ANNEXURE-1
List of Objectors
|
Objection No. |
Name & address of the objector |
|
1 |
Shri Shiv
Goyal, Director, M/s Avani Textiles Ltd., |
|
2 |
Shri
Raghubir Singh Saini, H.No.4424, Ward No.2,
Narindra Colony, Ropar ( |
|
3 |
Shri
Avtar Singh, General Secretary, Chamber of Industrial & Commercial
Undertakings, M.C.Block No.2, IInd Floor, |
|
4 |
Director,
M/s HANSO Iron & Steels Pvt.Ltd.,
Jalalpur Chowk, |
|
5 |
Shri
Kuldeep Singh Brar, Village & P.O. Sandhwan, Tehsil & Districrt
Faridkot |
|
6 |
Shri
Joginder Kumar, President, The |
|
7 |
Shri
Harinder Puri, Secretary, Steel
Furnace Association of |
|
8 |
Shri Amar
Singh, Consultant, Mandi Gobindgarh Induction Association, C/O.M/S. Gain
Castings Ltd., New Grain Market, Mandi Gobindgarh. |
|
9 |
Shri
Bhupinder Dhiman, President, Small Scale Industries Association,, Udyog
Bhawan, Industrial Estate, Rajpura-140401. |
|
10 |
Director,
M/s Hansco Iron & Steels Private Limited, Jalalpur Chowk, |
|
11 |
Shri
Manjatinder Singh Saini S/o Shri Raghbir Singh, R/o 4424 B Narindra Colony, Ropar. |
|
12 |
M/s
Mawana Sugars Ltd., formerly known as Siel Limited, 5th Floor,
Kirti Mahal, 19, Rajendra Place, New
Delhi-110125 |
|
13 |
Shri
P.D.Sharma, President, APEX Chamber of Commerce & Industry ( |
|
14 |
Shri
K.K.Garg, President, Induction Furnace Association of |
|
15 |
Shri Vijay
Talwar, General Secretary, National Electricity Consumers Association
(Regd.), 1051, Dada Colony, Industrial Area, Jalandhar-144004. |
|
16 |
Shri Rup
Singh Dhumal, Laghu Udyog Bharti ( |
|
17 |
Shri
B.P.Verma, Chief Electrical Distribution Engineer, Northern Railway,
Headquarters Office, |
|
18 |
Shri
Sanjeev Bhatia C/o Rajeev Bhatia, Ranjeev Steels Private Limited, |
|
19 |
Shri
Bhupinder Singh, General Secretary, PSEB Engineers’ Association, 45,
Ranjit Bagh, Near Modi Mandir, Passey Road, Patiala |
|
Objection No. |
Name & address of the objector |
|
20 |
Director,
Bansal Alloys & Metals Private Limited, G.T.Road, Sirhind Side, Mandi
Gobindgarh-147301 |
|
21 |
Director,
Vimal Alloys Private Limited, Shop No. 445, Sector 3-C, G.T.Road, Mandi
Gobindgarh-147301. |
|
22 |
Shri
Balbir Singh Kharbanda, General Secretary, Cycle Trade Union (Regd.),
Kharbanda Complex, Gill Road, Miller Ganj, Ludiana-141003. |
|
23 |
Shri
Sandeep Jain, Director, Antarctic Industries Limited, C-44/47, Focal Point,
Ludhiana-141010. |
|
24 |
Shri
A.Puri, General Manager (Projects & Materials), Punjab Alkalies &
Chemicals Limited, SCO 125-127, Sector 17-B, Post Box No.152,
Chandigarh-160017. |
|
25 |
Shri
Gurnek Singh Brar, 1, Ranjit Bagh, Opp.Modi Mandir, Patiala-147001. |
|
26 |
Shri
Rajeev Jain, General Secretary, United Cycle & Parts MFRs
Association, Near Campa Cola Chowk, |
|
27 |
Shri
Pankaj Gupta, G.M.(Projects), Ansal Mittal Township Private Ltd., Corporate Office: 703, Ansal Bhawan, 16 Kasturba Gandhi
Marg, New Delhi-110001 |
|
28 |
G.M.Projects,
Ganpati Townships Ltd., Regd. Office: |
|
29 |
PHD
Chamber of Commerce and Industry, PHD House, Sector 31-A, |
|
30 |
Shri |
|
31 |
General
Secretary, PSEB Engineers’ Association, 45, Ranjit Bagh, Near Modi Mandir, |
|
32 |
Shri
S.K.Seth, Engg.-in-Chief PSEB(Retd.),
Consultant, Power Utilities, Power |
|
33 |
Shri
R.L.Mahajan, President Technocrats Forum & Ex Er.-in-Chief/PSEB, 197-G,
B.R.S.Nagar, |
|
34 |
Shri
Avtar Singh, President, Northern Region, Sahveda (The Association for
Entrepreneurs), # 1367, Sector 48-B, |
|
35 |
Shri
Gurnek Singh Brar, 1, Ranjit Bagh, Opp.: Modi Mandir, Patiala-147001. |
|
36 |
Shri
Sandeep Jain, Director, Antarctic Industries Limited, Focal Point,
Ludhiana-141010 |
|
37 |
Shri
H.R.Singla, Director General, Lovely International Trust, |
|
38 |
Shri
Parmod Chopra, Federation of Jalandhar Engineering Associations,
H.O.B-IX-247, Santokhpura, |
|
39 |
Additional
Secretary/Irrigation & Power, Govt. of |
|
40 |
Shri
Raghbir Singh, H.No.4424, Narindera Colony, Ward No.2, Ropar. |
Annexure-II
Objections filed by
various stake holders, response of PSEB and View of the Commission
The
Commission would like to place on record, its appreciation to the
participating consumers and organizations for the comprehensive inputs received
both through the objections and in public hearings. In the following paras the
objections filed, response of PSEB and view of the Commission on each have been
briefly discussed.
Objection No. 1: Avani Textiles Ltd.
Issue No.1: HT rebate
HT rebate of 3% for LS
consumers has been withdrawn w.e.f. 1.4.2010 but 7.5% rebate for MS consumers
availing supply at 11 KV is still available even though the tariff for both the
categories is same. PSEB shall save on account of transformation and HT/LT
distribution losses. A rebate of atleast 10% or suitable reduction in tariff to
account for huge expenditure required for creating infrastructure to receive
supply at 66KV and above is requested.
Response of PSEB
As per section 62 of
Electricity Act 2003, Commission is required to determine the tariff rates for
retail consumer categories. Accordingly, PSERC has determined the tariff rates
for retail sale consumer categories of PSEB in the tariff order for FY 2009-10.
PSEB has no right to charge or frame different tariff rates including the
rebate to its various consumer categories from the one as determined by the
Hon'ble Commission.
View of the Commission
HT rebate has been discontinued where supply is catered by
the Board at the designated voltage. It, however, continues where supply is
received at voltages higher than those specified. The justification therefor
has been given in para 5.5 of the Tariff Order for 2009-10.
Objection No. 2&40: Sh. Raghbir Singh Saini
Issue No. 1: Tariff rationalisation
The tariff revision for the year 2010-11 must be uniform for all the
categories or on the basis of increase in various costs and not to compensate
the Board against losses incurred due to negligence or wrong policies. The
Conditions of Supply regulations and Electricity Regulatory Commission Act 1998
guidelines for revision of tariff should be followed which have not been
complied with, even in the past.
Response of PSEB
In the year 2003, Parliament has enacted the Electricity Act 2003 which
consolidates the laws relating to electricity business in
Further, the EA 2003 provides that the tariff to be set by the Regulatory
Commission should progressively reflect the cost of supply of electricity and
also reduces the cross-subsidies. The tariff increase in various consumer
categories on account of the revenue gap for FY 2010-11 would be determined by
the Hon’ble Commission accordingly."
View of the Commission
Tariff is determined on the basis of the provisions of the
Electricity Act 2003 and the Commission’s own Regulations framed thereunder.
Costs permitted to the Board are usually normative and no compensation is
allowed where such norms are exceeded. The Commission is also mandated to
gradually reduce cross subsidy and for that reason tariff revision can not be
uniform for all categories.
Issue No. 2: Discrimination to DS/NRS consumers
Discrimination done to DS/NRS
consumers since 11/86 should be rectified during the tariff revision for the
year 2010-11 because it is inconsistent and against the guidelines for
determination of tariff contained in section 61of the Electricity Act 2003.
Instead of three step tariff, only one rate should be prescribed.
Response of PSEB
The issue is a prerogative
of the Hon’ble Commission.
View of the Commission
As per section 62(3) of the Act, the Commission is within its mandate to
determine different tariffs for DS and NRS consumers. Tariff Policy requires
that the consumers below poverty line and consumers below the specified level
may receive special support through cross subsidy and the tariffs. The first
slab of tariff covers such DS consumers.
Objection No. 3: Chamber of Industrial & Commercial Undertakings
Issue No. 1: Cost of Coal
The Commission, in TO
2004-05, had directed the Board to limit the transit loss of coal from 2% to 1%
in next five years. However, the Board has made no efforts in this direction
and the transit loss level for 2010-11 is still projected at 2%. The coal
should be bought from cheapest sources to reduce expenditure but without
compromising on calorific value.
Response of PSEB
The plants operated by the
board are non-pit head stations and are located at a very large distance of
about 1300 to 1625 kms from the coal mines. While the board is a regulated
entity, whereas all other entities involved in the transportation of coal viz.
coal production companies, railways, liaison agents, contractors etc. are not
regulated. They are all bound by commercial contracts which cannot be bound by
the regulatory norms. While every effort is maintained to bring down the losses
through contractual obligations, however the same should be considered as an
uncontrollable factor and the burden for the same should not be passed on the
board. In order to control the transit losses, the board has appointed a
liaison agent. Also, some of the coal is getting sourced from the captive coal
mine (M/s Panem Coal Mines) at Pachhwara Block. The contractual obligations
from the said coal mine prevent loading of impact of transit losses on the cost
of coal.
View of the Commission
The Commission has carefully considered the issue of transit
loss of coal. As several agencies are involved in the movement of coal, it is
difficult to pin the entire responsibility for transit losses only on the
Board. The Commission has decided that a normative 2% transit loss is
reasonable and has been adopted accordingly. Receipt of coal from the Board’s
captive coal mine is on an FOR basis and no transit loss is allowable in that
case.
Issue No. 2: Power purchase
The total cost of power
purchase (Rs.5876 crore) projected for FY 2010-11 is very high. With good snow
this winter, dams are expected to be full thereby reducing power purchase
requirement from other sources. Unscheduled purchase of power is being done at
high cost during paddy season. The industrial sector should not be burdened
with the additional power purchase expenditure.
Response of PSEB
The real issue is the availability of cheaper
power on long term basis. In order to arrange for the same, board has been
making efforts to increase its share of in-house generation and has also been
tapping the other Central generating stations for providing power on long term
basis. The board has enumerated a list of all such plants from where the power
is envisaged to be sourced in the ensuing years in the ARR petition. Board is
concerned about its responsibility of ensuring adequate power supply for the
consumers in its license area and believes that once the power supply from the
aforementioned long term sources gets materialized, the suggested concerns of
the consumers will get addressed automatically.
View of the Commission
After examining the ARR of the Board, it is seen that given
the energy requirements and availability of power from different sources
excluding traders, there may be very limited requirements of purchase of power
from traders. Even so, the cost of such power that might be purchased through
trading has been capped by the Commission.
Issue No. 3: Interest Charges
The Interest charges
(Rs.1923 crore) projected are on account of money borrowed to compensate for
the losses probably due to free supply provided to agriculture sector at the
instance of GoP and to that extent the State Government should bear the losses.
The Hon’ble Supreme Court in one of the cases has ruled discontinuation of
cross-subsidy. Instead of free supply to agriculture, GoP should invest in
installing new thermal plants.
Response of PSEB
The issue needs to be addressed by taking all
relevant stakeholders in purview and sensitizing them towards the financial
health of the Board together with the concerns of the consumers towards any
increase in tariff. PSEB requests the Hon’ble Commission to take cognizance of
the prevailing circumstances and issue appropriate directives for all
stakeholders.
View of the Commission
Interest charges allowed by the Commission are only for
approved borrowings of the Board. In so far as free supply of power to the
agriculture sector is concerned, GoP, has been, by and large, paying the amount
of subsidy worked out on that account.
Issue No. 4: Employee cost
The employee cost for FY
2010-11 has been projected to increase by about Rs.821 crore, though the Board
was supposedly to reduce its expenditure on establishment. The Commission has
accepted that PSEB has one of highest cost in the country and that Board has
failed to initiate steps to right-size its manpower. The response by PSEB is
not convincing and there is no time frame to rationalize the man power.
Response of PSEB
In the year 2010-11, PSEB has considered the
impact to pay arrears (Rs. 525 crore i.e. 50% of the total arrears) which has
resulted in the overall increase as observed by the consumers. The detailed
rationale has been explained in the para 12.2.1 of the main text of the
petition. The initiatives of employee reduction has already been discussed by
PSEB in the paras 12.1.5, 12.1.6 and 12.1.7 of the main text of the petition.
View of the Commission
It is unrealistic to expect any drastic decrease in employee
cost of the Board. The urgent and immediate need is to properly determine man
power requirements over short and medium term and gradually right-size the staff
strength of the Board accordingly. Presently, employee cost is allowable to the
Board only on the basis of the Commission’s Regulations. There will, however,
be additional implications on this account as the recommendations of the Pay
Commission are partly to be given effect during the year 2010-11. The issue of
employee cost is discussed in detail in para 4.9.
Issue No. 5: Energy Audit and T&D losses
The Board has deliberately
omitted the latest information about number of 11KV feeders, accounted feeders
and feeder wise T&D losses. 1% reduction in T&D loss translates to
about Rs.100 crore decline in ARR and about 4 p/unit in tariff. The loss levels
also greatly impact requirement of subsidy as they have direct link with AP
consumption. T&D losses of the Board are assessed and not measured. The
Board should compare its losses with all states rather than just three as per
its convenience.
Response of PSEB
All the formats are
specified in the tariff regulations. While the T & D loss levels of PSEB
are one of the lowest in the country, however, should the Hon’ble Commission
feel the need to have further break-up of loss levels, the same will be
submitted subject to availability of data.
PSEB has only reiterated
its submissions of previous ARR petition for 2009-10. The only submission that
PSEB desired to bring to the notice of the Hon’ble Commission is that the T
& D losses in the state are already quiet low and considering the inherent
technical losses in the electrical networks, it is not possible to have a year
on year substantial reduction in the losses. In this regard, reliance may also
be placed on the Abraham Committee Report wherein it is suggested that T &
D loss reduction should be considered at 1% per year in case the loss level of
the utility is less than 20%.
View of the Commission
The Commission obtains information as per the prescribed
proformae.
For determination of
T&D losses refer to para 4.2. For assessing AP consumption more accurately,
the findings of an independent agency appointed for the purpose by the
Commission, have been considered.
Issue No. 6: Status of CFL
Details on number of CFL
distributed/replaced and time for process completion should have been
mentioned.
Response
of PSEB
The first phase covering
around 25 lac consumers would be implemented by
View of the Commission
Information required has been supplied by the Board. The
Commission, however, observes that use of CFLs is only a part of a larger
Demand Side Management (DSM) strategy. The Board has been asked to draw up a
comprehensive DSM plan and bring out the manner in which it would be
implemented.
Issue No. 7: Defaulters
The list of payment
defaulters has not been included in the tariff petition for FY 2010-11. Efforts
made to recover the amount and the progress made so far has also not been
mentioned.
Response of PSEB
All the prescribed formats pertaining to the
filing of ARR petition have been submitted by the Board. However, should there
be a need to submit the desired information for the purpose of this ARR, the
same may be suggested by the Commission. However, compilation of such
information is a bit time consuming as details are to be integrated from all relevant
field offices.
View of the Commission
It may not be necessary for the purpose of the ARR to seek
detailed information on arrears due to the Board. However, the Commission does
obtain data of outstanding arrears at the end of each financial year with a
view to ascertaining whether the Board has been taking adequate steps in
liquidating arrears to the extent possible.
Issue No. 8: Free power to employees
The Board has not indicated
the cost of free supply to its employees. The loss in revenue works out to
about Rs.37.5 crore per year which should ideally be added to main revenue of
the Board as if it was being collected.
Response of PSEB
The free supply to the Board’s employees varies
from 100 units to a maximum limit of 155 units per month. The free supply of
electricity is a perk provided by Board to its employees and forms an inherent
part of their salary structure. PSEB understands that similar perks are also
allowed by other Government organizations like Railways, Roadways etc.
Besides, the free energy supply provided by the
Board forms the taxable income of the employees of Board. The cost on account
of employee’s concession allowed during the year 2008-09 and 2009-10 (Up to Nov
2009) is Rs. 23.08 crore and Rs. 16.20 crore respectively.
View of the Commission
Existing
terms and conditions of service of the Board employees include free supply of
electricity upto certain limits. As such, it may not be legally tenable to
alter the terms and conditions of existing Board employees.
Issue No. 9: Maintenance schedule
Maintenance schedule of
thermal and hydro plants should be so planned that all units are available
during the months from June till September as there is maximum power shortage
in that period.
Response of PSEB
The maintenance of the plants is done in such a
way that no unit is under shut down during the maximum power shortage period.
However, the same may be considered for deferment for a limited period subject
to technical issues, if any, and practicability of the same.
View of the Commission
The Commission agrees with the response given by the Board.
Issue No. 10: Monthly Minimum Charges
Collection of Monthly
Minimum Charges (
The revised
Response of PSEB
Monthly minimum charges are levied on account of
inherent cost associated with installation of network which included O&M
cost, interest cost, depreciation, interest of working capital, employees
cost etc. Even in the absence of any
usage by the consumers, PSEB has to upkeep the network and the associated fixed
costs are incurred.
Further, PSEB understands that the minimum thresh
hold consumption to cover MMC can be achieved by ‘switching on’ the full load
for approximately 1 to 2.5 hours or more per day depending upon the various
categories. Accordingly, it is not justifiable to remove the MMC.
View of the Commission
The Commission has in its Tariff Order for the year 2004-05
observed that a substantial portion of the Board’s costs are fixed in nature
and do not undergo change with fluctuations in actual energy consumption.
Ideally, therefore, all such fixed costs need to be recovered through fixed
charges whereas the Board obtains only a small fraction of this cost through
MMC. The Commission holds the same view at present. It is also relevant to
mention that in deference to consumer sentiments in this respect, rates of MMC
were reduced by 10% w.e.f. 1.4.2004.
Issue No. 11: Theft
Controlling theft of power
is the most effective way in de-loading feeders and reduction of T&D
losses. The Board has not provided details of FIRs registered, convictions
obtained and revenue realized etc.
Response of PSEB
All prescribed formats pertaining to the filing
of ARR petition have been submitted by the Board. Further, PSEB has already
elaborated the MUs recovered under theft of electricity in para 3.2.2 of the
petition. Should there be a need to submit the desired information for the
purpose of this ARR, the same may be suggested by the Commission. However,
compilation of such information is a bit time consuming as details are to be
compiled from all relevant field offices.
View of the Commission
While it is necessary to take stringent action to control
theft which includes legal action in accordance with the law, the Commission
believes that it would be more effective if the issue of theft is
systematically dealt with. This would include undertaking base line surveys,
conducting energy audits at distribution level and segregation of technical and
commercial losses. On this basis, the Board would be able to take more focused
steps to control and minimize theft.
Objection No. 4&10: Hansco Iron and Steels (P) Ltd.
Issue No. 1: Load exemption during peak load hours
A 66 KV consumer is entitled to draw a maximum
of 50 KW or 5% of the sanctioned load during peak load hours as per ESR clause
168.1.1. The ‘no load losses’ of the main transformer, induction furnace
transformer and the auxiliary transformer alone account for about 30 to 37 KW.
This leaves the unit with just about 15KW load, which is not even sufficient
for factory / office lighting or small repairs. It is requested to raise the
load limit of 50KW to 100KW during peak load hours for 66KV consumers.
Response of PSEB
Maximum load limit of 50 KW to 66 kV LS consumers is to contain the
excessive demand during peak load hours. PSEB has capped this maximum limit at
50 KW on account of the following reasons:
·
Increase in the maximum load drawal limit may
provide a larger room for variation between demand and supply. The same may
result in situations wherein PSEB has arranged for lower supply in comparison
to the demand and vice versa. Severe mismatches between actual demand and
supply of power may endanger the security and safety of the grid
·
During the peak load period, Board procures
power from the short term sources to meet such extra demand, which often comes
at large premiums.
·
At the time of peak, the frequency of the
system generally falls and power drawal under such conditions have a
correspondingly higher UI charges. Procurement of power at lower frequencies
may put extra financial burden on the board.
Considering the above, the Board believes that the current limit on the
maximum load drawal during peak hours is sufficient and further enhancement in
the same may not be considered.
View of the Commission
The manner in which peak load hour restrictions are enforced
is being reviewed by the Commission. In case the issue raised is not resolved,
the objector would be advised to approach the Commission in accordance with its
Regulations.
Issue No. 2: HT rebate
LS consumer getting 66 KV
supply is entitled to a 3% rebate However, the medium supply (MS) consumers get
7.5% rebate on receiving supply at 11 KV, despite tariff being same for both LS
and MS consumers. As per the tariff order for FY 2009-10, the 3% rebate for LS
consumers is also withdrawn while PSEB shall save an account of transformation
and HT/LT distribution line losses. Therefore, enhancement in the rebate from
3% to 10% or suitable reduction in tariff to account for huge expenditure
required for creating infrastructure to receive supply at 66KV has been
requested.
Response of PSEB
The opinion and the objection raised by the
objector has already discussed by the Commission in detail in the Tariff Order
for FY 2008-09. The relevant para has been reproduced below:
“……..Commission observes that voltages at which
supply is to be given to different categories of consumers have been specified
in the Conditions of Supply since last
more than ten years and the Board was required to release all new
connections/additional loads/demands at the voltage specified in the Conditions
of Supply. Therefore there is no logic in any rebate in tariffs to a consumer
who is given supply at the specified voltage for that category. The Commission
also observes that there is a need for the existing consumers getting supply at
a lower voltage to convert to the specified voltage for benefit of the system
and to reduce T&D losses. However, actual conversion of supply voltage of
the existing consumers will require some time. There could also be technical
constraints in conversion of supply voltage or release of a new connection and
or additional load/demand at the prescribed supply voltage which merits
consideration…………………”
Further, it is submitted that the supply voltage
for any connection depends upon the nature, quantum and type of load. New
connections at higher voltage are taken by the consumers keeping in view their
own interest. Accordingly, Board requests the Hon’ble Commission that the issue
of continuation of rebate to HT consumers need not be reconsidered.
View of the Commission
Refer to objection no.1, issue no.1.
Issue
No. 3: Power factor incentive
The
LS consumers get incentive by maintaining power factor above 0.90 whereas
induction furnace units are eligible for incentive beyond a power factor of
0.95. Such a provision is discriminatory in nature as all other charges /
surcharges / tariff are levied equally to LS consumers as well as induction
furnace units. Therefore, PIU should also be allowed incentive above 0.90.
Response of PSEB
The
opinion and the objection raised by the objector has already discussed by the
Commission in detail in the Tariff Order for FY 2008-09. The relevant para has
been reproduced below:
“………….The
Commission had in its Tariff Order of 2004-05 observed that incentives should
be available for actual improvement in system conditions and not just for
maintaining the status quo. Accordingly, it had thought it necessary to fix
suitable thresholds for different categories of industries keeping in view
their basic inherent characteristics. It is observed that these findings remain
equally valid at present and thus, consumers where the power factor is
inherently higher need to be distinguished and allowed power factor incentive
at improved benchmarks. For this reason, the Commission does not see sufficient
justification for rebates to be allowed to RT and LS consumers having PIU’s at
a power factor of less than 0.95.”
PSEB
agrees with the observations of the Hon’ble Commission and believes that
different consumers need to be benchmarked against their respective
characteristics of industrial power factor. For example, Induction furnace load
by its very nature is an instantaneous, concentrated and power intensive load
which puts sudden jump in demand on the system. Therefore, we believe that the
different PF specified for the purpose of allowing rebate for different
consumer categories is reasonable and need not be reconsidered.
View of the Commission
The Commission had earlier taken the view that it is
desirable to fix suitable thresholds for different categories of industries
keeping in view their inherent characteristics. Thus, it is reasonable to
distinguish industries where power factor is inherently higher and determine a
higher benchmark to entitle them for power factor incentive. The Commission
sees no reason to review its stand in the matter.
Objection No. 5: Sh. Kuldeep Singh Brar
Issue No. 1: Special tariff for agriculture pilot project
In reference to the meeting
conducted by PSEB on
Response of PSEB
At present, Board does not have any such independent feeder existing in the
system. However, an application has been received by the Board for an
independent feeder for green house project on a pilot basis, which is under
consideration of the Board.
View of the Commission
The
matter will be separately considered as the Board has since filed a petition in
this regard.
Objection No. 6: The
Issue No. 1: Unjustified tariff Increase
The tariff increase sought by
PSEB is unjustified. Moreover, PSEB has not provided the balance sheet for FY
2008-09. The Board should contain T&D losses and minimize its staff. The
Regulatory Commission is also manned by retired officers of the Board. The
tariff should not be revised in the interest of the consumers.
Response of PSEB
The submissions made by PSEB contain the audited accounts for FY 2008-09 as
Vol.III. The Consumers have raised the issue of increase in tariff and
requested the Commission not to increase the same as the same is on account of
inefficiency in operations. Cost of operations of a utility are not dependent
entirely on its operational efficiency but also on other external factors like
increase in input costs viz. fuel cost, raw material, cost of wires, transformers,
third party services, inflation, price escalation and increase in establishment
cost etc. The same are likely to increase the cost of operations of any utility
and needs to be recovered through tariffs. PSEB in its submission has
substantiated the rationale for increase in expenses and understands that the
Hon’ble Commission will examine the prudence of the same before allowing the
same to be recovered through increase in tariff.
View of the Commission
The
Commission processes the ARR according to its notified Regulations, determines
the cumulative revenue gap and accordingly revises the tariff for various
categories of consumers, to recover the same.
Issue No. 2: T&D losses
T&D losses of the Board
are higher than that of the national average
Response of PSEB
The T&D losses of the Board are one of the lowest in the country, we
would appreciate in case the Consumers can share the basis of working out the
national average T&D losses so that the Board can benchmark its performance
and try to improve it further.
View of the Commission
It may be true that the T&D losses of the Board are not
higher than national average but that does not imply that there is no further
scope for improvement. The Commission has in this order re-determined a three
year loss reduction strategy and expects that the Board would be able to
achieve these levels. With a view to protecting interests of the consumers,
costs allowed to the Board are on the basis of normative T&D levels
determined by the Commission and not on the actual achievement of the Board.
Objection No. 7: Steel Furnace Association of
Issue No. 1: Agriculture consumption
There is still no
established and conclusive methodology for determination of agriculture
consumption and estimates of PSEB and the Commission vary. Efforts should be
made to ascertain actual agriculture consumption.
Response of PSEB
PSEB has already submitted its contentions and the approach for estimation
of such sales for the kind consideration of the Hon’ble Commission.
View of the Commission
Accurate computation of agricultural consumption requires
correct data on connected load and consumption as recorded by sample meters. On
the basis of studies undertaken by the Commission from time to time, the Board
has been asked to initiate specific measures which will assist the Commission
in a more realistic estimation of AP consumption.
Issue No. 2: Consumption limit for subsidized tariff
In FY 2008-09 and FY
2009-10, the Board has claimed 1524 MU in excess of agriculture consumption
than approved by the Commission. Beyond a reasonable level of consumption as
approved by the Commission, the power supplied should be charged at a higher
tariff which has no element of cross-subsidy. Therefore, 1524 MU of extra power
supplied by the Board should be priced at the actual purchase cost.
Response of PSEB
The proposed mechanism would be easier to
implement for metered AP consumers. However, in the current circumstances, it
may not be possible to ascertain the level of consumption by each of the
agricultural consumer over and above the approved quantum. Moreover, the
billing and collection infrastructure may require further enhancements as
currently the entire collection against the agricultural consumption is
recovered in the form of subsidy from the Government.
Further, the sale to a particular category of
consumers for the ensuing year (2010-11 in this case) is based on assumptions
and is likely to vary from the actual consumption. The same applies to all
categories of consumers and not particularly the agricultural consumers only.
Charging the consumers for such deviation based on the marginal pricing
essentially means that only the agricultural consumers are contributing to the
peak demand which may not be the case.
However, PSEB understands that the Hon’ble
Commission may consider the suggestions keeping into account the aforementioned
issues and other ground realities.
View of the Commission
Refer to para 3.2.3 and 4.1.3.
It may be difficult to
evolve consumption norms for AP consumers given the fact that there are
variations in the agro-climatic conditions and differing cropping patterns in
the State. Even if such a norm were to be evolved, the proposed approach might be difficult to follow in
practice given the inherent issues in exact estimation of AP consumption in
the absence of complete metering of agricultural connections at present.
Issue No. 3: T&D losses
The Commission approved a
T&D loss of 19.5% against 19.92% claimed by the Board for FY 2008-09. For
FY 2009-10, the Commission approved T&D loss of 22% against 19.5% claimed
by the Board. There should be T&D loss trajectory for next 5 years. Instead
of energy audit study for improvement in thermal plants, efforts should be
focused on distribution system where scope of improvement is much greater.
Response of PSEB
No response.
View of the Commission
The Commission has approved a higher T&D loss of 22%
against 19.5% due to the downward revision in the figure of AP consumption
based on the findings by its consultants M/s ABPS.
Also refer to objection no.6, issue no.2.
Issue No. 4: Interest and
finance charges
The interest on short term borrowings made by the Board
to meet revenue deficit due to disallowance of expenses by the Commission
should not be allowed. As such, it shall not be in conformance with the
decision of the Appellate Tribunal (page 152/199). The capital investment
projections should be realistic assessments based on past experience. Due to
over capitalization of RSD project, consumers should not be burdened with
unwarranted cost in the form of excess interest cost, high ROE and depreciation
charges. The interest due to non refund of excess interest paid should not be
passed on to consumers. Also since interest cost on account of the diversion of
funds done in the past is borne by the consumers, the issue needs detailed
investigation.
Response of PSEB
PSEB has already elaborated its rationale
regarding increase in short term borrowings and diversion of funds in its
Tariff petition. The suggestions made by the consumers are taken care by the
Commission while issuing the tariff order. However, the Board desires to
impress upon the issue that paucity of funds for meeting the daily operational
expenses is at an alarmingly high level. The said scarcity of financial
resources is primarily on the ground that the Board is not allowed to recover
the actual expenses under the prudence check adopted by the Hon’ble Commission.
Disallowance of such funds in the tariff order does not end the contractual
obligations towards the lenders, fuel suppliers, power traders/generators etc.
It is vital for any business entity to stick to its financial commitments and
PSEB is no exception to that. PSEB therefore impresses upon the need to reach a
consensus on the methodology of agricultural consumption and other such
uncontrollable factors which lead to the aforementioned issues raised by the
consumers.
View of the Commission
Interest allowable to the Board for short or long term
borrowings is only in respect of costs that are allowed by the Commission as
per norms.
Capital Investment projections of the Board are being
assessed by the Commission after taking into account the actual expenditure
incurred by the Board. Refer to para 3.14.2 and 4.13.2 of Tariff Order for
2009-10 and 2010-11.
The Commission has in its Order of 13.9.2007 addressed the
issue of RSD cost. Appeal against this order is, however, pending before the
ATE as discussed on page 175 of Tariff Order for 2009-10.
No increase in ROE has been allowed by the Commission. Refer
to para 3.16 and 4.15. Regarding depreciation charges refer to para 3.13 and
4.12.
No interest has been
allowed on non - refunded interest paid in excess by the Board to GoP. Refer to
paras 2.14.13 and 4.13.12 of Tariff Order 2009-10.
Interest of Rs.262.34 crore on account of diversion of
capital funds is being disallowed based on audited accounts. Refer to paras
2.14.11, 3.14.11 and 4.13.11.
Issue No. 5: Employee cost
As against employee cost of Rs.1.01/unit of
energy sold projected by the Board for FY 2010-11, the Commission had approved
Re.0.57/unit for FY 2008-09 and FY 2009-10. The increase in employee expenses
should not be approved beyond the increase in Wholesale Price Index (
Response of PSEB
PSEB has submitted its rationale for increase in
employee cost in the ARR petition and requests the Hon’ble Commission to
consider the same.
View of the Commission
Refer to para 4.9.
Issue No. 6: Excess depreciation
The depreciation charges
should be calculated based on the approved capital expenditure plan for FY
2010-11 as past experience shows mismatch between projected and actual
investment by the Board.
Response of PSEB
PSEB has submitted its rationale for the said
expenses in the ARR petition and requests the Hon’ble Commission to consider
the same.
View of the Commission
Refer to para 4.12.
Issue No. 7: Cross subsidy and tariff rationalisation
As per tariff policy, the
tariff should progressively reflect the cost of supply of electricity and should
be within +20% of the average cost of supply. The tariff should be
brought in the specified range by 2010-11. Despite repeated directions from the
Commission, the Board has not provided category wise cost of supply. The
Commission should calculate the cost of supply based on available information
as done by HPERC where cost of supply for LS consumers was found to be 60% of
average cost of supply. Tariff for LS consumers should be rationalized by
reducing the cross-subsidy burden.
Response of PSEB
Determination of Tariff is the prerogative of the
Commission and PSEB understands that the Hon’ble Commission may consider the
issues raised by the Consumers
View
of the Commission
The Commission has in its Regulations already specified the
gradual reduction of cross subsidy though total elimination of the same is no
longer envisaged in the Electricity Act 2003. A gradual reduction in cross
subsidy in percentage terms has been effected in the previous years. An
increase in average cost of supply will, however, result in increase in cross
subsidy in real terms.
Adequate information is not available with the Commission to
take an informed view on category-wise cost of supply. The Board has been
directed to carry out a study and make its findings available in the shortest
possible time frame.
Issue No.8: Disallowance of prior period expenses
Only approved expenditure
should be passed on to the consumers. In case, actual expenditure exceeds the
approved level, the same should be borne by the Board / Government. The prior
period expenses of Rs. 107 crore should be disallowed. In ‘True up’ only
expenditures approved by the Commission should be considered.
Response
of PSEB
PSEB
has submitted its rationale for such net expenses in the ARR petition and
requests the Hon’ble Commission to consider the same.
View of the Commission
The Commission has
disallowed the prior period expenses relating to employee cost which stands
capped.
Issue
No.9: Rebate to HT consumers
The HT consumers have been
allowed 3% rebate as they undertake large investments in creating
infrastructure to receive power at high voltage which lowers the T&D losses
and also benefits PSEB. The Commission however discontinued the rebate in the
tariff order of FY 2009-10 which should be restored in considerations of the
provision of EA, 2003 to link tariff with the cost of supply.
Response of PSEB
The opinion and the objection raised by the objector has already discussed
by the Commission in detail in the Tariff Order for FY 2008-09. The relevant para
has been reproduced below:
“……..Commission observes that voltages at which supply is to be given to
different categories of consumers have been specified in the Conditions of Supply since last more than ten years and the
Board was required to release all new connections/additional loads/demands at
the voltage specified in the Conditions of Supply. Therefore there is no logic
in any rebate in tariffs to a consumer who is given supply at the specified
voltage for that category. The Commission also observes that there is a need
for the existing consumers getting supply at a lower voltage to convert to the
specified voltage for benefit of the system and to reduce T&D losses.
However actual conversion of supply voltage of the existing consumers will require
some time. There could also be technical constraints in conversion of supply
voltage or release of a new connection and or additional load/demand at the
prescribed supply voltage which merits consideration…………………”
Further, it is submitted that the supply voltage for any connection depends
upon the nature, quantum and type of load. New connections at higher voltage
are taken by the consumers keeping in view their own interest. Accordingly,
Board requests the Hon’ble Commission that the issue of continuation of rebate
to HT consumers need not be reconsidered.
View of the Commission
Refer to objection no.1, issue no. 1.
Objection
No. 8: Mandi Gobindgarh Induction Furnace Association
Issue No. 1: Cross Subsidy
As
per Regulations, cross-subsidy has to be eliminated within ten years from FY
2005-06 thereby meaning a reduction of 10% each year. Quantum of LS
cross-subsidy per unit in FY 2005-06 was 71 paisa whereas it stands at 65 paisa
for FY 2009-10. Therefore, a reduction of just 7 paisa against the target of 28
paisa has been achieved. Similarly, in percentage terms only 5.38% reduction
has been achieved as against the target of 8%.The gap should be made good
during FY 2010-11by reducing the cross subsidy by 50%.
Response of PSEB
The Electricity Act 2003 has been amended and it
stipulates that the cross subsidization has to be progressively reduced rather
than eliminated. Fixation of tariff is the prerogative of the Hon’ble
Commission and the issues of the consumers may be considered appropriately
keeping in view the financial health of the Board.
View of the Commission
Refer to objection no.7, issue no.7.
Issue No. 2: Power cuts
The
power cut for LS and category II consumers has increased from a day in a week
during previous years to 3 days in a week at present. The consumers are forced to install diesel
generators which cost about Rs.11/unit of generation. Provision be made in
Tariff Order to compensate the Industrial units for power cut of more than one
day/week at Rs.11/unit for average daily consumption.
Response of PSEB
The real issue is the availability of cheaper
power on long term basis. In order to arrange for the same, PSEB has been
making efforts to increase its share of in-house generation and has also been
tapping the other Central generating stations for providing power on long term
basis. PSEB has enumerated a list of all such plants from where the power is
envisaged to be sourced in the ensuing years in the ARR petition. PSEB is
concerned about its responsibility of ensuring adequate power supply for the
consumers in its license area and believes that once the power supply from the
aforementioned long term sources gets materialized, the suggested concerns of
the consumers will get addressed automatically.
In this regard, it is submitted that there is a
huge disallowance on power purchase on account of non-consideration of AP sales
by the Commission. Even though the financial position of the Board is getting
more and more commercially unviable, however, only on account of its social
responsibility, the Board has to purchase short term power to meet the demand
of the consumers. PSEB requests the Hon’ble Commission to allow the AP sales as
per the projections as the same will eventually lead to availability of more
funds which can be used to procure more power for the state.
View of the Commission
There may not be any case for payment of compensation on
account of loss of production etc. caused by imposition of power cuts. On the
other hand, the Board needs to take every step possible to procure power at
reasonable rates with a view to minimizing duration of power cuts should they
be required to be imposed. In a situation of considerable mismatch between
availability and demand of power, unlimited purchase of power is constrained by
the high cost of power available during the periods of peak demand.
Issue No. 3: T&D Losses
Tariff
should be determined by considering the projected figure of T&D loss of
18%.
Response of PSEB
The request may be considered by the Commission
subject to approval of AP sales as requested by PSEB.
View of the Commission
Refer
para 4.2.
Issue No. 4: Agriculture consumption
The assessment of agriculture consumption is going
on since the issue of first Tariff Order FY 2002-03. The results of the study
undertaken by PSEB and later by
Response of PSEB
PSEB has already given the detailed submission
regarding the consideration of AP sales and the repercussions of disallowance
of AP sales on the financial health of the Board which may kindly be considered
by the Commission.
View of the Commission
Accurate computation of agricultural consumption requires
correct data on connected load and consumption as recorded by sample meters. On
the basis of studies undertaken by the Commission from time to time, the Board
has been asked to initiate specific measures which will assist the Commission
in a more realistic estimation of AP consumption.
Issue No. 5: Return on Equity
RoE gets burdened on account of disallowances in
respect of T&D losses, power purchase cost and interest charges etc.
Response of PSEB
PSEB requests the Commission to consider the
financial health of the Board and request for approval of expenses as submitted
in the petition.
View of the Commission
Refer to paras 4.2, 4.8,
4.13 and 4.15.
Issue
No. 6: LT surcharge/HT rebate
HT rebate of 3% should not be withdrawn and imposing the
surcharge after 18 months will result in severe financial impact on the
consumers.
Response of PSEB
The opinion and the objection raised by the
objector has already discussed by the Commission in detail in the Tariff Order
for FY 2008-09. The relevant para has been reproduced below:
“……..Commission observes that voltages at which supply is
to be given to different categories of consumers have been specified in the
Conditions of Supply since last more
than ten years and the Board was required to release all new
connections/additional loads/demands at the voltage specified in the Conditions
of Supply. Therefore there is no logic in any rebate in tariffs to a consumer
who is given supply at the specified voltage for that category. The Commission
also observes that there is a need for the existing consumers getting supply at
a lower voltage to convert to the specified voltage for benefit of the system
and to reduce T&D losses. However actual conversion of supply voltage of
the existing consumers will require some time. There could also be technical
constraints in conversion of supply voltage or release of a new connection and
or additional load/demand at the prescribed supply voltage which merits
consideration…………………”
Further, it is submitted that the supply voltage
for any connection depends upon the nature, quantum and type of load. New
connections at higher voltage are taken by the consumers keeping in view their
own interest. Accordingly, Board requests the Hon’ble Commission that the issue
of continuation of rebate to HT consumers need not be reconsidered.
View of the Commission
Refer
to objection no.1, issue no.1.
Issue
No. 7: Energy meters
The
argument of the Board that it is not feasible to manually read all meters and
100% metering be deferred till system to read all meters online is in place is
not tenable.The Commission must ensure implementation of its existing directive
to the Board to comply with Section 55 of the Electricity Act 2003 in respect
of installation of meters by 31.3.2010 since acceptable level of AP consumption
has not been achieved even after the lapse of a decade.
Response of PSEB
PSEB has already given the status and
implementation plan for increasing the sample size of AP consumers in the state
as per the directives of the Commission in the ARR petition for 2010-11 which
may be considered by the Commission.
View of the Commission
The Electricity Act 2003 provides for metering of all
electric connections. In addition, the Commission has already directed the
Board to ensure that the provisions of the Act are complied with. The
Commission will separately take into account the fact that the Board has so far
failed to comply with this directive.
Issue No. 8: Energy balance
Release of load may be allowed as per availability
of power as energy balance is getting skewed towards costly power purchase and
rural pattern of supply is getting replicated in urban areas rather than making
it vice versa.
Response
of PSEB
The
real issue is the availability of cheaper power on long term basis. In order to
arrange for the same, PSEB has been making efforts to increase its share of
in-house generation and has also been tapping the other Central generating
stations for providing power on long term basis. PSEB has enumerated a list of
all such plants from where the power is envisaged to be sourced in the ensuing
years in the ARR petition. PSEB is concerned about its responsibility of
ensuring adequate power supply for the consumers in its license area and
believes that once the power supply from the aforementioned long term sources
gets materialized, the suggested concerns of the consumers will get addressed automatically.
View of the Commission
It is not possible to restrict demand
which is linked to economic growth and increase in population. Legally too, the
obligation of universal service is cast upon the Board which cannot, thus,
refuse release of new connections. On the other hand, the Board must take all
possible steps to procure power at reasonable rates through long and short term
contracts and add to generation capacity in the shortest possible time frame.
Issue
No. 9: Power purchase
Power
purchase should be done with the objective of providing uninterrupted supply
with cost recovered from the category availing the benefit. Power purchase for
Industrial consumers shall yield higher profit margin for the Board and will
enhance industrial growth. Power purchase be allowed to PSEB with free hand to
avoid power cuts.
Response of PSEB
The suggestion may be considered by the Hon’ble
Commission. However, purchase of power should not be disallowed against
non-consideration of AP sales as it severely impacts the financial health of
the Board.
View of the Commission
It is true that the Board normally goes in for purchase of
additional power during the paddy season as that is the period of maximum
demand not only on account of increased agricultural consumption but also for
other categories such as domestic and commercial. While the Board must make all
efforts to procure additional power at that time, there are constraints on the
quantum of power that can actually be purchased on account of high prices
prevailing nationwide. Inordinate increase in the cost of power would
inevitably result in additional burden on all categories of consumers including
a very large number of such consumers who can ill-afford substantially enhanced
tariff.
Issue
No.10: Interest and finance charges
Reasons
cited for increase in the interest cost is delay or non-payment of dues by
State Govt., who is also withholding the refund of Rs.782.72 crore to PSEB.
Similarly, delay in payment of subsidy is another reason for the increase in
finance cost. The burden of such interest should not be passed on to the
consumer.
Response of PSEB
The suggestion of the consumer is appreciated and
the Hon’ble Commission is requested to exercise its power under the Electricity
Act to provide appropriate directives to the concerned stakeholders. The
Government may be asked to pay the interest on non-payment of subsidy for the
period of delay. However, the non-payment of such interest should not result in
reduction of interest on actual working capital loans taken by the Board.
View of the Commission
Refer
objection no.7, issue no.4.
Issue
No.11: Aggregate Revenue Requirement
The
revenue gap of Rs. 2890 crore projected for FY 2010-11 at existing tariff is
without factoring revenues from AP consumption and other dues payable by the
State Government. There will be no shortfall in revenue at the existing tariff
if such payments are taken into consideration. Accordingly, tariff should be
kept at existing level and dues from the State Government should be recovered
on priority.
Response of PSEB
The gap during the year 2010-11 is projected as
Rs 2890 crore and the cumulative gap over the years till 2010-11 is Rs. 6575
crore. The aforementioned gap for 2010-11 is after considering the revenue from
sale of power to AP consumers at the applicable tariff. Under such
circumstances, it is likely that the shortfall in recovery of ARR at the
existing tariff may have to be made by suitable tariff revision; however PSEB
believes that the prerogative of tariff fixation rests with the Hon’ble
Commission which may deal with the issues appropriately.
View of the Commission
The revenue gap for 2010-11 has been arrived at after taking
into account all estimated revenues including those for sale of power to the
agriculture sector. The revenue gap in the year 2010-11 and the accumulated gap
for the previous two years are taken into account to determine the total gap
for the purposes of tariff revision.
Objection
No. 9: Small Scale Industries Association
Issue No. 1: Monthly Minimum Charges (
The industry faces power cuts on a daily basis
round the year and is not even able to consume energy enough to cover the
monthly minimum charges. Therefore, the
Response of PSEB
Total expenditure as calculated and given in the
ARR Petition has two components viz., variable component and fixed component.
Variable component accounts for the expenditure which varies as per the
availability of power for example; power purchase expenses, Inter-state
transmission charges etc. Whereas fixed component is one which is spent in
spite of non-availability of power for example; R&M expenses, establishment
cost, depreciation, interest, finance charges etc. In other words the variable
charges depend on MUs purchased and fixed charges are independent of MUs
purchased/handled.
Since,
if some of the fixed component of the total expenditure is not recovered by way
of fixed tariff, it becomes a difficult proposition for PSEB to fulfill its day
to day business requirement. Accordingly,
Further,
it should be understood that the minimum thresh hold consumption to cover
In
addition to above, the real issue is the availability of cheaper power on long
term basis. In order to arrange for the same, PSEB has been making efforts to
increase its share of in-house generation and has also been tapping the other
Central generating stations for providing power on long term basis. PSEB has
enumerated a list of all such plants from where the power is envisaged to be
sourced in the ensuing years in the ARR petition. PSEB is concerned about its
responsibility of ensuring adequate power supply for the consumers in its
license area and believes that once the power supply from the aforementioned
long term sources gets materialized, the suggested concerns of the consumers
will get addressed automatically.
View of the Commission
Refer to objection no.3, issue no.10.
Issue
No. 2: Power cuts
The
power cut for LS and category II consumers has increased from a day in a week
during previous years to 3 days in a week at present. The consumers are forced to install diesel
generators which cost about Rs.11/unit of generation. Provision be made in
Tariff Order to compensate the Industrial units for power cut of more than one
day/week at Rs.11/unit for average daily consumption.
Response of PSEB
No response
View of the Commission
Refer to objection no.8, issue no.2.
Issue No. 3: Connected load/contract demand
With the installation of electronic energy meters
having the capability to measure load condition at specific intervals,
provision of connected load may be dispensed with for consumers having
electronic meters, as in case of contract demand consumers.
Response of PSEB
Deployment of electronic meters is primarily to
have better accounting of energy and enabling ease of recording data rather
than to have a check on the connected load of the consumers. In case relaxation
is provided to the consumers, there may be more case of meter burnouts and over
drawl of energy by certain consumers which may have a detrimental impact on the
overall system performance of PSEB under the UI regime. It is therefore
desirable that a check on the connected load is established to ensure
discipline in usage of energy by the consumers.
View of the Commission
The Commission had initially adopted the concept of contract
demand in the case of LS consumers but has subsequently extended it to some
other categories as well. The Commission intends to gradually increase the
consumer categories for whom the concept of contract demand will in due course
become applicable.
Issue No. 4: Annual Revenue Requirement
The
revenue gap of Rs. 2890 crore projected for FY 2010-11 at existing tariff is
without factoring revenues from AP consumption and other dues payable by the
State Government. There will be no shortfall in revenue at the existing tariff
if such payments are taken into consideration. Accordingly, tariff should be
kept at existing level and dues from the State Government should be recovered
on priority.
Response of PSEB
The gap during the year 2010-11 is projected as
Rs 2890 crore and the cumulative gap over the years till 2010-11 is Rs. 6575
crore. The aforementioned gap for 2010-11 is after considering the revenue from
sale of power to AP consumers at the applicable tariff. Under such
circumstances, it is likely that the shortfall in recovery of ARR at the
existing tariff may have to be made by suitable tariff revision; however, the
prerogative of tariff fixation rests with the Hon’ble Commission which may deal
with the circumstances prudently.
View of the Commission
Refer to objection no.8, issue no.11.
Issue No. 5: Tariff revision
The small and medium industry is already facing
adverse financial conditions and any further tariff increase will only worsen
the situation. Thus, tariff should be retained at the existing level.
Response of PSEB
No response.
View of the Commission
Refer
to objection no.6, issue no.1.
Objection No. 11: Sh. Manjatinder Singh Saini
Issue No. 1: Charging DS tariff
At premises of Congress Bhavan, Ropar where no
commercial activity is carried, DS tariff should be charged instead of NRS
tariff. Moreover, charging extra from NRS consumers is unjustified as no
additional facilities are provided and infact long power cuts are imposed.
Response
of PSEB
The
categorization of consumers is done as per Regulations/norms. However, the
objection does not relate to the ARR petition and may be taken up appropriately
in the office of PSEB separately.
View of the Commission
Office and commercial premises have all along been charged
NRS rates. No distinction is made even between private and government offices.
The Commission does not see sufficient merit for any change in this
dispensation.
Issue
No. 2: Extra power purchase
The
Board purchases power during election time under pressure of the ruling party
and investigate the amount of power purchase allowed during 2009-10. Month wise
quota should be fixed for power purchase and any over-drawl by Board should be
investigated.
Response of PSEB
The real issue is the availability of cheaper
power on long term basis. In order to arrange for the same, PSEB has been
making efforts to increase its share of in-house generation and has also been
tapping the other Central generating stations for providing power on long term
basis. PSEB has enumerated a list of all such plants from where the power is
envisaged to be sourced in the ensuing years in the ARR petition. PSEB is
concerned about its responsibility of ensuring adequate power supply for the
consumers in its license area and believes that once the power supply from the
aforementioned long term sources gets materialized, the suggested concerns of
the consumers will get addressed automatically.
Meanwhile, PSEB purchases short term power
considering the demand supply gap and the availability of power at the
prevailing rates in the market.
View of the Commission
It is imperative that the Board purchases power in a
judicious manner. However, monthly monitoring of purchases or fixing of quotas
may not be feasible in view of the fact that the prevailing situation both on
the demand or supply side are susceptible to change at short notice. The
Commission has in the Tariff Order of 2009-10 imposed a cap on the quantum of
purchases after which the purchase price would be linked to the average
realization cost of the Board.
Issue
No. 3: Interest due to delay in subsidy
The
Board should declare the source of finance and entity that pays the interest in
case of delay in subsidy payment by GoP.
Response of PSEB
The Hon’ble Commission is requested to exercise
its power under the Electricity Act to provide appropriate directives to the
concerned stakeholders. The Government may be asked to pay the interest on
non-payment of subsidy for the period of delay. However, the non-payment of
such interest should not result in reduction of interest on actual working
capital loans taken by the Board.
View of the Commission
The Board would perhaps need to raise extra finances in the
event of delay in receipt of subsidy from GoP which would involve payment of
additional interest as well. This aspect is invariably dealt with in the
relevant Tariff Order and seeking any further details from the Board in this
respect may not be entirely relevant.
Issue
No. 4: Tariff hike for DS consumers
Tariff
for DS consumers should not be hiked as that it the only category that makes
timely payment of bills while bearing the inefficiencies of power cuts, low
voltage etc.
Response of PSEB
The Consumers have raised the issue of increase
in tariff and had requested the Commission not to increase the same as the same
is on account of inefficiency in operations. PSEB submits that cost of
operations of a utility are not dependent entirely on its operational
efficiency but also on other external factors like increase in input costs viz.
fuel cost, raw material, cost of wires, transformers, third party services,
inflation, price escalation and increase in establishment cost etc. The same
are likely to increase the cost of operations of any utility and needs to be
recovered through tariffs. PSEB in its submission has substantiated the
rationale for increase in expenses and understands that the Hon’ble Commission
will examine the prudence of the same before allowing the same to be recovered
through increase in tariff.
View of the Commission
Refer to objection no.6, issue
no.1.
Issue
No. 5: Recovery of tariff from backdate
The
consumers should not be made to pay for delays on part of the Board in
submission of ARR petition and order by the Commission. The consumers price
their products on current cost and cannot take the burden of additional cost.
Response of PSEB
No response
View of the Commission
The
Commission wishes to avoid any increase in tariff with retrospective effect.
However, in certain instances it is inevitable as not doing so would correspond
to an abnormal increase in tariff which may have to remain applicable in
ensuing years even if a high tariff is not required.
Objection No.12: Mawana Sugars Ltd.
(formerly, Siel Ltd.)
The issues pertaining to
cost of supply, cross-subsidy, interest, RSD cost and submission of ARR in a
mechanical manner brought out in the initial submissions are the same verbatim as taken up by the
objector in the ARR for 2009-10 and views of the Commission, after due
examination afresh, are the same as expressed in the T.O. for 2009-10. The
remaining issues are dealt with hereunder:
Issue No.1: Processing of ARR
The Commission should not process the ARR petition for
2010-11 since the tariff orders for the past three years are under appeal and
till the same are finally disposed off by the ATE.
Response of PSEB
The filing of appeals on the previous year tariff order of
the Commission do not refrain PSEB to file tariff petition for the ensuing
period nor does the same hinders the Commission to determine the tariff for the
future years. However, any impact of the final judgment of the ATE can be
considered by the Commission in the subsequent tariff orders.
View of the Commission
Unless there is stay,
pendency of appeals in respect of the tariff orders for the previous years is
not a bar for proceeding with the ARR for the current year.
Issue No.2: Financial health of PSEB
The tariff petition by
Board based on year on year increasing expenditure and the subsequent order by
the Commission with standard allowance/disallowance has become a formality. The
Board has been diverting investible assets like depreciation reserve, consumer
contribution and ROE funds to meet its revenue requirement which speaks of the
poor financial health of the PSEB. Financial restructuring and cleaning of
balance sheet of PSEB needs to be ensured as suggested by the Commission in its
T.O. 2003-04 with a directives to Govt. of Punjab to return excess interest
paid by the Board.
Response of PSEB
Being the prerogative of the Hon’ble Commission, PSEB
requests the Commission to kindly address the issue by providing appropriate
directives to the stakeholders.
View of the Commission
GoP and the Board need to
ponder over the rising debt and accumulated loans of the Board and decide upon
measures necessary to contain the same so that financial health improves over
time.
Issue No.3: Capping of expenditure
a) The power purchase from
costly resources (more than Rs 4 per unit) should not be allowed and the power
purchase under UI should be minimized.
b) Board should control fuel cost by reducing
transit loss and Station Heat Rate.
Response of PSEB
a)
There are certain
periods during the year, wherein on account of the peak load requirements, the
demand for power is met through short term purchases, the prices of which are
essentially determined by market forces. While some of the consumers request
that PSEB may be given a free hand in procuring power whereas the others
request to have a cap on the power purchase cost. PSEB understands the issues of
the consumers and is therefore making efforts to maintain a balance and to
purchase power from long term sources at competitive prices. Besides, efforts
to have intrastate generation facilities are actively pursued to meet the
shortfall.
b) No response.
View of the Commission
a)
The Commission has already capped the
total quantum of power that can be purchased by the Board, keeping the energy
balance in mind. Should any additional power be purchased beyond that limit,
the Board would only be allowed the average cost of realization per unit.
b)
The Commission
allows only the normative rates and no extra burden is passed on to the
consumers. Also refer to para 4.7.
Issue No.4: Interest rate on Govt. loans
Interest rate on Government
loans should be brought down from 14-18% to a lower percentage of around 8%.
Response of PSEB
The
Govt. loans are in the range of 12-13.50%. PSEB would appreciate if the basis
of the aforementioned interest rate of 8% be shared.
View of the Commission
GoP has been extending loans to the Board from time to time
and the rate of interest on such loans being charged is the interest rate
prevalent at the time of release of loans by GoP to the Board. The rate of
interest on the totality of these loans, presently taken as 13.20%, is a matter
which needs to be discussed and decided upon by the Board and GoP.
Issue No.5:
Working capital loan
Working
capital requirement should be determined on normative basis. The interest on
loans taken on account of delay in subsidy should be borne by the Govt.
Response of PSEB
Increase
in Working Capital requirements is primarily on account of disallowances in the
expenses apart from the non-payment of timely dues by the Govt. In case of
non-timely payment by the Govt., under such circumstances, PSEB should not be
penalized by disallowing its actual cost of working capital loans.
View of the Commission
The Commission allows working capital
on normative basis as per its own Tariff Regulations. For the delay in payment
of subsidy, the Commission is levying interest which is also being paid by GoP.
Also refer to paras 4.13 & 3.15.
Issue No.6: Free units to AP and other consumers
Free
units allowed to AP consumers and SC & weaker sections (30 units/ month)
should be fixed in accordance with the decision of the ATE.
Response of PSEB
PSEB
could not find reference to the said ATE judgment referred by the consumer.
While the NTP says that “consumers below poverty line who consume below a
specified level, say 30 units per month, may receive a special support through
cross subsidy”, however, the said consumption of 30 units is just an indicative
number, which in no way becomes a norm that
the units allowed free to such consumers be capped at this level.
View of the Commission
The observation of ATE in respect of supply of 30 units per
month to SC and BPL consumers is possibly with regard to the concessional
tariff that might be made applicable to such categories. It has no relevance to
GoP’s decision to subsidize power to any category of consumers.
Issue No.7: Tubewell
efficiency
PSEB
is silent about the pilot project conducted for improving the efficiency of
tubewell.
Response of PSEB
Technical
consultant has been appointed to conduct the field data regarding the
efficiency of tube well connections. The consultants have recently compiled the
field data and are analyzing the same. It is envisaged that the draft report of
the analysis will be submitted to PSEB within one month. The same will be
shared with the Commission post finalization of the same
View of the Commission
The Board has reiterated that a field study is presently
under way by the Bureau of Energy Efficiency aiming at ways and means to
improving the efficiency of tubewells. This matter can be further considered
once the findings of this study become available.
Issue No.8: Increase in AP tariff
The increase in tariff for LS consumers since FY 2002-03
has been of the order of 30%. This is ironic as the Electricity Act directs
gradual reduction in tariff to bring them close to the cost of supply. The AP
tariff needs to be increased to reflect more than 80% of the average cost of
supply in line with NTP.
Response of PSEB
The issue raised by the
consumer is a prerogative of the Commission and may be considered at the time
of issuing the tariff order for 2010-11.
View of the Commission
The Commission appreciates the concern of appropriately
fixing agricultural tariff. It would be relevant to mention, however, that
there has been a 42.5% increase in agricultural tariff between 2002-03 and
2009-10.
Issue No.9: Advantage of
own generation
The average cost of power purchase in 2009-10 is
projected as Rs 6.21/unit. Considering that own generation is cheaper, the
Commission should issue directives to PSEB for early taking up of 2680 MW
Gidderbaha Power Plant.
Response of PSEB
Landed
cost of power purchase in 2009-10 is around Rs 3.63 per unit as per the ARR
submission. Besides, PSEB is actively pursuing the implementation of
intra-state generation projects so as to purchase power at lower rates.
View of the Commission
It is undoubtedly true that there is need to procure power
at reasonable rates from every available source including intra-state
generation.
Issue No.10: Depreciation Reserve Fund
PSEB
should be directed for creation of depreciation reserve fund.
Response of PSEB
The financial position of PSEB is on the verge of
collapse. It is unviable to fund the operations on a daily basis. The net returns available with PSEB after
meeting disallowances is already substantiated in the ARR petition. The same
may be considered by the Commission while dealing with this aspect.
View of the Commission
Opening a Depreciation
Reserve Fund is desirable. In view of the present precarious financial
position, the Board may take a view on the appropriate time for
operationalising this fund.
Issue No.11: AP subsidy
Additional subsidy needs to be recovered from the
Government for the corresponding revision in AP consumption. As per ATE order
dated 26.05.2006, AP subsidy has to be paid in full in cash and not to be
adjusted against interest payable to the Government. The burden of interest on
short term loans taken should not be put on the consumers.
Response of PSEB
The Hon’ble Commission is requested to exercise
its power under the Electricity Act to provide appropriate directives to the
concerned stakeholders. The Government may be asked to pay the interest on
non-payment of subsidy for the period of delay. However, the non-payment of
such interest should not result in reduction of interest on actual working
capital loans taken by the Board.
View of the Commission
Refer paras 3.15 & 5.4.
The Commission is of the considered view that the payment of loan is governed
by the terms and conditions decided between the lender and the borrower.
Issue No.12: Excess interest
Non refund of the excess
interest paid to the Govt. for the year 2006-07 to 2008-09 to the tune of
Rs.782.22 crore has further increased the short term loans of PSEB.
Response of PSEB
No response.
View of the Commission
Refer to paras 2.14, 2.16,
3.15 & 5.4.
Issue No.13: Cost of supply
Since Commission’s
observations in the T.O. 2003-04 to workout of category-wise cost of supply,
Board on one pretext or the other has avoided the same. Now Board has intimated
that it has invited bids from consultants for carrying out the said study. The
Commission on its part has again in a routine manner asked the Board to put up
findings as and when received.
Response of PSEB
The issue is prerogative of
Hon’ble Commission. However, in this regard, Board has invited tenders from the
consultancy firms for conducting the cost of service study for various
categories of consumers. The input of this study can be considered (as and when
finalized) for progressive reduction of cross subsidies in the spirit of the
National Tariff Policy.
View of the Commission
Refer to para 5.11.
Issue No.14: T&D losses
Board be directed to bring
down the T&D losses to 17% by 2011-12. T&D losses should not in any
case be allowed higher than projected as was done during the last year to
reduce AP consumption and thereby subsidy burden on the Government.
Response of PSEB
The issue is a prerogative of the Hon’ble Commission.
View of the Commission
Refer to para 4.2.
Issue No.15: Investment Plan
a) Provision of expenditure
for release of tube well connections in the Investment plan leads to other consumers
pay for it and should not be allowed.
b) 600 crore each provided
for Gidderbaha & Doraha thermal plants is too early.
c) Investment plan projections
are on a higher side against the previous performances.
d)
The investment plan should be pruned after taking into account depreciation,
ROE, consumer’s contribution (about Rs.1800 crore) as per decision of the ATE.
e)
Expenditure on R&M plants should reflect corresponding benefit in form of
additional generation and not reduction as shown in case of Thermal & Hydro
plants.
f)
Rs.2905 crore proposed to be spent on T&D be related to corresponding
reduction in T&D losses (to be quantified) and improvement in quality of
supply.
Response
of PSEB
a) The levy of charges for
release of tube well connections under the normal course (other than OYT) are
very minimal and PSEB is not able to recover the expenses incurred for such
release of connection from the consumers. Accordingly, funds need to be
arranged as part of the capex plan to release such connections which is not the
case with other consumer categories.
b to f) The Hon’ble Commission will undertake
prudence check to approve the capex plan proposed by the Board.
View
of the Commission
Refer para 4.13.2.
a) Any expenditure in excess of what a
consumer has to pay per BHP as his contribution that is specified in the Supply
Code, has to be borne by the Board. Allocation of resources for routine
activity such as release of AP connections should not feature in the investment
plan.
b) Projects intended to be executed on
BOO/BOT basis are excluded from the investment plan.
c) The Commission takes into account
the actual investment level of the Board in the previous years while
determining the size of the Investment Plan.
d) There is no such specific direction
in any of the orders of the ATE. Only consumers contribution and capital grants
to the Board has to be off set and the Commission determines the size of actual
Investment Plan accordingly. The depreciation is to be utilized for replacement
of depreciated assets and can only be used for repayment of capital loans. ROE
is not resulting in any actual profits for the Board which could be available
for the purposes of the Investment Plan.
e, f) It may not be possible to
correlate reduction in T&D losses or improvement in the performance of
thermal / hydel plants to the quantum of investment made.
Issue No.16: Return on Equity
There is no justification in the Board asking for ROE of 23.48% against
14%.
Response of PSEB
The issue is a prerogative of
the Commission. PSEB has already highlighted its rationale in the ARR petition.
However, PSEB understands that the CERC Regulations clearly specify that
grossing up is to be done with the tax rate as applicable to the utility
irrespective of the fact that whether the utility is paying the actual tax or
not. PSEB is liable to pay a tax rate of 33.39% and not the MAT rate and
therefore the claim of RoE at 23.48% is justified.
View of the Commission
Refer to para 3.16.
Issue No.17: Power factor
surcharge/incentive & KVAH tariff
KVAH based tariff is more
scientific as it accounts for both the active (kWh) and reactive (kVarh) energy
but introduction of the same has been pending for long. The incentive paid to
consumers consuming reactive energy lower than the threshold level is less than
the surcharge paid by consumers for consuming energy more than the level
identified by power factor. LS consumers are primarily affected as a result of
this and protest against the discriminatory treatment. In case of PIU specified
power factor is 0.95 and for others it is 0.9. In case of mixed loads, as there
is no policy for power factor. In such cases consumption should be segregated
on pro-rata basis and provide incentive accordingly..
Response of PSEB
PSEB is currently analyzing the
feasibility and repercussion of implementation of such tariff on the consumers.
PSEB feels that prima facie the request for introduction of KVAH tariff has
been received from small number of high end LS consumers and Induction furnace
consumers, whereas, large number of other consumers have not expressed any
inclination for opting the KVAH tariff. As this matter involves an in-depth
study on the revenue stream, the Board is working on the finer modalities of
the same. Besides, not many reference of implementation of such tariff
elsewhere in the country could be found. It is one of the reasons for the
timeframe of the said study to get prolonged.
View of the Commission
The Board has been asked to examine the issue and submit their
report in a limited time frame after which the Commission will take a view in
the matter.
For power factor incentive/surcharge, refer to objection
no.4, issue no.3.
Issue No.18:
Peak Load Exemption Charges (PLEC)
PSEB’s justification of levy of PLEC charges because of
higher cost of power purchase during peak times is unjustified as this cost is
already included in power purchase budget and is accounted for. These charges
are not levied on tube well consumers when power purchase is made to meet their
requirement during peak summer at extra high rates. Such an approach is
discriminatory.
Response of PSEB
It is submitted that:
·
Removing the PLEC
may provide a larger room for variation between demand and supply. The same may
result in situations wherein PSEB has arranged for lower supply in comparison
to the demand and vice versa. Severe mismatches between actual demand and
supply of power may endanger the security and safety of the grid
·
During the peak
load period, Board procures power from the short term sources to meet such
extra demand, which often comes at large premiums.
·
At the time of
peak, the frequency of the system generally falls and power drawal under such
conditions have a correspondingly higher UI charges. Procurement of power at
lower frequencies may put extra financial burden on the board.
Considering the above, the PLEC charges need not
be removed. Rather, PSEB submits that the Hon’ble Commission may consider the
submissions made by PSEB in the previous ARR regarding revision in the PLEC rates.
PSEB believes that the
View of the Commission
Levy of peak load exemption charges is one of the
instruments to reduce load at peak hours and is widely used as almost every
state in the country experiences power deficit during peak requirement hours.
There is very little justification for imposing such restrictions on
agricultural consumers who in any case are supplied power for 8 hours in a day.
Issue No.19: EHV rebate
The EHV rebate of 3% to
33/66 KV consumers has been unjustifiably withdrawn without opportunity to
consumers to raise objections and without such proposal from the Board. As such
this is not in order and cannot have precedence over the conditions/schedule of
tariff issued by Commission during April 2006 under section 181(U) of EA, 2003.
Further an appeal against the Tariff Order 2009-10, in which EHV rebate of 3%
has been withdrawn, is pending before ATE.
Response of PSEB
The opinion and the objection raised by the
objector has already discussed by the Commission in detail in the Tariff Order
for FY 2008-09. The relevant para has been reproduced below:
“……..Commission observes that voltages at which
supply is to be given to different categories of consumers have been specified
in the Conditions of Supply since last
more than ten years and the Board was required to release all new
connections/additional loads/demands at the voltage specified in the Conditions
of Supply. Therefore there is no logic in any rebate in tariffs to a consumer
who is given supply at the specified voltage for that category. The Commission
also observes that there is a need for the existing consumers getting supply at
a lower voltage to convert to the specified voltage for benefit of the system
and to reduce T&D losses. However actual conversion of supply voltage of
the existing consumers will require some time. There could also be technical
constraints in conversion of supply voltage or release of a new connection and
or additional load/demand at the prescribed supply voltage which merits
consideration…………………”
Further, it is submitted that the supply voltage
for any connection depends upon the nature, quantum and type of load. New
connections at higher voltage are taken by the consumers keeping in view their
own interest. Accordingly, Board requests the Hon’ble Commission that the issue
of continuation of rebate to HT consumers need not be reconsidered.
View of the Commission
Refer to
objection no.1, issue no.1.
Objection
No.13: APEX Chamber of Commerce and Industry (
The Commission observes that the objector has raised issues which are
fundamentally legal in nature. In the rejoinder he has further stated that
issues not replied to by the Board tantamount to admission. The Commission does
not deem it prudent to comment upon these issues for the moment. The objector
is free to approach the Commission in a petition as per its Regulations.
Issue
No.1: ARR without Tariff proposal
The ARR and retail tariff petition for
FY 2010-11 filed by PSEB violates the provisions of the Electricity Act, 2003
as there is no tariff proposal and formats are not in conformance with Tariff
Regulations, 2005.In the rejoinder, the Objector has stated that reply given by PSEB is
wrong and the objection is reiterated.
Response of
PSEB
PSEB has already submitted its response to the Hon’ble Commission
regarding the aspect of submission of tariff proposal. It is submitted that the
ARR as proposed by the Board is reduced and recomputed by the Commission and
therefore it is desirable that the Hon’ble Commission may determine the tariff
subject to approval of the final revenue determined by it. PSEB has submitted
the information in the formats to the extent the information was available with
the Board. PSEB is open to submit any further information if desired by the
Commission.
View of the Commission
It is indeed desirable that the
ARR should include specific tariff proposals as well. However, increase in
tariff is to be effected to cover the gap between projected revenue and
expenditure of the Board. An estimation of the tariff increase is therefore,
possible even if the ARR does not specify the proposed tariff increases.
Issue
No.2: Status of PSEB
The Board can continue to function only
as State Transmission Utility (
In the rejoinder, the objector has disagreed with the response given by
PSEB and has reiterated the preliminary objection. It has also been stated that
the copy of deficiencies raised by the Commission were not supplied to the
objector.
Response of
PSEB
As regards Board
functioning as a State Transmission Utility (
View of the Commission
As per the provisions of Electricity Act 2003, an integrated
entity such as the Board could continue to function for a period of one year
from the appointed date. This is further extendable beyond the period of one
year by notification of the State Govt. as may be mutually decided by the
Central Govt. and the State Govt. and on
that basis, the Board had been continuing as an integrated entity.
Issue
No.3: Audited accounts
The Board has not submitted audited
accounts including balance sheet, profit & loss etc. As a result, the
exercise of truing-up cannot be undertaken. Since PSERC regulations, 2005
provide for adjustment of revenue gap of the ensuing year based on review and
true-up exercise, the revenue gap of Rs.1453.55 crore should not be allowed. In the rejoinder,
the objector claims the response given by PSEB to be vague and has reiterated
the preliminary objection.
Response of
PSEB
PSEB has submitted the audited accounts (including audited report) and
all relevant details along with the replies to the deficiencies on the ARR
raised by Hon’ble Commission. Therefore PSEB requests the Hon’ble Commission to
undertake the true-up.
View of the Commission
Board has furnished the audited accounts for 2008-09 in response to
deficiency raised by the Commission. The Commission has accordingly undertaken
true-up exercise for 2008-09.
Issue
No.4: Multi-year tariff
Provisions in Tariff policy of Central
Government mandate that multi-year tariff be framed after 1.4.2006 and also as
per PSERC Tariff Regulations 2005 multi-year tariff is to be framed.
Response of PSEB
No response.
View of the Commission
The feasibility of
introducing the multi-year tariff regime is under examination in the
Commission.
Issue
No.5: Cost of supply
In line with the decision of the ATE in
2006, the Commission in its tariff order of FY 2007-08 had directed the Board
to determine category wise cost of supply which has not been followed by PSEB.
Actual T&D loss of EHT consumers and power intensive units with 11KV supply
are around 1% and 4% respectively against the approved loss level of 19.5%.
Moreover, these consumers maintain a load factor of more than 70% and have
borne the cost of sub-stations and the line. Tariff for EHT consumers and power
intensive units deserves reduction by 25% and 20% respectively than average
cost of supply.
In the rejoinder, the objector has disagreed with the response given by
PSEB stating that the reply is in total violation of order passed by ATE in
full bench judgment and has reiterated the preliminary objection. The objector
referring to decision of the Commission on objection no.15, issue no.1 in the
T.O. of 2009-10 wherein the Board was directed to submit the report on cost of
supply within six months of the T.O., has further alleged that the Board is
misleading the Commission and is liable to be punished as per section 142 and 146
of EA 2003.
Response of PSEB
PSEB has already initiated the exercise of inviting
the bids from consulting firms for undertaking the detailed study on cost of
supply to various consumer categories of consumers. PSEB envisages that the
said exercise will start in the next couple of month pursuant to selection of
the consultants.
View of the Commission
Refer to objection no.7, issue no.7.
Issue
No.6: Monthly Minimum Charges (
Under Electricity Act 2003 or the
Regulations there is no provision to charge MMC. Full cost is of the service
line is borne by the consumer. In a power shortage scenario with around 40%
power cuts charging
In the rejoinder, the objector stated that the response given by PSEB
is without any basis and has reiterated the preliminary objection. Against the
contention of PSEB that MMC can be recovered if full load for 1-2.5 hours is
utilized, the objector states that the response is crude attempt to mislead the
Commission as the utilization factor of majority of consumers is just 10% of
the full load. The objector has also submitted that the Board has shifted the
onus of levying of MMC on AP consumers onto the Commission.
Response of PSEB
Monthly minimum charges are levied on account of
inherent cost associated with installation of network which included O & M
cost, interest cost, depreciation, interest of working capital, establishment
cost etc. Even in the absence of any usage by the consumers, PSEB has to upkeep
the network and the associated fixed costs.
The very nature of such costs in case of PSEB is
similar to power purchase cost from central generating stations. Even in the
absence of drawl of power, PSEB will still have to bear the fixed charges for
such stations (from where PSEB has a capacity allocation) in the proportion of
capacity allocated to the Board.
In the same spirit, it is legible that PSEB also
recovers the
Further, the minimum thresh hold consumption to
cover
The real issue is the availability of cheaper power
on long term basis. In order to arrange for the same, PSEB has been making
efforts to increase its share of in-house generation and has also been tapping
the other Central generating stations for providing power on long term basis.
PSEB has enumerated a list of all such plants from where the power is envisaged
to be sourced in the ensuing years in the ARR petition. PSEB is concerned about
its responsibility of ensuring adequate power supply for the consumers in its
license area and believes that once the power supply from the aforementioned
long term sources gets materialized, the suggested concerns of the consumers
will get addressed automatically.
Further, tariff determination is the prerogative of
the Commission and therefore the request of the consumer may be considered by
the Commission. However, Domestic consumers are already paying the
View of the Commission
Refer to objection no. 3, issue no. 10.
Issue
No.7: Unmetered Consumption
In TO 2002-03 Board was directed that new AP
connections be released by providing meter. Thus all AP connections released
from 2002 to 2010 are metered, which is about 30% of AP consumers. Board is
duty bound to charge the metered AP connections on actual consumption basis and
charged unmetered consumers on connected load basis. Under Section 55 of the
EA, 2003 the Commission should take action for 100% metering of AP supply. To
encourage AP consumers for metered connections, only metered AP consumers
should be subsidized whereas tariff for unmetered consumers should be made
equal to cost of supply. In the rejoinder,
the objector states that the reply of the Board is evasive and has reiterated
the preliminary objection.
Response of PSEB
PSEB is already complying with the directives of the
Commission with respect to the AP metering. A specific road map has already
been chalked to increase the size of sample meters to 10%. However 100%
metering of all tube well consumers and reading such meters in time for
assessment of the AP consumption may be practically very difficult. This would
also involve large resources. Hence this should not be considered by the
Hon’ble Commission.
View of the Commission
It may not be appropriate to relate the question of metering
of connections with differential tariff payable within the same category of
consumers. As regards complete metering of agricultural connections, refer to
objection no.8, issue no.7.
Issue
No.8: Free electricity
As per tariff policy, concept of free
electricity is not desirable. Subsidized rates of electricity should be
permitted only upto a pre-determined level beyond which the tariff should
reflect the efficient cost of service. Moreover, since the Government bears the
cost of electricity supplied to AP consumers, cross-subsidy should not be
allowed. Use of pre paid meters can facilitate the transfer of subsidy to such
consumers. In
the rejoinder, the objector has reiterated the preliminary objection.
Response of PSEB
Free supply of electricity to the consumers is made
on the behest of the Government. Further, the process of determination of
tariff for various consumer categories including agricultural consumers is the
prerogative of the Commission which may please be considered by the Commission.
View of the Commission
It does not appear practicable to limit the quantum of free
supply to agricultural power after which higher rates would become applicable.
This aspect has been earlier discussed by the Commission in para 6.6 of the
Tariff Order of 2007-08.
Issue
No.9: Alternative to Cross-Subsidy
The tariff policy prescribes the option
for the State Government to raise resources through mechanism such as
electricity duty and giving direct subsidy to only needy consumers. Since, the State Government levies
electricity duty it cannot provide cross-subsidy by further burdening the
subsidizing class. The industrial consumers in
In the rejoinder, while reiterating, the objector has stated that the
Board has not opposed the preliminary objection amounting to admission.
Response of PSEB
The aforementioned issue is a prerogative of the
Hon’ble Commission.
View of the Commission
Levy of electricity duty and octroi is
in the purview of GoP.
Issue
No.10: Time of Day (ToD) tariff
TOD is an effective technique of load
management with differential tariff structure for peak and off-peak
supply. Tariff policy also encourages
ToD metering for large consumers with load of 1 MVA and above. PSEB’s Sales
Regulations clause 13.3.8.2, also provide for rebate in tariff for night
connections.
In the rejoinder,
while reiterating the objector has stated that the Board has not given details
of the feasibility analysis undertaken.
Response of PSEB
PSEB is currently analyzing the feasibility and
repercussion of implementation of such tariff on the consumers.
View of the Commission
The matter is under consideration of the Commission and an
early view in this respect will be taken.
Issue
No.11: Peak Load Violation Charges
The Board charges peak load violation
charges without being authorised by the Commission. Further, the income from
such charges has not been shown in revenue receipts. In the rejoinder, while reiterating the
objector has stated that the reply of the Board is wrong.
Response of PSEB
PSEB is authorized to collect PLEC as per the tariff
orders of the Commission and submits that the said charges have been considered
as part of revenue in the ARR.
View of the Commission
There is mention of peak load violation charges in the
Conditions of Supply framed by the Commission and as such any amount on this
account is recoverable as a part of tariff.
Issue
No.12: Debt Equity Ratio
State Government should maintain the Debt Equity ratio as 70:30 which is
mandatory as per the rules & regulations framed under the EA, 2003 and a
direction in this regard be issued by the Commission. This is essential to
safeguard the interest of consumers as well as employees.
In the rejoinder, the objector has stated that the reply of Board is
wrong and reiterated its objection.
Response of PSEB
The normative debt equity ratio is suggested to put
a ceiling on the equity investment for the purpose of calculating the return on
equity and not vice versa. A project can be funded through 100% equity as well.
However, the impact of such enhanced equity infusion will only be towards an
increase in tariff since RoE is a pass through in the tariff.
View of the Commission
The Commission ensures that interests
of consumers and other stake holders are safeguarded and in order to strike a
balance, allows costs on normative basis.
Issue
No.13: Unaccounted electricity
a) Board
supplies free electricity to its employees and establishment. Despite the same being metered, it is not
reflected in energy sales.
b)
Electricity procured at high cost during elections should be investigated.
In the rejoinder, the objector has stated that the reply of Board is
wrong and reiterated its objection.
Response of PSEB
a) The free supply to the Board’s employees is limited to a maximum limit of
155 units per month which varies from 100 to 155 units per month to depending
upon the hierarchy level of the Board. The free supply of electricity is a perk
provided by Board to its employees and forms an inherent part of their salary
structure which is duly accounted for in the Annual Accounts of PSEB. PSEB
understands that similar perks are allowed by other Government organizations
also. Besides, the free energy supply provided by the Board forms the taxable
income of the employees of Board.
b) No response.
View of the Commission
a) Refer to objection no.3,
issue no.8.
b) Refer to objection no.11, issue no.2.
Issue
No.14: Discrimination against private organizations
Government
organizations such as hospitals, schools etc are treated as domestic consumers
while similar private originations are treated as commercial. This preferential
treatment is unjustified and violates the EA, as supply voltage, load factor,
consumption, time of operation and purpose of supply are the same in both the
cases. This anomaly be removed.
In the rejoinder, the
objector has stated that such discrimination is violation of section 62(3) and
article 14 of the Constitution of India. The objection has referred to Appeal
No. 147 of 2007 titled Govt. of Himachal Pradesh vs. HPSEB where ATE held the
discrimination as violations of the provision of the EA 2003.
Response of PSEB
The tariff is charged as per the tariff schedule and
the categorization approved by the Commission in the tariff orders. However,
the suggestions may be considered by the Commission.
View of the Commission
Govt. Educational and Sports institutions and Govt.
Hospitals/Primary Health Centres & dispensaries provide services to the
society at as low a cost as possible. To that extent, there is some
justification to supply cheaper power to these institutions. This aspect has
been earlier discussed by the Commission in para 5.1 of the tariff order of
2009-10.
Issue
No.15: Incorrect energy forecast
PSEB is
imposing power cuts to the tune of 30% to 40%, which is the root cause of its
losses. PSEB and State Govt. is losing revenue on this account. Energy forecast
for the ensuing years should be done as per the growth rate in consumption
after factoring the power cuts. In the rejoinder, the objector has stated
that the reply of Board is wrong and reiterated its objection.
Response of PSEB
The projection of energy demand is made on a CAGR
basis which smoothens the increase/decrease in demand on a year to year basis.
The energy balance submitted by PSEB shows that the demand projected on the
CAGR basis is matched against the supply sources and any shortfall in the
supply is envisaged to be met through short term purchases. PSEB is trying to
tap the available competitive power sources to supply power on long term basis
and envisages that power cuts be minimized to the extent possible.
View of the Commission
In a situation where there is a gap between demand and
supply of power, it is perhaps more realistic to plan for growth of demand each
year on the basis of restricted demand. However, as the power availability
situation gradually improves there would be need to take unrestricted demand
into account in computing additional requirement in any successive year.
Issue
No.16: Free Supply to SC/BC consumers
Domestic
SC/BC consumers are given free supply of 200 units per month while they can
consume only 72 units at the restriction of 1 KW load. This encourages wastage
at the cost of cross-subsidising categories. Moreover, cross-subsidising
categories cannot be penalized twice, one by payment of electricity duty to the
Government and then again through cross-subsidization.
In the rejoinder,
while reiterating the objector has stated that the Board cannot escape its
liability by considering the threshold level to be the prerogative of GoP.
Response of PSEB
Free supply of electricity to the consumers is made
at the behest of the Government. Specifying the threshold level of consumption
is the prerogative of the GoP which may be considered by the Commission.
View of the Commission
The subsidy in the cases of SC/BPL domestic consumers has
recently been restricted to 100 units per month. All categories of consumers
including subsidized categories pay electricity duty. Thus, cross subsidizing
categories can not claim to be penalized twice.
Issue
No.17: General Conditions of Tariff
General Conditions of Tariff and
schedule of tariff allegedly framed by the Commission (CC No.36/2006 dated
14.7.2006) is neither a Tariff Order nor Regulations. Charges levied under GCT
are neither as per Act nor as per rules/ regulations.
Response of
PSEB
No response.
View of the Commission
‘General Conditions
of Tariff’ are prefixed to the Schedules of Tariff of the Board. These contain
important operating conditions including definitions of various terms,
operating conditions of agricultural tubewell consumers, billing procedures and
practices, tariffs for special categories, applicability of Electricity Duty,
taxes and fuel cost adjustment clause’. The Commission has approved ‘General
Conditions of Tariff’ effective from 1.4.2006 after following the due process.
Issue
No.18: Voltage surcharge
There is no
provision in the Act, Rules & Regulations for charging voltage surcharge.
Further, under section 39, 40, 42 of the EA, 2003 surcharge is only applicable
to open access consumers. In the
rejoinder, the objector has stated that the reply of the Board is wrong and
illegal and that the Commission has not framed any regulation specifying supply
voltage for various categories. The objector while reiterating has stated that
there is no provision in the Act, rules or regulations for charging voltage
surcharge and no tariff can be framed in violation of the provisions of the
Act.
Response of PSEB
Levy of any penalty/rebate is done on the basis of
tariff orders approved by the Commission. The supply voltage for any connection
depends upon the nature, quantum and type of load. New connections at higher
voltage are taken by the consumers keeping in view their own interest.
Accordingly,
the Hon’ble Commission has specified the supply voltage to various categories
of consumers. Having given such directives, the Commission has even
discontinued the applicable rebates for EHT consumers. In the same spirit, the
levy of voltage surcharge is justified as it prompts the consumer to adhere to
the specified voltage level for respective category of consumers.
View of the Commission
Voltage surcharge is imposed as per the General Conditions
of Tariff and Schedule of Tariff framed by the Commission exercising powers
under the Electricity Act 2003.
Issue
No.19: Two part tariff
As per tariff policy, two part tariff
was to be introduced with effect from 6.01.2007 but the same is still pending.
Bulk consumers with load more than 1 MW have metering at both ends and
differential tariff based on timing can be implemented. This will reduce peak
load burden and improve financial health of PSEB through additional procurement
and supply of electricity, and by optimal utilization of PSEB assets.
In the rejoinder, the objector has stated that the reply of the Board
is evasive and has reiterated its objection.
Response of PSEB
PSEB is currently analyzing the feasibility and
repercussion of implementation of such tariff on the consumers.
View
of the Commission
The Commission is awaiting a proposal and has asked the
Board to submit the same in a time bound manner.
Issue
No.20: Schedule of General Charges
Schedules of general charges is invalid
and has not been framed in accordance with the law without following the due
process and not published in the official gazette. Hence these cannot be
enforced till regulations required under the law are framed. In the rejoinder,
the objector has stated the reply of the Board to be vague and reiterated its
objection.
Response
of PSEB
All the charges levied by the Board are in line with the tariff
schedule and the directives given by the Hon’ble Commission from time to time.
PSEB takes the approval from the Commission before levying any charge on the
consumer. The same is evident from the following abstract mentioned in the TO
for the FY 2009-10 and reproduced below:
“……v) All other charges including rentals and
deposits which are being collected by the Board as per schedule of general
charges, supply code and general conditions of tariff & schedule of tariff
approved by the Commission, will be continued at the existing rates till these
are reviewed by the Commission…..”
View
of the Commission
The
Commission had approved Schedule of General Charges effective from
Issue
No. 21: Electricity Supply Regulations 2005 and circulars of PSEB
PSERC is the only competent authority
to frame regulation as per section 181 of EA, 2003. PSEB does not have the power
to frame such regulations and should be restrained from using the Electricity Supply Regulations, 2005.
Similarly, the Board does not have the
right to issue circulars, pass order, directions etc. affecting the right of
the consumer without approval of the Commission and without serving notice to
the affected person/persons.
In the rejoinder, the objector has stated that the reply for the Board
is vague and has reiterated the preliminary objection.
Response of PSEB
All the charges levied by the Board are in line with
the tariff schedule and the directives given by the Hon’ble Commission from
time to time. PSEB takes the approval from the Commission before levying any
charge on the consumer. The same is evident from the following abstract
mentioned in the Tariff Order for FY 2009-10 and reproduced below:
“….. v. All other charges including rentals and
deposits which are being collected by the Board as per Schedule of General
Charges, Supply Code and General Conditions of Tariff & Schedules of Tariff
approved by the Commission, will be continued at the existing rates till these
are reviewed by the Commission;………”
View of the Commission
The Commission had in 2005 informed the Board that all
commercial circulars involving Tariff matters (including any other issue which
brings about change in the liability of the consumers) should be issued only
with the prior approval of the Commission. The Commission has since approved
the Conditions of Supply effective from
Issue
No.22: KVAH Tariff
PSEB is not providing capacitors on AP
consumers causing extra demand on the system. Introduction of KVAH tariff
instead of KWH tariff is suggested thereby saving the Board from paying power
factor incentive apart from improving system parameters.
In the rejoinder, the
objector has stated the reply of the Board to be vague and reiterated its
objection.
Response of PSEB
PSEB is currently analyzing the feasibility and
repercussion of implementation of such tariff on the consumers. PSEB feels that
prima facie the request for introduction of kVAH tariff has been received from
small number of high end LS consumers and consumers having Induction furnaces,
whereas, large number of other consumers have not expressed any inclination for
opting the KVAH tariff. As this matter involves an in-depth study on the revenue
stream, the Board is working on the finer modalities of the same. Besides, not
many reference of implementation of such tariff elsewhere in the country could
be found. It is one of the reasons for the timeframe of the said study to be
prolonged.
View of the Commission
Refer to objection no. 12, issue no.17 in respect
of KVAH tariff.
Issue
No.23: Capacitor surcharge
The Board should levy capacitor
surcharge on consumers who have not installed capacitors and reflect the same
in the ARR. This would help save energy as well as yield revenues to the Board.
Board should be directed to check all connections where two part meter is not
installed.
In the rejoinder, the
objector has stated that the reply of the Board is vague and reiterated its
objection.
Response of PSEB
As per instruction of commercial
circular 36/06 dated 14.7.06, Power factor surcharge is being levied on Large
Supply consumers and capacitor surcharge is levied in other industrial
consumers.
View of the Commission
LS, MS, BS, RT and DS/NRS consumers with a connected load of
100 KW or more are expected to maintain stipulated power factor and are
incentivized or penalized for their failure to achieve/not achieve the
prescribed power factor. SP consumers have the choice either to maintain a prescribed
power factor or install capacitors of the requisite capacity. In their case,
the failure to either install or maintain capacitors of the required capacity
is penalized by the imposition of capacitor surcharge.
Issue
No.24: Impact of power cuts
More than 50 Lac consumers have
installed inverters due to huge power cuts. Discharged batteries consume about
three times the energy in banking. This leads to substantial wastage of
electricity. Alternative use of diesel generators leads to air and noise pollution.
The Board should be directed to make sufficient arrangements for generation. In the rejoinder,
the objector has stated that the Board has failed to implement measures which
can lead to reduction in power cuts.
Response of PSEB
Levy of power cuts is a forced measure taken to
flatten the load curve during peak hours or in case of any shortfall in supply
from the committed resources. It may be appreciated that electricity has become
a necessity in the livelihoods and our tolerance for living without electricity
has drastically reduced over the years. However, PSEB appreciates the
contentions of the consumer and is seeking measures to ensure long term
availability of power so that avoidable use of electricity is minimized.
View
of the Commission
Refer to objection
no.8, issue no.2.
Issue
No.25: 100 KW during peak hours
PSEB should not impose the condition on
the consumer to get minimum exemption for 100 KW when a consumer might actually
need much lower load. This encourages wastage even as PSEB already faces acute
power shortage. Board be directed that consumers should be made to pay on the
basis of their energy requirement during peak load hours.
In the rejoinder, the
objector has stated that the reply of the Board is wrong.
Response of PSEB
Levy of PLEC is based on the load profile of the
consumers and is levied as per the tariff schedule approved by the Commission.
It is in the hands of the consumers to minimize their load/peak requirements
and avoid levy of such charges. The minimum permission limit of 100 KW during
the peak load hours is kept to contain the number of consumers at the peak
hours as this will increase the energy requirement at the peak hours and in
turn will increase the power purchase cost of the Board.
View
of the Commission
The manner in which peak load hour restrictions are enforced
is being reviewed by the Commission. In case the issue raised is not resolved,
the objector would be advised to approach the Commission in accordance with its
Regulations.
Issue
No.26: Technical and commercial losses
Board should take immediate steps to
reduce the technical & commercial losses. T&D losses for power
intensive units and induction furnaces running at 11KV cannot be more than 3%
to 4%. Thus any penalty on such consumers is not justified.
Response of PSEB
No response.
View of the Commission
Refer to para 4.2.
Issue
No.27: Surplus land
Board has not disposed off the identified
surplus land amounting to Rs.1400 crore (present price Rs.5000 crore). RoE
should not be allowed on such amount. Also Board should provide detail of its
encroached properties and intimate action taken against officers and officials
responsible for releasing electric connections in encroached properties of the
Board.
Response of PSEB
No response
View of the Commission
The Commission will separately take a view on the
issue.
Issue
No. 28: 15% surcharge on freight of coal
15% surcharge on freight of coal is
leviable for not making timely payments and seems to have been added in under
the head of ‘freight’. Recently Hon’ble Punjab and Haryana High Court has
decided against the levy surcharge of 15% levied in favour of the Board. Thus
surcharge if any loaded should be deducted from the expenditure for the period
2008-09, 2009-10 & 2010-11.
Response of PSEB
No response
View of the Commission
The Board has
separately intimated to the Commission that no surcharge to the railways has
been paid by the Board during the years 2008-09, 2009-10 and 2010-11. A
case relating to payment of 15% surcharge on freight on coal for not making
timely payments to railways pertains to the period 1998-2003. The case has been
decided in favour of the Board and its effect will be separately examined.
Issue
No.29: AP Sales
Board has not disclosed the number of
metered AP consumers but an estimated over 30% AP consumers have metered
supply. The Commission has fixed tariff for metered AP consumers at Rs.2.40 per
unit while for unmetered consumers, a flat rate of Rs.283 per HP has been set.
Board should charge accordingly. Estimation of AP consumption is futile
exercise.
In the rejoinder, the objector has reiterated the issue.
Response of
PSEB
The details of AP consumption based on the sample meters are submitted
to the Commission. The overall consumption of AP consumers is
calculated/determined on the basis of these sample meters only. Hence the AP
consumption approved by the Commission is payable by the GoP in the form of
subsidy at the tariff rate approved by the Commission.
View of the Commission
There are approximately 13264 no. AP
connections which are being billed on the basis of meter readings. Estimation
of AP consumption becomes necessary as the per BHP rate which is then applied
to the remaining AP connections is actually worked out after estimating the
total consumption of power by the agriculture sector.
Issue
No.30: Domestic sales
The detail of domestic energy sale is
not clear. There are three categories of domestic consumers with different
tariffs. It has not been mentioned that out of total consumers having connected
load of 8375.533 MW, how many consumers are falling in each categories.
Response
of PSEB
No response.
View
of the Commission
It is not possible to furnish this information as the number
of consumers in each category would vary with the fluctuations in consumption.
Issue
No.31: T&D losses
T&D losses approved at 19.5% for FY
2008-09 should not be revised. Projected T&D losses as 19.5% for FY 2009-10 and 18%for FY 2010-11 should be
15% and 13% respectively due to installation of 1 Lac CFL by AP consumers and
other categories also. PSEB should install CFL in its offices. T&D losses
should accordingly be approved as proposed.
In the rejoinder, the
objector has stated that the reply of the Board is wrong and reiterated its
objection.
Response of
PSEB
Detailed rationale in the ARR petition for
consideration of Commission has already been submitted. Installation of CFLs would reduce the energy
consumption requirement in the system and not exactly the loss level in the
system. The argument of the consumer cannot be considered in this aspect.
View of the Commission
Refer to objection no.6, issue no.2.
Increased installation of CFLs is not likely to have any
significant effect on T&D losses.
Issue
No.32: Power purchase
For FY 2008-09, Board has demanded
Rs.414 crore for power purchase. Power purchase beyond the approved limit
should not be allowed especially when the actual losses are in excess of the
approved/projected losses. The licensee should seek approval of the Commission
for additional requirement of power. The cost of additional power purchase
should be met by the beneficiary category. Board should be directed to
increase generation for optimum utilization of fixed assets.
Response of PSEB
Detailed rationale in the ARR petition for
consideration of the Commission has already been submitted.
View of the Commission
Power
purchases have to be made to cover the gap between demand and supply but these
have to be effected prudently keeping its cost in view at all times.
Prior to the Tariff Order of 2009-10, the Commission had
been allowing purchase of power actually effected by the Board in a particular
year even though a lesser quantum of purchase had been projected in the
relevant Tariff Order. In line with that policy, excess power purchase in
2008-09 has been allowed. The cost of such power would, however, form a part of
the total power purchase costs of the Board and is borne by all categories of
consumers.
Issue
No.33: Employee cost
PSEB employee cost is highest in the
country and has increased from 16% in 2008-09 to 21% in 2010-11. As per ATE
order dated 26.05.2006, performance linked incentive is the requirement of the
day to improve low productivity of employees. Increase in employee cost should
be approved as per tariff regulations
2005.
Response of PSEB
PSEB has submitted the detailed rationale in the ARR
petition for consideration of the Commission.
View of the Commission
Refer to objection no.3, issue no.4.
Issue
No.34: Interest and finance charges
Interest and finance charges should not
be allowed in deviation of rules regulations and approved amount of 767.48
crore should not be revised. Interest on GPF should also not be allowed since
the interest given by the Banks and paid is almost equal.
Response of PSEB
PSEB has submitted the detailed rationale in the ARR
petition for consideration of the Commission.
View of the Commission
Refer to para 4.13.
Issue
No. 35: Value of scrap and damaged assets
Revenue from sale of scrap /damaged
assets etc has not been shown.
Response of PSEB
The net receipts value of scrap after duly following
the accounting principles is normally reflected as Non tariff income in the
books of accounts.
View of the Commission
Receipts from the sale of scrap/damaged assets is reflected
as non-tariff income in the books of account.
Issue
No.36: Meter reading and bill distribution expenses
Meter reading and billing expenses
should not be allowed as there is already overstaffing in the Board. Board
should train and utilize the existing staff.
Response of PSEB
No response.
View of the Commission
Commission expects that the Board is
optimally utilizing its man power resources.
Issue
No.37: Advertising expenses
Advertising expenses for the FY
2008-09, should not be allowed as they are on the higher side and details for
increase have not been supplied.
In the rejoinder, the objector has stated that there was no need for
such expenses and should be added to the capital cost of the plant.
Response of PSEB
The advertisement expenses are increased mainly on
account of the inaugural ceremony of the new plants viz., Talwandi Sabo Thermal
Power Plant and Goindwal Sahib Thermal Plant.
View of the Commission
These expenses form a part of the A&G expenses of the
Board which are determined on the basis of the Commission’s Regulations and are
capped for each year.
Issue
No.38: Hospitality expenses
These expenses for FY 2008-09 have been
projected manyfold of the previous year expenses and should not be allowed. In the rejoinder,
the objector has stated that these expenses cannot be allowed as revenue
expenses.
Response of PSEB
No response
View of the Commission
Same as issue no.37 above.
Issue
No.39: Subsidies, grants and incentives
Govt. is giving subsidies grants
incentives to implement the different schemes known as Rural Electrification,
kutir jyoti program, APDRP scheme which has not been shown in revenue receipts.
Response of PSEB
Detail of such amount is reflected in schedule-34 of
the accounts.
View
of the Commission
The Commission agrees with the response of the
Board.
Issue
No.40: Revenue of seasonal industries, temporary supply and
Revenue from metered sales to seasonal
industries, temporary supply, Golden temple and Durgiana temple has not been
reflected in revenue receipt. Revenue receipts of all categories of consumers
should be shown separately.
Response of
PSEB
The consumption of the said categories of consumers
is merged with that category of the DS consumers. The consumption at such
places is accounted in the accounts.
View of the Commission
Sales to these categories are accounted for in the tariff
income of the Board.
Issue
No.41: Income from deposit works,
shifting of lines etc.
Income from deposit works, shifting of
lines, recalibration of meters, peak load violation charges, load surcharge,
late payment surcharge etc. have not been shown. Board should disclose correct
figures of miscellaneous income for proper accounting.
Response of PSEB
The income from such
activities is booked under the Account code 62.930 which represents the
miscellaneous income (ultimately forming part of the non-tariff income of the
Board).
View of the Commission
These incomes are a part of non-tariff
income and booked as such.
Issue
No.42: Energy availability
Thermal
generation should be maximized and hydel generation estimates should be revised
in view of good monsoon & heavy snowfall.
Response of PSEB
No response
View of the Commission
Thermal generation is estimated by the Commission on the
basis of availability of the generating units after taking annual maintenance
into account. In the case of hydel generation, estimates are based on the
average of the last 3 years actual generation. These figures are firmed up in
review on the basis of actual generation reported.
Issue
No.43: R&M Expenses, A&G Expenses etc.
Demands of
the Board on R&M expenses, A&G expenses, interest & finance
charges, depreciation, RoE are unjustified and should be allowed on the basis
of regulations of the Commission & methods already approved. Board’s debt
equity ratio is 86:14 against the statutory requirement of 70:30. In line with
ATE judgment, Board be directed to
determine category-wise cost of supply.
Response of PSEB
No response.
View of the Commission
R&M expenses, A&G costs and interest & finance
charges are being allowed as per Regulations of the Commission taking an
average increase in assets on the basis of last three years and not on
projections submitted by the Board. ROE has been allowed as per past practice
of the Commission.
Issue
No.44: Formats
The formats 1, 1A, 1B and 1C
attached with the petition are not in accordance with the tariff regulations.
Further, details of no. of consumers, connected load, energy sales etc in
respect of certain categories has not been provided. Month wise agriculture
consumption data as per sample meters for different years has also not been
given. Board be directed to file separate petition for Generation,
Transmission,
Response of PSEB
No response
View of the Commission
The Board has subsequently supplied information as per
performae prescribed in the Tariff Regulations. If required, such information
can, even at this stage, be shared with the objector. The Commission in its
Tariff Orders is determining separate tariffs for generation and transmission
in addition to fixing wheeling charges and open access charges.
Issue
45: Retrospective Charges
No Tariff Order can be issued with retrospective
effect. A copy of the Tariff Order is required to be served to the effected
persons particularly to objectors.
In the rejoinder, the
objector has reiterated its objection.
Response of PSEB
The matter is a
prerogative of the Hon’ble Commission.
View of the Commission
Refer
to objection no.11, issue no.5.
Objection
No.14: Induction Furnace Association of
The objections filed by the objector and the
rejoinder are same as filed by APEX Chamber of Commerce and Industry (Punjab),
as detailed under objection no. 13 above. Accordingly, View of the Commission
in the specific issues is the same. The same may be referred to.
Objection
No.15: National Electricity Consumers Association
The
objections filed by the objector are same as filed by APEX Chamber of Commerce
and Industry (
Issue
No.1: Tariff
Tariff of any category may not be
enhanced.
Response
of PSEB
No response.
View
of the Commission
Refer
to objection no. 6, issue no.1.
Issue
No.2: Subsidy to SP & MS category
In view of the provision in the Tariff
Policy that the Government has the option to levy Electricity Duty as a
substitute of cross subsidy for giving subsidy direct to consumers. SP & MS
category be added in subsidized class because of negligible growth.
Response
of PSEB
No response.
View
of the Commission
Providing subsidy to any class of
consumers is the prerogative of GoP.
Objection
No.16: Laghu Udyog Bharti
The objections filed by the objector are same as
filed by APEX Chamber of Commerce and Industry (
Issue
No.1: SP Category
Load criterion for SP category be
changed from 20KW to 100 KW and considered a subsidized class.
Response
of PSEB
No Response
View
of the Commission
This is not a tariff related issue. The
consumer is free to approach the Commission separately.
Objection No.17: Northern Railway
The issues pertaining
to cost of supply, penalty for exceeding
contract demand, higher tariff as compared to tariff of central generating
stations, time bound revision of contract demand, power factor
incentive/surcharge, simultaneous metering of maximum demand, incentive for
timely payment, rebate for newly electrified routes/sections, change of tariff
category for domestic consumers, rebate for maintenance and operation of
distribution net work, minimum charges for supply on rural feeders, payment
through single bill, time for release of
new connections/enhancement of load and meter testing charges are the same as
taken up by the objector in the ARR for FY 2009-10 and the views of the
Commission, after due examination afresh, are the same as expressed in that
Tariff Order. Other issues are dealt with hereunder:
Issue No.1: Traction Tariff
Northern Railway has been
making timely payment, drawing uninterrupted power supply round the clock, and
is contributing negligible T&D losses into the system. So, existing tariff
rates @Rs 5.12 per unit for traction is not justified as projected cost of
power purchase for PSEB for FY 2010-11 s only Rs 3.17 per unit which has
reduced by 25 paisa as compared to last year’s cost of Rs.3.42/unit.
Existing traction tariff @
Rs 5.12 per unit is much higher than HT tariff @ Rs 4.36 per unit. It is in
violation of directives of Ministry of Energy not to charge railways at a rate
higher than HT industry and quoted the Appellate Tribunal of Electricity (ATE)
judgment dated 28.11.07 in case of Northern Railway v/s UERC in appeal No. 219
of 2006.
Response of PSEB
Fixation of Tariff is a
prerogative of the Commission. However, the same should be considered in light
of the financial health of the Board and its inability to meet its ARR with
even the existing tariffs as is evident from the revenue gap projected by the
Board.
View of the Commission
The Commission had in the past observed that neither peak
load restrictions nor weekly off days nor normal power cuts are applicable to
Railway Traction. Thus, the quality of service rendered to the railways is far
better as compared to other consumers of the Board. Moreover, the load of
railways fluctuates considerably and also generates harmonics which adversely
affect the system. In the circumstances, the Commission even now believes that
there is sufficient merit in charging higher tariff to this category.
Issue No.2: T&D losses
T&D loss for FY 2010-11
should be less than 18% in line with recommendation of Abraham Committee as
PSEB has already achieved a T&D loss level of 19.92% in FY 08-09. More than
10 Lac AP consumers are unmetered and forms major chunk contributing to T&D
losses, so it should be brought into metering net to reduce T&D losses.
Response of PSEB
No
response
View of the Commission
The Commission has fixed a new T&D loss reduction
trajectory for 2010-11 to 2012-13. Also refer to para 4.2. As regards metering
of agricultural connections, refer to objection no.8, issue no.7.
Issue No.3: Employee cost
The employee cost of the
Board is one of the highest in the country. As per ATE order dated 26.05.2006,
performance linked incentive is the requirement of the day to improve low
productivity of PSEB employees. Urgent steps need to be taken to reduce and
right-size the Board’s staff strength and reasonable employee cost should be
allowed.
Response of PSEB
No response
View of the Commission
Refer to objection no.3,
issue no. 4.
Issue No.4: Revenue gap
Revenue gap of Rs.6575
crore for FY 2010-11 should be supported by Government subsidy and tariff of
genuine consumers like railways should not be hiked. Tariff should be based on
cost of supply to railways & at a level lesser than the tariff for HT
Consumers.
Response of PSEB
No
response
View of the Commission
Funding
of the revenue gap subsidy is prerogative of GoP. The Commission takes all
relevant factors into account in determining tariff applicable to different
categories of consumers.
Issue No.5: Implementation of MYT frame
work
As
per Tariff Policy, the multi-year tariff (MYT) regime is to be adopted from
1.4.06 and review after three years in 2009-10. The same has not been done.
Response of PSEB
No
response.
View of the Commission
Refer to objection no.13,
issue no.4.
Issue No.6: Metering for Railway
Traction
Meter for railway traction
should be provided at traction substations instead of line substation to minimize
line losses.
Response of PSEB
In case of railway
traction, a dedicated line is provided to railways, which is normally very
short in length. Hence, the metering at the PSEB grid substation is justified.
Moreover, if there is any theft/loss of energy in such a dedicated line meant
for railways, the responsibility for the same lies with the railways.
View of the Commission
Despite considerable effort by the Commission, the Board has
been unable to supply complete information in this respect. The Commission
intends to suo-moto take up this issue as a petition and decide on its merit in
a time bound manner.
Issue No.7: Alternate supply
arrangement for traction and load violation charges
In case of supply failure
from PSEB, the instances of maximum demand exceeding contract demand due to
feed extension of adjacent
Response of PSEB
PSEB believes that the
overdrawal of power on account of the aforementioned reasons is a business risk
and needs to be borne by Railways. In case of overdrawal, it may be a case that
PSEB has to procure power under UI mechanism or it has to curtail load of other
consumers to supply the power to the traction substations which may have some
commercial liability on PSEB. Imposing the penalty charges is a kind of
indemnification of PSEB expenses to cover such risks which may arise on account
of operations of Railways.
View of the Commission
Same
as issue no.6 above.
Objection No.18: Ranjeev Steels Pvt. Ltd.
The
objector has raised only two issues pertaining to HT rebate and power factor
incentive which are similar to those already dealt with in objection no. 4
&10 at issue no.2&3 respectively. The same may be referred to.
Objection
No.19 & 31: PSEB Engineers’ Association
Issue No.1: Recovery of Cost of Service
The
financial parameters contained in the ARR reflect the progressively
deteriorating financial health of the Board whereby leading to non achievement
of the objectives of the Electricity Act 2003, NTP and
Response of PSEB
The
suggestions may be appropriately considered by the Hon’ble Commission.
View
of the Commission
Undoubtedly, one of the objectives of the Electricity Act
2003 is to ensure that tariffs are reasonably set at such levels as to make
electricity generation, transmission and distribution entities viable. However,
the Act, National Tariff Policy and National Electricity Policy make it equally
incumbent for such entities to perform efficiently in accordance with accepted
norms and standards. In the interests of consumers, disallowances become
inevitable when their performance remains sub-optimal. An important issue
concerning the financial health of the Board relates to its mounting debt on
which GoP needs to urgently address, possibly by financial restructuring.
Issue No.2: Capacity Addition
The Commission
should formulate a road map/trajectory for capacity addition including setting
up of a nuclear plant since power purchase from outside is one of the largest
component in the ARR. The Board is not taking up generation projects in state
sector as envisaged under clause 5.8.2 of NEP on the ground that sufficient
funds are not available for equity investment. The Commission may direct the
Board to execute the Gidderbaha project for departmentally.
Response of PSEB
PSEB
appreciates the concerns of the Association and submits that the delay in
implementation of the projects is on account of uncontrollable parameters viz.
allocation of land, fuel linkages etc. The status update of the plants which
are to be installed on BOO basis is given in the table below:
|
Name of Project |
Awarded to |
Year of Award |
Capacity (MW) |
Current status |
|
Talwandi Sabo |
M/s Sterlite |
Sep 2008 |
1980 |
Work in progress |
|
Rajpura Thermal Power Plant |
M/s L & T |
Jan 2010 |
1320 |
PPA signed |
|
Gidderbaha |
- |
- |
2640 |
Issues of coal linkages |
|
Goindwal Sahib TPS |
GVK |
|
540 |
Work in Progress |
View
of the Commission
The Board is being asked to prepare a medium and long term
strategy for capacity additions not only to overcome the current deficit but
also to ensure that there is no mis-match between supply and demand in the
future. The Commission will also suitably advise GoP in this regard.
Issue No. 3: Review petition to be made available
to public
The Board be
directed to place on its website and make public the review petition filed by
the Board before the Commission against the Tariff Order of 2009-10.
Response of PSEB
A copy of the
said review petition is already placed on the website of the Board.
View
of the Commission
The Board has made the information available by placing the
review petition on its website.
Issue No.4: AP Consumption for 2007-08 &
2008-09
The
Commission on the basis of field study has reduced the AP consumption by 11.25%
for 07-08 and 10.2% for 08-09. The methodology adopted by the agency to
determine AP consumption has many short comings. The Commission is requested to
finalise long and short term methodology for calculation of AP consumption in
consultation with the Board.
Response
of PSEB
The Board
agrees with the views of the Association and requests the Hon’ble Commission to
kindly consider the same.
View
of the Commission
The objective of the Commission is to make a more accurate
estimation of AP consumption and towards that end is working in consultation
with the Board.
Issue No.5: Fuel cost norms during trial run of
unit
The procedure of working out fuel cost for 2008-09 for Lehra Mohabbat as
Rs.2979 crore on the basis of applying SHR norms on infirm power is incorrect.
Instead of taking the fuel cost as Rs.190 crore it should be Rs.268 crore as
taken by the Board for infirm generation
of 1168 MU (before CoD) for unit-III of Lehra Mohabbat.
Unit-IV
scheduled to achieve COD on 12/09 has not been commissioned so far. So the presumed energy generation of 575 MU
by the unit need to be reviewed.
Response
of PSEB
The Board agrees with the views of the Association and requests the
Hon’ble Commission to consider the same
View
of the Commission
The Commission has calculated the fuel cost of GHTP in
accordance with applicable CERC norms. Unit-4 of GHTP has been commissioned in
January 2010 and any deviation in generation will be taken into account at the
time of review. As infirm power generated by unit-4 of GHTP has been consumed
within the state, there appears to be no rationale for that power to be priced
at UI rates. On the other hand, fuel costs for the generation of that power
have been allowed to the Board.
Issue
No.6: Relaxation in operational parameters
As per the NTP, in case the operations have been much below the operating
norms for many years, relaxed norms be fixed and a transition path over the
time be drawn for achieving the prescribed norms. The same may be considered by
the Commission for the Ropar Thermal Plant, which is not able to meet the SHR
norm 2500.
Response
of PSEB
The
Commission is requested to kindly consider the request as the same is in line
with the submission already made before the Commission in the ARR petition.
View
of the Commission
There does not seem to be sufficient justification for
relaxing SHR norms of GGSTP as the same have been adopted by CERC on the basis
of a detailed study undertaken of plants similar in most respects to those of
the Board. Attention is also invited to the Commission’s Order dated 16.4.2010
in petition no.23/2009.
Issue No.7: Efficiency improvement of thermal
plants
The principle adopted by the Appellate Tribunal for Electricity in appeal
86 and 87 of 2007 needs to be adopted for PSEB also. However, for efficiency
improvement, services of NTPC, which has a full fledged R&D organization
including a Cell for efficiency improvement instead of CPRI as suggested by the
ATE, should be utilized.
Response
of PSEB
PSEB has plans to undertake R&M of its old units. Post implementation
of such R&M measures, the performance of the units is likely to improve.
However, the suggestions may be considered by the Commission in near future, if
required.
View
of the Commission
R&M of old plants is capital intensive and experience in
the case of GNDTP has not been entirely positive. In case NTPC provides
services for efficient improvement of thermal plants on a more economic basis,
the Board will be well advised to consider this alternative.
Issue No.8: Quantify power cuts
The Board should specify power cuts in MUs during 2008-09 with details of
consumer categories affected. Similarly for 2009-10, actual quantum of power
cut for the period of April to December, 2009 and the projections for 2010-11
should be provided.
Response of PSEB
It may not be practically possible to provide category wise power cuts in
MUs as the supply to consumers is at times from mixed feeders. Moreover,
compilation of such data if required from the purpose of this ARR may take a
longer time to be integrated since the same needs to be collected from all
respective zones.
Regarding the payment of compensation to industries for their captive
generation, PSEB submits as follows:
a. It is the endeavor of PSEB to ensure round the clock power supply to its
consumers. Normally, one day supply cut in a different weekly off day is
imposed on Industry with a view to stagger the industrial load evenly on all
week days.
b. However, during the paddy season, due to sharp increase in demand, the
otherwise normal one weekly off day need to be enhanced to bridge the gap
between demand and supply. The paddy months of the year 2009 experienced
continuous shortfall of rains and the paddy transplantation and subsequent
watering remained totally dependent on tube well irrigation. There was a
deficit rainfall of 36% in the State during the period from June 09 to
September 09. In view of such conditions, staggered weekly off days were enhance
to three days in a week in a certain period.
c.
It may however, be appreciated
that whenever the demand was lower on account of good rainfall and/or favorable
grid conditions, the additional weekly off days were relaxed.
d. Further, while requisitioning the power connection and entering into
agreement with PSEB, the consumers agree to restrict / regulate the supply as
per directions of PSEB thus making itself fully aware of the implications of
power cuts/power regulating measures. Therefore, no cause of compensating the
consumers arises for such uncontrollable factors confronted by PSEB.
View
of the Commission
Projections of power cuts proposed to be imposed in 2010-11
may not be very realistic as there are likely to be variations both on the
demand and supply side which can affect the quantum of power cuts either way.
Issue No.9: Details of assets not commissioned and
prior period expense
PSEB to provide summary of assets not commissioned in 2008-09 due to
which the depreciation got reduced by Rs.28 crore. PSEB should also provide
detailed break-up of Rs.107.6 crore of prior period expense.
Response
of PSEB
The basic contention of difference in depreciation claims
lies in the fact that capitalization estimates for 2008-09 were submitted envisaging
investments that are likely to happen in several schemes (which have been shown
in Form-21 prescribed by the Hon’ble Commission). In practical terms, it is
likely that some of the schemes may not have actually fructified on accounts of
several reasons within/out of the control of PSEB and therefore the
depreciation amount is likely to differ and the same holds true for any other
utility as well.
View
of the Commission
There is need for instituting procedures that will more
accurately assess the value both of additional assets that get commissioned in
a particular year and others where written down value has reached a level where
it is no longer to be taken into account. The Commission intends to separately
take up this matter with the Board. Details of the prior period expenses are
available in the audit report for the relevant year.
Issue No.10: Assessment of Energy Demand
For realistic assessment, the data for metered
sales should include estimates of energy that would have been sold had there
been no power cuts. The Board should give estimates of power cuts (in MUs) to
be levied on various categories of consumers in the ensuing year.
Response of PSEB
The projection of energy demand is made on a
CAGR basis which smoothens the increase/decrease in demand on a year to year
basis. The energy balance submitted by PSEB shows that the demand projected on
the CAGR basis is matched against the supply sources and any shortfall in the
supply is envisaged to be met through short term purchases. PSEB envisages that
levy of power cuts is decided on a real time basis, subject to actual rainfall
during the year, capacity addition by CGS stations and availability of
competitive power on short term basis. PSEB is trying to tap the available
competitive power sources to supply power on long term basis and envisages that
power cuts be minimized to the extent possible.
However, it is submitted that the incremental
factor based on CAGR may be considered by the Commission.
View of the Commission
The Commission in its
tariff orders approves the energy sales and matches the same with the energy
available after factoring in the T&D loss. In case of any shortfall, the
Commission also approves the power purchase through short term purchases. The
unscheduled power cuts cannot be accurately projected for the ensuing year. The
Commission takes care of increase/decrease in the energy sales at the time of
review/true up.
Issue No.11: AP consumption for 2009-10 &
2010-11
a) AP consumption for 2009-10 (RE) is almost the same as actuals of
2007-08 whereas the growth in the first six months of 2009-10 as compared to
the same period 2008-09 has been 14.36% (not 12.72% as reported in the ARR).
Similarly, the projected AP consumption for 2010-11 is on lower side.
b) The criteria for reduce AP consumption in the
previous years should not become a benchmark for the future and in case PSEB
implements the directives of the Commission then there is no ground to impose
any cut on the AP consumption.
Response
of PSEB
a) PSEB has already explained the
detailed rationale for projecting the AP sales for the ensuing periods. PSEB
has not considered any abnormality in sales during the past years and has assumed
a normal monsoon for the purpose of projections. However, any incremental
factor may be considered by the Commission as deemed appropriate.
b) PSEB appreciates the argument of the Association and
requests the Commission to consider the same. However, in this regard PSEB
submits that even for the time in which PSEB is implementing the directives of
the Commission, a considerate view be taken on the AP sales submitted by the
Board.
View
of the Commission
Refer to paras
3.2.3 & 4.1.3.
Issue No.12:
Theft and T&D losses
Metered energy
sales as a percentage of energy input has stagnated since 2003-04 whereas the
AP consumption has increased by around 80.12%. Also the energy input has
increase only by 38.51% only. This is an indicator of rampant theft of
electricity. Monthly T&D loss reduction targets may be specified and
carefully monitored by the Commission. T&D losses for 2010-11 should be
fixed as 20% based on actual T&D losses and AP consumption for 2008-09.
Response
of PSEB
PSEB interprets
the aforementioned statistics in a different manner. It may be appreciated that
the ratio of metered sales has remained constant whereas the AP sales have
increased significantly despite the fact that there has not been a commensurate
increase in the energy input. The same suggests that on account of the increase
in sample meter database for AP consumers, regularization of connections under
VDS the AP consumption is getting reflected on a more accurate basis. PSEB
feels the importance of metering the AP consumers and is actively pursuing the
directives of the Commission towards such metering. Regarding the theft of
electricity, PSEB is taking adequate measures in this regard and details of
units booked under such cases have already been provided in the tariff
petition. Regarding the setting of monthly loss reduction targets, PSEB
understands that implementation of IT interventions, capital expenditure,
booking of thefts etc., is a time consuming process. Realization of potential
benefits from such activities can be assimilated in a broader time frame and
not on an immediate basis. Therefore, it may not be feasible to have monthly
targets for loss reduction.
View
of the Commission
Theft of electricity definitely needs to be tackled on a war
footing. However, the Commission has been repeatedly observing that the
enforcement activities of the Board would be more focused and effective if
energy audits at distribution level are regularly undertaken. Monitoring of
T&D loss reduction on monthly basis may not be feasible in so far as the
Commission is concerned. However, the Board could consider and undertake an
internal review on this basis if the same is practicable.
Issue No.13: CoD of Lehra Mohabbat unit IV
a)PSEB should provide correct date of
b) CERC norm for tariff period
2009-14 is 1 ml/kWh for specific oil consumption and 2500k.cal./unit for SHR.
However, for units to be commissioned after 1.4.09, SHR would be 6.5% above the
value of designed SHR. Since at present LM unit IV has not commissioned, SHR
norm of 2500 could be applied after CoD.
c) The fuel cost per unit for Lehra Mohabbat Unit-IV for 2009-10 as shown
by the PSEB is incorrect as the infirm energy rate has to be higher than the
firm energy rate.
Response of PSEB
a)The
b) Any specification of technical norms for the generating
stations should focus on the inherent issues faced by stations. For example,
even the new stations may not be able to provide the desired technical
efficiency on account of design aspects, quality of coal (ash content, sulphur
content), and quality of workmanship by the OEM etc. These issues must be examined
on the basis of prudence and SHR for any station may then be considered based
on such ground realities. It may not be advisable to follow such idealistic
norms which may not comprehend to the ground conditions prevalent in the state.
c) PSEB has been operating its units efficiently which has
lead to reduction in the overall variable cost of the station. The key
difference is the difference between actual SHR and the normative SHR which has
lead to the increase in variable cost calculated on the basis of normative SHR
post the commissioning of the unit.
View
of the Commission
a) The Commission notes that the GHTP Unit-4 achieved CoD on
25.1.2010.
b) The designed SHR of
the unit is 2241 Kcal/KWH. The Commission has taken SHR of 2500 Kcal/Kwh for
GHTP Unit-4.
c) Refer para 3.8.
Issue
No.14: Assessment of energy availability
The Commissioning schedule of various
projects is not envisaged in the time frame as considered by PSEB and needs to
be revised. Similarly, the power purchase cost of central stations and gas
based generating plants needs to be re-determined on a realistic basis.
Response of PSEB
PSEB has submitted the information to
the best of its knowledge and has relied on the
View
of the Commission
Power purchase projections of the Board have, by and large,
taken into account the commissioning schedule of various projects from which
energy is to be received by the Board. The cost of power from central stations
is adopted from the actual bills raised and is subsequently firmed up in
review.
Issue No.15: CERC Tariff regulations 2009-14
CERC regulations
2009-14 would escalate annual fixed charges by about 5%. Thus the Board should
work out annual fixed charges of the central generating stations based on these
new regulations by escalating annual fixed charges of 2008-09 by 5%.
Response of PSEB
No response
View of the Commission
The Commission allows for variation,
if any, in the fixed costs of Central Generating Stations at the time of
review/true up.
Issue No.16: UI charges and power purchase for
2008-09
Additional
UI charges of Rs.1384.44 lac paid by the
Board during 4/09 to 12/09 for purchase of power below 49.2 Hz, which is in
violation of IEGC, transform to 470.9 LU Rs. 2.94/unit.
Details of cost
and quantum of power purchased through all the traders be provided by the
Board. Similar details for the period from April to Dec.2009 should be
provided.
Response of PSEB
The board has submitted the average
cost of power purchase from trading companies in the ARR submission. PSEB
submits that power purchase from traders comprises of several transactions for
different intervals and the price of the power varies for power purchased at
different times in a day. Rather than providing such detailed submission, the
Board has integrated all such transactions and has submitted the information in
a more meaningful manner which may be considered for the purpose of the ARR.
View
of the Commission
The information submitted by the Board in respect of power
purchases is sufficient for the purposes of examining the ARR. The payment of
additional UI charges to the extent of Rs.1384.44 lac does not adversely affect
the consumer as the average cost at which power is purchased from traders has
been capped. To the extent that the Board has suffered avoidable loss through
purchase of power at very high cost, the matter needs to be inquired into and
responsibility fixed therefor.
Issue No.17: Employee cost
· PSEB should give
the detail of vacant posts of technical nature and for hydel and thermal
categories.
· Fill PSEB’s quota of posts vacant in BBMB.
· Provide training to engineers and technical
staff to fulfil the requirement under Electricity Rules, 1956.
·
Provide requisite
technical staff for new grid substations.
Response of PSEB
· All prescribed
formats pertaining to the filing of ARR petition have been submitted
by the Board. However, should there be a need to submit the desired information
for the purpose of this ARR; the same may be suggested by the Commission.
However, compilation of such information is a bit time consuming as details are
to be integrated from all relevant field offices.
· PSEB will consider the suggestions of
the Association to fill vacant positions in BBMB.
· No response.
·
Regarding the paucity of adequate manpower, PSEB submits that it
is currently considering the report of M/s PWC and based on the final report it
will undertake adequate steps to rationalize the manpower deployment in various
departments of the Board. However, PSEB is concerned for the recovery of
employee expenses which are already considered to be higher by the Commission.
View
of the Commission
The Commission presumes that the Board takes all steps
necessary for efficient cadre management, mans its installations and provides
in-service training to its personnel. In doing so, it is crucial that the Board
applies current man power norms in working out its personnel requirements and
take steps to right-size its staff strength in the short and medium terms.
Issue No.18: Capitalization of assets
PSEB should
provide details of capitalization of thermal assets worth Rs. 1298.75 crore
(Lehra Mohabbat Unit
Response of PSEB
The amount of capitalization against Lehra Mohabbat Unit
The envisaged capitalization for Lehra Mohabbat Unit IV is
Rs 1065.53 crore and remaining amount pertains to other assets capitalized
during the year.
As regards capitalization details of T&D assets, PSEB
submits that it is difficult to provide the actual capitalization figure during
the year as the same is reconciled only at the end of the financial year.
View
of the Commission
The requisite information has been
furnished by the Board.
Issue No.19: Unjustified adjustment of Subsidy
against long-term loans
The Commission
should
In addition, the
Commission should also direct GoP to clear arrears related to power subsidy for
2009-10, which is presently Rs.1038.57 crore.
Response of PSEB
PSEB appreciates the suggestions of the
consumer and would request the Hon’ble Commission to exercise its power under
the Electricity Act to provide appropriate directives to the concerned
stakeholders.
View
of the Commission
The Commission has already held that the question of
adjusting loans against payment of subsidy is an issue that is to be mutually
settled between GoP and the Board. The Commission sees no reason to change its
position. As regards arrears of subsidy payable to the Board, GoP has since
cleared the same even though it is by recalling its loans to the Board.
Issue
No.20: Return on Equity
The RoE claim of PSEB (23.48%) is
justified only when PSEB is making profit and is paying the tax on such profit
at a rate of 33.99%. In a loss situation ROE of 15.5% is justified instead of
14%.
Response of PSEB
PSEB understands that the CERC
Regulations clearly specify that grossing up is to be done with the tax rate as
applicable to the utility irrespective of the fact that whether the utility is
paying the actual tax or not. PSEB submits that it is liable to pay a tax rate
of 33.99% and not the
View
of the Commission
Refer to para 3.16.
Issue
No.21: Capital expenditure
a) PSEB should explain the rationale
for considering the proposed expenditure of Rs 600 crore on Gidderbaha project
as part of the ARR. Also, it needs to be confirmed that whether the said
project is being executed by a private party or by PSEB itself.
b) Expenses of Rs 600 crore have been
projected for Ropar Gas based project. Details of Fuel/ Gas supply agreement
and Gas Transmission Agreement should be provided.
c) The board should safe-guard against
the potential delays in the R& M work of Bathinda Unit III & IV awarded
to BHEL who has a track record of delaying the projects.
d) The Board should give status
regarding Lehra Mohabbat stage III.
Response of PSEB
a) It is submitted that Gidderbaha
Power Limited (GPL) is a company wholly owned by the Board created for
developing the power project on BOO basis. The Board has been drawing loan for
investing in GPL to meet its capital expenditure requirement for the
acquisition of land and other related activities. The same is reflected in the
Board’s account till the time the company is transferred to the selected
bidder. However, the bid process for award of the GPL is getting delayed on
account of delay in getting coal linkages.
b) The order to execute 1000 MW Ropar
Gas power Plant at existing premises of GGSSTP Ropar on
c) PSEB will consider the suggestion of
the Association.
d) The development of LM stage III is
under consideration by PSEB.
View
of the Commission
a) Refer to para 4.13.
b, d) The requisite information has
been furnished by the Board.
c) The Board may ensure that there is
no delay.
Issue
No.22: Interest & finance charges
Reason for increase in expenses on the
following accounts for 08-09 w.r.t. 07-08 should be explained as per specified
table:
a.
Interest
on borrowing for working capital
b.
Cost
of raising finances
c.
Arranger
Fee for non-
d.
Other Charges
Response of PSEB
|
Parameter |
2008-09 (Rs.crore) |
2007-08 (Rs.crore) |
Response from PSEB |
|
Interest
on borrowing for working capital |
569.54 |
365.80 |
The increase is on account of disallowances in expenses by
the Commission, delay in refund of interest expenses by the Government, delay
in release of subsidy by Govt. of Punjab and adjustment of Govt. loans
against subsidy. |
|
Cost of
raising finances |
6.80 |
0.10 |
PSEB had issued bonds to raise around Rs 315 crore in
2008-09. For the same, a guarantee fee of Rs 6.30 crore was payable @ 2% of
the amount raised. |
|
Arranger
Fee for non- |
1.57 |
0.00 |
PSEB had issued bonds in 2008-09 whereas in 2007-08, no
such bonds were issued. |
|
Other
Charges |
13.87 |
7.10 |
There had been a stamp duty of around 2% which was booked
under other charges. |
View
of the Commission
The requisite information has been
provided by the Board.
Issue
No.23: Charges for UI drawl to be borne by Government
No power cuts in the months of April 09
and May 09 were at the behest of the Govt should be confirmed. In case yes, the
charges for UI drawl (Rs 5.93 crore) needs to be borne by the Govt.
Response of PSEB
During the months of April 09 and May
09 (Election Period), PSEB purchased 2241 MUs of power from all sources at an
average rate of Rs.2.42 per unit. Out of the same, purchase of 170 MUs was
exclusively made from traders during these two months at an average rate of
Rs.4.20 per unit. Besides, bulk of power purchase (traded power) of 138 MUs was
made through traders on the basis of long term agreement executed with them.
The quantum of short term power purchase was only 32 MUs. Evidently, the power
purchase through traders is meager, at a reasonable rate and need based only.
In comparison, PSEB purchased 2045 MUs of power through traders during the
paddy months of June-09 to September-09 at an average rate of Rs.5.73 per unit
in order to meet the demand of agriculture sector. Therefore, the quantum of
power purchase through traders during April -09 and May-09 was barely 8% of the
purchases made during paddy months of June to September-09 and only 7% of total
traded power purchased from April -09 to December-09 (2425 MUs).
The fixation of
month wise quota for power purchase fall under the purview of the Hon’ble
Commission. It would not be out of place to mention here that the Hon’ble
Commission has already imposed a cap on excess power purchase (above approved
quantum) from traders at the rate of 402.46 paise/unit for the year 2009-10 in
the Tariff Order dated 08.09.09.
View
of the Commission
The Commission notes that purchase of power in the months of
April and May 2009 have been effected at a rate well below the average cost of
supply.
Issue
No. 24: Issues relating to subsidy
The directive of State Government to
provide subsidy does not remain operative in case of default in payment of
subsidy. Considering the default in payment of subsidy by the Government in
time, the Commission should frame specific Regulations regarding payment of
subsidy. Moreover, the Commission should advise the State Government that loan
is not to be recalled and subsidy is not to be adjusted against loan.
Response
of PSEB
The aforementioned issue is to be
considered by the Hon’ble Commission.
View
of the Commission
The Commission in its Order dated 27.5.2008 passed in the
matter of subsidy (to all categories of consumers) for neutralizing the
increase in the tariffs for the year 2007-08 held that GoP is within its rights
to call back overdue loans to the Board if it choses to do so and that the
issue is to be mutually resolved by GoP and the Board.
Issue
No. 25: Delay in implementation of new projects
There has been a severe delay in
implementation of new projects in the state. While much reliance is given to
projects awarded to private players, however the roadmap for implementation of
the same needs to be defined and suitable measures taken to ensure that no
further delay happens on their implementation.
Response
of PSEB
The delay in the projects is largely on
account of uncontrollable factors. Typically, in case of Gidderbaha, the RFQ
was released to the bidders as back as Oct 2008. However in the absence of coal
linkages, the bid process for award of project has not been completed. PSEB is
making efforts to expedite the availability of basic inputs to award the
project as early as possible
View
of the Commission
Implementation of projects that have been awarded need to be
closely monitored with a view to ensuring timely commissioning.
Issue
No.26: Roadmap for capacity addition
The Commission may suggest roadmap for
capacity addition by the Board in the State sector. Also, there needs to be
some head start towards implementation of nuclear plants in the State.
Response
of PSEB
The suggestions may be considered by
the Commission considering the practical difficulties faced in implementation
of other projects. However, PSEB is in the process of installing new generating
stations on BOO basis. The detail of these plants with status update is given
in the table below:
|
Name of Project |
Awarded to |
Year of Award |
Capacity (MW) |
Current status |
|
Talwandi Sabo |
M/s Sterlite |
Sep 2008 |
1980 |
Work in progress |
|
Rajpura Thermal Power Plant |
M/s L & T |
Jan 2010 |
1320 |
PPA signed |
|
Gidderbaha |
- |
- |
2640 |
Issues of coal linkages |
|
Goindwal Sahib TPS |
GVK |
|
540 |
Work in Progress |
View
of the Commission
Refer to issue no. 2 above.
Issue
No.27: R&M of GNDTP Units
Details of safeguards taken for timely
completion of R&M of the units-III & IV should be given.
Response
of PSEB
For timely completion of R&M works,
PSEB while awarding the contract to the bidder ensures that the contract
document should have penalty clauses related to the time over runs. Further,
PSEB also takes PERT chart from the bidders for the proposed R&M works and
monitors all the activities as per the activity wise schedule given by the
bidder.
View
of the Commission
In case R&M of Unit 3&4 of GNDTP is undertaken, the
Board needs not only to ensure timely completion thereof but also to ensure
that the contractual terms & conditions adequately take care of situations
where performance parameters are not met subsequent to the completion of
R&M works.
Issue No.28: CoD of Lehra Mohabbat Unit-IV
COD of Lehra Mohabbat
Unit-IV has not been declared yet. CERC Regulations prescribe that infirm power
should be charged at UI rate. Moreover the Regulations for determination of
tariff should be applied only after the declaration of COD.
Response of PSEB
The infirm power supplied by the units is served to the
consumers in the State. PSEB understands that the cost of generation had been
much lower than the UI rate. In case the cost of infirm power is charged at the
UI rate, the same will be required to be recovered through the tariff of
consumers which may not be desirable. There would be no justification for
loading the consumers with a higher tariff.
View
of the Commission
The Commission agrees with Board’s
response where the issue has been sufficiently clarified.
Issue
No.29: CoD of GNDTP Unit-I & II & Lehra
Unit-III
PSEB should provide the Unit
Heat Rate as per contract/order/specification & as per Performance
Guarantee Test and Design Heat Rate and Date of Commercial Operation in respect
of GNDTP Unit-I & II and Lehra Unit-III.
Response
of PSEB
All prescribed formats pertaining to
the filing of ARR petition have already been submitted to the Commission.
However, should there be a need to submit the desired information for the
purpose of this ARR, the same may be suggested by the Commission.
View
of the Commission
The Commission normally insists on receiving information as
per the prescribed proformae.
Issue
No.30: Station Heat Rate for GNDTP
The Commission may allow a margin of
10% on Station Heat Rate Target for GNDTP Unit-I & II units and considering
the previous norms for un-renovated units
Response
of PSEB
For the 10% margin for Bhatinda units, considering the
previous norms for un-renovated units III & IV, the Commission is requested
to consider the suggestion.
View
of the Commission
The Commission has taken the SHR norm of 2825 kcal/kWh for
GNDTP Units 1&2 based on the CERC norms for Tanda TPS for the period
2009-14. In the past also, the Commission has adopted CERC norms for Tanda TPS
in case of GNDTP units.
Issue
No. 31: Energy Audit for SHR Improvement
The Commission may direct PSEB to finalize an
action plan with NTPC for improvement in SHR and other O & M parameters of
the its generating stations.
Response
of PSEB
PSEB will consider the suggestions of
the Association.
View
of the Commission
Refer to issue no.7 above.
Issue
No.32: Long Term PPAs
There had been several instances
wherein the PPA executed by the agencies did not fructify and also where even
the open access was not allowed by the States. PSEB may be directed to secure
the implementation of long term PPAs.
Response
of PSEB
PSEB will consider the suggestions of
the Association.
View
of the Commission
The issues are primarily management
related and need to be taken note of by the Board.
Issue
No.33: Manpower Shortage
There is an acute shortage of manpower
in generation, transmission and distribution segments whereas there is over
staffing at ancillary levels. Employee cost is a cost of historical nature as
the number of employees cannot be reduced by way of VRS etc. those need to be
allowed as per actual in 2010-11. Benchmarks may be suggested keeping the
2010-11 level as the base reference.
Response
of PSEB
The suggestions may be considered by
the Commission.
View
of the Commission
Refer to issue no.17 above.
Issue
No.34: Allocation of Power from NTPC Lara Project
PSEB to clarify a)position regarding
allocation from Lara project b)detail of allocation from other NTPC projects
which NTPC claims that the same has already been given to Punjab, along with
the date of commissioning of the said projects. Further, PSEB may like to follow
up the allocation of power from Lara since any proposal from NTPC is not over
and above the decision taken by PMO.
Response
of PSEB
All prescribed formats pertaining to
the filing of ARR petition have been submitted to the Commission. However,
should there be a need to submit the desired information for the purpose of
this ARR, the same may be suggested by the Commission.
Further, PSEB submits that the Board
has enumerated a list of plants along with the allocation details, from where
the power is envisaged to be sourced in the ensuing years in the ARR petition.
View
of the Commission
The Commission trusts that the Board would take adequate
follow up measures to ensure that power is received from central generating
stations as per its allocated share.
Issue
No.35: Role of State Government
The entire sanctity of the tariff
determination procedure is lost if the Govt. tries to intervene in
implementation of the Commissions’ tariff order using administrative means. Any
roll-back of tariff hike needs to be made public by the Govt. during the
exercise of tariff determination by the Commission and comments/objections of
all the stake holders invited and not after wards.
Response of PSEB
The suggestions may be considered by
the Commission.
View
of the Commission
The Commissions follows the due
regulatory process in the tariff determination exercise. Actions of any
stakeholder in violation of the legal provisions are challengeable in the
appropriate forum.
Issue
No.36: Power factor incentive &Tariff matters
Norms for power factor incentive should
be set near the operating level (about one percent lower) by using suitable
benchmarks for different LS consumers. Further, the Board’s MDI meters
integrate over 30 minutes for obtaining MDI reading; and the energy accounting
of grid including UI is done on a 15 minutes interval. Both need to be aligned. Also the ACD of 30
days is inadequate which needs to be revised.
Response
of PSEB
The suggestions may be considered by
the Commission.
View
of the Commission
For power factor incentive, refer to
objection no.4, issue no.3.
The Commission trusts that the Board
will appropriately consider the suggestions regarding aligning the time
intervals of MDI meters and Grid meters.
Review of Consumption Security (ACD)
has been provided for in clause 16 of the ‘Electricity Supply Code and related
matters’ issued on 29.6.07(applicable w.e.f 1.1.08) wherein the licensee will
review the same after every three years preferably after revision of tariff for
the relevant year as per the methodology provided therein.
Issue
No.37: Estimation of AP Consumption
A detailed submission on the AP
consumption has been made and suggested that the report of the Consultants
cannot be relied upon on account of the inherent errors in the methodology of
calculating the AP sales.
Response
of PSEB
The suggestions may be considered by
the Commission.
View
of the Commission
Refer to objection no.8, issue no.4.
Suggestions by the
objector
It has been suggested that the Commission may issue
directives to the Board with regard to
(i) regulate power cuts on high/low loss feeders (ii) ban overdrawal of UI at
frequency below 49.2 Hz except under critical conditions and also inform the
Commission of such purchase on weekly basis (iii) in case GoP issues directions
for additional power purchase, it should make payment for additional power
purchase upfront (iv) provide feeder-wise losses suitably on its website (v)
maintain minimum stock of key/critical items in its stores (vi) obtain approval
of the Commission for augmenting/de-loading of the critically over loaded Grid
sub-stations & lines and to provide new substations as per loading
conditions (vii) display on website the list of industrial connections held up
due to over loading of sub-stations and formulate regulations for technical
feasibility of release of industrial connections (viii) provide the details of
power purchase through traders in short term on weekly basis (ix) GoP be
advised to develop a system of e-filing of FIRs of theft of energy cases (x) display on website,
a list of defaulters exceeding Rs.50000/- (xi) sign stringent agreement with
BHEL for R&M of Bhatinda unit III & IV to avoid delay in
commissioning (xii) to provide monthly information on the
collection efficiency.
View of the Commission
Some of the suggestions pertain to providing
data/information on the Board’s website. The Board should have no objection in
doing so in the interests of greater transparency. Other suggestions concern
issues that have a bearing on the day-to-day functioning of the Board and it is
for the Board to take a suitable view. Some other issues that might necessitate
the issue of directions to the Board will be separately considered by the
Commission.
Objection No.20: Bansal Alloys & Metals Pvt. Ltd.
The objector has raised only
two issues pertaining to HT rebate and power factor incentive which are similar
to those already dealt with in objection no. 4 &10 at issue no.2&3
respectively. The same may be referred to.
Objection No.21: Vimal Alloys &
Metals Pvt. Ltd.
The objector has raised only
two issues pertaining to HT rebate and power factor incentive which are similar
to those already dealt with in objection no. 4 &10 at issue no.2&3
respectively. The same may be referred to.
Objection No.22: Cycle Trade Union
Issue No. 1: Public notice
Advertisement method of
public notice is a wrong process in the interest of consumers both from PSEB
and PSERC side.
Response of PSEB
The objections is neither
explicitly detailing the manner in which the current process is wrong and not
in the interest of the consumers, nor does it reflect any other alternate
manner in which the same could be made more effective. PSEB humbly submits that
it is abiding by the process finalized and recommended by the Hon’ble
Commission. While doing so, all technical and financial details are duly shared
by the Board. However, in case the consumers can suggest any other manner so as
to make the process more effective, the same may be considered by the Hon’ble
Commission.
View of the Commission
The
public notice is issued to draw attention to the ARR which is otherwise
available on the website and in the offices of the Board. The process is in
line with the nationwide practice.
Issue
No. 2: Increase in tariff
The ARR document of
the Board is based on false and wrong figures and do not show the increase in
tariff and Monthly Minimum Charges for 2010-11. The Commission is requested not
to increase any kind of tariff alongwith MMC of all categories of consumers of
Response of PSEB
PSEB has projected the anticipated annual revenue
requirement and has prayed to the Hon’ble Commission to approve the same. The
final impact on tariff could be ascertained once the Hon’ble Commission, after
applying the prudence check, approves the final Aggregate Revenue Requirement
for the year 2010-11 and further decides the mechanism by which such Aggregate
Revenue Requirement is to be recovered through tariff from the consumers.
View of the Commission
Refer
to objection no. 6, issue no.1.
Objection No.23 & 36: Antarctic Industries Ltd.
The
issues pertaining to deteriorating financial health of PSEB, capping of
expenditure, free units to T/W and other consumers, efficiency of T/Ws,
Depreciation Reserve Fund, interest rate on Govt. loans, working capital loan,
increase in AP tariff, Advantage of own
generation, AP subsidy, excess interest,
Cost of supply, T&D losses, investment plan, Return on Equity, Power factor
incentive/KVAH tariff and Peak load Exemption Charges (PLEC) have been dealt
with in objection no. 12 at issue No.2 to 18 respectively. The
remaining issues are dealt with hereunder. In the rejoinder it has been stated
that the Board is issuing circulars with financial implications without the
approval of the Commission.
Issue No.1: Definition of PIU
There is no explicit
definition of Power Intensive Unit (PIU).
Response of PSEB
The Hon’ble Commission may
kindly provide the same in the tariff order.
View of the Commission
For the purposes of levy of surcharge, arc furnaces,
chloro-alkali units and induction furnaces are deemed to be power intensive
units.
Issue No. 2: HV Surcharge
The HV surcharge of 10% or
17.5% would widen the gap between the tariff and average cost of supply from an
amount of 43 paisa to 75 paisa per unit which would be against the EA, 2003
that prescribes that tariff should gradually reflect cost of supply with
reduction in cross-subsidy. Encouragement through a rebate is fine but the
consumers unable to change over to higher voltage on account of technical
unfeasibility or due to high cost of conversion and high O&M cost should
not be penalized with surcharge. The Commission’s order on surcharge emanated
from an inadvertent omission by the Board to mention about exemption of the
objector from payment of HV surcharge in its ARR application for FY 2004-05. On
the same 11 KV line, PSEB burdens the consumers with 2500
Response of PSEB
The opinion and the
objection raised by the objector has already discussed by the Commission in
detail in the Tariff Order for FY 2008-09. The relevant para has been
reproduced below:
“……..Commission observes
that voltages at which supply is to be given to different categories of
consumers have been specified in the Conditions of Supply since last more than ten years and the
Board was required to release all new connections/additional loads/demands at
the voltage specified in the Conditions of Supply. Therefore there is no logic
in any rebate in tariffs to a consumer who is given supply at the specified
voltage for that category. The Commission also observes that there is a need
for the existing consumers getting supply at a lower voltage to convert to the
specified voltage for benefit of the system and to reduce T&D losses.
However actual conversion of supply voltage of the existing consumers will require
some time. There could also be technical constraints in conversion of supply
voltage or release of a new connection and or additional load/demand at the
prescribed supply voltage which merits consideration…………………”
Also,
“The Commission observes that the reasons given by the Commission in Tariff
Order 2004-05 for levying PLEC on commitment basis still hold good. The
Commission also observes that it is not feasible to measure energy payable at
PLEC rates separately because the same meter would record energy consumption
payable at normal tariff as well as PLEC. Therefore the Commission decides to
continue to charge PLEC on commitment basis……….”
Further, the supply of
voltage for any connection depends upon the nature, quantum and type of load.
New connections at higher voltages are taken by the consumers keeping in view
of their own interest. Accordingly, Board requests the Hon’ble Commission that
such cases should not be considered.
View of the Commission
Levy
of surcharge by the Board in accordance with CC No.66/2007 dated 28.11.2007
issued on the basis of Tariff Orders for the years 2004-05, 2005-06 and 2006-07
and General Conditions of Tariff approved by the Commission was challenged in
the High Court. The High Court upheld levy of surcharge as well as validity of
CC No.66/2007. Thereafter review petition was filed in the High Court in which
it was ordered that the review applicants could approach the Regulatory
Commission in order to establish that Board’s Sale Circular dated 28.11.2007
runs contrary to the Tariff Order dated 30.11.2004 for the year 2004-05 and can
not be given effect to. As a sequel to the Order of the High Court, a petition
was filed before the Commission which was also dismissed.
In
the light of the legal position as brought out above, there is no scope for any
retrospective relief to consumers being subjected to HV surcharge. The
Commission would, however, separately consider the issue and decide on the
continuance or otherwise of the present dispensation.
Issue No. 3: Pro-rata HV Surcharge
The Board had allowed payment of pro-rata HV
surcharge having load above 2500
Response of PSEB
No response
View of the Commission
The
High Court has held that CC No. 52/2004 had become defunct and inoperative
after the Tariff Order passed by the Commission for the year 2004-05.
Issue No. 4: Transformer Capacity
As per the new policy, LS
Consumers should be allowed to install the transformer without any capacity
restriction.
Response of PSEB
Board does not agree with
the consumer’s view of removing the limit on the capacity of transformer
installation because excessive size of transformer will result in unavoidable
losses and also affects the fault level of the system. Therefore, commission
may consider allowing the installation capacity of the transformer up to two
times of the contracted demand in view of the future expansion, if any.
View of the Commission
In para 5.2.4 of the Tariff Order for 2009-10 the Commission
had observed that there is no limit on transformer capacity in case of LS
consumers. The Commission continues to
hold the same view.
Issue No. 5:
The two ways devised by the Board for PLR
timings are not correct as the one through
Response of PSEB
No response.
View of the Commission
The Commission has specified the procedure for working out
violation of Peak Load Hours Restrictions in Annexure-20 appended to Conditions
of Supply approved by the Commission.
Issue No. 6: Power factor for mixed load
Specified minimum power factor for general industry and PIU are 0.9 and
0.95 respectively. In case of mixed loads, there is specified power factor,
which should be fixed at 0.9.
Response of PSEB
No response.
View of the Commission
This matter will be separately
considered by the Commission.
Objection
No.24:
Issue No. 1: Tube well efficiency
PSEB is silent about the pilot project
conducted for improving the efficiency of tube wells.
Response
of PSEB
Technical consultant has been appointed
to collect the field data regarding the efficiency of tube well connections.
The consultants have recently compiled the field data and are analyzing the
same. It is envisaged that the draft report of the analysis when submitted to
PSEB will be shared with the Commission.
View
of the Commission
Refer to objection no.12, issue no.7.
Issue No. 2: Cross Subsidy
As
per the provisions of National Tariff Policy & the Electricity Act 2003,
the Commission has fixed the time frame for elimination of cross subsidy by the
year 2015. However, instead of gradual reduction, cross subsidy burden on objector
has increased from 31 paise to 51 paise in 2009-10. A road map should be drawn
for elimination of cross subsidy by the year 2015. A study of cost of supply of
electricity for different categories be done by PSEB to ascertain average cost
of supply for elimination of cross subsidy.
Response
of PSEB
The aforementioned issue is to be
considered by the Hon’ble Commission. However, in this regard, PSEB has invited
tenders from consultancy firms for conducting the cost of supply study for
various categories of consumers. The inputs of this study can be considered (as
and when finalized) for progressive reduction of cross subsidies in the spirit
of the National Tariff Policy.
View
of the Commission
The Commission has in its Regulations already specified the
gradual reduction of cross subsidy though total elimination of the same is no
longer envisaged in the Electricity Act 2003. A gradual reduction in cross
subsidy in percentage terms has been effected in the previous years. An
increase in average cost of supply will, however, result in increase in cross
subsidy in real terms.
Issue No.3: Limit on subsidized
Consumption
There
should be a limit of consumption by subsidized category beyond which normal
tariff should be charged or the Government should make good of the increased
consumption. Benefit of lowest slab in the domestic tariff should be limited to
consumers who cannot afford to pay for electricity consumption and who restrict
their consumption to 100 units.
Response
of PSEB
The aforementioned issue is a
prerogative of the Hon’ble Commission. However, PSEB feels that if the
suggestion is implemented, it will impact on the consumers whose consumption is
marginally above the 100 units as the consumer will have to pay the tariff at
higher rates for the whole consumption. So this issue of classification of
rich/poor domestic consumers is difficult to manage.
View
of the Commission
Regarding limit of consumption by
subsidized category, refer to objection no. 13, issue no.8.
Regarding benefit of lowest slab in the
domestic tariff, the Commission agrees with the response of the Board.
Issue No. 4: Cost of supply
Burden
of high T&D losses should be passed on to contributing consumers and not on
high voltage consumers as T&D loss in their case is minimal and also tariff
to any category should be in line with its cost of supply.
Response
of PSEB
The aforementioned issue is a
prerogative of the Hon’ble Commission.
View
of the Commission
This could be considered only after data on voltage-wise
losses is made available by the Board who have been directed to ensure early
submission of the same.
Issue No. 5: AP Consumption
More than 50% growth in the last 4
years is incomprehensible and 41% increase in AP consumption from 2006-07 to
2007-08 is unjustified. Also, an increase of 15% in AP consumption projected
for FY 10-11 from actual consumption of FY 08-09 is not palatable. The
consumption at cross-subsidized rates should be frozen as unrestricted
consumption further burden the cross-subsidizing categories.
Response
of PSEB
PSEB has already depicted the basis of
projecting the AP sales in the ARR petition. Moreover, PSEB has submitted its
detailed views on the methodology of AP sales in the petition. It may also be
highlighted that the consumption of power by AP consumers needs to be
correlated with decrease/increase in rainfall, depth of water table and pattern
of crops in the state. Moreover in last four years more number of tube well
connections have been released in the state and load to AP consumers have been
increased under various VDS schemes which has also resulted in more AP
consumption.
View
of the Commission
Refer para 4.1.3.
Issue No. 6: Subsidy
The amount of subsidy payable by the
GoP should not be adjusted against the loan repayments. The interest on working
capital loans on account of delay in subsidy payment should not be charged from
the consumer.
Response
of PSEB
PSEB appreciates the suggestions of the
consumer and would request the Hon’ble Commission to exercise its power under
the Electricity Act to provide appropriate directives to the concerned
stakeholders. The Government should be asked to pay the interest on non-payment
of subsidy for the period of delay and should not adjust the loan against
subsidy. However, the non-payment of such interest should not result in
reduction of interest on actual working capital loans taken by the Board.
View
of the Commission
Regarding adjustment of loans against subsidy payable by
GoP, refer to objection no.19&31, issue no.24. Interest on
delayed/non-payment of subsidy is only to GoP account and not passed on to the
consumers.
Issue No. 7: Re-allocation of
Ranjit Sagar Dam cost
The Commission has dealt with the issue
of allocation of RSD in a partisan manner. The issue therefore may be reopened
and new committee may be reconstituted with consumers’ representative in it.
The same is required because the amount still appropriated to PSEB is as high
as 60%.
Response
of PSEB
The issue under consideration falls
under the prerogative of the Commission and the same may be addressed at the
time of issuing the tariff order.
View
of the Commission
The Commission does not believe that its findings on
allocation of RSD cost is partisan in any manner. In any case, the Commission’s
findings are open to scrutiny in the event of an appeal.
Issue No. 8: Power purchase cost
The cost of power purchased from
outside the state has increased exponentially with no restrictions on quantum
and price. The generation from PSEB owned plants has decreased. Such a trend
needs to be checked.
Response
of PSEB
PSEB has far exceeded its own
projections during FY 2008-09 as submitted in the tariff petition for 2009-10.
Further, PSEB has also been able to achieve the approved generation target set
by the Commission for the said year.
It needs to be noted that despite of
the age of Board’s own stations, PSEB has been able to sustain generation from
the plants through pro-active, consistent and regular maintenance and by
taking- up timely renovation & overhaul of its units.
However, because of the regular
maintenance schedule of the plants, the projected energy availability from the
plants viz., GNDTP, GGSSTP and GHTP (Unit I & II) has been estimated at
lower levels. The details of the R&M work and maintenance schedule has
already been provided in the ARR Petition.
PSEB submits that the increase in short
term power purchase is essentially to meet the power requirements of the State.
Keeping a check on the overall quantum of power may further aggravate the power
crisis in the state, a concern which many of the consumers have already raised.
PSEB understands that the real issue is the availability of cheaper power on
long term basis. In order to arrange for the same, PSEB has been making efforts
to increase its share of in-house generation and has also been tapping the
other Central generating stations for providing power on long term basis. PSEB
has enumerated a list of all such plants from where the power is envisaged to
be sourced in the ensuing years in the ARR petition. PSEB is concerned about
its responsibility of ensuring adequate power supply for the consumers in its
license area and believes that once the power supply from the aforementioned
long term sources gets materialized, the suggested concerns of the consumers
will get addressed automatically.
View
of the Commission
Refer to para 4.8.5.
Issue No. 9: Capacity addition
The average cost of power purchase in
2009-10 is projected as Rs 6.21/unit. Considering that own generation projects
are cheaper, the Commission should issue directives to PSEB for taking up own
projects on a fast track basis.
Response
of PSEB
The landed cost of power purchase in
2009-10 is around Rs 3.63 per unit as per the ARR submission. Besides, PSEB is
actively pursuing the implementation of intra-state generation projects.
View
of the Commission
The Board has opted to add additional generation capacity in
the State on BOO basis. In the case of 1800MW±10%Talwandi Sabo and
1200MW±10%Rajpura Thermal Power Projects, the sites have already been handed
over to the respective lowest bidder. Further-more the Board intends to carry
on with the bidding process for 2400MW±10% Gidderbaha Power Project afresh as
Ministry of Coal, GOI did not provide fuel linkage and consequently the Board
had to cancel the ongoing bidding process. Another project of 540 MW is being
setup by M/s GVK Power (Goindwal Sahib) Ltd. in the State.
Issue No. 10: T&D losses
Any increase in AP consumption (over
& above approved consumption) should be quantified and charged to the
consumers or borne by the Government and not charged to other consumers in the
shape of T&D losses. Further, PSEB should control theft & pilferage and
not charge to HT consumers as theft is not possible at high voltages. T&D
losses, if pegged down to targets fixed by the Commission, shall substantially
reduce tariff and average cost of supply.
Response
of PSEB
PSEB appreciates the concerns of the
consumers; however, it is believed that the issue needs to be addressed by
taking all relevant stakeholders into the purview and sensitizing them towards
the financial health of the Board. PSEB has already submitted the required
information in the prescribed ARR formats in Petition for FY 2010-11. PSEB
requests the Hon’ble Commission to take cognizance of the prevailing
circumstances and issue appropriate directives for all stakeholders.
View
of the Commission
Refer to para 4.2.
Issue No. 11: Employee Cost
Proposed 92% increase in employee cost
is very high and unjustified. Any additional expenditure under this head should
be met by way of internal efficiency improvement or by way of reducing costs
over & above the performance level fixed by the Commission. Increase during FY10-11should be as per WPI.
Response
of PSEB
The items suggested by the consumers
are not dependent on any indices, e.g. the impact of pay revision cannot be
captured by means of escalating the base expenses using an average increase in
indices. Such items need to be considered on actual basis as per the audited
accounts. PSEB has already explained the rationale for increase in such
expenses in detail in its ARR petition.
View
of the Commission
Refer to para 4.9.
Issue No. 12: PLEC
PLEC should be recovered from consumers
who are responsible for increase in demand during peak load hours and not on
consumers who are receiving continuous power. The decision to continue with
these extra charges is arbitrary and required to be removed. PLEC should be
waived off for the continuous process industry who are not responsible for
increase in the peak demand.
Response
of PSEB
•Removing the PLEC may provide a larger
room for variation between demand and supply. The same may result in situations
wherein PSEB has arranged for lower supply in comparison to the demand and vice
versa. Severe mismatches between actual demand and supply of power may endanger
the security and safety of the grid
•During the peak load period, Board
procures power from the short term sources to meet such extra demand, which
often comes at large premiums.
•At the time of peak, the frequency of
the system generally falls and power drawl under such conditions have a
correspondingly higher UI charges. Procurement of power at lower frequencies
may put extra financial burden on the board.
Considering the
above, the PLEC charges need not be removed. Rather, PSEB submits that the
Hon’ble Commission may consider the submissions made by PSEB in the previous
ARR regarding revision in the PLEC rates. PSEB believes that the PLEC rate
needs to be aligned with the current short term power purchase cost which is
around Rs. 7 per unit. Moreover, UI rates have also been increase. In the last
submission PSEB had requested that PLEC may be levied at Rs. 5 per unit over
and above normal tariff rate. It will necessarily be a correct signal towards
the fact that actual cost of such power be charged through tariff which prompts
the consumers to make judicious use of the scarce resources. PSEB requests the
Commission to consider these aspects and revise the PLEC charges as deemed
appropriate.
View
of the Commission
Refer to
objection no. 4, issue no.1 and objection no. 12, issue no.18.
Issue No. 13: Transit Loss of Coal
Transit losses should be restricted
to 0.8% as per CERC norms.
Response
of PSEB
Though the Board is a regulated entity,
all other entities involved in the transportation of coal viz. coal production
companies, railways, contractors etc. are not regulated. They are all bound by
commercial contracts which cannot be bound by the regulatory norms. While every
effort is maintained to bring down the losses through contractual obligations,
however the same should be considered as an uncontrollable factor and the
burden for the same should not be passed on the PSEB.
View
of the Commission
Refer to objection no.3,
issue no.1.
Issue
No.14: Power factor incentive
Power factor incentive is applicable
over PF of 95% for Power Incentive units and general industry get an incentive
over PF of 90%, the same need to be rationalized and made equal for all i.e.
0.25% rebate for every 1% increase in power factor beyond 90%.
Response
of PSEB
The opinion and the objection raised by
the objector has already discussed by the Commission in detail in the Tariff
Order for FY 2008-09. The relevant para has been reproduced below:
“………….The Commission had in its Tariff
Order of 2004-05 observed that incentives should be available for actual
improvement in system conditions and not just for maintaining the status quo.
Accordingly, it had thought it necessary to fix suitable thresholds for
different categories of industries keeping in view their basic inherent
characteristics. It is observed that these findings remain equally valid at
present and thus, consumers where the power factor is inherently higher need to
be distinguished and allowed power factor incentive at improved benchmarks. For
this reason, the Commission does not see sufficient justification for rebates
to be allowed to RT and LS consumers having PIU’s at a power factor of less
than 0.95.”
Further, the Board understands that the
differential power factor incentive is due to various consumers having
different inherent power factor. For example, Induction furnace load by its
very nature is an instantaneous, concentrated and power intensive load which
puts sudden jump in demand on the system. Accordingly, the two differential
values for giving the incentives are reasonable.
View
of the Commission
Refer to objection no.4, issue no.3.
Issue No. 15: KVAH tariff
KVAH tariff should be implemented which
will resolved lot of complications related with tariff.
Response
of PSEB
PSEB is currently analyzing the
feasibility and repercussion of implementation of such tariff on the consumers.
PSEB feels that prima facie the request for introduction of kVAH tariff has
been received from small number of high end LS consumers and consumers having
Induction furnaces, whereas, large number of other consumers have not expressed
any inclination for opting the KVAH tariff. As this matter involves an in-depth
study on the revenue stream, the Board is working on the finer modalities of
the same. Besides, not many reference of implementation of such tariff
elsewhere in the country could be found. It is one of the reasons for the
timeframe of the said study to be prolonged.
View
of the Commission
The Board has been asked to examine the issue and submit
their report in a limited time frame after which the Commission will take a
view in the matter.
Issue
No.16: HT Rebate
HT rebate of 3% for supply at 33/66 KV
has been withdrawn in the tariff order for FY 2009-10, while PSEB saves on
account of transformation and HT/LT distribution line losses. The Order of the
Commission to eliminate HT rebate is unjustified and should be worked out on
the basis of actual T&D losses.
Response
of PSEB
The opinion and the objection raised by
the objector has already been discussed by the Commission in detail in the
Tariff Order for FY 2008-09. The relevant para has been reproduced below:
“……..Commission observes that voltages
at which supply is to be given to different categories of consumers have been
specified in the Conditions of Supply
since last more than ten years and the Board was required to release all new
connections/additional loads/demands at the voltage specified in the Conditions
of Supply. Therefore there is no logic in any rebate in tariffs to a consumer
who is given supply at the specified voltage for that category. The Commission
also observes that there is a need for the existing consumers getting supply at
a lower voltage to convert to the specified voltage for benefit of the system
and to reduce T&D losses. However actual conversion of supply voltage of
the existing consumers will require some time. There could also be technical
constraints in conversion of supply voltage or release of a new connection and
or additional load/demand at the prescribed supply voltage which merits
consideration…………………”
Further, the
supply of voltage for any connection depends upon the nature, quantum and type
of load. New connections at higher voltages are taken by the consumers keeping
in view of their own interest. Accordingly, Board requests the Hon’ble
Commission that such cases should not be considered.
View
of the Commission
Refer to objection no.1, issue no.1.
Issue
No.17: Open access charges
The open access charges may be defined
on per MW per hour basis to promote consumers to procure power from outside the
state through the exchange where the bidding is on hourly basis.
Response
of PSEB
The issue is the prerogative of the
Hon’ble Commission and this aspect may be dealt in the tariff order for
2010-11.
View
of the Commission
The issue is under active consideration
of the Commission and decision is likely to be taken shortly.
Issue
No.18: Return on Equity
The RoE of 23.48% sought by the Board
as against 14% allowed earlier has no justification and should not be accepted.
Response
of PSEB
No response.
View
of the Commission
Refer to paras 2.15 and 3.16.
Issue No. 19: Investment plan –
Tube well connections
PSEB may explain the rationale for
funding the T/W connections as part of its capex plan.
Response
of PSEB
The levy of charges for release of tube
well connections under the normal course (other than OYT) is very minimal and
PSEB is not able to recover the expenses incurred for such release of
connection from the consumers. Accordingly, funds need to be arranged as part
of the capex plan to release such connections which is not the case with other
consumer categories.
View
of the Commission
Service connection charges are equally payable by AP
consumers and any expense incurred in excess thereof for releasing a connection
is borne by the Board. However, any expenditure incurred by the Board on this
account need not be a part of the annual investment plan.
Issue No. 20: Investment Plan
The capex plan proposed by the Board
needs to be prudently examined and cost benefit analysis of the same may be
sought in terms of improvement in operational performance of T & D system,
performance of thermal stations etc.
Response
of PSEB
The Board requests the Hon’ble
Commission to approve its Capex Plan without any disallowance as any
disallowance would deteriorate the growth of the infrastructure needed to
support the increasing power requirements of the state of
View
of the Commission
Refer to para 4.13.
Issue
No.21: Tariff
As the Board is not following most of
the directives, the Commission may consider reducing the tariff for the year
2010-11.
Response
of PSEB
No response.
View
of the Commission
Refer
to objection no. 6, issue no.1.
Objection
No.25&35: Er. Gurnek Singh Brar
Issue No. 1: Timely payment of subsidy
More stringent safeguards may be
considered by PSERC against non-payment of timely subsidy by GoP. The amount of
subsidy payable by the GoP should not be adjusted against the loan repayment.
Response
of PSEB
PSEB appreciates the suggestions of the
consumer and would request the Hon’ble Commission to exercise its power under
the Electricity Act to provide appropriate directives to the concerned
stakeholders. However, applicability of full/unsubsidized tariff from the 16th
day of default in payment of subsidy by the Govt. (as suggested by the
consumer) may have practical problems in billing and
adjustments/reconciliations (with consumers) thereafter on receipt of subsidy
payment. Alternatively, the Government may be asked to pay the interest on
non-payment of subsidy for the period of delay. However, the payment of such
interest on non-payment of subsidy should not result in reduction of interest
on actual working capital loans taken by the Board.
View
of the Commission
The payment of subsidy by GoP is regularly monitored by the
Commission. As regards adjustment of loans against subsidy payable, refer to
objection no.19 & 31, issue no.24.
Issue No. 2: Charging AP Consumers
The subsidized rates of electricity
should be permitted only to the small land holders. There should be no cross
subsidy to the AP consumers since the Government is bearing the full cost of AP
consumption. In case tariff is charged, AP consumers will include the same in food
grain costing.
Response
of PSEB
Free supply of electricity to the
consumers is made at the behest of the Government. Specifying the consumers for
getting subsidy is the prerogative of the GoP. Determination of the tariff for
various consumer categories including agricultural consumers is the prerogative
of the Commission.
View
of the Commission
Regarding tariff for AP consumers, refer to objection no.12,
issue no.8. It is for GoP to decide the quantum of subsidy to be provided to AP
consumers.
Issue No. 3: Cost of supply to AP consumers
The cost of supply for agriculture
consumers is more and accordingly the subsidy from the Government should be
reimbursed at a higher cost of supply.
Response
of PSEB
The issue is a prerogative of the
Hon’ble Commission. However, in this regard, PSEB has invited tenders from
consultancy firms for conducting the cost of service study for various
categories of consumers. The inputs of this study can be considered (as and
when finalized) for progressive reduction of cross subsidies in the spirit of
the National Tariff Policy.
View
of the Commission
GoP pays subsidy as determined by the Commission. As regards
tariff for agricultural power, refer to objection no.12, issue no.8.
Objection No.26: United Cycle & Parts Mfrs. Association
Issue No.1: Tariff
There should be no increase in tariff including the
monthly minimum charges.
Response of PSEB
The Consumers have raised
the issue of increase in tariff and had requested the Commission not to
increase the same. The cost of operations of a utility are dependent on other
external factors like increase in input costs viz. fuel cost, raw material,
establishment cost, cost of wires, transformers, third party services,
inflation, price escalation, etc. The same are likely to increase the cost of
operations of any utility and needs to be recovered through tariffs. PSEB in
its submission has substantiated the rationale for increase in expenses and
understands that the Hon’ble Commission guided by the ‘Consumers interest’ will
necessarily examine the prudence of the same and allow the same to recover
through the increase in tariff.
View of the Commission
Refer to objection no.6, issue no.1.
Objection No.27: Ansal Mittal Township Pvt. Ltd.
Issue No.1: Removal of single point metering equipment
It is requested to remove
single point (11KV) metering equipment of the colony to avoid unchecked theft
of electricity in the township/colony.
Response of PSEB
The objection does not
relate to the ARR petition, however, PSEB has released the connection as per
the scheme under single point supply to which the consumer has agreed. Now that
the supply equipments pertaining to 11 kV have been installed, the consumer has
requested to remove the same. PSEB believes that such removal of infrastructure
will lead to duplication of efforts and consumption of resources for all such
other consumers, who may like to avail the same. However, the Hon’ble
Commission may consider the request and allow such relief to the consumers
subject to the agreement that the consumers will bear all applicable cost for
such removal of current infrastructure and other relevant costs for new
resources for providing such connections as applicable to installation of a new
connection. Such incremental cost should be allowed under the capex plan to the
PSEB by the Hon’ble Commission.
However, we understand that
the Hon’ble Commission is going to notify the Conditions of Supply and the
issue of the consumer can be addressed separately under the said notification.
View of the Commission
The matter does not strictly pertain to the ARR. The
objector is, however, free to separately approach the Commission in this
regard.
Objection No.28: Ganpati Townships Ltd.
Issue No.1: Tariff Rebate
The proposed NRS tariff
structure for FY 2010-11 does not mention the rebate of 7.5% being allowed on
electricity consumption or
Response of PSEB
The said matter is a prerogative
of the Hon’ble Commission and may be appropriately suggested by the Commission
at the time of issuing the tariff order.
However, we understand the
issue of rebate was discussed by the Commission in detail in the Tariff Order
for FY 2008-09. The relevant para has been reproduced below:
“……..Commission observes
that voltages at which supply is to be given to different categories of
consumers have been specified in the Conditions of Supply since last more than ten years and the
Board was required to release all new connections/additional loads/demands at
the voltage specified in the Conditions of Supply. Therefore there is no logic
in any rebate in tariffs to a consumer who is given supply at the specified
voltage for that category. The Commission
also observes that
there is a
need for the
existing consumers
getting supply at a lower voltage to convert
to the specified voltage for benefit of the system and to reduce T&D
losses. However actual conversion of supply voltage of the existing consumers
will require some time. There could also be technical constraints in conversion
of supply voltage or release of a new connection and or additional load/demand
at the prescribed supply voltage which merits consideration…………………”
View of the Commission
NRS consumers having load upto 100 KW are required to be
catered at 400 volts but consumers getting supply at 11 KV, will be entitled to
7 ½ % rebate as per provisions of relevant Schedule of Tariff. However, high
voltage rebate for NRS consumers with load exceeding 100 KW stands withdrawn
w.e.f 1.4.2010 as decided in para no. 5.5 of the Tariff Order for 2009-2010.
Consumers/developers obtaining one point supply in commercial buildings/
complexes will be governed as per provisions of Clause 8 of the Conditions of
Supply approved by the Commission.
Objection No.29: PHD Chamber of Commerce and Industry
Issue No.1: Capping of expenditure
In view of the rejection of
Board’s appeal before ATE who observed that the expenditure in respect of
purchase of power, interest charges and employee cost denied by the Commission
and resulting in Revenue gap for 2007-08 and 2008-09 maybe kept capped as per
the Commission’s order till improved performance of the Board.
Response of PSEB
No response
View of the Commission
Expenditure on account of purchase of power has since been
capped in the Tariff Order for 2009-10. As regards interest charges and
employee cost, these are determined only in accordance with the Commission’s
Regulations.
Issue No.2: T&D losses
T&D losses as projected
by PSEB do not reflect the true position. If the variation in the AP
consumption of 10.2% as per the report of the independent agency appointed by
the Commission is accepted, the losses would be 31.1%.
Response of PSEB
It seems apparently that working of T & D losses by the
consumer is not correct. The Hon’ble Commission had reworked the T & D
losses for PSEB by considering the disallowance in AP sales as part of the T
& D losses. However the Commission had worked out such losses to be around
22% in comparison to the loss level of 31%.
However, with regard to the disallowance in AP sales by the
Commission, PSEB has already submitted its observations on the Agency report in
the petition for the kind consideration of the Hon’ble Commission. PSEB
understands that while the calculation of AP sales is on a fair side, however
the same may still be lower than the actual consumption considering low pump
efficiencies and lowering of water table in the state (the point was also
substantiated by other consumers themselves by quoting excerpts from a study
conducted by NASA). In light of the same, we believe that the consumption as
projected by the Board may be considered by the Commission for working out the
T & D losses. Further, the roadmap of metering for such consumers has
already been submitted in the petition by PSEB.
View of the Commission
Refer to paras 3.2.3, 3.3
& 4.2.
Issue No.3: Cross subsidy
Practice to purchase excess
power at high rates to meet shortfall of supply to Agriculture sector should
not be allowed at the cost of cross-subsidizing by other consumer categories.
Government should pay for such additional power purchase.
Response of PSEB
The real issue is the availability
of cheaper power on long term basis. In order to arrange for the same, PSEB has
been making efforts to increase its share of in-house generation and has also
been tapping the other Central generating stations for providing power on long
term basis. PSEB has enumerated a list of all such plants from where the power
is envisaged to be sourced in the ensuing years in the ARR petition. PSEB is
concerned about its responsibility of ensuring adequate power supply for the
consumers in its license area and believes that once the power supply from the
aforementioned long term sources gets materialized, the suggested concerns of
the consumers will get addressed automatically.
View of the Commission
It is true that the Board has to effect power purchases during
periods of high demand, quite often at high cost. However, power so purchased
is not exclusively utilized by AP consumers.
Issue
No.4: Power Cuts
Industry is facing long
power cuts with increased peak load hour restrictions and also 50% restriction
in peak load.
Response of PSEB
No response.
View of the Commission
Refer
to objection no. 8, issue no.2.
Issue No. 5: Employee Cost
Technical staff deployed in
unproductive areas should be shifted for maintenance and other related works.
Information technology should be used for automation and online information and
billing through e-mail etc.
Response of PSEB
Implementation of software
applications can add into the operational efficiency of the Board. In this
regard, PSEB is actively pursuing several IT initiatives. The detailed IT
implementation plan has already been submitted to the Hon’ble Commission in
Chapter-23 (PSEB’s Response to Commission’s Directives S.No. 1 of the table).
The same is reproduced below for ease of reference:
The above IT implementation
is scheduled to be completed in 18 months from the date of selection of ITIA
(Under process). Salient IT modules for non-APDRP area/towns are also being
covered so that a unified IT plan is implemented throughout in PSEB.
Accordingly the same is likely to be taken up in 2009-10 and completed by
2011-12 as per the detailed scheduled given as follows:-
|
Year |
Target
Mile-stone (Months) |
Activity/
Deliverable |
|
2010-11 |
Data Centre Set -up ( |
|
|
0-3 months |
High level and low level Design and
approval (infrastructure & application) |
|
|
3-5 months |
Installation, commissioning and
configuration of hardware, network & operating system |
|
|
5-8 months |
Installation, configuration &
customization of application software. |
|
|
8-12 months |
User acceptance testing |
|
|
|
Pilot Project ( |
|
|
3-5 month |
Infrastructure design |
|
|
4-8 months |
DGPS field survey including consumer
indexing & asset mapping |
|
|
7-10 months |
Installation Commissioning and
configuration of H/W, N/W, O.S. |
|
|
10-12 months |
Installation, configuration & customization
of application software. |
|
|
|
10-12 months |
Integration with legacy application and
data centre |
|
10-12 months |
Data migration |
|
|
11-12 months |
User acceptance testing. |
|
|
11-12 months |
User training |
|
|
2011-12 |
Roll Out (Remaining 46 No. Towns)) |
|
|
6 months (after successful completion of
pilot project) |
Infrastructure Design |
|
|
DGPS field survey including consumer
indexing & asset mapping. |
||
|
Installation, commissioning &
configuration of H/W. N/W and O.S. |
||
|
Installation, configuration & customization
of application software. |
||
|
Integration with legacy application and
data centre |
||
|
Data migration |
||
|
User acceptance testing. |
||
|
User training |
||
Regarding
status of
View of the Commission
It would be beneficial for the Board to ensure that its IT
initiatives are implemented on schedule. Personnel of the Board need to be
utilized as per their specialization. Deployment of technical staff on other
duties or similar aberrations can be comprehensively addressed only once the
man power requirements of the Board have been appropriately determined and the
employee strength of the Board right-sized accordingly.
Issue No.6: Interest & finance charges
Increase in short term
borrowing is due to late payment of subsidy by the Government. As such,
interest on short term loan should not be included in ARR & the same be
recovered from the Government.
Response of PSEB
Suggestion of consumer is appreciated
and Hon’ble Commission is requested to
exercise its power under the Electricity Act to provide appropriate directives
to the concerned stakeholders. The Government may be asked to pay the interest
on non-payment of subsidy for the period of delay, however, the non-payment of
such interest should not result in reduction of interest on actual working
capital loans taken by the Board.
View of the Commission
Refer
to objection no. 7, issue no.4.
Issue No. 7: Annualisation
Tariff order should be made
applicable from the date of announcement and not with retrospective effect.
Response of PSEB
The issues raised by the
consumers are a prerogative of the Hon’ble Commission and may be considered
appropriately. However PSEB stresses upon the grave financial health of the
Board and suggests that the increase in expenses (belonging to fuel cost, power
purchase, interest expenses, employee cost etc) should be dealt on an yearly
basis by revision of tariff so that the carrying cost of such deferred recovery
of cost does not escalate the working capital requirements and the consumers do
not suffer a tariff shock on such account.
View of the Commission
Refer to objection no.11, issue no. 5.
Issue No. 8: Period of annual tariff order
Tariff Order procedure is a
long exercise and instead of annual tariff order, prorata provision for the
next two/three years may be made on HPERC pattern.
Response of PSEB
No response.
View of the Commission
The Commission is in the process of finalizing Multi-year
Tariff Regulations which can thereafter be the basis of determining tariff for
the entire span of the control period.
Issue No.9: HV Rebate
Withdrawal of HV rebate is
unjustified as the cost of infrastructure for receiving supply above 11KV is
very high. Instead of rebate, voltage based differential tariff should be
introduced on Himachal pattern.
Response of PSEB
Provision of rebate under
the tariff is the prerogative of the Hon’ble Commission. The opinion and the
objection raised by the objector have already been discussed by the Commission
in detail in the Tariff Order for FY 2008-09. The relevant para has been
reproduced below:
“……..Commission observes
that voltages at which supply is to be given to different categories of
consumers have been specified in the Conditions of Supply since last more than ten years and the
Board was required to release all new connections/additional loads/demands at
the voltage specified in the Conditions of Supply. Therefore there is no logic
in any rebate in tariffs to a consumer who is given supply at the specified
voltage for that category. The Commission also observes that there is a need
for the existing consumers getting supply at a lower voltage to convert to the
specified voltage for benefit of the system and to reduce T&D losses.
However actual conversion of supply voltage of the existing consumers will
require some time. There could also be technical constraints in conversion of
supply voltage or release of a new connection and or additional load/demand at
the prescribed supply voltage which merits consideration…………………”
Further, it is submitted
that the supply voltage for any connection depends upon the nature, quantum and
type of load. New connections at higher voltage are taken by the consumers
keeping in view their own interest. Accordingly, Board requests the Hon’ble
Commission that the issue of continuation of rebate to HT consumers need not be
reconsidered.
However, PSEB reiterates
the grave financial position of the Board and requests the Commission to
consider the two aspects appropriately while deciding the tariff for the
consumers
View of the Commission
Refer
to objection no.1, issue no.1.
Issue No. 10: Tariff
Industrial tariff is one of
the highest in the state. Tariff should not be increased for next 2-3 years and
should gradually be reduced to support the Industry.
Response of PSEB
The Consumers have raised
the issue of increase in tariff and had requested the Commission not to
increase the same. While fixation of tariff for a particular class of consumer
is the prerogative of the Commission, however PSEB submits that cost of
operations of a utility are dependent on other external factors like increase
in input costs viz. fuel cost, raw material, cost of wires, transformers, third
party services, inflation, price escalation, power purchase cost etc. The same
are likely to increase the cost of operations of any utility and needs to be
recovered through tariffs. PSEB in its submission has substantiated the
rationale for increase in expenses and understands that the Hon’ble Commission
guided by the ‘Consumers interest’ will necessarily examine the prudence of the
same and will allow the same to be recovered through increase in tariffs.
View of the Commission
Refer
to objection no.6, issue no.1.
Objection
No.30: Consumer Protection and Awareness Council (Regd.)
Issue No. 1: T&D losses
There has been no reduction in T &
D losses in the past. This is burdening the consumer as 1% reduction in losses
would save crores of Rupees. Staff should be incentivize for reduction in
losses.
Response
of PSEB
PSEB has achieved a loss reduction of
around 2.61% in 2008-09 from the loss level in 2007-08. Going forward, PSEB has
set a target of 18% by 2010-11.
View
of the Commission
Refer
to objection no.6, issue no.2.
Issue No. 2: Theft
PSEB should increase enforcement
activities.
Response
of PSEB
No response.
View
of the Commission
Refer
to objection no.3, issue no.11.
Issue
No.3&4: Overstaffing & accountability of staff
PSEB officials should be made more
accountable. The ratio of employees of PSEB vis.a.vis consumer is very high.
The man power must be brought down in this era of information Technology.
Response
of PSEB
PSEB is actively pursuing the same.
PSEB has awarded a consultancy services to M/s PwC to study the organization
structure of the Board and come out with the recommendations on the employee
strength required for various functions of the Board. The Board is currently
finalizing the report of consultants and plans to implement organizational
reforms depending upon the final recommendations.
View
of the Commission
Refer
to objection no.3, issue no.4.
Issue No. 5: Subsidy
Free supply being very limited is of
little help to the farmers, rather this causes huge loss to PSEB. Subsidy
amount be utilized for installing new plants.
Response
of PSEB
The Government is paying subsidy for
the entire AP consumption approved by the Commission.
View
of the Commission
Providing subsidy to any category of
consumers is the prerogative of GoP.
Issue No. 6: Commission paid
to Banks
Services of experienced and talented
staff of PSEB should be utilized instead of paying commission to Banks while
taking the loans, thus saving money.
Response
of PSEB
Regarding the commission paid to the
merchant bankers, it is submitted that raising of term loan through merchant
bankers is normal market practice and a number of Public Sector Undertakings
(both Central & State) are availing the services of merchant bankers for
raising term loans.
The merchant bankers are registered
with Security Exchange Board of India (SEBI) and are authorized to syndicate
term loan to borrowers.
The services of merchant bankers (who
are experts in syndicating the term loan for PSUs) were availed by the Board to
raise term loan at the most competitive rates which resulted in saving of
interest cost even after paying the commission to the merchant bankers.
View
of the Commission
It may be necessary to obtain specialized services of
merchant bankers. However, the Commission trusts that their remuneration is
determined on a competitive basis.
Issue No. 7: Debt trap
Raising loans to repay the old loans is poor fiscal
management resulting in additional liability of Rs.596 crore.
Response of PSEB
PSEB believes that the increase in Working Capital
requirements is primarily on account of disallowances in the expenses apart from
the non-payment of timely subsidy by the Govt. and adjustment of Govt. loans
against subsidy, forcing the PSEB to take short term loans to manage its day to
day operations.
View of the Commission
Only unjustified expenses of the Board are disallowed by the
Commission. It is true that such disallowances add to the increasing overall
debt burden of the Board. It is for the Board to take urgent steps to improve
its functioning so that disallowances are minimized. GoP also needs to urgently
consider financial restructuring plan of the Board so as to improve the overall
financial health of the Board.
Also refer to paras 2.14, 2.16, 3.14, 3.15 & 4.13.
Issue No. 8: Energy accounting
The energy purchase and supplied should be audited to check
theft and losses. Efforts should be made to improve the power factor of the
system.
Response of PSEB
PSEB appreciates the concern raised by the objector and will
consider the same at appropriate time.
View of the Commission
The Commission has laid down a detailed policy to be
followed by the Board in respect of different categories of consumers wherein
they are incentivized or penalized depending on their ability/inability in
achieving the prescribed power factor. Small power consumers who do not wish to
be covered by the power factor regime prescribed would need to install
capacitors and their failure to do so or maintain the same would make them
liable to payment of capacitor surcharge. Board has also indicated that it
intends to install 2100 MVAR to the
existing capacity of 5600 MVAR (approximately) with a view to further improve
the system power factor. The Commission has also been emphasizing for long the
need for the Board to adopt systematic energy audit at distribution level with
a view to containing its T&D losses.
Also refer to para 4.2.
Issue No.9: In-house
management
In-house management of PSEB is required to reduce losses,
extra expenditure and burden on consumers.
Response of PSEB
No response.
View of the Commission
The Commission, by and large, allows costs on a normative
basis. The Board would always require reducing expenditure with a view to
avoiding disallowances and possibly gain where its performance is better than
the norms permitted.
Issue No. 10&11: Capacity
addition
Capacity generation should be preferred over payment of
subsidy. To avoid costly power purchase, the State must install additional
generating plants.
Response of PSEB
No response
View of the Commission
This a matter on which GoP needs to take a view.
Issue No. 12: Energy conservation
Arrangements should be made by the Board to provide CFL’s at
cheaper rates to the consumers to save electricity and obtain the benefit of
carbon credits.
Response of PSEB
While PSEB is pursuing the aspects suggested by the
Commission, however PSEB appreciate the concern of the council and surely
consider the same.
View of the Commission
The Board has already been directed to draw up a Demand Side
Management Plan which shall comprehensively address all energy conservation
issues.
Issue No.13: Maintenance
of HT lines
a)Efforts should be made to replace the out dated system and
upgrade the same. b)There should be an
incentive scheme for the staff for reduction of T&D losses.
Response of PSEB
PSEB appreciates the concern raised by the objector and will
consider the same at appropriate time. Regarding incentive, the suggestion may
be considered by the Commission.
View of the Commission
Effective improvements in the transmission and distribution
system of the Board is an on-going process which is necessary to keep T&D
losses in control. The Commission would be happy to consider any scheme framed
by the Board with the objective of reducing T&D losses including an
incentive scheme for the staff.
Issue No.14:
Accelerated Power Development and Reforms Programme
PSEB must make full use of
the incentives provided under APDRP Scheme to save on expenditure and earned
extra revenue.
Response of PSEB
PSEB appreciate the concern
raised by the objector and will consider the same at appropriate time.
View of the Commission
The Commission expects the
Board to ensure optimum utilization of available funds under the APDRP
Schemes.
Issue No.15: Bio-gas plants
There is an urgent need to
establish environmental friendly Bio-gas plants which will provide additional
employment and electricity at comparatively less price.
Response of PSEB
While PSEB is pursuing the aspects suggested by the
Commission, however PSEB appreciate the concern of the council and surely
consider the same.
View of the Commission
Incentivizing the installation of bio-gas plants concerns
GoP. The NRSE policy stipulates the incentives currently available for such
projects.
Objection
No.32: Er. S.K.Seth
Issue No. 1: Subsidy
Mounting loans & servicing thereof
and delayed payment of subsidy amount by the Govt. is affecting the financial
health of the Board, resulting in higher tariff every year.
Response
of PSEB
PSEB appreciates the concerns of the
consumer. However, we believe that the issue needs to be addressed by taking
all relevant stakeholders into the purview and sensitizing them towards the
financial health of the Board together with the concerns of the consumers
towards any increase in tariff. PSEB requests the Hon’ble Commission to take
cognizance of the prevailing circumstances and issue appropriate directives to
all stakeholders.
View
of the Commission
The Commission allows all costs on
normative basis and interest on delayed payment of subsidy is also allowed so
as not to burden the consumers on this account. Also refer to paras 2.14, 2.16,
3.14, 3.15 & 4.13.
Issue No. 2: Cost of supply and Cross subsidy
Under the Act, the Commission should
safeguard the consumer interest by reducing the cross subsidies and prescribing
that consumers pay the average cost of supply. In terms of lower MSP for
agriculture produce all stake holders are losing and State is subsidizing the
other States.
Response
of PSEB
The Commission may consider the suggestions of the consumer.
View
of the Commission
Cross subsidy is being gradually reduced. The Commission’s
Regulations provide for phased reduction in cross subsidy by the year 2015.
Issue No. 3: Other sources of revenue
Board should avail benefit of sale of
CERs from increasing the boiler efficiency, higher efficiency of hydro plants,
cost reduction in purchase of DTs by improving the in-house workshops of PSEB
and utilizing existing material for improving the system.
Response
of PSEB
PSEB will consider the suggestions of the consumer.
View
of the Commission
The Board must strive to increase efficiency and reduce
costs wherever possible.
Issue No. 4: Impact of Electricity Duty
The existing electricity due of 10% is
additional to the tariffs paid by the consumer which should also be kept in
view while determining the new tariff.
Response
of PSEB
The Commission may consider the suggestions of the Consumer.
View
of the Commission
The total impact of bills payable by consumers is kept in
mind by the Commission while determining tariff.
Objection No.33:
Technocrats Forum
Issue No. 1: Revenue gap
The Board has not suggested any measure
to bridge the reported cumulative deficit for three years of Rs. 6575 crore.
Measures intended to be adopted to deal with the gap should be made known to
the Consumers.
Response
of PSEB
The suggestions may be considered by the Commission.
However, PSEB feels that the entire claim of ARR needs to be prudently observed
by the Commission before deciding the tariff hike.
View
of the Commission
It is desirable that
the details furnished in the ARR by the Board should indicate not only the
revenue requirement but also its proposals to meet the gap.
Issue No. 2: Tariff hike
In order to cover the entire deficit, a
tariff hike of about 50% would be required. Tariff increase, if inevitable, for
FY 2010-11 should be restricted to 5% and the balance be recovered from the
Govt. as it did not allow the Board to function as a commercial organization.
Increase in tariff should be linked with expected increase in WPI. It is the
responsibility of the Government to undertake financial restructuring of the
Board to retrieve it from the financial crisis and the Commission may advise
the Govt. on this account.
Response
of PSEB
The suggestions may be considered by the Commission.
However, PSEB feels that the entire claim of ARR needs to be prudently observed
by the Commission before deciding the tariff hike.
View
of the Commission
The Commission takes note of the suggestion regarding the
extent of tariff hike.
Issue No. 3: Additional subsidy
AP consumers were supplied power by
arranging extra power at high cost because of scanty rainfall in FY 2009-10.
Moreover, the Board has also lost revenue due to extra power cuts imposed on
industrial consumers. Accordingly, additional subsidy from the Government
should be claimed.
Response
of PSEB
The Government is paying subsidy for the entire AP
consumption as approved by the Commission. Further, PSEB understands that the
real issue is the availability of cheaper power on long term basis. In order to
arrange for the same, PSEB has been making efforts to increase its share of
in-house generation and has also been tapping the other Central generating
stations for providing power on long term basis. PSEB has enumerated a list of
all such plants from where the power is envisaged to be sourced in the ensuing
years in the ARR petition. PSEB is concerned about its responsibility of
ensuring adequate power supply for the consumers in its license area and
believes that once the power supply from the aforementioned long term sources
gets materialized, the suggested concerns of the consumers will get addressed
automatically.
View
of the Commission
It is true that the Board has usually to effect costly
purchases to meet high demand during the paddy season but not all power that is
obtained in this manner is consumed exclusively by AP consumers.
Issue No. 4: Income from open access charges
Board has not shown any income received
for allowing open access during FY 2009-10 which should be factored to reduce
deficit.
Response
of PSEB
The entire revenue generated from the operations of the
Board are booked under revenue from sale of power and other income (with
subheads) as per the books of accounts. The Board has not concealed any
information from the Commission in this regard. A copy of the final accounts
has already been served to all stakeholders.
View
of the Commission
The Board accounts for income from open access charges under
revenue from sale of power.
Issue
No.5: Cross subsidy
As per Section 61 (g) of the Indian
Electricity Act, 2003 the tariff should progressively reflect the cost of
supply of electricity and further, as per tariff policy, the tariff should be
within +20% of the average cost of supply by 2010-11.
Response
of PSEB
The issue may be considered by the Hon’ble Commission.
However, in this regard, PSEB has invited tenders from consultancy firms for
conducting the cost of service study for various categories of consumers. The
inputs of this study can be considered (as and when finalized) for progressive
reduction of cross subsidies in the spirit of the National Tariff Policy.
View
of the Commission
Refer to objection no.7, issue no.7.
Issue No. 6: Employee cost
The share of employee cost in the
overall unit cost of power is much higher as compared to some other progressive
SEBs. Board should improve its efficiency in operations and improve revenue
receipt per unit sold. Board may present
a comparative study of per unit employee cost with other SEBs. Board should also
apprise the Commission and the consumers about the action taken to change its
work culture.
Response
of PSEB
Regarding the paucity of adequate manpower, PSEB submits
that it is currently considering the report of M/s PWC and based on the final
report, the Board will undertake adequate steps to rationalize the manpower
deployment in various departments of the Board.
View
of the Commission
Refer to para 4.9.
Objection No.34: Sahveda (The
Association for Entrepreneurs)
Issue No. 1: Peak Load Exemption Charges and penalties
As directed by the Commission, the
Board has not submitted proposal to review the peak load exemption charges.
These charges are not aligned with section 62 of the Electricity Act, 2003 and
penalties being collected are not in line with section 126 of the Act. Also
circulars annexed with ARR relate to Sales Regulations made under the
Electricity Supply Act, 1948 which no more exists.
Response
of PSEB
Regarding the levy of PLEC, the Board
submits that:
·
Removing the PLEC may provide a larger room for variation
between demand and supply. The same may result in situations wherein PSEB has
arranged for lower supply in comparison to the demand and vice versa. Severe
mismatches between actual demand and supply of power may endanger the security
and safety of the grid
·
During the peak load period, Board procures power from
the short term sources to meet such extra demand, which often comes at large
premiums.
·
At the time of peak, the frequency of the system
generally falls and power drawl under such conditions have a correspondingly
higher UI charges. Procurement of power at lower frequencies may put extra
financial burden on the board.
Considering the
above, the PLEC charges need not be removed. Rather, the Hon’ble Commission may
consider the submissions made by PSEB in the previous ARR regarding revision in
the PLEC rates. PSEB believes that the PLEC rate needs to be aligned with the
current short term power purchase cost which is around Rs. 7 per unit.
Moreover, UI rates have also been increase. In the last submission PLEC may be
levied at Rs. 5 per unit over and above normal tariff rate. It will necessarily
be a correct signal towards the fact that actual cost of such power be charged
through tariff which prompts the consumers to make judicious use of the scarce
resources. The Commission is requested to consider these aspects and revise the
PLEC charges as deemed appropriate. Further PLEC is being charged as per Tariff
Schedule.
View
of the Commission
The Commission had in para 5.7 of the Tariff Order 2009-10
decided to continue the existing rates for levy of PLEC on commitment basis and
the Commission continues to hold the same view. The issue has been dealt in
detail in the Conditions of Supply approved by the Commission.
Objection
No.37: Lovely International Trust
Issue No. 1: Revenue gap
Effect of projected revenue gap of
Rs.6575 crore should not be passed on to the consumers as the same will upset
the budget of private education institutes and universities. Board should
reduce the gap by reviewing its own expenses under various heads.
Response
of PSEB
The issue is a prerogative of the
Hon’ble Commission. However, PSEB submits that the entire claim of ARR needs to
be prudently observed by the Commission keeping in view of the deteriorated
financial health of the Board for deciding the tariff hike.
View
of the Commission
Refer to objection no.6, issue no.1.
Issue
No.2: Cross subsidy
Subsidies given to various consumer
categories should be withdrawn to avoid cross subsidization.
Response
of PSEB
The issue is to be considered by the
Commission. However, in this regard, PSEB has invited tenders from consultancy
firms for conducting the cost of service study for various categories of
consumers. The inputs of this study can be considered (as and when finalized)
for progressive reduction of cross subsidies in the spirit of the National
Tariff Policy.
View
of the Commission
The law does not envisage total elimination of cross subsidy
but only requires their reduction in a phased manner. The Commission already
has a road map therefor which is brought out in its Regulations.
Objection
No.38: Federation of Jalandhar Engineering Associations
Issue No. 1: Lower tariff and Incentives in Himachal
Pradesh
Government of Himachal Pradesh provides
incentive to industries and in addition lower rate of power and 100% assured
supply has led companies setting industrial units in Himachal Pradesh. Thus it
is important that while fixing tariff it is important to consider power tariff
in Himachal Pradesh.
Response
of PSEB
The issue is a prerogative of the
Hon’ble Commission. However, PSEB submits that the entire claim of ARR needs to
be prudently observed by the Commission, keeping in view the deteriorated
financial health of PSEB, for deciding the tariff hike.
Further, PSEB
understands that the real issue is the availability of cheaper power on long
term basis. In order to arrange for the same, PSEB has been making efforts to
increase its share of in-house generation and has also been tapping the other
Central generating stations for providing power on long term basis. PSEB has
enumerated a list of all such plants from where the power is envisaged to be
sourced in the ensuing years in the ARR petition. PSEB is concerned about its
responsibility of ensuring adequate power supply for the consumers in its
license area and believes that once the power supply from the aforementioned
long term sources gets materialized, the suggested concerns of the consumers
will get addressed automatically.
View
of the Commission
The Commission takes note of the prevailing tariff in other
states and specially the neighbouring states. However, with varying local
conditions, it is not possible to bring about uniformity in tariff.
Issue No. 2: Efficiency improvements and reduction in
cost
The Board should use information technology
and ERP to increase efficiency and save costs. The inefficiencies of the Board
should not be passed on to the consumers.
Response
of PSEB
PSEB has noted the suggestion given by
the consumer and will act on the same if found suitable and financially viable.
View
of the Commission
Refer to objection no.29, issue no.5.
Issue No.
3: Night tariff
The rates for utilization of power from
Response
of PSEB
PSEB is currently analyzing the
feasibility and repercussion of implementation of Time of day tariff on the
consumers.
View
of the Commission
Refer to objection no.13, issue no.10.
Issue No. 4: Load checking for MS consumers
Since MS units have electronic meters
installed now, the benefits as applicable to LS consumers (liberty to install
additional load so long as it remains within sanctioned demand) should also be
extended to MS units.
Response
of PSEB
The board has noted the concern of the
consumer and will consider the same.
View
of the Commission
Refer to objection no.9, issue no.3.
Issue No. 5: Subsidy to AP consumers
Government gives subsidy to PSEB on AP
sales @ Rs.2.40 per unit against the cost of Rs.4-5 per unit. Why should Govt. compensate only half the
cost.
Response
of PSEB
Free supply of electricity to the
consumers is made at the behest of the GoP. The current tariff rate for AP
consumers is Rs. 2.85/ unit. Further, the process of determination of tariff
for various consumer categories including agricultural consumers is the
prerogative of the Commission.
View
of the Commission
The Commission determines the tariff payable for AP supply
and subsidy is payable by GoP on that basis.
Issue No. 6: Open access for power intensive units
Power purchase forms a major part of
PSEB expenses. By allowing a liberal open access policy to all power intensive
units, the Board can reduce its losses on power purchase significantly.
Response
of PSEB
As per the Open Access Regulations
notified by the Commission, the Commission has determined the Open Access
charges for the year 2009-10 in the Tariff Order for FY 2009-10 which the Board
has already implemented. Further, PSEB understands that the issue of liberal
‘open access’ is a prerogative of the Hon’ble Commission.
The entire revenue generated from the
operations of the Board is booked under revenue from
View
of the Commission
The Commission’s Open Access Regulations are in place. It is
also encouraging that an increasing number of consumers are availing open
access under these Regulations.
Issue No. 7: Power from UMPPs
Board should aggressively book power
from UMPPs which are under commissioning/ bidding.
Response
of PSEB
PSEB is concerned about its
responsibility of ensuring adequate power supply for the consumers from the
UMPPs and accordingly pursuing the same to get allocation from the UMPPs.
View
of the Commission
The
Commission trusts that the Board’s efforts will bear fruit.
39.
Government of
Department of Power, GoP in its letter
dated 15.2.2010 has briefly brought out certain issues, raised by various
consumers during public hearings for the ARR and concerning tariff setting by
the Commission. These issues relate to HV surcharge, power factor
incentive/rebate, IST and RTC of meters, transformer capacity restrictions,
MMC, cost of supply, metering of AP consumers, disparity in tariff between
Govt. and private Institutions within the same category, subsidy to DS consumers
above 100 units and hike in tariff. View of the Commission in respect of these
issues has been adequately expressed while dealing individual issues for the
respective objectors. However, the observations of GoP on the ARR conveyed in
its letter dated 10.3.2010 are summarized hereunder, alongwith the view of the
Commission:
1: Financial health of PSEB
Continued
disallowance by the Commission on Employee Cost, Interest & Financing
charges, fuel cost and Power purchase cost (due to under-achievement in T&D
losses) has led to decline in financial health of the Board. Disallowance of
about Rs. 4600 crore by the Commission upto 2007-08 has led to accumulated
commercial losses and short-term loans of the Board.
The Board
has consistently not been able to achieve norms, performance parameters and
targets set by the Commission, which has led to disallowances and subsequently
erosion in Board’s capacity to purchase power. This has resulted in long
duration of power cuts. Thus though the tariff rates have been contained the
availability of power to the consumers has been constrained.
Till now the
Commission has adopted the strategy of penalizing the Board for non-achievement
of norms and targets set by it, but instead of achievement of targets, the
financial condition of the Board has deteriorated. Thus, the Government has
requested the Commission to alter its strategy of bringing about improvement in
functioning of the Board without adversely hitting the financial health of the
Board.
View
of the Commission
Interests of
consumers have also to be kept in mind by the Commission and for that reason,
disallowances have to be effected when the Board’s performance is sub-optimal.
The Commission aims to set reasonable performance targets for the Board and
monitoring of its functioning would reveal the correctives that need to be
applied to ensure that these are achieved.
2: AP consumption
The Board
has the tendency of projecting AP consumption on the higher side to keep
T&D losses low. The report given by M/s ABPS have shown several
discrepancies/inconsistencies in the estimation of AP consumption by the Board.
The correction in AP consumption (8902 MU) made by the Commission for 2007-08
may still be on higher side if suitable correction in AP consumption for
2006-07 is considered.
With no
increase in area of cultivation, declaration of additional load in VDS and more
than one tube well in the same land holding, the AP factor i.e consumption per
KW of connected load should be less. Thus AP consumption for 2006-07 and 2007-08
approved by the Commission is on the higher side. Further, AP consumption of
8374 MU approved by the Commission 2008-09 in T.O 2009-10 needs to be retained
and also corrected for 2009-10. Similarly, AP consumption for 2010-11 be
allowed with a normative 5% increase over approved AP consumption for 2009-10.
Estimation
of correct AP consumption is a serious concern for the State Government as it
is paying subsidy for the free supply. The directives given by the Commission
based on the findings of M/S ABPS should be strictly implemented.
View
of the Commission
AP consumption is primarily to be
estimated on sample meter readings and AP factor worked out on the basis of
connected load. To the extent that there are aberrations in the reporting of
data by the Board, consumption has to be suitably curtailed as was done in the
years 2007-08 and 2008-09 in accordance with findings of an independent study
which was undertaken at the behest of the Commission. It would be difficult to
retain AP consumption in 2009-10 at the same level as 2008-09 specially when it
is otherwise contended that failure of monsoon in 2009-10 led to higher
consumption and higher quantum of power purchased by the Board. Refer also to
paras 3.2.3 and 4.1.3.
3: T&D losses
The
Commission has in its tariff order of 2004-05 set T&D loss reduction
trajectory, which the Board has not been able to achieve. The Commission has
been disallowing the power purchase cost which stood at Rs. 2050 crore by the
end of 2007-08. The measure adopted by the Commission has not yielded any
results in the past. Thus the Commission should reset the T&D loss
reduction target based on the actual T&D losses of 2007-08 worked out with
approved AP consumption and to achieve ultimate target of 15% by 2012.
Moreover the
Commission in 2009-10 had set T&D loss target considering the losses in
2008-09 of 24.07% but since the actual T&D losses for 2008-09 have worked
out to 22.54%, the Commission should now suitably revise the prescribed T&D
loss target for 2009-10. The Commission may consider prescribing the T&D
loss reduction trajectory as 20.50% (2009-10), 19% (2010-11) and 17.5%
(2011-12). Also, while approving revised estimates of energy requirement/ power
purchase for 2008-09 the Commission should take T&D loss target for 2008-09
at least 20.5%.
View
of the Commission
The Commission has now reset the loss
reduction trajectory for the years 2010-11, 2011-12 and 2012-13. It would be
unfair to the consumers to allow higher level of power purchases at high cost
on account of the Board’s inability to achieve targeted levels of loss
reduction. Refer also to para 4.2.
4: Disallowance of fuel cost
The
Disallowance of fuel cost by the Commission in the ARR for 2009-10 is not
justified, keeping in view the fact that the performance of thermal plants
owned by the Board is comparable with the best in the country. The Commission
should appoint expert group to carry out a study and recommend performance
norms/parameters for the thermal stations.
The disallowance is unjustified in the view of the fact that per unit
cost of generation from GGSSTP and GNDTP where station heat rate is higher than
norms is much less than average cost per unit of power purchased.
View
of the Commission
Fuel cost is being allowed largely as
per CERC norms which in turn have been determined on the basis of CEA’s
recommendations made after extensive studies of a large number of thermal
stations. Refer also to paras 3.8 & 4.7.
5: Power purchase cost
The monsoon
failed in most of the parts of the state in 2009-10 and hence the Hydel
generation from Board’s own plants as well as BBMB had gone down. In order to
provide power to all categories including AP consumers with reasonable power
cuts and to save the paddy crops, the Board had no option but to increase power
purchase. Thus the State Government
feels that the Commission should not make any cuts on the cost of traded power
procured by the Board in 2009.
Moreover as
power purchase cost is one of the major components of the ARR, there is a need
to develop a mechanism to regulate power purchase and bring transparency in
high cost short term power purchase. Accordingly, the Commission may issue
appropriate guidelines/procedure in this regard.
View
of the Commission
The
Commission has in the past allowed the entire power purchase cost upto 2008-09.
However, taking into account the injudicious purchase of power by the Board in
the past, the Commission has now allowed purchase upto the extent required as
per projections of the Board but the cost of purchases beyond that level have
been capped to the average cost of supply from 2009-10 onwards. Refer also to
paras 3.9 & 4.8.
6: Employee cost
The
Commission should allow full employee cost to the Board as it is legitimate
historical component of the cost of supply. The Commission had allowed full
employee cost in for the year 2002-03, since then the number of employees in
the board have reduced from 91624 to 64309 ending 3/09, thus the total employee
cost including the terminal benefits should be approved instead of notional
employee cost.
The impact
of revised pay scale including the arrears should be allowed in full to the
Board even if the employee cost is approved on notional basis.
View
of the Commission
Refer to para 4.9.
7: Adjustment of excess subsidy against interest on
diverted funds
As the
matter pertaining to the disallowance of interest on GoP loans due to diversion
of capital funds is under adjudication by the Appellate Tribunal, it is
reiterated that the Commission should allow payment of interest on GoP loans as
was done prior to 2007-08.
Further, the
following points are also brought out:
·
The Government cannot be held
responsible for any diversion of funds during the regulatory regime as it has
been paying subsidy as determined by the Commission.
·
Even when it is difficult to
pin point particular loans or capital borrowing diverted by the Board as held
by the Commission in its order dated 13.09.2007, the Commission has worked out
interest liability at the average rate of interest of 12.22% on the GoP loans,
instead of taking average rate of interest of total outstanding capital
loans(inclusive of GoP loans).
Furthermore,
the Commission cannot adjust subsidy against interest in diverted funds as the
payment of subsidy is a statutory payment under section 65 of the Electricity
act and the Commission is not empowered to direct the Government to make any
other payment, especially since the matter is under the adjudication of the
Appellate Tribunal, instead the excess subsidy paid during 2008-09 should be
adjusted against the subsidy payable in 2010-11.
View
of the Commission
Disallowance
of interest owing to diversion of capital funds is being effected in compliance
of the Orders of the Appellate Tribunal. As the Commission’s decision regarding
disallowance of interest has been challenged, there is little option but to
await a verdict before any changes are effected in the present dispensation.
The Commission does not propose to adjust subsidy against interest on diverted
funds.
8. Tariff hike in AP category
The Commission
should not increase AP tariff any further and in case hike is unavoidable it
should not be more than the average hike, considering the importance of
agriculture production for the country as a whole and state of
View
of the Commission
In line with
the recommendations in the Tariff Policy, the tariff hike approved by the
Commission in the past has been with the view to reduce cross-subsidy and to
bring the tariffs of various categories including AP closer to the average cost
of supply.
ANNEXURE-III
Minutes of the Meeting
of State Advisory Committee of the
The meeting of the State Advisory
Committee was held in the office of the Commission at
1.
Sh.
Jai Singh Gill, Ex-officio Chairperson
Chairman, PSERC,
2. Sh. Satpal Singh Pall, Ex-officio
Member
Member, PSERC,
3. Sh. Virinder Singh, Ex-officio
Member
Member, PSERC,
4.
Shri
Prithi Chand, Member
Addl.Secretary/Power,Govt. of
(on behalf of Secy/Power,
5. Shri Jacob Pratap, Member
Asst.Labour Commissioner,
(on behalf of Labour Commissioner, Pb),
6. Sri Amarjit Goyal Member
on behalf of Chairman,
PHDCCI,
7. Shri B.P.Verma, Member
Chief Elec.
Distribution Engineer,
Northern Railway,
8. Shri K.D.Chaudhary, Member
Member/Distribution,
PSEB,
9. Sh.Y.P.Mehra, Member
Ex-Tech. Member, PSEB,
# 12 Ram Bagh Colony,
10. Prof. R. S. Ghuman, Member
Deptt. of Economics,
11. Shri
J.S. Mann,Dy.Manager, NTPC Member
(on
behalf of Executive Director, NCR-HQ,
NTPC),
12. Sh. Bhagwan Bansal, Member
Shop No. 109, New Grain Market,
Muuktsar
13. Sh.Sarbagh Singh, Member
Passi Nagar,
14. Sh. Jagtar Singh, Member
Director,Social Work &Rural
Development Centre
Vill Nurpur Bedi, Distt. Ropar
15. Shri Gurmit Singh Palahi, Member
Secretary, National Rural
Development Society,
V & P.O Palahi,
Teh. Phagwara (Kapurthala)
16. Smt.
Namita Sekhon, IAAS, Secretary
Secretary,
PSERC
1. The Chairman welcomed the Members of the
State Advisory Committee and thanked everyone present for having spared time to
attend the meeting. The Chairman thereafter requested the Members for their
valuable suggestions.
2. Shri
Amarjit Goyal appreciated the efforts of the Commission in bringing
transparency into the working of the Board which was lacking before the
constitution of the Commission. Shri Goyal offered the following
suggestions/views:
- Board should be advised not to include cost of those
items in their ARR which have earlier been disallowed for true up and
review by the Commission.
- Board’s present debt needs to be replaced with loans
carrying lower interest rates so as to reduce the interest expenses.
- Theft of electricity in the Board is high and is
invariably being resorted to in connivance with the employees of the
Board. This needs to be checked.
- The total energy sold to all categories/consumers in
the State should be metered as per provisions of the Electricity Act, 2003
so that T&D losses are accurately measured and theft is reduced.
- There should not be any increase in tariff for
industrial consumers, as any such increase would force the industry to
shift to other States.
- Staff of the Board needs to be screened and reduced to
control the salary bill.
- The burden of excess power purchase at higher cost
being effected for AP consumers should not be passed on to industrial consumers.
Presently, the industrial consumers are not only subjected to huge power
cuts but also charged additional expenses on account of additional power
purchase cost. The extra expenditure on this account should be borne
either by the State Govt. or the
- The AP consumption is increasing every year. Tariff
should be determined at 80% of average cost of supply as per Tariff Policy
and the higher subsidy charged to GoP.
- Road map for reduction of cross subsidy should be
indicated in the Tariff Order.
- Release of AP connections under OYT should be limited.
Govt. may be advised in this regard.
- The proposed abolition of high voltage rebate of 3% /
5% with effect from
- Discrimination in power factor rebate between the PIUs
and General Industry needs to be done away with.
- Due to shortage of power in the State, Open Access
should be made more liberal and on perpetual basis.
- The time block for scheduling under Open Access
Regulations should be of 1 hour rather than 15 minutes.
- ToD tariffs should be introduced in the State.
- Due to provision of peak load charges, night tariff
should be on the lower side.
- Open Access charges should be on the actual quantum and
duration cleared and not on the basis of application for NOC/concurrence
etc.
3. Shri Gurmit Singh Palahi pointed out
that:
·
Many applicants under general category have been awaiting
release of connections since 1990 but cannot opt for OYT/discretionary quota
schemes which are being launched by the Board from time to time. Board should,
therefore, consider releasing large number of AP connections under the General
Category.
·
The officers of concerned area should be held
accountable/responsible for power theft.
·
Supply of electricity to all consumers should be metered so
that T&D losses are properly quantified.
·
Introduction of various schemes such as VDS for various
categories do not reach grass root level. A foolproof method for building
awareness in this regard needs to be devised.
·
Punjabi should be introduced in the functioning of the
Board.
·
Bills should be allowed to be paid through Co-operative
Societies.
4. Shri Jagtar Singh suggested that
land holding limit of say 5 acres may be fixed for supply of power at Rs. 50
per BHP per month whereas for consumers with more land holdings, the AP tariff
should be higher. He suggested that the AP connections of small farmers should
be released on priority.
5. Shri Bhagwan Dass Bansal drew attention
of the SAC to the fact that:
·
Industry is shifting out of state due to shortage of power.
Power shortage in the State has resulted in delay in paddy milling.
·
The focus of the Govt. is agriculture rather than industry.
·
Seasonal industry needs an assured supply of 18 hours per
day during working season for its survival and financial viability.
·
Electricity complaints in newly set up residential colonies
are not being promptly attended. Complaint staff of the Board needs to be
properly equipped to handle complaints.
Shri Bansal suggested
that:
·
Payment of Electricity bills should be made online to avoid
long queues.
·
Open Access for purchase of power from outside the State
should be made simpler.
·
Commission should direct the Board to introduce one time
settlement scheme for the large number of defaulting consumers in the State.
6. Shri
Sarbagh Singh was of the view that
·
Transit loss of coal should be reduced to 1%
·
The Board should add to its generation capacity rather than
purchasing power at high cost.
·
The employee cost should be reduced.
·
Free supply of power to PSEB employees should be stopped.
·
Maintenance of the transmission/distribution system should
be improved.
·
There is large scale power theft in connivance with the
Board employees. Action against erring employees should be taken and any
political interference to save such employees should be resisted.
·
Interest cost is very high and needs to be reduced.
·
Board should carry out energy audit and also reduce T&D
losses.
·
There is no mention of defaulting bill amounts in the ARR.
This should be rectified.
7. Sh. B.P.Verma, Chief Elect.
Distribution Engineer, Northern Railway expressed his views:
- Railways are being penalized on account of increased
Tariff even though payments are made well in time.
- Railway Traction getting supply at 132/220 KV should be
allowed rebate as admissible to industrial/other categories.
- Tariff hike should be avoided by reducing T&D
losses, employee cost and increase in efficiency in operations of the
Board.
- Metering should be at the premises of RT Substation and
not at the grid Substation of PSEB.
- Failure of supply by Board at a supply point results in
excess drawal of power from neighbouring supply point. Hence, CD should be
sanctioned for RT cumulatively for one section.
- RT should be allowed power factor incentive above 0.90
as being allowed to other industries.
- Cross subsidy in case of RT should be reduced.
- The RT tariff should not be more than industrial
Tariff.
- Extension of railway electrification should be
encouraged by offering concessional Tariff as in States like Tamil Nadu.
8. Shri Y.P. Mehra, Ex.Tech
Member,PSEB offered the following suggestions/views:
- The orders of the Commission are not being implemented.
This needs to be reviewed by the Commission.
- The power purchase cost is increasing every year. For
this the Board should be directed to add its own generation.
- There should be proper mix of generation through power
plants both in public sector and private sector.
- Board should not finance the Capital Cost for release
of tubewell connections. Rather this amount should be used for creating
additional capacity in the State.
- The Commission may advise the Govt. to undertake
financial restructuring of Board which is long overdue.
- Commission should ensure that Depreciation Reserve Fund
is not utilized for Working Capital.
- All the orders of APTEL need to be implemented.
- Govt. should be advised to pay subsidy in time and
Govt. loan/debt should not be allowed to be adjusted against subsidy.
- Voltage wise cost of supply needs to be accounted.
- Pilot Project study for improving the efficiency of AP
pump sets needs to be expedited.
- The PF surcharge and rebate discrimination should be
removed.
- The proposed withdrawal of high voltage rebate would
result in higher tariff for HT industries. This needs to be reconsidered.
- Regularization of temporary tubewells should not be
allowed due to shortage of power and also due to a long queue of pending
connections.
- Carbon Credit study should be carried out as Carbon
Credit would be a source of added revenue for the Board.
- Open Access should be encouraged by the Commission by
amending OA Regulations and simplifying procedures.
- Introduction of KVAH Tariff would result in reduced
losses and increased stability of the system.
- AP Tariff should be at least 80% of the average cost of
supply.
9. Prof. R.S. Ghuman, Pbi. University
raised the following issues:
- The methodology of projections using CAGR needs to be
reviewed and made more in line with ground realities.
- The AP consumption should be metered to give real
estimation of AP consumption as well as T&D losses.
- Govt. should subsidize AP consumption fully and not in
part.
- Open Access should be encouraged to increase production
and employment.
- Generation Projects should be taken up in the Public
Sector also rather than depending entirely on the private sector. With the
present approach there would be monopoly of the private sector.
- Subsidy should be given only to the deserving
consumers, not to everybody. AP consumers with land holding upto 7.5 acres
(max 10 acres) only should be eligible for free/subsidized supply.
- The huge revenue gap is a matter of concern and needs
to be considered by the Commission.
- Members should be impressed upon to attend the SAC
meetings.
- Board should not limit the comparative study of T&D
losses to only 3-4 states.
10. Sh. Jacob Pratap, Asstt. Labour
Commissioner pointed out that cess on building and other construction works is
required to be recovered by the Board from contractors. Such payments can be
affected by recovery from the bills of the contractor. He was of the view that
the Board representatives should attend Lok Adalats. Non attendance of Board
representatives often leads to cases being decided in favour of the employees.
Therefore, the Board ends up paying huge sums as compensation to employees. The
Court cases regarding labour disputes also need to be handled properly in order
to save huge sums of money of the Board.
11. Lt. Gen.
(Retd.) Kamaljit Singh was unable to attend the meeting. He however, sent his
suggestions which are annexed as Annexure.
12. Shri Prithi Chand, Addl. Secy.
/Power stated that the comments of the Govt. on the ARR of the Board would be
sent separately. He admitted that the financial health of the Board was very
poor and with a debt of Rs. 16000 crore its very survival was in jeopardy. He requested the Commission to consider the
financial viability of the Board while determining the tariff. He pointed out
that Power theft, T&D losses & purchase of power at higher cost were
responsible for the huge revenue gap.
He further pointed
out that the AP consumption is not determined accurately and undue burden on
this account was being passed on to the Govt. He suggested that all the AP
connections should be metered to ascertain the actual consumption and the
amount of subsidy payable by the GoP. He informed the house that work on three
Power Plants was already in progress and the work on the fourth power plant
would start soon. With this, he expressed the hope that by the end of 2013, the
State would be self sufficient in power.
13. Er. K.D. Chaudhary,
Member/Distribution stated that various measures were being undertaken to
improve the efficiency of the Board. He further informed that the Board was
envisaging various DSM measures like Bachat Lamp Yojna and Installation of
additional capacitors for purposes of power factor management. He also informed
that a pilot study for improving the efficiency of about 2000 tube well
connections on 4 feeders has been commenced by BEE free of cost.
He drew the
attention of the house to various measures that were in the offing like
establishment of Consumer Call Centre at
He also assured
that grant of Open Access procedure would be simplified and suitable amendment
effected in the Grid Code to provide for installation of several makes of
meters for OA purposes. Accountability would also be fixed in case of power
theft. He further informed the members
that three new Thermal Plants will be established over the next couple of
years. He, however, felt that it may not be possible to introduce ToD tariffs
as adequate surplus power was not available in the State.
Addressing some of
the other issues raised by members of the SAC, he informed that information
system for consumers upto village level was already in place, instructions in
Punjabi were being issued, supply to Rice Millers was regular, online payment
of bills for industrial consumers was in place and one time Settlement scheme
of electricity dues for defaulting consumers was already in existence.
He further pointed
out that temporary tube well connections were not given last year and would not
be given in future, registration for Carbon Credits had been formalized, sample
size for correct estimation of AP consumption has been increased from 4% to 8%
and would further be increased to 10%. AMR system was being introduced to
supplement the Sample Meter Reading system. Also, AP load has been separated on
all 11 KV feeders except 300-400 feeders with mixed load. The work of
separating AP load on these 300/400 feeders would also be completed by
14. Reacting to some of the issues raised, Chairman, PSERC informed the members
that cross-subsidy is being reduced in percentage terms as per Tariff
Regulations notified by the Commission. Provision for online banking exists in
the Supply Code and Open Access Regulations are constantly being reviewed for
easy facilitation of Open Access in the State. He referred to a presentation
made by Indian Energy Exchange which indicated that nearly half of the total
number of Exchange customers were from
The Chairman expressed concern about the poor financial health of the
Board and observed that there is urgent need to consider its FRP without
linking it to the unbundling of the Board. He also observed that,
(a) a suitable mix of public/private participation requires
to be considered while adding generation capacity in the State. He also
clarified that rates for all IPPs except for GVK (for which rates are to be
determined by the Commission), are attractive and have been competitively
determined.
(b) As applications are pending for release of AP connections for the
last 18-19 years, a fair scheme has to be urgently put in place to determine
the manner in which AP connections are to be released. This would also fulfill
one of the requirements of the Supply Code.
(c) The Board must expedite information with regard to very old issues,
like KVAH tariff, Voltage-wise Cost of Supply etc. so as to enable the
Commission to take a final view on these matters. He also requested the Board
to draw up and implement a comprehensive DSM plan.
(d) Appreciating the introduction of Consumer Call Centres/Electricity
Call Centres in 6 cities of the State, the Chairman also emphasized the need to
consider upgradation of consumer complaint facilities in other and specially
the rural areas of the State.
Chairman, in his
concluding remarks thanked the members of the SAC for their valuable
suggestions. He also thanked the Member/Distribution for his informative
comments on several issues raised in the meeting.
Annexure
Suggestions by Lt.
Gen. (Retd) Kamalajit Singh
Lt. Gen. (Retd.)
Kamaljit Singh has suggested the following steps for reducing the T& D
losses:
(1) Installation of LT capacitors
on tube well connections. The cost of each is about Rs.500/-. The farmer should
bear this, if he wants free power. Alternatively, the PSEB should recover the
cost of installation of these capacitors in the billing which should be done in
two installments. This measure will reduce consumption of electricity of
tubewells by 50 percent.
(2) Conversion of LT
distribution system to HVDS system, to prevent tampering with the high voltage
wires. Since this conversion is cost intensive, the PSEB should be permitted to
bill the cost of Capital expenditure and larger amount under capital
expenditure be permitted for early implementation, by obtaining a loan from the
Central Govt.
(3) Replicate the Andhra
Pradsh Demand Side Management (DSM) plan which involves the user having an ISI
marked pumpset, LT capacitor, friction less foot valve and plastic suction and
delivery pipes to maximize delivery of water. The farmer gets free power, only
if he implements the above measures, otherwise he has to pay for the
electricity consumers. This will require political will to implement for which
the commission could use the provision of Sec. 65 of the Electricity Act to
enforce / cajole the Punjab Government, if possible.
(4) Replacement of
electro-mechanical meters with electronic meters.
(5)
The shifting of meters outside residential premises.
He has also
suggested that the Commission should direct the Punjab Government and the PSEB
to expedite the construction of Shahpur Kandi Barrage. The Board should carry out a study for
optimizing the use of Ravi Water by way of creating additional hydel stations
on the UBDC to the
Annexure-IV
COMPLIANCE WITH DIRECTIVES ISSUED IN CHAPTERS 4 & 5 AND ANNEXURE-IV
OF TARIFF ORDER FY 2009-10
An overview of the Directives issued to the Board
in the Tariff Order FY 2009-10 and status of their implementation is summarized
below:
|
Sr. No. |
Issues |
Directive in Tariff Order FY 2009-10 |
PSEB’s reply |
PSERC’s comments |
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|
1. |
Energy Audit
and T&D Loss Reduction. |
Background The Commission observed that in the absence of
yearly targets and the Board’s achievements against them, the Commission is
unable to comment on the steps being taken by the Board for carrying out the
energy audit and T & D loss reduction. Attention was also invited to para
4.2 of the Tariff Order. The Board was also advised to furnish a
comprehensive IT implementation plan with yearly targets and achievements. Directive The Board was directed to issue within one month of
the issue of tariff order, its final projections of financial and physical
targets that are to be achieved for the current and next two years in respect
of: i) Conversion
of LT distribution system to HVDS. ii) Replacement of electro-mechanical meters by
electronic meters. iii) Installation of capacitors at all 11 KV feeders
in urban and rural areas. iv) Shifting of meters outside residential premises. and
also the targets for completion of assessment of base line data, segregation
of technical and commercial losses and energy audit upto distribution level. At
the time of Tariff Order the Commission would assess the performance of the
Board in respect of these specific measures and then take a view on the
fixation of loss reduction trajectory for the next phase. |
PSEB had
placed two work orders for carrying out energy audit at GGSSTP Roop Nagar by
the following firms: ·
M/s Electrical Research & Development Association Vadodara for
balance of plant area. ·
M/s Energy & Resources Institute, The firm at Sr. No.1 has submitted the final
report and the follow up action is in process. The firm at Sr. No. 2 has submitted the draft energy
audit report and the final report is being awaited. Work of Energy Audit for GHTP was also required
to be done by above firms and final energy reports are being awaited from the
firms. Work of Energy Audit for GNDTP Bhatinda of
Unit-II was conducted by firm at S. No.(ii) above and detailed energy audit
of balance of plant area was audited by firms at S.No.(i). The reports of
energy audit of Unit-II are attached as per Annexure-VI of Volume-II. Following measures were planned to be taken for
achieving the target of reduction of losses up to 17% by the year 2011-12
from the present losses of 19.92% for the year 2008-09:- ·
Conversion of LT DS system to HVDS ·
Installation of LT capacitor on AP tube well connections ·
100% replacement of electromechanical meters with electronic meters ·
Providing effective earthling at substations and DS transformers ·
Refurbishing/Strengthening the DS system R-APDRP ·
Installation of capacitors on 11KV Feeders in urban as well as rural
areas. ·
IT initiatives like spot billing, GIS mapping, Centralized Call
Centres, Remote metering etc. ·
Augmentation of over loaded and de-loading of DS transformers and 11
KV feeders. ·
Installation of meters outside the consumers’ premises. ·
More theft detection by Enforcement Agencies. The financial and physical targets for the
current year and next two years in respect of items (i) to (iv) under para
4.2 of Tariff Order 2009-10 is as under:- As regards Item No.(i) i.e. conversion of LVDS
System in to HVDS is quite capital intensive. 6 such schemes stand already
completed and 34 schemes (for 5,24856 connections of AP Tube Wells) stand
sanctioned by REC and work of tendering is in progress to issue work orders. The Board has also prepared its low cost Demand
side Management plans which are quite effective and will result in
controlling growing demand. These are as under:- The Board has started the process of replacement
of incandescent lamps with CFL under Bachat Lamp Yojna. Under this scheme
CFLs will be provided to 48.00 lakh domestic consumers @Rs.15/- per CFL. The
developer shall provide maximum of 4 CFL Lamps to each consumer and recover
the balance cost of CFL by utilizing CDM (clean development mechanism) thus
costing nil to PSEB. By adding 2100 MVAR capacity at a cost of Rs.20
Cr., the Board aims to reduce the demand significantly and the same will also
help in reducing the losses. The tender process for BLY stands completed after
pre-bid conference. Now, the offers of firms are being evaluated. The work will be completed in 12-15 months from
the inception of the scheme. The work of replacement of electro-mechanical
with electronic meters will be undertaken parallel to the shifting of meters
outside the consumers’ premises in respect of 32 Lac consumers to be covered
in Non-APDRP areas up to 10/2010 and further 17 Lac under APDRP schemes up to
June 2011. The balance electro-mechanical meters will be replaced under
R-APDRP scheme for 47 Towns. Part-A of APDRP for IT initiative stands
sanctioned for Rs.272.83 Cr. from steering committee of IT set up by Ministry
of power, GOI. The schemes for part-B of APDRP are under preparation by Field
Offices as per guidelines issued by MOP/GOI. Month wise physical and financial details are
attached as per Annexure-VII in Volume-II. Regarding IT Implementation Plan, PSEB is in the
process of implementing IT under R-APDRP (Part-A) 11th Plan
covering 47 towns of 1. GIS based consumer indexing and asset mapping. 2. GIS based net work analysis modules. 3. Metering, Billing and collection. 4. Centralized Customer Care Service 5. Energy Audit. 6. Metering Data acquisition. 7. New Connection. 8. Disconnection and dismantling (CRM) 9. Management Information System (MIS) 10. Web self service. 11. Identity and asset management. 12. System Security requirement. The above IT implementation is scheduled to be
completed in 18 months from the date of selection of ITIA (under process).
Salient IT modules for non-APDRP area/towns are also being covered so that a
unified IT is implemented throughout in PSEB. Accordingly the same is likely
to be taken up in 2009-10 and completed by 2011-12 as per the detailed
schedule given as follows:-
Regarding status of AMR, the same has been
implemented at about 500 substations and all AP feeder meter points (about
2000) have been covered under AMR system. MIS is being generated at the |
The Commission notes that
the Board has quantified the specific steps that it proposes to take in
2010-11 with a view to reducing T&D losses. The Commission expects that
the Successor
Entities
would put in every effort to see that quantitative targets and time-lines are
achieved. It is also crucial to ensure that IT plan is initiated at the
earliest and implemented in the scheduled 18 months. In addition to capital
intensive measures proposed by the Board, sustained low cost technical
interventions such as reduction in earthing resistance, tightening of joints
and balancing of loads needs also to be considered. |
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|
2. |
Agriculture Consum- ption |
Background The Commission had appointed an independent
agency for validation of AP consumption. The findings of the study conducted
by the agency had been taken into account in the Tariff Order. Directive The Commission directed the Board as under: a) Monthly division-wise consumption
recorded by sample meters be made available directly to the Commission by the
agency undertaking this work. b) The Board will furnish to the
Commission on monthly basis (division-wise): · The complete data on the
basis of which AP factor has been calculated. · Details of increase/ decrease in sample meter loads
(including light load) along with total connected load of each division. · Data of the actual AP supply hours. c) Sample meter readings in excess of what can
possibly be consumed with the given supply hours and connected load will not
be taken into account for evaluation of AP factor and division-wise details
of such meters will be furnished every month. d)
Faulty/ non-functional sample meters will be replaced in a time bound manner
and in no case should the faulty meters exceed 10% of the total sample meters
in a division during any month of the year. e) The size of sample meters may be
gradually increased to 10% of the total number of AP connections for more
accurate estimation of AP consumption. |
Ending September-2009, PSEB has installed 62826
Sample Meters for assessment of energy consumption for 1059263 unmetered tube
well consumers a) The work for taking
monthly reading of sample meters installed on AP motors has been awarded to
M/s G4S. The Company has shown
appreciable improvement in taking readings and is expected to streamline its
operation in next 2-3 months. PSEB would be able to submit the monthly data
recorded by M/s G4S to the Commission only after streamlining the working of
the firm. b) The detailed data reading
in many cases is still maintained in the hard format at the sub division
level and it will not be possible to transmit the data in the soft format
immediately. It will take 2 to 3 months to prepare the entire monthly data as
required by PSERC in the soft format. However, the data at the
circle/zonal/Board level on the basis of which monthly consumption is being
calculated is being supplied to the Commission every month. c) The AP sample meters have
been installed in a geographically scattered area and due to various system
constraints, the AP load is fed from various branches of 11 KV feeders. So it
is not possible to provide exact supply hours as per S/S data. Also many
times due to system conditions, the supply hours to agriculture sector are
increased/ decreased to balance the supply demand parameter. Moreover, the consumption
of same capacity motors could be different from rating of a motor due to
factors indicated below:- 1) Whether motor is
submersible or mono-block. 2) Whether motor is
star-rated or ordinary. 3) Whether motor is
re-winded or not. 4) Whether shunt capacitor
has been working or not. So correct estimation is only possible with
actual energy consumption recorded by correct energy meter. However, the
consumption recorded more than permissible with standard current rating of
the motor and 24 hours supply is being ignored for calculating AP
consumption. d) The directive is being
complied and faulty/non functional sample meters are being replaced by DS
organization and it is hoped that in future number of faulty/ non functional,
meters will not exceed 10% of the total sample meters in a division every
month. e)
The directive is being complied with as the sample size has already
increased to 6% and will improve in the coming month. |
The Commission notes that the Board has agreed to
restrict the number of faulty meters to 10% of the total installed and to
increase the sample meters to 10% of total AP connections. As regards
furnishing monthly/ division-wise consumption recorded by sample meters, the
Board has indicated that it might take some more time to streamline its
reporting system and make the information available. Taking this into
account, the Commission directs that the Successor Entities may begin to supply this information by
1.6.2010. The same would apply also to division-wise information on connected
load, AP factor, increase/decrease in sample meter loads and data on actual
AP supply hours. In the case of supply hours, information could be
restricted, for the moment, to data as maintained by the supplying sub-station.
In view of the Board’s contention that consumption of motors of the same
capacity and rating could vary for a variety of reasons, the Commission
observes that one or combination of such factors could at best have limited
effect on consumption. The Commission, therefore, reiterates that monthly
details of meters recording consumption in excess of what can possibly be
consumed be furnished where the variation is in excess of 10%. In the course of discussion with representatives
of the Board, it had been agreed that it would be helpful to install an AMR
system on all AP feeders so that agricultural consumption estimated on the
basis of sample meters can be cross checked and greater accuracy achieved.
The Commission would like that AMR system should also be installed on a
priority basis. |
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|
3. |
Improve-ment
in Quality of Service. |
Background The
Commission observed some improvement in achieving parity in the supply of
power to the rural areas, but there is further scope for improvement. The
directive for putting up the Reliability Indices on the Board’s website as
per the Electricity Supply Code has not been implemented which may now be
complied with and a report to this effect be furnished within one month of
the issue of the Tariff Order of 2009-10. |
As per the power supply position in the State
during 2009-10 (up to Aug.09), the duration of average power cuts on urban
Sector is 2.30 hours per day (average of District headquarter Urban
Industrial Cat.1 and Main Cities) while for Rural Domestic Sector the same is
2.44 hours per day (average of UPS 3 wire and 4 wire) indicating that there
is virtually no discrimination between these sectors. Month wise break up of
power cut is enclosed as per Annexure-VIII of Volume-II. PSEB is working on these lines to put reliability
indices on the website. The modalities for putting up the data on the website
and regular updation of the same are being discussed and will be implemented
shortly. |
The directive for putting up the Reliability
indices on Board’s Website has not been complied with. The
Commission sees no reasons why the Successor Entities should not be able to place the
Reliability Indices on the Web-site as directed. Final
compliance may be intimated to the Commission by 30.06.2010. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
4. |
Two Part
Tariff. |
Background The Tariff Policy provides for implementation of
Two Part Tariff featuring separate fixed and variable charges and for fixing
ToD tariff on priority for large consumers (say consumers with demand
exceeding 1 MW). The Board was directed to furnish a comprehensive
proposal in this regard. |
The Board is currently working on the
implications of the introduction of such tariff in the State and will submit
the details separately. |
Comprehensive proposal as desired by the
Commission is still awaited and should be furnished within two months of
issue of Tariff Order. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
5 |
KVAH Tariff. |
Background The Commission introduced power factor surcharge/
incentive for BS and DS/NRS consumers with load exceeding 100 KW and SP
consumers in the Tariff Order of 2009-10. Since more consumers are covered
for levy of power factor surcharge/incentive, the Board needs to take into
account the overall impact and submit a comprehensive report on the
implications of introducing KVAH tariff. Directive Before taking a view regarding introduction of
KVAH tariff, the Commission deems it proper to examine this matter separately
taking into account not only the implications on the revenue but also views
of all categories of consumers who are likely to be covered there under. |
The Board is currently working on the
implications of the introduction of such tariff in the State and will submit
the details separately. |
The Commission reiterates its direction that the Successor Entities examine the implications
of introduction of such tariff and submit requisite details at the earliest. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
6. |
Bulk Supply
Tariff. |
Directive To clearly identify and define the type of
consumers who can be covered under this category. |
The Board is working on the modalities of
coverage of consumers under this tariff category and will submit its
suggestions separately. |
No further action is necessary as the Commission
has in the Tariff Order of 2009-10 effected suitable amendments in the bulk
supply schedule. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
7. |
Metering
Plan. |
Background The Commission noted lack
of progress regarding metering of AP connections and reiterated its directive
to implement 100% metering of AP connections as mandated in section 55 of the
Electricity Act 2003. |
Carrying out 100% metering of AP consumers
involve heavy initial investment and recurring expenditure for monthly
recording of readings. Due to geographically scattered area, the recording of
readings of more than 10 lac consumers every month is a gigantic exercise. Keeping in view the above, Central Electricity Authority
(CEA) on the recommendations of Forum of Regulators has proposed to initiate
R&D Project for developing cost effective method for remote metering of
AP consumers PSEB has expressed its willingness to participate in the
project. On its successful completion, the project may be extended to cover
the State. |
The Successor Entity is directed to comply with the
requirements of the Electricity Act, 2003 without any further delay as it is
mandatory to have 100 % metering of all connections including AP. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
8. |
Employee
Cost. |
Background Refer para 4.9 of the
Tariff Order of 2009-10. Directive The Board was
directed to immediately ensure that the findings of the study on manpower
norms and related issues are forthcoming and that it takes the requisite
decisions regarding norms of manpower that will in future be applicable to
achieve reduced manpower levels. |
The
initial report (submitted by PWC as Consultant for detailed Staffing Study on
manpower requirement across different business groups of PSEB) has been
recently received by the Board. The
initial report is under consideration by the Board. The
action plan along with complete staffing study will be submitted after
finalizing and acceptance of above PWC Reports. |
The Board has
reported that the study to re-determine manpower norms and requirements is
currently under way. The Commission directs the Successor Entities to ensure that the study
is completed and the action plan in the light of its findings finalized by
31.3.2011. The Successor Entities should also, as a part of
the manpower study or otherwise finalize its views on the restructuring of
various wings on a functional basis and prepare the road map for its
implementation by 31.3.2011. Simultaneously, the time frame to implement manpower saving technologies such as
unmanned sub-stations, AMR of high end consumers, distribution SCADA etc.
should also be considered and decided upon. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
9. |
Receivables. |
Background The Commission noted that there was no
improvement in reducing the receivables as the amount had increased from
Rs.478.20 Cr. (31.3.08) to Rs.497.95 Cr. (31.3.09). As the Govt. had reportedly consented to adjust
its dues against outstanding loans, the Board needs to take immediate action
to liquidate this amount. Reducing
the receivables on account of amounts involved in pending DSC & PDCO
cases is within the control of the Board and it should make concerted effort
to substantially reduce the same. |
Efforts to minimize the defaulting amount/
outstanding dues relating to Court Cases, PDCO and others are being made. A
statement showing age wise analysis of defaulting amount ending 30.9.2009
(un-audited) is enclosed as per Annexure - III |
The Commission notes that total receivables of
the Board on 31.3.2009 stood at Rs.497.95 crore which have been reduced to
Rs.478.13 crore on 30.9.2009 as per details brought out in Ann.P-1. Evidently, there has been appreciable improvement
in the outstanding dues of various departments of GoP. However, the position
in respect of other categories is by and large the same. The Commission notes
that DSC and PDCO cases are internally dealt with and it should be possible
to reduce the pendency of such cases and thereby substantially reduce the
outstanding arrears. On the other hand, latest data reveals that there has
been a marginal increase in the outstandings of both these categories. Even
with reduced receivables as on |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10. |
Manage- ment Infor- mation
System (MIS). |
Background The Commission regularly requires authenticated
ARR and Regulatory Information Management System (RIMS) related data. It is
desirable that the Board creates a system where the Commission can directly
access such data online. Modalities for the same need to be worked out at an
early date. |
1) Month wise HR data of employees is
completed upto 10/2009. 2) The information of store inventory of
S&T (T) Stores is printed in the Board’s MIR Manual. |
The Commission notes that development of MIS is a
part of the IT plan to be rolled out shortly. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
11. |
Energy Conserva- tion. |
Background The Board had been directed to draw up a Demand
Side Management plan which comprehensively addresses all energy conservation
issues. The Commission expected that this plan would be finalized within this
year and action initiated thereon. |
The Board has only intimated the names of
officers for implementation of DSM plan as under: CE/HRD CE/Sub- Stn. EIC/Planning, Chief Controller/ Finance & Director /Energy Conservation |
The Commission notes that the Board is taking a
few random steps towards effecting energy conservation but has yet to draw a
comprehensive DSM plan as earlier directed. The Commission would like the Successor Entities to submit such a plan
within three months. At the same time, high priority needs to be assigned to
complete the pilot project for improving the efficiency of AP pump sets and
prepare a plan for its phased roll out in the state. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
It is noted that level of compliance to the
directives is not satisfactory. As in the preceding year, the Commission
intends to further interact with the Successor Entities for better compliance of the directives.
…………………………..
Receivables; Year-wise trend: Annexure
- P-1
|
Sr. No. |
Year |
Amount (Rs. in crore) |
|
1 |
2007-08 |
478.20 |
|
2 |
2008-09 |
497.95 |
|
3 |
2009-10(30.9.09) |
478.13 |
Categories
of Receivables: (Rs. in crore)
|
Details of outstanding |
2008-09 |
2009-10(30.9.09) |
|
|
51.48 |
12.81 |
|
Court Cases |
150.17 |
146.47 |
|
DSC cases |
37.93 |
42.74 |
|
PDCO |
107.61 |
114.82 |
|
Others |
150.76 |
161.29 |
|
Total |
497.95 |
478.13 |
|
Annexure-V |
||||||||
|
Apportionment
of Cost among various functions as per |
||||||||
|
Board's
Audited Accounts for the year 2008-09 |
||||||||
|
Sr.
No. |
Particulars |
Hydel |
Thermal |
Total
Generation |
Transmission |
Distribution |
Total |
Common
Assets / Expenses |
|
A – ASSETS |
||||||||
|
|
Direct |
5957.44
|
4321.87
|
10,279.31 |
2040.46
|
5975.25
|
18,295.02 |
|
|
|
Apportioned |
44.52 |
32.30 |
76.82 |
15.25 |
44.66 |
136.74
|
136.74
|
|
|
Total (Amount) |
6,001.96 |
4,354.17 |
10,356.13 |
2,055.71 |
6,019.91 |
18,431.76 |
|
|
|
Total (%) |
32.56% |
23.62% |
56.19% |
11.15% |
32.66% |
100.00% |
|
|
B – EXPENSES |
||||||||
|
1 |
Power Purchase Cost |
0 |
0 |
0 |
0 |
5184.05 |
5,184.05 |
|
|
|
Power
Purchase Cost - % |
0.00% |
0.00% |
0.00% |
0.00% |
100.00% |
100.00% |
|
|
2 |
Fuel Cost |
0 |
3064.65 |
3064.65 |
0 |
0 |
3,064.65 |
|
|
|
Other Fuel Related
Costs |
0 |
36.272 |
36.27 |
0 |
0 |
36.27 |
|
|
|
Sub
Total |
0 |
3100.92 |
3100.92 |
0 |
0 |
3,100.92 |
|
|
|
Add: Fuel Related Losses |
|
49.40 |
49.40 |
|
|
49.40 |
|
|
|
Total
|
0 |
3150.32 |
3150.32 |
0.0 |
0.0 |
3150.3 |
|
|
|
Total
Fuel cost (%) |
0.00% |
100.00% |
100.00% |
0.00% |
0.00% |
100.00% |
|
|
3 |
Repair &
Maintenance |
|
|
|
|
|
|
|
|
|
Direct |
88.56 |
129.41 |
217.97 |
35.57 |
70.09 |
323.63 |
|
|
|
Apportioned |
4.97 |
7.26 |
12.22 |
1.99 |
3.93 |
18.15 |
18.15 |
|
|
Less: Capitalisation |
0.89 |
1.29 |
2.18 |
0.36 |
0.70 |
3.24 |
3.24 |
|
|
Total (Amount) |
92.64 |
135.37 |
228.01 |
37.20 |
73.32 |
338.54 |
|
|
|
Total
(%) |
27.36% |
39.99% |
67.35% |
10.99% |
21.66% |
100.00% |
|
|
4 |
Employee Cost |
|
|
|
|
|
|
|
|
|
Direct |
84.20 |
236.29 |
320.49 |
143.10 |
1230.68 |
1694.27 |
|
|
|
Apportioned |
31.09 |
87.27 |
118.36 |
52.86 |
454.43 |
625.65 |
625.59 |
|
|
Less Capitalisation |
5.86 |
16.43 |
22.29 |
9.96 |
85.58 |
117.81 |
117.81 |
|
|
Total (Amount) |
109.44 |
307.12 |
416.56 |
186.01 |
1599.53 |
2202.11 |
|
|
|
Total
(%) |
4.97% |
13.95% |
18.92% |
8.45% |
72.64% |
100.00% |
|
|
5 |
Administration &
General |
|
|
|
|
|
|
|
|
|
Direct |
3.14 |
4.50 |
7.64 |
11.71 |
45.13 |
64.48 |
|
|
|
Apportioned |
1.28 |
1.83 |
3.11 |
4.77 |
18.37 |
26.25 |
26.25 |
|
|
Less Capitalisation |
0.96 |
1.38 |
2.34 |
3.59 |
13.83 |
19.77 |
19.77 |
|
|
Total (Amount) |
3.46 |
4.95 |
8.41 |
12.88 |
49.67 |
70.96 |
|
|
|
Total
(%) |
4.87% |
6.98% |
11.85% |
18.16% |
69.99% |
100.00% |
|
|
6 |
Depreciation &
Related Debits (net) |
|
|
|
|
|
|
|
|
|
Direct |
133.76 |
137.31 |
271.07 |
97.63 |
316.41 |
685.11 |
|
|
|
Apportioned |
2.15 |
2.21 |
4.36 |
1.57 |
5.09 |
11.03 |
11.03 |
|
|
Less Capitalisation |
0.47 |
0.48 |
0.96 |
0.34 |
1.12 |
2.41 |
2.41 |
|
|
Total (Amount) |
135.44 |
139.03 |
274.48 |
98.86 |
320.39 |
693.73 |
|
|
|
Total
(%) |
19.52% |
20.04% |
39.57% |
14.25% |
46.18% |
100.00% |
|
|
7 |
Interest & Finance
Charges |
|
|
|
|
|
|
|
|
|
Direct |
621.42 |
197.17 |
818.59 |
163.77 |
460.04 |
1442.39 |
|
|
|
Apportioned |
1.61 |
0.51 |
2.12 |
0.42 |
1.19 |
3.73 |
3.73 |
|
|
Less Capitalisation |
108.36 |
34.38 |
142.74 |
28.55 |
80.21 |
251.53 |
251.53 |
|
|
Total (Amount) |
514.67 |
163.29 |
677.96 |
135.65 |
381.01 |
1194.59 |
|
|
|
Total
(%) |
43.08% |
13.67% |
56.75% |
11.35% |
31.89% |
100.00% |
|
|
8 |
Return on equity (in
ratio of assets) |
134.30 |
97.42 |
231.76 |
45.99 |
134.71 |
412.46 |
412.46 |
|
|
Return
on equity - % |
32.56% |
23.62% |
56.19% |
11.15% |
32.66% |
100.00% |
|
Annexure: VI
|
Proportion
of Plant-wise cost of Generation for 2008-09 (As per information submitted by
PSEB) |
|||||||||||||||
|
(Units
in MKWH) |
|||||||||||||||
|
(Rs.
in Lacs) |
|||||||||||||||
|
Sr. |
Particulars |
HYDEL |
THERMAL |
Total |
|||||||||||
|
No. |
RSD |
Mukerian Hydel |
UBDC |
UHL |
Anandpur Sahib |
Micro Hydel |
Bhakra Complex |
Dehar & Pong |
Total |
GGSSTP |
GNDTP |
GHTP |
Total |
||
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11=(3 to 10) |
12 |
13 |
14 |
15=(12 to 14) |
16=(11+15) |
|
1 |
MKWH generated during the year |
1473.82 |
1131.86 |
338.95 |
531.52 |
689.28 |
9.9 |
2594.12 |
1713.02 |
8482.47 |
9610.67 |
2845.6 |
5610.09 |
18066.36 |
26548.83 |
|
2 |
MKWH use in auxiliaries |
5.2 |
24.78 |
2.44 |
5.91 |
5.68 |
0 |
0 |
0 |
44.01 |
801.34 |
329.12 |
483.85 |
1614.31 |
1658.32 |
|
3 |
MKWH sent out |
1468.62 |
1107.08 |
336.51 |
525.61 |
683.60 |
9.9 |
2594.12 |
1713.02 |
8438.46 |
8809.33 |
2516.48 |
5126.24 |
16452.05 |
24890.51 |
|
4 |
Total depreciated capital cost of generating
assets in use at the beginning of the year including share of G.E. |
371229.53 |
24332.37 |
7360.26 |
2292.81 |
11511.32 |
774.54 |
5142.36 |
11391.1 |
434034.29 |
36216.45 |
-191.71 |
49648.07 |
85672.81 |
519707.1 |
|
5 |
Total capital expenditure on generation assets
brought in use during the year with date of commissioning including share of
G.E. |
24.44 |
3646.65 |
2717.1 |
533.05 |
17.76 |
0 |
0 |
0.43 |
6939.43 |
9692.85 |
93.53 |
726.53 |
10512.91 |
17452.34 |
|
6 |
|
||||||||||||||
|
i) |
Fuel |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
165972.53 |
53736.52 |
95696.7 |
315405.75 |
315405.75 |
|
ii) |
Oil water & stores |
0 |
0 |
0 |
0 |
0 |
0 |
0.7 |
140.23 |
140.93 |
1218.35 |
548.78 |
140.38 |
1907.51 |
2048.44 |
|
iii) |
Salaries & wages including contribution
made for pension Provident Superannuation of Officer/servants + Fringe
benefit tax (FBT) |
1128.59 |
1925.78 |
1761.36 |
931.69 |
1570.4 |
0.13 |
1738.79 |
882.29 |
9939.03 |
14043.2 |
10221.53 |
5794.61 |
30059.34 |
39998.37 |
|
iv) |
R&M
expenses |
52.51 |
172.62 |
148.93 |
86.08 |
209.01 |
67.28 |
1685.91 |
6228.18 |
8650.52 |
5326.14 |
1800.78 |
3879.44 |
11006.36 |
19656.88 |
|
v) |
Admn. Charges attributable to generation |
81.49 |
70.15 |
58.3 |
35.82 |
19.93 |
0 |
90.36 |
33.85 |
389.90 |
269.19 |
180.39 |
168.78 |
618.36 |
1008.26 |
|
vi) |
Specified Depriciation) including share of
G.E. |
10676.45 |
1068.73 |
393.73 |
150.7 |
349.36 |
21.11 |
683.45 |
503.78 |
13847.31 |
2839.68 |
1857.21 |
9031.98 |
13728.87 |
27576.18 |
|
vii) |
Interest |
49239.2 |
3227.4 |
976.25 |
304.11 |
1526.84 |
102.73 |
682.07 |
1510.89 |
57569.49 |
4803.68 |
-25.43 |
6585.23 |
11363.48 |
68932.97 |
|
|
Total cost of Generation |
61178.24 |
6464.68 |
3338.57 |
1508.40 |
3675.54 |
191.25 |
4881.28 |
9299.22 |
90537.18 |
194472.77 |
68319.78 |
121297.12 |
384089.67 |
474626.85 |
|
|
Cost of Generation per KWH in paisa |
416.57 |
58.39 |
99.21 |
28.70 |
53.77 |
193.18 |
18.82 |
54.29 |
107.29 |
220.76 |
271.49 |
236.62 |
233.46 |
190.69 |
Annexure
|
PLANT-WISE
PROPORTION OF GENERATION |
||||||||||||||
|
(in
%) |
||||||||||||||
|
Sr. |
Particulars |
HYDEL |
THERMAL |
|||||||||||
|
No. |
RSD |
Mukerian Hydel |
UBDC |
UHL |
Anandpur Sahib |
Micro Hydel |
Bhakra Complex |
Dehar & Pong |
Total |
GGSSTP |
GNDTP |
GHTP |
Total |
|
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11=(3 to 10) |
12 |
13 |
14 |
15=(12+13+14) |
|
1 |
MKWH generated during the year |
17.37% |
13.34% |
4.00% |
6.27% |
8.13% |
0.12% |
30.58% |
20.19% |
100.00% |
53.20% |
15.75% |
31.05% |
100.00% |
|
2 |
MKWH use in auxiliaries |
11.82% |
56.31% |
5.54% |
13.43% |
12.91% |
0.00% |
0.00% |
0.00% |
100.00% |
49.64% |
20.39% |
29.97% |
100.00% |
|
3 |
MKWH sent out |
17.40% |
13.12% |
3.99% |
6.23% |
8.10% |
0.12% |
30.74% |
20.30% |
100.00% |
53.55% |
15.30% |
31.16% |
100.00% |
|
4 |
Net Fixed Assets |
85.53% |
5.61% |
1.70% |
0.53% |
2.65% |
0.18% |
1.18% |
2.62% |
100.00% |
42.27% |
-0.22% |
57.95% |
100.00% |
|
5 |
Capital Expenditure during the year |
0.35% |
52.55% |
39.15% |
7.68% |
0.26% |
0.00% |
0.00% |
0.01% |
100.00% |
92.20% |
0.89% |
6.91% |
100.00% |
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i) |
Fuel Cost |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
52.6% |
17.0% |
30.3% |
100.0% |
|
ii) |
Oil water & stores |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.50% |
99.50% |
100.00% |
63.87% |
28.77% |
7.36% |
100.00% |
|
iii) |
Employee Cost + FBT |
11.36% |
19.38% |
17.72% |
9.37% |
15.80% |
0.00% |
17.49% |
8.88% |
100.00% |
46.72% |
34.00% |
19.28% |
100.00% |
|
iv) |
R & M Expenses |
0.61% |
2.00% |
1.72% |
1.00% |
2.42% |
0.78% |
19.49% |
72.00% |
100.00% |
48.39% |
16.36% |
35.25% |
100.00% |
|
v) |
Admn. & General charges |
20.90% |
17.99% |
14.95% |
9.19% |
5.11% |
0.00% |
23.18% |
8.68% |
100.00% |
43.53% |
29.17% |
27.29% |
100.00% |
|
vi) |
Other Expenses including Depriciation |
77.10% |
7.72% |
2.84% |
1.09% |
2.52% |
0.15% |
4.94% |
3.64% |
100.00% |
20.68% |
13.53% |
65.79% |
100.00% |
|
vii) |
Interest |
85.53% |
5.61% |
1.70% |
0.53% |
2.65% |
0.18% |
1.18% |
2.62% |
100.00% |
42.27% |
-0.22% |
57.95% |
100.00% |
|
|
Total cost of Generation |
67.57% |
7.14% |
3.69% |
1.67% |
4.06% |
0.21% |
5.39% |
10.27% |
100.00% |
50.63% |
17.79% |
31.58% |
100.00% |
|
Annexure-VIII |
|||||||||||||||
|
Plant-wise Revenue Requirements for
the FY 2010-11 |
|||||||||||||||
|
(on the basis of Annexure |
|||||||||||||||
|
(Rs. in crore) |
|||||||||||||||
|
Sr. No. |
Item of expense |
Hydel* |
RSD |
|
UBDC |
Shanan |
ASHP |
Micro Hydel |
Bhakra Complex |
Dehar & Pong |
Thermal* |
GGSSTP |
GNDTP |
GHTP |
Basis of Apportionment (from
Annexure VI) |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
|
1 |
Cost of
fuel |
0.00 |
- |
- |
- |
- |
- |
- |
- |
- |
3,370.40 |
1,773.5 |
574.3 |
1,022.6 |
Fuel Cost |
|
2 |
Employee cost |
148.59 |
16.88 |
28.80 |
26.33 |
13.92 |
23.48 |
0.00 |
25.99 |
13.20 |
417.08 |
194.86 |
141.81 |
80.41 |
Employee Cost |
|
3 |
R&M expenses |
102.12 |
0.62 |
2.04 |
1.76 |
1.02 |
2.47 |
0.80 |
19.90 |
73.53 |
149.26 |
72.23 |
24.42 |
52.61 |
R & M Expenses |
|
4 |
A&G expenses |
3.88 |
0.81 |
0.70 |
0.58 |
0.36 |
0.20 |
0.00 |
0.90 |
0.34 |
5.57 |
2.42 |
1.62 |
1.52 |
Rent, Rates, Taxes and Insurance |
|
5 |
Depreciation |
168.59 |
129.98 |
13.02 |
4.79 |
1.84 |
4.25 |
0.25 |
8.33 |
6.14 |
173.08 |
73.16 |
-0.38 |
100.30 |
Net Fixed Assets |
|
6 |
Interest charges |
418.98 |
358.36 |
23.50 |
7.12 |
2.22 |
11.10 |
0.75 |
4.94 |
10.98 |
132.95 |
56.20 |
-0.29 |
77.04 |
Interest on Depriciated Cost of Genenration |
|
7 |
Return on Equity |
134.30 |
114.86 |
7.53 |
2.28 |
0.71 |
3.56 |
0.24 |
1.58 |
3.52 |
97.42 |
41.18 |
-0.21 |
56.46 |
Net Fixed Assets |
|
8 |
Total Revenue Requirement |
976.47 |
621.52 |
75.59 |
42.86 |
20.07 |
45.06 |
2.05 |
61.65 |
107.69 |
4,345.76 |
2,213.55 |
741.28 |
1,390.93 |
|
|
9 |
Add: Consolidated Gap and carrying
cost of gap for 2009-10 |
99.22 |
63.15 |
7.68 |
4.36 |
2.04 |
4.58 |
0.21 |
6.26 |
10.94 |
441.58 |
224.92 |
75.32 |
141.33 |
In proportion to Total Revenue
Requirement |
|
10 |
Gross revenue requirement (8+9) |
1,075.69 |
684.67 |
83.27 |
47.22 |
22.11 |
49.64 |
2.25 |
67.91 |
118.63 |
4,787.34 |
2,438.48 |
816.60 |
1,532.26 |
|
Annexure XI
COMPUTATION OF OPEN
ACCESS CHARGES - EXAMPLES
Case 1:
|
Sr.No. |
Particulars |
Charges
for 2.5 MW Capacity for 1 month (Rs.) |
|
1 |
No of
units to be delivered to the consumer |
1800000
units |
|
2 |
T&D
Losses at 11 KV |
10.00%
(50% of T&D loss determined by the Commission) |
|
3 |
Units
required to be injected in the System |
2000000
units (2.778 MW) |
|
4 |
Transmission
& Wheeling Charges @ Rs.3143/MW/day |
Rs.261937 |
|
5 |
Operating
Charge @ Rs 1000 /day |
Rs.30000 |
|
6 |
OA
Application Registration Fee |
Rs.10000 |
|
7 |
Net
Open Access Charge |
Rs.301937 |
|
8 |
Effective
Open Access Charge (Unit) |
16.77
paise/unit |
Note:
1
Open
Access customer will also have to bear the cost of 200000 units lost in
Transmission & distribution besides Open Access charges.
2
Electricity
Duty and Octroi are statutory levies which are chargeable as per State
Government notification(s).
3
Reactive
energy charges, cross subsidy surcharge, additional surcharge, interconnection
charges, standby charges, parallel operation charges, connectivity charges and
any other charges shall be payable as per the regulations of the Commission.
Case 2:
|
Sr.No. |
Particulars |
Charges
for 10 MW Capacity for 1 month (Rs.) |
|
1 |
No of
units to be delivered to the consumer. |
7200000
units |
|
2 |
T&D
Losses at 66V |
6.00% (30%
of T&D loss determined by the Commission) |
|
3 |
Units
required to be injected in the System |
7659574
units (10.638 MW) |
|
4 |
Transmission
& Wheeling Charges @ Rs.3143/MW/day |
Rs.1003057 |
|
5 |
Operating
Charge @ Rs 1000 /day |
Rs.30000 |
|
6 |
OA
Application Registration Fee |
Rs.10000 |
|
7 |
Net
Open Access Charge |
Rs.1043057 |
|
8 |
Effective
Open Access Charge (Unit) |
14.49
Paise/unit |
Note:
1.
The
Open Access customer will also have to bear the cost of 459574 units lost in
Transmission & distribution besides Open Access charges.
2.
Electricity
Duty and Octroi are statutory levies which are chargeable as per State
Government notification(s).
3.
Reactive
energy charges, cross subsidy surcharge, additional surcharge, interconnection
charges, standby charges, parallel operation charges, connectivity charges and
any other charges shall be payable as per the regulations of the Commission.