GUJARAT ELECTRICITY REGULATORY COMMISSION
Tariff Order

Truing up for FY 2019-20,
Determination of ARR and Tariff for FY 2021-22

For

Dakshin Gujarat Vij Company Limited
(DGVCL)

Case No. 1912 of 2020
31^st March, 2021

th

• 6
• Floor, GIFT ONE, Road 5C, Zone 5, GIFT CITY

Gandhinagar-382 355 (Gujarat), INDIA
Phone: +91-79-23602000 Fax: +91-79-23602054/55 E-mail: [email protected] : Website www.gercin.org

GUJARAT ELECTRICITY REGULATORY COMMISSION
(GERC)
GANDHINAGAR

Tariff Order

Truing up for FY 2019-20,
Determination of ARR and Tariff for FY 2021-22

For

Dakshin Gujarat Vij Company Limited

(DGVCL)
Case No. 1912 of 2020
31^st March, 2021

Dakshin Gujarat Vij Company Limited
Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22

CONTENTS

1. Background and Brief History......................................................................................... 2
1.1. Dakshin Gujarat Vij Company Limited (DGVCL) ..................................................... 2 1.2. Background............................................................................................................. 2

1.3. Commission’s Orders Approved under MYT Control Period for FY 2016-17 to FY

2020-21............................................................................................................................. 3 1.4. Background of the Present petition ......................................................................... 4 1.5. Registration of the Petition and Public Hearing Process.......................................... 5 1.6. Approach of this Order............................................................................................ 7 1.7. Contents of this Order............................................................................................. 8
2. Summary of DGVCL’s Petition....................................................................................... 9
2.1. Introduction............................................................................................................. 9 2.2. True-Up for FY 2019-20.......................................................................................... 9 2.3. Revenue gap for FY 2019-20................................................................................ 10 2.4. Aggregate Revenue Requirement for FY 2021-22 ................................................ 10 2.5. Summary of projected Revenue Surplus/(Gap) for FY 2021-22 ............................ 11 2.6. Request of DGVCL ............................................................................................... 12
3. Brief Outline of objections raised, response from DGVCL and Commission’s view ...... 13
3.1. Public Response to the Petition ............................................................................ 13 3.2. Suggestions/ Objections pertaining to all DISCOMs.............................................. 13
4. Truing up of FY 2019-20 .............................................................................................. 51
4.1. Energy Sales ........................................................................................................ 51 4.2. Distribution Losses................................................................................................ 53 4.3. Energy requirement .............................................................................................. 54 4.4. Power Purchase Cost ........................................................................................... 56 4.5. Renewable Purchase Obligation (RPO) for FY 2019-20........................................ 61

• 4.5.1
• RPO compliance for FY 2019-20....................................................................... 61

4.6. Fixed Cost ............................................................................................................ 62

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March 2021

Dakshin Gujarat Vij Company Limited
Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22

• 4.6.1
• Operations and Maintenance (O&M) Expenses for FY 2019-20 ........................ 62

Employee Cost .............................................................................................. 63 Repairs & Maintenance (R&M) Expenses...................................................... 68 Administration & General (A&G) Expenses.................................................... 69 Other Expenses Capitalised........................................................................... 70
Capital Expenditure and Capitalization.............................................................. 72
Funding of Capitalisation ............................................................................... 77
Depreciation...................................................................................................... 78 Interest and Finance charges ............................................................................ 80 Interest on Working Capital ............................................................................... 83 Bad Debts Written Off........................................................................................ 84 Return on Equity................................................................................................ 86 Income Tax ....................................................................................................... 88 Non-Tariff Income.............................................................................................. 89
4.6.1.1 4.6.1.2 4.6.1.3 4.6.1.4 4.6.2 4.6.2.1 4.6.3 4.6.4 4.6.5 4.6.6 4.6.7 4.6.8 4.6.9 4.7. ARR approved in the Truing up for FY 2019-20 .................................................... 90 4.8. GUVNL Profit/ (Loss) Allocation............................................................................ 91 4.9. Revenue for FY 2019-20....................................................................................... 94 4.10. 4.11. 4.12.
Revenue (Gap) / Surplus for FY 2019-20 .......................................................... 95 Consolidated True-Up ARR Summary for FY 2019-20 for State DISCOMs ....... 97 Consolidated Revenue (Gap)/ Surplus for FY 2019-20 for State DISCOMs....... 98
5. ARR and Tariff Determination for FY 2021-22............................................................ 101

• 5.1
• ARR for FY 2021-22 ........................................................................................... 101

Submission of DGVCL........................................................................................ 101
Summary of the Petition for determination of Tariff and Aggregate Revenue
5.2 5.2.1 Requirement for FY 2021-22 ......................................................................................... 101

• 5.3
• Estimation of ARR for FY 2021-22...................................................................... 102

Energy Sales ...................................................................................................... 103
Projection of Energy sales for FY 2021-22 ...................................................... 103 Consumer Profile............................................................................................. 104
5.4 5.4.1 5.4.2

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Dakshin Gujarat Vij Company Limited
Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22

5.4.3 5.4.4
Category-wise Connected Load ...................................................................... 105 Category-wise Projected Growth rates ............................................................ 106
5.4.5 22
Category wise projections for Sales, consumers and connected load for FY 2021- 107

5.4.6 5.4.7 5.5
Detailed Analysis of Energy Sales projected ................................................... 108 Total Energy Sales.......................................................................................... 112
Distribution Losses.............................................................................................. 113 Energy Requirement and Energy Balance .......................................................... 114
Energy Requirement ....................................................................................... 115 Energy Balance............................................................................................... 115
Power Purchase Cost- Petitioner’s Submission .................................................. 116
Power Purchase Sources................................................................................ 116 Power Purchase Cost...................................................................................... 121 Transmission and other Cost........................................................................... 124
Transmission Charges................................................................................. 124 GUVNL Cost................................................................................................ 125
Total Power Purchase Cost............................................................................. 125 Net Power Purchase Cost ............................................................................... 126 Bulk Supply Tariff (BST).................................................................................. 126
Power Purchase Cost– Commission’s Analysis .................................................. 127
Power Purchase Sources................................................................................ 127 Power Purchase during FY 2021-22................................................................ 127 Merit Order despatch and Total Energy requirement including tradable energy130 Power Purchase Cost for the period FY 2021-22............................................. 132 Transmission and Other Cost.......................................................................... 135
Transmission Cost....................................................................................... 135 GUVNL Cost................................................................................................ 136 SLDC Fees and Charges............................................................................. 136
Total Power Purchase Cost............................................................................. 136
5.6 5.6.1 5.6.2 5.7 5.7.1 5.7.2 5.7.3 5.7.3.1 5.7.3.2 5.7.4 5.7.5 5.7.6 5.8 5.8.1 5.8.2 5.8.3 5.8.4 5.8.5 5.8.5.1 5.8.5.2 5.8.5.3 5.8.6

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Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22

5.8.6.1 5.8.6.2 5.9
Fixed Cost ................................................................................................... 136 Variable Cost ............................................................................................... 137
Allocation of Power Purchase Cost..................................................................... 137
Renewable Purchase Obligation ..................................................................... 140 Capital Expenditure......................................................................................... 142 Fixed Charges................................................................................................. 149
5.10 5.11 5.12 5.12.1 Operations and Maintenance (O&M) Expenses............................................... 149 5.12.2 Depreciation.................................................................................................... 151 5.12.3 Interest and Finance Charges ......................................................................... 152 5.12.4 Interest on Working Capital ............................................................................. 154 5.12.5 Provision for Bad and Doubtful Debts.............................................................. 155 5.12.6 Return on Equity.............................................................................................. 156 5.12.7 Income Tax ..................................................................................................... 157 5.12.8 Non-Tariff Income............................................................................................ 158

• 5.13
• Aggregate revenue Requirement (ARR).......................................................... 159

6. ARR and Revenue (Gap)/Surplus for FY 2021-22...................................................... 161
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8
Revenue from existing Tariff ............................................................................... 161 Revenue from FPPPA Charges .......................................................................... 162 Other (consumer related) income........................................................................ 165 Agriculture Subsidy............................................................................................. 165 Total Expected Revenue for FY 2021-22 ............................................................ 166 Estimated Revenue (Gap)/ Surplus for FY 2021-22 ............................................ 167 Consolidated ARR of the State-Owned DISCOMs .............................................. 168 Consolidated Revenue (Gap)/ Surplus of the State-Owned DISCOMs................ 169
7. Compliance to Directives ........................................................................................... 171
7.1 7.2 7.3
Compliance to earlier directives .......................................................................... 171 Compliance to directives in the recent order ....................................................... 177 Fresh Directives.................................................................................................. 179

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Dakshin Gujarat Vij Company Limited
Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22

8. Fuel and Power Purchase Price Adjustment .............................................................. 181
8.1. Fuel Price and Power Purchase Price Adjustment .............................................. 181 8.2. Base Price of Power Purchase (PPCB)............................................................... 181 8.3. Shifting of Base FPPPA...................................................................................... 183
9. Wheeling Charges and Cross-Subsidy Surcharge ..................................................... 184
9.1. Allocation Matrix ................................................................................................. 184 9.2. Wheeling charges............................................................................................... 185 9.3. Cross-Subsidy Surcharge ................................................................................... 186
10. Tariff Philosophy and Tariff Proposals........................................................................ 188
10.1. 10.2.
Tariff Philosophy.............................................................................................. 188 Tariff Proposal................................................................................................. 188
Commission’s Order.......................................................................................................... 189 ANNEXURE: TARIFF SCHEDULE ................................................................................... 191