Ranchi December 2015
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Jharkhand State Electricity Regulatory Commission Provisional Tariff Order on Review of ARR for FY 2013-14 (6 th January 2014 to 31 st March 2014) & FY 2014-15 and ARR and Transmission Tariff for FY 2015-16 for Jharkhand Urja Sancharan Nigam Ltd (JUSNL) Ranchi December 2015 Review of ARR for FY 2013-14 and FY 2014-15; ARR & Tariff Determination for FY16 TABLE OF CONTENTS A1: INTRODUCTION ......................................................................................................................................... 6 JHARKHAND STATE ELECTRICITY REGULATORY COMMISSION (JSERC) ....................................................................... 6 THE PETITIONER - JHARKHAND URJA SANCHARAN NIGAM LTD .................................................................................... 8 THE PETITIONER ’S PRAYERS .......................................................................................................................................... 9 SCOPE OF THE ORDER ..................................................................................................................................................... 9 A2: PROCEDURAL BACKGROUND ............................................................................................................. 11 INFORMATION GAPS IN THE PETITION .......................................................................................................................... 12 INVITING PUBLIC COMMENTS / SUGGESTIONS ............................................................................................................... 13 MEETING OF THE STATE ADVISORY COMMITTEE ......................................................................................................... 15 CONDUCT OF PUBLIC HEARINGS ................................................................................................................................... 15 MEETING OF THE EXPERT COMMITTEE ......................................................................................................................... 16 A3: BRIEF FACTS............................................................................................................................................. 17 CWIP, CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................................... 17 SUMMARY OF ARR FOR FY 2013-14 TO FY 2015-16................................................................................................... 17 A4: PUBLIC CONSULTATION PROCESS ................................................................................................... 19 TRUE UP OF FY 2011-12, FY 2012-13 & FY 2013-14 (FROM 1ST APR 13 TO 5TH JAN 2014) .......................................... 19 BUSINESS PLAN FOR FY 2013-14 TO FY 2015-16 ........................................................................................................ 20 AUDITED ACCOUNTS FOR FY 2013-14 (FROM 6TH JANUARY 2014 TO 31 ST MARCH 2014) AND FY 2014-15 ................ 22 COMPONENTS OF ARR ................................................................................................................................................. 23 A5: REVIEW OF AGGREGATE REVENUE REQUIREMENT FOR FY 2013-14 AND FY 2014-15 .... 24 FIXED COST DETERMINATION ...................................................................................................................................... 24 OPERATION AND MAINTENANCE (O&M) EXPENSES .................................................................................................... 24 CWIP, CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................................... 29 GROSS FIXED ASSET (GFA) ......................................................................................................................................... 30 RETURN ON EQUITY ..................................................................................................................................................... 31 INTEREST & FINANCE CHARGES (IFC) .......................................................................................................................... 33 INTEREST ON WORKING CAPITAL ................................................................................................................................. 34 DEPRECIATION ............................................................................................................................................................. 35 NON -TARIFF INCOME (NTI) ......................................................................................................................................... 36 SUMMARY OF ARR FOR FY 2013-14 (6 TH JANUARY 2014 TO 31 ST MARCH 2014) AND FY 2014-15 ............................. 36 REVENUE FROM EXISTING TARIFF AND REVENUE GAP / SURPLUS ................................................................................ 37 A6: AGGREGATE REVENUE REQUIREMENT FOR FY 2015-16 ........................................................... 39 FIXED COST DETERMINATION ...................................................................................................................................... 39 OPERATION AND MAINTENANCE (O&M) EXPENSES .................................................................................................... 39 CWIP, CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................................. 41 GROSS FIXED ASSET (GFA) ......................................................................................................................................... 43 RETURN ON EQUITY ..................................................................................................................................................... 44 INTEREST & FINANCE CHARGES (IFC) .......................................................................................................................... 45 INTEREST ON WORKING CAPITAL ................................................................................................................................. 46 DEPRECIATION ............................................................................................................................................................. 47 NON -TARIFF INCOME (NTI) ......................................................................................................................................... 47 SUMMARY OF ARR FOR FY 2015-16 ........................................................................................................................... 48 REVENUE FROM EXISTING TARIFF AND REVENUE GAP / SURPLUS ................................................................................ 48 A7: TRANSMISSION TARIFF FOR FY 2015-16 .......................................................................................... 50 A8: DIRECTIVES .............................................................................................................................................. 52 ANNEXURES ............................................................................................................................................................ 54 Review of ARR for FY 2013-14 and FY 2014-15; ARR & Tariff Determination for FY16 List of Abbreviations Abbreviation Description A&G Administrative and General ARR Aggregate Revenue Requirement Cr. Crores CWIP Capital Work in Progress DVC Damodar Valley Corporation FY Financial Year GFA Gross Fixed Assets GoI Government of India HT High Tension JSEB Jharkhand State Electricity Board JSERC Jharkhand State Electricity Regulatory Commission JBVNL Jharkhand Bijli Vitaran Nigam Limited JUSNL Jharkhand Urja Sancharan Nigam Limited JUVNL Jharkhand Urja Vikas Nigam Limited JUUNL Jharkhand Urja Utpadan Nigam Limited LT Low Tension MU Million Units MYT Multi Year Tariff NFA Net Fixed Assets NTI Non-Tariff Income O&M Operations and Maintenance PLR Prime Lending Rate R&M Repair and Maintenance RoE Return on Equity Rs Rupees SBI State Bank of India SLM Straight Line Method Review of ARR for FY 2013-14 and FY 2014-15; ARR & Tariff Determination for FY16 List of Tables Table 1: List of newspapers and dates on which the public notice appeared 13 Table 2: List of newspapers and dates in which the public notice by JSERC was published 13 Table 3: Location and date of Public Hearings 15 Table 4: CWIP, Capital Expenditure and Capitalisation (Rs Cr) 17 Table 5: Proposed ARR for FY 2013-14 to FY 2015-16 (Rs Cr) 18 Table 6: Proposed transmission tariff for FY 2015-16 18 Table 7: Employee cost as computed by the Commission (Rs Cr) 26 Table 8: Employee cost as approved by the Commission (Rs Cr) 26 Table 9: A&G cost as computed by the Commission (Rs Cr) 27 Table 10: A&G cost as approved by the Commission (Rs Cr) 27 Table 11: Computation of ‘k’ factor 28 Table 12: R&M cost as computed by the Commission (Rs Cr) 28 Table 13: R&M cost as approved by the Commission (Rs Cr) 28 Table 14: O&M cost as approved by the Commission (Rs Cr) 28 Table 15: CWIP, Capital Expenditure and Capitalisation as submitted by the Petitioner (Rs Cr) 29 Table 16: CWIP, capital expenditure and capitalization as approved by the Commission (Rs Cr) 30 Table 17: Approved GFA for FY 2013-14 and FY 2014-15 (Rs Cr) 31 Table 18: Approved sources of funding for FY 2013-14 and FY 2014-15 (Rs Cr) 31 Table 19: Return on normative equity as computed by the Commission (Rs Cr) 32 Table 20: Return on Equity as approved