012 as per the audited annual accounts of segregated
entities for FY 2012-13 is as shown here under:
Particulars BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NBPDCL(Nov'12-Mar'13)
SBPDCL(Nov'12-Mar'13)
Total
Opening GFAas on1.11.2012
459.70 5707.56 2773.92 3969.99 10711.17
The Commission approves the depreciation charges at Rs. 74.45 crore as per the
computations made by the Commission as given in the table 4.25 given below. As
per the audited annual accounts, the depreciation charges claimed by the Petitioner
for FY 2012-13 is Rs. 223.05 crore (Schedule 11 of the Audited Annual Accounts of
FY 2012-13).
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 62
The Commission has considered the depreciation on the assets created out of
consumer contribution and grants and deducted it from the gross depreciation to
arrive at the net depreciation charge. The computation of the depreciation on the
assets created out of consumer contribution and grant is based on the proportion of
‘Grants and contributions’ and original value of ‘GFA’ for FY 2012-13. The
methodology adopted by the Commission in MYT order dated 15th March 2013 for
computation of depreciation has been adopted in the True up order for FY 2012-13.
As per Schedule-34 of the Annual Accounts for FY 2012-13 of segregated entities
(BSPGCL, BSPTCL, NBPDCL and SBPDCL), the total contributions, grants and subsidies
towards cost of capital assets at the end of FY 2012-13 is Rs. 4937.67 crore. Out of
these grants, Rs. 0.63 crore (as per the accounts NBPDCL) pertains to subsidy against
loss due to flood/cyclone, which are of revenue nature and has therefore, excluded
from the total grant and subsidies towards cost of capital assets. Further, Rs.46.79
crore reduced from the value of Grants and adjusted against Non-tariff Income
(Deferred Income - Schedule 5 of Audited Annual Accounts for FY 2012-13) by the
Petitioner, were added back to Grants (BSPTCL – Rs.9.64 crore, NBPDCL – Rs.26.94
crore and SBPDCL – Rs.10.21 crore) for the purpose of computation of Depreciation.
Table 4.25: Depreciation approved in the truing-up for FY 2012-13
(Rs. Crore)
Particulars
Approvedin Tariff
Order forFY 12-13
Approved in Truing-up for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NorthDISCOM(Nov'12-Mar'13)
SouthDISCOM(Nov'12-Mar'13)
Total forFY
2012-13
Opening GFA as on1.4.2012 5049.28 5049.28
Opening GFA as on1.11.2012 459.70 5707.56 2773.92 3969.99
Additions to GFA inFY 2012-13 1857.85 6.51 700.09 38.00 2602.45
Less: Assetwithdrawals/ retired 62.03 1.00 63.03
Less: Assets retainedin BSPHCL 26.40 26.40
Closing GFA 6938.00 6880.73 397.67 3513.07 3474.00 4007.99
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 63
Less: Revaluation(Land) 130.63 1255.06 965.90 1478.84
Original value of GFAas on 31.3.2013 267.04 2258.01 2508.10 2529.15 7562.30
Depreciation for theyear (as per Accounts) 105.69 3.91 16.25 49.82 47.39 223.06
Grants andcontributions 4881.92 345.63 1632.08 1708.77 1297.35
Proportion of grantsto GFA 70.68% 129.43% 72.28% 68.13% 51.30%
Depreciation onassets created out ofgrants
74.70 3.91 11.75 33.94 24.31 148.61
Net Depreciationapproved 83.04 30.99 4.50 15.88 23.08 74.45
Note:- The closing GFA and Grants shown in segregated entities of BSPGCL, BSPTCL,
NBPDCL and SBPDCL includes the balance of BSEB and hence, the total values were
not shown under Total for FY 2012-13.
Accordingly, the Commission approves depreciation expenses at Rs. 74.45 crore for
FY 2012-13 in the truing-up.
4.16 Interest and Finance Charges
A. Interest on loans
Petitioner’s submission:
The BSPHCL has submitted that it has considered the audited accounts of all entities
for FY 2012-13 to claim the interest and finance charges. As per the provisions of the
transfer scheme 2012, the interest on State Government loans taken after effective
date 1st April 2011 only has been considered for the purpose of claim as expenses.
The interest on State Government loans taken prior to the effective date has been
taken over by the state government along with the interest and principal amount.
Hence the interest amount appearing in audited annual accounts of erstwhile BSEB is
on higher side; however the claim is made only for the loan additions in FY 2011-12
and FY 2012-13 (up to 31-10-2012).
BSPHCL has also submitted that, the interest on State Government loans against
Bonds issued to CPSU are also taken over by the State Government and will not have
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 64
any financial burden on utilities. Thus, interest & finance charges on those loans
have not been considered, while filing the Truing-up for FY 2012-13.
The Petitioner in the Format – 13 of the petition, furnished the details of interest and
finance charges for FY 2012-13 as per the audited annual accounts as given in the
Table below:
Table 4.26: Interest and finance charges claimed in the truing up for FY 2012-13
(Rs. crore)
Sl.No. Particulars
BSEBApr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NBPDCL(Nov'12-Mar'13)
SBPDCLNov'12-Mar'13)
Total FY12-13
1Interest on Govt.loans* 55.37 16.31 4.69 7.46 8.14 91.97
2
Interest on StateGovt. loans againstBonds issued to CPSU 0.00
3 Interest on LIC loan 3.69 3.69
4Interest on REC loan(Normal/RMPN) 23.60 29.81 3.89 3.89 61.19
5Interest on REC loan(RGGVY) 9.81 14.03 7.11 30.95
6 Interest on PFC loan 3.55 5.23 8.787 Interest on ADB loan 0.41 0.41
8Other interest andfinance charges 56.74 0.01 9.13 20.08 85.96
9 Total 149.21 46.12 4.70 38.06 44.86 282.95
10
Less: State Govt.support for intereston Govt. loans 0.00
11Less: InterestCapitalised 46.12 0.39 46.51
12Net interest andfinance charges 149.21 0.00 4.31 38.06 44.86 236.44
* Interest on loan additions after cutoff date for restructuring
BSPHCL requested the Commission to approve the interest and finance charges of
Rs. 236.44 crore for FY 2012-13, as detailed in above Table.
Commission’s analysis:
The Commission has approved Interest & Finance charges of Rs. 191.18 crore for
FY 2012-13 in the Tariff Order dated 30th March 2012 and revised the figures to
Rs. 144.50 crore for FY 2012-13 (RE) in the Tariff Order dated 15th March 2013.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 65
The Petitioner has not furnished the details of scheme wise capital investment made
vis-à-vis the source wise funding for the FY 2012-13.
In the absence of adequate data/information with erstwhile BSEB and now BSPHCL
regarding the details of the capital expenditure incurred during the year for the
creation of usable assets, its funding and capitalization, etc. the Commission has
adopted the same methodology for FY 2012-13 truing up as was applied in the truing
up for FY 2011-12. The Commission has used the normative closing balance of loan
(Rs. 434.89 crore) as arrived in truing up for FY 2011-12 as the opening outstanding
loans used for creation of usable assets as on 1st April, 2012 for the purpose of
computation of interest and finance charges for FY 2012-13.
The Commission, while truing up the interest and finance charges for FY 2011-12 had
observed in the Tariff order for FY 2013-14 that the loan amount also includes the
defaulted loan repayments on capital liabilities which are created on account of
default in repayments done by BSEB in the past and had observed that this burden
on account of default in making repayments should not be passed on to the
consumers. Further the Commission had also taken into cognizance the fact that the
interest booked by the erstwhile BSEB and segregated entities under the head
"Interest and Finance Charges" may also include the penal or additional interest
incurred by the entities for defaulting on making timely repayments.
The Commission has also outlined the methodology adopted for estimating the
additional borrowing for FY 2012-13 for funding the assets got capitalized, during the
year, after considering the amount available in form of consumer contributions,
grants/subsidy towards cost of capital asset during the year.
In the absence of adequate data with erstwhile BSEB and now BSPHC Ltd., the
Commission has considered the repayment during the year as deemed depreciation,
as per the Central Electricity Regulatory Commission (Terms and Conditions for
Tariff) Regulations 2009 reproduced below:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 66
"The repayment for the year of tariff period 2009-14 shall be deemed to be equal to
the depreciation allowed for that year:"
Based on the above methodology, the opening loan as on 1st April, 2012 considered
for computing interest cost for FY 2012-13 has been taken equal to closing
normative loan of Rs. 434.89 crore arrived in the true up for FY 2011-12 in the Tariff
Order dated 15th March 2013 (para 4.19 Table-4.28).
The BERC Tariff Regulations provide for recovery of interest and finance charges on
loans have been utilized to create assets and are eligible for recovery only after the
assets have been put to use. The normative outstanding loan as on 1st April, 2012 is
considered to be used for creation of assets which have been put to use till that date
and hence the interest against this loan is considered for recovery from consumers.
In addition to this, there will be certain additional loans which will be eligible for
recovery on account of capitalization of assets achieved during FY 2012-13.
The assets capitalized during the year comprise of (i) assets created out of CWIP at
the beginning of the year and (ii) the part of the assets created out of investments
done during the year itself. This break-up is not available in the Annual Accounts.
While it is desirable to have the bifurcation of these assets created out of
capitalization of CWIP at the beginning of the year and those created through
capitalization of investment done during the year, the same is not possible from the
information made available by the petitioner.
Therefore, the Commission has considered the assets capitalized during the year as
being first funded through consumer contribution and grant/subsidy towards capital
assets received during FY 2012-13 and the remaining portion of the assets getting
capitalized during the FY 2012-13 is assumed to be funded through additional loans
received during FY 2012-13. If any amount of consumers’ contribution and grant/
subsidy towards capital assets remains available after this adjustment, the same will
be considered as funding for creation of assets to be capitalized in the subsequent
years. While the Commission understands that this methodology has its own
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 67
limitation, the Commission has no other option to adopt this methodology till the
time BSPHCL is able to improve the availability of information to enable the
Commission to approve the interest expenses based on actual information.
Assumption of loan against assets getting capitalized during FY 2012-13 is given
below:
Particulars (Rs. Crore)Total assets capitalized during the year (A) 2602.45
Less: Grants/subsidies towards cost of capital assets (B) 1208.20 1208.20
Less: Loans pertaining to Generation function (BTPS) and BSEB (C) 1071.03
PFC Loan received by BSEB for BTPS (Apr’12 to Oct’12) 382.16
State Govt. Loan received by BSEB (Apr’12 to Oct’12) 338.58
Loans received by BSPGCL (Nov’12 to Mar’13) 350.29Estimated funding through Loans {A – (B+C)} 323.22
It can be seen from the table above that out of the total assets capitalized during
FY 2012-13, Rs.2279.23 crore has been funded by contributions, grants and subsidies
towards cost of capital assets (Rs. 1208.20 crore) and loans pertaining to renovation
and modernization of BTPS (generation function) are not considered as the R&M of
BTPS assets not put to use. Thus the estimated assets funded through loans are
arrived at Rs. 323.22 crore.
The Commission, while truing up for FY 2011-12 in the Tariff Order dated 15th March
2013 has stated (section 4.19 of the Tariff Order for FY 2013-14) that a balance of
Rs.2568.03 crore of contribution, grant and subsidies remains which will be
considered for funding of assets capitalized during subsequent years. As such, the
balance estimated assets of Rs.323.22 crore is adjusted against Rs.2568.03 crore
leaving a balance of Rs.2244.81 crore of contribution, grant and subsidies for funding
of assets capitalized during subsequent years.
It is considered to compute interest based on the methodology adopted for
computing interest on funds utilized for assets capitalized in the earlier tariff orders
for truing up for FY 2012-13.
The effective interest rate for computing interest and finance charges has been
computed using the same methodology as was used in true up for FY 2011-12. The
average of all the opening and closing balance of loans (excluding State Government
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 68
funds) from different sources during FY 2012-13 and total interest accrued / paid
during the year have been considered for arriving at the effective average rate of
interest for the purpose of computing interest charges as indicated in the Table
below :
Table 4.27: Computation of effective rate of interest for FY 2012-13(Based on audited annual accounts)
(Rs. crore)
Sourceof loan
OpeningBalance
as on1-4-2012
Additionsduring
FY 12-13
Repaymentin FY 12-13
CB ason
31-3-13
Interestaccruedduring
theyear
Averageloan
duringthe year
Averagerate of
Interest
REC(RGGVY) 491.81 27.60 42.06 477.35 56.21PFC 232.94 575.31 35.63 772.62 29.96ADB 0.00 19.51 0.00 19.51 0.41Total 724.75 622.42 77.69 1269.48 86.58 997.12 8.68%
As per CERC (Terms and Conditions for Determination of Tariff) Regulations 2009,
the repayment during the year has been considered to be equal to the depreciation
allowed for the year.
On the basis of the aforesaid methodology, the Commission approves the interest
and finance charges for FY 2012-13 as given in the Table below:
Table 4.28: Approved interest and finance charges for FY 2012-13(Rs. Crore)
The Commission approves Rs. 61.55 crore towards interest and finance charges for
FY 2012-13 in truing up
ParticularsApproved in Tariff
Order forFY 2012-13
Now approved intruing up forFY 2012-13
Opening Loan(as per the closing balance of true up in Tariff Order forFY 2013-14
983.33 434.89
Additions during the year 1072.94 622.42Repayments (restricted to Depreciation) 98.33 74.45Closing Loan 1957.93 982.86Average Loan {(Opening loan + Closing loan) / 2} 1470.63 708.87Rate of Interest 13.00% 8.68%Interest and finance charges (Average loan x Rate ofinterest) 191.18 61.55
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 69
B. Other Interest and finance charges
Petitioner’s submission:
The BSPHCL had claimed Rs.236.44 crore (refer table 4.26) towards interest and
finance charges which includes Rs.85.97 crore (Sl.No.7 of table 4.26) towards other
interest and finance charges. However, no breakup details for Rs.85.97 crore were
furnished in the petition. The other interest and finance charges claimed are as
detailed in the table below:
Table 4.29 Other interest and finance charges for FY 2012-13
(Rs. crore)
ParticularsBSEB
(Apr'12-Oct'12)
BSPTCLov'12-
Mar'13)
NBPDCL(Nov'12-Mar'13)
SBPDCL(Nov'12-Mar'13)
Total FY12-13
Other interest and financecharges 56.74 0.01 9.13 20.08 85.97
The BSPHCL had requested to approve the other interest and finance charges of
Rs.85.97 crore for FY 2012-13 as per the audited annual accounts.
Commission’s analysis:
BSPHCL claimed Rs.85.97 crore against Rs.85.96 crore, difference is due to rounding
off.
The Petitioner has not furnished the details of the other interest and finance charges
separately component wise in the petition. However, the details of the amounts
were extracted from the audited annual accounts of the segregated entities which
are as detailed in the table:
Table 4.30: Other Interest and Finance Charges for FY 2012-13(Rs. Crore)
Sl.No. Particulars
BSEB(Apr'12-Oct'12)
BSPTCL(Nov'12-Mar'13)
NBPDCL(Nov'12-Mar'13)
SBPDCL(Nov'12-Mar'13)
TotalFY 12-13
1Discount to consumers fortimely payment of bills(Rebate)
10.59 1.68 5.63 17.90
2 Power factor Rebate 20.71 2.66 13.79 37.16
3 Interest on ContributoryProvident fund 23.81 23.81
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 70
4
Interest to suppliers/contractors (Late paymentSurcharge to powersuppliers)
4.47 4.47
5 Other charges 1.63 0.01 0.32 0.66 2.626 Total 56.74 0.01 9.13 20.08 85.96
Discount to consumers for timely payment of bills (Rebate)
The Clause 85 (I) – Definitions of Income of the BERC (Terms and Conditions for
Determination of Tariff) Regulation 2007 specifies that the income shall include all
income from any source but shall not be limited to sale of energy or gross receipts
from sale of energy less discounts / rebates given based on the orders of the
Commission for determination of tariffs.
Power Factor Rebate
The Commission in the Tariff Orders issued year on year, specifies in the Tariff
Principles, Design and Tariff Schedule that Rebate for prompt payment of energy bills
on or before due date by the LT and HT consumers and Power factor Rebate to the HT
consumers shall be allowed as per the rates prescribed in the tariff orders.
Interest on Contributory Provident fund
The Commission in the tariff order for FY 2012-13 has stated that “the contribution
of the employees towards GPF and GSS is not a part of employee cost. This amount
is deducted from the salary of the employees and should be deposited in a separate
fund to be governed by a Trust. Any investment out of this fund has to be with the
approval of the Trust”.
The Commission further stated that BSEB has utilized the amounts available in the
fund created towards GPF and GSS towards meeting its day to day expenses i.e. for
the purpose of funding its working capital requirements. Accordingly, permitting
these expenses to be passed on to the consumers shall mean that the consumers
have to bear the burden for the past financial mismanagement by the Board. The
Commission is of the view that such liabilities on account of past issues should be
funded by BSEB through its own means and should not be passed on to the
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 71
consumers. The Regulations provide for interest on normative working capital to be
passed on to the consumers thus meeting the working capital requirements of the
licensee for the year.
Accordingly, the interest on GPF, as claimed by the petitioner is not considered for
truing up for FY 2012-13.
Interest to suppliers/contractors (Late Payment Surcharge to Power Suppliers)
As per Clause 85 (ii) (5) of the BERC (Terms and Conditions for Determination of
Tariff) Regulations 2007, the penal charges are not considered.
Other Charges
The other charges were considered by the Commission as they represent the other
finance charges towards bank collection charges etc.
Accordingly, the Commission approves the Discount allowed to consumers for timely
payment of energy bills and the power factor rebate, which were specified by the
Commission in the Tariff Orders issued year on year as detailed in the table below:
Table 4.31: Approved interest and finance charges for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Claimed byBSPHCL forFY 2012-13
Approved intruing up forFY 2012-13
1 Discount to consumers for timely payment of bills(Rebate) 17.90 17.90
2 Power factor Rebate 37.16 37.163 Interest on Contributory Provident fund 23.81
4 Interest to suppliers/contractors(Late payment Surcharge to power suppliers) 4.47
5 Other charges 2.62 2.626 Total 85.96 57.68
The Commission approves Rs.57.68 crore towards other interest and
finance charges for FY 2012-13 in the truing up.
The Commission approves the total interest and fiancé charges at Rs.119.23
(Rs.61.55 + Rs.57.68) crore in the truing up for FY 2012-13.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 72
4.17 Interest on working Capital
Petitioner’s submission:
BSPHCL has claimed Rs.159.52 crore towards interest on working capital in the truing
up for FY 2012-13 against Rs.93.28 crore considered in the RE for FY 2012-13 in the
Tariff Order dated 15th March 2013 as detailed in the Table below:
Table 4.32: Proposed Interest on Working Capital for FY 2012-13
(Rs. Crore)
Sl No. Interest on working capital
Approved inreview for
FY 2012-13 inT.O. dated 15th
March 2013
Claimed byBSPHCL fortrue up forFY 2012-13
1 O&M exp. (1 month) 50.87 49.972 Receivables - 2 months 888.04 918.013 Maintenance spares @1% of opening GFA 53.51 113.544 Total working capital 992.42 1081.52
5 Less: Power purchase bills paid to NTPC byState Govt. (2 months) 360 0
6 Net working capital 632.42 1081.527 Rate of interest 14.75% 14.75%8 Interest on working capital 93.28 159.52
The BSPHCL has submitted that interest on working capital is computed as per the
BERC (Terms and Conditions for Determination of Tariff) Regulations, 2007 for
recovery of the interest on working capital from the consumers on a normative basis.
The principles for this normative computation have been specified in the tariff
regulations and are different for generation function and transmission & distribution
functions. BSPHCL further submitted that it has computed the working capital
requirements and interest thereon on overall basis.
BSPHCL has submitted that it has calculated the interest on working capital based on
the normative principles outlined by the Commission in its Tariff Regulations, 2007
and sought for approval of the same from the Commission.
Commission’s analysis:
BSPHCL had proposed maintenance spares @1% of opening GFA of Rs.10711 core
which includes the value of Land revalued. The same is realigned to the original value
of GFA of Rs.5049 crore and accordingly considered in the computations.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 73
The Regulation 73 (4) (ii) specifies that the rate of interest on working capital shall be
equal to the short-term PLR of SBI as on 1st April of the year. The short-term PLR of
SBI as on 1st April 2012 is @14.75% and the same is considered for computations.
Accordingly, based on the principles prescribed in the BERC (Terms and Conditions
for Determination of Tariff) Regulations 2007, the information available in the
audited annual accounts and the observation of the Commission, the Commission
approves the interest on Working Capital of Rs.97.45 crore as against Rs.159.52
crore claimed by BSPHCL for FY 2012-13 as shown in the Table below:
Table 4.33: Interest on working capital approved for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Approvedin Tariff
Order forFY 2012-13
Approved inreview for
FY 2012-13 inT.O. dated15th March
2013
Claimed byBSPHCL fortrue up forFY 2012-13
Approvedin truingup for FY2012-13
1 Opening original value of assets(GFA) (incl. Revaluation of assets) 10711
2 Opening original value of assets(GFA) as on 1st April 2012 5351 5049
3 Fuel cost (2 months) 15.91 0.00 0.00 0.004 O&M expenses (1 month) 76.14 50.87 49.97 49.975 Receivables - 2 months 982.09 888.04 918.01 917.156 Maintenance spares @1% of
opening GFA with 6% escalation 56.62 53.51 113.54 53.527 Total working capital (3 to 6) 1130.76 992.42 1081.52 1020.658 Less: Resource gap grant towards
Power purchase bills paid to NTPCetc. (2 months) 360 360.00
9 Net working capital (7-8) 1130.76 632.42 1081.52 660.6510 Rate of interest 13% 14.75% 14.75% 14.75%11 Interest on working capital (9*10) 147.00 93.28 159.52 97.45
The Commission approves Rs. 97.45 crore towards interest on working capital for
FY 2012-13 in the truing up.
4.18 Interest on Security Deposit
Petitioner’s submission:
The BSPHCL has submitted that it has paid Rs.14.60 crore towards interest on
Consumers Security Deposit for FY 2012-13 as per the audited annual accounts of
the segregated entities as detailed in the table below;
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 74
Table 4.34: Interest on Consumers Security Deposit for FY 2012-13(Rs. crore)
ParticularsBSEB
(April’12 toOctober’12)
NBPDCL(November’12to March’13)
SBPDCL(November’12to March’13)
Total forFY
2012-13Interest on Consumers securityDeposits 7.02 3.35 4.22 14.59
BSPHCL requested the Commission to approve the interest on consumers Security
Deposits for FY 2012-13, as detailed in above Table.
Commission’s analysis:
The Commission in the Tariff Order for FY 2011-12 has opined that the consumer
security deposits provided to the distribution licensees by the consumers should be
either be used for funding working capital requirement or should be kept with the
bank and interest earned on the amount should be passed on to the consumers. In
such a scenario, there is no additional financial implication on distribution licensees
because it is compensated for its working capital funding on a normative basis or the
interest earned can be passed on to the consumers. The BSEB and segregated
entities collecting security deposits from the consumers and using these deposits for
meeting its working capital requirement since it is paying consumers at bank rate
thereby saving on higher interest cost that may be payable on working capital loans
borrowed from market.
In view of the above, the Commission accordingly disapproves interest payable on
security deposits as an expenditure item in truing up.
4.19 Return on Equity
Petitioner’s submission:
BSPHCL has submitted that the opening equity balances for the segregated entities
are considered as per revised submission made by M/s. PFC. It is submitted that the
total amount of equity as per revised submission in all the 4 entities (Generation,
Transmission and Distribution) is to the tune of Rs. 6965.66 crore as against the
figure of Rs.1974.88 crore appearing in the audited annual accounts for FY 2012-13.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 75
BSPHCL has also submitted that finalization /approval of State Government to the
final transfer scheme is in process.
BSPHCL has claimed as detailed in the table below:
Table 4.35: Proposed Return on Equity for FY 2012-13
(Rs. crore)
Return on EquityBSEB
(Apr’12to Oct’12)
Figures for period from Nov’12 toMar’13 Total
BSPGCL BSPTCL NBPDCL SBPDCLOpening – Equity capital
Notapplicable
1551.14 1630.46 1642.74 2141.32 6965.66RoE – Post Tax 14.00% 14.00% 14.00% 14.00%Return on equity 217.16 228.26 229.98 299.78 975.19Return on equity for 5 Months 95.83 124.91 220.74
BSPHCL has requested the Commission to approve Return on Equity for FY 2012-13
as per above computations as against Rs.85.05 crore approved in review order.
Commission’s analysis:
The Commission had considered equity of Rs. 1458 crore (Generation – Rs. 344
crore, Transmission – Rs. 235 crore and Distribution – Rs. 879 crore) for FY 2012-13
(RE) in the Tariff order for FY 2013-14 based on the equity approved in the Bihar
State Electricity Reforms Transfer Scheme, 2012 and approved Rs. 85.05 crore
towards Return on Equity for 5 months.
The clause 9 of the Bihar State Electricity Reforms Transfer Scheme, 2012 specifies
that “the classification and transfer of property rights, assets, liabilities and
proceedings to be provisional in the first instance for a period of one year from the
effective date”.
The clause 9.3 of the Transfer scheme specifies that “on the expiry of the period of
one year from the effective date and subject to any directions given by the State
Government, the transfer of undertakings, properties, interests, rights, assets,
liabilities, personnel and proceedings made in accordance with the transfer scheme
shall become final”.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 76
The Petitioner has claimed return on equity on enhanced/ revalued equity of
Rs. 6965.66 crore of segregated entities. As per the audited annual accounts, the
equity shown by the entities is Rs. 1974.88 crore. Further, as could be seen from the
audited accounts of the entities, the government has not infused any equity during
FY 2012-13.
The Commission has considered based on the provisional transfer scheme dated 1st
November 2012, an equity of Rs. 1458 crore equity in the MYT order dated 15th
March 2013 in respect of generation, transmission and distribution functions and
accordingly considered return on equity (RoE). The currency of the provisional
transfer scheme is one year from the date of notification of provisional transfer
scheme and the final transfer scheme shall be notified before completion of the one
year period.
The Commission has observed that final transfer scheme has not been notified by
the Government before 1st November 2013 i.e. one year from the effective date of
notifying the provisional transfer scheme. It is informed by the Petitioner that the
approval/order to the final transfer scheme by the State Government is in process.
Further, it is noticed that the State Government has not infused any equity in the
BSEB/segregated companies during the FY 2012-13. As such, in the absence of
clear/specific orders of the Government within the prescribed time limit and in view
of no fresh equity infusion by the State Government during FY 2012-13, the
Commission does not find any reason to consider the enhanced/revised equity
capital adopted by the Petitioner. However, the Commission has considered the
equity based on the provisional transfer scheme adopted in the Tariff Order for
FY 2013-14 for computation of return on equity for true up for FY 2012-13.
The Petitioner has not claimed return on equity in respect of Generation and
Transmission functions. Accordingly, the Commission has considered return on
equity in respect of Distribution (Rs. 879 crore) function only for FY 2012-13 for
truing up.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 77
In absence of the final transfer scheme, the Commission has now considered return
on equity on Rs. 879 crore for 5 months as detailed below:
Table 4.36: Return on equity approved for FY 2012-13
(Rs. crore)
Particulars
Approved in reviewfor FY 2012-13 inT.O. dated 15th
March 2013
Claimed byBSPHCL for true
up forFY 2012-13
Approved intruing up forFY 2012-13
Equity 1458 6965.66 879Rate of Return 14% 14% 14%Return per year 204.12 975.19 123.06Return for 5 months (Nov'12to 31st Mar'13) 85.05 220.74 51.28
The Commission, therefore, approves Return on Equity at Rs.51.28 crore for
FY 2012-13 in the truing up.
4.20 Non-Tariff Income
Petitioner’s submission:
The BSPHCL has submitted that the Non-tariff income of all the entities is considered
as per audited annual accounts at Rs.268.43 crore for FY 2012-13, the details of
which are furnished in Format 16 of the petition as given in the table below:
Table 4.37 Non-tariff income proposed for FY 2012-13
(Rs. crore)
Sl.No
ParticularsApprovedin Tariff
Order forFY
2012-13
Actuals as per Annual Accounts for FY 2012-13
BSEB(Apr'12-Oct'12)
BSPGCL(Nov'12-Mar'13)
BSPTCL(Nov'12-Mar'13)
NBPDCL(Nov'12-Mar'13)
SBPDCL(Nov'12-Mar'13)
Total FY2012-13
1DPS as per actuals(@1.5%/pm) (A) 41.96 103.11 31.44 24.12 158.67
2
Principal amount onwhich DPS wascharged (B = A/18%) 233.11 572.83 0.00 0.00 174.65 134.00 881.48
3
Interest rate forfunding Principal ofDPS 14.75% 14.75% 14.75% 14.75% 14.75% 14.75%
4
Interest on fundingof Principal amountof DPS 34.38 84.49 0.00 0.00 25.76 19.77 130.02
5 Non-tariff income 107.14 160.04 0.51 1.02 50.48 56.37 268.43
6
Less: above financialcost/capitalisationof BSPGCL 34.38 84.49 0.51 0.00 25.76 19.77 130.53
7Net Non-tariffincome 72.76 75.55 0.00 1.02 24.72 36.61 137.90
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 78
The petitioner has further submitted that the funding cost of principal amount of
Delayed Payment Surcharge (DPS) is adjusted as per the methodology adopted by
the Commission in the previous tariff orders and net non-tariff income.
The Petitioner requested for approval of Non-tariff income of Rs.137.90 crore for
FY 2012-13, as given in the above Table.
Commission’s analysis:
The Commission had approved the total non-tariff income as Rs.127.16 crore in
Tariff order dated 30th March, 2012 and Rs.72.76 crore (RE) in Tariff Order dated
15th March 2013 for FY 2012-13.
The Commission has adopted the approach on Non-Tariff income in line with the
judgment of Hon’ble Appellate Tribunal for Electricity (APTEL) dated 12.07.2011 in
case no. 142 & 147 of 2009. The relevant extracts of the Judgment are reproduced
below:
“The normative working capital compensates the distribution company in delay for
the 2 months credit period which is given to the consumers. The late payment
surcharge is only if the delay is more than the normative credit period. For the
period of delay beyond normative period, the distribution company has to be
compensated with the cost of such additional financing. It is not the case of the
Appellant that the late payment surcharge should not be treated as a non- tariff
income. The Appellant is only praying that the financing cost is involved due to late
payment and as such the Appellant is entitled to the compensation to incur such
additional financing cost. Therefore, the financing cost of outstanding dues, i.e. the
entire principal amount, should be allowed and it should not be limited to late
payment surcharge amount alone. Further, the interest rate which is fixed as 9% is
not the prevalent market Lending Rate due to increase in Prime Lending Rate since
2004-05. Therefore, the State Commission is directed to rectify its computation of
the financing cost relating to the late payment surcharge for the FY 2007-08 at the
prevalent market lending rate during that period keeping in view the prevailing
Prime Lending Rate”.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 79
As per audited annual accounts of the segregated entities for FY 2012-13, the Non-
Tariff income is Rs.268.43 crore, out of which, the Delayed Payment Surcharge from
consumers is at Rs. 158.67 crore. As the petitioner charges DPS @ 18% per annum
(1.5% per month), the principal amount on which DPS has been charged will be
Rs.881.50 crore.
The Commission has allowed 14.75% being the prevailing SBI PLR as on 1st April 2012
towards the financing cost for DPS. The financing cost approved by the Commission
is shown in Table below:
Table 4.38: Funding of DPS(Rs. crore)
Sl.No. Particulars
Approved in TariffOrder FY 2012-13
Now approved for FY2012-13 in truing up
1 DPS as per actuals (@1.5%/pm) 30.84 158.672 Principal amount on which DPS charged 171.35 881.503 Interest rate for funding Principal of DPS 13.00% 14.75%4 Interest on funding of Principal of DPS 22.28 130.02
The non-tariff income of Rs. 0.51 Crore as per Annual Accounts of BSPGCL for
FY 2012-13 capitalized is added to interest on funding of principal amount of DPS
and adjusted against non-tariff income.
Accordingly, the Commission has computed the amount of Non -Tariff Income as
summarized in the table below:
Table 4.39: Non-tariff Income approved for FY 2012-13
(Rs. crore)
Sl. No. Particulars
Approved inTariff Order
forFY 2012-13
Approved inreview forFY 2012-13
in T.O.dated 15th
March 2013
Claimedby BSPHCLin true up
for FY2012-13
Approvedin truing
up forFY 2012-
13
1 Total Non-tariff income 149.44 107.14 268.43 268.43
2 Less: Interest on funding ofPrincipal amount of DPS 22.28 34.38 130.53 130.53
3 Net Non-tariff income 127.16 72.76 137.90 137.90
The Deferred income shown in the audited annual accounts of BSPTCL, NBPDCL and
SBPDCL represents the depreciation on the assets created out of Grants/Subsidies is
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 80
not included in the total NTI, as the depreciation is considered separately in
proportion to the GFA and Grants (Sec.4.18).
Therefore, the Commission approves Rs. 137.90 crore as Non-Tariff Income in
truing up for FY 2012-13.
4.21 Net Prior Period Credits / Charges
Petitioner’s submission:
The BSPHCL in the true up petition has proposed net prior period charges of Rs.
745.87 crore for FY 2012-13. The Petitioner has submitted that subsidy amount
taken as prior period income has been presented in the subsidy received from State
Government and hence net prior period charges to the effect would increase. The
summary of net prior period charges claimed by the petitioner are as detailed in the
table below:
Table 4.40 Net prior period charges proposed for FY 2012-13(Rs. crore)
The Petitioner requested the Commission to approve the same for FY 2012-13.
Commission’s analysis:
The Commission has addressed the Petitioner through letters dated 19th and 27th of
November 2013 to furnish the complete particulars of the claims giving details of (i)
nature of claim, (ii) period for which the claim relates, (iii) Source of claim i.e. from
whom the claim is received, and (iv) whether the claims were discharged as on date.
The Petitioner vide letter dated 6-1-2014 had submitted that there are certain
elements which come up for adjustments including expenses and income after the
annual accounts are audited and closed. Such elements are treated in next year as
prior period expenses/income and hence need to be considered at appropriate time
based on audited accounts in that financial year. The details furnished by the
Petitioner are given in the Tables below:
Sl. No. Particulars Amount1 Prior period income (40.12)2 Prior period expenses 785.993 Net prior period expenses / (Income) 745.87
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 81
Table -A
Particulars
Net Prior Period Credits/(Charges)
Respective
Period
Bihar State Electricity Board1-Apr-2012 to 31-Oct-2012
Closing BalanceDebit Credit
Income Relating to Previous Year 46,000 28,65,60,755
For FY 2011-12
Other Income Related to PriorPeriod
4,02,819
Other Excess Provision in PriorPeriod
12,86,126
Prior Period Sale of Power 28,48,25,810Prior Period Expenses/losses 7,22,25,74,223 99,10,42,409Prior Period Power Purchase 29,36,66,070 Correction EntryPrior Period Adjustment ofConsumer's Dues
88,19,68,829 69,73,76,339
For FY 2011-12
Interest & Finance Charges toPrevious Year
28,83,572
Operating Expenses of PreviousYear
2,36,79,497
Depreciation Underprovided inPrevious Year
35,04,578
Employee Cost Related to PreviousYear
5,75,46,37,811
Other Charges Related to PreviousYear
25,23,81,963
Short Provision for PP in PreviousYear
30,35,17,972 For FY 2008-2012*
Grand Total 7,22,26,20,223 1,27,76,03,164Net Total 5945017058
*Detailed year wise bi-furcation is provided in separate Table - B
Table – B
Net Prior PeriodCredits/(Charges)
RespectivePeriod
Bihar State Electricity BoardParticulars 1-Apr-2012 to 31-Oct-2012
Closing BalanceDebit Credit
Short Provision for PPin Previous Years
30,35,17,972 -7,43,55,354 - 2008-20091,88,59,709 - 2009-20104,16,86,890 - 2010-2011
16,86,16,019 - 2011-2012
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 82
Table – C
*Detailed year wise bi-furcation is provided in separate Table - D
Table – D
Net Prior PeriodCredits/(Charges)
RespectivePeriod
NBPDCLParticulars 1-Nov-2012 to 31-Mar-2013
Closing BalanceDebit Credit
Short Provision forPP in PreviousYears
77,92,72,364 -1,38,372 - 2004-2005
15,02,823 - 2005-20062,02,44,648 - 2006-20074,91,92,552 - 2007-2008
76055150 - 2008-200928764197 - 2009-201017236038 - 2010-2011
462511517 - 2011-2012123627067 - 2012-2013
Net Prior Period Credits/(Charges)
RespectivePeriod
North Bihar Power Distribution Co.Ltd.
Particulars 1-Nov-2012 to 31-Mar-2013Closing Balance
Debit CreditIncome Relating toPrevious Year
27,61,180 11,17,13,774 For FY 2011-12
Other Income Related toPrior Period
2,37,356 For FY 2011-12
Prior Period Sale of Power 10,87,15,238Prior PeriodExpenses/losses
78,26,22,605 48,03,058
Other Prior PeriodExpenses/losses
30,33,125 For FY 2011-12
Prior Period PowerPurchase
77,92,72,364 For FY 2004-13*
Employee Cost Related toPrevious Year
44,85,942 For FY 2011-12
Grand Total 78,53,83,785 11,65,16,832Net Total 668866954
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 83
Table – E
Net Prior PeriodCredits/(Charges)
Respective PeriodSouth Bihar Power Distribution
Co. Ltd.Particulars 1-Nov-2012 to 31-Mar-2013
Closing BalanceDebit Credit
Income Relating toPrevious Year
57,24,814
For FY 2011-12Other Excess Provision inPrior Period
57,24,814
Prior PeriodExpenses/losses
85,05,44,142
For FY 2004-13*Prior Period PowerPurchase
85,05,44,142
Grand Total 85,05,44,142 57,24,814Net Total 844819328
* Detailed year wise bi-furcation is provided in separate Table-F
Table - FNet Prior Period
Credits/(Charges)
RespectivePeriod
SBPDCLParticulars 1-Nov-2012 to 31-Mar-2013
Closing BalanceDebit Credit
Short Provision for PPin Previous Years
85,05,44,142 -56,577 - 2004-2005
1,57,652 - 2005-200630,10,339 - 2006-200796,94,898 - 2007-200840008043 - 2008-2009
4267041 - 2009-20104418529 - 2010-2011
583484739 - 2011-2012205446323 - 2012-2013
The Commission has examined the above details furnished by the Petitioner and
observed that the Petitioner had not furnished the details of prior period
income/expenses separately for each component and the period for which the
income and expenses related to, and nature of income/expenses etc. As per the
annual accounts of the segregated entities for FY 2012-13, the total prior period
charges are as detailed below:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 84
Table 4.41: Prior period charges as per annual accounts for FY 2012-13
(Rs. crore)
Sl.No. Particulars
BSEB(April '12 toOctober'12)
NBPDCL(Nov –
Mar 13)
SBPDCL(Nov –
Mar 13)
Total forFY 2012-13
1 Short provision forPurchase of power 30.35
2 Prior period powerpurchase (29.37) 77.92 85.05
3 Net prior period purchaseof power (1+2) 0.98 77.92 85.05 163.95
4 Net Prior periodadjustment of consumerdues 88.20
5 Net Prior periodadjustment of consumerdues (69.74)
6 Prior period sale of power (28.48)7 Net prior period sale of
power (4 to 6) (10.02) (10.02)8 Other charges related to
prior period 25.24 (0.14)9 Operating expenses of prior
period 2.3710 Other income related to
prior period (0.04) (24.49) (24.09)11 Other excess provisions (0.13)12 Net other prior period
income/expense(8 to 11) 27.44 (24.63) (24.09) (21.28)
13 Interest & Finance charges 0.29 0.2914 Depreciation under
provided 0.35 0.3515 sub-total (3+7+12 to 14) 19.04 53.29 60.96 133.2916 Employee cost related to
prior period 575.46 575.4617 Total prior period charges
(15+16) 594.50 53.29 60.96 708.75
The Commission has observed that as per audited annual accounts of BSEB for
FY 2012-13 (from Aprl’12 to October’12), the subsidy received from State
Government is at Rs.1980.00 crore. It is stated by the Petitioner that the actual
subsidy receivable is Rs.2017.11 crore against which Rs.1980.00 crore received and
the difference amount of Rs.37.11 crore is taken into accounts by making
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 85
adjustments to the prior period expenses. Thus the total prior period expenses are
shown at Rs.745.87 crore (Rs.708.75 crore + Rs.37.11 crore).
The Commission has not considered Rs.37.11 crore, adjustment made by the
Petitioner towards prior period expenses as the adjustment cannot be considered as
expenditure as no cash outflow is involved.
The Petitioner had claimed Rs. 575.46 crore towards Employee cost related to prior
period. The amount represents the accrued liability towards employee’s terminal
benefits taken into accounts based on the actuarial valuation as on the date of the
unbundling.
As per the Bihar State Electricity Reforms Transfer Scheme 2012 vide Notification No.
Proc. /Board No.31/2008/17/ Patna dated 30.10.2012, wherein clause 6.14 provides
that the liability in respect of existing pensioners of the Board (based on actuarial
valuation as on 31.3.2011) shall be the liability of the State Government. Further, the
liability as assessed on actuarial valuation, in respect of the retirement dues of
existing employees as on the effective date (i.e. 01.11.2012), to the extent they are
unfunded, shall also be the liability of the State Government. Relevant extract of
Bihar State Electricity Reforms Transfer Scheme 2012 is quoted below:
"6.14 The liability in respect of existing pensioners of the Board (based on actuarial
valuation as on 31.03.2011) shall be the liability of the State Government. Further the
liability, as assessed on actuarial valuation, in respect of the retiral dues of the
existing employees, as on the effective date, to the extent they are unfunded, shall
also be the liability of the State Government. As per actuarial valuation carried out by
registered actuary, the net present value of the total terminal benefit liabilities is
Rs. 4613 crores (discounted at 8% per annum) out of which total unfunded liability is
approximately Rs. 4438 Crores as on 31.03.2011.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 86
“6.15 The unfunded liabilities accumulated in respect of terminal benefits of the
employees, covered under State Govt.'s policies and directions, will be borne by the
State Govt. The unfunded liability upto the cut-off date will be treated as covered
under State Govt. policies and directions. The energy department will obtain the
detailed statement in respect thereof from the Board/holding Company and will
submit after due analysis for decision of the State Govt. and thereafter on this point
the transfer scheme will be considered final. The above unfunded terminal benefit
liability will be determined on yearly basis by the actuary considering the impact of
inflation, pay revisions etc. After the effective date, the liability on account of service
in the subsequent periods shall be borne by the respective successor companies. The
disbursal of terminal benefits will be through a master trust administered by the
holding company. The contribution from the State Govt. will be paid in advance in
two installments every year i.e. by 31st May and 30th November and the successor
companies will be contributing on monthly basis by 7th of the following month. The
State Government and the transferee shall be jointly and severally liable for
payments arising thereon till such notification, establishment of master trust and
proper funding."
As per the State Government notification on Bihar State Electricity Reforms Transfer
Scheme 2012, the entire terminal benefit of the existing pensioners based on the
actuarial valuation as on effective date i.e. 31st October 2012, shall be the liability of
the State Govt. The Transfer Scheme further states that the entire terminal benefit
of the existing employees till the effective date (1st November, 2012) based on
actuarial valuation shall also be the liability of the State Govt. Therefore, whatever
provision for terminal benefit was made in the accounts for FY 2012-13 shall be
liability of the State Government. Thus, the amount of Rs. 575.46 crore on account of
terminal benefits is to the account of the State Govt.
In view of the commitment given by the State Government in "Bihar State
Electricity Reforms Transfer Scheme 2012" amount of Rs. 575.46 crore claimed in
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 87
true up petition for FY 2012-13 by BSPHC Ltd., is not considered by the
Commission.
The Petitioner had claimed Rs. 163.95 crore (Rs.0.98 crore in BSEB, Rs. 77.92 crore in
NBPDCL and Rs.85.05 crore in SBPDCL) towards prior period power purchase cost.
The Commission has examined the details of prior period power purchases and
observed that these claims relates to Central Generating Stations (CGS), PGCIL etc.
towards fixed cost and variable cost etc. The Petitioner has intimated that these
claims/bills have been admitted by NBPDCL and SBPDCL. Accordingly, the
Commission, based on verification of the bills, has considered the prior period power
purchase cost of Rs. 163.95 crore.
As could be seen from the table 4.42, there is a net other prior period income of
Rs. 31.30 crore (Rs. 10.02 crore + Rs. 21.28 Crore) and accordingly the Commission
has considered the prior period income.
The Petitioner claimed prior period interest and finance charges Rs. 0.29 crore and
Depreciation under provided Rs. 0.35 crore for FY 2012-13. The Commission
considers different parameters/methodology for computing the interest and finance
charges, which is based on average closing balance of loan and effective interest rate
of the relevant tariff year. Similarly, for Depreciation, the Commission considers the
GFA vis-à-vis the proportionate Grants used for GFA for computing Depreciation. As
such there can be no short fall of expenditure under these heads of expenditure and
hence, the Commission has not considered the amounts.
Accordingly the Commission approves Rs. 132.65 crore towards prior period
charges pertaining to adjustment made for subsidy from State Government for
FY 2012-13 in the truing up for FY 2012-13
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 88
4.22 Revenue from Sale of Power at existing Tariff for FY 2012-13
Petitioner’s submission:
The BSPHCL has reported revenue from sale of power at Rs. 3307.16 crore for the
FY 2012-13 as per audited annual accounts and requested for considering the
revenue from sale of power at Rs. 3307.16 for FY 2012-13 in the Truing-up as
detailed in the Table below:
Table 4.42 Revenue from sale of power for FY 2012-13
(Rs. crore)
Particulars Apr'12 toOct'12 (BSEB)
Nov’12 to March’13 Total forFY 2012-13NBPDCL SBPDCL
Domestic 501.18 139.60 170.52 811.30Kutir Jyoti 49.56 20.17 11.56 81.29Domestic – I 98.69 41.64 24.56 164.89Domestic – II 352.76 77.61 134.37 564.74Domestic – III 0.17 0.18 0.03 0.38Commercial 272.98 76.27 119.11 468.36NDS-I 3.32 1.56 0.69 5.57NDS-II 269.12 74.59 118.06 461.77NDS-III 0.54 0.12 0.36 1.02Public Lighting 16.33 3.21 7.98 27.52Street Light – I 3.82 1.48 0.66 5.96Street Light - II 12.51 1.73 7.32 21.56Irrigation 51.91 15.36 23.10 90.37Irrigation IAS-I 13.87 0.74 8.63 23.24Irrigation IAS-I I 38.04 14.62 14.48 67.14Public water works 23.17 6.50 10.33 40.00Industrial LT 80.76 22.49 42.79 146.04LTIS – I 47.08 13.83 22.82 83.73LTIS – II 33.68 8.66 19.97 62.31
Industrial HT 591.43 89.61 297.72 978.76HTS-I 294.79 51.78 118.90 465.47HTS-II 81.58 15.05 47.45 144.08HTS-III 31.44 6.30 13.83 51.57HTSS 183.62 16.48 117.54 317.64Railway 185.26 4.93 124.64 314.82Nepal 137.83 129.88 267.71U I 155.87 2.24 4.17 162.28Total 2016.71 490.08 800.37 3307.16
Commission’s analysis:
The Commission has approved the revenue from sale of power, as stated below, in
the Tariff Order dated 30th March 2012 for FY 2012-13 and in Tariff Order dated 15th
March 2013 for FY 2012-13 (RE).
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 89
Table 4.43: Estimated Revenue from Sale of Power for FY 2012-13
(Rs. crore)
Against the above estimated revenue, BSPHCL has achieved the performance as
stated below, as per the Audited Annual Accounts for FY 2012-13.
Table 4.44: Actual Revenue received as per the audited Annual Accounts for FY 2012-13
(Rs. crore)
The Commission approves the revenue from sale of power at Rs. 3307.16 crore for
FY 2012-13, as per audited annual accounts in truing-up.
4.23 Resource gap funding received from the State Government for FY 2012-13
Petitioner’s submission:
The BSPHCL has submitted that since the erstwhile BSEB was a Government of Bihar
entity, the un-bridged expenditure gap has to be met either by revenue income from
the tariff fixed by the Commission for the different categories of consumers, or as
subsidy/resource gap funding by the Government of Bihar.
Sl. No. Particulars Approved inTariff Order for
FY 2012-13
Approved inreview for FY
2012-13 in T.O.dated 15th
March 20131 Revenue from sale of power at existing
tariffs 3418.68 2930.08
2 Sale of power to Nepal 258.63 258.633 Sale of power through bilateral / UI 107.76 107.764 Sale of additional power 120.995 Total 3906.06 3296.47
Sl. No. ParticularsActual revenue as
per audited accountsfor FY 2012-13
1 Revenue from sale of power at existing tariffs 2877.172 Sale of power to Nepal 267.713 Sale of power through bilateral / UI 162.284 Total 3307.16
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 90
BSPHCL has submitted that the State Government in its letter No.21/2010-285 dated
16th January 2013 had informed the Commission that the resources gap funding
support for FY 2012-13 would be Rs. 2880 crore.
The Petitioner has furnished subsidy receivable and actual subsidy received during
FY 2012-13 as detailed in the Table below:
Table 4.45: Details of Subsidy and Grant received during FY 2012-13
(Rs. crore)
Particulars
FY 2012-13Total for
FY 2012-13BSEB(Apr’12 toOctober’12)
NBPDCL(November’12to March’13)
SBPDCL(November’12to March’13)
Subsidy to be receivedfor the year 2017.11 339.38 587.13 2943.61
Details of Subsidy and Grant received Quarter-wise during FY 2012-13
Particulars Q1 Q2 Q3 Q4 TotalSubsidy received for FY2012-13 1120.00 679.80 540.20 603.61 2943.61
The BSPHCL also submitted that it has worked out likely disallowance in the power
purchase cost of Rs. 1025.22 crore because of higher T&D losses, as compared to the
approved trajectory by the Commission and has reduced the same amount from the
Aggregate Revenue Requirement. At the same time, it has also reduced resource
gap funding to the same tune and only the remaining amount of Rs. 1918.21 crore is
considered as available for reducing the Aggregate Revenue Requirement to arrive at
the revenue gap for FY 2012-13 as detailed in Table below.
Table 4.46: Allocation of Resource Gap for FY 2012-13.
(Rs. crore)
Particulars Approved forFY 2012-13
Now proposedfor True up by
BSPHCLResource Gap funding from State Government 2880.00 2943.61Less: Disallowed power purchase cost 1020.17 1025.22Balance Resource gap funding available with BSPHCL 1859.83 1918.39
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 91
BSPHCL requested that Rs 2943.61 crore be considered as the resource gap funding
for reducing the Aggregate Revenue Requirement to arrive at the revenue gap for
FY 2012-13.
Commission’s analysis:
The actual resources gap assistance received for FY 2012-13 is Rs. 2943.61 crore and
the same is considered by the Commission in the truing up for FY 2012-13 against
Rs. 2880.00 crore considered in the review for FY 2012-13 in T.O. dated 15th March
2013.
The Commission in paragraph 4.9 has disallowed an amount of Rs.1198.84 crore
towards power purchase cost for FY 2012-13. Accordingly, out of Rs.2943.61 core of
resource gap assistance received for the year FY 2012-13, Rs. 1198.84 crore is
adjusted towards financial loss caused due to higher T&D loss. Thus Rs.1744.77 crore
is available as resource gap grant for reducing ARR gap approved in the truing up for
FY 2012-13.
The details of adjustment of resource gap assistance are given below:
Table 4.47: Details of State Government Resource Gap Assistance/Subsidy for FY 2012-13
(Rs. crore)Sl.
No. Particulars Amount
1 Resource gap assistance for State Government 2943.61
2
Less: Resource gap grant adjusted towards disallowed powerpurchase cost on account of high T&D loss with respect to BERCtarget 1198.84
3Balance Resource gap grant available for reducing ARR gap forFY 2012-13 1744.77
4.24 Approved ARR and Revenue Gap for FY 2012-13
Based on the above analysis, the annual revenue requirement, along with the
revenues at existing tariffs and revenue gap for FY 2012-13, is as shown below:
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 92
Table 4.48: Summary of Trued-up ARR and Revenue gap/surplus for FY 2012-13
(Rs. crore)
Sl.No. Particulars
Approvedin Tariff
Order forFY 2012-13
Approvedin review
for FY2012-13 in
TariffOrder for
FY2013-14
BSPHCLproposal intruing up
forFY 2012-13
Nowapprovedin truing
up forFY
2012-13
1 Power Purchase Cost 5181.71 4167.07 4152.44 4152.432 PGCIL Transmission charges 180.00 359.99 359.993 BSPTCL Transmission charges 53.66 53.664 Own Generation Cost - Fuel 103.525 Repairs and Maintenance Expenses 110.27 90.99 74.18 74.186 Employees' Cost 735.37 470.05 456.93 456.937 Administration and General Expenses 74.78 49.40 68.57 68.578 Depreciation 159.77 83.04 128.25 74.459 Interest and Finance Charges 191.18 144.50 236.44 61.55
10Other charges (Power factor Rebate, Disc.To consumers, other fin. Charges) 57.68
11 Interest on Working Capital 147.00 93.28 159.52 97.4512 Interest on SD 14.6013 Return on Equity 0.00 85.05 220.74 51.2814 Prior Period Charges / (Credits) 745.88 132.6515 Total Revenue Requirement (1 to 14) 6703.60 5363.38 6671.20 5640.8216 Less: Non-Tariff Income 127.16 72.76 137.90 137.90
17Less: Expenditure Disallowed due tohigher T&D losses 1006.52 1020.17 1025.22 1198.84
18 Net Revenue Requirement [15 -(16+17)] 5569.92 4270.45 5508.08 4304.08
19Less: Recovery of revenue Gap /(Surplus) of previous year (822.69)
20
Revenue Requirement after consideringtrued-up Gap/(Surplus) from FY 2006-07 toFY 2011-12 (18 - 19) 4747.23 4270.45 5508.08 4304.08
21 Revenue from existing Tariff 3070.63 2930.08 2877.17 2877.1722 Revenue from sale to Nepal 258.63 430.98 267.71 267.7123 Revenue from UI 107.76 162.28 162.2824 Revenue from sale of additional power 120.9925 BSPTCL Transmission charges 53.66 53.6626 Net Revenue Gap [20 -(21+22+23+24+25)] 1189.22 909.39 2147.26 943.26
27Less: Resource gap grant from StateGovernment 0.00 1859.83 1918.39 1744.77
28Less: Additional resource gap available withBSPHCL
29 Net Gap / (Surplus) [26 -(27+28)] 1189.22 (950.44) 228.87 (801.51)
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 93
The Trued up revenue surplus as approved by the Commission for FY 2012-13 is at
Rs. 801.51 crore, as against revenue gap of Rs.228.87 crore projected by the
Petitioner in the Truing up Petition for FY 2012-13.
The BERC Tariff Regulations, 2007 provide for revenue gap of the following year to
be adjusted as a result of truing-up exercise for FY 2012-13. While approving
adjustments towards revenue / expenses in subsequent years, arising out of review /
truing-up exercise, the Commission will allow this surplus during FY 2012-13.
Accordingly, the revenue surplus arising out of the truing up for FY 2012-13 is to be
adjusted in the ARR for FY 2014-15. The Commission approves interest for one and
half year (for the entire FY 2013-14 and for half of the FY 2014-15 assuming that the
recovery would have been done over the year) amounting to Rs. 173.73 crore on the
revenue surplus for FY 2012-13 arising on account of the truing-up exercise.
Table 4.49: Summary of the interest on revenue surplus of FY 2012-13 permitted to becarried forward to ARR of FY 2014-15
(Rs. crore)Particulars Approved
surplus truingup for
FY 2012-13
Revenue Loss (surplus) approved for FY 2012-13 to be carried forward 801.51Interest for FY 2013-14 (SBI PLR @ 14.45%) for 1 year 115.82Interest for FY 2014-15 (SBI PLR @14.45%) for 6 months 57.91Total Surplus with interest 975.24
The trued up revenue surplus, as approved by the Commission for FY 2012-13,
amounts to Rs. 975.24 crore, as against revenue gap of Rs. 261.92 crore (including
carrying cost) proposed by the Petitioner in the truing-up petition of FY 2012-13.
Accordingly, the surplus would be carried forward to the ARR of the FY 2014-15 for
adjustment.
4.25 Past Recoveries
The Commission has passed its truing up order for FY 2006-07 to FY 2008-09 on
4th January 2012, true up order for FY 2009-10 on 27th January 2012 and for FY 2010-
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 94
11 on 30th March 2012. The summary of the true up of FY 2006-07 to FY 2010-11 is
as detailed in the table below:
Year Particulars Amount(Rs. crore)
2006-07 Revenue Gap/(Surplus) 7.232007-08 Revenue Gap/(Surplus) 86.562008-09 Revenue Gap/(Surplus) 123.412009-10 Revenue Gap/(Surplus) 274.672010-11 Revenue Gap/(Surplus) (639.93)Total (148.06)
In the Tariff Order for FY 2012-13 dated 30th March 2012; the amount of Rs. 148.06
Crore was fully considered and adjusted in FY 2012-13 while arriving at the ARR and
the gap for FY 2012-13.
Further, in the Tariff order for FY 2012-13, the revenue surplus arrived at Rs. 674.63
crore, based on Annual Performance Review for FY 2011-12 (RE), is also considered
along with Rs.148.06 Crore in the final true up orders thereby a total amount of Rs.
822.69 crore (Rs.148.06 crore + Rs. 674.63 crore) is considered and adjusted against
the ARR for the FY 2012-13.
The Commission had issued its true up order FY 2011-12 vide Tariff Order dated 15th
March 2013 wherein the Commission had arrived at net surplus of Rs.170.33 crore
(surplus Rs.139.64 crore + carrying cost of Rs.30.69 crore) for adjustment in ARR for
FY 2013-14.
However, the Commission has considered the Surplus for truing up in FY 2012-13
itself and accordingly carrying cost for half year (i.e. six (6) months) of FY 2012-13 is
considered amounting to Rs.10.30 crore. Thus the surplus and carrying cost is revised
to Rs.149.94 crore (Rs.139.64 crore + Rs.10.30 crore) against Rs.170.33 crore
considered in Tariff Order dated 15th March 2013. There by the actual revenue
surplus based on the true up orders issued by the Commission from FY 2006-07 to
FY 2011-12 is Rs. 298.00 Crore (Rs. 148.06 crore + Rs.149.94 crore). However in the
Tariff Order (table 147) for FY 2012-13, an amount of Rs. 822.69 crore was adjusted
against the ARR for FY 2012-13 and tariffs finalized and Tariff Order issued for
FY 2012-13.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 95
The truing up for FY 2012-13 as resulted in a revenue surplus of Rs. 975.24 crore
(Rs. 801.51 crore + Rs. 173.73 crore carrying cost)
As per the final true-up orders issued by the Commission from FY 2006-07 to
FY 2012-13, the actual adjustment of surplus to be made in the Tariff Order vis-à-vis
the adjustment made in the Tariff Order for FY 2012-13 is furnished in the table
below:
Table 4:50: Approved Revenue Gap/ (Surplus) based on true-up to end of FY 2012-13
(Rs. Crore)
Sl.No.
Particulars
As per TariffOrder of FY
2012-13
Actuals based on thefinal True-up for FY
2012-13
1 Revenue Requirement for FY 2012-13after adjustment of NTI and disallowanceof power due higher T&D losses
5569.92 4304.08
2 Less: BSPTCL Transmission charges 53.663 Net Revenue Requirement (1-2) 5569.92 4250.424 Less: Revenue from energy sales within
the State3070.63 2877.17
5 Less: Revenue from sale of Power to Nepal 258.63 267.716 Less: Revenue from UI sales 107.76 162.287 Less: Revenue from the sale of additional
power120.99 --
8 Total Revenue (4 to 7) 3558.01 3307.169 Net Revenue Gap for FY 2012-13 (3-8) 2011.91 943.2610 Less: Additional Revenue from Tariff
revision for FY 2012-13348.06 --
11 Less: Subsidy Adjustment 683.90 1744.7712 Net Gap/ (Surplus) (9-(10+11)) 979.95 (801.51)13 Carrying cost for on gap/(surplus) (on 12) (173.73)14 Gap/(Surplus) (12+13) 979.95 (975.24)15 Less: Gap/(Surplus) considered based on
true-up for FY 2006-07 to FY 2010-11 andFY 2011-12
(822.69) (298.00)
16 Net Gap / (Surplus) carried forward for FY2012-13 (14-15)
157.26 (1273.24)
The net revenue surplus arrived as based on truing up based on the audited annual
accounts to end of the tariff year 2012-13 is Rs. 1273.24 crore, which is carried
forward.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 96
ANNEXURE-I
Bihar Electricity Regulatory Commission (BERC)
Proceedings of State Advisory Committee (SAC) meeting held on 23.01.2014 at
11:30 A.M. in BERC Office.
1. At the outset, Sri U.N. Panjiar, Chairman BERC and Chairman SAC welcomed all the
participants. The list of participants is annexed.
Chairman, BERC and SAC informed the Committee that Bihar State Power (Holding)
Company Limited (BSPHCL) has submitted the petition for True up of FY 2012-13 on
behalf of erstwhile Bihar State Electricity Board (BSEB) and unbundled entities Bihar
State Power Generation Company Ltd. (BSPGCL), Bihar State Power Transmission
Company Ltd. (BSPTCL), North Bihar Power Distribution Company Ltd. (NBPDCL) and
South Bihar Power Distribution Company Ltd. (SBPDCL). Also the four subsidiary
companies of BSPHCL i.e. BSPGCL, BSPTCL, NBPDCL and SBPDCL have filed separate
petitions for Annual Performance Review (APR) for FY 2013-14, revised Annual
Revenue Requirement (ARR) and Tariff for FY 2014-15. The suggestions/objections
on the petitions have been invited from the stakeholders and general public through
notices in newspapers and website of the respective companies. Public hearing has
also been held so far at Bhagalpur, Munger, Patna, Saharsa, Purnea, Darbhanga and
Muzaffarpur. Public hearing is also scheduled at Chapra, Gaya and Patna during the
month of February, 2014.
This meeting of State Advisory Committee was called to discuss and seek the advice
and suggestions from the members.
2. Sri S.K. Singh, C.E (Comml.) NBPDCL welcomed the members of SAC and made a
power point presentation giving the summary of true up, APR, ARR and Tariff
petitions.
3. During the presentation, Chairman made the following observations and
representatives of the company gave the following clarifications:-
3.1 Transmission & Distribution (T&D) Losses- Actual T&D loss reported by BSPHCL
during the FY 12-13 is 45.49% against approved loss of 27.50%. In the previous tariff
orders, a trajectory was given to reduce the T&D losses in a phased manner.
Therefore, the high T&D losses in excess of approved levels are not justified.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 97
3.2 Shri N. K. Jha, DGM (F), BSPHCL clarified that equity and return on equity figures
based on accounts and other are based on the revaluation of the assets by Power
Finance Corporation (PFC) submitted to the State Government and not on the actual
equity infused and approved by the Government and other figures are based on
accounts. He also clarified that the accounts have been audited by the statutory
auditors, the Accountant General but are still to be certified by the A.G.
3.3 During the presentation of Transmission Company, Chairman asked for the
availability factor of the transmission lines. C.E (Comml.) NBPDCL assured that he will
revert back on this issue.
3.4 R&M expenses of BSPTCL for FY 2013-14 were projected as Rs. 115.10 crore. The
chairman asked the actual expenditure accrued till December, 2013. It was informed
that actual expenditure up to December, 2013 was Rs. 20 crore. On this Chairman
said that the figure of Rs. 115 crore is not realistic consider the progress made so far
and the capacity to spend.
4. Suggestions by other members of the SAC:-
4.1 Shri Sanjay Bharatiya, Secretary General Bihar Industries Association raised the
following points:
4.1.1 BSPHCL has claimed Rs. 745.87 crore as prior period charges. As a matter of fact
there should not be any prior period charges as the truing up exercise for FY 2011-12
has already been completed and the account for the year 2011-12 has already been
closed. So it was not proper for the petitioner to again claim prior period charge in
FY 2012-13.
4.1.2 It was the responsibility of BSPHCL to finalize the transfer scheme within one year of
issue of the provisional transfer scheme in November, 2012. Since the final transfer
scheme has not been notified so far, the provisional scheme has to be treated as
final.
4.1.3 Additional petitions for capitalization of transmission assets should not be
entertained as hearing has already been completed.
4.1.4 The BSPHCL has claimed Rs. 220.74 crore as RoE. In this context it was stated that
the equity approved by the state government in the successor companies after
reorganization of erstwhile BSEB has already been approved by the State
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 98
Government in the provisional transfer scheme which has not yet been revised and
therefore, has become final after November, 2013. There was also no additional
equity infusion by the state government in the successor companies. For allowing
RoE there had to be actual infusion of equity and it cannot be allowed on the basis of
expected equity.
4.2 Shri A. K. P. Sinha, Bihar Chamber of Commerce & Industries observed that there has
been decrease in average cost of power purchase during FY 2012-13.
It was suggested to determine the FPPCA for the FY 2012-13 on the basis of data
supplied by the petitioner licensees as in the previous year’s tariff order, it is
mentioned that “variation of FPPCA charges will be allowed only when it is five (5)
paise or more per unit”.
4.3 Shri S. K. Patwari, Vice President, BCCI suggested that the actual annual fixed charge
may be ascertained by the Commission and fixed charges for different categories of
consumers may be determined on that basis.
4.3.1 Demand charge should be in proportion to hours of supply given to consumers.
4.4 Shri Umesh Poddar of BIA suggested that T&D loss is very high. All efforts may be
made to minimize this loss.
4.4.1 He also suggested that MMC may be abolished for all categories of consumers.
4.4.2 It was suggested that DT wise regulation of power can be done for the area from
where revenue collection is low.
4.5 Shri S. K. P. Singh, C.E (Comml.) SBPDCL raised the following issues and sought the
direction of the Commission:
4.5.1 There is a provision in the supply code that in case a meter becomes defective, the
consumer has to be billed on the basis of average consumption of previous three
months. However, in the tariff order for FY 2013-14, it is mentioned that
consumption will be assed and billed on an average consumption of last 12 months
from the date of meter going out of order. Thus there are two contradictory
provisions. It was suggested that this is to be taken care of in next tariff order.
4.5.2 Sri. S.K.P. Singh further mentioned that there are two different demand charges for
induction furnace in the tariff order 2013-14. One tariff for existing furnaces for
which contract demand will be determined on the basis of 600 KVA per metric tone.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 99
However for new connection and if furnace is replaced with a new one for the
existing connections, the contract demand shall be based on total capacity of the
furnace and equipment as per manufacturer technical specifications, and in case of
difference of opinion, the provision of Bihar Electricity supply Code (Clause 6.39 &
6.40) shall apply.
4.6 Sri Vikram Singh, Vice President, Indian Energy Exchange raised the following issues:
4.6.1 In the present UI regime when under drawl is also penalised, the role of State Load
Despatch Centre (SLDC) has increased manyfold. Hence there should be separate
manpower earmarked for the SLDC and it should be strengthened. Also out of total
ARR of Transmission Company, certain amount may be earmarked for SLDC as
separate ARR.
4.6.2 In Renewable Purchase Obligation (RPO), carry forward should not be allowed.
4.7 Sri. N.K. Jha, Dy. Chief Electrical Engineer, E.C. Railway, Hajipur raised the following
issues:-
4.7.1 Billing demand is more than the actual demand. Shri Vikram Singh of IEE informed
that in some other states maximum instantaneous demand is considered as contract
demand. Shri Jha requested the Chairman to consider sympathetically while fixing
the tariff for Railway traction.
The meeting ended with a vote of thanks to all the participants for taking active part
in discussions and suggestions.
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 100
List of Participants who attended the meeting of State Advisory Committee
Held on 23rd January, 2014 in BERC office at Patna
Sl. No. Name Designation Organisation1. Shri U.N. Panjiar Chairman BERC2. Shri S.C. Jha Member BERC3. Shri Sanjay Kr. Agrawal Managing Director NBPDCL4. Shri S.K.P. Singh Chief Engineer (Com) SBPDCL5. Shri Vijay Kumar FCI NBPDCL6. Shri N. K. Jha DGM BSPHCL7. Shri Arvind Kumar DGM (F) BSPHCL8. Shri Arun Agrawal President BIA9. Shri Umesh Kr. Poddar Energy Sub-
CommitteeBIA
10. Shri A.K.P. Sinha Sec. General, Bihar Chamber ofCommerce
11. Shri S.K. Patwari Vice-president BCCI12. Shri Sanjay Bhartiya Secretary General BIA13. Shri Nadeem Ahmad EEE/Com. SBPDCL14. Shri D.N.Pandey Director BREDA15. Shri N. K. Jha Dy. Chief Elec. Eng. E.C. Rly, Hajipur16. Shri Surya Sekhar Panda Regional Manager Indian Energy
Exchange Ltd.17. Shri Bikram Singh Vice-president Indian Energy
Exchange Ltd.18. Shri S. K. Singh C.E/Com NBPDCL19. Shri R.C. Singh ESE (Com) SBPDCL20. Shri Jayant Kumar Dubey EEE (Com) NBPDCL21. Prabhat Kumar Sr. SB/TRD/DMR ECR, Hajipur22. Shri Parmanand Singh Secretary BERC23. Shri Ganesh Prasad Consultant BERC24. Shri R. P. Kanth Consultant BERC25. Shri P. Ranjan Consultant BERC26. Shri Lakshman Bhakta Dy. Director BERC27. Shri Jayesh Chauhan Tariff consultant BSPHCL28. Shri Souvik Das Consultant ASCI, Hyderabad
BSPHCL True-up for FY 2012-13
Bihar Electricity Regulatory Commission Page 101
ANNEXURE-II
I. List of consumers/consumer organizations who filed their objections
1. Balamukund Concast Ltd.
2. Bihar Industries Association
3. Bihar Chamber of Commerce
4. Kalyanpur Cements Ltd.
II. List of Objectors who have participated in the Public Hearing
Sl.No.
Name Designation Organization
On Behalf of Board1 S.K. Singh Chief Engineer
(Commercial)NBPDCL
2 J.K. Dubey EEE (Commercial) NBPDCL3 Manish Shakya AEE (Commercial) NBPDCL4 R. C. Singh ESE (Commercial) SBPDCL5 Nadeem Ahmed EEE (Commercial) SBPDCL6 N.K. Jha DGM (F&A) BSPHCL7 Arvind Kumar DGM (Finance) BSPGCL8 Pramod Tiwari DGM (F&A) BSPTCL9 Neeraj Verma Consultant,
FeedbackinfraBSPTCL
10 Jayesh Chauhan Consultant,Feedbackinfra
BSPTCL
On Behalf of Consumers/Consumer Organization11 Sanjay Kumar Bhartiya General Secretary Bihar Industries
Association12 S.K. Patwari Vice- President Bihar Chamber of
Commerce13 Sanjay Kanodiya Exec. Officer Balamukund Concast
Ltd.14 Doman Singh Consumer -
On Behalf Of Commission15 Parmanand Singh Secretary BERC16 Lakshman Bhakt Dy. Secretary BERC17 Ganesh Prasad Consultant BERC17 Nand Sharma Consultant BERC18 Priya Ranjan Consultant BERC19 R.P. Kanth Consultant (Finance) BERC20 Sanjeev Kumar Singh Dy. Director (Finance) BERC