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Order on Tariffs for FY 2020-21

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Order on Tariffs for FY 2020-21 Order On True up for FY 2018-19, Annual Performance Review for FY 2019-20 & Annual Fixed Charges for FY 2020-21 For UJVN Ltd. April 18, 2020 UTTARAKHAND ELECTRICITY REGULATORY COMMISSION Vidyut Niyamak Bhawan, Near I.S.B.T., P.O. MajraDehradun–248171 Table of Contents 1 Background and Procedural History ..................................................................................... 4 2 Stakeholders ‘Objections/Suggestions, Petitioner’s Responses and Commission’s Views ........................................................................................................................................... 8 2.1 Tariff Increase ................................................................................................................................ 8 2.1.1 Stakeholder’s Comments ................................................................................................ 8 2.1.2 Petitioner’s Reply ............................................................................................................. 9 2.1.3 Commission’s Views ....................................................................................................... 9 2.2 Capital Cost and RoE .................................................................................................................... 9 2.2.1 Stakeholder’s Comments ................................................................................................ 9 2.2.2 Petitioner’s Reply ........................................................................................................... 10 2.2.3 Commission’s Views ..................................................................................................... 10 2.3 Design Energy/Actual Energy Generated ............................................................................... 10 2.3.1 Stakeholder’s Comments .............................................................................................. 10 2.3.2 Petitioner’s Reply ........................................................................................................... 11 2.3.3 Commission’s Views ..................................................................................................... 11 2.4 Operation & Maintenance of dams/barrages ......................................................................... 12 2.4.1 Stakeholder’s Comments .............................................................................................. 12 2.4.2 Petitioner’s Reply ........................................................................................................... 12 2.4.3 Commission’s Views ..................................................................................................... 12 2.5 Rehabilitation and Resettlement of affected villagers ......................................................... 13 2.5.1 Stakeholder’s Comments .............................................................................................. 13 2.5.2 Petitioner’s Reply ........................................................................................................... 13 2.5.3 Commission’s Views ..................................................................................................... 13 2.6 Allegation of Corruption existing in UJVN Ltd. ................................................................... 14 2.6.1 Stakeholder’s Comments .............................................................................................. 14 2.6.2 Petitioner’s Reply ........................................................................................................... 14 (i) 2.6.3 Commission’s Views ..................................................................................................... 15 2.7 Issues raised during the Meeting of State Advisory Committee ....................................... 15 2.7.1 Views of State Advisory Committee ........................................................................... 15 2.7.2 Petitioner’s Reply ........................................................................................................... 16 2.7.3 Commission’s Views ..................................................................................................... 16 3 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up of 9 LHPs & MB-II for FY 2018-19 .................................................................... 17 3.1 Impact of Sharing of Gains and Losses on account of Controllable Factors for FY 2018- 19 ..................................................................................................................................................... 18 3.1.1 Physical Parameters ....................................................................................................... 19 3.1.2 Financial Parameters ..................................................................................................... 26 4 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2019-20 and AFC for FY 2020-21 ................................................................................ 84 4.1 Annual Performance Review .................................................................................................... 84 4.2 Physical Parameters .................................................................................................................... 85 4.2.1 NAPAF ............................................................................................................................ 85 4.2.2 Design Energy, Auxiliary Energy Consumption and Saleable Primary Energy ... 90 4.3 Financial parameters ................................................................................................................... 93 4.3.1 Apportionment of Common Expenses ....................................................................... 93 4.3.2 Capital Cost..................................................................................................................... 93 4.3.3 Additional Capitalisation .............................................................................................. 94 4.3.4 Depreciation .................................................................................................................... 99 4.3.5 Return on Equity .......................................................................................................... 101 4.3.6 Interest on Loans .......................................................................................................... 104 4.3.7 Operation and Maintenance expenses ...................................................................... 106 4.3.8 Interest on Working Capital ....................................................................................... 115 4.3.9 Non-Tariff Income ....................................................................................................... 117 (ii) 4.3.10 Annual Fixed Charges, Capacity Charge and Energy Charge Rate (ECR) for FY 2020-21 ........................................................................................................................... 118 5 Commission’s Directives ..................................................................................................... 122 5.1 Compliance to the Directives Issued in Order dated 05.04.2010....................................... 122 5.1.1 Transfer Scheme ........................................................................................................... 122 5.2 Compliance to directives issued in Order dated 10.05.2011 .............................................. 123 5.2.1 Colony Consumption .................................................................................................. 123 5.3 Compliance to the Directives Issued in MYT Order dated 06.05.2013 ............................ 124 5.3.1 Design Energy .............................................................................................................. 124 5.4 Directives specifically issued in Meeting dated 04.09.2013 ............................................... 124 5.4.1 Status of upcoming projects ....................................................................................... 124 5.4.2 Utilisation of Expenses approved by the Commission ........................................... 125 5.5 Compliance to the Directives Issued in Tariff Order dated 29.03.2017 ........................... 125 5.5.1 Financial Relief towards restoration of damage caused due to Natural Calamity 125 5.5.2 RMU works of Khatima LHP ..................................................................................... 126 5.5.3 Impact of VII Pay Commission .................................................................................. 128 5.5.4 Non-Tariff Income ....................................................................................................... 129 5.6 Compliance to the Directives Issued in Tariff Order dated 21.03.2018 ........................... 129 5.6.1 Expenses claimed under Major Overhauling ........................................................... 129 5.6.2 Balance Capital Works of MB-II HEP ........................................................................ 130 5.6.3 Observation on abnormal increase in Additional Capital Expenditure in certain LHPs .............................................................................................................................. 132 5.7 Compliance to the Directives Issued in Tariff Order dated 27.02.2019
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