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RAJASTHAN ELECTRICITY REGULATORY COMMISSION
Petition No. RERC 300/12
In the matter of approval of Investment Plan for Rajasthan Rajya Vidyut Prasaran
Nigam Ltd for FY 2012-13.
Coram: Sh D. C. Samant, Chairman
Sh. S. K. Mittal, Member
Sh. S. Dhawan, Member
Petitioner : Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (RVPN), Jaipur.
Respondent(s) : 1. Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL), Jaipur
2. Jaipur Vidyut Vitran Nigam Ltd (JVVNL), Jaipur
3. Ajmer Vidyut Vitran Nigam Ltd (AVVNL), Ajmer
4. Jodhpur Vidyut Vitran Nigam Ltd (JdVVNL), Jodhpur
Date(s) of hearing : 17.05.2012 and 31.05.2012
Date of Order: 25.10.2012
O R D E R
1. Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (RVPN) filed a petition for
approval of Investment Plan for FY 2012-13 on 27.01.2012. Public notices,
along with salient features of the petition, inviting comments/suggestions
from any desirous person, were published in following newspapers:
(1) Rajasthan Patrika : 03.03.2012
(2) Dainik Bhaskar : 03.03.2012
(3) Dainik Navjyoti : 03.03.2012
(4) Rashtradoot : 03.03.2012
(5) Times of India : 04.03.2012
The petition was also placed on Commission’s website.
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2. On scrutiny of the petition, some discrepancies and data gaps were
observed which were intimated to the petitioner on 2.4.2012. The petitioner
filed reply on 23.04.2012.
3. Commission observed that the investment proposal had evacuation
schemes related with commissioning of generation projects of RVUN and
system strengthening/augmentation schemes based on requirement of
Discoms. The Commission, therefore, decided to make RVUN and Discoms
parties to the petition and accordingly, notices were issued to RVUN and
Discoms.
4. The comments/suggestions on the petition were received from two
stakeholders, namely:
(1) Sh. G.L. Sharma ; and
(2) Sh. R.G.Gupta, Rajasthan Vidyut Vikas Sansthan (RVVS).
The comments/suggestions of the above stakeholders were also forwarded
to the petitioner for reply.
5. The first hearing was held on 17.05.2012. Commission observed that
petitioner has not furnished reply to the comments/suggestions of
stakeholders. Petitioner during hearing committed that the replies will be
submitted by 23.5.2012. Accordingly, the replies were filed by Petitioner on
dated 22.5.2012.
6. The comments/suggestions received from AVVNL on dated 30.5.2012 were
also forwarded to the petitioner. Petitioner replied to the same during the
hearing held on 31.05.2012.
7. The final hearing was held on 31.5.2012. The petitioner and stakeholders
presented their views and subsequently also furnished their written
submissions in the first week of June 2012.
Stakeholder’s comments/suggestions, RVPN’s response and Commission’s Views
and Decision:
(1) Compliance with RERC (Investment Approval) Regulations, 2006:
Stakeholder’s comments/Suggestions
8. The main points raised by Sh. G.L. Sharma and Sh. R.G. Gupta on the issue
are as under:
(a) As per RERC (Investment Approval) Regulations 2006, all the schemes
must incorporate cost benefit analysis as provided by respective
distribution licensee proposing new substation or augmentation of the
substation and also cost benefit based on addition of transmission
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capacity. No such cost benefit analysis has been appended with the
petition.
(b) As per Regulations, power evacuation schemes, whether framed by
generating company or by transmission licensee shall have the
justification of least cost of transmission satisfying the requirement of
Grid Code. Petitioner has not appended any such information with the
petition.
(c) The petitioner is required to submit project feasibility reports of the
schemes having capital expenditure exceeding Rs. 10 Crores to the
Commission for prudence check. RVPN may supply such information
whether project feasibility reports of all the schemes mentioned in this
petition have been submitted to the Commission and whether
Commission has granted approval to such schemes.
(d) As per regulation 3 (3) of RERC Investment Approval Regulations, 2006,
schemes for setting up of EHV GSS and EHV transmission lines require
approval of State Transmission System Planning and Coordination
Committee (TSPCC)constituted under Grid Code. The investment plan
includes some schemes which are not approved by the TSPCC. All
such schemes, which are not approved by TSPCC, should be deleted
from the plan straight away and schemes duly appraised by the
Commission should only be included in the plan.
RVPN’s Response
9. (a) The cost benefit analysis of each scheme (wherever applicable) is
done as per letter No. 260, dated 28.5.2005 of the Commission. The
financial analysis sheet is part of the detailed project report of the
scheme. Copies of project reports are available with Commission
and in the office of SE (P&P), RVPN, Jaipur. The result of financial
analysis i.e. Net Present Values (NPV) in the 5th & 10th year are
indicated in Form-2 of Petition.
(b) The power evacuation system is planned based on maximum
quantum of power to be evacuated and location of the load
centers from the generating stations which, as per CEA's guidelines
Grid Code, should satisfy N-1 criterion. Wherever, more than one
option is available the least cost option is evaluated. Such details are
available in the respective project reports.
(c) After approval of transmission schemes from BoD of RVPN, the project
report of each and every scheme costing more than Rs.10 Crores is
invariably sent to the Commission, as required under Regulation 3(1)
of RERC (Investment Approval) Regulations 2006. Since the approval
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of the investment plan is being regularly accorded by the
Commission, therefore, approval of the individual scheme is not
required separately.
(d) The transmission schemes for setting up of EHV GSS and EHV
transmission lines are being got approved from TSPCC from time to
time. The last two meetings of committee were held on 17.10.2011 &
28.3.2012. All the EHV schemes included in Investment Plan 20012-13
have been approved by TSPCC.
Commission’s View
10. The Commission has taken note of RVPN’s submissions that all the
transmission schemes included in the investment plan have the approval
of the board of directors of RVPN, TSPCC and these approvals are based
on examination of various options leading to adoption of best option in
the interests of the consumers of the State. The project-wise/scheme-wise
approval issue has been discussed later in this order.
(2) Expenditure on Evacuation Schemes (including 765 kV system)
Stakeholder’s comments/Suggestions
11. Sh. G.L. Sharma submitted that
(a) 400kV D/C Rajwest- Jodhpur line and 400kV line bay at Jodhpur with
reactor has been commissioned on 30.9.2010 to evacuate power from
Rajwest LTPS (phase-II) against which total expenditure upto 1.4.2011
has been shown as Rs.20,048.76 lacs. This phase has not yet come and
perhaps it may take about a year more. This shows that RVPN has not
taken care of such delay in commencement of generation and it has
resulted in expenditure without any benefit and has put an unnecessary
burden on transmission tariff.
(b) RVPN must provide details of evacuation schemes for evacuating
power from RAPP, Barsingsar Power Stations etc. for sale within state
and outside state as this would help in determining the intra state and
inter -state transmission and wheeling charges.
12. Sh. R.G. Gupta submitted that the petitioner must ensure that in respect of
execution of evacuation schemes, there is complete synchronization of the
commissioning of transmission projects with the generation projects. In this
regard, he pointed out that:
(a) The composite power evacuation schemes of 765 kV needs to be re-
examined in view of slippage of Chhabra & Kalisindh super critical
plants. As per Form-2 of the petition, the petitioner has shown
commissioning of schemes in FY 2013-14 whereas neither the Letters
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of Intent for the power plants have been placed nor fuel linkage has
been established.
(b) Establishment of 765 kV System has been justified by RVPN
considering upcoming supercritical projects at Chabbra (2X660 MW),
Kalisindh (2X600 MW) and Kawai(2X330 MW) and considering
maximum demand as 13,000 MW during 2013-14 and 16,000 MW
during 2016-17. Heavy demand considered by RVPN has nowhere
been projected either in 18th EPS of CEA, neither Energy Assessment
Committee nor the Commission. Actual demand recorded in the
system on 6.3.2012 was only 7605 MW, which is not likely to exceed
9,000 MW in the year 2013-14. Further, there is heavy slippage in
availability of new generation projects. Thus, both demand/
generation capacity does not justify the evacuation system
proposed. Discoms had in past also opposed creation of 765 kV
systems which, if erected, would remain charged on 400 kV for at
least 5 years.
(c) The power evacuation system of Banswara Super Critical TPS as per
Form-2 is to be commissioned in the year 13-14, whereas power plant
is presently nowhere in the picture. Further, in view of less than
normal growth the schemes linked to Banswara evacuation cannot
be justified simply on the ground of system improvement. 400 kV
schemes earlier linked to Banswara & now delinked require a cost
benefit analysis. RERC should review its permission for delinking. This
expenditure should be avoided.
(d) The power evacuation system for Suratgarh super critical TPS as
shown in Form-2 is proposed to be commissioned in the FY 13-14
whereas the power station is not going to come before 5 years from
now as the Letter of Intent for this has not been placed.
13. Ajmer Vidyut Vitran Nigam Limited (AVVNL) also suggested that before
approving proposed investment plan, the CoD of various power stations
should be considered.
RVPN’s Response
14. Eight units of 135 MW each are to be constructed by M/s Rajwest. Further,
at the time of planning of evacuation system for above project, first two
units were considered under Phase -I and balance 6 units were considered
in Phase-II and accordingly the evacuation system was planned. Till date 4
units of M/s. Rajwest have been commissioned and balance units are likely
to be commissioned in 2012-13. Since 2 units covered in Phase-II have also
been commissioned, RVPN have to provide the evacuation system for the
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same. RVPN further mentioned that they have to plan the evacuation
system in such a way that it is ready six months in advance from the
scheduled commissioning of generating units.
15. The issue regarding RVPN’s transmission system being used to evacuate
power from Central Generating Station like RAPP has already been taken
up with CERC and National Power Committee for calculation of Point of
Connection (PoC) transmission charges and losses. No bifurcation is
required for evacuation of power from Barsingsar Power Station as the
entire power is purchased by Discoms.
16. As regards the issue of review of 765 kV system, the transmission system is
required to be commissioned six months in advance from the
commissioning date of the generating station. Further, slippages not only
occur in generation projects, but also in transmission schemes due to Right
of Way (RoW) problems, forest clearances etc. RVUN’s Kalisindh units are
scheduled for commissioning in September, 2012 and December 2012 and
Unit-1 of Kawai is scheduled for commissioning in September, 2012.
Therefore, evacuation system charged on 400 KV voltage level would be
needed.
17. RVPN submitted that it has planned 765 kV, 2X S/C lines along with one
400/765 kV S/S at Anta (Baran) and one 765/400 kV Sub-Station at Phagi
(Jaipur) for bulk power evacuation from 2 Nos. Super Critical Power Plants
at Chhabra & Kawai each having a capacity of 1320 MW and Thermal
Power Project at Kalisindh having capacity of 1200 MW. This power
evacuation scheme was approved by BoD of RVPN wherein Chairman
Discoms is also the Board Member. The feasibility/cost economics of the
765 kV systems proved better in view of requirement of large no. of 400 kV
D/C lines, RoW corridors, forest clearance, cost & time of construction etc.
Thus, for evacuation of about 3840 MW the planning of 765 kV system was
technically essential, otherwise 5 corridors of 400 kV D/C lines would have
been required for evacuation which is practically not possible and
charging of 765 kV lines initially on 400 kV is more viable and a practical
approach. Out of three generating plants, two are expected to be
commissioned shortly for which RVPN is trying hard to evacuate the power.
18. RVPN further submitted that for FY 13-14, the expected peak demand of
Rajasthan as per 18th EPS is 10,360 MW & for FY 16-17 it is 13,886 MW. For
conducting load flow studies and working out adequate Transmission
System for future, all the expected generation in the time frame are to be
considered to avoid any extra expenditure in future in constructing
additional transmission system for the same.
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19. Regarding evacuation system of Banswara Super Critical TPS, the two lines
viz. 400 kV D/C Banswara TPS-Udaipur line and 400 kV D/C Banswara TPS-
Chittorgarh line emanating directly from Banswara TPS as decided in the
169th Board meeting held on dated 25.8.2009 stand deferred till the Bid for
the power plant is finalized and project is awarded to the successful bidder.
Further, the Board of Directors of RVPN in its meeting held on 28.6.2011 have
decided to delink the scheme of 400kV GSS Udaipur along with associated
EHV lines from Power evacuation scheme of Banswara Super Critical TPS .
400kV GSS Udaipur along with 400kV D/C Jodhpur (New) - Udaipur line is
proposed to be executed through Private Sector participation. Also, 400 kV
GSS at Jodhpur (New) and 400 kV GSS at Chittorgarh along with their
associated lines were technically essential (based on the system studies).
Therefore, it was decided to advance the construction of these works.
Hon’ble Commission is also well aware about the same as is evident from
the views of the Commission at para 87 of the Order dated 29.12.2010.
Commission as per decision at para 31 of the Order dated 30.08.2011 has
given permission for taking up the 400 kV GSS at Udaipur along with
associated transmission system. It was further submitted that only
technically essential works have been taken under normal development
works with the approval of Commission. The system under execution is
technically required for meeting the load demand of the area and
evacuation of wind generation in Pratapgarh and Banswara Districts.
20. Regarding evacuation schemes of Suratgarh, RVPN stated that it has not
taken up execution of 400kV lines emanating directly from Suratgarh TPS
except 400 kV D/C Suratgarh-Babai (Quad Moose) line. From the load flow
studies, it is concluded that under the condition when there would be no
generation at Suratgarh Super Critical TPS (6x660 MW), the availability of
240 km. 400 kV D/C Suratgarh– Babai (Quad Moose) line along with 400 kV
Babai GSS (approved under evacuation system of Suratgarh Super Critical
TPS) would strengthen the system, reduce the transmission losses and the
said line would also be utilized even though not to its full capacity.
Therefore, action for execution of these schemes has been taken up.
Commission’s View
21. The Commission has noted the submissions of RVPN in response to
comments of stakeholders.
22. Commission appreciates the concern of the stakeholders that execution of
the evacuation schemes should be planned in such a way that the
Commissioning of the same synchronises with commissioning of the
generating projects. Commission in its Order dated 30.08.2011while
approving the investment plan for FY 2011-12 had noted that RVPN had
planned the execution of evacuation schemes based on the expected
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COD of generation projects indicated by RVUN which were later on revised
by RVUN. Commission had directed RVPN to review the status of execution
of evacuation schemes and provide the details of the schemes, the work
on which could be deferred. RVPN in response had indicated that looking
to the status of schemes no work could be deferred.
23. Commission vide para 22(iii) of said Order directed RVPN that in future
transmission projects related to evacuation schemes shall be awarded only
after award of the main contract of generation project so that mismatch in
commissioning of transmission and generation projects could be avoided.
Commission has also observed that in case the evacuation system being
developed by RVPN remains idle, the liability for the same may have to be
borne by RVUN which would be considered at the time of fixing tariff for
respective generating station. Therefore, in case the evacuation system
being constructed by RVPN remains idle, the Commission while undertaking
prudent check for inclusion of such works in ARR would decide as to the
extent of additional cost of idling to be passed on in ARR and the amount
of this extra cost which would need to be borne by the generating
company.
24. Commission at this stage is not inclined to withdraw the permission which
were given after due consideration for execution of the transmission system
delinked from Banswara super critical power evacuation system.
25. The issues of review of 765 kV system and that of Suratgarh Super Critical
Power project have been discussed later in this order.
(3) Tariff and ARR as compared to other States
Stakeholder’s comments/Suggestions
26. Shri R.G. Gupta submitted the following data with regard to capacity
handled and ARR in some States including Rajasthan and observed that
despite ROE not being charged in Rajasthan the ARR is higher than other
States:
Table-1: ARR and Capacity handled in some States
S.No. Name of State Approved ARR Capacity handled (MW)
1 Madhya
Pradesh
Rs 1,526 Cr
(including Rs. 263 Cr as RoE)
10,200
2 Andhra
Pradesh
Rs.1,405 Cr
(including Rs.622 Crores as RoE)
17,877
3 Gujarat Rs.1,880 Cr
(including Rs.440 Crores as RoE)
18,510
4 Rajasthan Rs.2,162Cr (Proposed) 9,166
27. He also stated that Rajasthan’s tariff is highest when compared with other
States.
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28. He further pointed out that in States like Madhya Pradesh and Andhra
Pradesh, the MVA capacity is around three times the capacity handled
while in Rajasthan, it is about five times.
29. This shows unnecessary investment. The Commission may, therefore, cut
the size of investment plan as higher investment plan would lead to higher
Gross Fixed Assets (GFA) and higher corresponding Tariff.
RVPN’s Response
30. In this regard, it is stated that Rajasthan is having typical geographical
conditions wherein some of the districts have very low population density
with low load demands and higher percentage of voltage regulation for
which, RVPN has to lay long transmission lines for creation of Sub-Station, to
maintain proper parameters capacitive & reactive compensation is
required to be added, which involve higher O&M cost. Here, it is also
relevant to mention that a lot of new Generation schemes and Renewal
Power Generation schemes are coming in the State for which huge
investment is required for creation of required power evacuation system.
Thus, due to variation in load demand spread over an area and generation
injection in far through & remote area, the respective data for other States
cannot be compared just on the basis of line lengths and capacity
handled.
Commission’s Views
31. In the light of the points raised by the stakeholder as regards ARR and
transmission tariff of Rajasthan being significantly higher than adjoining
States like M.P., Gujarat and even Andhra Pradesh, the Commission had
looked at the ARR and transmission tariff of the other States, as well as that
of Rajasthan. It is true that transmission tariff of Gujarat, M.P., A.P. and
many States is much lower than that of Rajasthan. However, the
transmission tariff of Maharashtra has been higher than that of Rajasthan as
could be seen from the following table:
Table-2: Interstate Transmission Tariff Comparison
S.No. State Year Transmission Tariff (Rs./kW/Month)
1. M.P. 12-13 124.71(based on charges of Rs.
4100/MW/Day)
2. Gujarat 12-13 84.56 based on charges of Rs.
2780/MW/Day)
3. Rajasthan 11-12 136.08
12-13 146.61 (Interim)
4. Maharashtra 11-12 164.68
12-13 219.39
5. A.P. 12-13 65.5(based on order dated 20.3.2009)
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32. In the light of huge variation in transmission tariff among States, it doesn’t
seem possible to compare the investment plan or even transmission tariff of
the State with any other State. There could be numerous variables
impinging on transmission tariff like: load density; location of generating
stations – both that of State’s own as well as Central Generating Stations.
Though RVPN is not charging ROE while other State transmission utilities are
adding that on ARR; the incidence of terminal benefits of employees in
case of Rajasthan to a great extent offsets the impact of ROE on ARR.
33. RVVS has raised the issue of MVA and contracted capacity ratio in
Rajasthan being 5:1 as against 3:1 in other States like M.P. and Andhra. The
Commission for the purpose of analysis, of the issue asked RVPN to explain
the position. They explained that Discoms draw their power from RVPN at
33 kV/11 kV voltage level and the MVA capacity at 132 kV/32 kV/11 kV
level in FY 11-12 was 21194 MVA as against simultaneous peak load of 7605
MW which leads to a ratio of 2.8:1. It has further been explained that the
ratio needs to be seen in respect of sum of non-simultaneous peak load,
which is about 1.2 to 1.5 times of simultaneous peak load. As such details in
respect of other Stats are neither available in the clarification given by
RVPN, nor in the various submissions, which have been received by the
Commission; the Commission is not indicating any view on this issue in this
order. The petitioner is directed to get this matter analysed at length based
on similar ratio of other States and a justification note, if required in case the
ratio in the State is adverse, be given along with the Annual Plan approval
petition of the next financial year.
(4) Evacuation/Transmission system for Renewable Energy power plants
Stakeholder’s comments/Suggestions
34. Sh. G.L. Sharma and Sh. R.G. Gupta submitted that Commission at para 12
(g) of its order dated 23.12.2011 has observed that cost for evacuating
power for sale of energy outside of the state from solar or wind projects
should not lead to undue burden on state's transmission tariff. RVPN,
therefore, must keep this in consideration while working out investment
plan. In view of above decision, RVPN should have bi-furcated the cost of
evacuating power schemes of solar and wind plants for use within the state
and outside the State.
35. Sh. R.G. Gupta also submitted that:
(a) The investment in the transmission scheme for purchase of power from
non-conventional sources including solar plants should be limited to
level of Renewable Purchase Obligation (RPO) of the distribution
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licensee as per para 129 of the tariff order issued by the Commission
for FY 2011-12.
(b) Significant capacity is coming up in solar generation under the JNNSM
which have PPAs to sell power to other States whereas the RPO of
Rajasthan’s Discoms is around 200 MW. Therefore, why RVPN should
spend money on transmission system for more than 200 MW.
(c) RVPN, on the request of RREC, generally starts construction of
transmission lines for power evacuation from RE sources, which may
not be required as per RPO. Therefore, RVPN must ensure that they do
not start constructing the transmission lines for evacuation from RE
plants unless there is a request from the beneficiary of such projects.
(d) As per regulation 89(1) of RERC Tariff Regulations 2009 on grid
connectivity for Renewable Energy (RE) power stations, STU shall
prepare a perspective plan for power evacuation from RE power
stations proposed to be set up in next five years. Such plan be revised
every year and submitted to the Commission along with associated
cost.
(e) Where PPA of generated power like solar stations under NVVN are not
with Distribution licensee, how petitioner can include the capex for
evacuation in the intra-state transmission plan and load the Discoms?
RVPN’s Response
36. RVPN submitted that the evacuation system has been designed
considering integrated approach, where it can evacuate generation
available not only from solar/ wind generators but also from Ramgarh GTPS,
Rajwest LTPS and Giral LTPS located in the western part of Rajasthan.
Therefore the bifurcation of cost of evacuation system for wind/solar
generators used for state and outside the state may not be possible. There
is no such provision in the regulations also. Moreover, when the power is
injected for outside sale, the beneficiary is required to pay the open access
charges which will help to reduce the burden of transmission charges
payable by the Discoms.
37. In reply to the various submissions of Sh. RG Gupta relating to evacuation of
RE power and on limiting the expenditure on transmission system to
evacuate power from solar energy sources to the extent of RPO only, RVPN
submitted that there is no limit for granting the connectivity to solar/ wind
power plants. RVPN has to provide transmission system for the prospective
RE power developers as mandated by RREC/GoR Solar Policy 2011 and
under REC/Open Access Schemes based on the Agreement/ PPA
executed by developers with Discoms or NVVN.
Page 12
Commission’s View
38. This has been discussed later in this order.
(5) Expenditure exceeding investment approval in past years
Stakeholder’s comments/Suggestions
39. Shri R.G.Gupta pointed out that:
(a) Commission had approved a total investment of Rs.6,658 Crores during
the MYT period, however an amount of Rs.6,270 Crores has already
been allowed upto year 2011-12. The current year’s plan of Rs.2,800
Crores added to the already allowed plan would take the investment
to Rs.9,070 Crores by FY 2012-13. Thus, the petitioner has already
exhausted the MYT plan last year itself and the plan for this year and
next year should be a token provision only.
(b) Against a target addition of 5,476 ckt-km allowed in MYT order, the
petitioner has added nearly 5000 ckt-km as on 31.3.2012 and still two
years of control period are left. Similarly, against 11,580 of MVA
capacity allowed in MYT order the petitioner has added around
16,000 MVA, which is more than five year target. He further referred
the targets approved by the Commission in the MYT order for FY 10-11
& 11-12 for commissioning of lines (ckt-km) as well as installation of
MVA capacity. He pointed out that in FY 10-11, 1969 ckt-km of lines
and 9,328 MVA capacity was installed against the approved target of
1,009 ckt-km lines and 1,925 MVA capacity respectively. Similarly, in
FY 11-12 1,191 ckt-km lines and 6,540 MVA capacity were added
against approval of 870 ckt-km lines and 2,483 MVA capacity.
Physical targets of the lines & substations for FY 2012-13 be reduced
corresponding to the lines and substations energized over and above
the approved targets during FY 2010-11 and 2011-12.
RVPN’s Response
40. The petitioner did not furnish any comments in time on this issue.
Commission’s View
41. Commission has taken adverse view of non-furnishing of comments in time
by RVPN on the issue.
42. However, the Commission observes that investment of Rs.6,658 Crores
during MYT period as pointed out by Shri R.G.Gupta is actually the
estimated capitalization considered by the Commission for the current
control period and not the capital expenditure/investment plan approved
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by the Commission. As per practice, the Commission considers the likely
capitalization (gross assets put to use) for determination of tariff for each
year which is significantly less than the approved investment. This is evident
from the fact that after issue of the MYT order, Commission has approved
the investment plan of the petitioner each year and has also considered
the capitalization separately for the purpose of determination of tariff, as
under:
Table 3: Approved investment and capitalization
(Rs. Crores)
Year Investment
approved for
Transmission
Capitalization
considered in tariff
order
Capitalization
considered in MYT
order
2009-10 1213 735 735
2010-11 2260 1200 1090
2011-12 2450 1800 1382
43. Commission has also taken adverse note of considerable variation in
actual physical work as against what was approved in annual plan and the
variation has not been explained. This has been given consideration while
effecting deduction in the annual plan ceiling for the current financial year.
(6) Lack of coordination between RVUN, RVPN & Discoms
Stakeholder’s comments/Suggestions
44. Both Shri R.G.Gupta and Shri G.L.Sharma pointed out that there was lack of
coordination between the three wings, which resulted in huge anomalies.
Transmission licensee is laying transmission lines simply on the basis of a
letter received from the generating company. It was suggested that
Assessment Committee/Coordination Committee should regularly review
the status of generating stations/transmission projects and take decision
regarding no change in pace, go slow or deferment of the schemes. The
coordination needs to be increased and further proposals should be fully
supported by detailed analysis and approved by Energy Assessment
Committee.
RVPN’s Response
45. RVPN stated that adequate coordination exists amongst RVUN, RVPN and
Discoms. The meetings of TSPCC in which representatives of these
companies are members are held from time to time to decide the
investment in various schemes. The last two meetings of the Committee
were held on 17.10.2011 and 28.3.2012 in which all EHV schemes included
in investment plan were approved.
Page 14
Commission’s View
46. Commission agrees with stakeholders that adequate coordination
between RVPN, RVUN and Discoms should exist to ensure coordinated
development of power sector in the State. Commission had also observed
at para 22(iv) of the Order dated 30.08.2011 that Commission would like
that the coordinated development of generation and transmission projects
is discussed regularly in the Coordination Committee of the power
companies, wherein chief executives of RVPN, RVUN and Discoms are
members, so that mismatch in the Commissioning of evacuation system &
generation projects can be avoided. Commission reiterates that
Coordination Committee of power companies shall regularly discuss the
progress of generating projects and associated evacuation system for
coordinated development of the same.
(7) Annual Plan ceiling limit
Stakeholder’s comments/Suggestions
47. Sh. G.L. Sharma submitted that as per Annexure (1) of the investment
guidelines of the investment regulations , 2006, the upper ceiling of the
plan has to be as "Annual plan = K*GFA*( ( 1+ inflation rate)* (1+growth
rate)-1 ). The petitioner should calculate the plan size and provide the
calculations in the petition so as to determine the ceiling with reference to
GFA and accordingly the Annual Plan size should not exceed more than
Rs.1,300 Crores. The Commission should not allow a Plan more than this
ceiling.
48. Sh.R.G.Gupta further requested that Plan size should be heavily curtailed to
a level of Rs.1,200 Cr as Discoms have cut down the number of Agriculture
connections to be released annually from 70,000 to 15,000 only. This would
result in low CAGR in comparison with forecast. The proposals for 132 kV
rural GSS submitted by Discoms need re-examination. Till such time, no new
132 kV GSS in rural area shall be included in Plan of FY 2012-13.
49. Sh. G.L.Sharma and Shri R.G.Gupta submitted that the Annual expenditure
is not more than Rs 1000 Cr upto December 2011 for FY 2011-12, therefore,
prudent check is required and investment is allowed based on bare
necessity of the system.
50. Shri G.L.Sharma stated that :
(a) In Form No.2 a saving of 8021.96 LU has been shown to support the
justification of schemes. In respect of lines, which have been shown as
Commissioned till FY 11-12 such savings come to 1284 LU. No basis of
calculating such savings was furnished.
Page 15
(b) The investment Plan also includes the purchase of testing equipments,
metering, IT Software, Automation/SCADA solutions, which are part of
O&M expenses and should not form part of Investment Plan. Further,
cost benefit analysis has not been provided. Besides, it is not a
mandatory system.
(c) The actual expenditure for Generation (Shared Projects) during past
three years has not been more than 9 to 9.5 Crores against sanctioned
Rs 20 Crores. Petitioner is utilizing such savings for transmission works. In
order to check this, Commission while approving the Investment Plan,
may sanction a specific amount to be utilized only for specific work for
which it has been sanctioned and no adjustment of savings etc would
be available. Further, looking to the past trends of expenditure for
shared projects investment of Rs 10 Crores may only be sanctioned.
RVPN’s Response
51. The stakeholders have suggested that the plan size shall not exceed Rs.
1300/1200 Crores, but no calculations for the same have been furnished.
The annual plan size is worked out on the basis of the works under
execution and the requirement of system as per load growth. Since, the
schemes like evacuation from Generation & Renewable power are
incidental to the Normal Development; therefore, the plan size cannot be
restricted to the formula based on GFA, inflation rate and growth rate etc.
However, as per the formula prescribed by Commission by considering a
normal inflation rate of 10% & WPI rise as 10%, the investment plan size will
be more than 25% of GFA. If we add expenditure required for evacuation
system then our proposal for Investment Plan comes within limits. RVPN
also submitted that capital expenditure proposed under various category
of schemes for FY 12-13 is well within the ceiling prescribed under
Regulation as given below:
Table-4: Details of the proposed capital expenditure under various
category of schemes for FY 2012-13
S.No Schemes Investment/
Provision
(Rs. in lacs)
% of total
investment
Rs.2780 Crore
for transmission
Ceiling
limit of
outlay
1 Evacuation schemes and
strategic importance schemes
1,44,880 52.12 60%
2 Schemes based on cost
benefit analysis
57,000 20.50 60%
3 Ongoing schemes and carried
over liabilities
34,520 12.42 10%
4 Capacitors installation 1,500 0.54 5%
Page 16
52. RVPN submitted that above mentioned details of investment are generally
in line with guidelines of Investment Plan. However, in case of ongoing and
carried over liabilities, the percentage of proposed investment is more than
the ceiling limit because of the heavy investments in system strengthening
schemes essentially required for system improvement of Jaipur and
Jodhpur city.
53. Regarding decrease in number of Agriculture connections and erection of
132 kV rural GSS, the petitioner submitted that the system strengthening
works have been included in the investment plan as per requirement of
Discoms which have already considered reduction in number of Agriculture
connections. Further, erection of 132 kV GSS in rural area is also essential to
provide appropriate voltage to tail end consumers.
54. The petitioner further submitted that provisional expenditure in FY 11-12 was
Rs.2,015 Crores as against Rs.1,000 Crores upto December 2011 as pointed
out by the stakeholders.
55. Regarding observation of Shri G.L.Sharma on calculation of energy savings,
the petitioner pointed out that the transmission loss for particular peak
power, set of generation and load is calculated based on the Load Flow
software package. The system or element in particular is judged with and
without for the expected time frames and accordingly expected losses or
savings are indicated. This is a universally adopted practice. Nowhere, this
individual element loss is physically measured or intimated. If the set of
assumption changes or actual flow changes, the system loss calculation
gives different results.
56. In the investment Plan, all those expenses which are considered as capital
expenditure have been covered. The expenditure on testing equipments,
metering, I.T. Automation/SCADA are essential for smooth running of
transmission system and for quality supply of the power. New technologies
are being introduced in transmission system. CEA and Govt. of India are
promoting use of smart grid application and distributed architecture are
being used for digital network. Thus, the SCADA/Automation are essential
and considered mandatory by CEA.
Commission’s View
57. As per the Investment Plan Regulation, 2006, the annual plan size of the
investment plan should be governed by the following formula:
Annual Plan = K*GFA*((1+ inflation rate)*(1+growth rate)-1)
Where K – constant, to be treated 1.3
Page 17
Inflation Rate = Ratio of WPI as on 1st April of previous year and
current year.
Growth rate – sales growth over previous year
The Commission has dealt with the application of this formula for deciding
investment plan later in this order.
58. The Commission has noted the comments of the petitioner on other issues
raised by the stakeholders.
59. Regarding percentage ceiling on various category of Schemes, the
Commission notes that as per RVPN’s submissions, the capital expenditures
for the proposed investment plan are normally within the specified ceiling
limits as defined in Investment Approval Regulations, 2006, except for
ongoing and carried over liabilities, which is slightly higher than specified
ceiling limit. The Commission agrees with the reason given by RVPN for the
same.
60. As regards the concern expressed relating to diversion of investment
approved for generation project, Commission directs RVPN that the
expenditure should be made for in accordance with the respective heads
for which the investment plan has been approved.
(8) Other issues
61. The stakeholders also raised the following points for consideration:
(a) The demand of 13000 MW for FY 13-14 has been arbitrarily assumed by
RVPN and transmission system has also been accordingly developed
by RVPN;
(b) RERC should get the transmission requirement analysed from CEA or its
own independent consulting team in view of very high tariff as
compared to other States, high MVA to contracted capacity ratio
and arbitrarily adopted peak demand of 13000 MW and taking into
account the changed scenario of generation addition, realistic likely
demand etc.;
(c) Schemes approved by the TSPCC should be first scrutinized by the
Commission before approval of the transmission investment plan;
(d) The names of schemes approved in the plan should be specifically
mentioned, giving their projected cost, length/MVA, likely year of
completion and purpose;
(e) RVPN may be specifically directed that in future, in respect of
Investment Plan, Discoms and RVUN would be made parties;
Page 18
(f) The transmission licensee as well as private developer, both add to the
liability of Discoms. Hence, investment plan size should take into
account the projects being executed by private licensee.
Commission’s Views
62. As regards the points raised at (b) to (d) above, Commission observes that
it amounts to interfering with the micromanagement of affairs of utility as
observed by Hon’ble APTEL in its order dated 29.8.2006 and this has been
discussed later in this order.
63. Regarding issue raised at (d), Commission agrees with the suggestion and
therefore, RVPN is directed to act accordingly.
64. Regarding point raised at (e) above, Commission feels that in case of
transmission projects selected for execution through competitive bidding,
the role of Commission is restricted to adoption of tariff discovered through
the bidding only. Therefore, approval of investment in schemes to be taken
up through competitive bidding falls outside the purview of the Commission
and hence, it would not appropriate to include such schemes in the
approval of investment plan.
Analysis and Decisions of the Commission:
65. Commission would first like to examine some important issues which have
been raised but not analysed in earlier part of this order, which are as
under::
(1) Schemewise sanction and involving CEA/consultant for analysis of
transmission requirement.
(2) Review of 765 kV evacuation scheme
(3) Evacuation scheme – Suratgarh Super Critical Project
(4) Demand of 13,000 MW in FY 13-14
(5) RE evacuation
Schemewise sanction and Involving CEA/consultant for analysis of transmission
requirement
66. Similar issues had arisen in the appeal No. 84 of 2006 before APTEL and it
would be worthwhile to first have a look at the order of Hon’ble APTEL in the
said matter before taking a view on the issues which have emerged in the
issues under consideration before us.
67. The issue of according approval by Regulatory Commission of investment
plan of a utility had come up before Hon’ble APTEL in appeal No. 84 of
2006. The said appeal had arisen against order of the Karnataka State
Page 19
Regulatory Commission, wherein investment plan of the State Transmission
Utility was reduced by the Commission after getting capital investment
plan examined by a committee constituted by the Commission.
68. Hon’ble APTEL in that case has examined at length the powers and
functions of the Regulatory Commission as regards investment approval
and in paras 7, 9, 10, 11, 12, 15, 19, 20, 21 and 22 observed as under:
……………………………….
“7. ………………………
There is no parallel provision in Section 86 or any other provisions in The
Electricity Act 2003 which will enable the Commission to regulate the
investment approval for generation, transmission, distribution and
supply of electricity within the State, and it is not as if it is the repository
of entire power or authority to control the whole spectrum of
Transmission or Distribution including financial management of utilities
or it has the power to micromanage the affairs of the utilities.
8. ……………….
9. The only provison, if at all which has a relevance is Section 86 (2), which
is advisory in nature. This being the position it is obviously clear that the
legislature has left it to the utilities to decide their plans of investment or
improvement of system or expansion to meet the demand of power
within their area including up gradation and maintenance for a better
and quality generation, transmission or supply as the case may be. It is
the commercial decision of the utility and its source to raise funds
which falls within the domain of the utility and not liable to be
interfered, except at the stage when utility claims for return on such
investment, interest on capital expenditure and depreciation. It is at
that stage the Commission shall undertake a prudent check and if
deemed fit allow the claim. In appropriate cases the Commission may
disallow such claims of utility and it is for the utility to bear the brunt of
such investment and it cannot pass it on to consumers.
10. We are unable to appreciate the procedure adopted by the
Commission in appointing a Committee to examine the proposal or to
find out whether it is feasible or not to implement the investment
proposal. It is being commented as a day dream on the part of utility.
Yet they are within the domain, commercial decision and internal
management of the utility and there is time enough for the Commission
to undertake prudent check when the utility comes forward to claim
return on such investment. in its annual revenue requirement and till
then the proposal to invest is well within the domain of the utility. It is
sufficient if the utility confirms its proposal to invest.
11. Further when the Technical Experts and Engineers, have applied their
mind with respect to their proposal and plan it is not for the
Commission to examine by appointing another expert Committee……
Page 20
12. All that it is being pointed that it may not be possible to execute. Here
again it is within the domain and control of the utility. Assuming that the
utility has a dream, it is expected that it will wake up with
determination and act, lest the State which owns the undertaking will
not spare and accountability of the utility is unending to the State,
State Legislature and audit by The Accountant General. The power
demand is increasing by leaps and bounds and quality has to be
maintained and this compels the utility to update its transmission
system including reduction in transmission loss ordered by the
Commission. It is not for the Commission to throw its spanner in the
wheels of the utility when it has proposed to invest for the improvement
and expansion of system after a study by its Technical Team and when
its board has approved the investment proposals.
13. ………..…….
14. ……………...
15. The further approach that it is obligatory for the Commission to keep
the cost of the power at the lowest possible level is not a proper
approach. Being a regulator, the Commission has to approach such
issues as a regulatory measure and not as if the Commission is there to
protect the consumers alone. When the Commission expects the utility
to upgrade its system of transmission or distribution or quality of service,
it follows automatically that utility has to invest in upgradation,
maintenance for providing quality service. This could be by way of
balancing and not by approaching the issue as if the consumer has to
pay at the lowest rate. When the consumer expects quality service, the
consumer should be prepared to pay a reasonable charge and here
the role of Regulator is vital and it has to balance between the two. If
timely capital investment is not made to improve the system then the
quality of service by the utility cannot be complained either by
consumers nor it could be commented by Regulator. The appointment
of an expert committee by the regulator at the stage of proposal to
invest is neither warranted nor justified as the plan to invest, estimate of
investment and the program of up gradation or extension or
development of transmission system is exclusively within the domain of
transmission utility.
16. ………………..
17. ………………..
18. ………………..
19. …………… The claim of the 1st respondent that it is empowered to
interfere with investment proposal made by the appellant and
substitute its recommendations in respect of the same in our
considered view is far fetched. If such a stand is to be sustained then
utility will be a depart mart of the Commission and the Commission
Page 21
may not be exercising its power or functions as a regulator but as a
head of the utility. This is not the object of the 2003 Act. It shall not be
lost sight that the regulator has no budget or funds of its own to invest
nor it could interfere with the micro management of the utility.
20. The preamble of the Act shall not be lost sight of, where in it has been
emphasized that the object of the Act being to take measures
conducive to development of the electricity industry, promote
competition there in, protecting interest of consumers and supply with
electricity to all areas etc. A question may be raised as to the
effectiveness of capital investment and further question that if such
investment is found to be a waste or otherwise not required which may
result in waste of funds of utility. This over looks the fact that the utility
being a State undertaking is controlled by its Board and responsible
officials of the State and it is subject to the control and approval of the
State in such matters which provides funds for such investments or over
see such investments. For all these reasons we are not persuaded to
accept the line of reasoning assigned by the Commission.
21. The Commission overlooked the fact that the appellant being
transmission utility transmitting power through out the State for the bulk
supply as well as distribution as an obligation to maintain the supply as
well as quality supply and when the demand increase, either at the
level of distribution or at the level of bulk supply it is the transmission
licensee who should provide for the supply. This obviously means that
the transmission utility has to plan in advance and should be in a
position to supply power as demanded from time to time. Section 42,
43 of The Electricity Act 2003 also should not be lost sight of. To meet
the ever increasing demand consequent to development and
improvement in the status of the consumer public, industrialization,
computerization, heavy industries and requirement increases by
geometric proportion, it is for the transmission utility or such other utility
to estimate the future demands as well, besides improving the quality
and standard of maintenance. This is possible only if the utilities have
the freedom to plan with respect to their investment, standardization,
upgrading of the system. For such a course it is within the domain of
those utilities to undertake to plan, invest and execute the projects or
schemes of transmission etc. If the view of the Commission is to be
sustained, as already pointed out, the same would mean for each and
every investment an approval has to be sought by the utility in
advance which is not the objective of The Act.
22. The consumers interest also do not arise at this stage for consideration
nor they could be an objector in respect of proposal or plan or
investment by utility as the liability of the consumers, if any, arise or
there could be a passing by way of return on equity or interest etc. as
such contingency arises only when the Regulatory Commission subject
to its prudent check allows such expenditure, while fixing the annual
revenue requirement and determining the tariff. Till then, the
consumers have no say and there could be no objection from their
Page 22
side. When the consumers complain poor service or failure to maintain
supply, to face such a situation the utility has to plan in advance, invest
in advance, execute the project or scheme for better performance
and maintain.”
(emphasis supplied)
69. In the said judgment, it has clearly come out that Regulatory Commission
should confine itself to exercising prudent check on investment being
made by licensee and should not delve in the area of micro management
of utility. This inference has been drawn by Hon’ble APTEL after careful
examination of the provisions of Electricity Act, 2003. Suffice to say that any
control by a Regulatory Commission on investment plan of a licensee
beyond requirement of prudent check would not be in consonance with
Electricity Act, 2003. The Act has not assigned transmission network
planning function to the regulatory Commission. It has also been held by
Hon’ble APTEL that appointment of an expert committee by the Regulatory
Commission was neither warranted nor justified.
70. As per our knowledge, there is perhaps no Regulatory Commission in the
country, which accords prior approval to individual schemes of transmission
licensee. CERC Regulations also do not envisage prior approval of
individual schemes/projects by the Commission in respect of transmission
schemes of Central Transmission Utility (CTU) and it exercises prudent check
in respect of capital investment while determine tariff of CTU.
71. In the light of the said position, the Commission doesn’t agree with the
suggestion of the stakeholder that RERC should get the transmission
requirement analyzed from CEA or by appointing a consulting team.
72. Also, in the light of the legal position of the Electricity Act, 2003 having been
comprehensively examined by Hon’ble APTEL and in view of their clear
findings on the subject of investment approval, the Commission would be
exercising only prudent check on the investment of the licensee and
allow/dis-allow expenditure based on such prudent check instead of
according project/scheme-wise approvals. Regulations have to be seen
and applied within the overall mandate and objective of the Electricity
Act.
Review of 765 kV evacuation scheme
73. Commission would now like to deal with the suggestion of the stakeholder
that 765 kV evacuation system be reviewed. The two main grounds have
been given for this. One relates to assumed demand of 13000 MW in FY 13-
14 and 16000 MW in FY 16-17 in carrying out load flow studies and the other
is that no super critical generating plant is going to get commissioned in the
12th Plan as not even letter of intent has yet been granted.
Page 23
74. The transmission utility has said that system has been planned keeping in
view the huge generation capacity of about 3840 MW coming up in the
area and CEA guidelines. The petitioner in the written response dated
6.6.12 has given the following justifications for 765 kV system:
“1. Review of 765kV System/Planning/Matching with Generating Projects
etc.: RVPN has planned 765kV, 2xS/C lines along with one 400/765kV
S/S at Anta (Baran) and one 400/765kV Sub-Station at Phagi (Jaipur) for
bulk power evacuation from 2 Nos. Super Critical Power Plants at
Chhabra & Kawal each having capacity of 1320 MW and Thermal
Power Project at Kalisindh having capacity of 1200 MW. This power
evacuation scheme was approved by BoD of RVPN wherein Chairman
Discoms is also the Board Member. The feasibility/cost economics of
the 765kV system proved better in view of requirement of large no. of
400kV D/C lines. RoW corridors, forest clearance, cost &time of
construction etc. Thus, for evacuation of about 3840 MW the planning
of 765kV System was technically essential otherwise 5 corridors of 400kV
D/C lines would be required for evacuation which would have been
practically not possible and charging of 765kV lines initially on 400kV is
a more viable and practical approach. Out of three generating plants
two are expected to be commissioned shortly for which RVPN is trying
hard to evacuate the power.
75. Further, in response to stakeholders suggestions/comments, the petitioner
vide letter dated 22.5.12 has given their comments on various points and in
Appendix II of the said letter, comparison of 400 kV and 765 kV evacuation
system with only 400 kV system has been given to highlight the benefits of a
combined 400 kV and 765 kV evacuation system, as given under:
400 kV & 765 kV Evacuation System Only 400 kV Evacuation System
Proposed Evacuation System • 2 Nos. of 400 kV 1xD/C (Quad
Moose) lines from Generating
Stations to Dahra Pooling Station
• 2 Nos. of 400 kV 1xD/C (Quad
Moose) lines from Generating
Stations to Dahra Pooling Station • 2 Nos. of 2*1500 MVA 765/400 kV
GSS at Dahra Pooling Station
and Jaipur (South)
• Extenstion at Dahra Pooling
Station by additional 10 Nos. of
400 kV feeder bays • 765 kV 2xS/C lines between
Dahra Pooling Station – Jaipur
(Sought)
• 3 Nos of 2x315 MVA, 400/220 kV
GSSs at Jaipur(South), Jaipur
(New & Alwar • 4 Sets of 3x80 MVAR (Single
Phase), 765 kV line reactors
• 3 Nos of 400 kV D/C (Quad
Moose) lines between Dahra –
Jaipur (South) Jaipur (New)/Alwar
Page 24
• 1 Set of 1x125 MVAR 400 kV Bus
type reactor at 765/400 kV GSS
Jaipur (South)
• 12 Sets of 1x80 MVAR line type
400 kV reactors
• 3 Sets of 125 MVAR bus type
reactors at new proposed 400 kV
GSSs
Total System Losses for 2013-14 conditions
496 MW 512 MW
Tentative Cost Estimate (Annexure-E)
Rs. 1892.91 crores Rs. 2234.09 crores Note: Cost of common transmission system has not been in above two cost
Right of Way (Annexure-F)
For 2013-14 conditions
29250 sq metres 42540 sq metres
For 2016-17 conditions
50050 sq metres 67600 sq metres
76. As regards peak demand of 13000 MW, the petitioner in its response dated
6.6.2012 has said as under:
“For the FY 13-14, the expected peak demand of Rajasthan as per 18th
EPS is 10360 MW & for FY 16-17 it is 13886 MW. For conducting load flow
studies and working out adequate Transmission System for future, all the
expected generation in the time frame are to be considered to avoid any
extra expenditure in future in constructing additional transmission system
for the same.”
77. Commission has also been informed that the 765 kV evacuation system has
been approved both by the Transmission System Planning & Coordination
Committee (TSPCC) comprising of the technical persons of Transmission,
Distribution and Generation Companies and also by the Board of Directors.
78. In consideration of the position discussed above, Commission is of the
considered view that the project of 765 kV evacuation system cannot be
reckoned as a project coming out of an imprudent decision. The position
being so, it need not be dis-approved in prudent check by the
Commission.
79. However, having said that the Commission does share the concern of the
stakeholders that there would be delay in utilization of 765 kV lines on
envisaged voltage and would instead remain charged on 400 kV during
that period on account of considerable delay in commissioning of Super
Critical generation project of Chhabra (unit# 5 & #6 of 2x660 MW).
80. As mentioned earlier, the said 765 kV lines may remain charged on 400 kV
for a considerable time, the 1500 MVA transforms and the attached
Page 25
equipments would remain idle at the 765 kV/400 kV sub-stations at both the
ends i.e. at Dahra in Kota and at Jaipur.
81. The position being so, the Commission is of the view that purchase of
transformers and other equipments not required to be used till 765 kV line
remains charged on 400 kV needs to be reviewed so that incidence of IDC
due to idling of these assets could be prevented to the extent possible.
82. Accordingly, Commission directs the transmission utility to review the
position in respect of transformers and other items which would remain un-
utilized till lines remain charged on 400 kV to see as to which of this could
be deferred/postponed. A decision on IDC and other costs to be allowed
on the said items for the period of idling would be taken by the Commission
at the time of capitalization of these assets. The lapse on the part of
Generating Company would also be taken into consideration at that time
to assess the share of extra incidence on ARR to be passed on to the
Generating Company in the light of earlier observation of the Commission
in the order dated 30.8.11 while according investment approval of FY 11-12.
Evacuation Scheme – Suratgarh Super Critical Project
83. Similarly, the Commissioning of Suratgarh (2x660 MW) super critical project is
also considerably delayed and is now likely to get commissioned in FY 16-17
as per information given by the Generation Company (RVUN). A similar
review in respect of evacuation scheme of this project also needs to be
undertaken and a similar approach would be adopted by the Commission
at the time of capitalization of these assets.
Demand of 13,000 MW in FY 13-14
84. As mentioned earlier, objections have been raised by the stakeholders as
regards assumption of demand of 13,000 MW in FY 13-14 by the petitioner in
working out investment plan, which is far higher than the demand of 10,360
MW in FY 13-14 coming out of 18th EPS Survey and much higher than the
demand which emerges if the actual demand witnessed by the grid say in
the FY 11-12 is extrapolated.
85. The said demand assumed by the petitioner is indeed too high and seems
quite unrealistic. Though this may not invalidate the 765 kV system being
implemented by the transmission company; the overall augmentation and
strengthening of transmission system would have co-relation with the peak
demand assumed for load flow studies for transmission system planning. In
view of this, the transmission company needs to review its investment plan
based on a realistic peak demand not exceeding the demand of 10940
MW for FY13-14 indicated by the Commission in its order dated 23.3.2011
passed in the petition filed by RVPN for approval of quantum of capacity to
Page 26
be procured by RVPN as per “Guidelines for determination of tariff by
bidding process for procurement of power by distribution licensees”.
Further, the works/items to be included in future plans would have to be
based on such a realistic demand. The directions as given above would
be kept in view while allowing capital expenditure in GFA of ARR.
RE Evacuation:
86. RVVS in its written submission has stated that transmission lines for RE
evacuation should be drawn only when there is request from beneficiary
which has PPA instead of starting the work based on request from the
Rajasthan Renewable Energy Corporation or investor which may not be
required as per RPO obligation of the distribution licensee.
87. RVPN in their written response vide letter dated 6.6.2012, on the said issue
have stated as under:
“As stated in our reply vide letter No. 281 dated 22.5.2012, the evacuation
system for new Solar and Wind Power plants in Jaisalmer, Barmer, Bikaner &
Jodhpur Districts have been planned as per generation data given by
Rajasthan Renewal Energy Corp. Ltd., (RREC) who is the nodal agency
declared by GoR for overall planning and development of RE power and
anticipated connectivity to be provided to developers, with reference to
the Raj. Solar Policy, 2011 under REC and Open Access schemes.”
88. It may be mentioned that Power Grid in its recent report on Green Energy
Corridors of July 2012 has assumed RE capacity of 5700 MW (3700 MW Solar
and 2000 MW Wind) to get set up in 12th Plan (FY 12-13 to FY 16-17) and
Transmission Plan has been envisaged accordingly. Similarly, the STU has
presumed a likely capacity of 4000 MW of RE projects to get set up in the
State in next 2-3 years and they have accordingly worked out and sent an
evacuation plan of Rs. 4394 Crs. for funding through grant by the Central
Govt. from Renewable Energy Fund. The Power Grid in its said report has
also recommended for providing support from National Clean Energy Fund
and Viability Gap Funding to reduce transmission charges on account of
renewable capacity.
89. Commission is of the view that execution of evacuation schemes on the
basis of assessment made by RREC may lead to idling of transmission
capacity with resultant undue burden on consumer. Advance assessment
of capacity likely to come up in an area would at best be an estimate. The
actual RE capacity (both Solar & Wind) getting set up in the State for inter-
State sale in fraught with considerable uncertainty primarily due to two
major constraints. The first and foremost being the fact that inter-State,
particularly of Solar Energy, is heavily dependent on purchase by
Distribution Companies of other States in compliance of RPO target
Page 27
specified by respective State Regulatory Commissions. The generation of
such inter-State sales against RPO actually tied up through PPA, is still too
small when seen in the context of envisaged Solar capacity of 3700 MW in
the 12th Plan. The other major constraint in inter-State sale of RE is the ‘non-
firm’ nature of both wind and solar energy where scheduling on real time
basis is still a problem.
90. In view of the considerable uncertainty in our view as to how much RE
capacity is actually likely to fructify in 12th Plan period, the envisaged
evacuation plan for 4000 MW worked out by the State utility, if undertaken
by STU through its own funding arrangement may lead to undue burden on
consumers in the event of idling of transmission capacity in respect of RE
projects assumed to come up while implementing the evacuation plan but
which later on do not get commissioned. This needs to be avoided to the
extent possible.
91. Thus while Commission may have no objection to envisaged evacuation
plan of 4000 MW being taken up after getting grant from National Clean
Energy Fund as a promotional measure for giving fillip to RE generation; STU
would need to exercise due diligence to be reasonably assured as to
likelihood of envisaged RE projects getting commissioned in taking up
evacuation schemes out of STU’s own funding arrangement and this would
be kept in view by the Commission while undertaking prudence check in
allowing capitalization of such schemes for the purpose of ARR and tariff.
Approved Annual Plan Ceiling:
92. In the light of the position discussed earlier, Commission would like to finalize
the annual plan ceiling of the investment plan sent by the petitioner
without going into approval of specific schemes and projects.
93. Petitioner has envisaged an investment plan of Rs. 2800 Cr. for FY 12-13,
which includes Rs.1448.50 Cr. for evacuation schemes, including
evacuation plan of 765 kV and Suratgarh Super Critical Projects as well as
that of RE evacuation.
94. Commission observes that the formula prescribed in the Regulations for
allowing annual plan size although takes care of inflation, growth in sales
and reasonable addition in GFA, does not include any parameter to
correctly reflect the impact of major addition in generation capacity
requiring commensurate evacuation system. A large number of
generating projects are under implementation in the conventional power
sector and renewable energy generation in the State has also in past few
years seen quantum jump. On account of the considerable enhancement
in generation activities in the State both in conventional and RE sectors;
Page 28
additional allowance needs to be duly considered in approving annual
plan size of the licensee to accommodate required evacuation schemes.
Therefore, the investment plan size cannot be limited to the amount which
emerges if the formula specified in Regulations for working out annual plan
size is applied.
95. Commission in this order has given detail guidelines as regards review to be
undertaken by the petitioner in respect of items of 765 kV system as well as
Suratgarh Super Critical Projects evacuation plan. Execution of evacuation
plan for RE projects has also to be embarked upon with due diligence, as
has been discussed in this order. The transmission plan needs to be
reviewed on account of unrealistic demand of 13000 MW in FY 13-14
assumed by the petitioner, as mentioned earlier.
96. In addition, Commission has observed that petitioner has not been able to
satisfy us as regards variation in physical works actually undertaken in past
two years in comparison to what was approved in respective annual plan,
as discussed earlier in this order.
97. In consideration of the position discussed above, the Commission deems
appropriate to reduce the envisaged transmission investment plan by 20%
and restrict that upto Rs. 2224 Cr. The overall plan investment plan,
accordingly, would be as under:
Table 5 – Break up of approved investment plan
Approved Investment Plan for FY12-13 – Outlay Rs Crores
Particulars Proposed Approved
Generation (shared generating projects) 20 20
Transmission 2780 2224
Total 2800 2244
98. The copy of this order may be sent to petitioner, respondents, CEA, GoR
and stakeholders.
(S. Dhawan)
Member
(S.K. Mittal)
Member
(D.C. Samant)
Chairman
Page 29
Annexure
Present:
1. Sh. S. S. Gupta, Dy. CE, RVPN
2. Sh. D. S. Sharma, SE (NPPNR), RVPN
3. Sh. L. N. Nimawat, SE (P&P), RVPN
4. Sh. S. C. Sapra, XEN (Proj), RVPN
5. Sh. B. D. Koli, XEN (PSR), RVPN
6. Sh. G. D. Pamnani, Addl. XEN (Project), RVPN
7. Sh. S. C Sharma, SE (Comml), JVVNL
8. Sh. Ajeet Saxena, XEN, JVVNL
9. Sh. J. K. Sharma, SE, AVVNL
10. Sh. N. K. Ojha, XEN (SSM), JDVVNL
11. Sh. R. G. Gupta, Chief Executive, RVVS
12. Sh. Jitendra Singh, Director, RVVS
13. Sh. R. Jhalani, Director, RVVS
14. Sh. G. L. Sharma, Individual
15. Sh. Saurabh Gupta, Area Convener, TERI
16. Sh. Ramit Malhotra, Associate Fellow, TERI
17. Sh. Chetan Yadav, Research Associate, TERI
