Corporation Limited Truing up of FY 2013-14 and FY 2014-15

MYT Petition for Transmission & Distribution Business of TSECL

Tripura StateElectricityCorporation LimitedTruing up of FY 2013-14and FY 2014-15 &Multi Year TariffPetition for Generationand Distributionbusiness for FY 2016-17to FY 2018-19

June 2018


Filed By

Tripura State Electricity CorporationBidyut Bhawan, Banamalipur

Agartala, Tripura (W)

Draft MYT Petition for Transmission & Distribution Business of TSECL

Table of Contents1. Form -1: Petition.................................................................................................................... 7

2. Form-2: Affidavit .................................................................................................................. 9

3. Summary of Petition ............................................................................................................11

3.1. Preamble..................................................................................................................................................... 11

3.2. Procedural History .................................................................................................................................... 11

3.3. Current Petition .........................................................................................................................................12

3.4. Contents of the Petition.............................................................................................................................13

4. Power Sector Overview ....................................................................................................... 14

4.1. About the State of Tripura.........................................................................................................................14

4.2. Background of TSECL ...............................................................................................................................14

4.3. Generation Overview.................................................................................................................................15

4.4. Transmission & Distribution Overview....................................................................................................16

5. True Up for FY 2013-14 ....................................................................................................... 18

5.1. Introduction .............................................................................................................................................. 18

5.2. O&M Expenses...........................................................................................................................................19

5.3. Interest on Working Capital......................................................................................................................19

6. True Up for FY 2014-15 ........................................................................................................21

6.1. Introduction ...............................................................................................................................................21

6.2. Asset Base and Capital Expenditure.........................................................................................................21

6.3. Capital Work In Progress ......................................................................................................................... 22

6.4. Investments .............................................................................................................................................. 22

6.5. Working Capital and Interest .................................................................................................................. 22

6.6. Depreciation ............................................................................................................................................. 23

6.7. Reasonable Return ................................................................................................................................... 24

6.8. Expenditure .............................................................................................................................................. 25

6.8.1. Power Purchase Cost ...................................................................................................................... 25

6.8.2. Fuel Cost ......................................................................................................................................... 26

6.8.3. Operation & Maintenance Expenses ............................................................................................. 26

6.8.4. Depreciation ................................................................................................................................... 27

6.8.5. Interest and Financial Charges...................................................................................................... 27

6.9. Income ......................................................................................................................................................28

6.9.1. Income from Sale of Power ............................................................................................................28

6.9.2. Non-Tariff Income..........................................................................................................................28

6.10. Summary of Truing Up........................................................................................................................... 29

7. Generation MYT for the FY 2016-17 to FY 2018-19 ...............................................................31

7.1. Introduction ...............................................................................................................................................31

7.2. Own Generation Parameters.....................................................................................................................31

7.2.1. Plant Load Factor (PLF) and Auxiliary Consumption ...................................................................31


7.2.2. Heat Rate......................................................................................................................................... 33

7.3. Assets Base and Capital Expenditure ...................................................................................................... 33

7.4. Investment ................................................................................................................................................ 35

7.5. Working Capital ........................................................................................................................................ 35

7.6. Return on Equity and Tax on Income ..................................................................................................... 36

7.7. Expenditure............................................................................................................................................... 37

7.7.1. Fuel Cost .......................................................................................................................................... 37

7.7.2. Operation and Maintenance Cost ..................................................................................................38

7.7.3. Interest on Working Capital ...........................................................................................................40

7.7.4. Depreciation ....................................................................................................................................40

7.7.5. Non-tariff Income ............................................................................................................................41

7.7.6. Summary of ARR and Tariff Proposal for the FY 16-17 to FY 18-19 .............................................41

7.7.7. Actual ARR of FY 2015-16 .............................................................................................................. 42

7.7.8. Annual Revenue Requirement and Proposed Tariff for the FY 2016-17 ..................................... 42

7.7.9. Annual Revenue Requirement and Proposed Tariff for the FY 2017-18 ..................................... 43

7.7.10. Annual Revenue Requirement and Proposed Tariff for the FY 2018-19 ................................... 44

8. ARR for Transmission & Distribution Business of TSECL for MYT Control Period (FY 2016-17

to FY 2018-19) .........................................................................................................................46

8.1. Introduction .............................................................................................................................................. 46

8.2. Category wise Projection for growth in No. of Consumers .................................................................... 46

8.3. Category wise Projection for growth in Sales ......................................................................................... 47

8.4. Transmission and Distribution Loss .......................................................................................................48

8.5. Energy Balance ......................................................................................................................................... 49

8.6. Power Purchase ........................................................................................................................................ 49

8.7. Transmission Charges ...............................................................................................................................51

8.8. O&M Expenses ..........................................................................................................................................51

8.9. Capital Expenditure ................................................................................................................................. 52

8.10. GFA and Depreciation............................................................................................................................ 53

8.11. Interest and Finance Charges................................................................................................................. 56

8.12. Interest on Working Capital................................................................................................................... 56

8.13. Return on Equity and Tax on Return on Equity ................................................................................... 57

8.14. Non-tariff Income................................................................................................................................... 59

8.15. Aggregate Revenue Requirement ..........................................................................................................60

9. Revenue from Operations for FY 2016-17 to FY 2018-19 ..................................................... 61

10. Tariff Design and Proposed Rate Schedule ....................................................................... 62

10.1. Introduction ............................................................................................................................................ 62

10.2. Tariff Structure ....................................................................................................................................... 62

10.3. Proposed Rate Schedule ......................................................................................................................... 64

10.4. New Provisions in Tariff Schedule......................................................................................................... 66

10.5. Proposed Miscellaneous Charges........................................................................................................... 67

11. Revenue Gap for FY 2018-19 .............................................................................................. 70

11.1. Revenue gap at existing tariff.................................................................................................................. 70

11.2. Revenue gap at proposed tariff............................................................................................................... 70


12. Open Access Charges ......................................................................................................... 72

12.1. Introduction............................................................................................................................................. 72

12.2. Allocation Matrix .................................................................................................................................... 72

12.3. Wheeling Charges ................................................................................................................................... 73

12.4. Cross Subsidy Surcharge ........................................................................................................................ 74

13. Compliance to Directives ................................................................................................... 75

13.1. Introduction............................................................................................................................................. 75

13.2. Adherence to past directives of Hon’ble Commission .......................................................................... 75

13.2.1. Directive 3: Filing Petition for approval of inter-State tariff for Manipur and Mizoram to the

Commission............................................................................................................................................... 75

13.2.2. Directive 4: Annual Performance Report (APR) ......................................................................... 75

13.2.3. Directive 5: Timely filing of ARR & Tariff Petition ..................................................................... 76

13.2.4. Directive 6: Annual Statement of Accounts ................................................................................ 76

13.2.5. Directive 7: Assets and Depreciation Register ............................................................................ 76

13.2.6. Directive 8: Management Information System (MIS)................................................................ 76

13.2.7. Directive 9: Collection of past arrears...........................................................................................77

13.2.8. Directive 10: Transmission and Distribution Loss ......................................................................77

13.2.9. Directive 11: Capital Expenditure Plan .........................................................................................77

13.2.10. Directive 12: AT&C Loss ............................................................................................................. 79

13.3. Adherence to fresh directives of Hon’ble Commission......................................................................... 79

13.3.1. Directive 1: Separate annual accounts for Generation, Transmission, Distribution and SLDC79

13.3.2. Directive 2: Submission of final truing up Petition for years from FY 2009-10 to FY 2012-1380

13.3.3. Directive 3: Submission of Report regarding status of consumer metering and roadmap for

achieving 100% consumer metering........................................................................................................ 81

13.3.4. Directive 4: Submission of minutes of meeting of all distribution circles................................. 81

13.3.5. Directive 5: Conducting internal audit of the Corporations assets / offices..............................82

13.3.6. Directive 7: Tariff Petition for diesel generating station ............................................................82

14. Annexures .........................................................................................................................83

14.1. Proposed Recruitment Plan of TPGL .....................................................................................................83

14.2. Annexure-A: Audited Annual Accounts along with CAG Report .........................................................84

14.3. Annexure-B: Asset Register ...................................................................................................................84

14.4. Annexure-C: Status of Arrears ...............................................................................................................84

14.5. Annexure-D: Minutes of Meeting of distribution circles......................................................................84

14.6. Annexure-E: Internal Audit Report .......................................................................................................84

14.7. Annexure F: DPR of combine cycle conversion of RGTPP & BGTPP and renovation &

modernization/life extension project of GHEP .............................................................................................84

14.8. Annexure G: Copy of fuel bill of ONGC & GAIL for the period Oct 2016 to Dec 2016 .......................84

14.9. Annexure H: Form A: Planned R&M of Rokhia, Baramura and Gumti ..............................................84

14.10. Annexure I: Form F: Plant Characteristics of Rokhia, Baramura and Gumti ...................................84


List of Tables

Table 1: Plant wise Effective capacity of TPGL ..........................................................................................................15Table 2: Procurement from Central Generating Stations .........................................................................................16Table 10: Summary of Truing Up for the FY 2013-14 (In Lakh)...............................................................................18Table 21: O&M Expenses (Approved vs Actual) Rs. in Lakh ....................................................................................19Table 14: Norms for Interest on Working Capital as Tariff Regulation 2004 .........................................................19Table 14: Calculation of Working Capital and Interest thereon in Rs. Lakhs ..........................................................19Table 10: Original Value of Fixed Assets in Rs. Lakhs .............................................................................................21Table 12: Cost of Capital Works in Progress in Rs. in Lakhs ................................................................................... 22Table 13: Investments in Rs. in Lakhs....................................................................................................................... 22Table 14: Norms for Interest on Working Capital as Tariff Regulation 2004 ........................................................ 22Table 14: Calculation of Working Capital and Interest thereon in Rs. Lakhs ......................................................... 23Table 16: Rate of Depreciation as per Companies Act 1956..................................................................................... 23Table 15: Calculation of Assets created through Grants (Rs. in Lakhs) .................................................................. 24Table 16: Depreciation for the FY 2014-15 (Rs. In Lacs).......................................................................................... 24Table 19: Calculation of Reasonable Return for the FY 2014-15 in Rs. Lakhs ........................................................ 24Table 18: Central Sector Allocation in ISGS.............................................................................................................. 25Table 19: Source wise Power purchase cost .............................................................................................................. 25Table 22: Plant wise fuel cost (Approved vs Actual) ................................................................................................ 26Table 21: O&M Expenses (Approved vs Actual) ........................................................................................................27Table 22: Interest on Loan for the FY 2014-15 (In Lakh) .........................................................................................27Table 23: Sale from Power for the FY 2014-15 ......................................................................................................... 28Table 24: Non-tariff Income & Grant (Approved vs Actual).................................................................................... 29Table 26: Summary of Approved TERC Order for the FY 2014-15 (In Rs. Lakhs)................................................. 29Table 27: Summary of Truing Up for the FY 2014-15 (In Rs. Lakh) ....................................................................... 29Table 3: Actual Plant wise PLF from FY 11-12 to FY 15-16........................................................................................31Table 4: Plant wise Availability %.............................................................................................................................. 32Table 5: Projected PLF and Auxiliary Consumption from FY17 to FY19................................................................. 32Table 6: Plant wise Heat Rate of Past Years ............................................................................................................. 33Table 7: Capital Expenditure from FY 16-17 to FY 18-19 (Rs. lakhs) ...................................................................... 33Table 8: Details of Combine cycle conversion and R&M of GHEP Projects ........................................................... 34Table 9: Original Value of Fixed Assets in Rs. Lakhs ............................................................................................... 34Table 10: Original Value of Fixed Assets in Rs. Lakhs ............................................................................................. 35Table 11: Interest on Working Capital in Rs. Lakhs ................................................................................................. 36Table 12: Calculation of Equity Fund in Rs. Lakhs....................................................................................................37Table 13: Calculation of Pre-tax Return on Equity ....................................................................................................37Table 14: Projected Source wise Supply of Fuel and fuel cost (per SCM) ............................................................... 38Table 15: Fuel consumption and Fuel Cost in Rs. Lakhs.......................................................................................... 38Table 16: O&M Expenses as per Norms .................................................................................................................... 38Table 17: Expected O&M Cost on Planned Repair & Maintenance for the FY 16-17 to FY 18-19 in Rs. Lakhs..... 39Table 18: O&M Cost in Rs. Lakhs .............................................................................................................................. 39Table 19: Rate of Depreciation as per Tariff Regulation .......................................................................................... 40Table 20: Calculation of Assets created through Grants .......................................................................................... 40Table 21: Projected Depreciation (Rs. In Lacs)......................................................................................................... 40Table 22: Summary of Actuals of FY 15-16in Rs. Lakhs........................................................................................... 42Table 23: Summary of ARR of FY 16-17 in Rs. Lakhs............................................................................................... 42Table 24: Proposed Tariff of FY 16-17 in Lacs........................................................................................................... 43Table 25: Summary of ARR of FY 17-18in Rs. Lakhs ............................................................................................... 43Table 26: Proposed Tariff of FY 17-18 in Lacs .......................................................................................................... 44Table 27: Summary of ARR of FY 18-19 in Rs. Lakhs .............................................................................................. 44Table 28: Proposed Tariff of FY 18-19 in Lacs .......................................................................................................... 45Table 1: Projection for growth in Number of Consumers ........................................................................................ 47Table 2: CAGR for projecting growth in sales........................................................................................................... 47Table 3: Projection for growth in Sales ..................................................................................................................... 47Table 4: Projection of T&D Loss for MYT Period ..................................................................................................... 48Table 5: Projection of Energy Balance for MYT Period............................................................................................ 49Table 6: Projection for Power Purchase Cost for MYT Period ................................................................................. 50Table 7: Projection of Transmission Charge for MYT Period ...................................................................................51


Table 8: Projection of O&M Expense for Transmission Business for MYT Period .................................................51Table 9: Projection of O&M Expense for Distribution Business for MYT Period....................................................51Table 10: Projection of Expense Capitalization of Transmission Business of TSECL for MYT Period ................. 52Table 11: Projection of Capital Expenditure of Distribution Business of TSECL for MYT Period......................... 52Table 12: Depreciation Rate as provided in ‘Annexure-8’ of the TERC Regulations (Multi Year Tariff), 2015.... 53Table 13: Depreciation for Transmission Asset calculated as per TERC Regulations (Multi Year Tariff), 2015 .. 54Table 14: Depreciation for Distribution Asset calculated as per TERC Regulations (Multi Year Tariff), 2015 .....55Table 15: IoWC calculation for Transmission Business ........................................................................................... 56Table 16: IoWC calculation for Distribution Business ............................................................................................. 56Table 17: Return on Equity calculation for Transmission Business ........................................................................ 58Table 18: Return on Equity calculation for Distribution Business .......................................................................... 58Table 19: Calculation of Annualized RoE on Pre-tax basis for Transmission Business ......................................... 59Table 20: Calculation of Annualized RoE on Pre-tax basis for Distribution Business........................................... 59Table 21: Non-tariff Income for Transmission Business ......................................................................................... 59Table 22: Non-tariff Income for Distribution Business ........................................................................................... 59Table 23: Aggregate Revenue Requirement for Transmission Business ................................................................ 60Table 24: Aggregate Revenue Requirement for Distribution Business................................................................... 60Table 25: Category wise revenue at existing tariff (Rs. Crores) ................................................................................61Table 26: Category wise revenue at proposed tariff ..................................................................................................61Table 27: Applicability of the Tariff Categories ........................................................................................................ 62Table 28: Proposed Rate Schedule for FY 2018-19 .................................................................................................. 64Table 29: Proposed Rate Schedule for FY 2017-18................................................................................................... 67Table 30: Revenue Gap at existing tariff for MYT Period ........................................................................................ 70Table 31: Revenue Gap at proposed tariff for MYT Period ...................................................................................... 70Table 32: Allocation matrix for separation of ARR for Wires Business and Retail Supply Business .....................72Table 33: Separation of ARR for Wires Business and Retail Supply Business ........................................................73Table 34: Wheeling Charge for 33 kV voltage level ...................................................................................................73Table 35: Calculation of Cost of Supply..................................................................................................................... 74Table 36: Calculation of Cross Subsidy Surcharge ................................................................................................... 74


1. Form -1: PetitionBEFORE THE HON’BLE TRIPURA ELECTRICITY REGULATORY COMMISSION, AGARTALA

File No.

Case No.

IN THE MATTER OF

Filing of the Truing up Petition by Tripura State Electricity Corporation Limited (TSECL) for FY 2013-14 andFY 2014-15 under TERC (Tariff procedure) Regulations, 2004 and the MYT petition from FY 2016-17 to FY2018-19 for generation business and distribution and retail supply business under TERC MYT regulations, 2015along with other guidelines and directions issued by the TERC from time to time and under Section 62 of theElectricity Act, 2003 read with the relevant Guidelines.

AND

IN THE MATTER OF

Tripura State Electricity Corporation Limited (hereinafter referred to as “TSECL” or the “utility”) -PETITIONER.

The applicant respectfully submits hereunder:

1. The power supply industry in Tripura had been under the control of the State Government till 31stDecember 2004. As part of the power sector reforms, Tripura State Electricity Corporation Limited(TSECL) was formed and registered under the Companies Act 1956 on 9th June 2004, in compliancewith the MOU among Ministry of Power, Government of India & Government of Tripura on 28th dayAugust 2003. TSECL was made functional, under section 131 & 133 of the Indian Electricity Act 2003,w.e.f. 1st January 2005 with the operational control of all assets related to Generation, Transmission,Distribution & its allied activities related to power sector of Tripura transferred to TSECL fromGovernment of Tripura. This was done with the objective of improving the efficiency of services in thissector. In continuation with this reforms, Tripura Power Generation Limited (TPGL) has beenconstituted and all assets relating to Generation projects owned by TSECL is being transferred to TPGLwith effect from 1st April 2016. However, the demerger of TPGL from TSECL as per provisions ofCompanies Act 2015, is still in progress, post which the independent functioning of TPGL shallcommence. As such, a combined petition for generation and distribution is being filed by TSECL tillsuch stage.

2. The Hon’ble Commission in exercise of power conferred under section 181 of The Electricity Act 2003and all other powers enabling in this behalf issued the TERC Tariff Regulation 2004, TERC Tariff Procedure Regulation 2004. TERC Conduct of Business Regulation 2004.

3. The present tariff petition is being filed in accordance with the relevant provision of the abovementioned regulations as well as that of Electricity Act 2003 and National Tariff Policy.

4. This petition includes the True-up for the FY 2013-14 and FY 2014-15 and the MYT petition of FY 2016-17 to FY 2018-19 for generation and distribution business along with tariff proposal of FY 2017-18.Under the TERC MYT regulations 2015, TSECL proposes that the first control period should be forthree years i.e. from FY 2016-17 to FY 2018-19. Also, TSECL craves leave of the Commission forsubmitting the audited annual accounts of FY 2015-16 as the statutory audit of FY 2015-16 is in processand the same shall be submitted to the Hon’ble Commission as and when the audit is completed.

5. TSECL along with this petition is submitting the supporting/ supplementary data & informationavailable and shall further make available the same to the extent available with TSECL as may berequired by the Hon’ble Commission during its processing.

Prayer

TSECL respectfully prays that the Hon’ble Commission may:

a. Admit this Petition;


b. Examine the proposal submitted by the Petitioner for a favorable dispensation as detailed in the enclosedproposal;

c. Consider the submissions and allow the proposed Truing up for FY 2013-14 to FY 2014-15 and MYTprojections of FY 2016-17 to FY 2018-19for generation and distribution business along with tariff proposalfor FY 2018-19;

d. Pass suitable orders for implementation of the tariff proposal;e. Approve the terms and conditions of tariff and various other matters as proposed in this petition and the

proposed changes therein.f. Condone any inadvertent omissions/ errors/ shortcomings and permit TSECL to add/ change/ modify /

alter this filing and make further submissions as may be required at a future date.g. Pass such orders as the Hon’ble Commission may deem fit and proper, keeping in view the facts and

circumstances of the case;

(Er. Arup Gan Chaudhuri)

Deputy General Manager

Commercial & Tariff

For and on behalf of

Tripura State Electricity Corporation Limited (TSECL)

Dated: ______, 2018


Tripura State Electricity Corporation LimitedPwC 11

3. Summary of Petition

3.1. Preamble1. Tripura State Electricity Corporation Limited (TSECL) has been created from the Department of Power,

Government of Tripura and started its operation from 1stJanuary, 2005. TSECL was the sole electricity

utility in Tripura responsible for generation, transmission and distribution of electricity in the State.Now,

new company named Tripura Power Generation Limited (TPGL) has been formed with all

generation assets of TSECL with effect from June, 2015. TPGL which is now responsible for the State

generationstarted functioning as an independent entity from September 2016.However, the demerger of

TPGL from TSECL as per provisions of Companies Act 2015, is still in progress, post which the

independent functioning of TPGL shall commence. As such, a combined petition for generation and

distribution is being filed by TSECL till such stage.

2. The Government of Tripura (GoT) vide notification dated 24thJuly, 2007, notified the final opening

balance of the assets of TSECL with effect from January 1st 2005. As per this notification of Government

of Tripura, Rs. 636.35 Crore worth of Fixed Assets and Rs. 18.39 Cr. of worth of current assets (after

netting off current liabilities of Rs. 44.17 Crore) transferred to TSECL from the Department of Power,

GoT. The authorised Capital of TSECL increased from Rs. 10.00 Crore to Rs. 120.00 Crore. TSECL

increased its issued, subscribed and paid-up share capital from Rs. 9.55 Crore to Rs. 109.29 Crore for

consideration of other than cash by way of conversion of capital reserve amounting to Rs. 9.50 Crore and

conversion of Department of Power loan amounting to Rs. 90.24 Crore.

3.2. Procedural History1. The Tripura State Electricity Corporation Limited had filed its first Tariff Petition for the FY 2005-06 in

accordance with the Tripura Electricity Regulatory Commission (Tariff Procedure) Regulation 2004, and

Tripura Electricity Regulatory Commission (Tariff) Regulation 2004 (hereinafter referred to asTERC

Tariff Regulations, 2004). The Tripura Electricity Regulatory Commission (hereafter referred as ‘the

Hon’ble Commission), in exercise of the powers vested under Sections 61, 62 and 64 of the Electricity Act,

2003 carried out a detailed review of Petition submitted by TSECL.

2. The Hon’ble Commission examined the Petition and other submissions made by TSECL along with

solicited views of the public representatives on the Petition submitted by TSECL. After a thorough

examination of the Petition and Public comments and suggestions, the Hon’bleCommission issued its

first Tariff Order on 24th June 2005.

3. The TSECL submitted its second ARR and Tariff Petition for FY 2006-07 on 4thAugust, 2006 and

subsequently the Hon’ble Commission issued its second Tariff Order on 14thSeptember, 2006.



4. From FY 2007-08 to FY 2010-11 TSECL had not filed any ARR Petition. In FY 2010-11, TSECL submitted

a Petition for Fuel & Power Purchase Cost Adjustment (FPPCA) for approval of adjustment of cost against

increase in fuel (gas) cost for its own generating stations at Rukhia and Baramura and cost incurred for

procurement of power from the Central Generating Stations (CGSs). The Hon’bleCommission after due

examination of the Petition and considering all the aspects in this matter, issued FPPCA Order on 13th

September, 2010. The Hon’bleCommission also issued an amendment to the saidOrder on 22nd

September, 2010 after allowing subsidy to some categories of consumer.

5. Further, the TSECL submitted the Petition for ‘Truing-Up’ for the period FY 2007-08 to FY 2010-11 and

determination of Aggregate Revenue Requirement (ARR) for FY 2012-13 on 20th January, 2012. In this

regard, the Hon’bleCommission passed its first True-Up Order for FY 2007-08, FY 2008-09, FY 2009-10

and FY 2010-11 on 28th March, 2012. The Order also included review of ARR for FY 2011-12 and

determination of ARR and tariff for FY 2012-13.

6. Subsequently on 15th March, 2013, the Hon’ble Commission approved the provisional True-Up for FY

2011-12, Review for FY 2012-13 and ARR and Tariff Order for FY 2013-14. Thereafter, the Hon’ble

Commission also issued an Order with regard to True-Up for FY 2012-13, Review of FY 2013-14 and

determination of Tariff for FY 2014-15 on 22nd November, 2014.

3.3. Current Petition1. Section 62 of the Electricity Act, 2003 mandates the utility to furnish details as may be specified by the

State Electricity Regulatory Commission for determination of tariff. In addition, as per the Regulations

issued by the Hon’ble Commission, TSECL is required to file Petition for all reasonable expenses which it

believes would incur over the next financial year and seek the approval of the Hon’ble Commission for the

same. The filing is to be done based on the projections of the expected revenue and costs.

2. In compliance of this regulatory obligation, TSECL hereby files True-Up Petition for FY 2013-14 and FY

2014-15 and ARR & Tariff Petition for the MYT Control Period of FY 2016-17 to FY 2018-19 for generation

business and distribution &retail supply business separately. TSECL craves leave of the Commission in

submission of audited accounts for FY 2015-16 along with this petition as the audit of FY 2015-16 is in

progress. The audited accounts shall be submitted as and when the audit is completed.

3. The current petition has been prepared in accordance with the provisions of the following

Acts/Policies/Regulations:

1. Electricity Act 2003;

2. National Electricity Policy;

3. National Tariff Policy issued from time to time;

4. Tripura Electricity Regulatory Commission (Tariff Regulations) 2004 and

5. Tripura Electricity Regulatory Commission Tariff Regulations (Multi Year Tariff), 2015



4. TSECL has made genuine efforts for compiling all relevant information relating to the True-up Petition as

required under the Regulations issued by the Hon’ble Commission and has also made every effort to

ensure that information provided to the Hon’ble Commission is accurate and free from material errors.

However, there may be certain deficiencies owing to the limitations of the management information

systems of the TSECL. Hence, TSECL prays before the Hon’ble Commission that the information

provided be accepted for the current filing and at the same time TSECL assures that it is taking

appropriate measures to improve its management information system for improved data collection.

5. Accordingly, TSECL prays before the Hon’ble Commission to admit &process this ARR/ Tariff Petition,

allow for proposed schedule of tariff to be charged by TSECL in its areas of operation for FY 2018-19.

3.4. Contents of the PetitionThis petition comprises of following main sections namely:

1. Review of the Power Sector of Tripura;

2. True-Up Petition for FY 2013-14;

3. True-Up Petition for FY 2014-15and

4. Annual Revenue Requirement (ARR) and Tariff Petition for MYT Control Period of FY

2016-17 to FY 2018-19 for Generation business and Distribution & retail supply

Businessseperately.



4. Power Sector Overview

4.1. About the State of Tripura6. Tripura is a land locked state in the Northeast India whichis

bounded on the north, west, south and southeast by

Bangladesh, whereas in the east, it shares a common boundary

with Indian states of Assam and Mizoram. It was formally

declared as Union Territory on 1 November, 1957 and was

elevated to the status of a full-fledged state on 21 January, 1972.

The state lies approximately between latitude 220 56' and 240

32' north and longitude 910 10' and 920 21' east. For

administrative convenience and decentralization of power, Tripura which was once a single district is now

divided into altogether eight districts. Between 2004-05 and 2015-16, Gross State Domestic Product

(GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 9.13 per cent to USD 5.20 billion

whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 8.50 per cent to USD 4.47

billion.

7. The state has a population of 36.74 lakhs according to 2011 census and spread over 10,490 sq km.

Although Tripura is the 2nd smallest state in India, it is the 2nd most populous state in North eastern

region and has the 2nd highest population density in the north east region (NER)1. The per capita income

in the state stands around INR 36000 in comparison to national average of around INR 54500. About 83

% of the state’s population lives in rural areas.Agriculture and allied activities form the backbone of the

economy of Tripura and employ about 64% of the population.

4.2. Background of TSECL8. The power supply Industry in Tripura had been under the direct control of the State Government till

2004. Before 31st December 2004, all the functions in power sector like generation, transmission,

distribution of electricity were entrusted on Department of Power, Government of Tripura. As a part of

power sector reforms, Tripura State Electricity Corporation Limited (TSECL) was formed and registered

under the Companies Act 1956 on 9th June 2004 in compliance with the MOU between Ministry of

Power, GOI and Govt. Tripura on 28th August, 2003. TSECL was made functional under section 131 & 133

of the ElectricityAct, 2003 w.e.f. 1st January, 2005 with the operational control of all assets related to

Generation, Transmission & Distribution.

9. Recently, a generation company in the name of “Tripura Power Generation Limited” (TPGL)has been

constituted and all assets related to Generation Project owned by TSECL is being transferred to TPGL.

The remaining functions of electricity transmission and distribution are still lying with TSECL.However,

1http://www.censusindia.gov.in/



the demerger of TPGL from TSECL as per provisions of Companies Act 2015, is still in progress, post

which the independent functioning of TPGL shall commence.

4.3. Generation Overview10. In spite of severe geographic and infrastructure constraints, Tripura has made a significant progress in its

capacity addition programme. The state had reached a generation capacity of 2.5 MW (composed of onlydiesel generation units) by the end of 4th 5-year plan, from its pre-independence generation of 30 kW. In5th and 6th five year plans, rain-fed hydro generation has been added in Gumti with the first two units (5MW each) commissioned in 1976 and another 5 MW unit added in 1984.

11. The exploration of oil and natural gas, which are the most important mineral resources in Tripura, hasled to a new chapter in Tripura power sector. Two 5 MW gas-based generation units at Baramura havebeen installed in 1986 followed by 6.5 MW unit in 1990 with funding by North-East Council (NEC). Also,two 8 MW gas-based generation units have been commissioned at Rokhia in 1990 followed by two more 8MW units in the later half of the 8th 5-year plan. Further, augmentation has been done at Rokhia by 16MW (2x 8 MW) with funding of NEC. Larger units (21 MW) have been installed both in Rokhia andBaramura Gas thermal power plants after 2000 to enable greater efficiency in operation.

12. Different details of generation units and their status is summarized below:

Table 1: Plant wise Effective capacity of TPGL

Name ofGenerationstation

Unit Capacity(MW)

De ratedCapacity(MW)

Year ofInstallation Status

Gomuti Hydro-electric Project(GHEP)

Unit-I 5

10

June 1976Only 2 units of 5MW each run at atime and the 3rd unit is kept asstand by

Unit-II 5 February 1977

Unit -III 5 January 1984

Sub-total 15 10

Baramura GasThermal PowerPlant (BGTPP)

Unit-IV* 21 21 27th Nov 2002 In operation

Unit-V* 21 21 3rd August 2010 In operation

Sub-total 42 42

Rokhia GasThermal PowerPlant (RGTPP)

Unit-VII 21 21 24th Sept 2002

In operationUnit-VIII 21 21 30th Mar 2006

Unit-IX 21 21 28th Aug 2013

Sub-total 63 63

Total 120.0 115.0

Till 31st Dec 2004G-T-D under control of

State Govt.

June 2004Incorporation of TSECL

January 2005Operational

commencement of TSECL

June 2015Incorporation of TPGL

with all Generation assetsof TSECL



*50% of generation to be shared with Manipur and Mizoram as per financial arrangement with NEC

13. As seen from the above table, 70.35 MW capacity is not operational and in case of Gomuti only2 units of5MW each run at a time and the 3rd unit is kept as stand by on rotation basis as the water content allowsrunning only two units at a time. Out of total state capacity, only around 94MW is available for the stateof Tripura after adjusting the non-working units and the share of Manipur and Mizoram.

14. To meet the demand, the state also depends on the allocation of energy from central generating stations.There is no privately owned generation plant in Tripura.

Table 2: Procurement from Central Generating Stations

Details of generatingstation Ownership Installed

Capacity (MW)Allocation (MW) Power

Taken in FY16-17 (MW)Peak Off-Peak

Palatana Gas based Powerplant, Gumti district

ONGC TripuraPower Company 726.6 196.00 196.00 142.02

NEEPCO Gas & HydroPlants NEEPCO 1276 200.56 190.95 120.00

NHPC Loktak HPS NHPC 105 12.93 12.10 12.52

NTPC, BGTPP (Thermal) NTPC 250 20.76 18.70 17.00

15. In order to enhance its own generation and improve the efficiency of generation, TPGL has plans ofconverting the existing open cycle operation of Rokhia and Baramura gas based plants to combined cyclemode. Further, the Renovation and Modernization/ life extension project of 3X5 MW GHEP is alsoplanned to be taken up immediately. Since pre-project activities and fund tie up is not completed yet,hence, expected benefits from the implementation of these projects has not been considered in thisdocument as these projects are expected to be complete after the end of control period. However, theabove mentioned projects is expected to be initiated within the control period and TPGL is currentlyexploring various options for tying up the funding arrangements for the project.

4.4. Transmission & Distribution Overview16. In spite of severe geographic and infrastructure constraints, Tripura has made a significant progress in its

capacity addition programme. In order to match the growth in generated capacity to meet the increase in

demand within the state, there has been a corresponding augmentation and upgradation in the

transmission and distribution sector. The intra-state transmission system has been planned at both 132

kV and 66 kV lines to evacuate power from the generating stationswhich is supported by downstream

distribution network of 33 kV, 11 kV and LT lines.

17. The power evacuation system of Gumti Hydro Electric Project (GHEP) is composed of 66 kV lines

emanating to Agartala via Amarpur&Teliamura via Udaipur. Generation from Rokhia Gas Thermal Power

Plant (RGTPP)&Baramura Gas Thermal Power Plant (BGTPP) is evacuated to the load centres of

Agartala, Badharghat, Udaipur, and Teliamura, Ambassa etc. by transmission systemconstituted of both

66 kV and 132 kV lines.



05000

10000150002000025000

FY 11 FY 12 FY 13 FY 14 FY 15

Growth in T&D Network (ckt. km.)

66 &132 kV 33 kV 11 kV LT

18. The state is connected to other states of Northeastern region through 132 kV Kumarghat- Badarpur single

circuit(S/C) line, 132 kV Dharmanagar – Dullavcherra single circuit (S/C) line, 132 kV Kumarghat-

Aizawl single circuit (S/C) line, 400kV Silchar- P. K. Bari Double circuit (D/C) line (operated at 132 kV)

and 400 kV Palatana- Silchar double circuit (D/C) lines.

19. TSECL currently owns around 22,937 ckt km of Low Tension (LT) lines, around 14,320 ckt km of 11 kV

lines andmore than 1,705 ckt km of 33 kV and above lines. The voltage-wise growth in ckt km for T&D

network and rise indistribution transformation capacity (MVA) of TSECL shows that growth has mainly

happened in the LT & 11 kVnetwork showing the focus on distribution system augmentation to increase

access of supply to rural and remoteareas.

The total transformation capacity (MVA) at different transmission voltage levels of different substations

is asshown below:

Sl. No. VoltageLevel (kV)

TransformationCapacity (MVA)

1. 132/66 30

2. 132/33 325

3. 132/11 90

4. 132/33/11 45

5. 66/33 90.3

6. 66/11 125.8

7. 66/33/11 4

Total 710.1

0.00

200.00

400.00

600.00

800.00

1,000.00

FY 11 FY 12 FY 13 FY 14 FY 15

Distribution Transformation Capacity(MVA)



5. True Up for FY 2013-14

5.1. Introduction1. The regulatory provisions of Electricity Act 2003, specifies that the Hon’ble Commission shall undertake

the True-up of Aggregate Revenue Requirement (hereinafter referred as “ARR”) of utility for the periodbased on the comparison of the actual performance of the year with the approved estimate for thatperiod. In line with the provisions of TERC Tariff Regulations, 2004, TSECL has filed this True-uppetition for the year FY 2013-14. The TSECL presents its submissions for the purpose of true-up for thefinancial year 2013-14 as per the audited Annual Accounts for the year. The audited annual accounts forthe period FY 2013-14are also being submitted to the Hon’ble Commission along with this petition for thepurpose of true up in the Annexure A. TSECL already filed the Review petition of ARR for the FY 2013-14on 23rd July 2014 and it was approved by TERC on 22nd November 2014.

2. TSECL craves leave of the Commission for submission of item wise details for the truing up of FY 2013-14as the same has already been undertaken in the last tariff order issued by the Commission on 22nd

November 2014. The approved ARR for the FY 2013-14 and proposed ARR in Review petition are tabledbelow:

Table 3: Summary of Truing Up for the FY 2013-14 (In Lakh)

Particulars Approved inOrder dated25.06.2013

Review of FY2013-14dated22.11.2014

Petitioner'ssubmission fortruing up of FY2013-14

Gap

A B C D=C-B

Fuel cost 18,798.0 17,826.0 19,450.0 1,623.5

Power purchase cost 22,465.0 21,819.0 22,996.2 1,177.2

O&M expense 13,525.0 14,471.0 15,411.0 9,40.0

Depreciation 2,431.0 2,155.0 2,369.2 2,14.2

Interest on working capital - - 1,321.2 1,321.0

Interest and finance charges 34.0 - - 0.0

Reasonable Return 1,652.0 3,103.0 3,389.9 286.9

Prior Period (Power Purchase) 4,243.0 4,243.0

Aggregate RevenueRequirement (ARR) 58,905.0

59,374.069,179.8

9,805.8

Less: non-tariff income 4,201.0 3,540.0 4,664.0 1,124.0

Net Aggregate RevenueRequirement 54,704.0 55,834.0 64,515.8 8,681.8

Revenue from sale of Power 56,103.0 49,884.0 47,570.4 (2,313.6)

Revenue subsidy from GoT - 4,000.0 4,000.0 0.00

Revenue Gap/(Surplus) (1,399.0) 1,950.0 12,945.4 10,995.4

3. This section outlines the performance of TSECL those factors which are deviated from Approved Reviewpetition for the FY 2013-14. In line with the provisions of the Tripura Electricity Regulatory Commission(Tariff Regulations) 2004, the TSECL hereby submits the true-up petition for FY 2013-14 based on theaudited annual accounts for FY 2013-14.



5.2. O&M Expenses4. Operation and Maintenance expenses of TSECL includes following major heads:

Employee Cost:Employee expenses comprise of salaries, dearness allowance, bonus, terminalbenefits in the form of pension & gratuity, leave encashment and staff welfare expenses.

Repair & Maintenance expenses:Regular Repair and Maintenance of the electrical system aswell as the civil and IT infrastructure is critical for operating the system and ensuring that assets areable to serve for complete expected life.

Administration and General (A&G) Expenses:The A&G expenses of TSECL mainly coverexpenses for administrative requirements like telephone, electricity, vehicles lease, statutory taxes tobe paid etc. and payment of outsourced agencies like statutory auditors, legal charges, consultancyfees etc.

5. It is to be noted that O&M expenses of TSECL for the FY 2013-14 is more or less close to approved O&Mexpenses as shown in table below. There is a slight increase in the figures of R&M expenses and A&Gexpenses from the approved figures which were based on provisional accounts:

Table 4: O&M Expenses (Approved vs Actual) Rs. in Lakh

Name of Generation station Approved by TREC inTariff order dated22.11.2014

Petitioner'ssubmission fortruing up of FY 2013-14

Employee Cost 10,175.9 10,175.9Repair & Maintenance 2842.0 3,599.9A&G 1451.0 1,635.1Total O&M Expenses 14471.9 15,411.0

5.3. Interest on Working Capital6. The working capital is estimated for calculating the normative interest charges to be allowed for financing

the working capital requirements. As per TERC Regulations (Tariff) 2004, the working capital normshave been defined separately for generation, transmission and distribution functions, as given below:

Table 5: Norms for Interest on Working Capital as Tariff Regulation 2004

Description Generation Transmission DistributionNorms for calculation ofWorking Capital

One and Half Months ofsales for generation (45days)

One and Half Months ofsales for transmission (45days)

Two months of sales fordistribution business(60 days)

7. The sales for generation, transmission and distribution have been estimated based on the totalexpenditure of all the generation accounting divisions, transmission accounting divisions and distribution& other accounting divisions. For this calculation, interest is taken as per average SBI PLR rate for FY2013-14. The normative working capital requirements as per TERC regulations, is tabulated below:

Table 6: Calculation of Working Capital and Interest thereon in Rs. Lakhs

Sr.No.

Particulars % of AssetsBreak up

Norms ofWorking

Capital (InDays)

ARR Value(Allocated

in AssetsRatio)

Petitioner'ssubmission fortruing up of FY

2013-141 Generation 32.82% 45 20,345.1 2,508.32 Transmission 22.38% 45 13,875.8 1,710.73 Distribution 44.79% 60 27,766.4 4,564.34 TOTAL 8,783.4



Sr.No.


Norms ofWorking

Capital (InDays)

ARR Value(Allocated

in AssetsRatio)

Petitioner'ssubmission fortruing up of FY

2013-145 Interest Rate (@ SBI PLR on 1st

April 2014)14.45%

6 Normative Interest on WorkingCapital @ the average SBI PLR

1,269.2

7 Interest on Working Capitalapproved as per Tariff Orderfor FY 2013-14

0.0

8. It may be noted that the working capital is a normative cost and should be allowed even though actualloans have been taken or not. This is because even if TSECL had not taken any loans for working capitalin FY 2013-14, it had managed the working capital requirements because of availability of funds fromother schemes like deposit works, capital expenditure schemes, fixed deposits from accumulated profitsof past years etc. which resulted in lower non-tariff income.



6. True Up for FY 2014-15

6.1. Introduction9. The regulatory provisions of Electricity Act 2003, specifies that the Hon’ble Commission shall undertake

the True-up of Aggregate Revenue Requirement (hereinafter referred as “ARR”) of utility for the periodbased on the comparison of the actual performance of the year with the approved estimate for thatperiod. In line with the provisions of TERC Tariff Regulations, 2004, TSECL has filed this True-uppetition for the year FY 2014-15. The TSECL presents its submissions for the purpose of true-up for thefinancial year 2014-15 as per the audited Annual Accounts for the year. The annual accounts for theperiod FY 2014-15are also being submitted to the Hon’ble Commission along with this petition for thepurpose of true up in the Annexure A. This section also outlines the performance of TSECL during FY2014-15.

10. In line with the provisions of the Tripura Electricity Regulatory Commission (Tariff Regulations) 2004,the TSECL hereby submits the true-up petition for FY 2014-15 based on the annual accounts of FY 2014-15. Accordingly, revised Aggregate Revenue Requirement, revenue and consequent Gap with carryingcosts for the period FY 2014-15 are provided in the following paragraphs of this section.

11. TSECL requests the Hon’ble Commission to consider the information submitted in this petition and inthe formats and allow true-up of expenses as prayed in this petition.

6.2. Asset Base and Capital Expenditure12. This section details the gross value of fixed assets available for use and necessary for the purpose of

generation transmission and distribution (G-T-D) business at the end of each financial year. In order toshow the break-up of G-T-D assets, the following method has been used in the absence of segregatedaccounts.

13. In TSECL, the account statements are prepared by consolidation of account figures of different businessunits/divisions. These divisions are of five categories, namely generation, transmission, distribution,corporate and other divisions. For the purpose of segregation of assets, it has been assumed that the assetbase of generation, transmission and distribution divisions is equal to generation, transmission anddistribution assets respectively and the asset base of corporate and other divisions have been allocatedamong generation, transmission and distribution. The booked value of assets in TSECL accounts includethe assets created out of government grants and consumer contribution. The value of assets created out ofgovernment grants has been estimated based on the amount of capital grants received and value of fixedassets in books. Based on the above, the value of the gross value of assets and the asset base forcalculation of depreciation is tabulated below:

Table 7: Original Value of Fixed Assets in Rs. Lakhs

S. No. ParticularsPetitioner's

submission for truingup of FY 2014-15

1 Generation Assets 31,926.12

2 Transmission Assets 21,761.46

3 Distribution Assets 48,913.55

GROSS TOTAL 102,601.13

5 Assets created through Government Grants53,826.21

Total Asset Base for Depreciation48,774.92

6 Cost of intangible assets, if any-



14. The gross value of the asset base has increased based on the various capital expenditure schemesundertaken by TSECL based on the approved schemes of Central Government as well as StateGovernment for capacity augmentation, system strengthening, rural electrification and reduction oflosses.

6.3. Capital Work In Progress15. Details of the year wise value of capital works in progress for generation, transmission, distribution and

other works is tabulated below. It is submitted that since the funding of the capital schemes is in the formof grants and interest free loans, there is no interest charges being incurred on long term loans and assuch no interest charges have been capitalized because of interest incurred during progress of projects.

Table 8: Cost of Capital Works in Progress in Rs. in Lakhs

S. No. Particulars Petitioner's submission for truing up of FY 2014-151 Generation Works 100.0

a RGTPP -

b BGTPP 100.0

c Gomuti -

2 Transmission Works 8,374.01

3 Distribution Works 9,002.09

4 Other Works 4,098.96

TOTAL 21,575.06

6.4. Investments16. TSECL has made investments in the form of fixed deposits with various banks. A majority of such

investments have been made from the accumulated cash profits earned by TSECL and funding receivedfrom deposit works. The income earned from such investments in the form of interest is being separatelybooked under other income category. The investment and income earned from it are tabulated below:

Table 9: Investments in Rs. in Lakhs

S No. Closing Balance of Investments Petitioner's submission fortruing up of FY 2014-15

1 Fixed Deposit as per annual accounts 24,360.882 Interest received on Fixed Deposit and booked under Other Income 2,547.45

6.5. Working Capital and Interest17. The working capital is estimated for calculating the normative interest charges to be allowed for financing

the working capital requirements. Owing to the deteriorating financial health of the Corporation, TSECLis in dire needs of funds to meet the working capital and hence it is claiming interest on working capitalon normative basis as given in Tariff Regulation 2004.

18. The working capital is estimated for calculating the normative interest charges to be allowed for financingthe working capital requirements. As per TERC Regulations (Tariff) 2004, the working capital normshave been defined separately for generation, transmission and distribution functions, as given below:

Table 10: Norms for Interest on Working Capital as Tariff Regulation 2004

Description Generation Transmission DistributionNorms for calculation ofWorking Capital

One and Half Months ofsales for generation (45days)

One and Half Months ofsales for transmission (45days)

Two months of sales fordistribution business(60 days)



19. The sales for generation, transmission and distribution have been estimated based on the totalexpenditure of all the generation accounting divisions, transmission accounting divisions and distribution& other accounting divisions. For this calculation, interest rate for calculation of interest on workingcapital is taken as per average SBI PLR rate for FY 2014-15. The normative working capital requirementsas per TERC regulations, the normative interest component on same and actual interest incurred forworking capital is tabulated below:

Table 11: Calculation of Working Capital and Interest thereon in Rs. Lakhs

Sr.No.


Norms ofWorking

Capital (InDays)

ARR Value(Allocated

in AssetsRatio)

Petitioner'ssubmission

for truingup of FY2014-15

1 Generation 31.12% 45 24,734.0 3,049.02 Transmission 21.21% 45 16,859.0 2,079.03 Distribution 47.67% 60 37,895.0 6,229.04 TOTAL 11,357.05 Interest Rate (@ SBI PLR on 1st

April 2014)14.75%

6 Normative Interest on WorkingCapital @ the average SBI PLR

1,675.0

7 Interest on Working Capitalapproved as per Tariff Orderfor FY 2014-15

0.0

6.6. Depreciation20. For the calculation of depreciation, the depreciation rates have been takenfrom Companies Act

1956/TERC Tariff Regulations 2004 under the Straight Line Method on the gross asset value and nodepreciation is claimed on assets created out of government grants. However, in account statementdepreciation have been calculated as per depreciation rate provided in Companies Act 2013.

Table 12: Rate of Depreciation as per Companies Act 1956

Particulars Depreciation RateLand 0.00%Building 2.49%Plant & Machinery 5.28%Computer 16.21%Computer and Office Equipment 16.21%Furniture 6.33%Vehicles 9.50%

21. As already mentioned above, the gross asset base booked in account statements includes assets createdout of government grants. However, in accordance with accounting procedures as well as regulatorypractices in other states, depreciation on such assets has not been claimed to be recovered through tariffand ARR. The gross asset value as per the account statements and the gross asset value excluding assetscreated through grants have been mentioned earlier in Table 7. Further, the assets which have completelydepreciated have also been deducted from the total gross value of assets shown in account statements forthe purpose of calculation of depreciation. The calculation of assets created through grants is providedbelow:



Table 13: Calculation of Assets created through Grants (Rs. in Lakhs)

Particulars AmountGrants for creation of assets (as per accounts statement 2014-15) 53,826.21Fixed Assets Value including CWIP (as per accounts statement 2014-15) 102,601.13% of Assets created through Grants 52.5%

22. Category wise depreciation calculation are tabled below:

Table 14: Depreciation for the FY 2014-15 (Rs. In Lacs)

Particulars Petitioner's submission for truing up of FY 2014-15Land -Building 79.87Plant & Machinery 4,087.64Furniture 9.75Computer &Office Equipment 78.54Vehicles 2.62

Total 4,258.42Less: Depreciation on Assets acquired through Grant 2,234.04

Net Depreciation 2,024.38

6.7. Reasonable Return23. As per TERC tariff regulations 2004, (clause 2 of Schedule -1 and 3) return on generation and distribution

business is defined as, “the reasonable return for this purpose means 5% above the RBI rate or 3% abovethe PLR rate of State Bank of India or average of any other three approved Nationalized Bank whicheveris higher and calculated on the subscribed and paid up equity capital which shall also include SharePremium Balance for this purpose but shall not include Bonus Shares or Shares issued other than forcash.”

24. Similarly, for reasonable return on transmission business, TERC tariff regulations 2004 (Clause 2 ofSchedule 2) states that, “the reasonable returnfor this purpose means 4% above the RBI rate or 2%above the PLR rate of State Bank of India or average of any other three approved Nationalized Bankwhichever is higher and calculated on the subscribed and paid up equity capital which shall also includeShare Premium Balance for this purpose but shall not include Bonus Shares or Shares issued other thanfor cash.”

25. It is observed that the SBI PLR rate as on 01.04.2014 was 14.75% thus for calculation of reasonablereturn, the rate of return for overall paid-up equity capital has been assumed to be 17.75% i.e. 3% overSBI PLR for Generation and Distribution business and 16.75% for Transmission business.

26. In order to calculate the reasonable return amount for generation, transmission and distributionbusiness, the total paid-up equity capital for TSECL is divided into paid-up equity for generation,transmission and distribution in the ratio of total net asset base for generation, transmission anddistribution business, the values of which are already provided under Table 7.

27. It may be noted that the Commission in its past orders had considered equity base for the generationprojects as 30% of the Gross Fixed Asset Value and as such the same is considered here for the purpose ofcalculation of reasonable return. The calculation of reasonable return are provided below:

Table 15: Calculation of Reasonable Return for the FY 2014-15 in Rs. Lakhs

Particulars Approved by TREC in Tariff orderdated 22.11.2014

Petitioner's submission fortruing up of FY 2014-15

AverageEquity

InterestRate

ReasonableReturn

AverageEquity

InterestRate

ReasonableReturn

Generation 6195.0 15.23% 944.0 7,563.8 17.75% 1,342.6



Particulars Approved by TREC in Tariff orderdated 22.11.2014

Petitioner's submission fortruing up of FY 2014-15

AverageEquity

InterestRate

ReasonableReturn

AverageEquity

InterestRate

ReasonableReturn

Transmission 1876.0 14.23% 267.0 5,155.6 16.75% 863.6Distribution 12399.0 14.23% 1888.0 11,588.3 17.75% 2,056.9Total 3099.0 5,398.2

6.8. Expenditure6.8.1. Power Purchase Cost28. TSECL is currently purchasing power from central generating stations of NEEPCO, NHPC and OTPC

Palatana in which Tripura is having allocated share/ allocation of power. The central sector allocationsand power purchase from ISGS (Inter-state Generating Stations) in the FY 2014-15 are given below:

Table 16: Central Sector Allocation in ISGS

S.No Name of Generationstation Owner

Installedcapacity(MW)

Tripura Share Actual for FY2014-15

Percent MW MU

1. LoktakHydro-ElectricPower station (HEP)

NHPC 105 11.92% 12.52 41.51

2. Khandong HEP NEEPCO 50 5.75% 2.88 4.85

3. Kopiliplus KopiliextnHEP NEEPCO 200 6.08% 12.16 31.25

4. Kopili-stage II NEEPCO 25 9.53% 2.38 7.55

5. Assam Gas Based Powerplant (AGBPP) Kathalguri

NEEPCO 291 6.95% 20.22 111.58

6. Agartala Gas TurbinePower Plant (AGTPP)

NEEPCO 84 18.60% 15.62 101.59

7. Doyang HEP NEEPCO 75 7.07% 5.30 10.82

8. Ranganadi HEP NEEPCO 405 7.57% 30.66 81.97

9. OTPC Palatana OTPC 526 27.00% 142.02 655.81

Total 1761 13.84% 243.76 1046.52

29. The power purchase rates for these CSGS and the associated transmission charges paid to PGCIL fortransmission of power to state bus of Tripura, are governed by CERC tariff regulations and areuncontrollable by TSECL. The actual power purchase cost along with approved cost are tabulated below:

Table 17: Source wise Power purchase cost

Particulars

Approved by TREC in Tarifforder dated 22.11.2014 Actual for FY 2014-15

(MU)Cost (InCr.) Rs./kwh (MU) Cost (In

Cr.) Rs./kwh

NEEPCO 365.28 122.62 3.36 349.204 117.22 3.36

NHPC 71.72 18.49 2.58 41.506 13.83 3.33

OTPC Palatana 700.80 179.28 2.56 655.811 172.20 2.63

Total Power Purchase Cost 1137.80 320.38 2.82 1046.520 303.24 2.90

PGCIL Charges 37.51 42.99



Particulars

Approved by TREC in Tarifforder dated 22.11.2014 Actual for FY 2014-15

(MU)Cost (InCr.) Rs./kwh (MU) Cost (In

Cr.) Rs./kwh

POSOCO 1.14 0.00

Supplementary bills raised byNEEPCO, NHPC, PGCIL etc.

61.98

Total Power Purchase Cost 359.03 408.20

6.8.2. Fuel Cost30. The only fuel used by TPGL for self-generation of energy is natural gas. The natural gas is being sourced

from the reserves at Rokhia, Baramura and Konabanpartly under the Average Price Mechanism (APM) atthe rates notified by the Ministry of Petroleum and Natural Gas (MoP&NG), Government of India andpartly at the Market Determined Price (MDP). TPGL has allocations of 0.58 MMSCMD and 0.40MMSCMD under the APM gas mechanism for its generation plants at RGTPP and BGTPP respectively.

31. Other than the APM gas allocations, TPGL also purchased some quantity of gas under MarketDetermined Price (MDP) to meet the outstanding gas requirements for running the generation plants atRokhia and Baramura.

Table 18: Plant wise fuel cost (Approved vs Actual)



RGTPPQuantity of Gas (In MMSCM) 200.14 181.51Amount (In Rs. Lacs) 13636.0 12797.3Rate (Rs. /Scm) 6.81 7.05BGTPPQuantity of Gas (In MMSCM) 123.28 132.0Amount (In Rs. Lacs) 8484.0 8868.7Rate (Rs. /Scm) 6.88 6.71

TotalQuantity of Gas (In MMSCM) 323.42 313.5Amount (In Rs. Lacs) 22120.0 21666.0Rate (Rs. /Scm) 6.84 6.91Cost of HSD 10 0Total Fuel Cost 22130.0 21666.0

6.8.3. Operation & Maintenance Expenses32. Operation and Maintenance expenses of TSECL includes following major heads:

Employee Cost:Employee expenses comprise of salaries, dearness allowance, bonus, terminalbenefits in the form of pension & gratuity, leave encashment and staff welfare expenses.

Repair & Maintenance expenses:The A&G expenses of TSECL mainly cover expenses foradministrative requirements like telephone, electricity, vehicles lease, statutory taxes to be paid etcand payment of outsourced agencies like statutory auditors, legal charges, consultancy fees etc.

Administration and General (A&G) Expenses:Regular Repair and Maintenance of theelectrical system as well as the civil and IT infrastructure is critical for operating the system andensuring that assets are able to serve for complete expected life.



33. It is to be noted that O&M expenses of TSECL for the FY 2014-15 is more or less close to approved O&Mexpenses as shown in table below:

Table 19: O&M Expenses (Approved vs Actual)



Employee Cost 109.92 111.77Repair & Maintenance 30.7 28.94A&G 15.67 17.06Total O&M Expenses 156.29 157.77

6.8.4. Depreciation34. The details of depreciation booked and depreciation claimed have already been explained in Depreciation

Section above.

6.8.5. Interest and Financial Charges35. While preparing the provisional truingup for FY 2014-15, the TSECL has considered the following for

the total Interest and Finance charges:

Interest on loans Guarantee Fee Bank Commission for letter of credit

36. The TSECL has taken loans from the PFC/REC/ Govt. of Tripura. The details about the loan taken byTSECL is given below:

Loan from PFC: The fund is released by PFC under various schemes. 100% of the approved cost isprovided as loan from the Government of India through Gross Budgetary Support (GBS). The loan alongwith interest thereon shall be converted into grant once the establishment of the required system isachieved and verified by an independent agency appointment by Ministry of Power (MoP). No conversionto grant will be made in case projects are not completed within 3 years from date of sanction of theproject. In such case, TSECL will have to bear full loan and interest repayment. As no interest paymentand repayment schedule is mentioned for PFC loan for the computation of interest and finance charges inthis petition no repayment of loan from PFC has been considered.

Loan from REC:The fund is released by REC under RGGVY scheme. 90% of the approved cost isprovided as grant and remaining 10% as loan. This fund is not given directly to TSECL but is disbursedthrough Government of Tripura. TSECL is paying interest on this loan on behalf of GoT in four quarterlyinstallments. In the accounts, this loan is treated under head ‘GoT loan’. The moratorium period of 5years is provided on repayment of this loan. Since this is not the loan given to TSECL and fund receivedon behalf of the GoT,

Loan from Govt. of Tripura (GoT): The Government of Tripura loan is disbursed as interest freeloans from the state government under budgetary Non-Plan consideration and to be repaid to the GoTunder 30 equal installments within a period of 15 years as provided in Memorandum of the governmentof Tripura dated 17th July 2009. The TSECL is persuading with the government of Tripura to convert thisinterest free loan into equity portion. But, till it is converted into equity the amount have been treated asloan.

37. The table below shows the source wise loan during FY 2014-15:

Table 20: Interest on Loan for the FY 2014-15 (In Lakh)

ParticularsLoanfromPFC

Loan fromREC

LoanfromGoL

Loan fromothers

BankCommission

on LCTotal



ParticularsLoanfromPFC

Loan fromREC

LoanfromGoL

Loan fromothers

BankCommission

on LCTotal

Opening Balance 6,008.88 4,244.68 6,033.56 4,152.50

Closing Balance 9,304.88 - 6,333.56 -

Interest Rate 11.75% 11.75% 0% 11.00% -

Financing charges 7.94

Proposed Interestfor Truing up 7.94 7.94

Approved Interest &finance charges inTariff Order

0.00

6.9. Income6.9.1. Income from Sale of Power38. TSECL supplies power both within the state to the consumers of Tripura at the retail supply tariff notified

by TERC as well as to other states based on bilateral contracts or surplus availability from time to time.The power within Tripura is completely met (except during peak period) before supplying the surpluspower to other states.

39. The detailed actual sales vs. approved sales for the FY 2014-15 are provided below:

Table 21: Sale from Power for the FY 2014-15

ParticularsApproved by TREC in Tariff orderdated 22.11.2014

Petitioner's submission for truingup of FY 2014-15

Sales (MU) Revenue(Lakh) Rs./kwh Sales (MU) Revenue(Lakh) Rs./kwh

Intra-State sale ofpower 784.42 48348.0 6.16 786.12 40,995.8 5.21

Total Inter-StateSales 929.87 28644.0 3.08 706.45 18,715.2 2.65

Total Sale ofPower by TSECL 1714.29 76992.0 4.49 1492.57 59,711.0 4.00

6.9.2. Non-Tariff Income40. The other income of TSECL covers mainly

Income earned on the subsidy paid by State Government of Tripura against the commitment of StateGovernment for reduction in retail supply tariff,

Interest earned on fixed deposits made in various banks and as detailed under the head of‘Investments’, and

Other Miscellaneous Income like sale of scrap, sale of tender, meter rent etc.

Subsidy41. Regarding the subsidy provided by State Government, section 65 of Electricity Act 2003, mandates that,

“If the State Government requires the grant of any subsidy to any consumer or class of consumers in thetariff determined by the State Commission under section 62, the State Government shall,notwithstanding any direction which may be given under section 108, pay, within in advance in themanner as may be specified , by the State Commission the amount to compensate the person affected by



the grant of subsidy in the manner the State Commission may direct, as a condition for the license or anyother person concerned to implement the subsidy provided for by the State Government:

42. Provided that no such direction of the State Government shall be operative if the payment is not made inaccordance with the provisions contained in this section and the tariff fixed by State Commission shall beapplicable from the date of issue of orders by the Commission in this regard.”

43. Hence, the Act clearly states that the subsidy for reduction of tariff, if desired by the State Government,has to be paid in advance by the State Government and in the scenario of the State Government notpaying the subsidy in advance, the tariff reduction on account of the subsidy promised shall not beapplicable. As such, for calculation of ARR of FY 14-15, the subsidy actually paid by State Governments asrevenue grant of Rs. 62 Crores have been considered under other income as against the subsidycommitted by State Government.

Table 22: Non-tariff Income & Grant (Approved vs Actual)

ParticularsApproved by TREC inTariff order dated22.11.2014


Revenue from sale of Power 769.92 597.11Revenue subsidy from GoT - 62.00

6.10. Summary of Truing Up

Table 23: Summary of Approved TERC Order for the FY 2014-15 (In Rs. Lakhs)

Particulars Approved byTREC in Tarifforder dated22.11.2014

Fuel cost 22130.0Power purchase cost 35903.0O&M expense 15629.0Depreciation 2206.0Interest on working capital -Interest and finance charges -Reasonable Return 3099.0Aggregate Revenue Requirement (ARR) 78967.0Less: non-tariff income 3540.0Net Aggregate Revenue Requirement 75427.0Revenue from sale of Power 76992.0Revenue subsidy from GoT -Revenue Gap/(Surplus) (1565.0)

Table 24: Summary of Truing Up for the FY 2014-15 (In Rs. Lakh)

SN Particulars ProposedforTruingUp (InLakh)

1 ExpensesA Fuel cost 21,666.1B Power purchase cost 40,820.6C O&M expense 15,776.5D Depreciation 2,024.4



SN Particulars ProposedforTruingUp (InLakh)

E Interest on working capital 1,675.2F Interest and finance charges 7.9

Total Expenses (1) 81,970.82 RevenueA Revenue from sale of Power 59,711.2B Non-tariff income 6,745.0C Revenue subsidy from GoT 6,200.0

Total Revenue (2) 72,656.23 Reasonable Return Allowed 4,263.085 Actual Gap 13,577.76 Approved gap 1,565.07 Total Gap Sought under Truing up 15,142.7

44. Based on the truing-up exercise done for FY 2014-15, it is seen that a total amount of Rs. 151.43 croresneeds to be passed on to the consumers through anincrease in tariff.



7. Generation MYT for the FY 2016-17to FY 2018-19

7.1. Introduction1. This section deal with the revenue requirement of generation business of TPGL for the years FY 2016-17

to FY 2018-19.TPGL has calculated the ARR and tariff requirements of generation as per the TERC TariffRegulation (Multi Year Tariff), 2015.

2. TPGL is filing its Annual Revenue Requirement and tariff petition for first time to the Hon’ble TERC asthis company has been formed with all generation assets of TSECL with effect from June, 2015. TPGL hasstarted functioning as an independent entity from September 2016. Also, it is submitted that TSECL hasnot segregated the account statements for generation, transmission and distribution business completely.The break-up of costs in generation, transmission and distribution business, wherever necessary for ARRand tariff calculation, have been done based on the division wise break-up of account statements andmaking suitable assumptions, as necessary, for the common functions like accounts and finance, HR,projects etc. at corporate level.

3. As on date, the statutory audit of the account statements till FY 2013-14 has been completed while thestatutory audit of FY 14-15 & FY 15-16 are in process. Since the account statements for complete year forFY 2016-17 are not available, the figures of FY 2016-17have been projected for the entire year based onthe latest information available at the time of filling of petition and incorporating the audited actual dataof past years as applicable.The financial projections of FY 2017-18 and FY 2018-19have been done basedon the actual data of past years and norms of Tariff Regulation (Multi Year Tariff) 2015, as applicable.

4. The detailed schedules and formats of the Revenue Requirement Form for FY 16-17and MYT for theperiod FY 17-18 & FY 18-19 are given in the subsequent sections.

7.2. Own Generation Parameters7.2.1. Plant Load Factor (PLF) and Auxiliary ConsumptionPast Performance

5. TPGL’s generation is comprised of gas based RGTPP and BGTPP and hydro based GHEP. The PLFs andauxiliary consumption for the three generation units for the period FY 2011-12 to FY 2015-16 is tabulatedbelow:

Table 25: Actual Plant wise PLF from FY 11-12 to FY 15-16

PLF calculation Units FY 12 FY 13 FY 14 FY15 FY 16

Rokhia gas based thermal power plant (RGTPP)Gross Generation MU 419.0 411.8 454.2 420.4 468.8Installed Capacity MW 58.0 57.8 58.1 63.0 63.0PLF % 82.5 81.3 89.3 76.2 84.9Auxiliary Consumption % 1.0 1.0 1.0 1.0 1.0Baramura gas based thermal power plant (BGTPP)Gross Generation MU 358.7 350.2 275.0 306.2 232.9Installed Capacity MW 42.0 42.0 42.0 42.0 42.0PLF % 97.49 95.19 74.74 83.22 63.30Auxiliary Consumption % 1.0 1.0 1.0 1.0 1.0Gumti Hydro Electric Plant (GHEP)Gross Generation MU 38.9 38.8 34.5 30.3 22.0Installed Capacity MW 10 10 10 10 10PLF % 52.2 52.0 46.3 40.7 29.5Auxiliary Consumption % 0.7 0.7 0.7 0.7 0.7



6. The installed capacity for the years has been calculated based on the average capacity available for theyear (as per the dates of commissioning mentioned in the previous table). It may be noted that PLF ofRGTPP is ranging from around 76% to 89% in last five years and is very close to TERC norms related toPLF in Tariff Regulation (Multi Year Tariff), 2015 i.e. 85%.Based on the trend and expected performance,the PLF of RGTPP is projected at the actual level of FY 2015-16 for the control period.

7. On the other hand, PLF of BGTPP was much higher than TERC norms in FY 2011-12 & FY 2012-13. But inlast three year it is in the range of 63% to 83%. This is because of constraints in gas availability for BGTPPin the last few years. BGTPP has gas allocations of 0.40 MMSCMD (Million Metric Standard Cubic Metreper Day), out of which 0.2 MMSCMD is under the Administered Price Mechanism (APM) gas mechanismand balance 0.2 MMSCMD under the MDP (Market Determined Price) mechanism.

8. However, of late, GAIL is able to supply gas only up to 0.30 MMSCMD (75% of allocation) of which theAPM quota shall be exhausted first and the balance shall be under MDP mechanism. As huge quantity ofgas is required initially only to run the gas turbine, it is not technically and economically feasible to runthe plant at full capacity with this supply. So, currently BGTPP is able to run only one unit of the plant formost durations resulting in lower PLF.

9. Compared to the PLF, the availability factor of RGTPP and BGTPP are much higher at around 98% and93% respectively for the FY 2015-16 as compared to the PLF figures given above. The availability factorsfor the last few years is tabulated below and the details of the calculation are provided in Annexure H:Form A.

Table 26: Plant wise Availability %

Plant wise availability Units FY 15 FY 16 FY 17(tillDec,16)

RGTPP % 88 98 92

BGTPP % 97 93 99

10. In case of GHEP, out of the three units, only two units run continuously based on the annual average livestorage capacity which can generate electricity of 50-60 MUs annually. As such, Gumti plant canpresently generate only 7-8 MW output by running two units.

11. It may be noted that the auxiliary consumption of the generating plants has been considered as per thenorms of the Commission value and the normative values have been considered for calculation of netgeneration.

Projection for FY 16-17 to FY 18-19

12. The PLF for the FY 16-17 have been projected based on actual available data till Nov, 2016 and forremaining four months it is taken same as last four months of FY 15-16 for three plants. In case of FY 17-18 & FY 18-19, it has been assumed to be same as the actual PLF of last year i.e. FY 15-16 in case ofRGTPP & BGTPP and average of last three years in GHEP (to account for the fluctuations on account ofavailability of water).

13. Further, for projecting the net generation in case of BGTPP, an effective increase in capacity of 1.645 MWis assumed with effect from September 2017 after completion of Major Inspection with capacityenhancement & improvement of energy efficiency with procurement of uprated hot gas path capital parts.Hence expected Generation (MU) for FY 17 to FY 19 is calculated below:

Table 27: Projected PLF and Auxiliary Consumption from FY17 to FY19

PLF calculation Units FY 17 FY18 FY 19

Rokhia gas based thermal power plant (RGTPP)Gross Generation MU 448.8 468.8 468.8Installed Capacity MW 63.0 63.0 63.0PLF % 81.1 84.9 84.9Auxiliary Consumption % 1.0 1.0 1.0Baramura gas based thermal power plant (BGTPP)



PLF calculation Units FY 17 FY18 FY 19

Gross Generation MU 207.3 238.2 242.0Installed Capacity MW 42.0 43.0 43.6*PLF % 56.2 63.3 63.3Auxiliary Consumption % 1.0 1.0 1.0Gumti Hydro Electric Plant (GHEP)Gross Generation MU 36.0 31.1 31.1Installed Capacity MW 10.0 10.0 10.0PLF % 41.0 35.5 35.5Auxiliary Consumption % 0.7 0.7 0.7*The effective capacity after completion of Major Inspection is shown

7.2.2. Heat Rate14. Heat rate of a thermal power plant is a measure of the power plant’s energy efficiency and the heat rates

calculated for RGTPP and BGTPP for FY 12 to FY 16 based on the net calorific values (kcal/StandardCubic Meter) of the gas being supplied to power plants and consumption of gas (Standard Cubic Meter orSCM) is shown below.

Table 28: Plant wise Heat Rate of Past Years

15. It may be observed that actual SHR of BGTPP in last five years is better than TERC norms as per TariffRegulation (Multi Year Tariff), 2015 i.e. 3700 (Kcal/kwh) except in FY 2015-16. The SHR of both plantshas been assumed to be same as the latest performance for the current year (from Apr 2016 to Nov 2016)for the projection period.

7.3. Assets Base and Capital Expenditure16. This section details the gross value of fixed assets and capital expenditure projected for the purpose of

generation business for the FY 16-17, FY 17-18 and FY 18-19. The value of gross fixed asset base is used toproject the amount of depreciation to be recovered from the proposed tariff.

17. In order to project the value of assets, the total capital expenditure expected to be incurred in these yearsis projected. For this, the capital expenditure in progress (projects in pipeline) and those planned to beimplemented in these years are considered and the amount spend in each of these plans is projectedbased on the progress of the work or the expenditure planned to be incurred in the scheme. The tablegiven below details the amount of capital expenditure expected to be incurred from FY 16-17 to FY 18-19.

Table 29: Capital Expenditure from FY 16-17 to FY 18-19 (Rs. lakhs)

Planned Capital Expenditure FY 17 FY18 FY 19

Baramura gas based thermal power plant (BGTPP)Major Inspection / Life extension with capacity enhancement inUnit-V by Sept 2017 (Capacity enhance by 1.645 MW)

- 1796.0 -

Gumti Hydro Electric Plant (GHEP)Major R&M work (DRP ready but some pre project activities andfunding tie up yet not completed) for life extension

- 500.0 700.0

Total - 2296.0 700.0

Year Heat Rate (Kcal/kWh)BGTPP RGTPP Average

FY12 3354.14 3778.58 3591.61FY 13 3320.38 3714.75 3533.49FY 14 3113.65 3468.41 3334.62FY 15 3531.61 3548.20 3541.21FY 16 3747.68 3972.33 3897.77FY 17 (till Nov’16) 3469.6 3635.4 3522.5



18. It can be observed from the above table that around Rs.30 Cr is expected to be incurred on capitalexpenditure in above mentioned years. These capital expenditure mainly incurred for renovation andmaintenance works of generation plant & machineries. It is expected that 100% of the capital expenditureincurred shall be capitalized in the same year and converted to gross fixed assets, which works out to bearound Rs. 30 crores. The DPR of the above two schemes is attached as Annexure F for reference.

19. One of the major planned capital expenditure of TPGL is combine cycle conversion of RGTPP &BGTPP and renovation & modernization/life extension project of GHEP with total expectedproject value of Rs. 552.60 Crore. TPGL has already prepared DPR to execute this project. Since pre-project activities and fund tie up is not completed yet, hence expected capital expenditure for this projecthas not been considered in this document. This expenditure is detailed below:

Table 30: Details of Combine cycle conversion and R&M of GHEP Projects

Particulars CapacityAddition

Estimated Cost EstimatedTenure

Rokhia gas based thermal power plant(RGTPP)RokhiaConversion of three (3) gas turbine units of Rokhia Powerstation operating in simple/open cycle mode into combinedcycle operation.

35 MW 250.80Crores 28 months

Baramura gas based thermal power plant (BGTPP)Conversion of unit # 4 and 5 gas turbines into a combinedcycle unit in order to derive the benefits of improvement inplant efficiency as well as generate higher plant output

25 MW 192.8Crores 36 months

Gumti Hydro Electric Plant (GHEP)Major inspection and overhauling with capital maintenance ofthe station - 109.60 Crores 36 months

20. Based on the above, the value of the gross value of assets and the asset base for calculation of depreciationis tabulated below. It may be noted that the booked value of assets is based on the original gross valueand no revaluation has been done for the value of assets.


Particulars FY 16Actual

FY 17Projected

FY 18Projected

FY 19Projected

Rokhia gas based thermal power plant(RGTPP)Rokhia

Opening GFA 24,026.3 24,026.3 24,026.3 24,026.3Addition during the year - - - -

Closing 24,026.3 24,026.3 24,026.3 24,026.3

Baramura gas based thermal power plant(BGTPP)

Opening GFA 15,254.4 15,254.4 15,254.4 17,050.1Addition during the year - - 1,795.7 -

Closing 15,254.4 15,254.4 17,050.1 17,050.1

Gumti Hydro Electric Plant (GHEP)Opening GFA 3060.4 3060.4 3060.4 3560.4

Addition during the year - - 500.0 700.0Closing 3060.4 3060.4 3560.4 4260.4

GROSS TOTAL 42,341.1 42,341.1 44,636.8 45,336.8



Particulars FY 16Actual

FY 17Projected

FY 18Projected

FY 19Projected

Assets created through Government Grants 23,754.7 23,754.7 25,042.6 25,435.3

Total Asset Base for Depreciation 18,586.4 18,586.4 19,594.2 19,901.5

Cost of intangible assets, if any - - - -

7.4. Investment21. It is submitted that TSECL has not segregated the account statements for generation, transmission and

distribution business completely. TSECL has made investments at corporate level which represents allthree businesses. These investment are primarily in the form of fixed deposits with various banks. Amajority of such investments have been made from fund payable against deposits works or depositreceived from customers for project works which is pending for execution.

22. The income earned from such investments in the form of interest is being separately booked under otherincome category. The projected income earned from such investment allocated between Generation,Transmission and Distribution business in the ratio of gross fixed assets hold by the respectiveaccounting divisions.

23. Earning from investment is projected for FY 17, FY 18 & FY 19 same as FY 2015-16.


Particulars FY 17Projected

FY 18Projected

FY 19Projected

Rokhia gas based thermal power plant(RGTPP)Rokhia

Investment 5069.21 5069.21 5069.21Interest earned in Investment 335.4 335.4 335.4

Baramura gas based thermal power plant (BGTPP)Investment 3155.74 3155.74 3155.74

Interest earned in Investment 195.0 195.0 195.0

Gumti Hydro Electric Plant (GHEP)Investment 421.18 421.18 421.18

Interest earned in Investment 30.5 30.5 30.5

7.5. Working Capital24. The working capital is estimated for calculating the normative interest charges to be allowed for financing

the working capital requirements. As per TERC Tariff Regulation (Multi Year Tariff), 2015, the workingcapital norms have been defined separately for thermal generation station and Hydro generating stations,as given below:

For Open-cycle Gas Turbine/Combined Cycle thermal generating stations (for RGTPP and BGTPP):

One month Fuel cost

Maintenance spares @ 30% of operation and maintenance expenses

Receivables equivalent to two months of capacity charge and energy charge

One Month O&M Expenses

For Hydro generating station (for GHEP):



Receivables equivalent to two months of fixed cost



25. Based on the above, the normative working capital requirements as per TERC regulations, the normativeinterest component on same and actual interest projected to be incurred for working capital is tabulatedbelow:

Table 33: Interest on Working Capital in Rs. Lakhs

Particulars FY 2016-17Projected

FY 2017-18Projected

FY 2018-19Projected

Rokhia gas based thermal power plant (RGTPP)RokhiaFuel stock 696.4 727.5 727.5Maintenance Spares stock 890.9 951.6 1,016.4Receivables 2,234.7 2,334.8 2,373.3O&M expenses 247.5 264.3 282.3TOTAL 4,069.5 4,278.3 4,399.6Normative Interest on Working Capital @ SBI Base Rate + 3% 12.30%Interest Projected to be Incurred for Working Capital 500.6 526.2 541.1

Baramura gas based thermal power plant (BGTPP)Fuel stock 396.3 455.3 462.6Maintenance Spares stock 594.0 648.9 704.2Receivables 1,342.1 1,342.1 1,342.1O&M expenses 165.0 180.3 195.6TOTAL 2,497.3 2,626.6 2,704.4Normative Interest on Working Capital @ SBI Base Rate + 3% 12.30%Interest Projected to be Incurred for Working Capital 307.2 323.1 332.6

Gumti Hydro Electric Plant (GHEP)Fuel stock - - -Maintenance Spares stock 54.1 57.7 61.5Receivables 73.3 78.4 85.0

O&M expenses 30.1 32.1 34.2TOTAL 157.5 168.1 180.7Normative Interest on Working Capital @ SBI Base Rate + 3% 12.30%Interest Projected to be Incurred for Working Capital 19.4 20.7 22.2

Total Interest on Working Capital of TPGL 827.1 870.0 896.0

7.6. Return on Equity and Tax on Income26. As per Clause 26 of Tariff Regulation (Multi Year Tariff) 2015, Return on Equity shall be computed at a

base rate of 15.50% for thermal stations and 16.50% storage type hydro stations on equity base. So, Baserate for calculation of RoE of two gas plants (RGTPP & BGTPP) and GHEP would be 15.50% and 16.50%respectively.

27. The amount of equity base to be considered for calculation of return has been considered based on therelevant clause (clause 21) of Tariff Regulation (Multi Year Tariff) 2015, which states

“For a project declared under commercial operation on or after 16th Oct 2015, if the equity actuallydeployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normativeloan.In case of the generating station declared under commercial operation prior to 16th Oct 2015, debt-



equity ratio allowed by the Commission for determination of tariff for the period ending the year beforethe date of publication of above regulation on the Official Gazette shall be considered”.

28. It may be noted that the Commission in its past orders had considered equity base for the generationprojects as 30% of the Gross Fixed Asset Value and as such the same is considered here for the purpose ofcalculation of RoE. Equity fund of TPGL is calculated after allocating equity fund of TSECL in the Grossfixed assets ratio among generation, transmission and distribution business. After that equity fund ofgeneration business allocated among three plants based on gross fixed assets ratio for each of the plants.

29. The return on equity has been computed on projected paid up capital is summarized in the table givenbelow:

Table 34: Calculation of Equity Fund in Rs. Lakhs


FY 18Projected

FY 19Projected

Rokhia gas based thermal power plant (RGTPP)RokhiaEquity fund (Allocated based on GFA ratio) 11,620.2 11,620.2 11,620.2Total GFA 24,026.3 24,026.3 24,026.3Normative Equity fund (30% of GFA) 7,207.9 7,207.9 7,207.9Equity fund considered for RoE (Min of actual and normative) 7,207.9 7,207.9 7,207.9

Baramura gas based thermal power plant (BGTPP)

Equity fund (Allocated based on GFA ratio) 7,233.9 7,233.9 7,233.9Total GFA 15,254.4 17,050.1 17,050.1Normative Equity fund (30% of GFA) 4,576.3 5,115.0 5,115.0Equity fund considered for RoE (Min of actual and normative) 4,576.3 5,115.0 5,115.0

Gumti Hydro Electric Plant (GHEP)Equity fund (Allocated based on GFA ratio) 965.5 965.5 965.5Total GFA 3,060.4 3,560.4 4,260.4Normative Equity fund (30% of GFA) 918.1 1,068.1 1,278.1

Equity fund considered for RoE (Min of actual and normative) 918.1 965.5 965.5

30. As per Clause 27 of Tariff Regulation (Multi Year Tariff) 2015,

The base rate of return on equity as allowed by the Commission under Clause 26 (mentioned above)shall be grossed up with the effective tax rate of the respective financial year. For this purpose, theeffective tax rate shall be considered on the basis of actual tax paid in the respect of the financial year inline with the provisions of the relevant Finance Acts.

31. Since TPGCL is a newly incorporated company, the Minimum Alternative Tax (MAT Rate)rate has beenconsidered for calculation of RoE as shown below.

Table 35: Calculation of Pre-tax Return on Equity

Sr. No. Particulars RGTPP BGTPP GHEPA. Return on Equity as per norms 15.50% 15.50% 16.50%B. Applicable MAT rate (including surcharge,

education and secondary education cess) 21.91% 21.91% 21.91%

C. Pre-tax Return on Equity [A/(1-B)] 19.85% 19.85% 21.13%

7.7. Expenditure7.7.1. Fuel Cost32. The only fuel used by TPGL for self-generation of energy is natural gas. The natural gas is being sourced

from the reserves at Rokhia, Baramura and Konabanpartly under the Average Price Mechanism (APM) atthe rates notified by the Ministry of Petroleum and Natural Gas (MoP&NG), Government of India and



partly at the Market Determined Price (MDP). TPGL has allocations of 0.58 MMSCMD and 0.40MMSCMD under the APM gas mechanism for its generation plants at RGTPP and BGTPP respectively.

33. Currently, GAIL is able to supply only 0.50 MMSCMD (86% of allocation) and 0.30 MMSCMD (75% ofallocation) under APM gas mechanism to RGTPP and BGTPP respectively. As huge quantity of gas isrequired initially only to run the gas turbine, it is not technically and economically feasible to run theBaramura plant at full capacity with this supply. So, currently BGTPP is procuring only 0.20 MMSCMDfrom GAIL under APM gas mechanism and running one unit for most of the time. Other than the APMgas allocations, TPGL also purchased some quantity of gas under Market Determined Price (MDP) tomeet the outstanding gas requirements for running the generation plants at Rokhia and Baramura. Basedon above, source wise (APM and MDP) supply of gas of last three years are provided in Table 14 below.For projecting fuel cost, it is assumed that source wise supply of natural gas would be same as FY 2015-16.

34. As per Clause 25 of Tariff Regulation (Multi Year Tariff) 2015, the landed fuel cost of primary fuel andsecondary fuel for tariff determination shall be based on actual weighted average cost of primary fuel andsecondary fuel of the three preceding months. For projecting fuel cost, we have taken average fuel cost forthe period October 2016 to December 2016 for both APM and MDP supply. This fuel cost includes othercosts like metering charges, Vat payable, etc. The supporting invoices for the fuel cost for the threemonths are attached as Annexure G.

Table 36: Projected Source wise Supply of Fuel and fuel cost (per SCM)

Particulars RGTPP BGTPPSource wise supply of Natural Gas(In %)

APM supply from GAIL 89% 64%MDP Supply from ONGC 11% 36%

Fuel Cost (Rs./SCM)Cost of APM Supply 4.10 3.99Cost of MDP Supply 7.49 7.41

35. Plant wise fuel consumption and fuel cost for the projected years are tabled below:

Table 37: Fuel consumption and Fuel Cost in Rs. Lakhs


FY 18Projected

FY 19Projected

Rokhia gas based thermal power plant (RGTPP)RokhiaFuel Consumption (In MMSCM) 187.5 195.9 195.9Fuel Cost (In Lacs) 8,356.8 8,729.7 8,729.7Baramura gas based thermal power plant (BGTPP)

Fuel Consumption (In MMSCM) 91.4 105.0 106.7Fuel Cost (In Lacs) 4,755.3 5,464.0 5,551.1

7.7.2. Operation and Maintenance Cost36. As per Clause 31 (1) (b) of Tariff Regulation (Multi Year Tariff) 2015, Operation and Maintenance

expenses of RGTPP and BGTPP shall be as follows:

Table 38: O&M Expenses as per Norms

Particulars Amount (Rs. in Lacs perMW)

FY 2015-16 44.14FY 2016-17 47.14FY 2017-18 50.35FY 2018-19 53.78FY 2015-16 44.14

37. For hydro generating stations, O&M cost is calculated by escalating last year O&M cost by 6.64%.



38. It may be submitted that O&M cost of all three plants of TPGL are projected as per norms detailed above.It is also noted that actual O&M cost of each plants of TPGL booked in account statements of previousyears are currently much less as compared to normative O&M cost. This is because of the pending R&Mworks required to be done by TPGCL which are not being carried out because of constraints in funds.However, TPGL plans to carry out planned repair & maintenance of plants including CIBI, majorinspection, etc. as most of machineries in generating stations are quite old. The details of the plannedR&M works are provided in required formats as Annexure H. The expected repair & maintenance for theFY 2016-17 to FY 2017-18 are detailed below:

Table 39: Expected O&M Cost on Planned Repair & Maintenance for the FY 16-17 to FY 18-19 in Rs. Lakhs

Particulars FY 16-17 FY 17-18 FY 18-19

Rokhia gas based thermal power plant (RGTPP)MI & Generator overhauling, Exaust Plenum replace 1200.0Schedule CIBI 95.1 1000.0 1050.0Schedule HGPI 350.0Baramura gas based thermal power plant (BGTPP)Schedule CIBI 100.0

39. Currently, generating plants are running with minimum manpower and TPGL is planning to recruit morethan 110 officials at high level and also increase the strength of field officers. This will also lead to increasein O&M cost of TPGL for the coming years. The recruitment plan of TPGL are details in Annexure14.2Annexure-A: Audited Annual Accounts along with CAG Report

7.8. Annexure-B: Asset Register

7.9. Annexure-C: Status of Arrears

7.10. Annexure-D: Minutes of Meeting of distributioncircles

40. Annexure-E: Internal Audit Report.

41. Based on the above mentioned facts, TPGL is proposing to allow O&M costs as per the norms prescribedby TERC in MYT Regulations 2015 as shown below.

Table 40: O&M Cost in Rs. Lakhs

Particulars FY 2015-16Actual

FY 2016-17Projected

FY 2017-18Projected

FY 2018-19Projected

Rokhia gas based thermal power plant(RGTPP)RokhiaOperation & Maintenance Cost

Employee Cost 252.9Repair & Maintenance 64.5

A&G Cost 175.5Total 492.9 2,969.8 3,172.1 3,388.1

Baramura gas based thermal power plant(BGTPP)Operation & Maintenance Cost

Employee Cost 211.9Repair & Maintenance 266.4

A&G Cost 107.4Total 585.6 1,979.9 2,163.0 2,347.2

Gumti Hydro Electric Plant (GHEP)Operation & Maintenance Cost



Particulars FY 2015-16Actual

FY 2016-17Projected

FY 2017-18Projected

FY 2018-19Projected

Employee Cost 294.4 314.0 334.8

Repair & Maintenance 15.6 16.7 17.8

A&G Cost 28.2 30.1 32.1Total 338.2 360.7 384.6 410.2

Grand Total 1,416.74 5,310.4 5,719.7 6,145.5

7.10.1. Interest on Working Capital42. The details of interest on Working capitalhave already been explained in section 8.7in detail.

7.10.2. Depreciation43. For the calculation of depreciation, the depreciation rates have been takenfrom Tariff Regulation (Multi

Year Tariff) 2015on the gross asset value. However, in account statement depreciation have beencalculated as per depreciation rate provided in Companies Act 2013 i.e. based on the useful life.

Table 41: Rate of Depreciation as per Tariff Regulation

Particulars Depreciation Rate asper Tariff Regulation

Land 0.00%Building 3.34%Plant & Machinery 5.28%Computer 15.00%Computer and Office Equipment 15.00%Office Equipment 6.33%Furniture 6.33%Vehicles 9.50%

44. The gross asset base booked in account statements includes assets created out of government grants.However, in accordance with accounting procedures as well as regulatory practices in other states,depreciation on such assets has not been claimed to be recovered through tariff and ARR. The gross assetvalue as per the account statements and the gross asset value excluding assets created through grantshave been mentioned earlier in Table 31. Further, the assets which have completely depreciated have alsobeen deducted from the total gross value of assets shown in account statements for the purpose ofcalculation of depreciation. The calculation of assets created through grants is provided below:

Table 42: Calculation of Assets created through Grants

Particulars Amount (Rs. In Lacs)Grants for creation of assets (as per accounts statement 2015-16) 61,929.79Fixed Assets Value including CWIP (as per accounts statement 2015-16) 110,385.83% of Assets created through Grants 56.1%

45. Category wise depreciation calculation for ARR are tabled below:

Table 43: Projected Depreciation (Rs. In Lacs)

Particulars DepreciationRate

FY 17Projected

FY 18Projected

FY 19Projected

Rokhia gas based thermal power plant(RGTPP)RokhiaLand 0.00% - - -Building 3.34% 21.5 21.5 21.5Plant & Machinery 5.28% 1,081.1 1,081.1 1,081.1




FY 17Projected

FY 18Projected

FY 19Projected

Computer 15.00% 0.7 0.7 0.7Computer and Office Equipment 15.00% 1.5 1.5 1.5Office Equipment 6.33% 0.4 0.4 0.4Furniture 6.33% 0.8 0.8 0.8Vehicles 9.50% 0.4 0.4 0.4

Total 1,106.3 1,106.3 1,106.3Less: Depreciation on Assets acquired through Grant 620.7 620.7 620.7

Net 485.6 485.6 485.6Baramura gas based thermal power plant(BGTPP)Land 0.00% - - -Building 3.34% 6.9 6.9 6.9Plant & Machinery 5.28% 666.7 716.0 752.0Computer 15.00% 0.4 0.4 0.4Computer and Office Equipment 15.00% 0.8 0.8 0.8Office Equipment 6.33% 0.2 0.2 0.2Furniture 6.33% 0.5 0.5 0.5Vehicles 9.50% 0.3 0.3 0.3

Total 675.9 725.2 761.2Less: Depreciation on Assets acquired through Grant 379.2 406.9 427.1

Net 296.7 318.4 334.2Gumti Hydro Electric Plant (GHEP)Land 0.00% - - -Building 3.34% 14.9 14.9 14.9Plant & Machinery 5.28% 120.4 132.2 160.7Computer 15.00% 0.2 0.2 0.2Computer and Office Equipment 15.00% 0.1 0.1 0.1Office Equipment 6.33% 0.1 0.1 0.1Furniture 6.33% 0.1 0.1 0.1

Vehicles 9.50% 0.1 0.1 0.1

Total 136.0 147.7 176.2Less: Depreciation on Assets acquired through Grant 76.3 82.9 98.9

Net 59.7 64.9 77.4

7.10.3. Non-tariff Income46. The other income of TPGL covers mainly interest earned on fixed deposits made in various banks and as

detailed under the head of Investment above, and other miscellaneous income like sale of scrap, sale oftender, meter rent etc. These incomes are being separately booked under other income category. Earningfrom investment and other miscellaneous incomes are projected for the FY 16-17, FY 17-18 & FY 18-19 onthe same level as FY 2015-16.

7.10.4. Summary of ARR and Tariff Proposal for the FY 16-17 to FY18-1947. Based on the details of expenditure and non- tariff income given above and determined in accordance

with TERC tariff regulations, the total annual revenue requirement of FY 15-16 to FY 18-19 is calculated.Currently there is no specific tariff of Generation Company as TPGL filing its first tariff petition. We aresubmitting below generation station wise ARR and tariff proposal for FY 2016-17 to FY 2018-19.



7.10.5. Actual ARR of FY 2015-16Table 44: Summary of Actuals of FY 15-16in Rs. Lakhs

ParticularsActual FY 2015-16

RGTPP BGTPP GHEP Total1. Installed Capacity (MW) 63.00 42.00 10.00 115.002. Generation (MU) 468.78 232.89 21.97 723.643. Auxiliary Consumption 4.69 2.33 0.15 7.17

Net units available for sale (2-3) 464.09 230.57 21.82 716.47

Expenditure1.Fuel Cost 13,519.0 7,882.0 - 21,401.02. Operation & Maintenance Cost 492.9 585.6 338.2 1,416.7Employee Cost 252.9 211.9 294.4 759.2Repair & Maintenance 64.5 266.4 15.6 346.5A&G Cost 175.5 107.4 28.2 311.13.Finance Cost - - - -4. Depreciation 485.6 296.7 59.7 842.05. Interest on Working Capital - - - -

Total Expenditure (1+2+3+4+5) 14,497.5 8,764.4 397.9 23,659.7Add: Return on Equity 1,430.7 908.4 194.0 2,533.1

ARR 15,928.2 9,672.7 591.9 26,192.9Less: Non-Tariff Income 335.4 195.0 30.5 560.8

Net ARR 15,592.8 9,477.7 561.5 25,632.0

7.10.6. Annual Revenue Requirement and Proposed Tariff for theFY 2016-17Table 45: Summary of ARR of FY 16-17 in Rs. Lakhs

ParticularsProjected FY 2016-17

RGTPP BGTPP GHEP Total1. Installed Capacity (MW) 63.00 42.00 10.00 115.002. Generation (MU) 448.76 207.32 36.03 692.11



Particulars Projected FY 2016-17

3. Auxiliary Consumption 4.49 2.07 0.25 6.81Net units available for sale (2-3) 444.27 205.25 35.78 685.29

Expenditure1.Fuel Cost 8,356.8 4,755.3 - 13,112.12. Operation & Maintenance Cost 2,969.8 1,979.9 360.7 5,310.4Employee Cost - - 314.0 -Repair & Maintenance - - 16.7 -A&G Cost - - 30.1 -3.Finance Cost - - - -4. Depreciation 485.6 296.7 59.7 842.05. Interest on Working Capital 500.6 307.2 19.4 827.1



Net ARR 13,408.2 8,052.5 603.3 22,063.9

Table 46: Proposed Tariff of FY 16-17 in Lacs


RGTPP BGTPP GHEP TotalCapacity ChargesO&M Expenses 2,969.8 1,979.9 360.7 5,310.4Finance Cost - - - -Depreciation 485.6 296.7 59.7 842.0Interest on Working Capital 500.6 307.2 19.4 827.1Reasonable Return 1,430.7 908.4 194.0 2,533.1

Less: Non- Tariff Income 335.4 195.0 30.5 560.8

Capacity Charges (Total) 5,051.4 3,297.1 603.3 8,951.8

Energy Charges 8,356.8 4,755.3 - 13,112.1

Capacity charges Per Unit (Rs. /Unit) 1.14 1.61 0.84 1.31Energy charges Per Unit (Rs. /Unit) 1.88 2.32 0.84 1.91

7.10.7. Annual Revenue Requirement and Proposed Tariff for theFY 2017-18Table 47: Summary of ARR of FY 17-18in Rs. Lakhs







Total Expenditure (1+2+3+4+5) 12,913.6 8,268.4 470.2 21,652.2Add: Return on Equity 1,430.7 1,015.3 204.0 2,650.1


Net ARR 14,009.0 9,088.7 643.7 23,741.4



RGTPP BGTPP GHEP TotalCapacity ChargesO&M Expenses 3,172.1 2,163.0 384.6 5,719.7Finance Cost - - - -Depreciation 485.6 318.4 64.9 868.8Interest on Working Capital 526.2 323.1 20.7 870.0Reasonable Return 1,430.7 1,015.3 204.0 2,650.1



Energy Charges 8,729.7 5,464.0 - 14,193.6


7.10.8. Annual Revenue Requirement and Proposed Tariff for theFY 2018-19Table 49: Summary of ARR of FY 18-19 in Rs. Lakhs







Total Expenditure (1+2+3+4+5) 13,144.6 8,565.2 509.8 22,219.5Add: Return on Equity 1,430.7 1,015.3 204.0 2,650.1


Net ARR 14,240.0 9,385.5 683.3 24,308.8



RGTPP BGTPP GHEP TotalCapacity ChargesO&M Expenses 3,388.1 2,347.2 410.2 6,145.5Finance Cost - - - -Depreciation 485.6 334.2 77.4 897.1Interest on Working Capital 541.1 332.6 22.2 896.0Reasonable Return 1,430.7 1,015.3 204.0 2,650.1



Energy Charges 8,729.7 5,551.1 - 14,280.8




8. ARR for Transmission &DistributionBusiness of TSECL for MYT ControlPeriod (FY 2016-17 to FY 2018-19)

8.1. Introduction48. This section deals with the Aggregate Revenue Requirement (ARR) of transmission& distribution

business of TSECLfor the years FY 2016-17toFY 2018-19.TSECL has calculated the ARR and tariff

requirements for transmission & distribution of power within the State as per theTERC Tariff

Regulations (Multi Year Tariff), 2015. Since this is the first MYT control period, TSECL is proposing

a three control period from FY 2016-17 to FY 2018-19. Based on the experience of the MYT framework

during this control period, the second control period would be appropriately taken.

49. TSECL is filing its AggregateRevenue Requirement (ARR) and Tariff Petition for transmission and

distribution business for the first timeseparately from generation business before the Hon’ble

Commission as a step towards unbundling in power sector of Tripura.A new company named Tripura

Power Generation Limited (TPGL)has been formed with all generation assets of TSECL with effect

from June, 2015. TPGL has started functioning as an independent entity from September 2016. Also, it is

submitted that TSECL has not yet segregated the account statements for generation, transmission and

distribution business completely. The break-up of costs in generation, transmission and distribution

business, wherever necessary for ARR and tariff calculation, have been done based on the division wise

break-up of account statements and making suitable assumptions, as necessary, for the common

functions like accounts and finance, HR, projects etc. at corporate level.

50. As on date, the statutory audit of the account statements till FY 2014-15 has been completed while the

statutory audit of FY 15-16 are in process.Since the account statements for complete year for FY 2016-17

are not available, the figures of FY 2016-17have been projected for the entire year based on the latest

information available at the time of filling ofthe Petition and incorporating theaudited actual data of past

years as applicable.The financial projections for FY 2016-17, FY 2017-18 and FY 2018-19are done

considering FY 2015-16 as base year, actual data available for past years and as per norms of Tariff

Regulations (Multi Year Tariff) 2015, as applicable.

51. The detailed schedules and formats of the Revenue Requirement Form for FY 16-17and ARR for MYT

period of FY 2017-18 to FY 2018-19 are given in the subsequent sections.

8.2. Category wise Projection for growth in No. ofConsumers

1. The category wise growth in number of consumers across various categories for FY 2016-17to FY 2018-19

have been projected based on the provisional values of FY 2015-16 consumer numbers. A YoY growth rate

of 8% is assumed across domestic category, 7% across commercial / non-domestic category, 5% across



irrigation, 2% across industrial category, 15% across Public Lighting and 13% for the consumers of Mobile

Tower category.

2. The following table shows the no. of consumers for FY 2015-16 to FY 2018-19:

Table 51: Projection for growth in Number of Consumers

Category FY 2015-16(Provisional)

FY 2016-17(Projected)



Kutirjyoti 14835 14835 14835 14835RGGVY 12286 12286 12286 12286Domestic 548991 685840 929299 1394743Commercial 56630 79589 144195 350671Irrigation 5206 5485 5785 6107Public water works 4863 5304 5785 6310Industries 5080 5466 5981 6680Tea, Coffee & Rubber Garden 63 82 107 140Bulk supply 885 983 1091 1211Public Lighting 1586 2007 2822 4527Mobile Towers 1199 1358 1539 1744Total 651624 813236 1123726 1799254

8.3. Category wise Projection for growth in Sales1. In the period FY 2013-14 and FY 2014-15 certain categories of consumers have shown high growth rate.

Especially in Domestic and Industrial category. Hence, TSECL has used different growth rates for each

category of consumer. The following table shows the different growth rates used for projecting the sales

for FY 2016-17 to FY 2018-19.

Table 52: CAGR for projecting growth in sales

Sl. No. Category CAGRUsed

1. Domestic 6.36%

2. Commercial 7.65%

3. Industrial 7.71%

4. Irrigation 7.12%

5. Public Lighting 6.90%

6. Public Water Works & Sewage disposal 8.42%

7. Any other category (Tea, Coffee & RubberGarden and Bulk)

7.12%

8. Mobile Towers 9.29%

2. Using the growth rates as mentioned above, the category wise sales have been projected in the followingtable:

Table 53: Projection for growth in Sales

All figures are in Million Units (MUs)



Sl.No.

Category FY 2015-16(Provisional)




1. Domestic 439.78 467.76 497.52 529.18

2. Commercial 74.92 80.65 86.82 93.46

3. Industrial

a Low & Medium Voltage 21.41 21.41 21.41 21.41

b High Voltage withdemand less than 1 MW

13.99 19.87 28.22 40.09

c HV/EHV with demand of1 MW & above

7.61 10.44 14.33 19.66

4. Railways 0.00 0.00 0.00 0.00

5. Irrigation 33.91 36.32 38.91 41.68

6. Public Lighting 39.71 42.46 45.39 48.52

7. Public Water Works &Sewage disposal

79.35 86.04 93.29 101.15

8. Any other category (Tea,Coffee & Rubber Gardenand Bulk)

76.85 82.33 88.19 94.47

9. Mobile Towers 25.52 27.89 30.48 33.31

13 Total: 813.06 875.17 944.56 1022.93

8.4. Transmission and Distribution Loss1. The table below highlights the T&D losses projected for FY 2016-17 to FY 2018-19:

Table 54: Projection of T&D Loss for MYT Period

FY 2015-16(Provisional)




Distribution Loss (%) 26.77% 21.61% 17.76% 14.51%

Transmission Loss (%) 6.00% 6.00% 5.50% 5.00%

T&D Losses (%) 31.16% 26.32% 22.28% 18.78%

2. The Petitioner submits that high level of T&D loss, is due to increase in the LT:HT ratio as a result

of extensive village electrification, new service connection in remote areas over the years, huge

increase in the LT network etc.

3. TSECL is making sincere efforts in electrifying the un-electrified areas of the state at a fast pace

under grants and loans provided by the Rural Electrification Corporation (REC) under the Rajiv

GrandhiGraminViduyatikaranYojna (RGGVY). Through the implementation of the scheme the

TSECL has provided the electricity to the far flung areas and villages to of the Tripura state. At the

same time, due to increase in the LT network and the domestic and KutirJyoti consumers, losses of

the utility are also increasing at considerable pace. Through different loss reducing measures and

schemes the TSECL has remained successful to contain the losses at the level mentioned in the

Petition.

4. In light of above made submission, we therefore request the Hon’ble Commission to approve the

above projected T&D losses of the TSECL.



8.5. Energy Balance1. Based on the above projected the energy balance for FY 2016-17 to FY 2018-19 has been calculated

and shown in the table below:

Table 55: Projection of Energy Balance for MYT Period



Energy from CGS 1744.03 1898.38 2032.28

Inter State Sales 1125.03 1195.94 1195.94

Sale to Mizoram 83.45 83.45 83.45

Sale to Manipur 83.45 83.45 83.45

Bangladesh Sale (100 MW) 643.15 643.15 643.15

Bangladesh Sale (60 MW) 385.89 385.89

Energy Trading 0.44

UI 29.84

IEX 284.71Inter State Transmission Loss 78.48 85.43 91.45

Power Purchase from Other Sources 211.06 211.06 211.06

ISGS Energy at State Bus 751.58 828.08 955.95

Energy from State Generation 685.29 730.84 734.60

Energy available at State Bus 1436.87 1558.92 1690.56

Projected Energy Sales 875.17 944.56 1022.93

Projected T&D Loss (%) 26.32% 22.28% 18.78%

Energy Required at State Bus 1187.73 1215.33 1259.48

Projected Intra State Transmission Loss(%) 6.00% 5.50% 5.00%Energy required at 11 kV level 1116.46 1148.49 1196.50

Projected Distribution Loss (%) 21.61% 17.76% 14.51%

Energy Surplus / (Deficit) at State Bus 249.15 343.59 431.08

Inter State Sales 249.15 343.59 431.08

Energy Trading 32.19 104.91 104.91

UI 1.33 20.14 20.14

IEX 215.62 218.54 306.03

8.6. Power Purchase1. TSECL procures power from NEEPCO, NHPC, NTPC and OTPC. TSECL is receiving power from

OTPC Palatanasince Jan 2014. While projecting power procurement from the NEEPCO and NHPC

sources it is assumed that in FY 2017-18 TSECL will receive the same amount of energy as available

in FY 2016-17 from each of the stations.

2. While projecting the power purchase cost for Power Plants of NEEPCO, TSECL has assumed an

escalation of 2.00% on fixed chargeand energy charge.

3. The following table shows the power procurement cost projected for FY 2016-17 to FY 2018-19:



Table 56: Projection for Power Purchase Cost for MYT Period

All figures are in Rs. Crore

Generating Stations

FY 2016-17 FY 2017-18 FY 2018-19Fixed

Charge(Rs.

Crore)

EnergyCharge

(Rs.Crore)

FixedCharge(Rs.

Crore)

EnergyCharge

(Rs.Crore)

FixedCharge

(Rs.Crore)

EnergyCharge

(Rs.Crore)

State Generating StationsRGTPP 50.51 83.57 52.79 87.30 55.10 87.30BGTPP 32.97 47.55 36.25 54.64 38.34 55.51GHEP 3.02 3.02 3.22 3.22 3.42 3.42Sub-total 86.50 134.14 92.26 145.16 96.86 146.22Central Generating StationsNEEPCO

Assam GPP 20.82 18.49 21.24 18.86 21.67 19.24Agartala GPP 21.19 23.32 21.61 23.79 22.05 24.26

Kopili –II 0.75 0.90 0.75 0.89 0.76 0.91Ranganadi 11.72 10.39 11.66 10.35 11.89 10.55

Doyang 3.21 4.29 2.51 3.35 2.56 3.42Khandong 0.94 0.77 0.80 0.66 0.81 0.67

Kopili 2.67 2.57 2.20 2.12 2.24 2.16Pare Unit-I 0.00 0.00 0.80 0.80 3.25 3.25

Pare Unit-II 0.00 0.00 0.80 0.80 3.25 3.25Kameng Unit-I 0.00 0.00 1.44 1.44 5.89 5.89

Kameng Unit-II 0.00 0.00 0.00 0.00 5.89 5.89NTPC

Bongaigaon Unit-I 17.39 21.86 17.74 22.30 18.09 22.30Bongaigaon Unit-II 0.00 0.00 25.61 32.19 26.12 32.19

Bongaigaon Unit-III 0.00 0.00 12.80 16.09 26.12 32.19NHPC

Laoktak 8.95 11.30 7.16 9.03 7.30 9.21OTPC

Palatana 167.98 140.60 197.35 136.57 201.30 139.30Sub-total 255.62 234.50 324.46 279.23 359.20 314.68Power from other Sources

Monarchak 0.00 40.64 0.00 51.11 0.00 52.13Solar Power from Monarchak 0.00 1.74 0.00 1.74 0.00 1.74Through Trading 0.00 1.35 0.00 1.35 0.00 1.35Through UI 0.00 42.57 0.00 42.57 0.00 42.57IEX 0.00 3.31 0.00 3.31 0.00 3.31Sub-total 0.00 89.61 0.00 100.08 0.00 101.10Grand Total 342.13 458.24 416.72 524.46 456.06 562.00



4. The Hon’ble Commission is requested to approve the power purchase cost of Rs. 800.37 Crore for

FY 2016-17,Rs. 941.19 Crore for FY 2017-18 andRs. 1018.06 Crore for FY 2018-19.

8.7. Transmission Charges1. The following table shows the Inter State and Intra State transmission charges for FY 2016-17 to FY

2018-19.

Table 57: Projection of Transmission Charge for MYT Period


Transmission Charge FY 2016-17 FY 2017-18 FY 2018-19Inter State (PGCIL) 37.80 40.81 43.91Intra State 30.75 56.48 78.19Total 68.55 97.29 122.09

2. The Hon’ble Commission is requested to approve the transmission charge as projected above.

8.8. O&M ExpensesTERC Tariff Regulations, 2015 stipulates the O&M cost to be comprising of Employee cost, R&M

expense and A&Gexpense. Employee cost for FY 2016-17 has been calculated by escalating the

provisional employee expense incurred in the base year of FY 2015-16 by consumer price index

(CPI). Similarly, A&G expense for FY 2016-17 has been calculated by escalating the provisional

employee expense incurred in the base year of FY 2015-16 by wholesale price index (WPI). R&M

expense for FY 2016-17 has been taken in same proportion of opening GFA as that of FY 2015-16.

For calculating employee expense and A&G expense for FY 2017-18 and FY 2018-19 same escalation

index has been used as that taken for FY 2016-17 and for calculating R&M expense same proportion

of opening GFA has been considered. The O&M expense for transmission and distribution business

has been calculated as provided below:

Transmission Business

Table 58: Projection of O&M Expense for Transmission Business for MYT Period


Particulars FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19As per B.S. Escalation

RateCost Escalation

RateCost Escalation

RateCost

Employee Cost 13.57 7.21% 14.55 23.00% 17.90 7.21% 19.19Repair & Maintenance 1.72 1.72 2.50 18.30A&G Cost 2.86 1.83% 2.92 1.83% 2.97 1.83% 3.02Total O&M 18.15 19.19 23.36 40.51

Distribution Business

Table 59: Projection of O&M Expense for Distribution Business for MYT Period




Particulars FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19As per B.S. Escalation

RateCost Escalation

RateCost Escalation

RateCost

Employee Cost 107.68 7.21% 115.44 23.00% 141.99 7.21% 152.22Repair & Maintenance 9.26 11.67 16.73 22.73A&G Cost 13.61 1.83% 13.86 1.83% 14.11 1.83% 14.37Total O&M 130.55 140.97 172.83 189.32

8.9. Capital Expenditure1. Capitalization of the transmission business expenditure for the MYT period has been provided in

the table below:

Table 60: Projection of Expense Capitalization of Transmission Business of TSECL for MYT Period



Transmission Line 46.02 893.25 357.49

Sub-station 21.91 493.94 120.00

Total Capitalization 67.93 1,387.19 477.49

2. Capital expenditure of the distribution business for the MYT period has been provided in the table

below:

Table 61: Projection of Capital Expenditure of Distribution Business of TSECL for MYT Period


Item/Description FY 2016-17 FY 2017-18 FY 2018-19A) Status of Funds for Capacity Addition: ElectricalInfrastructure in Rural Areas ( Including under theongoing schemes DDUGJY and others)Power Sub-Stations (66/33/22/11KV)-NewAddition 4.40 4.40 13.19Power Sub-Stations (66/33/22/11KV)-Augmentation 0.00 0.00 11.93Feeders of Power Sub-Stations (66/33/22/11KV)-Newaddition

4.06 4.06 12.82

Feeders of Power Sub-Stations (66/33/22/11KV)-Augmentation

0.00 0.00 5.69

Distribution Transformers- New Addition 5.09 5.17 5.28Feeders (11KV)-New Addition 6.22 6.22 18.67Feeder Segregation, 11KV 2.87 2.87 0.00LT Feeders-New Addition 6.12 12.24 0.00Metering of all Consumers 65.23 65.35 65.47Sub-Total 93.99 100.31 133.052) Status of Funds for Capacity Addition of ElectricalInfrastructure in Urban areas ( Including under theongoing schemes IPDS and Others)Power Sub-Stations (66/33/22/11KV)-New Addition 15.28 22.93 0.00Power Sub-Stations (66/33/22/11KV)- Augmentation 2.82 2.82 0.00Feeders of Power Sub-Stations (66/33/22/11KV)-Newaddition

10.37 15.55 0.00

Feeders of Power Sub-Stations (66/33/22/11KV)-Augmentation

5.36 5.36 0.00

Distribution Transformers- New Addition 6.38 6.48 6.48Distribution Transformers- Augmentation 0.74 0.00 0.00



Item/Description FY 2016-17 FY 2017-18 FY 2018-19Feeders (11KV)-New Addition 12.45 18.67 0.00Feeders (11KV)-augmentation 0.00 0.00 0.00Feeder Segregation, 11KV 6.22 9.33 0.00LT Feeders-New Addition 24.47 36.71 0.00Metering of all Consumers 35.12 35.19 35.25Sub-Total 119.21 153.04 41.73Total 213.20 253.35 174.78

8.10. GFA and Depreciation1. The Gross Fixed Assets (GFA) for TSECL is taken from provisional accounts for FY 2015-16.

Function wise GFA is considered to estimate the GFA added in FY 2016-17 to FY 2018-19. Closing

balance of FY 2015-16 has been considered as opening balance for FY 2016-17 and so on.

2. The Petitioner has considered the depreciation in the following manner:

full year depreciation on the opening balance of GFA

pro-rata depreciation on the additions made to the GFA balance during the financial year

3. It is submitted that for the purpose of computing the allowable depreciation, the GFA base as per

provisional accounts for FY 2015-16has been considered and subsequently yearly capitalization for

2016-17 to FY 2018-19 have been added for calculating closing balance for each year. Further, it is

submitted that depreciation has been computed only on the depreciable asset base and non-

depreciable assets such as land, land rights, etc. have been excluded from such computation.

4. It is further submitted that the “Annexure: 8” to the TERC Regulations (Multi Year Tariff), 2015

specifies the depreciation rate to be charged on each class of asset.

Table 62: Depreciation Rate as provided in ‘Annexure-8’ of the TERC Regulations (Multi Year Tariff), 2015

Asset Depreciation Rate(Salvage

Value=10%)- SLM

Land under full ownership 0.00%

Building 3.34%

Plant & Machinery 5.28%

Computer 15.00%

Computer and Office Equipment 15.00%

Office Equipment 6.33%

Furniture 6.33%

Vehicles 9.50%

5. The following table shows the GFA added for FY 2016-17 to FY 2018-19 and the depreciation for the

asset for the transmission and distribution business of TSECL.




Table 63: Depreciation for Transmission Asset calculated as per TERC Regulations (Multi Year Tariff), 2015


ParticularsFY 2016-17 FY 2017-18 FY 2018-19

Open Add. Close Avg. Dep. Open Add. Close Avg. Dep. Open Add. Close Avg. Dep.

Land 11.53 5.18 16.71 14.12 0.00 16.71 105.74 122.45 69.58 0.00 122.45 36.40 158.85 140.65 0.00Building 1.94 0.87 2.81 2.38 0.07 2.81 17.80 20.61 11.71 0.35 20.61 6.13 26.74 23.68 0.71Plant &Machinery 136.92 61.50 198.42 167.67 7.97 198.42 1255.87 1454.29 826.35 39.27 1454.29 432.29 1886.58 1670.43 79.38

Computer 0.12 0.06 0.18 0.15 0.02 0.18 1.14 1.32 0.75 0.10 1.32 0.39 1.71 1.52 0.20Computer andOfficeEquipment

0.19 0.09 0.28 0.23 0.03 0.28 1.75 2.02 1.15 0.16 2.02 0.60 2.62 2.32 0.31

OfficeEquipment 0.15 0.07 0.22 0.19 0.01 0.22 1.40 1.62 0.92 0.05 1.62 0.48 2.10 1.86 0.11

Furniture 0.33 0.15 0.47 0.40 0.02 0.47 2.99 3.47 1.97 0.11 3.47 1.03 4.50 3.98 0.23Vehicles 0.05 0.02 0.08 0.07 0.01 0.08 0.49 0.57 0.32 0.03 0.57 0.17 0.74 0.65 0.06Total 151.23 67.93 219.16 185.20 8.13 219.16 1387.19 1606.35 912.75 40.07 1606.35 477.49 2083.84 1845.09 81.00Less: AssetsCreated throughGovt Grant

84.85 145.98 5.07 145.98 1,394.45 770.22 33.81 1,394.45 1,824.19 1,609.32 70.65

Total AssetsBase excludingGrants

66.39 73.18 3.06 73.18 211.90 6.26 211.90 259.65 10.35




Table 64: Depreciation for Distribution Asset calculated as per TERC Regulations (Multi Year Tariff), 2015


ParticularsFY 2016-17 FY 2017-18 FY 2018-19

Open Add. Close Avg. Dep. Open Add. Close Avg. Dep. Open Add. Close Avg. Dep.

Land 52.76 22.84 75.60 64.18 0.00 75.60 27.14 102.74 89.17 0.00 102.74 18.72 121.46 112.10 0.00

Building 19.93 8.63 28.56 24.25 0.73 28.56 10.25 38.81 33.69 1.01 38.81 7.07 45.89 42.35 1.27

Plant & Machinery 412.87 178.75 591.62 502.24 23.87 591.62 212.41 804.03 697.82 33.16 804.03 146.54 950.56 877.29 41.69

Computer 1.46 0.63 2.09 1.77 0.24 2.09 0.75 2.84 2.46 0.33 2.84 0.52 3.35 3.09 0.42

Computer andOffice Equipment

3.22 1.39 4.61 3.92 0.53 4.61 1.66 6.27 5.44 0.73 6.27 1.14 7.41 6.84 0.92

Office Equipment 0.72 0.31 1.03 0.87 0.05 1.03 0.37 1.40 1.22 0.07 1.40 0.26 1.66 1.53 0.09

Furniture 1.33 0.57 1.90 1.61 0.09 1.90 0.68 2.58 2.24 0.13 2.58 0.47 3.05 2.82 0.16

Vehicles 0.17 0.07 0.24 0.20 0.02 0.24 0.09 0.32 0.28 0.02 0.32 0.06 0.38 0.35 0.03

Total 492.45 213.20 705.64 599.04 25.52 705.64 253.35 958.99 832.32 35.46 958.99 174.78 1133.77 1046.38 44.58

Less: AssetsCreated throughGovt Grant

276.28 395.89 336.08 14.32 395.89 538.02 466.96 19.89 538.02 636.08 587.05 25.01

Total Assets Baseexcluding Grants 216.17 309.76 11.20 309.76 420.97 15.57 420.97 497.69 19.57



8.11. Interest and Finance ChargesThe Petitioner has not considered any interest charge for FY 2016-17 to FY 2018-19 for both the

transmission and distribution business in line with the approach adopted by the Commissionin its last

Tariff Order for FY 2014-15 as it has not incurred any actual expense towards interest and finance

charges for FY 2015-16. However, Finance charge of Rs. 0.07 Crore for distribution business has been

considered for FY 2016-17 to FY 2018-19 same as that of provisional accounts of FY 2015-16.

8.12. Interest on Working Capital1. The TERC Tariff Regulation (Multi Year Tariff), 2015 provides for normative interest on working Capital

based on the methodology outlined in the Regulations. The Petitioner is eligible for interest on working

capital worked out on methodology specified in the Regulations for transmission and distribution

business as provided below:

i. Receivables equivalent to two months of fixed cost;

ii. Maintenance spares @ 15% of operation and maintenance expenses specified in Clause 31; and

iii. Operation and maintenance expenses for one month.

2. In accordance with the TERC Tariff Regulations (Multi Year Tariff), 2015, the interest on the working

capital requirement would be the SBI Base Rate plus 300 basis points as on 1st April of the year for which

tariff is determined. The Petitioner in the instant Petition has considered the interest rate on working

capital requirement at 12.30% for FY 2016-17 as well as for FY 2017-18 and FY 2018-19.

3. The Petitioner in accordance with the above mentioned Regulations, calculated the interest on working

capital as shown in the table below:


Table 65: IoWC calculation for Transmission Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Receivables (2 months) 5.12 9.41 13.03Maintenance Spares (15% of O&M) 3.94 4.07 4.21O&M Expense (1 Month) 2.19 2.26 2.34Working Capital 11.25 15.75 19.57Rate of Interest 12.30% 12.30% 12.30%Interest on Working Capital 1.38 1.94 2.41


Table 66: IoWC calculation for Distribution Business





Particulars FY 2016-17 FY 2017-18 FY 2018-19Receivables (2 months) 96.14 93.21 107.64Maintenance Spares (15% of O&M) 21.15 25.92 28.40O&M Expense (1 Month) 11.75 14.40 15.78Working Capital 129.03 133.53 151.81Rate of Interest 12.30% 12.30% 12.30%Interest on Working Capital 15.87 16.42 18.67

8.13. Return on Equityand Tax on Return on Equity1. The Regulation 26 of the TERC Tariff Regulation (Multi Year Tariff) 2015 provides for Return on

Equity(RoE) @15.5% on equity base. The amount of equity base to be considered for calculation of

return has been considered based on the relevant clause (clause 21) of Tariff Regulation (Multi Year

Tariff) 2015. The relevant extract of the regulations are as under:

“26. Return on Equity:

I. Return on equity shall be computed in rupee terms, on the equity base determined

inaccordance with Clause 21.

II. Return on equity shall be computed at the base rate of 15.50% for thermal generating

stations, transmission/distribution system including communication system and run

ofthe river hydro generating station, and at the base rate of 16.50% for the storage type

hydro generating stations and run of river generating station with pondage:”

“21. Debt-Equity Ratio:

I. For a project declared under commercial operation on or after the date of publication of

this regulation on the Official Gazette, the debt-equity ratio would be considered as 70:30

as on COD. If the equity actually deployed is more than 30% of the capital cost, equity in

excess of 30% shall be treated as normative loan:

Provided that:

i. where equity actually deployed is less than 30% of the capital cost, actual equity shall

be considered for determination of tariff:

ii. the equity invested in foreign currency shall be designated in Indian rupees on the

date of each investment:

iii. any grant obtained for the execution of the project shall not be considered as a part of

capital structure for the purpose of debt : equity ratio.”

2. It may be noted that the Commission in its past orders had considered equity base for the transmission

and distribution business as 30% of the Gross Fixed Asset Value and as such the same is considered here

for the purpose of calculation of RoE. Equity fund of TSECLis calculated after allocating equity fund of

TSECL in the Gross fixed assets ratio among generation, transmission and distribution business.

3. The return on equity has been computed on projected paid up capital is summarized in the table given

below:




Table 67: Return on Equity calculation for Transmission Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Equity fund (Allocated based onassets ratio)

145.28 145.28 145.28

Opening GFA 151.23 219.16 1,606.35Closing 219.16 1,606.35 2,083.84Average 185.20 912.75 1,845.09Normative Equity (30% of GFA) 55.56 273.83 553.53Equity considered for RoE (Minof actual and normative)

55.56 145.28 145.28

Rate of RoE 15.50% 15.50% 15.50%Return on Equity 8.61 22.52 22.52


Table 68: Return on Equity calculation for Distribution Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Equity fund (Allocated based onassets ratio) 322.28 322.28 322.28

Opening GFA 492.45 705.64 958.99Closing 705.64 958.99 1,133.77Average 599.04 832.32 1,046.38Normative Equity (30% of GFA) 179.71 249.70 313.92Equity considered for RoE (Min ofactual and normative) 179.71 249.70 313.92

Rate of RoE 15.50% 15.50% 15.50%Return on Equity 27.86 38.70 48.66

4. Regulation 27 of TERC Tariff Regulation (Multi Year Tariff) 2015 provides for grossing up of base rate of

return on equity with the effective tax rate of the respective financial year and the effective tax rate shall

be computed as per the following formula.

“Rate of pre-tax return on equity = Base rate / (1-t)

Where “t” is the effective tax rate in accordance with Clause (I) of this regulation and shall be

calculated at the beginning of every financial year based on the estimated profit and tax to be paid

estimated in line with the provisions of the relevant Finance Act applicable for that financial year to

the company on pro-rata basis by excluding the income of non-generation or non-

transmission/distribution business, as the case may be, and the corresponding tax thereon. In case of

generating company or the Transmission or the Distribution licensee paying Minimum Alternate Tax

(MAT), “t” shall be considered as MAT rate including surcharge and cess.”

5. The Petitioner has consideredMinimum Alternative Tax (MAT Rate)of 21.91% rate for calculation of pre-

tax RoE as shown below:




Table 69: Calculation of Annualized RoE on Pre-tax basis for Transmission Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Return on Equity 8.61 22.52 22.52Rate of RoE 15.50% 15.50% 15.50%Effective Tax Rate 21.91% 21.91% 21.91%Effective RoE (%) on Pre-tax basis 19.85% 19.85% 19.85%

Annualized RoE onPre-tax Basis 11.03 28.84 28.84


Table 70: Calculation of Annualized RoE on Pre-tax basis for Distribution Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Return on Equity 27.86 38.70 48.66Rate of RoE 15.50% 15.50% 15.50%Effective Tax Rate 21.91% 21.91% 21.91%Effective RoE (%) on Pre-tax basis 19.85% 19.85% 19.85%

Annualized RoE onPre-tax Basis 35.67 49.56 62.31

8.14. Non-tariff IncomeThe other income of TSECL covers mainly interest earned on fixed deposits made in various banks

and as detailed under the head above, and other miscellaneous income like sale of scrap, sale of

tender, meter rent etc.These incomesare being separately booked under other income

category.Earning from investment and other miscellaneous incomes are projectedfor the FY 16-17,

FY 17-18 & FY 18-19 on the same level as FY 2015-16.


Table 71: Non-tariff Income for Transmission Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Non-tariff Income 3.92 3.92 3.92


Table 72: Non-tariff Income for Distribution Business


Particulars FY 2016-17 FY 2017-18 FY 2018-19Non-tariff Income 10.85 10.85 10.85



8.15. Aggregate Revenue RequirementBased on the details of expenditure and non- tariff income discussed above, the aggregate revenue

requirement of FY 2016-17 to FY 2018-19 is calculated. The following table shows the total ARR

for FY 2016-17 to FY 2018-19.


Table 73: Aggregate Revenue Requirement for Transmission Business

Sl.No. Particulars Units FY 2016-17 FY 2017-18 FY 2018-19

A Fixed Charge

1 O & M Expenses Rs. Crore 19.19 23.36 40.512 Depreciation Rs. Crore 3.06 6.26 10.353 Interest on Term Loans & Fin. Charges Rs. Crore 0.00 0.00 0.004 Interest on Working Capital Loans Rs. Crore 1.38 1.94 2.415 Recovery of ARR & Tariff Petition Fees# Rs. Crore 0.00 0.00 0.006 Return on Equity Rs. Crore 11.03 28.84 28.847 Provision for bad and Doubtful debt Rs. Crore 0.00 0.00 0.008 Total Fixed Charge Rs. Crore 34.67 60.40 82.119 Less: Non‐Tariff Income Rs. Crore 3.92 3.92 3.92

10 Total Cost Rs. Crore 30.75 56.48 78.19B Total unit transmitted or wheeled MUs 1187.73 1215.33 1259.48C Transmission and Wheeling Charge Paisa/kwh 25.89 46.47 62.08

# Fees for filing tariff Petition has been considered under A&G expense


Table 74: Aggregate Revenue Requirement for Distribution Business

Sl. No. Particulars Units FY 2016-17 FY 2017-18 FY 2018-19A Fixed Charge

1 Power Purchase Cost Rs. Crore 800.37 941.19 1,018.062 Inter State Transmission Charges Rs. Crore 37.80 40.81 43.91

3 REC Purchase Cost Rs. Crore 7.90 10.01 11.264 Power Purchase Cost Adjustment Rs. Crore 65.65 0.00 0.005 Intra State Transmission Charges Rs. Crore 30.75 56.48 78.196 O & M Expenses Rs. Crore 140.97 172.83 189.327 Depreciation Rs. Crore 11.20 15.57 19.578 Interest on Term Loans & Fin. Charges Rs. Crore 0.07 0.07 0.079 Interest on Working Capital Rs. Crore 15.87 16.42 18.67

10 Recovery of ARR & Tariff Petition Fees Rs. Crore 0.00 0.00 0.0011 Return on Equity Rs. Crore 35.67 49.56 62.3112 Provision for bad and Doubtful debt Rs. Crore 0.00 0.00 0.0013 Total Fixed Charge Rs. Crore 1,146.26 1,302.94 1,441.3614 Less: Non‐Tariff Income Rs. Crore 10.85 10.85 10.8515 Less: Receipt on account of Cross Subsidy

SurchargeRs. Crore 0.00 0.00 0.00

16 Total Cost Rs. Crore 1,135.40 1,292.09 1,430.51# Fees for filing tariff Petition has been considered under A&G expense



9. Revenue from Operations for FY2016-17 to FY 2018-19

1. TSECL has estimated revenue from sale of power in its licensee area at Rs. 569.32 Crorefor FY

2016-17, Rs. 633.54 Crore for FY 2017-18 and Rs. 716.56 Crore for FY 2018-19 at existing tariff

structure. The revenue from inter State sale of power is estimated to be Rs. 558.55 Crore for FY

2016-17, Rs. 732.85 Crore for FY 2017-18 and Rs. 784.69 Crore for FY 2018-19.The detailed break-

up of the calculation of revenue for various categories of consumers has been provided below:

Revenue at existing tariff

Table 75: Category wise revenue at existing tariff (Rs. Crores)

Category FY 2016-17 FY 2017-18 FY 2018-19

Kutirjyoti 1.08 1.08 1.08RGGVY 0.90 0.90 0.90Domestic 275.89 309.20 355.82Commercial 62.15 69.72 78.05Irrigation 21.05 22.44 23.91Water Works 58.37 63.31 68.66Industrial 40.09 49.37 62.31Tea, Coffee and Rubber Garden 2.29 2.99 3.90Bulk Supply 60.19 64.08 68.10Public Lighting 26.77 28.05 29.37Mobile Tower 20.55 22.41 24.45Total 569.32 633.54 716.56

2. TSECL has calculated revenue at proposed tariff as detailed in the table provided below. The

proposed tariff of around 20% over the existing rates is essential to recover the pending gaps of

future years and meet the increase in cost over the last few years:-

Revenue at proposed tariff

Table 76: Category wise revenue at proposed tariff


Category FY 2016-17# FY 2017-18# FY 2018-19

Kutirjyoti 1.08 1.08 1.19RGGVY 0.90 0.90 0.99Domestic 275.89 309.20 391.40Commercial 62.15 69.72 85.86Irrigation 21.05 22.44 26.30Water Works 58.37 63.31 75.53Industrial 40.09 49.37 68.54Tea, Coffee and Rubber Garden 2.29 2.99 4.29Bulk Supply 60.19 64.08 74.91Public Lighting 26.77 28.05 32.31Mobile Tower 20.55 22.41 26.90Total 569.32 633.54 788.21#No hike considered

3. The treatment of the revenue gap / (surplus) has been discussed subsequently in this Petition.



10. Tariff Design and Proposed RateSchedule

10.1. Introduction1. Tariff for a utility should reflect the cost and must be based on cost of supply. While designing the

tariff for the state of Tripura, the tariff were rationalised to the extent that it is in line with the cross

subsidy targets set by the National tariff Policy.

2. The Hon’ble Commission has introduced telescopic tariff which has been accepted positively by the

consumers of the state.

3. In addition, introduction of special category for Mobile towers have helped TSECL in rationalising

the tariff for the state.

4. The current tariff structure has the following categories of consumers

10.2. Tariff StructureTable 77: Applicability of the Tariff Categories

Sl.No.

Category Description

KJ. Kutirjyoti Kutir-Jyoti connection covered under scheme of the State Govt. or Central Govt. Loadmaximum 120 watt (60 watt x 2 points), monthly consumption limited to 15 units, and shallhave to be metered.

A. Domestic Electric service connection related to consumption of electricity for lights, all types of fans,Heating devices, Television, Radio, Refrigerator, Air Conditioner and all other appliances forconsumers own domestic use but not for commercial purpose, educational institutions ownedor aided by State/Central government and all government hospital and all hospital owned bycharitable institutions (not maintained for commercial purposes), as approved and notified bythe State Government.

Classification of Domestic sub-categories are as follows:-

Sub-Category 1 (Single Phase-Domestic [rural])-The sub-category is exclusively provided forrural (as defined under applicable clause of the relevant act) areas subject to a maximumconsumption of 30 units per month.

Sub-Category 2(Single Phase-Slab-1) - For monthly consumption limit:-0-50 units

Sub-Category 3(Single Phase-Slab-2) -For monthly consumption limit: 51-150 units

Sub-Category 4 (SinglePhase-Slab-3) For monthly consumption limit: 151-300 units

Sub-Category 5 (Single Phase-Slab-4) – For monthly consumption above 300 units.

Sub-Category 6 (Three Phase-Compulsory above 10 kW contracted load) - For 3 phaseconnection for all units consumed.

B. Commercial Electric service connection related to consumption of electricity for lights, all types of fans,Heating devices, Television, Radio, refrigerator, Air Conditioner, lift motors, pumps and all



Sl.No.


other appliances used for commercial purposes maintained for Private gain including othersmall power, supply of power to Cinema Hall, Auditorium, Stadium, Nursing Home,Pathological & Clinical Laboratories, Chamber of Medical Practitioners Advocates/ConsultantEngineers/Chartered Accountants and similar other, Private educational institutions ,hospitalsetc.

Classification of Commercial categories are as follows:-

Sub-Category 1 (Single Phase Small Commercial/Pan Shop)-The sub-category isexclusively provided for small entrepreneurs having maximum consumption not exceeding 30Units per month.

Sub-Category 2 (Single Phase–Slab –1)-For monthly consumption limit 0-150 units

Sub-Category 3 (Single Phase-Slab-2)-For monthly consumption above 150 units

Sub-Category 4 (Single Phase–Semi-Commercial) – Applicable for private Educationalinstitution, Private hospital etc. having any type of electrical appliance for all units consumed.

Sub-Category 5 (Three Phase-Commercial –Compulsory above 10 KW contracted load) – Forall units consumed for commercial purpose

Sub-Category 6 (Three Phase – Group Consumer – Commercial) –For 3 Phase connection togroupSub –Category 7Mobile Towers Electric service connection related to consumption ofelectricity in Mobile Tower and metered on HT supply end or on L.T. supply plus 3%Transformer loss.

C. C. Industrial Electric service connection related to Supply/consumption of electricity for industrial purpose,each installation having Motor and other industrial appliances, Battery Charger, WeldingTransformer etc. including the power consumed for Light & Fan in an industry.

Classifications of Industrial sub-categories are as follows

Sub-Category 1 (Up to 5 HP [E-R/5] – Small industrial Entrepreneur in rural (as definedunder applicable clause of the relevant act) areas and for all units consumed having connectedload up to 5 HP

Sub- Category 2 (Up to 5 HP [E-U/5] –The sub-category is for all urban based and for allunits consumed for a maximum connected load up to 5 HP.

Sub-Category 3 (above 5 HP & up to 20 HP) – For all units consumed for a maximumconnected load above 5 HP and up to 20 HP.

Sub-Category 4 (above 20 HP & up to 100 HP) – For all units consumed for a maximumconnected load above 20 HP and up to 100 HP.

Sub-Category 5 (above 100 HP) -For all units consumed for a maximum connected loadabove 100 HP.

D Bulk Supply Electric service connection related to consumption of electricity to the organizations andestablishments having total connected load of 25 KVA or above, such Institutions, School,Collage, University, Defense installations, Railways, All India Radio, Office complexDepartmental, Colony, Dairy with Chilling Plant, Doordarshan , Cold storage, who aremaintaining LT distribution system and having mixed load but desirous to be bulk powersupply consumer based on bulk power supply contract agreement and metered on HT supplyend or on L.T. supply plus 3% Transformer loss.

E. Tea, Coffee &Rubber Garden

Electric service connection related to consumption of electricity for Tea, Coffee and RubberPlantation/Garden for utilization electric power for factory & Irrigation in the Estate including



Sl.No.


the power consumed for lights and fans, in an around the factory premises for all units.F. Public Utility Electric service connection related to consumption of electricity for Water Works, Irrigation,

Public Lighting for Panchayat & Nagar Panchyat /Municipal area, Special public utility forCrematorium, Water pumping, Drainage, Dewatering for all units consumed

Classifications of Public Utility Sub-categories are as follows:

1. Water Works: -Applicable for Motive Power for Water Works including the power consumedfor Light & Fans in Pump House for Water Works for all unit consumed.

2. Irrigation: - Applicable for Motive power for Irrigation including the power consumed forLight & Fans in Pump House for Irrigation as follows:-

a) For all units consumed up to a connected load up to 5 HP.

b) For all unit consumed above 5 HP connected load.

3. Public Lighting :- Electric service connection related to consumption of electricity for allpublic lighting system for streets, roads, lane and parks etc. as follows :-

a) Panchayat: –Within Panchayat area.

b) Nagar Panchyat/ Municipal area – Within Nagar Panchayat/Municipal area.

4. Special Public Utility: - Applicable for Crematorium, emergency water pumping, andDrainage. Dewatering etc and having any type of electrical equipment required in the publicinterest as approved by the State government

a) Special Public Utility (Nagar Panchyat//Municipal area): - Within Nagar Panchayat area.

b) Special Public Utility (Panchayat): - Within Panchayat area..

10.3. Proposed Rate ScheduleThe following table shows the proposed tariff for all the categories of consumers in the state for FY 2018-

19 which is almost 10% increase over the existing rates:

Table 78: Proposed Rate Schedule for FY 2018-19

Sl.No.

ConsumerCategory

Existing(without Subsidy)

Proposed(Without Subsidy)

FixedCharge

EnergyCharge

(Rs./kWh))

Fixed Charge EnergyCharge

(Rs./kWh)

A. KutirJyoti Rs.62/C/M Rs.68.00/Connection/month

B. DomesticDomestic (rural): 0-50 units

Rs.15/C/M 4.03 Rs.17/C/M 4.43Slab 1: Up to 50Units

Rs.25/C/M 4.84 Rs.28/C/M 5.32Slab 2: 51 – 150units

Rs.40/C/M 5.98 Rs.44/C/M 6.58



Sl.No.

ConsumerCategory



FixedCharge

EnergyCharge

(Rs./kWh))


(Rs./kWh)

Slab 3: 151 – 300units

Rs.50/C/M 6.16 Rs.55/C/M 6.78Slab 4: 301 unitsonwards

Rs.50/C/M 7.20 Rs.55/C/M 7.92Three phase(Compulsoryabove 3 kW): Allunits

Rs.50/KW/Month 7.20 Rs.55/KW/Month 7.92

C. Commercial

Small Commercial/ Pan shop: 0-50unit

Rs.25/C/M 5.93 Rs.28/C/M 6.52

Slab 1: Up to 150units

Rs.45/C/M 6.69 Rs.50/C/M 7.36Slab 2: 151 unitsonwards

Rs.60/C/M 7.25 Rs.66/C/M 7.98Semi Commercial:All units


Three Phase(Compulsoryabove 3 kW):All units


Three Phase –Group Consumer:All units


D. Mobile Tower: Allunits


E. IrrigationUp to 5 H.P: Allunits


Above 5 H.P. : Allunits


F. Water works: Allunits


G. IndustrialUp to 5 HP (E-R/5):All units


Up to 5 HP (E-U/5):All units


Above 5 to 20 HP:All units


Above 20 to 100 HP:All units


Above 100 HP: Allunits

Rs.75/KW/Month 7.25 Rs.83/KW/Month 7.98H. Tea, Coffee and

Rubber Gardens:All units


I. Bulk Supply: Allunits


J. Public LightingPublic Lighting(Panchayat)

Rs.30/KW/Month 5.55 Rs.33/KW/Month 6.11Public Utility (NagarPanchayat /Municipality)

Rs.60/KW/Month 6.63 Rs.66/KW/Month 7.29K. Special Public

Utility



Sl.No.

ConsumerCategory



FixedCharge

EnergyCharge

(Rs./kWh))


(Rs./kWh)

Special Public Utility(Crematorium)


Special Public Utility(Emergency WaterPumping, Drainage,Dewatering, etc.)


10.4. New Provisions in Tariff ScheduleTariff For Pre-Paid Meters

In order to reduce AT&C losses, TSECL is planning to promote deployment of pre-paid consumer

meters. This would help TSECL to improve its collection efficiency as well as reduce the working capital

requirements. The cost of pre-paid meters have also reduced over the last few years and the technology

has already been deployed in other placed in India. As such, TSECL plans to promote the

implementation of pre-paid meters are deploy pre-paid meters for new connections, replacement of

defective meters etc.

In order to promote use of pre-paid meters, TSECL proposes to provide consumers a rebate of 2% on

the total electricity bill amount. This shall incentivize the consumers for moving to pre-paid

meters and also would benefit the utility as the risk for non-collection would be mitigated and the

working capital requirement would reduce.

Under pre-paid meters, consumers are required to pay vend transaction charges for every transaction

or recharge done as service charges for the transaction. TSECL feels that levy of additional charges may

become a hindranceinsmooth implementation of pre-paid meters at this stage. As such, in order to

promote pre-paid meters, TSECL proposes that these vend transaction charges would also be borne by

TSECL and the consumers would get a total rebate of 2% on the total electricity bill amount as proposed

above. It is submitted that the expected vending transaction charge would be around Rs. 12 per

consumer per transaction, which shall be recovered through ARR in the initial period.

Online payment

In order to improve customer satisfaction and increase the avenues of easy payment for customers,

TSECL has already implanted the facility of online payment of electricity bill payment by the customers.

For conducting these transactions, certain charges have to be made to the payment service gateway. In

case of online payment, the customer is already incentivized as he can pay the electricity bill from

anywhere without having to come at the collection counter of TSECL. As such, in case of online

payment, TSECL is proposing that the transaction charges of the payment gateway should also be borne

by TSECL and the same shall be recovered through ARR.

Power Factor Rebate and Penalty



At present, all the consumer categories are charged based on the electricity consumption in kWh and as

such there is no incentive for improvement in power factor. Most of the other states in India have an

incentive-penalty provision in tariff for the big consumers like the industrial consumers to keep the

power factor within the acceptable limits and reduce the losses in the system. Based on the similar

provisions prevalent in other states, TSECL proposes to introduce the following power factor rebate and

penalty provision for HT/EHT Industrial Category consumers initially. The same shall be presently

applicable only for all industrial category consumers but may be extended for other categories in future.

(a) Power Factor Rebate:

I. In case, the average PF (leading or lagging) maintained by the consumer is more than 0.85 and

upto 0.95, a rebate of 1% on the Energy Charges on unit consumption shall be applicable;

II. For PF (leading or lagging) of 0.95 and above upto 0.97, a rebate of 2% on the Energy Charges

on unit consumption shall be applicable;

III. For PF (leading or lagging) of 0.97 and above upto Unity PF, a rebate of 3%on the Energy

Charges on unit consumption shall be applicable.

(b) Power Factor Penalty:

I. In case average PF (leading or lagging) in a month for a consumer fallsbelow 0.85, a penalty

@1% for every 1% fall in PF (leading or lagging) from0.85 to 0.60; plus 2% for every 1% fall

below 0.60 to 0.30 upto and including0.30 shall be levied on total unit consumption.

Limit for Single Phase/Three Phase Consumers

At present, the limit for connected load in single phase connections in LT categories of domestic and

commercial is 3 kW. As against this, most of the states in India have a limit of 5 kW for single phase

connections. The single phase meters available now are also capable of supporting load upto 5 kW.

With the increasing use of appliances like AC, geysers etc. it is felt that the limit for single phase

connections may be increased up to 5 kW to avoid unnecessary inconvenience to the consumers for

change of meters etc. As such, the Hon’ble Commission is requested to change the limit of connected

load in LT domestic and commercial consumers from 3 kW to 5 kW.

10.5. Proposed Miscellaneous ChargesMiscellaneous charges are various charges applicable apart from charges due to regular consumption of

power. TSECL proposes the following miscellaneous charges for FY 2017-18.

Table 79: Proposed Rate Schedule for FY 2017-18

Sl.No. Charge Proposed for FY2017-18

Category-I:- MISCELLANEOUS CHARGES




A The tariff for temporary supply for lights and fans for festival, ceremonies,public meeting shall be charged at the following rate, namely :-

i Net Rs. 6.00 / kWh

ii Rebate Rs. 0.10 / kWh

iii Gross Rs. 5.90 / kWh

N.B: The minimum charge for each installation which shall be paid in advance shall be Rs. 60/- per day per kWof contracted load or a

fraction thereof

B The tariff for temporary supply for lights & fans to commercialestablishment which shall include temporary Cinema, Theater,Circus, Exhibition, Fare shall be charged at the following rate,namely:-i Net Rs. 7.00 / kWh

ii Rebate Rs. 0.10 / kWh

iii Gross Rs. 6.90 / kWh

N.B: The minimum charge for each installation which shall be paid in advance shall be Rs.60/- per day per KWof contracted load or a

fraction thereofCategory: Other Charges

1 The monthly meter rent for different phases shall be at the followingrate, namely:-

i For single phase meter not exceeding 10 Amp - Rs. 10.00

ii For three phase meter - Rs. 20.00

iii For three phase meter with C.T. Rs. 40.00

iv For HT metering equipment i.e. kWh meter with MDl& KVR suppliedby the Deptt. -

Rs. 250.00

v For Trivector meter- Rs. 400.00

vi For TOD meter Rs. 400.00

2 The charges for testing of meter at the request of consumer for differentphase shall be at the following rate, namely:-

i For each single phase meter- Rs. 50.00

ii For each three phase meter - Rs. 100.00

iii For each HT meter - Rs. 250.00

Provided that after testing it is found that the meter has no defect, and it isin order.

3 The charges for replacement of meter owing to temporary increase ofload which shall be paid in advance shall be at the following rates,namely:-i For single phase Rs. 100.00

ii For three phase Rs. 250.00

4 The charge for replacement of fuse at consumer premises. Nil

5 The charges for installation of subtraction meter & additional meter atconsumer's meter board shall be NOTE- Where two or more meters areinstalled against one connection instead of one meter to suit theconvenience of the consumer, reading of the main meter will be takenand billed for.

Rs. 250.00

6 The monthly meter rent for an additional meter shall be at the followingrates, namely:-

i For single phase Rs. 15.00





7 There shall be no charge for test, inspection and connection of a newinstallation. But for any further test or inspection which may be foundnecessary owing to any fault in the installation or due to non- compliancewith the condition of supply the charge for each additional test shall be

Rs. 200.00

8 The charges for disconnection on consumers request shall be at the followingrate, namely:-,



iii For Bulk/HV/EHV Rs. 200.00

9 The charges for reconnection on consumers request shall be at thefollowing rates, namely:-



iii For Bulk/HV/EHV Rs. 250.00

10 The charges for temporary connection which shall be non-refundable forall categories of load through a meter within permissible distance from theelectric supply main shall be at the following rates, namely:-

i For 220-230V(i.e. Single Phase connection) Rs. 300.00 perinstallation

ii For 380-400V (i.e. 3-phase, 4-wire connection). Rs. 500.00 perinstallation

N.B: (i) The consumer shall supply all materials required for service linesas may be approved by licensee, from the nearest pole of the supply point.There shall be no disconnection charge and meter rent for temporaryconnection.N.B: (ii) For temporary. Connection the consumer shall pay as securitydeposit of Rs.750.00 for single phase or Rs.1500.00 for three phase supplywhich is refundable after disconnection of the temporary connection andfinal payment of the energy bill by consumer.N.B: (iii) For the purpose of this clause, temporary connection means aconnection for a continuous period not exceeding 15 days.

11 The charge for changing of meter by a larger capacity at the request ofconsumer in respect of permanent connection shall be at the followingrates, namely:-

i For 220-230V(Single phase) Rs. 150.00

ii For 380-400V (3-phase, 4-wire). Rs. 400.00

The charge for changing the position the meter & the board within the samebuilding at the request of the consumer when no addition in the service lineis required shall be at tile following rates, namely:-

i For 220-230V(Single phase) Rs. 200.00

ii For 380-400V (3-phase, 4-wire). Rs. 400.00

13. Charges for calibration of check meter upon request of consumer. Rs. 200.00

14. Charges for special meter reading on consumer request Rs. 150.00



11. Revenue Gap for FY 2018-19

11.1. Revenue gap at existing tariffFor calculating the total regulatory asset, TSECL has considered the revenue gap of Rs. 261.38 Crore

corresponding to True-up of FY 2013-14 and FY 2014-15. Further, the gap for FY 2016-17 is calculated by

considering the RE and revenue from retail and bulk sales

The following table shows the gap at existing tariff.

Table 80: Revenue Gap at existing tariff for MYT Period

Sl.No. Particulars Unit FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

1 Revenue at Existing Tariff Rs. Crore 459.28 569.32 633.54 716.56

2 Revenue Subsidy from State Govt. Rs. Crore 69.00 40.00 40.00 0.00

3 Revenue from Inter State Sales Rs. Crore 301.07 558.55 732.85 784.69

4 Total Revenue Rs. Crore 829.35 1,167.87 1,406.39 1,501.25

5 Revenue Gap at existing tariff Rs. Crore 104.76 (32.47) (114.30) (70.74)

11.2. Revenue gap at proposed tariffThe gap at proposed tariff is calculated by considering revenue from tariffs without subsidy. Henceno

Govtsubsidy for FY 2016-17 is considered. The carrying cost for the revenue gap from previous years has

been considered at a rate same as that of rate considered for calculating the interest on working capital

i.e. 12.30% for FY 2017-18 and FY 2018-19. The following table shows the revenue gap for FY 2017-18

and FY 2018-19.

Table 81: Revenue Gap at proposed tariff for MYT Period

Sl. No. Particulars Unit FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

1 Revenue Gap at existingtariff Rs. Crore 104.76 (32.47) (114.30) (70.74)

2 Regulatory Asset carriedover from previous year Rs. Crore 261.38 366.14 333.66 219.37

3 Total Cumulative Gap at theend of the year Rs. Crore 366.14 333.66 219.37 148.63

5 Proposed Tariff HikeAverage % 10%

6Additional Revenuerequired from Proposedtariff

Rs. Crore71.66

7 Balance gap proposed to bekept as regulatory asset Rs. Crore 76.97

It can be observed from the above that the revenue at existing tariff would be sufficient enough to meet

the annual revenue requirement for FY 2017-18 as well as for FY 2018-19. But when the revenue gap

carried over from previous years is considered, it becomes imperative that there is a need to increase the



existing tariff to make it sufficient enough to meet the requirement. Hon’ble Commission is also aware

that TSECL has signed the tripartite MoU under UDAY scheme which also requires a periodic tariff hike

for FY 2017-18 as well as for FY 2018-19.

In view of above, the Petitioner proposes a tariff hike of 10% over existing tariff to partially recover the

revenue gap of the previous yearstill FY 2018-19. Since the amount of the total gap is quite huge and the

gap has accrued over the last three years, as such, around 50% of the gap is proposed to be recovered in

FY 2018-19 and the balance may be recovered in the subsequent year i.e FY 2019-20.



12. Open Access Charges

12.1. IntroductionIn this section, TSECL is proposing the open access charges, particularly the distribution wheeling

charge and cross subsidy surcharge, for FY 2017-18.

12.2. Allocation MatrixThe Commission in MYT regulations 2015 has specified that the distribution licensee should segregate

the accounts of licensed business into wheeling business and retail supply business. Further, it provides

that in case accounts are not segregated as per provisions of these Regulations, the distribution licensee,

shall prepare an allocation statement to apportion costs and revenue to respective businesses. The

relevant clause is given below:

“Provided that the commission reserves the right to determine Wheeling Charges of theDistribution Licensee on the basis of segregated accounts the Licensed business intoDistribution Wires Business and Retail Supply Business.

Provided further that where the Distribution Licensee is not able to submit audited andcertified separate accounts for Distribution Wires Business and Retail Supply Business, theCommission shall determine allocation matrix in the following manner:

• The Licensee shall prepare an “allocation matrix” for the control period showingapportionment of costs and revenues to Distribution Wires Business and Retail SupplyBusiness. The statement shall be supported with an explanation of the methodology usedfor such allocations. The Allocation Statement should be consistent over the ControlPeriod, as approved by the Managing Director/CEO of the Licensee.

• The Commission shall review the “allocation matrix” submitted by the Licensee and basedon the prudence check shall finalize the “allocation matrix” for each year of the controlperiod.”

However, TSECL at present, has not segregated its accounts and as such, it is proposing an allocation

matrix for segregation of costs in respective business.

Table 82: Allocation matrix for separation of ARR for Wires Business and Retail Supply Business

Sl.No. Particulars WireBusiness

Retail SupplyBusiness

1 Power purchase expenses 0% 100%

2 Transmission Charge 0% 100%

3 Employee expenses 60% 40%

4 Repair and Maintenance expenses 90% 10%

5 Administration and General expenses 50% 50%

6 Depreciation 90% 10%

7 Interest and Finance charges 90% 10%

8 Interest on working capital 10% 90%

9 Interest on Security deposit 0% 100%

10 Bad debts written off 0% 100%





11 Income tax 90% 10%

12 Return on equity 90% 10%

13 Other income 10% 90%

14 Non-tariff income 0% 100%

15 Revenue subsidy 0% 100%

Based on the above allocation matrix, the total ARR for wheeling business is provided below:

Table 83: Separation of ARR for Wires Business and Retail Supply Business


Sl.No.

Particulars FY 2017-18 FY 2018-19

WireBusiness

RetailSupply

Business

WireBusiness

RetailSupply

Business1 Power purchase expenses 0.00 951.20 0.00 1029.322 Transmission Charge 0.00 97.29 0.00 122.093 Employee expenses 85.19 56.80 91.33 60.894 Repair and Maintenance expenses 15.05 1.67 20.46 2.275 Administration and General expenses 7.05 7.05 7.18 7.186 Depreciation 14.01 1.56 17.61 1.967 Interest and Finance charges 0.07 0.01 0.07 0.018 Interest on working capital 1.64 14.78 1.87 16.819 Bad debts written off 0.00 0.00 0.00 0.0010 Return on equity 44.61 4.96 56.08 6.2311 Non-tariff income 0.00 10.85 0.00 10.85

Total 167.63 1124.46 194.60 1235.91

12.3. Wheeling ChargesThe wheeling charges for distribution open access consumers and 33 kV voltage level for FY 2017-17,

has been determined from the ARR of the Wires Business distribution, as determined in table above.

Table 84: Wheeling Charge for 33 kV voltage level

Sl. No. Particulars Unit FY 2017-18 FY 2018-19

1 Total energy input into Distributionsystem

MU 1215.33 1259.48

2 Total distribution cost Rs. Crore 167.63 194.60

3 Distribution cost for wires businessfor 33 kV voltage level (assuming 35%of cost at 33 kV)

Rs. Crore 58.67 68.11

4 Wheeling charges for 33 kV voltagelevel

Rs./kWh 0.48 0.54

The wheeling charges for FY 2017-18, as determined above, are applicable for use of the distribution

system of TSECL by other licensees or generating companies or captive power plants or

consumers/users who are permitted open access at 33 kV voltage level under Section 42(2) of the

Electricity Act, 2003.



12.4. Cross Subsidy SurchargeThe open access consumers are liable to pay the cross subsidy surcharge to compensate the utility for

any loss of revenue due to the shifting of the consumer to the open access system. In accordance with

Regulation ……..of the Tripura Electricity Regulatory Commission(Terms and Condition of Open

Access) Regulation, 2010, consumers with a connected load of 1 MW and above shall be allowed open

access.

For determination of cross subsidy, TSECL would like to propose the following voltage wise cost of

supply which has been calculated based on the methodology specified by Hon’ble APTEL in Appeal No.

102 of 2010 and other related appeals in this matter. Based on the methodology specified by Hon’ble

APTEL, the voltage wise cost of supply is provided below:

Table 85: Calculation of Cost of Supply

Particulars SymbolFY 2017-18

LT 11 kV 33 kV Above33 kV

T&D losses (%) L 22.28% 11.54% 7.03% 5.50%Average Power Purchase rate(Rs./kWh) A 3.31 3.31 3.31 3.31

Average Power Purchase Cost Per UnitSold (Rs./kWh) B=A/(1-L)

4.26 3.75 3.56 3.51

Other Cost Per Unit Sold (Rs./kWh) C=OtherCost/Units sold

1.66 1.66 1.66 1.66

Total Voltage Wise Cost of Supply((Rs./kWh) D=B+C 5.92 5.40 5.22 5.16

Accordingly, the cross subsidy surcharge for HT industry category for FY 2017-18, is shown in the Table

below:

Table 86: Calculation of Cross Subsidy Surcharge

Sl.No.

Particulars Unit 33 kV 33 kV &above

Industrial(Above 100 HP)

Tea, Coffee& Rubber

1 Average Billing Rate as perproposed tariff

Rs./kWh 7.04 7.04 8.47 8.02

2 Voltage Wise Cost ofSupply

Rs./kWh 5.22 5.16 5.92 5.92

3 Cross subsidysurcharge

Rs/kWh 1.82 1.88 2.55 2.10



13. Compliance to Directives

13.1. Introduction

The Hon’ble Commission has given fresh directives to TSECL in the Tariff Order for FY 2014-15. Thischapter address the compliance of the directives issued by the Commission.

13.2. Adherence to past directives of Hon’ble Commission

13.2.1. Directive 3:Filing Petition for approval of inter-State tariff forManipur and Mizoram to the Commission

The Hon’ble commission has provided the following directive:

“The Commission directs the Petitioner to expedite the process of reviewing the

existing Power Purchase Agreement with Manipur and Meghalaya. The Petitioner

shall submit the Petition for finalisation of tariff for Manipur and Mizoram before the

Commission within two months of the issuance of this Order.”

Compliance to Hon’ble Commission’s Directive:

It is humbly submitted that the Petitioner is selling power to the States of Manipur and

Mizoram as per Power Purchase Agreement. TSECL has filed a separate Petition before the

Hon’ble Commission for determination of tariff for its generating stations. The approved power

purchase rate of the generating stations will be used for fixation of tariff for selling of power to

other States.

13.2.2. Directive 4:Annual Performance Report (APR)


“TSECL has submitted APR for FY 2013-14 along with its Tariff Petition. However, the APR submitted

by TSECL is not complete as many fields in the APR has been left blank by the Petitioner. Further, the

Petitioner has only submitted the information in figures and no relevant reasons in support of the data

has been given in the APR. The Commission directs that at the time of filing the Tariff Petition for FY

2015-16, the Petitioner should submit more detailed APR with complete information and reasons

supporting the actuals wherever necessary.”


It is humbly submitted that the Petitioner in the instant Petition has filed True-up Petition for

FY 2013-14 and FY 2014-15.



13.2.3. Directive 5:Timely filing of ARR & Tariff Petition


“In view of the above, the Commission directs the Petitioner to submit the Petition for

approval of ARR and Tariff for FY 2015-16 strictly in accordance with the Tariff

Regulations, 2004 and without deficiencies and sticking to the timelines. Further, the

Petitioner should be able to produce all the information sought by the Commission in

a timely manner.”


It is humbly submitted that since the tariff period of FY 2015-16 has already been expired, filing

of Petition for approval of ARR and Tariff for the expired period will not solve the purpose as

tariff cannot be altered retrospectively. Thus, TSECLshall file the True-up Petition for FY 2015-

16 subsequently for approval of the Hon’ble Commission.

13.2.4. Directive 6:Annual Statement of Accounts


“The Commission directs the Petitioner to submit complete Statement of Accounts duly

audited by statutory auditor for all the years from FY 2009-10 to FY 2013-14 by within

three months of issuance of this Order.”


It is humbly submitted that the audited annual accounts for FY 2013-14 to FY 2014-15 along

with CAG audit report has been attached as “Annexure-A” to this Petition.

13.2.5. Directive 7:Assets and Depreciation Register


“The Commission strictly directs the Petitioner to expedite the process of preparing the

asset wise Fixed Assets and Depreciation Register duly audited and submit the same by

within three months of issuance of this Order. Further, the Petitioner shall produce the

same at the time of procedure of determination of ARR and tariff for FY 2015-16.”


It is humbly submitted that the duly audited fixed asset register has been attached as

“Annexure-B” to this Petition.

13.2.6. Directive 8:Management Information System (MIS)




“The Petitioner is directed to submit a report on upgradation of its billing system within

two months of issuance of this Order. In the said report, TSECL should submit the time

line for completion of a compete Management Information System.”


It is humbly submitted that the Petitioner is making its sincere efforts for upgrading its billing system.

Proposal for upgradation of billing system at 55 electrical sub-division (existing old CEBS system) has

been approved by the Govt. Initiatives are being taken for tying up for funding support. The expected

date of completion is March, 2018.

13.2.7. Directive 9:Collection of past arrears


“The Commission directs the Petitioner to submit the latest status of arrears pending to be collected

within one month of issuance of this Tariff Order.”


It is humbly submitted that the data of arrears has been attached as “Annexure-C” to this

Petition.

13.2.8. Directive 10:Transmission and Distribution Loss


“In view of the same, the Commission directs the Petitioner to expedite its efforts for

reducing the T&D loss of its network. Further, in view of the increased T&D loss, the

Commission directs TSECL to submit within three months of issuance of Tariff Order

for TSECL for FY 2014-15 this Order, its detailed action plan and roadmap for

reducing the T&D loss of its network.”


Hon’ble Commission would appreciate that TSECL has signed tripartite MoU with Ministry of

Power, GoI, Govt. of Tripura under UjwalDiscom Assurance Yojana. In the MoU TSECL has

agreed upon the following AT&C loss trajectory.

Year FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20

AT&C Loss 33.80% 30% 25% 20% 15%

13.2.9. Directive 11:Capital Expenditure Plan




“Despite being repeatedly directed by the Commission, the Petitioner has again failed to

submit its Capital Expenditure Plan. The Commission strictly directs that TSECL should

review the Capital Expenditure Plan and Business Plan submitted by other utilities in

the country and accordingly prepare and submit its Capital Expenditure Plan for FY

2015-16 within three months of issuance of this Order. TSECL shall produce the same

during the procedure for determination of ARR and tariff for FY 2015-16.”


Hon’ble Commission would appreciate that TSECL has signed tripartite MoU

with Ministry of Power, GoI, Govt. of Tripura under UjwalDiscom Assurance Yojana. In the

MoU TSECL has agreed upon the following capital expenditure trajectory.

Item/Description Total FundRequirement,

in RsCrs

FY2015-

16

FY2016-

17

FY2017-

18

FY2018-

19

FY2019-

20

A) Status of Funds for Capacity Addition: Electrical Infrastructure in Rural Areas ( Including under the ongoing schemesDDUGJY and others)Power SubStations (66/33/22/11KV)-NewAddition

212.91 10.64 4.40 4.40 13.19 61.56

Power SubStations (66/33/22/11KV)-Augmentation

94.17 4.70 0.00 0.00 11.93 5.96

Feeders of Power SubStations (66/33/22/11KV)-New addition

196.55 9.18 4.06 4.06 12.82 56.83

Feeders of Power SubStations (66/33/22/11KV)-Augmentation

44.96 2.26 0.00 0.00 5.69 2.85

Distribution Transformers- New Addition 33.44 1.68 5.09 5.17 5.28 5.32

Feeders (11KV)-New Addition 183.38 9.16 6.22 6.22 18.67 87.11

Feeder Segregation, 11KV 75.40 3.76 2.87 2.87 0.00 40.11

LT Feeders-New Addition 241.50 12.07 6.12 12.24 0.00 128.48

Metering of all Consumers 413.89 20.69 65.23 65.35 65.47 65.59

Sub-Total 1,496.20 74.14 93.99 100.31 133.05 453.81

2) Status of Funds for Capacity Addition of Electrical Infrastructure in Urban areas ( Including under the ongoingschemes IPDS and Others)Power Sub-Stations (66/33/22/11KV)-NewAddition

56.31 2.82 15.28 22.93 0.00 15.28

Power SubStations (66/33/22/11KV)-Augmentation

5.94 0.30 2.82 2.82 0.00 0.00

Feeders of Power SubStations (66/33/22/11KV)-New addition

38.20 1.91 10.37 15.55 0.00 10.37

Feeders of Power SubStations (66/33/22/11KV)-Augmentation

11.28 0.56 5.36 5.36 0.00 0.00

Distribution Transformers- New Addition 41.67 2.09 6.38 6.48 6.48 6.68

Distribution Transformers- Augmentation 1.47 0.74 0.74 0.00 0.00 0.00

Feeders (11KV)-New Addition 45.85 2.28 12.45 18.67 0.00 12.45



Feeders (11KV)-augmentation 0.00 0.00 0.00 0.00 0.00 0.00

Feeder Segregation, 11KV 22.92 1.15 6.22 9.33 0.00 6.22

LT Feeders-New Addition 90.16 4.51 24.47 36.71 0.00 24.47

Metering of all Consumers 222.87 11.15 35.12 35.19 35.25 35.32

Sub-Total 536.67 27.50 119.21 153.04 41.73 110.79

Total 2,032.88 101.65 213.20 253.35 174.78 564.60

13.2.10. Directive 12:AT&C Loss


“The Commission again directs the Petitioner to get the AT&C losses figures for all the

years from FY 2009-10 to FY 2013-14 audited by the Statutory Auditor and submit the

same before the Commission within two months of issuance of this Order. TSECL shall

also produce the same along during the procedure for determination of ARR and tariff

for FY 2015-16. Further, the audited AT&C losses figures should also reflect in TSECL's

audited Annual Accounts.”


The audited accounts of TSECL are prepared as per the relevant provisions and formats

of Companies Act and presently there is no provision to audit the energy related figures

in AT&C loss calculation. As such, the audit accounts of past years cannot include the

AT&C loss figures.

13.3. Adherence to fresh directives of Hon’ble Commission

13.3.1. Directive 1:Separate annual accounts for Generation, Transmission,Distribution and SLDC


“TSECL is a bundled utility undertaking all three functions, viz., Generation

transmission and distribution of electricity. In most of the States of the Country, the

electricity utilities are unbundled in accordance with Section 131 of the Electricity Act,

2003. Further, for stimulation of competition in the electricity market through Open

Access, which is an underlying spirit of Electricity Act, 2003, unbundling of the state

electricity utility is necessary. In view of the same, the Commission views separation

of accounts of generation, distribution, transmission and load dispatch functions as a

first step in the direction of unbundling of TSECL. In view of the same, the

Commission directs TSECL to submit separate accounts for generation, distribution,

transmission and SLDC functions along with the Tariff Petitions in the future.



Further, TSECL is directed to submit by March 31st, 2015, a report on its roadmap for

unbundling of the corporation.”


In compliance to the direction of Hon’ble Commissiona new company named Tripura Power

Generation Limited (TPGL) has been formed with all generation assets of TSECL with effect

from June, 2015 for which separateAnnual Revenue Requirement (ARR) and Tariff Petition has

been filed. Also, a separate Annual Revenue Requirement (ARR) and Tariff Petition is being

filed for transmission and distribution business of TSECL, before the Hon’ble TERC. TPGL has

started functioning as an independent entity from September 2016. Also, it is submitted that

TSECL has not yet segregated the account statements for generation, transmission and

distribution business completely. The break-up of costs in generation, transmission and

distribution business, wherever necessary for ARR and tariff calculation, have been done based

on the division wise break-up of account statements and making suitable assumptions, as

necessary, for the common functions like accounts and finance, HR, projects etc. at corporate

level. TSECL shall subsequently undertake adequate measures for prudent segregation of

accounts.

13.3.2. Directive 2:Submission of final truing up Petition for years from FY2009-10 to FY 2012-13


“As mentioned earlier, truing for years since FY 2009-10 has been done on

provisional basis only, based on the provisional annual accounts of TSECL. Final

truing-up based on annual accounts duly audited by Statutory Auditors has been

pending for years since FY 2009-10 because of TSECL’s inability to submit the

audited annual accounts for the previous years. During the regulatory proceedings

for this Tariff Order, TSECL has conveyed that the final annual accounts duly audited

by Statutory Auditors are available for years till FY 2011-12. Further, as mentioned

earlier, the Commission has directed TSECL to produce annual accounts for all the

years from FY 2009-10 to FY 2013-14 duly audited by Statutory Auditors along with

the Tariff Petition for FY 2015-16.

It is directed that within four months of issuance of this Order, TSECL should submit

the Petition for final truing up for all the years from FY 2009-10 to FY 2012-13 based

on the annual accounts of these years duly audited by Statutory Auditors.”


TSECL has undertaken the statutory audit of its financial accounts up to FY 2014-15 and CAG

audit for FY 2013-14. The audited annual accounts for FY 2013-14 to FY 2014-15 along with CAG



audit report has been attached as “Annexure-A”. The Commission may undertake final truing

up based on the audited annual accounts for respective years.

13.3.3. Directive 3:Submission of Report regarding status of consumermetering and roadmap for achieving 100% consumer metering


“TSECL is directed to submit within two months of issuance of this Order a report on

status of metering of consumers and roadmap for achieving 100% consumer

metering in the State of Tripura. The report shall include the information regarding

number of unmetered consumers in the State and will also include the roadmap of the

Corporation to achieve 100% metering in the State. TSECL is directed to submit the

report within two months of issuance of this Order.”


It is submitted that TSECL has achieved almost 100% metering at the consumer level and is in the

process of ensuring 100% metering at feeder and Distribution Transformer level. All the new

connections are being released with meter and TSECL is purchasing meters at regular interval to

meet its requirement for replacement of defective meters and releasing new connections.

13.3.4. Directive 4:Submission of minutes of meeting of all distributioncircles


“The commission understands that to bring better functional efficiency of the

distribution function of TSECL, there is a need for conducting regular meetings of

permanent and contractual employees of the Corporation at all of its distribution

circles. TSECL is directed to conduct meetings at all of its distribution circles every

month and submit the minutes of the meeting to the Commission every month which

shall include the following:

Circle wise actual loss levels

Loss reduction efforts,

Efforts towards timely billing of consumers

Efforts towards timely revenue collection

Targets given to the officers of the Corporation and compliance of these targets

by the officers

Actions taken on the officers failing to achieve the given targets “




TSECL has been conducting circle level meetings at regular intervals for reduction in loss, timely

billing of the consumers, timely revenue collection etc. for bringing functional efficiency. The

minutes of meeting conducted in this regard are attached as “Annexure-D” to this Petition.

13.3.5. Directive 5:Conducting internal audit of the Corporationsassets/offices


“The Commission intends TSECL to keep track of its incomes and expenses as well as

its assets at various offices. Hence, the Commission directs TSECL to conduct an

internal audit of its offices at different places and submit the report of the same to the

Commission by June 30th, 2015 indicating procedural discrepancies in following

standard procedures as well as actions taken for its rectification.“


In compliance to the Hon’ble Commission direction, TSECL has been conducting internal audits

at division levels. The internal audit report has been attached as “Annexure-E” to this Petition.

13.3.6. Directive 7:Tariff Petition for diesel generating station


“The revenue requirement related to diesel generating station of TSECL has not been

considered as part of this Tariff Order. The Petitioner is directed to file a separate

tariff Petition with all the relevant data for its diesel generating station.”


It is submitted that the diesel generating station was previously used for emergency purpose and

is not currently in use. The cost of the same has also not been claimed in this Petition.



14. Annexures

14.1. Proposed Recruitment Plan of TPGL

Existing AdditionalProposed






1 GM (Tech.) 0 1 0 0 0 0 0 0 0 0 0 12 AGM 1 1 0 0 0 0 0 0 0 0 1 13 DGM (Electrical) 2 0 1 0 0 1 1 0 0 0 4 14 DGM (Mechanical) 0 2 0 0 0 0 0 0 0 0 0 25 DGM (Civil) 0 1 0 0 0 0 0 0 0 0 0 16 DGM (IT) 0 1 0 0 0 0 0 0 0 0 0 17 Mgt. Trainee (Electrical) 0 0 0 6 0 6 1 2 0 0 1 148 Mgt. Trainee (Mechanical) 0 0 0 6 0 6 0 2 0 0 0 149 Mgt. Trainee (Civil) 0 0 0 2 0 2 0 2 0 0 0 610 Mgt. Trainee (IT) 0 0 0 2 1 1 0 1 0 0 1 411 Jr. Operator 0 0 3 5 2 5 1 5 0 0 6 1512 Helper Gr. II 0 0 10 10 8 10 7 10 1 0 26 3013 Electrician 0 0 0 3 0 3 0 3 0 0 0 9

1 CFO-cum-CS 0 1 0 0 0 0 0 0 0 0 0 12 DGM (Finance) 0 1 0 0 0 0 0 0 0 0 0 13 Assistant Manager (Finance) 3 0 1 0 1 0 1 0 0 0 6 0

1 DGM (HR & Admin.) 0 1 0 0 0 0 0 0 0 0 0 12 Sr. Manager (HR & Admin.) 1 0 0 0 0 0 0 0 0 0 1 03 Management Trainee 0 2 0 1 0 1 0 1 0 0 0 54 Office Superindent 0 1 0 0 0 0 0 0 0 0 0 15 UDC 3 0 1 0 1 0 0 0 0 0 5 06 LDC 1 2 3 2 0 2 1 2 0 0 5 8

Total

HR & Admin. wing

Finance wing

Technical wing

* Draft Recruitment Proposal of TPGL during 2017 - 18

***Total proposed additional manpower during 2017 - 18: 114 Nos.Corporate Office Rokhia Baramura Gumati MaharaniSl. No. Designation



14.2. Annexure-A: Audited Annual Accounts along with CAG Report

14.3. Annexure-B: Asset Register

14.4. Annexure-C: Status of Arrears

14.5. Annexure-D: Minutes of Meeting of distribution circles

14.6. Annexure-E: Internal Audit Report

14.7. Annexure F: DPR of combine cycle conversion of RGTPP & BGTPP and renovation &modernization/life extension project of GHEP

14.8. Annexure G: Copy of fuel bill of ONGC & GAIL for the period Oct 2016 to Dec 2016

14.9. Annexure H: Form A: Planned R&M of Rokhia, Baramura and Gumti

14.10. Annexure I: Form F: Plant Characteristics of Rokhia, Baramura and Gumti


Tripura StateElectricity CorporationLimitedSupplementary /additional Informationon Multi Year Tariff forGeneration andDistribution business forFY 2016-17 to FY 2020-21including approval ofARR for FY 2015-16

February 2020

Filed By

Tripura State Electricity CorporationBidyut Bhawan, Banamalipur

Agartala, Tripura (W)


Table of Contents1. Form -1: Petition.................................................................................................................... 4

2. Form-2: Affidavit .................................................................................................................. 6

3. Summary of Present Supplementary Filing ..........................................................................8

3.1. Contents of the Petition .............................................................................................................................. 8

4. Generation MYT for the FY 2016-17 to FY 2020-21................................................................9

4.1. Introduction ................................................................................................................................................ 9

4.2. Own Generation Parameters ..................................................................................................................... 9

4.2.1. Plant Load Factor (PLF) and Auxiliary Consumption .................................................................... 9

4.2.2. Heat Rate ........................................................................................................................................ 10

4.3. Assets Base................................................................................................................................................. 11

4.4. Working Capital.........................................................................................................................................12

4.5. Return on Equity and Tax on Income ......................................................................................................14

4.6. Expenditure ...............................................................................................................................................15

4.6.1. Fuel Cost ...........................................................................................................................................15

4.6.2. Operation and Maintenance Cost ...................................................................................................16

4.6.3. Interest on Working Capital .......................................................................................................... 18

4.6.4. Depreciation ................................................................................................................................... 18

4.6.5. Non-tariff Income............................................................................................................................19

4.6.6. Summary of ARR and Tariff Proposal for the FY 16-17 to FY 20-21 including ARR of FY 2015-16

.....................................................................................................................................................................19

4.6.7. ARR of FY 2015-16..........................................................................................................................20

4.6.8. Annual Revenue Requirement for the FY 2016-17 .......................................................................20

4.6.9. Annual Revenue Requirement for the FY 2017-18........................................................................21

4.6.10. Annual Revenue Requirement for the FY 2018-19......................................................................21

4.6.11. Annual Revenue Requirement for the FY 2019-20 ..................................................................... 22

4.6.12. Annual Revenue Requirement for the FY 2020-21..................................................................... 22

5. ARR for Transmission &Distribution Business of TSECL for MYT Control Period (FY 2016-17

to FY 2020-21) including ARR of FY 2015-16........................................................................... 24

5.1. Introduction .............................................................................................................................................. 24

5.2. Category wise Projection for growth in No. of Consumers .................................................................... 24

5.3. Category wise growth in Sales.................................................................................................................. 25

5.4. Transmission and Distribution Loss ....................................................................................................... 25

5.5. Energy Balance ......................................................................................................................................... 26

5.6. Power Purchase ........................................................................................................................................28

5.7. Transmission Charges ..............................................................................................................................30

5.8. O&M Expenses .........................................................................................................................................30

5.9. GFA and Depreciation .............................................................................................................................. 32

5.10. Interest and Finance Charges ................................................................................................................ 35

5.11. Interest on Working Capital ................................................................................................................... 35

5.12. Return on Equityand Tax on Return on Equity .................................................................................... 36

5.13. Non-tariff Income ...................................................................................................................................38


5.14. Provision for Bad and Doubtful debts ................................................................................................... 39

5.15. Aggregate Revenue Requirement........................................................................................................... 39

6. Revenue from Operations for FY 2016-17 to FY 2018-19 ..................................................... 42

7. Tariff Design and Proposed Rate Schedule ......................................................................... 43

7.1. New Provisions in Tariff Schedule ........................................................................................................... 43

8. Revenue Gap for the control period .................................................................................... 45

8.1. Revenue gap at existing tariff................................................................................................................... 45

9. Open Access Charges .......................................................................................................... 47

9.1. Introduction .............................................................................................................................................. 47

9.2. Allocation Matrix ...................................................................................................................................... 47

9.3. Wheeling Charges..................................................................................................................................... 49

9.4. Cross Subsidy Surcharge.......................................................................................................................... 49


1. Form -1: PetitionBEFORE THE HON’BLE TRIPURA ELECTRICITY REGULATORY COMMISSION, AGARTALA

File No……………………………………………………..

Case No……………………………………………………

IN THE MATTER OF

Filing of the Truing up Petition by Tripura State Electricity Corporation Limited (TSECL) for FY 2013-14 and

FY 2014-15 under TERC (Tariff procedure) Regulations, 2004 and the MYT petition from FY 2016-17 to FY

2020-21 including approval of ARR for FY 2015-16 for generation business and distribution and retail supply

business under TERC MYT regulations, 2015 along with other guidelines and directions issued by the TERC

from time to time and under Section 62 of the Electricity Act, 2003 read with the relevant Guidelines.

AND

IN THE MATTER OF

Tripura State Electricity Corporation Limited (hereinafter referred to as “TSECL” or the “utility”) -

PETITIONER.

The applicant respectfully submits hereunder:

1. After the issuance of the new MYT Regulations 2015 by TERC, TPGL had first filed the first generation

MYT tariff petition from FY 2016-17 to FY 2018-19 on 15th March 2017 and the same was admitted by the

Commission after obtaining various detailed additional information from the petitioner on 16th June

2017. However, the order on the same could not be passed and the same was returned to TPGL on 7th

August 2017.

2. Thereafter, TSECL was finalizing the first MYT petition for distribution business and a

combined petition for generation and distribution business was subsequently filed on 7 th

June 2018 after the approval of BoD. A combined petition was filed because TPGL had not started

independent functioning pending the completion of demerger of TPGL from TSECL as per requirements

of Companies Act 2015. Further, the MYT control period was proposed to be of three years as per

stipulation 5.3(h) of Tariff Policy of MOP, GOI considering this was the first MYT petition of TSECL and

in absence of any approved baseline data uncertainties and other practical consideration, it was felt that

the projections for a longer control period would not be realistic and justified.

3. This petition was not admitted by the Commission and returned on 4th July 2018 directing to resubmit

again at a suitable time. On this order, TSECL wrote a letter to TERC requesting the Commission to not

return the petition but initiate the work of preliminary examination/scrutiny of the petition and the

combined petition for FY 2016-17 to FY 2018-19 (along with truing up of FY 2013-14 and FY 2014-15 and

approval of ARR for FY 2015-16) was again filed on 13th August 2018.

4. On this petition, the Commission wrote a letter on 5th September 2019 directing TSECL to submit MYT

petition for subsequent years as the MYT period of FY 2016-17 to FY 2018-19 had elapsed, without




3. Summary of Present SupplementaryFiling

3.1. Contents of the PetitionThis petition comprises of following main sections namely:

1. Revised Annual Revenue Requirement (ARR) and Tariff Petition for MYT Control Period of

FY 2016-17 to FY 2018-19 for Generation business and Distribution & retail supply Business

separately based on the actual latest data.

2. MYT Projection for FY 2019-20 & FY 2020-21 based on trends of previous years.



4. Generation MYT for the FY 2016-17to FY 2020-21

4.1. Introduction1. This section deals with the revenue requirement of generation business of TSECL for the years FY 2016-

17 to FY 2020-21. TSECL has calculated the ARR and tariff requirements of generation as per the TERCTariff Regulation (Multi Year Tariff), 2015.

2. TSECL is filing its Annual Revenue Requirement for generation business separately and tariff petition forfirst time to the Hon’ble TERC. It is submitted that TSECL has not segregated the account statements forgeneration, transmission and distribution business completely and the work is under progress. Thebreak-up of costs in generation, transmission and distribution business, wherever necessary for ARR andtariff calculation, have been done based on the division wise break-up of account statements and makingsuitable assumptions, as necessary, for the common functions like accounts and finance, HR, projects etc.at corporate level. As such, TSECL is submitting a combined petition for generation, transmission anddistribution business with segregated ARR calculations as provided below.

3. As on date, the statutory audit of the account statements till FY 2015-16 and FY 2016-17 has beencompleted while the statutory audit of FY 17-18 and FY 18-19 are in process.The present petition has beenfiled based on the provisional accounts data till FY 2018-19.The ARR and tariff for FY 2019-20 & FY2020-21 has been projected based on the actual data of past years and norms of Tariff Regulation (MultiYear Tariff) 2015, as applicable.

4. The detailed schedules and formats of the Revenue Requirement Form and MYT for the period FY 16-17to FY 20-21 are given in the subsequent sections.

4.2. Own Generation Parameters4.2.1. Plant Load Factor (PLF) and Auxiliary Consumption5. TSECL’s generation is comprised of gas based RGTPP and BGTPP and hydro based GHEP. The PLFs and

auxiliary consumption for the three generation units for the period FY 2011-12 to FY 2020-21 is tabulatedbelow:

Table 1: Actual Plant wise PLF from FY 11-12 to FY 20-21

PLFcalculation Units FY

11-12

FY12-13

FY13-14

FY14-15

FY15-16

FY 16-17

FY 17-18

FY 18-19

FY 19-20

FY 20-21

Rokhia gas based thermal power plant (RGTPP)GrossGeneration

MU 419.0 411.8 454.2 420.4 468.8 435.86 408.29 439.33 441.07 442.82

InstalledCapacity

MW 58.0 57.8 58.1 63.0 63.0 63 63 63 63 63

PLF % 82.5 81.3 89.3 76.2 84.9 78.99 74.00 79.61 79.92 80.24AuxiliaryConsumption

% 1.0 1.0 1.0 1.0 1.0 0.4 0.4 0.4 0.4 0.4

Baramura gas based thermal power plant (BGTPP)GrossGeneration

MU 358.7 350.2 275.0 306.2 232.9 189.54 178.57 173.61 166.15 159.02

InstalledCapacity

MW 42.0 42.0 42.0 42.0 42.0 42 42 42 42 42


% 1.0 1.0 1.0 1.0 1.0 0.47 0.5 0.36 0.38 0.4

Gumti Hydro Electric Plant (GHEP)



PLFcalculation Units FY

11-12

FY12-13

FY13-14

FY14-15

FY15-16

FY 16-17

FY 17-18

FY 18-19

FY 19-20

FY 20-21

GrossGeneration

MU 38.9 38.8 34.5 30.3 22.0 40.79 43.85 35.51 33.31 30.91

InstalledCapacity

MW 10 10 10 10 10 10 10 10 10 10


% 0.7 0.7 0.7 0.7 0.7 0.07 0.08 0.09 0.1 0.11

6. The installed capacity for the years has been calculated based on the average capacity available for theyear. It may be noted that PLF of RGTPP is ranging from around 76% to 87% in last seven years and isvery close to TERC norms related to PLF in Tariff Regulation (Multi Year Tariff), 2015 i.e. 85%. However,a Major Inspection test was done for Rokhia in FY 2016-17 reducing the availability and PLF in that year.Based on the trend of past years and expected performance, the performance of RGTPP for FY 19-20 & FY20-21 is projected based on the performance in the last two years as provided in the table above.

7. PLF of BGTPP was much higher than TERC norms in FY 2011-12& FY 2012-13. But FY 15-16 onwards, itis in the range of 63% to 48%. This is because of constraints in gas availability for BGTPP in the last fewyears. BGTPP has gas allocations of 0.40 MMSCMD (Million Metric Standard Cubic Metre per Day), outof which 0.2 MMSCMD is under the Administered Price Mechanism (APM) gas mechanism and balance0.2 MMSCMD under the MDP (Market Determined Price) mechanism.

8. However, of late, GAIL is able to supply gas only up to 0.30 MMSCMD on an average (75% of allocation)of which the APM quota shall be exhausted first and the balance shall be under MDP mechanism. As hugequantity of gas is required initially only to run the gas turbine, it is not technically and economicallyfeasible to run the plant at full capacity with this supply. So, currently BGTPP is able to run only one unitof the plant for most durations resulting in lower PLF. Based on the trend of the last two years andexpected performance, the PLF of BGTPP for FY 19-20 & FY 20-21 is projected as shown in the tableabove

9. Compared to the PLF, the availability factor of RGTPP and BGTPP are much higher at around 98% and50% respectively for the period FY 2016-17-FY 2018-19as compared to the PLF figures given above.Theavailability factors for FY 20 & FY 21 has been kept same as the actual availability factor of FY 18-19 basedon the existing performance and fuel supply scenario mentioned above. The availability factors for thelast few years is tabulated below :

Table 2: Plant wise Availability %

Plant wise availability Units FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21

RGTPP % 88 98 89.1 93.4 94.1 94.1 94.1

BGTPP % 97 93 61.0 46.8 49.1 49.1 49.1

10. In case of GHEP, out of the three units, only two units run continuously based on the annual average livestorage capacity which can generate electricity of 50-60 MUs annually. As such, Gumti plant canpresently generate only 7-8 MW output by running two units.

11. It may be noted that the auxiliary consumption of the generating plants has been considered as per actualwhich is well within the norms of theCommission.

4.2.2. Heat Rate12. Heat rate of a thermal power plant is a measure of the power plant’s energy efficiency and the heat rates

calculated for RGTPP and BGTPP for FY 12 to FY 19based on the net calorific values (kcal/Standard CubicMeter) of the gas being supplied to power plants and consumption of gas (Standard Cubic Meter or SCM)is shown below. The heat rate for FY 20 & FY 21 has been kept same as the actual value of FY 19 based onthe latest performance expected to continue.



Table 3: Plant wise Heat Rate of Past Years

YearHeat Rate (Kcal/kWh)

BGTPP RGTPP Average

FY12 3354.14 3778.58 3591.61

FY 13 3320.38 3714.75 3533.49

FY 14 3113.65 3468.41 3334.62

FY 15 3531.61 3548.20 3541.21

FY 16 3747.68 3972.33 3897.77

FY 17 3500 3700 3600

FY 18 3400 3700 3550

FY 19 3400 3700 3550

FY 20 3400 3700 3550

FY 21 3400 3700 3550

13. It may be observed that actual SHR of BGTPP in last eight years is better than TERC norms as per TariffRegulation (Multi Year Tariff), 2015 i.e. 3700 (Kcal/kwh) except in FY 2015-16. For Rokhia, the averageheat rate is same also as per the normative value of 3700 kCal/kWh.

4.3. Assets Base14. This section details the gross value of fixed assets for the generation business for the FY 16-17 to FY 20-

21. The value of gross fixed asset base is used to determine the amount of depreciation to be recoveredfrom the proposed tariff.

15. The value of the gross value of assets and the asset base for calculation of depreciation is tabulated below.The actual value of assets is tabulated from FY 16-17 to FY 18-19. In order to project the value of assets forFY 19-20 & FY 20-21, the total capital expenditure expected to be incurred in these years is projectedbased on the trend of actual addition of assets in the past few years on provisional basis. For this theprevious years’ trend of addition of assets as well as the capital expenditure in progress (projects inpipeline) and those planned to be implemented in these years is considered. It may be noted that thebooked value of assets is based on the original gross value and no revaluation has been done for the valueof assets.

Table 4: Value of Fixed Assets in Rs. Crores

Particulars FY 16 -17

FY 17-18 FY 18-19 FY 19-20(Projected)

FY 20-21(Projected)

Rokhia gas based thermal powerplant (RGTPP)Rokhia

Opening GFA 241.62 241.62 241.62 241.64 241.65Addition during the year - - 0.02 0.01 0.02

Closing 241.62 241.62 241.64 241.65 241.67

Baramura gas based thermalpower plant (BGTPP)

Opening GFA 158.61 158.61 159.47 159.86 160.04Addition during the year - 0.86 0.39 0.18 0.08

Closing 158.61 159.47 159.86 160.04 160.12

Gumti Hydro Electric Plant(GHEP)

Opening GFA 31.86 31.86 31.86 31.86 31.86

Addition during the year - -



Particulars FY 16 -17

FY 17-18 FY 18-19 FY 19-20(Projected)

FY 20-21(Projected)

Closing 31.86 31.86 31.86 31.86 31.86

GROSS TOTAL 432.09 432.96 433.36 433.55 433.65

Assets created throughGovernment Grants 237.54 237.54 237.54

Total Asset Base for Depreciation 194.55 195.42 195.82

Cost of intangible assets, if any - - -

4.4. Working Capital16. The working capital is estimated for calculating the normative interest charges to be allowed for financing

the working capital requirements. As per TERC Tariff Regulation (Multi Year Tariff), 2015, the workingcapital norms have been defined separately for thermal generation station and Hydro generating stations,as given below:

For Open-cycle Gas Turbine/Combined Cycle thermal generating stations (for RGTPP and BGTPP):

One month Fuel cost


Receivables equivalent to two months of capacity charge and energy charge


For Hydro generating station (for GHEP):

Receivables equivalent to two months of fixed cost



17. The historical SBI base rate is tabulated below which has been used to calculate the normative interestrate.

Effective Date for SBI Base Rate Interest Rate (%)

16.12.2019 8.45

10.09.2019 8.95

10.12.2018 9.05

01.10.2018 9

01.07.2018 8.95

01.04.2018 8.7

01.01.2018 8.65

01.10.2017 8.95

01.07.2017 9

01.04.2017 9.1

01.01.2017 9.25

05.10.2015 9.3



Effective Date for SBI Base Rate Interest Rate (%)

08.06.2015 9.7

10.04.2015 9.85

18. 07.11.2013 19. 10

20. Based on the above, the normative working capital requirements as per TERC regulations, the normativeinterest component on same and actual interest to be incurred for working capital is tabulated below:

Table 5: Interest on Working Capital in Rs.Crores

Particulars FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20(Projecte

d)


Rokhia gas based thermal power plant (RGTPP)RokhiaFuel stock 7.21 6.19 10.91 12.18 12.23MaintenanceSpares stock

8.91 9.52 10.16 10.86 11.59

Receivables 23.16 21.41 31.44 34.47 34.96O&M expenses 2.47 2.64 2.82 3.02 3.22TOTAL 34.54 33.57 44.43 48.34 49.78NormativeInterest onWorking Capital @SBI Base Rate +3%

12.3% 12.1% 11.7% 12.05% 11.45%

Interest onWorking Capital

4.25 4.06 5.2 5.83 5.7

Baramura gasbased thermalpower plant(BGTPP)Fuel stock 4.81 4.13 3.65 3.78 3.61MaintenanceSpares stock

5.94 6.34 6.78 7.24 7.73

Receivables 15.44 14.3 13.57 14.12 14.06O&M expenses 1.65 1.76 1.88 2.01 2.15TOTAL 23.03 22.4 22.23 23.37 23.93NormativeInterest onWorking Capital @SBI Base Rate +3%

12.3% 12.1% 11.7% 12.05% 11.45%


2.83 2.71 2.6 2.82 2.74

Gumti HydroElectric Plant(GHEP)Fuel stock - - -MaintenanceSpares stock

0.37 0.42 0.45 0.96 1.02

Receivables 0.69 0.77 0.83 0.89 0.93

O&M expenses 0.21 0.23 0.25 0.27 0.28TOTAL 1.27 1.43 1.52 2.11 2.24Normative 12.3% 12.1% 11.7% 11.45%




d)


Interest onWorking Capital @SBI Base Rate +3%

12.05%


0.16 0.17 0.18 0.25 0.26

Total Interest onWorking Capital

of TSECL(Generation)

7.24 6.95 7.98 8.9 8.7

4.5. Return on Equity and Tax on Income21. As per Clause 26 of Tariff Regulation (Multi Year Tariff) 2015, Return on Equity shall be computed at a

base rate of 15.50% for thermal stations and 16.50% storage type hydro stations on equity base. So, Baserate for calculation of RoE of two gas plants (RGTPP & BGTPP) and GHEP would be 15.50% and 16.50%respectively.

22. The amount of equity base to be considered for calculation of return has been considered based on therelevant clause (clause 21) of Tariff Regulation (Multi Year Tariff) 2015, which states

“For a project declared under commercial operation on or after 16th Oct 2015, if the equity actuallydeployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normativeloan.In case of the generating station declared under commercial operation prior to 16th Oct 2015, debt-equity ratio allowed by the Commission for determination of tariff for the period ending the year beforethe date of publication of above regulation on the Official Gazette shall be considered”.

23. It may be noted that the Commission in its past orders had considered equity base for the generationprojects as 30% of the Gross Fixed Asset Value and as such the same is considered here for the purpose ofcalculation of RoE based on legal precedent as per past orders. Equity fund of TSECL is calculated afterallocating equity fund of TSECL in the Gross fixed assets ratio among generation, transmission anddistribution business. After that equity fund of generation business allocated among three plants basedon gross fixed assets ratio for each of the plants.

24. As per Clause 27 of Tariff Regulation (Multi Year Tariff) 2015,

The base rate of return on equity as allowed by the Commission under Clause 26 (mentioned above)shall be grossed up with the effective tax rate of the respective financial year. For this purpose, theeffective tax rate shall be considered on the basis of actual tax paid in the respect of the financial year inline with the provisions of the relevant Finance Acts.

25. Since TPGCL is a newly incorporated company, the Minimum Alternative Tax (MAT Rate) rate has beenconsidered for calculation of RoE as shown below.

Table 6: Calculation of Pre-tax Return on Equity

Sr. No. Particulars RGTPP BGTPP GHEP

A. Return on Equity as per norms 15.50% 15.50% 16.50%

B. Applicable MAT rate (including surcharge,education and secondary education cess) 21.91% 21.91% 21.91%

C. Pre-tax Return on Equity [A/(1-B)] 19.85% 19.85% 21.13%

26. The return on equity computed on paid up capital is summarized in the table given below:

Table 7: Calculation of Equity Fund and Return on Equity in Rs. Crores


d)

FY 20-21(Projecte

d)




d)

FY 20-21(Projecte

d)Rokhia gas based thermal powerplant (RGTPP)RokhiaEquity fund (Allocated based on GFAratio)

146.25 145.79 146.39 145.80 145.81

Total GFA 241.62 241.62 241.63 241.65 241.66Normative Equity fund (30% of GFA) 72.49 72.49 72.49 72.49 72.5Equity fund considered for RoE (Min ofactual and normative)

72.49 72.49 72.49 72.49 72.5

Return on Equity 14.39 14.39 14.39 14.39 14.39Baramura gas based thermal powerplant (BGTPP)Equity fund (Allocated based on GFAratio)

91.31 91.6 91.97 91.6 91.61

Total GFA 158.6 159.04 159.66 159.95 160.08Normative Equity fund (30% of GFA) 47.58 47.71 47.9 47.98 48.02Equity fund considered for RoE (Min ofactual and normative)

47.58 47.71 47.9 47.98 48.02

Return on Equity 9.44 9.47 9.51 9.52 9.53Gumti Hydro Electric Plant (GHEP)Equity fund (Allocated based on GFAratio)

9.03 9 9.03 9.00 9.00

Total GFA 31.86 31.86 31.86 31.86 31.86Normative Equity fund (30% of GFA) 9.56 9.56 9.56 9.56 9.56

Equity fund considered for RoE (Min ofactual and normative)

9.03 9.00 9.03 9.00 9.00

Return on Equity 1.79 1.79 1.79 1.79 1.79

4.6. Expenditure4.6.1. Fuel Cost27. The only fuel used by TSECL for self-generation of energy is natural gas. The natural gas is being sourced

from the reserves at Rokhia, Baramura and Konaban partly under the Average Price Mechanism (APM) atthe rates notified by the Ministry of Petroleum and Natural Gas (MoP&NG), Government of India andpartly at the Market Determined Price (MDP). TPGL has allocations of 0.58 MMSCMD and 0.40MMSCMD under the APM gas mechanism for its generation plants at RGTPP and BGTPP respectively.

28. Currently, GAIL is able to supply only 0.50 MMSCMD (86% of allocation) and 0.30 MMSCMD (75% ofallocation) under APM gas mechanism to RGTPP and BGTPP respectively. As huge quantity of gas isrequired initially only to run the gas turbine, it is not technically and economically feasible to run theBaramura plant at full capacity with this supply. So, currently BGTPP is procuring only 0.20 MMSCMDfrom GAIL under APM gas mechanism and running one unit for most of the time. Other than the APMgas allocations, TSECL also purchased some quantity of gas under Market Determined Price (MDP) tomeet the outstanding gas requirements for running the generation plants at Rokhia and Baramura. Basedon above, source wise (APM and MDP) supply of gas of FY 2018-19 are provided in Table 8 below.

29. As per Clause 25 of Tariff Regulation (Multi Year Tariff) 2015, the landed fuel cost of primary fuel andsecondary fuel for tariff determination shall be based on actual weighted average cost of primary fuel andsecondary fuel of the three preceding months.This fuel cost includes other costs like metering charges,Vat payable, etc. The latest fuel cost for FY 2018-19 is shown in the table given below

Table 8: Source wise Supply of Fuel and fuel cost (per SCM) in FY 18-19

Particulars RGTPP BGTPPSource wise supply of Natural Gas(In %)

APM supply from GAIL 89.93% 98.83%MDP Supply from ONGC 10.07% 1.17%



Particulars RGTPP BGTPP

Fuel Cost (Rs./SCM)Cost of APM Supply 6.51 5.87Cost of MDP Supply 8.28 8.10

30. The APM prices notified by MoPNG, GoI during the control period is tabulated below. It may be observedfrom the table that there was an average reduction of 10% in average gas price in FY 2017-18 over FY2016-17 and a subsequent increase of around 30% in FY 2018-19 and a 10% increase in FY 2019-20.Besides the increase in raw gas prices in FY 2018-19, there was an also an increase in taxes applicableon gas price (through VAT charges( and the transportation cost of gas in FY 2018-19 leading to aneffective increase of around 40% in FY 2018-19. The projected fuel cost for FY 2020-21 is estimated to bebased on the actual rate prevailing in the current financial year i.e. FY 2019-20.

Period Gas Price (US$)

April 2016 – Sept 2016 3.06Oct 2016 – Mar 2017 2.5

April 2017 – Sept 2017 2.48Oct 2017- Mar 2018 2.89

April 2018-Sept 2018 3.06Oct 2018- Mar 2019 3.36

April 2019-Sept 2019 3.69Sept 2019 – March 2020 3.23

31. The Plant wise fuel consumption and fuel cost are tabled below:

Table 9: Fuel consumption and Fuel Cost in Rs. Crores

Particulars FY 16-17 FY 17-18 FY18- 19 FY 19-20(Project

ed)

FY 20-21(Project

ed)Rokhia gas based thermal power plant(RGTPP)RokhiaFuel Consumption (In MMSCM) 189.77 183.92 195.64 199.02 199.81Fuel Cost 100.67 88.66 130.97 146.19 146.77Baramura gas based thermal powerplant (BGTPP)Fuel Consumption (In MMSCM) 83.28 75.22 73.48 69.31 66.33Fuel Cost 43.44 34.98 43.79 45.32 43.37

4.6.2. Operation and Maintenance Cost32. As per Clause 31 (1) (b) of Tariff Regulation (Multi Year Tariff) 2015, Operation and Maintenance

expenses of RGTPP and BGTPP has been calculated based on the normative cost per MW of capacity. Thetotal O&M cost for the generation is shown below:

Table 10: O&M Expenses as per Norms

Particulars Amount (Rs. in Lacsper MW)

FY 2015-16 44.14

FY 2016-17 47.14

FY 2017-18 50.35



Particulars Amount (Rs. in Lacsper MW)

FY 2018-19 53.78

FY 2015-16 44.14

FY 2016-17 51.98

FY 2017-18 55.68

FY 2018-19 53.78

FY 2019-20 57.44

FY 2020-21 61.34

33. For hydro generating stations, O&M cost is calculated by escalating last year O&M cost by 6.64%.

34. The plant wise actual O&M Cost incurred from FY 2015-16 to FY 2020-21 is detailed below.

Table 11: O&M Cost in Rs. Crores

Particulars FY2015-16Actual

FY2016-17Actual

FY 2017-18Actual

FY 2018-19

Actual



Rokhia gas based thermal powerplant (RGTPP)RokhiaActual Operation & MaintenanceCost

Employee Cost 2.52 2.67 3.39Repair & Maintenance 0.64 3.13 12.5

A&G Cost 1.75 1.32 3.26Normative Cost 4.92 29.7 31.72 33.88 36.19 38.65

Baramura gas based thermalpower plant (BGTPP)Actual Operation & MaintenanceCost

Employee Cost 2.11 2.26 2.83Repair & Maintenance 2.66 (0.1) 5.24

A&G Cost 1.07 0.28 1.53Normative Cost 5.85 19.8 21.15 22.59 24.12 25.77

Gumti Hydro Electric Plant(GHEP)Actual Operation & MaintenanceCost

Employee Cost 2.94 1.92 2.36

Repair & Maintenance 0.15 0.34 0.24

A&G Cost 0.28 0.23 0.21

Normative cost 3.38 2.48 2.81 3Total O&M cost claimed 14.16 51.98 55.68 59.47 3.20 3.41

35. The total employee cost has increased to a huge extent in 2017-18. This is because of the impact of the 7th

Pay Commission which resulted in an average increase of the employee pay by 22% from April to June2017. There was a further revision of salary for selected staff in 2018-19 leading to an average increase ofaround 8%.

36. It is noted that actual O&M cost of each plants of TSECL booked in account statements of previous yearsare currently much less as compared to normative O&M cost. This is because the cost of periodic plannedmaintenance like CIBI, Major Inspection etc. is not being booked under R&M works but are booked asCapex and other R&M activities undertaken under disaster management is also not booked under R&M



expenses resulting in understatement of R&M expenses in accounts. As such, the normative expenseshave been claimed in this petition.

37. There was a hike in A&G expenses in 2017-18. This has been majorly contributed by the increase in thecomputer maintenance expenses due to aging of systems and most systems being out of warranty.

4.6.3. Interest on Working Capital38. The details of interest on Working capital have already been explained in section 5.7in detail.

4.6.4. Depreciation39. For the calculation of depreciation, the depreciation rates have been taken from Tariff Regulation (Multi

Year Tariff) 2015on the gross asset value. However, in account statement depreciation have beencalculated as per depreciation rate provided in Companies Act 2013 i.e. based on the useful life.

Table 12: Rate of Depreciation as per Tariff Regulation

Particulars Depreciation Rate asper Tariff Regulation

Land 0.00%

Building 3.34%


Computer 15.00%



Furniture 6.33%

Vehicles 9.50%

40. Category wise depreciation calculation for ARR are tabled below:

Table 13: Actual Depreciation (Rs. In Crores)


FY 16- 17 FY 17- 18 FY 18- 19 FY 19-20(Project

ed)

FY 20-21(Project

ed)Rokhia gas based thermal power plant (RGTPP)RokhiaLand 0.00% - - -Building 3.34% 0.11 0.11 0.11 0.11 0.11Plant & Machinery 5.28% 4.71 4.71 4.71 4.71 4.71Computer & Accesaories

15.00% 0.00 0.00 0.00 0.00 0.00

Office Equipment15.00% 0.01 0.01 0.01 0.01 0.01

Furniture6.33% 0.00 0.00 0.00 0.00 0.00

Vehicles 9.50% - - - - -Total

4.82 4.82 4.82 4.82 4.82

Baramura gas based thermalpower plant (BGTPP)Land 0.00% - - - - -Building

3.34% 0.04 0.04 0.04 0.04 0.04

Plant & Machinery 5.28% 2.88 2.88 2.88 2.89




FY 16- 17 FY 17- 18 FY 18- 19 FY 19-20(Project

ed)

FY 20-21(Project

ed)2.88

Computer & Accessories15.00% 0.00 0.00 0.00 0.00 0.0

Office Equipment6.33% 0.00 0.00 0.00 0.00 0.0

Furniture6.33% 0.00 0.00 0.00 0.00 0.0

Vehicles 9.50% - - - - -Total

2.92 2.92 2.92 2.92 2.93

Gumti Hydro Electric Plant(GHEP)Land 0.00% - - - - -Building 3.34% 0.17 0.17 0.17 0.17 0.17Plant & Machinery 5.28% 0.33 0.33 0.33 0.33 0.33Computer & Accessories 15.00% - - - - -Office Equipment

6.33% 0.00 0.00 0.00 0.00 0.00

Furniture6.33% 0.00 0.00 0.00 0.00 0.00

Vehicles 9.50% - - - - -Total 0.50 0.50 0.50 0.5 0.5

4.6.5. Non-tariff Income41. The other income of TSECL covers mainly interest earned on fixed deposits made in various banks, sale

of tender forms and other miscellaneous income like sale of scrap, sale of tender, meter rent etc. Theseincomes are being separately booked under other income category. Earning from investment and othermiscellaneous incomes are detailed in the table below from the FY 16-17 to FY 20-21. .The actual databased on audited accounts has been tabulated for FY 16-17 to FY 18-19. The figures for FY 19-20 & FY 20-21 has been derived based on previous years’ trends. The non tariff income in FY 2016-17 was slightlyhigher due to booking of prior period items on account of adjustment in depreciation.

Table 14: Non-Tariff Income (In Crores)

Particulars FY 16- 17 FY 17- 18 FY 18- 19 FY 19-20(Projec

ted)

FY 20-21(Project

ed)Rokhia gas based thermal power plant (RGTPP)RokhiaNon Tariff Income 0.69 0.74 0.62 0.59 0.55Baramura gas based thermal power plant (BGTPP)Non Tariff Income - - - - -Gumti Hydro Electric Plant (GHEP)Non Tariff Income 0.77 0.62 0.52 0.43 0.35Total 1.47 1.37 1.14 1.01 0.90

4.6.6. Summary of ARR and Tariff Proposal for the FY 16-17 to FY20-21 including ARR of FY 2015-1642. Based on the details of expenditure and non- tariff income given above and determined in accordance

with TERC tariff regulations, the total annual revenue requirement of FY 15-16 to FY 20-21 is calculated.We are submitting below generation station wise ARR and tariff proposal for FY 2016-17 to FY 2020-21..



4.6.7. ARR of FY 2015-16Table 15: Summary of Actuals of FY 15-16in Rs. Lakhs

ParticularsActual FY 2015-16



Expenditure1.Fuel Cost 13,519.0 7,882.0 - 21,401.02. Operation & Maintenance Cost 492.9 585.6 338.2 1,416.7Employee Cost 252.9 211.9 294.4 759.2Repair & Maintenance 64.5 266.4 15.6 346.5A&G Cost 175.5 107.4 28.2 311.13.Finance Cost - - - -4. Depreciation 485.6 296.7 59.7 842.05. Interest on Working Capital - - - -



Net ARR 15,592.8 9,477.7 561.5 25,632.0

4.6.8. Annual Revenue Requirement for the FY 2016-17Table 16: Summary of ARR of FY 16-17 in Rs. Crores

ParticularsFY 2016-17 (Actual)

RGTPP BGTPP GHEP TotalGeneration (MU) 435.86 189.54 40.79 666.19Less: Auxiliary Consumption 1.74 0.90 0.03 2.67Net Generation Available for Sale (In MU) 434.12 188.64 40.76 663.52

Installed Capacity (MW) 63.00 42.00 10.00 115.00PLF 78.98% 51.52% 46.56%Plant Availability Factor 89.1% 61.0% 87.0%ExpenditureFuel Cost 86.49 57.67 - 144.16O & M Cost 29.70 19.80 2.48 51.98Employee Cost 2.67 2.26 1.92Repair & Maintenance 3.13 (0.10) 0.34A&G Cost 1.32 0.28 0.23Finance Cost - - - -Depreciation 4.82 2.92 0.50 8.24Interest on Working Capital 4.25 2.83 0.16 7.24Total Expenditure 125.26 83.22 3.14 211.62



Return on Equity 14.39 9.44 1.91 25.74ARR 139.64 92.67 4.93 237.36Less: Non-Tariff income 0.69 - 0.77 1.47Net ARR 138.95 92.67 4.27 235.89

4.6.9. Annual Revenue Requirement for the FY 2017-18Table 17: Summary of ARR of FY 17-18in Rs. Crores

Particulars FY 2017-18 (Actual)RGTPP BGTPP GHEP Total

Generation (MU) 408.29 178.57 43.85 630.71Less: Auxiliary Consumption 1.63 0.90 0.03 2.57

Net Genration Available for Sale (In MU) 406.66 177.67 43.82 628.14Installed Capacity (MW) 63.00 42.00 10.00 115.00

PLF 73.98% 48.54% 50.06%Plant Availability Factor 93.4% 46.8% 97.7%

ExpenditureFuel Cost 74.24 49.53 - 123.77

O & M Cost 31.72 21.15 2.81 55.68Employee Cost 3.39 2.83 2.36

Repair & Maintenance 12.50 5.24 0.24A&G Cost 3.26 1.53

Finance Cost - - - -Depreciation 4.82 2.92 0.50 8.24

Interest on Working Capital 4.06 2.71 0.17 6.95Total Expenditure 114.84 76.31 3.49 194.63Return on Equity 14.39 9.47 1.90 25.76

ARR 129.23 85.78 5.27 220.28Less: Non-Tariff income 0.74 - 0.62 1.37

Net ARR 128.48 85.78 4.77 219.03


ParticularsFY 2018-19 (Actual)

RGTPP BGTPP GHEP TotalGeneration (MU) 439.33 173.61 35.51 648.45

Less: Auxiliary Consumption 1.76 0.63 0.03 2.42Net Genration Available for Sale (In MU) 437.57 172.98 35.48 646.03

Installed Capacity (MW) 63.00 42.00 10.00 115.00PLF 79.61% 47.19% 40.54%

Plant Availability Factor 94.1% 49.1% 86.4%Expenditure

Fuel Cost 130.97 43.79 - 174.76O & M Cost 33.88 22.59 3.00 59.47

Employee CostRepair & Maintenance

A&G CostFinance Cost - - - -Depreciation 4.82 2.92 0.50 8.24

Interest on Working Capital 5.20 2.60 0.18 7.98



Total Expenditure 174.87 71.89 3.68 250.44Return on Equity 14.39 9.51 1.91 25.80


Net ARR 188.64 81.40 5.07 275.11


ParticularsFY 2019-20 (Projected)


Less: Auxiliary Consumption 1.76 0.63 0.03 2.42Net Generation Available for Sale (In MU) 439.32 165.52 33.10 637.94



Fuel Cost 146.2 45.33 - 191.52O & M Cost 36.19 24.12 3.20 63.51





Net ARR 206.83 84.71 5.31 296.86


ParticularsFY 2020-21 (Projected)


Less: Auxiliary Consumption 1.76 0.63 0.03 2.42Net Generation Available for Sale (In MU) 441.07 158.39 30.88 630.34



Fuel Cost 146.78 43.38 - 190.16O & M Cost 38.65 25.77 3.41 67.83







Net ARR 209.78 84.34 5.60 299.73



5. ARR for Transmission &DistributionBusiness of TSECL for MYT ControlPeriod (FY 2016-17 to FY 2020-21) including ARR ofFY 2015-16

5.1. Introduction43. This section deals with the Aggregate Revenue Requirement (ARR) of transmission& distribution

business of TSECLfor the MYT control period ofFY 2016-17toFY 2020-21 including ARR of FY 2015-

16.TSECL has calculated the ARR and tariff requirements for transmission & distribution of power within

the State as per theTERC Tariff Regulations (Multi Year Tariff), 2015.TSECL is proposing a five

control period from FY 2016-17 to FY 2020-21.. Based on the experience of the MYT framework during

this control period, the second control period would be appropriately taken.

44. TSECL is filing its AggregateRevenue Requirement (ARR) and Tariff Petition for transmission and

distribution business for the first timeseparately from generation business before the Hon’ble

Commission as a step towards unbundling in power sector of Tripura.A new company named Tripura

Power Generation Limited (TPGL)has been formed with all generation assets of TSECL with effect

from June, 2015. Also, it is submitted that TSECL has not yet segregated the account statements for

generation, transmission and distribution business completely and the same is work in progress. The

break-up of costs in generation, transmission and distribution business, wherever necessary for ARR and

tariff calculation, have been done based on the division wise break-up of account statements and making

suitable assumptions, as necessary, for the common functions like accounts and finance, HR, projects etc.

at corporate level.

45. As on date, the statutory audit of the account statements till FY 2015-16and FY 2016-17 has been

completed.The provisional account statements of FY 17-18 and FY 18-19 are available. The ARR is

calculated based on the actual data available of FY 16-17 to FY 18-19. The ARR of FY 19-20 & FY 20-21

have been projected based on the trends of previous years and norms specified in the TERC Tariff

Regulations(Multi Year Traiff),2015.

46. The detailed schedules and formats of the Revenue Requirement Form from FY 16-17 to FY 20-21are

given in the subsequent sections.

5.2. Category wise Projection for growth in No. ofConsumers

1. The following table shows the no. of consumers for FY 2015-16 to FY 2018-19. There has been a slight

reduction in industrial sales in FY 2018-19 due to slowness in economic growth and increase in captive

consumption. Moreover, there has been a rapid increase in RGGVY/Kuti Jyoti connections due to the



implementation of various rural electrification schemes like RGGVY, DDUGJY and Saubhagaya scheme

(of late).

Table 1: Growth in Number of Actual Connected Consumers

Category FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Kutirjyoti 14835 16258 17699 17700RGGVY 12286 15963 27671 31270Domestic 576112 611392 641502 692386Commercial 58125 56019 58933 59897Irrigation 5206 5286 5943 6328Public water works 4863 5553 5810 6195Industries 5080 5069 5408 5218Tea, Coffee & Rubber Garden 35 37 39 41Bulk supply 885 871 905 963Public Lighting 1347 1912 2018 2094Mobile Towers 1078 1241 1302 1350Total 652731 687380 721860 774472

5.3. Category wise growth in Sales1. The category wise actual growth in Units Sold is shown in the table below. The overall sales in FY 2018-19

have reduced because of the increase in LT: HT ratio of sales and consequent increase of T&D losses.

Table 2: Actual Growth in Sales


Sl.No.

Category FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

1. Kutirjyoti 10.5 11.24 16.87

2. RGGVY 10.3 11.04

3. Domestic 420.78 454.17 486.37 470.06

4. Commercial 74.92 78.66 84.24 57.2

5. Industrial 43.01 45.1 48.29 40.1

6. Irrigation 33.91 35.96 38.51 31.67

7. Public Lighting 39.71 42.28 45.28 53.73

8. Public Water Works &Sewage disposal

79.35 82.12 87.95 62.03

9. Tea, Coffee & RubberGarden

76.85 1.14 1.23 1.45

10. Bulk Supply 75.75 80.34 86.04 102.09

11. Mobile Towers 25.52 25.99 27.84 33.03

12. Total: 813.05 866.56 928.01 868.23

5.4. Transmission and Distribution Loss1. The table below highlights the Actual T&D losses for FY 2016-17 to FY 2018-19 and the projected

figures for FY 2019-20 & FY 2020-21 :



Table 3: T&D Loss for MYT Period

Particulars FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

FY 2019-20(Projecte

d)

FY 2020-21(Projecte

d)

Distribution Loss (%) 26.77% 22.5% 22.3% 31.3% 26.4% 24.4%

Transmission Loss (%) 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

T&D Losses (%) 31.16% 27.17% 26.92% 35.42% 30.84% 28.90%

2. The Petitioner submits that high level of T&D loss, is due to increase in the LT:HT ratio as a result

of extensive village electrification, new service connection in remote areas over the years, huge

increase in the last mile connectivity and LT network etc. During this period, the state has also seen

a number of severe gayles and thunderstorms resulting in damage to the electrical network and

increasing load on the electrical network thereby increasing technical losses. TSECL has been

suffering from old ageing and overloaded assets like transformers/lines due to limited investment

in strengthening and upgradation of distribution network particularly in HT network of 33 kV and

11 kV.

3. TSECL is making sincere efforts in electrifying the un-electrified areas of the state at a fast pace

under grants and loans provided by the Rural Electrification Corporation (REC) under the Rajiv

Grandhi Gramin Viduyatikaran Yojna (RGGVY) and Saubhagya Scheme. Through the

implementation of the scheme the TSECL has provided the electricity to the far flung areas and

villages to of the Tripura state. At the same time, due to increase in the LT network and the

domestic and Kutir Jyoti consumers, losses of the utility are also increasing at considerable pace.

Through different loss reducing measures and schemes the TSECL has remained successful to

contain the losses at the level mentioned in the Petition.

4. In light of above made submission, we therefore request the Hon’ble Commission to approve the

above projected T&D losses of the TSECL.

5.5. Energy Balance1. Based on the T&D Loss above the energy balance for FY 2016-17 to FY 2020-21 has been calculated

and shown in the table below:

2. It may be noted that TSECL presently has an agreement for sale of power to Bangladesh sale till the

end of FY 2020-21 and as such, the same has ben considered in the projections. However, the

energy balance and financial projections for TSECL is expected to be heavily impacted

if the sale to Bangladesh does not continue further beyond FY 2020-21 and the gap

between cost and revenue will increase significantly in such a scenario.The Hon’ble

Commission is requested to take the dynamic situation for TSECL based on the sale to Bangaldesh

while approving the ARR projections of TSECL



Table 4: Energy Balance for MYT Period


Particulars FY2016-17

FY2017-18

FY 2018-19



Remarks

Energy fromCGS

1812.82 2321.22 2629.92 2629.92 2629.92 Increase due to new plants likeMonarchak, Bongaigaon and increasedgeneration from Pallatana. Projectedfigures for FY 19-20 & FY 20-21 are

assumed same as FY 18-19.Inter State Sales 1363.46 1709.29 1880.45 1880.45 1880.45 Projected figures for FY 19-20 & FY 20-

21 are assumed same as FY 18-19.Energy Trading 0.44 10.86 0.34 0.34 0.34 Pallatana going for planned

maintenance for 1 month in17-18 and 10 days in 18-19during which a swappingarrangement was made,swapping with Mizoramduring Christmas/puja.

Projected figures for FY 19-20 & FY 20-21 are assumed

same as FY 18-19.Energy

Swapping1.11 1.38 5.08 5.08 5.08 Increased deviations due to

Bangladesh powerfluctuations. Projected

figures for FY 19-20 & FY20-21 are assumed same as

FY 18-19.UI 52.55 76.13 106.26 106.26 106.26 Projected figures for FY 19-

20 & FY 20-21 are assumedsame as FY 18-19.

Sale to Mizoram 73.53 41.26 41.60 41.6 41.6 Projected figures for FY 19-20 & FY 20-21 are assumed

same as FY 18-19.Sale to Manipur 73.53 41.26 41.57 41.57 41.57 Projected figures for FY 19-

20 & FY 20-21 are assumedsame as FY 18-19.

IEX 524.13 595.93 679.68 679.68 679.68 Surplus power sold in IEX.Projected figures for FY 19-20 & FY 20-21 are assumed

same as FY 18-19.Bangladesh Sale 638.16 942.45 1005.92 1005.92 1005.92 Bangladesh sale removed

from Input (ConsideredInter-State Sales). Projected

figures for FY 19-20 & FY20-21 are assumed same as

FY 18-19.Inter State

TransmissionLoss

87.79 85.34 101.30 101.30 101.30 As per NERLDC data.Projected figures for FY 19-20 & FY 20-21 are assumed

same as FY 18-19.Power Purchase

from OtherSources

168.59 113.44 53.25 53.25 53.25 Projected figures for FY 19-20 & FY 20-21 are assumed

same as FY 18-19.ISGS Energy atState Bus (MU)

530.16 640.03 701.42 701.42 701.42

Energy fromState

Generation

659.63 629.79 642.99 640.36 632.76 As per projection shown ingeneration section




FY2017-18

FY 2018-19



Remarks

Energy at StateBus

1189.79 1269.82 1344.40 1341.78 1334.18

Intra StateTransmission

Loss

71.39 76.19 80.66 80.51 80.05Assumed 6% loss

Energy at 11 kVlevel

1118.41 1193.63 1263.74 1261.27 1254.13

Energy Sales 866.56 928.01 868.23 928.01 948.55 FY 19-20 and FY 20-212projected sales based on past

trendsDistribution

Loss251.84 265.62 395.51 333.26 305.58

DistributionLoss (%)

22.5% 22.3% 31.3% 26.4% 24.4%

T&D Loss (%) 27.17% 26.92% 35.25% 30.84% 28.90% Inclusive of TransmissionLoss

5.6. Power Purchase1. TSECL procures power from NEEPCO, NHPC, NTPC and OTPC. TSECL is receiving power from

OTPC Palatana since Jan 2014.

2. The following table shows the power procurement cost for FY 2016-17 to FY 2018-19 and the

subsequent table shows the cost of FY 2019-20 and FY 2020-21:

Table 5: Power Purchase Cost for MYT Period

All figures are in Rs. Crores

PowerPurchaseData

2016-17 2017-18 2018-19

Cost(INRcrores)

EnergyPurchased(MUs)

CostPerUnit(INRperunit)

Cost(INRcrores)



Cost(INRcrores)



NEEPCO 178.09 584 3.05 343.66 1063.96 3.23 372.60 1070.8 3.59

NHPC 22.73 83.64 2.72 25.49 94.42 2.70 22.52 67.42 3.28

NTPC 37.98 41.5 9.15 88.86 111.27 7.99 130.93 249.72 5.24

OTPC 348.86 1097 3.18 339.47 1044.90 3.27 373.99 1235 3.10

NEEPCOSolar 2.00 6.962 2.87 1.93 6.66 2.90 2.06 7.05 2.92

IEX 3.46 12.74 2.71 4.21 15.30 2.75 3.12 10.82 2.88

Trading/Swapping 1.20 5.348 2.25 4.82 21.90 2.20 1.42 4.183 3.39

DSM 36.58 150.5 2.43 18.30 76.24 2.40 7.54 38.24 1.97



Inter StateTransmissionCharges

53.49 0.27 55.48 0.23 52.63 0.20

Prior PeriodItems 3.17

TOTAL 687.56 1981 3.47 882.22 2434.65 3.62 966.81 2683.16 3.60

PowerPurchaseData

2019-20 2020-21

Cost(INRcrores)



Cost(INRcrores)



NEEPCO 383.78 1070.78 3.58 395.29 1070.78 3.69

NHPC 23.20 67.42 3.44 23.89 67.42 3.54

NTPC 134.86 249.72 5.40 138.90 249.72 5.56

OTPC 385.21 1234.95 3.12 396.77 1234.95 3.21

NEEPCOSolar

2.12 7.05 3.01 2.18 7.05 3.10

IEX 3.21 10.82 2.97 3.31 10.82 3.06

Trading/Swapping

1.46 4.183 3.50 1.51 4.183 3.60

DSM 7.77 38.24 2.03 8.00 38.24 2.09

Inter StateTransmissionCharges

54.21 0.20 55.84 0.21

Prior PeriodItems

TOTAL 995.81 2683.16 3.71 1025.69 2683.16 3.82

3. There was commencement of generation of 100 MW from NEEPCO Monarchak from Dec’16 which

has caused the power purchase cost of NEEPCO to increase from FY 17-18. The second unit of NTPC

Bongaigaon Plant was completed on March’18. The allocation for Tripura was 23 MW which was

added from FY 18-19 onwards. OTPC Palatana is generating at full capacity from June’18 due to

better availability of gas which has resulted in an additional supply of 200 MUs in FY 18-19.

4. The Hon’ble Commission is requested to approve the power purchase cost of Rs. 687.56 Crore for

FY 2016-17,Rs. 882.22 Crore for FY 2017-18 andRs. 966.81 Crore for FY 2018-19. The power

purchase cost for FY 2019-20 and FY 2020-21 has been projected based on the actual source wise

generation observed in FY 2018-19 and escalating the average rate for power purchase rate by 3 %



each year in FY 2019-20 and FY 2020-21 based on the trend observed in the last few years. There is

no new generation capacity expected to be added or disposed during the projected period.

5.7. Transmission Charges1. The following table shows the Inter State and Intra State transmission charges for FY 2016-17 to FY

2020-21.

Table 6: Transmission Charge for MYT Period


Transmission Charge FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20

FY 2020-21

Inter State 53.49 55.48 52.63 54.21 55.84

Intra State 32.65 32.57 33.56 35.09 36.15

Total 86.14 88.05 86.19 89.30 91.99

2. The Hon’ble Commission is requested to approve thetransmission charge as detailed above.

5.8. O&M Expenses1. TERC Tariff Regulations, 2015 stipulates the O&M cost to be comprising of Employee cost, R&M

expense and A&Gexpense.

2. The total employee cost has increased to a huge extent in 2017-18 by around 27%. This is because of

the impact of the 7th Pay Commission which resulted in an average increase of the employee pay by

22% from April 2017 (Salary Level increased from 1.88 to 2.25 of basic pay level). There was a

further revision of salary for selected staff in 2018-19 from Oct’18 leading to an average increase of

8% in monthly employee cost (Salary Revised from 2.25 to 2.57 of basic pay on an average).The

total employee cost for FY 19-20 & FY 20-21 has been escalated by the current average CPI

escalation rate (4.22%) on previous year’s data. The employee cost for FY 19-20 has been

additionally increased by 3% due to the remaining impact of 7th Pay Commission implemented

during mid of last year and full year impact coming in FY 19-20.

3. Besides, the employees cost during FY 2015-16 also increased due to recruitment of 531 number of

staff which resulted in average increase of employee cost by around 11% in FY 2015-16. The year

wise actual number of employees, number of recruitments and retirements from FY 14-15 to FY 18-

19 is shown in the table given below:

Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

Employee Cost in INR crores 111.77 128.47 131.57 166.94 178.54

YoY Increase 14.9% 2.4% 26.9% 6.9%



Justification

Number of employees at the startof the year 3992 3869 4283 4119 4018

New Recruitments 0 531 0 50 3

Retirements 123 117 164 151 173

Employees at the end of the year 3869 4283 4119 4018 3848

% Estimate Increase due to VIIPaY 0.0% 22.0% 4.0%

4. Regarding R&M expenses, it is submitted that the overall expenses during the past years have been

quite low i.e around 1% of the Gross Fixed Asset Value. The key reasons for this are:

Accounting has been done on cash basis resulting in under booking and there is a huge

amount of liabilities (unpaid bills) which are not being booked.

The grants received for disaster management have been used for various R&M works but

have been booked under Capex instead of R&M expenses.

5. The actual O&M expense for FY 16-17 to FY 18-19 and the projected figures for FY 19-20 and FY 20-

21 for transmission and distribution business is provided below:


Table 7: O&M Expense for Transmission Business for MYT Period


O&M Expense Transmission

Particulars FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21Employee Cost 13.87 15.73 16.59 17.78 18.53R&M Cost 2.79 1.53 1.54 1.56 1.59A&G Cost 2.60 1.80 1.90 1.98 2.06Total 19.26 19.06 20.03 21.33 22.19


Table 2: O&M Expense for Distribution Business for MYT Period


O&M Expense Distribution

Particulars FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21Employee Cost 110.86 142.63 150.41 161.26 168.05R&M Cost 18.27 8.19 8.21 8.23 8.25A&G Cost 19.24 17.27 18.21 18.99 19.80Total 148.37 168.09 176.83 188.49 196.12



5.9. GFA and Depreciation1. The Gross Fixed Assets (GFA) and depreciation for TSECL is taken from the account statements of

respective years. The Petitioner has considered the depreciation in the following manner:

full year depreciation on the opening balance of GFA

reduction of depreciation on assets which are fully depreciated

reduction of depreciation on assets created out of government grants

2. It is further submitted that the “Annexure: 8” to the TERC Regulations (Multi Year Tariff), 2015

specifies the depreciation rate to be charged on each class of asset.

Table 8: Depreciation Rate as provided in ‘Annexure-8’ of the TERC Regulations (Multi Year Tariff), 2015

Asset Depreciation Rate(Salvage

Value=10%)- SLM

Land under full ownership 0.00%

Building 3.34%


Computer 15.00%



Furniture 6.33%

Vehicles 9.50%

3. The following table shows the GFA added for FY 2016-17 to FY 2018-19 and the projected

depreciation for FY 19-20 & FY 20-21for the transmission and distribution business of TSECL.




Table 9: Depreciation for Transmission Asset calculated as per TERC Regulations (Multi Year Tariff), 2015


Particulars

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Open

Add.

Close

Avg.

Dep.

Open

Add. Close

Avg.

Dep.

Open

Add.

Close

Avg. Dep.

Open

Add.

Clos

e

Avg.

Dep.

Open

Add.

Clos

e

Avg.

Dep.

Land 10.93 0.0

6

10.99 10.9

6

0.00 10.9

90.0 10.99 10.9

9

0.00 10.99 0.03 11.02 11.0 0.0

0

11.02

0.05

11.07

11.04

- 11.07

0.08

11.15

11.11

-

Building1.32 1.32 1.32 0.0

41.32 0.42 1.74 1.53 0.04 1.74 0.19 1.92 1.83 0.0

4

1.92

0.31

2.24

2.08

0.04

2.24

0.51

2.75

2.49

0.05

Plant &Machinery 138.1

81.4

7139.6

5138.

923.0

9139.

65 0.28 139.93

139.79 3.11 139.9

3 0.94 140.87 140.4 3.1

140.87

1.55

142.42

141.65

3.13

142.42

2.55

144.9

7

143.6

9

3.18

Computer&Accessories

0.18 0.0 0.18 0.18 0.02 0.18 0.0 0.18 0.18 0.01 0.18 0.01 0.19 0.19 0.01

0.19

0.01

0.19

0.19

0.01

0.19

0.01

0.21

0.20

0.01

OfficeEquipment 0.15 0.0

3 0.18 0.17 0.03 0.18 0.02 0.21 0.39 0.04 0.21 0.03 0.24 0.22 0.0

30.2

40.0

50.2

80.2

60.0

40.2

80.0

80.3

60.3

20.0

5Furniture

0.21 00 0.22 0.22 0.09 0.22 0.0 0.22 0.22 0.02 0.22 0.0 0.22 0.22 0.0

20.2

20.0

00.2

20.2

20.0

20.2

20.0

00.2

20.2

20.0

2Vehicles - - - - -

Total 150.98

1.56

152.54

151.76

3.19

152.54 0.72 153.2

6152

.9 3.21 153.26 1.19 154.4

6153.8

6 3.2 3.24

3.30


Table 10: Depreciation for Distribution Asset calculated as per TERC Regulations (Multi Year Tariff), 2015


FY 2016-17 FY 2017-18 FY 2018-19 FY 2019 - 20 FY 2020-21



Particulars

Open

Add.

Close

Avg.

Dep.

Open

Add.

Close

Avg.

Dep.

Open

Add.

Close

Avg. Dep.

Open

Add.

Clos

e

Avg.

Dep.

Open

Add.

Clos

e

Avg.

Dep

.Land 36.5

40.0 36.5

436.5

40.00 36.5

40.26 36.8 36.6

70.00 36.8 0.12 36.9

236.86 0.0

036.92

0.13 37.05

36.98

- 37.05

0.14

37.19

37.12

-

Building 14.89

0.0 14.89

14.89

0.24 14.89

0.03 14.92 14.91 0.24 14.92 0.01 14.93 14.93 0.24

14.93

0.02

14.95

14.94

0.24

14.95

0.02

14.97

14.96

0.24

Plant &Machinery

553.32

0.74 554.07

553.69

5.3 554.07

1.05 555.11

554.59

5.32 555.11

0.89 556 555.56

5.31 556 0.97

556.97

556.48

5.32

556.97

1.05

558.0

2

557.49

5.33

Computer &Accessories

3.95 0.24 4.2 4.07 0.27 4.2 0.15 4.34 4.27 0.22 4.34 0.2 4.54 4.44 0.24

4.54

0.22

4.76

4.65

0.26

4.76

0.24

5.00

4.88

0.27

OfficeEquipment

0.36 0.08 0.44 0.4 0.07 0.44 0.02 0.47 0.45 0.07 0.47 0.06 0.52 0.49 0.07

0.52

0.06

0.58

0.55

0.08

0.58

0.07

0.65

0.61

0.09

Furniture 0.96 0.03 0.98 0.97 0.05 0.98 0.02 1.01 1.00 0.05 1.01 003 1.03 1.02 0.05

1.03 0.03

1.06 1.05 0.05

1.06

0.03

1.09

1.08

0.06

Vehicles 0.32 0.0 0.32 0.32 0.0 0.32 0.0 0.32 0.32 0.0 0.32 0.0 0.32 0.32 0.0 0.32

- 0.32

0.32

- 0.32

- 0.32

0.32

-

Total 610.34

1.1 611.43

610.88

5.94 611.43

1.53 612.96

612.2

5.91 612.96

1.3 614.26

613.61

5.92

614.26

1.42

615.68

614.97

5.96

615.68

1.55

617.2

3

616.

46

5.99



5.10. Interest and Finance ChargesTSECL does not have any long term loans. However, the finance charges such as guarantee charge, bank

commission for Letter of Credit etc. have been shown under interest and finance charges. The interest on

Term Loans and Finance Charges from FY 2014-15 to FY 2020-21 have been detailed as under:

Table 9: Interest on Finance Charges (In Crores)

Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

2020-21

Interest on Finance Charges 0.08 0.07 0.11 0.16 0.20 0.25 0.32

5.11. Interest on Working Capital1. The TERC Tariff Regulation (Multi Year Tariff), 2015 provides for normative interest on working Capital

based on the methodology outlined in the Regulations. The Petitioner is eligible for interest on working

capital worked out on methodology specified in the Regulations for transmission and distribution

business as provided below:

i. Receivables equivalent to two months of fixed cost;

ii. Maintenance spares @ 15% of operation and maintenance expenses specified in Clause 31; and

iii. Operation and maintenance expenses for one month.

2. In accordance with the TERC Tariff Regulations (Multi Year Tariff), 2015, the interest on the working

capital requirement would be the SBI Base Rate plus 300 basis points as on 1st April of the year for which

tariff is determined. The Petitioner in the instant Petition has considered the interest rate on working

capital requirement at 12.30% for FY 2016-17, 12.1% for FY 2017-18 ,11.7% for FY 2018-19, 12.05% for FY

2019-20 & 11.45% for FY 2020-21.

3. The Petitioner in accordance with the above mentioned Regulations, calculated the interest on working

capital as shown in the table below:


Table 10: IoWC calculation for Transmission Business

All figures are in Rs. Crores


FY2017-18

FY2018-19



Receivables (2 month) 5.44 5.43 5.59 5.84 6.02Maintenance Spares 2.89 2.86 3.00 3.20 3.33O&M Expense 1.60 1.59 1.67 1.78 1.85Working Capital 9.94 9.88 10.27 10.83 11.20Rate of Interest 12.30% 12.10% 11.70% 12.05% 11.45%Interest on Working Capital 1.22 1.19 1.20 1.30 1.28




Table 11: IoWC calculation for Distribution Business



FY2017-18

FY2018-19



Receivables (2 month) 110.45 96.58 111.17 118.48 121.52Maintenance Spares 22.26 25.21 26.52 28.27 29.42O&M Expense 12.36 14.01 14.74 15.71 16.34Working Capital 145.07 135.8 152.43 162.46 167.29Rate of Interest 12.30% 12.10% 11.70% 12.05% 11.45%Interest on Working Capital 17.84 16.43 17.83 19.58 19.15

5.12. Return on Equityand Tax on Return on Equity1. The Regulation 26 of the TERC Tariff Regulation (Multi Year Tariff) 2015 provides for Return on

Equity(RoE) @15.5% on equity base. The amount of equity base to be considered for calculation of

return has been considered based on the relevant clause (clause 21) of Tariff Regulation (Multi Year

Tariff) 2015. The relevant extract of the regulations are as under:

“26. Return on Equity:

I. Return on equity shall be computed in rupee terms, on the equity base determined

inaccordance with Clause 21.

II. Return on equity shall be computed at the base rate of 15.50% for thermal generating

stations, transmission/distribution system including communication system and run

ofthe river hydro generating station, and at the base rate of 16.50% for the storage type

hydro generating stations and run of river generating station with pondage:”

“21. Debt-Equity Ratio:

I. For a project declared under commercial operation on or after the date of publication of

this regulation on the Official Gazette, the debt-equity ratio would be considered as 70:30

as on COD. If the equity actually deployed is more than 30% of the capital cost, equity in

excess of 30% shall be treated as normative loan:

Provided that:

i. where equity actually deployed is less than 30% of the capital cost, actual equity shall

be considered for determination of tariff:

ii. the equity invested in foreign currency shall be designated in Indian rupees on the

date of each investment:

iii. any grant obtained for the execution of the project shall not be considered as a part of

capital structure for the purpose of debt : equity ratio.”



2. It may be noted that the Commission in its past orders had considered equity base for the transmission

and distribution business as 30% of the Gross Fixed Asset Value and as such the same is considered here

for the purpose of calculation of RoE. Equity fund of TSECL is calculated after allocating equity fund of

TSECL in the Gross fixed assets ratio among generation, transmission and distribution business.

3. The return on equity has been computed on projected paid up capital is summarized in the table given

below:


Table 12: Return on Equity calculation for Transmission Business


Particulars FY 2016-17

FY 2017-18

FY 2018-19



Equity fund(Allocated based onassets ratio)

103.34 103.49 103.91 103.49 103.49

Opening GFA 150.98 152.54 153.26 154.46 156.42Closing 152.54 153.26 154.46 156.42 159.65Average 151.76 152.90 153.86 155.44 158.03Normative Equity(30% of GFA)

45.53 45.87 46.16 46.63 47.41

Equity consideredfor RoE (Min ofactual andnormative)

45.53 45.87 46.16 46.63 47.41


Table 13: Return on Equity calculation for Distribution Business


Particulars FY 2016-17

FY 2017-18

FY 2018-19 FY 2019-20(Projected)


Equity fund(Allocated based onassets ratio)

315.83 315.88 317.15 315.86 315.85

Opening GFA 610.34 611.43 612.96 614.26 615.68Closing 611.43 612.96 614.26 615.68 617.23Average 610.88 612.20 613.61 614.97 616.46Normative Equity(30% of GFA)

183.27 183.66 184.08 184.49 184.94

Equityconsidered forRoE (Min ofactual andnormative)

183.27 183.66 184.08184.49 184.94

4. Regulation 27 of TERC Tariff Regulation (Multi Year Tariff) 2015 provides for grossing up of base rate of

return on equity with the effective tax rate of the respective financial year and the effective tax rate shall

be computed as per the following formula.

“Rate of pre-tax return on equity = Base rate / (1-t)



Where “t” is the effective tax rate in accordance with Clause (I) of this regulation and shall be

calculated at the beginning of every financial year based on the estimated profit and tax to be paid

estimated in line with the provisions of the relevant Finance Act applicable for that financial year to

the company on pro-rata basis by excluding the income of non-generation or non-

transmission/distribution business, as the case may be, and the corresponding tax thereon. In case of

generating company or the Transmission or the Distribution licensee paying Minimum Alternate Tax

(MAT), “t” shall be considered as MAT rate including surcharge and cess.”

5. The Petitioner has consideredMinimum Alternative Tax (MAT Rate)of 21.91% rate for calculation of pre-

tax RoE as shown below:


Table 14: Calculation of Annualized RoE on Pre-tax basis for Transmission Business


Particulars

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20(Projected)


Equityconsidered forRoE 45.53 45.87 46.16

46.63 47.41

Rate of RoE 15.50% 15.50% 15.50% 15.50% 15.50%Effective TaxRate 21.91% 21.91% 21.91% 21.91% 21.91%

Effective RoE (%)on Pre-tax basis 19.85% 19.85% 19.85% 19.85% 19.85%

AnnualizedRoE on Pre-taxBasis

9.04 9.1 9.169.26 9.41


Table 15: Calculation of Annualized RoE on Pre-tax basis for Distribution Business


Particulars

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20(Projected)


Equityconsidered forRoE

183.27 183.66 184.08184.49 184.94

Rate of RoE 15.50% 15.50% 15.50% 15.50% 15.50%Effective TaxRate 21.91% 21.91% 21.91% 21.91% 21.91%

Effective RoE (%)on Pre-tax basis 19.85% 19.85% 19.85% 19.85% 19.85%

AnnualizedRoE on Pre-taxBasis

36.38 36.45 36.5436.62 36.71

5.13. Non-tariff IncomeThe other income of TSECL covers mainly interest earned on fixed deposits made in various banks

and as detailed under the head above, and other miscellaneous income like sale of scrap, sale of



tender, meter rent etc.These incomesare being separately booked under other income

category.The non tariff income in FY 2016-17 was higher because of booking of prior period items

due to adjustment of depreciation.


Table 16: Non-tariff Income for Transmission Business


Particulars

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Non-tariffIncome

0.06 0.0 0.03 0.03 0.03


Table 17: Non-tariff Income for Distribution Business


Particulars

FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Non-tariffIncome 34.84 33.03 29.00 26.46 24.14

5.14. Provision for Bad and Doubtful debtsTSECL during this period has introduced Surcharge Waiver scheme two times, one in FY 2015-16 for

Government Consumers and another in FY 2017-18 for Private Consumers. This scheme was introduced to

increase revenue collection of old arrears. Under this scheme, the delayed payment surcharge accrued on

arrears was waived if the consumer paid the balance amount. In this way, consumer was also incentivized for

clearing the old outstanding dues which accrued over a period of time. As a result of this scheme, TSECL had to

waive off surcharge amount of the corresponding balance dues paid by the consumers and the waived off

amount has been booked in account statements as Waived off Bad debts . TERC MYT Regulations 2015 also has

provision for claiming provision for bad and doubtful debts. As such, TSECL has claimed the amounts waived

off in FY 2015-16 and FY 2017-18 under surcharge waiver scheme, which is shown below:

Particulars FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21Provision for badand doubtful debts

16.500.00

1.97 0.03 0.00 0.00

5.15. Aggregate Revenue RequirementBased on the details of expenditure and non- tariff income discussed above, the aggregate revenue

requirement of FY 2016-17 to FY 2020-21 is calculated. The following table shows the total ARR

for FY 2016-17 to FY 2020-21.




Table 18: Aggregate Revenue Requirement for Transmission Business

S.No.

Particulars Units FY2015-16

FY2016-17

FY2017-18

FY2018-19



A Fixed Charge

1 O & M Expenses Rs. Crore 18.15 19.26 19.06 20.03 21.33 22.19

2 Depreciation Rs. Crore 2.91 3.19 3.21 3.20 3.24 3.30

3 Interest on WorkingCapital Loans

Rs. Crore 1.37 1.22 1.19 1.20 1.30 1.28

4 Return on Equity Rs. Crore 8.99 9.04 9.10 9.16 9.26 9.41

5 Total Fixed Charge Rs.Crore

31.43 32.71 32.58 33.59 35.13 36.18

6 Less: Non‐TariffIncome

Rs. Crore 3.92 0.06 0.01 0.03 0.03 0.03

7 Total Cost Rs.Crore

27.51 32.65 32.57 33.56 35.09 36.15

B Total unit transmittedor wheeled

MUs 1181.15

1189.79 1269.82 1344.40

1341.78 1334.18

C Transmission andWheeling Charge

Paisa/kwh

23.29 27.44 25.65 24.96 26.16 27.10



Table 19: Aggregate Revenue Requirement for Distribution Business

S.No. Particulars Units FY2015-16

FY 2016-17

FY 2017-18

FY 2018-19



A Fixed Charge

1 Power Purchase Cost Rs.Crore

549.44 634.12 822.9 914.18 941.61 969.85

Inter State TransmissionCharges

Rs.Crore

32.23 53.49 51.48 52.63 54.21 55.84

Power Purchase CostAdjustment (Prior Period)

Rs.Crore

36.91 0.00

2 Intra State TransmissionCharges

Rs.Crore

27.51 32.65 32.57 33.56 35.09 36.15

3 Cost of State own/ TSECLGeneration

Rs.Crore

155.92 235.89 219.03 275.11 296.86 299.73

4 O & M Expenses Rs.Crore

130.05 147.86 167.59 176.53 188.05 195.71

5 Depreciation Rs.Crore

8.26 5.94 5.91 5.92 5.96 5.99

6 Interest on Term Loans &Fin. Charges

Rs.Crore

0.07 0.11 0.16 0.26 0.25 0.32

7 Interest on Working Capital Rs.Crore

14.67 17.84 16.43 17.83 19.58 19.15

8 Recovery of ARR & TariffPetition Fees

Rs.Crore

0.50 0.51 0.5 0.3 0.44 0.41

9 Return on Equity Rs.Crore

26.30 36.38 36.45 36.54 36.62 36.71

10 Provision for bad andDoubtful debt

Rs.Crore

16.501.97

11 Total Fixed Charge Rs.Crore

961.45 1201.7 1355.00 1512.87 1578.66 1619.87

12 Less: Non‐Tariff Income(Including GovernmentGrant)

Rs.Crore

10.85 34.84 33.03 29.00 26.46 24.14



13 Less: Receipt on account ofCross Subsidy Surcharge

Rs.Crore

14 Total Cost Rs.Crore

950.60 1166.86 1321.97 1483.87 1552.21 1595.73




6. Revenue from Operations for FY2016-17 to FY 2018-19

1. The detailed break-up of the actual revenue for various categories of consumers for FY 2015-16 to

FY 2018-19 has been provided below. The revenue for FY 2019-20 and FY 2020-21 has been

projected based on the average tariff of FY 2018-19 multiplied by total sales as per the Energy

Balance table.

Revenue at existing tariff

Table 1: Category wise revenue at existing tariff (Rs. Crores)

Category FY2015-16

2016-17 2017-18 2018-19 FY 2019-20(Projected)


Domestic 242.94 248.58 250.33 255.99 273.61 279.66Commercial 41.53 42.49 44.53 41.97 44.86 44.30Irrigation 14.29 14.62 15.67 15.28 16.33 16.58Water Works 29.19 29.87 35.99 34.82 37.22 39.93Industries 27.15 27.78 29.20 26.26 28.07 27.12Mobile Towers 14.39 14.73 17.72 16.30 17.42 18.21Bulk Supply 30.53 31.24 34.81 32.72 34.97 35.56Tea, Coffee & Rubber Plants 1.70 1.74 0.61 0.20 0.21 0.07

Public Lighting 2.66 2.72 3.11 3.38 3.61 4.00Border flood lighting 0.33 0.34 0.26 0.11 0.11 0.06

Others 54.57 55.83 58.26 56.24 60.11 59.94Total 459.2

8469.94 490.46 483.25 516.51 525.43

2. The treatment of the revenue gap / (surplus) has been discussed subsequently in this Petition.



7. Tariff Design and Proposed RateSchedule

7.1. New Provisions in Tariff ScheduleTariff for Pre-Paid Meters

In order to reduce AT&C losses, TSECL is planning to promote deployment of pre-paid consumer

meters. This would help TSECL to improve its collection efficiency as well as reduce the working capital

requirements. The cost of pre-paid meters have also reduced over the last few years and the technology

has already been deployed in other placed in India. As such, TSECL plans to promote the

implementation of pre-paid meters are deploy pre-paid meters for new connections, replacement of

defective meters etc.

In order to promote use of pre-paid meters, TSECL proposes to provide consumers a rebate of 2% on

the total electricity bill amount. This shall incentivize the consumers for moving to pre-paid

meters and also would benefit the utility as the risk for non-collection would be mitigated and the

working capital requirement would reduce.

Under pre-paid meters, consumers are required to pay vend transaction charges for every transaction

or recharge done as service charges for the transaction. TSECL feels that levy of additional charges may

become a hindranceinsmooth implementation of pre-paid meters at this stage. As such, in order to

promote pre-paid meters, TSECL proposes that these vend transaction charges would also be borne by

TSECL and the consumers would get a total rebate of 2% on the total electricity bill amount as proposed

above. It is submitted that the expected vending transaction charge would be around Rs. 12 per

consumer per transaction, which shall be recovered through ARR in the initial period.

Online payment

In order to improve customer satisfaction and increase the avenues of easy payment for customers,

TSECL has already implanted the facility of online payment of electricity bill payment by the customers.

For conducting these transactions, certain charges have to be made to the payment service gateway. In

case of online payment, the customer is already incentivized as he can pay the electricity bill from

anywhere without having to come at the collection counter of TSECL. As such, in case of online

payment, TSECL is proposing that the transaction charges of the payment gateway should also be borne

by TSECL and the same shall be recovered through ARR.

Power Factor Rebate and Penalty

At present, all the consumer categories are charged based on the electricity consumption in kWh and as

such there is no incentive for improvement in power factor. Most of the other states in India have an

incentive-penalty provision in tariff for the big consumers like the industrial consumers to keep the

power factor within the acceptable limits and reduce the losses in the system. Based on the similar



provisions prevalent in other states, TSECL proposes to introduce the following power factor rebate and

penalty provision for HT/EHT Industrial Category consumers initially. The same shall be presently

applicable only for all industrial category consumers but may be extended for other categories in future.

(a) Power Factor Rebate:

I. In case, the average PF (leading or lagging) maintained by the consumer is more than 0.85 and

upto 0.95, a rebate of 1% on the Energy Charges on unit consumption shall be applicable;

II. For PF (leading or lagging) of 0.95 and above upto 0.97, a rebate of 2% on the Energy Charges

on unit consumption shall be applicable;

III. For PF (leading or lagging) of 0.97 and above upto Unity PF, a rebate of 3%on the Energy

Charges on unit consumption shall be applicable.

(b) Power Factor Penalty:

I. In case average PF (leading or lagging) in a month for a consumer fallsbelow 0.85, a penalty

@1% for every 1% fall in PF (leading or lagging) from0.85 to 0.60; plus 2% for every 1% fall

below 0.60 to 0.30 upto and including0.30 shall be levied on total unit consumption.

Limit for Single Phase/Three Phase Consumers

At present, the limit for connected load in single phase connections in LT categories of domestic and

commercial is 3 kW. As against this, most of the states in India have a limit of 5 kW for single phase

connections. The single phase meters available now are also capable of supporting load upto 5 kW.

With the increasing use of appliances like AC, geysers etc. it is felt that the limit for single phase

connections may be increased up to 5 kW to avoid unnecessary inconvenience to the consumers for

change of meters etc. As such, the Hon’ble Commission is requested to change the limit of connected

load in LT domestic and commercial consumers from 3 kW to 5 kW.

Separate Tariff Category for Electric Vehicles

As per the guidelines issues by Ministry of Power, a separate tariff category is proposed for

commercially operating electric vehicle charging stations (not for own use) at 5% discounted rate (in

fixed and energy charges) than the applicable rate for LT commercial or HT commercial as applicable

Notices to be provided to consumers on SMS/Whatsapp

There will be a provision for serving notices to consumers through digital medium like SMS, whatsapp,

email etc. The scope is intimation of billing information, Billing alerts informing total due amount, due

date, when services will be disconnected if not paid, notices for unpaid bills and notice for

disconnections.

Go Green Initiative

There will be a rebate of 10/- per electricity bill if consumer opts for receiving a digital copy of bill

instead of hard copy



8. Revenue Gap for the control period

8.1. Revenue gap at existing tariffFor calculating the total regulatory asset, TSECL has considered the revenue gap at existing tariff.

Further the gap is calculated considering the revenue from retail and bulk sales and the total cost of

distribution business for the respective FY 2013-14 to FY 2020-21

The following table shows the gap at existing tariff.

Table 1: Revenue Gap at existing tariff for MYT Period

Revenue Gap and Regulatory Asset FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-

19

FY 2019-20

(Projected)


Revenue at Existing Tariff Rs.Crore 459.28 469.94 490.46 483.25 516.21 525.43

Revenue Subsidy from StateGovt.

Rs.Crore 69.00 40.00 32.00 20.00 40.00 40.00

Revenue from Inter StateSales

Rs.Crore 301.07 504.13 742.48 816.83 841.34 866.58

Total Revenue Rs.Crore 829.35 1014.06 1264.95 1320.09 1397.85 1432.01

Revenue Gap at existing tariff Rs.Crore 121.25 152.79 57.02 163.78 154.35 163.72

Revenue at proposed Tariff Rs.Crore 0.00 469.94 490.46 483.25 516.51 525.43

Additional Revenue atproposed Tariff

Rs.Crore 0.00 0.00 0.00 0.00 0.00 0.00

Revenue gap at proposedtariff

Rs.Crore 121.25 152.79 57.02 163.78 154.35 163.72

Regulatory Asset carried overfrom previous year (FY 14-FY

14)

Rs.Crore 261.38 382.63 535.42 592.45 755.80 910.15

Rate of Carrying Cost (Sameas IoWC)

Rs.Crore 13.00% 12.30% 12.10% 11.70% 12.05% 11.45%

Carrying Cost on RegulatoryAsset

Rs.Crore 69.32 91.07 104.21

Total Regulatory Asset Rs.Crore 382.63 535.42 592.45 825.54 1001.22 1178.08

It can be observed from the above that the revenue at existing tariff would not be sufficient enough to

meet the annual revenue requirement of each of the years during control period. Besides, when the



revenue gap carried over from previous years is considered, it becomes imperative that there is a need to

increase the existing tariff to make it sufficient enough to meet the requirement and recover the pending

gap of past years which has accumulated over the past few years. The Hon’ble Commission is also aware

that TSECL has signed the tripartite MoU under UDAY scheme which also requires a periodic tariff hike

for FY 2017-18 as well as for FY 2018-19. It has been calculated that an average tariff hike of around 30%

would result in annual increased revenue of around INR 157 crores and the proposed gap would be

recovered in around 7 years if average tariff hike of 30% is imposed. Since this is the first MYT control

period and the first baseline data has not been approved, TSECL has not proposed the exact tariff hike at

this stage since the quantum of approved gap over such a long period cannot be estimated at this stage.

In addition to this, the cost and revenue dynamics of TSECL is estimated to change drastically in future

depending on the future prospects of sale to Bangladesh. However, in order to give an idea of the tariff

hike that may be required, TSECL is showing the average time taken to recover the proposed gap in

different scenarios of tariff hike.

Particualrs Scenarios10% averagehike

20% averagehike

30% averagehike

Additional Revenue at ProposedTariff in FY 20-21 52.54 105.09 157.63Time Taken for BridgingRegulatory Gap years 22.42 11.21 7.47



9. Open Access Charges

9.1. IntroductionIn this section, TSECL is proposing the open access charges, particularly the distribution wheeling

charge and cross subsidy surcharge, for the ensuing years based on the ARR proposed above for FY

2018-19.

9.2. Allocation MatrixThe Commission in MYT regulations 2015 has specified that the distribution licensee should segregate

the accounts of licensed business into wheeling business and retail supply business. Further, it provides

that in case accounts are not segregated as per provisions of these Regulations, the distribution licensee,

shall prepare an allocation statement to apportion costs and revenue to respective businesses. The

relevant clause is given below:

“Provided that the commission reserves the right to determine Wheeling Charges of theDistribution Licensee on the basis of segregated accounts the Licensed business intoDistribution Wires Business and Retail Supply Business.

Provided further that where the Distribution Licensee is not able to submit audited andcertified separate accounts for Distribution Wires Business and Retail Supply Business, theCommission shall determine allocation matrix in the following manner:

• The Licensee shall prepare an “allocation matrix” for the control period showingapportionment of costs and revenues to Distribution Wires Business and Retail SupplyBusiness. The statement shall be supported with an explanation of the methodology usedfor such allocations. The Allocation Statement should be consistent over the ControlPeriod, as approved by the Managing Director/CEO of the Licensee.

• The Commission shall review the “allocation matrix” submitted by the Licensee and basedon the prudence check shall finalize the “allocation matrix” for each year of the controlperiod.”

However, TSECL at present, has not segregated its accounts and as such, it is proposing an allocation

matrix for segregation of costs in respective business.

Table 1: Allocation matrix for separation of ARR for Wires Business and Retail Supply Business



1 Power purchase expenses 0% 100%

2 Transmission Charge 0% 100%

3 Employee expenses 60% 40%

4 Repair and Maintenance expenses 90% 10%

5 Administration and General expenses 50% 50%

6 Depreciation 90% 10%

7 Interest and Finance charges 90% 10%

8 Interest on working capital 10% 90%

9 Interest on Security deposit 0% 100%





10 Bad debts written off 0% 100%

11 Income tax 90% 10%

12 Return on equity 90% 10%

13 Other income 10% 90%

14 Non-tariff income 0% 100%

15 Revenue subsidy 0% 100%

Based on the above allocation matrix, the total ARR for wheeling business is provided below:

Table 2: Separation of ARR for Wires Business and Retail Supply Business


Sl.No. Particulars

FY 2018-19

WireBusiness


1 Power purchase expenses 0.00 914.18

2 Transmission Charge 0.00 52.63

3 Employee expenses 20.14 13.42

4 Repair and Maintenanceexpenses 247.49 27.50

5 Administration and Generalexpenses 88.26 88.26

6 Depreciation 5.33 0.59

7 Interest and Finance charges 0.23 0.03

8 Interest on working capital 1.78 16.05

9 Interest on Security deposit

10 Bad debts written off 0.00 0.00

11 Income tax

12 Return on equity 32.88 3.65

13 Other income

14 Non-tariff income 0.00 29.00

15 Revenue subsidy

Total 396.13 1087.32



9.3. Wheeling ChargesThe wheeling charges for distribution open access consumers and 33 kV voltage level for FY 2018-19,

has been determined from the ARR of the Wires Business distribution, as determined in table above.

Table 3: Wheeling Charge for 33 kV voltage level

Sl. No. Particulars Unit FY 2018-19

1 Total energy input into Distributionsystem

MU 1263.74

2 Total distribution cost Rs. Crore 396.13

3 Distribution cost for wires businessfor 33 kV voltage level (assuming 35%

of cost at 33 kV)

Rs. Crore 138.64

4 Wheeling charges for 33 kV voltagelevel

Rs./kWh 1.10

The wheeling charges for FY 2018-19 as determined above, are applicable for use of the distribution

system of TSECL by other licensees or generating companies or captive power plants or

consumers/users who are permitted open access at 33 kV voltage level under Section 42(2) of the

Electricity Act, 2003.

9.4. Cross Subsidy SurchargeThe open access consumers are liable to pay the cross subsidy surcharge to compensate the utility for

any loss of revenue due to the shifting of the consumer to the open access system. In accordance with

Tripura Electricity Regulatory Commission(Terms and Condition of Open Access) Regulation, 2010,

consumers with a connected load of 1 MW and above shall be allowed open access.

For determination of cross subsidy, TSECL would like to propose the following voltage wise cost of

supply which has been calculated based on the methodology specified by Hon’ble APTEL in Appeal No.

102 of 2010 and other related appeals in this matter. Based on the methodology specified by Hon’ble

APTEL, the voltage wise cost of supply is provided below:

Table 4: Calculation of Cost of Supply

Particulars SymbolFY 2018-19

LT 11 kV 33 kV Above33 kV

T&D losses (%) L 35.42% 11.54% 7.03% 6.00%Average Power Purchase rate(Rs./kWh) A 3.60 3.60 3.60 3.60

Average Power Purchase Cost Per UnitSold (Rs./kWh) B=A/(1-L)

5.58 4.07 3.88 3.83

Other Cost Per Unit Sold (Rs./kWh) C=OtherCost/Units sold

2.10 2.10 2.10 2.10

Total Voltage Wise Cost of Supply((Rs./kWh) D=B+C 7.68 6.18 5.98 5.94



Accordingly, the cross subsidy surcharge for HT industry category for FY 2018-19, is shown in the Table

below:

Table 5: Calculation of Cross Subsidy Surcharge

Sl.No.

Particulars Unit Industrial(11 kV)

Industrial(33 kV)

BulkSupply

Tea, Coffee& Rubber

1 Average Billing Rate asper proposed tariff

Rs./kWh 9.64 10.07 .8.46 8.96

2 Voltage Wise Cost ofSupply

Rs./kWh 6.18 5.98 6.18 6.18

3 Cross subsidysurcharge as Differenceof Actual Cost andTariff

Rs/kWh 3.46 4.09 2.28 2.78

4 20% of Average Cost ofSupply

Rs/kWh 1.54 1.54 1.54 1.54

5 Cross SubsidyCharges Proposed(Minimum of Sr.No.3 and 4)

Rs/kWh 1.54 1.54 1.54 1.54

Documents

Corporation Limited Truing up of FY 2013-14 and FY 2014-15