National Electric Power Regulatory Authority Islamic Republic of Pakistan 2nd Floor, OPF Building, G-5/2, Islamabad Ph: 9206500, 9207200, Fax: 9210215 E-mail: [email protected] Registrar No. NEPRA/TRF-175/MEPCO-2011/01-03 January 2, 2012
Subject: Determination of the Authority in the matter of Petition filed by Multan Electric Power Company Ltd. for Determination of its Consumer end Tariff Pertaining to the FY 2011-12 [Case # NEPRA/TRF-175/MEPCO-2011 Intimation of Determination of Tariff pursuant to Section 31(4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997
Dear Sir,
Please find enclosed herewith the subject Determination of the Authority along with Annexure-I, II, III, IV & V (64 pages) in Case No. NEPRA/TRF-175/MEPCO-2011.
2. The Determination is being intimated to the Federal Government for the purpose of notification of the approved tariff in the official gazette pursuant to Section 31(4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997) and Rule 16(11) of the National Electric Power Regulatory Authority (Tariff Standards and Procedure) Rules, 1998.
3. Please note that only the Order of the Authority at para 25 of the Determination along with Annexure-I (Fuel Price Adjustment Mechanism), Annex-III (Schedule of Electricity Tariffs), Annex-IV (CpGenE, CpGenCap & USCF) and Annex-V (Terms and Conditions) needs to be notified in the official Gazette. Enclosure: As above __7Etilv^ ( Syed Safeer Hussain )
Secretary Ministry of Water & Power `A' Block, Pak Secretariat Islamabad
CC: 1. Secretary, Cabinet Division, Cabinet Secretariat , Islamabad. 2. Secretary, Ministry of Finance , Islamabad. Decision of the Authority in the matter of Multan Electric Power CompAny Limited No. NEPRAITRF-175/MEPCO-2011
NATIONAL ELECTRIC POWER REGULATORY AUTHORITY (NEPRA)
PETITION NO: NEPRA/TRF-175/MEPCO-2011
TARIFF DETERMINATION
FOR
MULTAN ELECTRIC POWER COMPANY
(MEPCO)
DETERMINED UNDER
NEPRA TARIFF (STANDARDS AND PROCEDURE) RULES - 1998 PERTAINING TO THE FY 2011-12
ISLAMABAD ^uMWOw 02, 2n12
1 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
DETERMINATION OF THE AUTHORITY IN THE MATTER OF PETITION FILED BY MULTAN ELECTRIC POWER COMPANY LIMITED (MEPCO) FOR DETERMINATION OF ITS CONSUMER END TARIFF PERTAINING TO THE FY 2011-12 CASE NO. NEPRA/TRF/175/MEPCO-2011
PETITIONER
Multan Electric Power Company Limited (MEPCO), MEPCO Headquarter, Khanewal Road, Multan.
INTERVENERS
1. Pakistan Cotton Ginners Association, Multan
2. Masood Spinning Mills, Multan
3. Ahmad Hassan Textile Mills, Multan
4. Roomi Cotton Ginning Industries, Multan
5. Multan Chamber of Commerce & Industry
COMMENTATORS
None. REPRESENTATION
1. Ch. Guftar Ahmad, Chief Executive Officer, MEPCO
2. Syed Mushtaq Hussain Bukhari, Finance Director, MEPCO
3. Mr. Malik Imtiaz Ahmad, Manager Commercial 4. Mr. Jahangir Bhutta, Manager Finance (CP&C) 5. Khawaja Azam, Representative of the Interveners
2 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
Abbreviations
CpGenCap The summation of the capacity cost in respect of all CpGencos for a billing period minus the amount of liquidated damages received during the months CPPA Central Power Purchasing Agency DISCO Distribution Company DM Distribution Margin FY Financial Year GOP Government of Pakistan MoWP Ministry of Water and Power GWh Giga Watt Hours KV Kilo Volt kW Kilo Watt kWh Kilo Watt Hour MW Mega Watt NEPRA National Electric Power Regulatory Authority O&M Operation and Maintenance PEPCO Pakistan Electric Power Company PPP Power Purchase Price PYA Prior Year Adjustment RAB Regulatory Asset Base RORB Return on Rate Base SRO Statutory Regulatory Order T&D Transmission and Distribution TOU Time of Use USCF The fixed charge part of the Use of System Charges in Rs./kW/Month
3 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
The Authority, in exercise of the powers conferred on it under Section 7(3) (a) read with Section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, Tariff (Standards and Procedure) Rules, 1998 and all other powers enabling it in this behalf, and after taking into consideration all the submissions made by the parties, issues raised, evidence/record produced during hearings, and all other relevant material, hereby issues this determination.
3 r2 (G suddin Ahme (Shaukat Ali Kundi) Member Member 1
L,- (Maqbomad Khawaja) alid Sae Vice Chairman
4 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
1. BACKGROUND:
1.1 Multan Electric Power Company Limited (MEPCO), hereinafter, called "the Petitioner" being Distribution Licensee of NEPRA filed tariff Petition for the determination of its consumer end tariff pertaining to the FY 2011-12. The grounds and basis of the Petition are described as under:
1.2 GROUNDS OF PETITION:
MEPCO submitted that its tariff consists of two components i.e. pass through cost and distribution margin. The major portion of pass through cost is power purchase price which the company has to pay to ensure continuous flow of power in its distribution system. In addition, MEPCO must earn sufficient distribution margin and adequate stream of cash flow to maintain its system, discharge its financial commitments, invest on the augmentation and expansion of the network and a reasonable return to sponsor on its investments. The Petitioner submitted that the following factors necessitate filing of fresh tariff petition.
• Increase in the cost of Power Purchased; • Increase in O&M cost; • Low tariff rate due to unrealistic line losses; • Prior Period Adjustment.
2. RELIEF SOUGHT:
2.1 The Petitioner has sought the following relief-
0 Determination of Consumer-End Tariff as submitted; • Acceptance of Revenue Requirement as computed by the company and its recovery by timely determination; • Assurance of adequate O&M; • Acceptance of Investment Plan; • Introduction of separate tariff for Seasonal Industries; • Bifurcation of Al tariff into Residential and Non-Residential; • Application of Fixed Minimum Charges for A2(C) & D (Agriculture Tariff) and rationalization of Minimum Charges and Fixed Minimum Charges; • Any other relief which the Authority may deem proper.
9 5 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
3 PROCEEDINGS:
3.1 In terms of rule 4 of the Tariff Standards and Procedure Rules 1998 (hereinafter referred to as "Rules"), the Petition was admitted by the Authority on 28th June, 2011. In compliance of the provisions of rules 6 & 7 of the Rules, notices of admission and hearing were sent to the parties which were considered to be affected or interested. An advertisement in this regard was also published in the leading national newspapers with title and brief description of the petition on July 1, 2011.
4. FILING OF OBJECTIONS/ COMMENTS:
4.1 Comments/replies and filing of intervention request, if any, was desired from the interested person/ party within 7 days of the publication of notice of admission i.e. July 1, 2011, and in response, five intervention requests were received and accepted by the Authority from the following;
1. Pakistan Cotton Ginners Association , Multan 2. Masood Spinning Mills, Multan 3. Ahmad Hassan Textile Mills, Multan 4. Roomi Cotton Ginning Industries , Multan 5. Multan Chamber of Commerce & Industry
4.2 Pakistan Cotton Ginners Association (PCGA)•
4.2.1 PCGA, as an Intervener, submitted that its association has 1200 members all over Pakistan and about 800 cotton factories are situated in MEPCO's jurisdiction. The concerns raised and relief sought by PCGA is as under:
i. In MEPCO's petition it is clearly admitted that industrial and commercial consumers are cross-subsiding domestic and agricultural consumers since last many years but while giving proposed increase in tariff, again the burden is put on commercial and industrial consumers which is against the contents and spirit of Petition therefore it is requested that Industrial Tariff should not be increased rather it should be reduced.
ii. MEPCO is charging low power factor penalty on the basis of 90% whereas MEPCO's supply system is over age and is not according to the international standards therefore, the power factor penalty should be reduced to 80%.
iii. Increase in rates of B-2, B-3 tariff should not be allowed;
6
e Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
iv, Due to load shedding, electricity is supplied only for 8-12 hours in the cotton season. Therefore, Fixed Charges should not be imposed for the load shedding period and there should be no increase in the Fixed Charges.
4.3 Masood Spinning Mills. Multan:
4.3.1 As an Intervener, concerns raised by Masood Spinning Mills are as under:
i. The Intervener falls under B-3 category and difference between B-2 and B-3 is only 10 paisas which becomes 1%. MEPCO has calculated T&D losses of 15.30% for B-2 and 7.5% for B-3 consumers, therefore, the increase in the rates for B-3 tariff should not be allowed rather it should be lower by 7.8% as compared to B-2 tariff. ii. Feeder losses of B-3 consumers are not more than 7% therefore, the same should be added in electricity purchase rate for B-3 category instead of average loss of 15% added in rates for all consumers categories of MEPCO. iii. O&M cost is added at uniform rates in all consumer categories. However, being B-3 consumers, their O&M, distribution and maintenance costs are very nominal. Therefore, only 25% of total average O&M cost should be added in B-3 tariff.
4.4 AhmadHassan Textile Mills, Multan
4.4.1 Ahmad Hassan Textile Mills, Multan being intervener, opposed the tariff petition inter-alia on the following grounds.
i. The Intervener falls under B-4 category and difference between B-2 and B-4 rates is only 20 Paisas which becomes 2% of their tariff. MEPCO has calculated T&D losses of 15.30% for B-2 and 3.5% for B-4 consumers, therefore, the increase in the rates for B-4 tariff should not be allowed rather it should be lower by 11.8% as compared to B-2 tariff.
ii. Grid Station of 132 kVA is installed at their mills and MEPCO meters as well as their own distribution meters are installed at the grid, therefore there are no distribution losses especially in their case. The adding of MEPCOs average losses for B-4 consumers is against the justice therefore, it is requested that no losses should be added in electricity purchase rate for B-4 consumers. iii. O&M cost is added at uniform rates in all consumer categories. However, being B-4 consumers, their O&M, distribution and maintenance costs are very nominal. Therefore, only 25% of total average O&M cost should be added in B-4 tariff. iv. Most of the Textile Mills are using their own captive power through gas generation and their maximum cost is Rs.4/kWh. Only about 80 textile units are connected with
7
V- Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPPAITRF-175/MEPCO-2011
WAPDA connection. By implementing MEPCO's proposed tariff, the electricity rates for Textile Industry will be more than double of their competitors who are using captive power. This will result closure of industry, therefore it is requested not to allow increase in B-4 tariff rather the rates should be reduced.
4.5 Roomi Cotton Ginning Industries. Multan:
4.5.1 Roomi Cotton Ginning Industries made similar submissions as those made by the Pakistan Cotton Ginners Association.
4.6 Multan Chamber of Commerce & Industry (MCCI):
4.6.1 MCCI also presented similar submissions as those made by Ahmad Hassan Textile Mills. It is however added that the Industrial Tariff in other industrial competitor countries like China, Bangladesh and India is very low; therefore, the industrial tariff in Pakistan should also be at par with its neighboring countries.
5. HEARING:
5.1 The pleadings so available on record were examined by the Authority and in order to arrive at a just and informed decision, the Authority decided to conduct a hearing into the matter on July 27, 2011. Notice of admission were sent to the concerned parties and published in the leading newspapers on July 1, 2011. As per schedule, the hearing was conducted on July 27, 2011 at the Auditorium of Lahore Chamber of Commerce and Industry, (LCCI) 11-Shahrah- Aiwan-Tijarat, Lahore. During the hearing, MEPCO was represented by Mr. Guftar Ahmad, Chief Executive Office MEPCO along with his financial and technical teams. The Interveners were represented by Khawaja Azam of Pakistan Cotton Ginners Association.
6. FRAMING OF ISSUES:
6.1 The Authority framed the following issues to be considered during the hearing and for presenting written as well as oral evidence and arguments:-
1. Whether the concerns raised by the Interveners are justified? 2. Whether the Petitioner has complied with the directions of the Authority to install TOU meters by June, 2011? 3. Whether the Petitioner's projected purchase and sales units for the FY 2011-12, are reasonable? 4. Whether the Petitioner's proposed transmission and distribution losses for the FY 2011- 12 are justified?
8 0- Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/ RF-175/MEPCO-2011
5. Whether the Petitioner's proposed investments for the FY 2011-12 are justified keeping in view its prospective benefits?? 6. Whether prior year Adjustment calculated by MEPCO is justified? 7. Whether the Petitioner's projected O&M cost for the FY 2011-12, is justified? 8. Whether the Petitioner's projected Other Income for the FY2011-12, is justified? 9. Whether the aging of Receivables as shown in the Audited Financial Statements is justified? 10. Whether the Miscellaneous Issues regarding rationalization of fixed minimum charges, wheeling charges and introduction of separate tariff for seasonal industries are justified? 11. Whether the Petitioner's proposed Revenue Requirement for the FY 2011-12, is justified? 12. Whether the Petitioner's proposed Power Purchase Cost, depreciation charge and Return on Regulatory Asset Base (RORB) for the FY 2011-12, are justified?
6.2 In addition to above, the Authority had also framed an additional issue with respect to the future tariff methodology in respect of Annual determinations, Quarterly and monthly adjustments.
6.3 On the basis of pleadings, evidence/record produced and arguments raised during the hearing, issue-wise findings are given as under:
7. Additional Issue: Future Tariff Methodology with respect to the Annual determinations, Quarterly and Monthly adjustments pertaining to the FY 2011-12.
7.1 Rational for Annual Assessment:
DISCOs current operational and financial cycle emanates over a complete year, whereby;
• Lesser revenue generated in winter is compensated by higher revenue generated in the summer of the same financial year;
• Changes in generation mix resulting in lower PPP in wet seasons (with greater hydel generation) compensating high PPP in winter (with greater generation reliance on RFO);
• Variation in T&D Losses due to seasonal fluctuation.
7.2 Due to the above mentioned reasons the Consumer-End Tariff would fluctuate drastically if all components of tariff are assessed on quarterly basis. As per the guidelines under Rule 16 of the Tariff Standards and Procedure Rule 1998 the tariff should be predictable. In order to
0 9 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA%IRF-175/MEPCO-2011
minimize the volatility in consumer-end tariff due to aforementioned reasons, the Authority determines revenue requirement annually. However, certain adjustments like impact of losses, variation in capacity transfer price and UoSC, impact of extra or lesser purchases of units could be made on quarterly basis. The same rationale and methodology has been adopted while assessing the average sale rate of the Petitioner for the FY 2011-12. Thus, following components of tariff are subject to annual assessment;
• Assessment of T&D losses target. • Assessment of Sales target. • Impact of Consumption mix variance. • Month wise assessment of reference values with respect to PPP (including Energy, Capacity & Transmission charges) for the whole control period. • Assessment of Distribution Margin, • Assessment of Prior Period Assessment, if any, • The impact of over / under recovery on account of Distribution Margin and Prior Period Adjustment due to increase/decrease in sales (from the reference sales units). • Impact of Delayed Tariff Notification.
7.3 Quarterly Adjustments:
7.3.1 On the basis of annual assessment, certain adjustments with respect to the different components of Power Purchase Price (being passing through) have to be done on quarterly basis. Thus, the scope of these adjustments would be limited to;
1. The adjustments pertaining to the capacity and transmission charges.
2. The impact of T&D losses on all the components of PPP.
3. Impact of extra or lesser purchases of units on account of PPP.
4. The overall consumer-end tariff will be adjusted keeping in view the GOP policy with respect to Life line and Agricultural consumers categories.
5. The Authority may review the monthly fuel references on quarterly basis in order to incorporate abnormal variation situation.
7.4 Monthly Fuel Adjustments:
7.4.1 In addition to aforementioned, u/s 31(4) of the Act, the Authority is also entrusted with a mandate to review and revise the approved tariff on a monthly basis due to variation in fuel charges, therefore, the existing practice with respect to the adjustments on account of
0 10 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
variations in Energy (fuel) cost components of PPP on monthly basis would continue. This adjustment reflects in the consumers' monthly bill as Fuel Adjustment Charge.
8. Issue # 1. Whether the concerns raised by the Interveners are justified?
8.1 The Petitioner provided the Para-wise submissions on the concerns raised by the Interveners which are stated below:
• The rates of industrial consumers of MEPCO are at par with the industrial consumers of other DISCOs. The consumers pay subsidized rates therefore the Interveners stance that the Industrial rates of MEPCO are high is without any solid ground.
• Low Power Factor Penalty is charged on low power factor which is recorded due to the installation of sub standard machinery and other electrical appliances. Internal Electrical system and equipments of the consumer are mainly responsible for the low power factor. So, the consumers can avoid it by using efficient equipments. The low power factor penalty is uniform throughout the country.
• The seasonal consumers run their business for part of the year where the cost of service is not covered due to limited billing period. MEPCO has made presentation for determination of separate tariff for Seasonal Industries.
• MEPCO has the capacity to supply electricity for 24 hours, however, actual supply depends on actual receipt in the system. MEPCO also pays fixed charges to CPPA on 24 hours basis. The breakup of fixed and variable charges in two part tariff is based on the total Revenue Requirement of the company. So any reduction in fixed charges will automatically increase variable charges to balance out the total Revenue Requirement of the company.
• Interveners stance that the losses of B-2 consumers are not more than 7%-8% is not valid as B-2 connections are energized on distribution feeders where their losses cannot be calculated separately.
• The cost of service of MEPCO has been increased due to inflation hence the increase of tariff is indispensable.
• The NTDC tariff is determined on the mix generation of the electricity hence only gas generation cost cannot be kept in view for determination. Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
• MEPCO does not agree with the Interveners argument that no losses should be added in the electricity purchase rates for B4 consumers because there is a Transmission and Transformation Line Loss which is being born by the MEPCO.
• In fact O&M cost for industrial consumers is high as compared to other consumers, because of dedicated senior officers and staff for customer service. Prudently incurred O&M is recovered on units sold basis.
• Load shedding period for textile sector and power looms is lower than the Cotton Ginning Factories because dedicated feeders have been provided to textile sectors. Similarly adequate supply of power can be maintained for those Power Looms which are located and restricted to a particular area. The Ginning Factories are spread over the scattered area and there are hardly one or two Ginning Factories located in one feeder while the rest are domestic consumers therefore it is difficult to provide rebate to the whole feeder for one or two Ginning Factories.
• It is in the MEPCOs own interest to provide regular power supply to Industrial Category of B2, B3, B4 connections as the recovery ratio for these categories is 100% and their losses are also comparatively lower than the other categories. It is also proposed that those industries, whose load is more than 15 kW or 25 kW, should get independent transformers.
• MEPCOs O&M cost is much lower than the LESCO's, HESCO's and PESCO's O&M cost therefore , the Interveners' point that the MEPCO's O&M cost is higher is not valid.
8.2 The Authority has considered the concerns raised by the Interveners as well as the stance of MEPCO. The Authority is of the opinion that the Petitioner's response is quite satisfactory, therefore, is being accepted. In view thereof the Intervener's objections being without solid basis do not merit for consideration of the Authority, therefore are not accepted.
9. Issue # 2. Whether the Petitioner has complied with the directions of the Authority to install TOU meters by June, 2011?
9.1 The Authority, while determining the Consumer - End Tariff of the Petitioner for FY 2008- 09, gave clear directions to convert all consumer categories, including residential consumers having load requirement of 5 kW and above to TOU metering. All new consumers having load exceeding 5 kW were required to be provided TOU metering arrangement with effect from 1st January 2009. During 1s, quarter of the FY 2009-10, the Petitioner stated that it might not be possible for the company to arrange TOU metering for all consumers having load requirement of 5KW and above by June 30, 2010 and requested to extend that date to
g 12 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA%TRP-175/MEPCO-2011
June 30, 2012. The Authority decided not to extend target date of June 30, 2010 and directed the Petitioner to make all out efforts to complete the task by the target date i.e. June 30, 2010.
9.2 Same request was again made by the Petitioner during the proceedings of the tariff determination for 2nd quarter of FY 2009-10, whereby an extension till 30th June, 2012 was solicited which was not agreed by the Authority. Again in the tariff petition pertaining to 3rd quarter of FY 2009-10, the Petitioner once again requested for extension of time for installation of TOU meters till June, 2011 on the plea that it failed to meet the deadline set by the Authority due to the practical problems faced by it. The Petitioner attributed the delay in the installation for TOU mainly to the availability issue of these meters as there was limited number of manufacturers with limited production capacity. In view of the aforementioned argument, the Authority decided to extend the deadline for the installation of TOU meters by June, 2011.
9.3 During hearing , the Petitioner informed that it has completed 94% installation of TOU meters as on June 30, 2011 as per the following details:
Category Connections TOU Meters Balance to % Replaced qualified for installed upto be installed installation of 30-06-2011 TOU meters Domestic 8,387 6,176 2,211 73.64% Commercial 8,648 8,304 344 96.02% Industrial 23,616 21,513 2,103 91.10% Tube-well 51,134 50,274 860 98.32% Others 182 182 - 100.00% Total 91,967 86,449 8,683 94.00%
9.4 While replying to the Authority's query on the delay in installation of TOU meter, the Petitioner stated that it is facing problems in installation of TOU meters in small industries like Aara machines , power looms etc because power looms associations are creating hindrances in installation of TOU meters in the fear that their actual load will be disclosed which is higher than what they are being charged . However, MEPCO will overcome the situation and the remaining meters will be installed within one month.
9.5 The Petitioner also submitted that for those consumers where TOU meters have been installed, MEPCO is charging its consumers on the basis of Peak / Off Peak rates.
13 Decision of the Authority in the matter ofMultan Electric Power Com-pAn,y Limited No. NEPRAITRF-175/MEPCO-2011
9.6 The Petitioner informed that TOU meters have been installed where the declared sanctioned load is more than 5 kW. However there are also consumers with sanctioned load of 2-3 kW but their actual load is more than 5 kW. MEPCO is also trying to catch these consumers and after their actual load is enhanced, they will also be brought under TOU metering.
9.7 Replying to the Authority's question as to how MEPCO is educating its consumers about benefit of TOU meters, the Petitioner replied that to create awareness, MEPCO has printed on its consumers' bills, the benefits which the consumers can avail by using the electricity during Off-peak hours.
9.8 The Petitioner further submitted that its approximate load requirement is 2900 MW however its shortfall is around 750 MW and there is also an unscheduled forced interruption in the power supply by NPCC. Therefore MEPCO is forced to fill this gap by load shedding of 6 hours in the urban areas and 8 hours in the rural areas which sometimes is prolonged to 10 hours. However Textile sector is being provided un-interrupted power supply due to their dedicated feeders.
9.9 Due to load shedding in Off peak hours, its domestic and agricultural consumers are not getting full benefit of TOU meters as they are forced to use electricity during peak hours. However when the gap between demand and supply will be reduced then the true benefit of TOU meters can be reaped.
9.10 Keeping in view the progress of the Petitioner and its commitment for the remaining work, it is anticipated that the Petitioner will be able to complete 100% installation for all categories very soon. Therefore, the Authority has decided to extend the deadline for installation of TOU meters up to 31St October, 2011 which will not be extended further and legal action/ penalties may be imposed in case the above deadline is not achieved.
10. Issue # 3: Whether the Petitioner's projected purchase and sales units for the FY 2011-12 are reasonable?
10.1 The Petitioner, on the basis of updated figures projected its sales for the FY 2011-12 as 10,672 GWh assuming purchase of 12,781 GWhs. The Petitioner stated that its actual sales during the FY 2010-11 remained around 10,189 GWh with actual purchase of 12,470 GWhs as against the Authority's assessment of 12,952 GWhs. The Petitioner informed that due to load shedding, its actual increase in sales during FY 2010-11 was only 2.75% as against the projected increase of 10%. The Petitioner has now assumed 5% growth in its sales over the actual sales of FY 2010-11.
9 14 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
10.2 The Authority considers that in view of the additional generation capacity of 1359 MW already added to the system, the Petitioner's sales estimation appears to be on the lower side. Although the methodology provides an in built mechanism for adjusting any variation in actual sales as against the estimated sales but the Authority still feels that the estimates should be as realistic as possible to avoid unnecessary fluctuations in the Consumer-End Tariff due to such adjustments. In view thereof, the Authority has decided to revise the Petitioner's estimates of sales for the FY 2011-12. Accordingly, the Authority based on the available information in the instant case has assessed 10,947 GWh sales for the FY 2011-12. The assessment is based on expected purchase of 12,879 GWhs after incorporating target T&D losses of 15.0% for the FY 2011-12 as discussed below under Issue # 4.
11. Issue # 4 . Whether the Petitioner's Proposed Transmission and Distribution Losses for the FY 2011-12 are justified?
11.1 The Petitioner has estimated its T&D losses to remain at 16.5% despite the investment plan of Rs. 12,200 million projected for FY 2011-12 and no improvement has been proposed in the losses. The losses target for the FY 2010-11 as per the Authority's determination was 15.0% against the requested target of 16.5%. The Petitioner's actual T&D losses for the FY 2008-09, FY 2009-10 and FY 2010-11 remained 18.40%, 18.94% and 18.3% respectively. The Authority assessed the target of 15% on the basis of efficiency that a DISCO should achieve considering the amount of investments already made by the Petitioner with respect to the up- gradation and improvement in its existing system.
11.2 In 2008-09, MEPCO's reported actual technical losses were 15.41% which were based on a study pertaining to 11 kV losses and LT losses carried out on selected feeders. The study was conducted by MEPCO's Planning Directorate in co-ordination with General Manager (Power Planning) NTDC through ELR software. In Authority's opinion the report was based on selected feeders and did not provide proper rationale for selecting these feeders therefore the Authority was constrained to satisfy itself as to what extent the selected feeders were representative of the overall system. Therefore, the Authority directed the Petitioner to carry out study of its entire system to be conducted by an independent firm of engineers and set the deadline of 31St July, 2011 for completion of the study. Authority's direction with respect to the provision of information regarding Feeder wise losses is reproduced below;
• Feeder wise losses along with the breakup of dedicated and mixed feeders; • Breakup of urban and rural mixed feeders along with units fed, lost and billed; • Feeder wise units fed, lost and billed; • No. of feeders and transformers with loading of more than 70% along with impact on losses; • Measures/ plan to curtail the losses of high losses feeders;
15 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAI7RF-175/MEPCO-2011
• Study of Industrial consumers not governed by two-part tariff indicating the impact of low power factor on system stability quantifying the financial burden attributed to other consumers.
11.3 As a result, MEPCO engaged the services of M/S BARQAAB Consulting Services (Pvt) Ltd, (Consultant) for conducting the above study. This study report was completed and submitted by the Petitioner on September 30, 2011 to NEPRA. The main features of the Technical Study Report are summarized below:
11.4 Main Features of MIS BARQAAB's Technical Loss Study Report:
11.4.1 The consultant has solely relied upon parameters and loading of feeders as per the data provided by MEPCO. The correctness of the data provided by MEPCO has not been verified being not covered in the scope of the consultant.
11.4.2 According to the BARQAAB's report, MEPCOs 11 kV losses are 9.005% while LT losses are 4.34% for FY 2010-11. The study does not cover the Transmission losses or Administrative Losses. A brief summary of each components of Technical Loss is discussed below:
11.5 11 kVA Loss:
11.5.1 M/S BARQAAB worked out the list of 883 feeders exclusive of L.T. lines on FDRANA computer software by applying the actual Power Factor and Load Factor after deducting the Load Shedding hours. A database has been enlisted in the report in descending order of their technical loss. The feeders have also been segregated into categories of load nature i.e. Rural, Urban, Mixed, Dedicated feeders etc. The number of feeders has also been split into the quantum of %age loss to enable the staff to study and plan the remedial measures required to be taken to reduce the technical loss, save energy and earn the revenue. The impact of loading more than 70% feeders on technical loss have also been worked out. On the basis of 100% study of 883 feeders, actual technical loss of MEPCO for FY 2010-11 has been reported to be 9.005% with total length of HT feeders to be 66,989.36 kms.
11.6 LT Lines Loss:
11.6.1 MEPCO has more than 126,000 Distribution Transformers out of which about 60% Transformers are combined Transformers which involve LT lines. According to the report, technical study of about 63000 LT lines in such a short period was beyond the scope of consultant/ MEPCO, therefore, 242 LT lines have been technically studied by the Consultant which resulted into an average LT line losses of 4.34%.
16 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
11.7 Transmission Loss:
11.7.1 The Petitioner submitted that the study of Transmission Network is a complex exercise because the feeding scheme is not permanent and is regularly changed by the system operator i. e. NPCC. Therefore, the load flow studies are only indicative and not 100% accurate . MEPCO previously carried out the study which showed the Transmission loss between 4.67% to 5.29%. However MEPCO reported that BARQAAB' s assessed actual Transmission Losses is 3.8% for FY 2010-11 which in fact has not been found anywhere in the BARQAAB's report.
11.8 Analysis of Data:
11.8.1 The report provides in depth analysis of 11 kV line losses segregating feeders according to their load nature i.e. Rural, Urban, Mixed, Dedicated etc. The number of feeders has also been split up into quantum of % loss to enable the staff to study and plan the remedial measures required to be taken to reduce the technical loss, save energy and earn the revenue. The impact on technical loss for those feeders having load more than 70% has also been worked out. A summary of the above data is provided in the following tables:
i) Urban, Rural, Mixed & Dedicated Feeders:
Feeder Type No. of Length Annual Receipt Power Loss Feeders (kms) (GWh) (GWh) % Urban 208 5,890.0 4,156.407 168.17 4.05% Rural 496 54,144.6 9,581.595 1,130.40 11.80% Mixed 63 62,41.3 1,285.890 124.98 9.72% Dedicated 116 713.3 1,135.755 31.67 2.79% Total 883 66,989.36 16,159.600 1,455.20 9.005%
ii) Feeder with load more than 70%:
Urban, Rural and 267 28,534.4 km 6,256.61 829 13.25% Mixed
Note : The feeders with load more than 70% has increased the percentage loss from 6929% to 13.25% i.e. from 433.56 to 829 MkWh per annum.
iii) Feeder with load more than 200 Amperes:
Urban, Rural and 528 44,139 km 12,581.1 1,243.9 9.887% Mixed Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
iv) Feeder with length more than 120 kms:
Urban, Rural and 210 34,659.4 km 4,805,33 723.69 15.06% Mixed v) Circle wise b breakup of Feeder wiselosses in different slabsranranging f 0-10%-10% to above 40% are listed below:
Name of Above Circle 0-10% 11-20% 21-30% 31-40% 40% Total Multan 169 34 8 2 0 213 Sahiwal 93 24 3 0 0 120 Bahawalpur 72 31 7 1 0 111 R.Y. Khan 77 19 3 2 1 102 Muzaffargarh 96 16 1 0 0 113 Vehari 53 22 4 0 0 79 D.G. Khan 64 10 4 1 0 79 Bahawalnagar 47 17 2 0 0 66 Total 671 173 32 6 1 883 vi) Feeders having losses greater than 16%:
Name of Feeder Name of Loss S Name of Name of Loss S# Division % # Feeder Division %
1 Mousa Nagar Sadiqabad 43% 26 Kichiwala Haroonabad 23%
2 Feeder No. 7 Sadiqabad 35% 27 Tipu Vehari 22%
3 Noor Ahmad Wali D.G.Khan II 33% 28 Khanpur Mumtazabad 22%
4 New Lar Mumtazabad 33% 29 Shah Madar Sahiwal 21%
5 New boson Moosa Pak 32% 30 Jallah Lodhran 21%
6 Nawazabad Sadiqabad 31% 31 Rawani Lodhran 21%
7 Hategi Ahmad P. East 31% 32 Malik pura Bhawalnagar 19%
8 Tibbi Qaisrani D.G.Khan II 29% 33 Lalazar Layyah 19%
9 Bhond Geeder Sadiqabad 27% 34 Sargana Mailsi 19%
Jh Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
10 Tube Well Lodhran 27% 45 Al Abbas Burewala 19%
11 Bukhara Rajanpur 27% 36 Nadir Wali Vehari 19%
12 Tatey Pur Mumtazabad 27% 37 Alipur Shujabad 19%
13 Exp-II Sadiqabad 26% 38 Old lar Mumtazabad 19%
14 Ghulam Qadir Arif Wala 25% 39 Jamal Pur Chishtian 18%
15 Gunj Shakar Sahiwal 25% 40 Hotta Arifwala 18%
16 Mubarik Put Ahmad P. East 25% 41 Khanpur A.P. East 18%
17 Lal Kamal Lodhran 25% 42 13/BC Bhawalpur 18%
18 Kot Kaisarani D.G.Khan II 25% 43 Noori lal Lodhran 17%
19 KPBS Muzaffargarh 24% 44 Kotli Mughlan Rajanpur 17%
20 Mitru Mailsi 24% 45 Chak # 102 Mian Chanu 17%
21 Qadir Pur Shujabad 24% 46 Sinawan Kot Addu 16%
22 Makhdoom Put Khanewal 24% 47 Noor Pur A. P. East 16%
23 Donga Bonga Haroonabad 23% 48 Shah Jamal Muzaffargarh 16%
24 Rang pur feeder Bhawalpur 23% 49 New Firdous Chichawatni 16%
25 Ratta Tibba Vehari 23% 50 Shah Gunj Mailsi 16% vii) Some of the Feeders with Negative Losses:
S. Name of Feeder Name of Sub- Urban/ Rural/ Loss % No Division Independent
2 500 KV Grid Manzoorabad Independent -55.89%
3 Central Jail Road Makhdoom Rashid Dedicated/ Urban -58.81%
4 A.T.M Khanewal Independent -10.87%
5 Railway Traction Khanewal 11 -15.67%
6 Yahya Mill D.G.Khan Independent -55.41%
7 Scarp No.3 Allahabad D/Rural -88.53%
8 Islamia University Abbasia Rural/ Dedicated -18.61%
9 Radio Pak Yazman Independent -34.94%
19 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
11 10 Nasir Salvent Lodhran -21.50%
11 Grid Colony Civil Lines Dedicated/ Urban -65.65%
12 Railway Traction Bhawalpur Independent -52.46%
11.9 The Petitioner also provided the details of line losses of those Sub-divisions which are located at most difficult areas of MEPCO involving theft of electricity and law & order situation. The details of worst sub-divisions are as under:
July 2010 to Jun 2011 (GWh) Jul-Jun Inc/ Units Units Units 2009-10 % Loss Dec Sub Div Received Billed Lost (% Loss)
ROJHAN 21.18 13.87 7.31 34.5 34.7 -0.2
GULSHANABAD 45.28 32.45 12.83 28.3 29.1 -0.8
AHMED PUR LAMA 128.25 92.14 36.11 28.2 28.6 -0.4
SHAH JAMAL 28.68 20.73 7.94 27.7 20.0 7.7
ZAHIR PIR 56.08 40.66 15.43 27.5 26.3 1.2
FAZIL PUR 42.52 31.14 11.39 26.8 27.9 -1.1
JAMALDIN WALI 105.94 77.87 28.06 26.5 25.7 0.8
JATOI 47.74 35.60 12.14 25.4 20.8 4.7
M.W. QURESHIAN 58.22 43.59 14.63 25.1 24.7 0.4
ROHAILAN WALI 38.44 29.44 9.00 23.4 24.8 -1.4
RURAL KHANPUR 61.22 47.34 13.88 22.7 20.4 2.3
KHAN GARH 40.31 31.28 9.04 22.4 21.6 0.8
SHEHR SULTAN 40.55 31.47 9.08 22.4 22.5 -0.1
11.10 The Petitioner reported that its actual T&D losses have reduced by 0.64% from 18.94% in FY 2009-10 to 18.3% in FY 2010-11. The Petitioner in support of its stance with respect to higher transmission losses stated that its network is being used for export of electric power to the neighboring DISCOs. In this regard almost 20% of power received by it is being exported. This matter was taken up with PEPCO and a committee was established to analyze the impact on MEPCO's line losses due to export of power to other DISCOs. The committee
0 20 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
recommended that the impact of power export on Transmission Losses, using the Petitioner's 132 kV and 66 kV lines, is 1.15%. However, this impact is determined as 0.7% by MEPCO's Performance Improvement Action Plan report by MWP-USAID.
11.11 The Petitioner further submitted that the administrative losses are due to pilferage of electricity, defective meters or improper meter readings while Technical losses comprise of Transmission Loss, 11 KV loss and LT loss . The distribution loss depends upon the length of the feeders and current passing through the conductors . The Petitioner stated that the lengths of its 132 kV, 66 kV, 11 kV and LT lines are the highest among all DISCOs in Punjab. LESCOs average length of feeder is 22 kms while MEPCOs average length of feeder is more than 70 kms. The Petitioner also informed that another factor for higher losses is the load and size of the conductor. Due to larger rural area in MEPCO 's jurisdiction its conductor losses are higher than the other DISCOs
11.12 While replying to the Authority's observation on the technical losses of 8.61% as recommended by MEPCO's Performance Improvement Action Plan report by MWP-USAID, the Petitioner replied that the said report by MWP-USAID is carried out on selected feeders and is not comprehensive which does not cover all the feeders therefore, it does not reflect the correct figure of losses.
11.13 While replying the Authority's question about the reasons of wide variation in feeder wise losses, the Petitioner stated that these abnormal figures arise due to extensive load management as a result of unscheduled load shedding scenario. The Petitioner justified that in an emergency situation it has to shift one feeder's load to the other, whereby the billing is not incorporated accordingly on feeder wise basis within the same subdivision. Yet, if the overall figure of losses is seen on subdivision level, no negative figure or abnormal figure of loss would appear.
11.14 The Authority observed that according to the BARQAAB's report, that there are 6 circles in the jurisdiction of MEPCO where losses are extremely high ranging between 31% to 40% and there are 32 Circles where losses vary between 21% to 30%. Similarly losses of 19 Sub- Divisions exceed 20%. Although these losses are actual but chances of improvement always exist and these losses cannot be accepted as such and it would not be justifiable if the burden of inefficiencies on the part of the Petitioner is passed on to the consumers.
11.15 The BARQAAB's report also highlights that the high technical losses in MEPCO system are due to inadequate, 11 kV and L. T. distribution system developed in the past many years in haphazard and unplanned manner under various, political pressures/ programs specially the village electrification. The abnormal length of feeders, undersize HT/ LT conductors and lengthy service cables warrant heavy system rehabilitation. The lengthy under capacity 132
21 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
kV and 66 kV transmission line system with abnormal low voltage is also one of the paramount element for causing high current, resultantly the increased (12 R) loss in HT/ LT distribution system. The report also depicts various steps to be taken by MEPCO during next 5 years to bring down the line losses from 9.005% to 3.0% in view of available financial resources and constraints based on financial model. The additional funds thus generated through line losses reduction will have to be utilized for further system improvement and expansion.
11.16 In Authority's opinion, LT Line losses of 4.34% in the BARQAAB's report are based on a study conducted on 242 LT lines out of total 63,000 LT lines, therefore, the report does not provide proper rational for selecting these LT lines and the Authority is constrained to satisfy itself as to what extent the selected LT lines are representatives of the overall system.
11.17 In addition, the study is conducted during the peak load period i.e. summer when the losses are normally high and there must be variations in the off peak load periods, therefore, the reported losses may not be reflecting the true results.
11.18 The Authority feels that if losses of 1.1% pertaining to the export are adjusted from the Petitioner's request of 16.5%, the adjusted requested losses would work out as 15.4% which is very close to the Authority's target set for the last year. This clearly indicates that the Authority's assessment of 15% losses was realistic.
11.19 Based on the available information, evidence and keeping in view the aforementioned arguments, the Authority considers that the Petitioner's request for setting 16.50% as T&D losses target for the FY 2011-12 is on higher side and is not justifiable. The losses target set by the Authority pertaining to the FY 2010-11, was not only realistic but also achievable; therefore the Authority has decided to maintain its earlier assessment of 15% T&D losses and assessed the same target of 15% for FY 2011-12.
12. Issue # 5. Whether the Petitioner's proposed investments for the FY 2011-12 are justified keeping in view its prospective benefits?
12.1 The Petitioner requested Rs.12,200 million to execute its development/ investment plan for the FY 2010-11 as per the following details: Rs. Million Distribution of Power (DOP) 600 Energy Loss Reduction (ELR) 3,450 Village Electrification 1,000 STG 5,550 Others/ Capital Receipts 1,600 Total 12,200
n 22 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
12.2 MEPCO was required to submit the details of each of the above expenditure which MEPCO provided vide its letter No.FDM/BS/Tariff dated 29-08-2011. The details provided are summarized below:
12.3 DOP.• The Petitioner projected Rs.600 million for investment under Development of Power (DOP) financed through PSDP. Further breakup of this investment expenditure is provided as under:
Rs Million Land/ Civil works 160.0 Distribution Expansion: HT proposals 284.5 HT Capacitors 8.7 LT Proposals 7.0 Transformers 105.8 General/ Industrial/ Agricultural 7.0 Connections Other Plant/ T&P 20.0 Development funds for Village 7.0 electrification Total 600.0
12.4 ELR: Under the head of Energy Loss Reduction (ELR), as against the projection of Rs.3,450 million requested in the Petition, the Petitioner provided the following details of Rs.2,332 million; Rs Million
Financed By Head of Account World Bank ADB Total
HT Renovation, Rehabilitation and Augmentation 882.50 381.87 1264.37
LT Renovation, Rehabilitation and Augmentation 458.50 304.68 763.13
Air Bundled Conductors & Capacitors (134 sets) - 46.00 46.00
Advance Metering Infrastructure (single phase) 150.00 - 150.00
Advance Metering Infrastructure (3-Phase) 42.50 - 42.50
Investment on AMR Meters 66.00 - 66.00 Total 1599.50 732.50 2332.00
9- 23 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
12.5 Village Electrification: The Petitioner estimated an amount of Rs 1,000 million to be incurred under this head. As per the details provided, approximately 1,116 villages are estimated to be electrified at an average cost of Rs.0.896 million each during FY 2011-12.
12.6 Secondary Transmission Grids (STG).• An amount of Rs 5,550 million is projected by the Petitioner to be incurred for the construction of new Grid Stations. Following details are provided in support:
Financed By
Detail of Work Prime Minister World Bank ADB Package
8 Nos. (No cost 3 Nos. 66 kV and 18 Nos 30 Nos 132 kV Grid Grid Stations is provided) 132 kV Grid Stations stations
Transmission 13 Nos with a total 8 No 132 kV Lines (132 kV) length of 174.6 Kms Transmission Lines
12.6.1 It is stated that the above projects are at different stages of their implementation from the inception till 100% completion, however their estimated costs to be incurred during FY 2011-12 have not been provided to reconcile the requested amount of Rs.5,500 million under this head. Keeping in view the past trend, the Authority considers that in the instant case the Petitioner will not be able to spend more than Rs.1,400 million. Accordingly the same is being approved.
12.7 Capital Contributions/Grants. • An amount of Rs 1,600 million has been proposed for various development schemes to be financed by grants and deposits from consumers and the same has been allowed for investments for FY 2011-12.
12.8 The Authority observed that the actual investments by the Petitioner in the last three years were Rs.6,280 million, Rs.6,467 million and Rs.5,840 million for FY 2008-09, FY 2009-10 and FY 2010-11 respectively which also shows that the actual investments during FY 2010-11 were 23% lower than the Authority's allowed investments of Rs.7,545 million for FY 2010- 11. The Authority inquired as to how this investment of around 19 billion in the last three years has resulted in the improvement of system or reduction of losses. MEPCO replied that due to these investments, its T&T losses have been reduced by 2%-2.5% over the last three years. The Petitioner also submitted that due to commissioning of 1 No. 220 KV Grid Station, 2 Nos. 66 KV Grid Stations and 20 Nos. 132 kV Grid Stations, approximately 1.476 million beneficiaries have been benefited in its system.
,4 Decision of the Authority in the matter ofMultan Electric Power Compan y Limited No. NEPRAITRF-175/MEPCO-2011
12.9 The Authority noted that the Petitioner although provided details of the anticipated investments but these were not linked to support the estimate of Rs.12,200 million. Based on the assessment made in the preceding paragraphs, the Authority in the instant case has assessed Rs.6,932 million investment under the following heads; Rs. Million Development Of Power (DOP) 600 Energy Loss Reduction (ELR) 2,332 Village Electrification 1,000 STG 1,400 Others/ Capital Receipts 1,600 Total 6,932
13. Issue # 6. Whether the Prior Year Adjustment requested by the Petitioner is justified?
13.1 Although the Petition is silent on the issue of Prior Period Adjustment / Unrecovered Costs, yet during the hearing the Petitioner requested Rs. 3,696 million on account of unrecovered costs for the FY 2011-12. However the Petitioner did not provide the breakup of the above adjustment.
13.2 The Petitioner's request with respect to un-recovered cost pertaining to the FY 2010-11 has been carefully examined keeping in view the recoveries on target losses, monthly and quarterly adjustments including 3rd and 4th quarters adjustments, actual other income and impact of consumer mix.
13.3 Based on the information provided with respect to units sold and adjustments already made, the Petitioner's un-recovered cost works out as follows;
Annual Revenue Requirement for FY 2010-11 Rs. 105,107 million
Add: Assessed quarterly PPP adjustment (Quarter I) Rs. 414 million
Less: Revenue earned by the Petitioner in 11t quarter of FY 2010-11 Rs. 31,816 million
Less: Assessed quarterly PPP adjustment (Quarter II) Rs. 1,851 million q Less: Revenue earned by the Petitioner in 2 d quarter of FY 2010-11 Rs. 22,053 million
Less: Assessed quarterly PPP adjustment (Quarter III) Rs. 43 million
Less: Revenue earned by the Petitioner in 3rd quarter of FY 2010-11 Rs. 19,865 million
Add: Assessed quarterly PPP adjustment (Quarter IV) Rs. 1,401 million
Less: Revenue earned by the Petitioner in 4th quarter of FY 2010-11 Rs. 28,098 million
Unrecovered cost for the FY 2010-11 Rs. 3,196 million
25 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
13.4 As per the calculation, the impact of unrecovered cost works out to be Rs.3,196 million as against the requested Rs.3,696 million. In addition the Petitioner's other income during FY 2010-11 remained Rs.412 million higher than the estimated figure of other income for FY 2010-11 which also needs to be adjusted. Therefore, after adjusting the impact of other income, Prior Period Adjustment has been worked out as Rs.2,784 million.
14. Issue # 7. Whether the Petitioner's O&M Cost (e.g. Salaries & wages, repair & maintenance, traveling expenses , vehicle maintenance & miscellaneous expenses ) projected for FY 2011-12 is justified?
14.1 The Petitioner requested an amount of Rs.8,716 million on account of Operations and Maintenance (O&M) expenses for FY 2011-12. The actual O&M expenses during FY 2010- llwere Rs. 7,332 million as against the allowed O&M cost of Rs.5,619 million for FY 2010-11 with the following breakups; Rs. Million S. Expense Head Determined Actual Projected No. 2010-11 (Un-audited) 2011-12 2010-11 1 Salaries, wages and employees cost 4,014 5,590 6,287 2 Travelling Allowance 248 278 470 3 Repair and Maintenance 506 671 782 4 Vehicle Running 218 192 350 5 Miscellaneous Expenses 634 601 827 Total 5,619 7,332 8,716
14.2 Salaries , Wages & Other Benefits:
14.2.1 An analysis of the actual expenditure on Salaries, Wages and Benefits during last three years is tabulated below: Rs. Million Head of 2008-09 2009-10 2010-11 2011-12 Account Determined Actual Determined Actual Determined Provisional Proposed by NEPRA by NEPRA by NEPRA Un-audited
Salaries,Wages & 3,035 3,443 3,490 4,433 4,014 5,590 6,287 Benefits
+/ over actual +1.37% +28.75% -9.45% +26.10% +12.5% +/- over NEPRAs +15 .00% +27.02% +15.0% +39.26% +56.63% allowed cost
26 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
14.2.2 The above table shows that the projected cost for Salaries, wages and Benefits for FY 2011-12 is 12.5% higher than the actual expenditure of FY 2010-11 and by 56.63% higher than the determined figure of FY 2010-11. According to the Petitioner, PEPCO approved danger allowance of Rs.5,000 p.m. to the line staff, the approximate effect of this account is estimated at over Rs.400 million. Thus, the projected figure of 8,716 million consists of Rs.4,528 million for Salaries, Allowance and Benefits and Rs.1,760 million for Retirement benefits. In addition 15% increase in basic pay as allowed by GoP in Federal Budget 2011-12 and 4% increase from December 2011 is assumed for annual increments.
14.2.3 While assessing Salaries, Wages and Benefits, for FY 2009-10, the Authority disallowed the impact of all new recruitments and the Petitioner was required to justify the additional recruitments as most of the new recruits were unskilled/ non-professionals. The Authority observed that there is also litigation in the court on these recruitments. While replying to the Authority's query as to what is the status of this litigation, MEPCO replied that the court declared these recruitments null and void and ordered that these should be re-recruited and till that time the existing employees will continue to work. Similarly for FY 2010-11, the Petitioner did not comply with the Authority's direction with respect to provision of rationale and justification for new recruitments therefore the Authority disallowed impact of new recruitments and directed that in future the Petitioner should provide detailed recruitment plan along with justification and additional financial impact.
14.2.4 As per information provided at Form 1, in the MEPCO system, 3 Divisions, 2 sub-divisions, 1500 km of feeders and NIL Circles will be added during FY 2011-12. For this infrastructure, 2011 new recruitments for FY 2011-12 are projected. However the information provided on "Staffing" at the last page of MEPCO's submission dated 29-06-2011 and MEPCOs presentation during hearing reflected projected hiring of 763 employees in FY 2011-12. While clarifying this difference, MEPCO stated that 763 is the correct figure for new recruitments projected in FY 2011-12 while 2011 is projected figure for next 5 years. While justifying 763 new recruitments, MEPCO stated that its current strength is 17000 employees and anticipated increase in sales during FY 2011-12 is 5% over last year. The Authority questioned about the justification of 763 employees including 389 non-technical staff. MEPCO replied that the technical staff works on transmission lines and its total infrastructure is a combination of Technical and non technical staff therefore, non- technical staff is also required with the Technical staff. Replying to a question as to how many recruitments were made during FY 2010-11, MEPCO replied that no recruitments were made in FY 2010-11 however it recruited around 1100 employees in the last three years from 2008 to 2010. Decision of the Authority in the matter ofMultan Electric Power Com-pun,y Limited No. NEPRAITRF-175/MEPCO-2011
14.2.5 Finance Director MEPCO also informed that some of the allowances have been merged into the basic salary therefore there is an abnormal increase in the basic salaries. In addition, conveyance allowance was previously restricted to only big cities but now it has been extended to all the cities within the jurisdiction of MEPCO.
14.2.6 The Authority observed that the DISCOs should not act as employment exchanges. Only in the circumstances where there is a substantial increase in network and customers and new recruitments are inevitable then there is a justification to fill in the essential posts. By projecting only 5% growth in sales, the increase of 763 employees is not justified and additional financial impact of these employees will adversely affect the financial position of the company. These recruitments are also not acceptable in the wake of increased tariff over the last few years and higher demand and supply gap which is around 25% The best utility practice is not to put additional burden on the company by recruiting new employees but efficient utilization of the available resources.
14.2.7 MEPCO stated that its employee to customer ratio is lower than the other DISCOs like LESCO and IESCO, therefore while making assessment on salaries and wages, the Authority should also consider these ratios in comparison to other DISCOs. The Authority while agreeing to the Petitioners stance directed the Petitioner to provide statistical data for these ratios in comparison to other DISCOs. The Authority also directed to justify the new recruitments with current strength in each category and their justification with the increase in network and customers. The Petitioner vide its letter No.FDM/BS/Tariff/ dated 29-08- 2011 provided grade wise detail of its total sanctioned strength of 21, 544 employees, out of which 16,951 are currently working and 4,593 are lying vacant. However the justification of new recruitments with the increased network and customers and its financial impact has not been provided. The question of sanctioned strength also arose during hearing where the Authority clearly informed that NEPRA has never approved the yard stick of sanctioned strength which WAPDA had approved for MEPCO. Since MEPCO is working as an independent entity under the Companies Ordinance having its CEO and Board of Director, therefore, it should have its own parameters for recruitments based on the best utility practices.
14.2.8 Another pertinent point with respect to salaries, wages and other benefits is the element of Post Retirement benefits. It is observed that although the Petitioner is recording provision in the said account as per the actuarial valuations, yet the parameters used by different actuarial valuators across the DISCOs in Pakistan are not consistent. As per the aforementioned standard, the discount rate should be linked with rate offered on government bonds. Yet most of the DISCOs have not correlated T-bills rate offered by government and have assumed different discount rates. Further, there is great deal of disparity in the provision charged versus actual payments made per year. Here it is pertinent to mention that IAS- 19 clause 27
28 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
(a), clarifies that under defined benefit plan; the entity's obligation is to provide the agreed benefits to current and former employees.
14.2.9 The Authority inquired as to what amount actually has been paid for retirement benefits during FY 2010-11 as against the provision of Rs.1,759 million. The Petitioner replied that all its expenditures are on accrual basis and it has paid Rs.432 million on account of retirement benefits during FY 2010-11. The Petitioner further stated that it has a liability of more than 4 billion under Post Retirement Benefits as of June 30, 2011 however it has no funds to pay off this liability. Considering the overall liquidity position in the power sector and in order to ensure that the Petitioner fulfils its legal liability with respect to the post retirement benefits, the Authority directs the Petitioner to create a separate fund in this regard before 30th June 2012, which is allowed by IAS - 19. Creation of funds would ensure that the Petitioner records it liability more prudently as the funds would be transferred to a separate legal entity. In addition to that these independent funds would generate their own profits, if kept separate from the company's routine operations.
14.2.10 Based on the discussion made in the preceding paragraphs and incorporating GOPs recent increases and annual assessment of salaries & wages for FY 2011-12 of other DISCOs, the Authority maintains its previous stance on new recruitments. In order to get these approved the Petitioner has to justify these on the basis of efficient utility practices and functions. Keeping in view the abovementioned reasons, it is estimated that Rs.4,616 million will be a fair assessment for Salaries, Wages and Benefits for FY 2011-12 in the instant case.
14.3 Maintenance Expenses:
14.3.1 Repair and maintenance expenses have been assumed at Rs.782 million for FY 2011-12 which are 16.7% higher as compared to actual expenses of Rs.670 million for FY 2010-11 and 54.55% more than the Authority's assessment of Rs.506 million for FY 2010-11. MEPCO stated that as a normal practice, the maintenance expenses are 3.5% of the net fixed assets which comes to Rs.1,400 million but MEPCO has proposed 50% of the amount simply not to over burden the consumers. As per the Petitioner, MEPCO's two circles were totally inundated and other two circles were partially affected in the last year floods and MEPCO had to rehabilitate them at a significant cost. However no specific details of this cost for the rehabilitation of flood affected infrastructure have been provided.
14.3.2 The Petitioner during the hearing submitted that major expenditure under Repair & Maintenance relates to the maintenance of Distribution Transformers, Meters, Grid Stations and Service Drops and due to increased rates of material and extension in its network, its maintenance cost is increasing. The Petitioner in its petition and during the hearing
9- 29 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
submitted that inflation remained around 15%, which is expected to continue as such during the FY 2011-12.
14.3.3 The Authority is cognizant of the fact that the repair & maintenance cost is not only affected by the inflation but also with the variation in the gross assets in operation due to the addition of new investments and new consumers in the system. In the Authority's opinion, by using the actual/un-audited figures as a base expense for the percentage increase would tantamount allowing inefficiency of the previous year in the current year, which again is against the very spirit of regulatory regime.
14.3.4 Having considered the aforementioned reasons, the Authority is of the view that the requested amount of Rs. 782 million is considerably high and needs to be rationalized. Keeping in view past trend and comparison with other DISCOs, the Authority has assessed Rs.600 million for repairs & maintenance for FY 2011-12 in the instant case.
14.4 Traveling Expenses:
14.4.1 The Petitioner has projected Travelling expense of Rs.470 million on the basis of increase in daily allowances to the employees of BPS 1-16 announced by the Government in its Federal Budget of FY 2010-11. The Authority's assessed cost for FY 2010-11 was Rs.248 million. The actual cost on this account as per the draft accounts for the FY 2010-11 is Rs.278 million which is 16% higher when compared with the audited figure of Rs.239 million for FY 2009- 10.
14.4.2 According to the Petitioner, it has the largest network in the country and it has added four new operation divisions and sub divisions in its network. Its employees have to travel long ways to attend complaints and maintain the system and approximate effect of this increase is Rs.240 million. The Petitioner in its petition stated that its BoD has approved three new operation divisions and three sub-divisions which will also require additional amount therefore an amount of Rs.470 is reasonable and should be allowed.
14.4.3 The Authority had been allowing considerable increase each year in order to provide inflationary cover to the said cost. GOP has not announced any further increase on this account for FY 2011-12. Here it is pertinent to mention that only those employees who work in rural sub-divisions and travel for routine maintenance, complaints and night patrolling are entitled for the travelling allowance. In view of the aforementioned reasons, past trend and comparison with other DISCOs, the Authority in the instant case has assessed Rs.285 million for travelling expenses for FY 2011-12.
30
9- Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA%IRF-175/MEPCO-2011
14.5 Vehicle Running Expenses:
14.5.1 The Petitioner requested Rs. 350 million under the head of Vehicle maintenance for the FY 2011-12. The actual cost on this account as per the draft accounts for the FY2010-11 is Rs.192 million as against the allowed cost of Rs.218 million.
14.5.2 During hearing and in the Petition, the Petitioner submitted that its service area comprises of 13 districts of southern Punjab having the largest network and consumers in the country and it has created new offices in its territory. The vehicles have to run for attending complaints, maintain the system and for other related matters of the company. There is continuous upsurge in the prices of the petrol, diesel, mobile oil and spare parts and the comparison of its Vehicle Running Expenses with the other Distribution Companies does not seem appropriate. Moreover, the MEPCO BoD has approved three operation divisions and three operations sub- divitions and a transformer reclamation workshop will be operative w.e.f. July 01, 2011, therefore, its requested expenditure of Rs.211 should be allowed.
14.5.3 MEPCO's vehicle fleet consists of a total of 964 vehicles; 241 of which are 20 years old or older; thus, the average vehicle running cost remained around Rs.199,170 per vehicle during FY 2010-11. The company's fleet management policy requires vehicle replacement after ten years, but according to MEPCO Performance Improvement Action Plan report by MWP- USAID, vehicles are rarely replaced on schedule due to conflicting approval policies. Even if MEPCO were to demonstrate that purchase of a new vehicle would result in lower operating and maintenance costs, there is no policy which would allow for vehicle replacement. Not surprisingly, older vehicle maintenance costs are significantly higher than those for newer vehicles.
14.5.4 The matter of the fact is that the vehicle running cost is not only affected by the increase in fuel prices but also with the variation in the number of vehicles of the Petitioner, which in turn is dependant on the distribution area of the Petitioner. In view of the aforementioned reason, past trend and comparison with other DISCOs, the Authority decided to allow vehicle running cost to the tune of Rs. 211 million for FY 2011-12 in the instant case.
14.6 Other Expenses:
14.6.1 The Petitioner requested Rs.827 million for FY 2011-12 pertaining to the Other Expenses like rent, rates & taxes, power, light and water, bills collection charges, postage, telephone, office supplies, insurance expense, overhead expenses, Auditor's remuneration, NEPRA fee and charges , advertisement & publicity, provision of obsolete stores, miscellaneous expenses etc. The projected expenditure is 37.6% higher than the actual expenditure of Rs.601 million (un-audited) for FY 2010-11 and 30.44% higher than the Authority's assessment of Rs.634 million for FY 2010-11.
k 31 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
14.6.2 The Petitioner during hearing although submitted breakup of Rs.827 million into different components however no further rationale or evidence has been provided by the Petitioner in order to substantiate increase in each component of Miscellaneous expenses.
14.6.3 In the absence of any authentic documentary evidence, the Petitioner's request can not be accepted as such. In order to make fair assessment of other expenses, the Authority has kept in view the past trend and comparison with other DISCOs. In view thereof, in the instant case, Rs.661 million have been assessed for FY 2011-12 on the account of other expenses.
15. Issue # 8: Whether the Petitioner's projected Other Income for the FY 2011 - 12 is justified?
15.1 The Petitioner has estimated Other Income of Rs 3,400 million for the FY 2011-12. The Other Income estimated by the Authority for the FY 2010-11 was Rs 3,092 million. However other income as per the draft accounts for the FY 2010-11 remained Rs.3,213 million. According to the information provided, the other income includes amortization of deferred credit, meter and rental income, late payment surcharge profit on bank deposit, sale of scrap, income from non-utility operations and commission on PTV fees and miscellaneous.
15.2 The Authority has noted that CPPA on various forums agitated that the Authority has been disallowing markup on delayed payments to IPPs at CPPA level whereas the late payment surcharge recovered from the consumers is adjusted against the Distribution Margin. In CPPA's opinion the consumers have been given double benefit. It was therefore requested to offset the two markups against each other. The request was declined on the grounds that each company is a different legal entity and in the absence of any Sale/ Purchase agreement between CPPA and the DISCO, passing on such cost is legally not sustainable. Notwithstanding the aforementioned legal position, the Authority feels that among other reasons for delayed payments to IPPs one of the reasons is delayed payment of bills by some of the consumers. Considering the CPPA's contention as valid, CPPA was directed to enter into bilateral agreements with the DISCOs no later than 15th March, 2011, but till today no progress has been made so far in this regard.
15.3 The Authority has been deducting Other Income from the Distribution Margin of the Petitioner considering it a non - regulated Income for a DISCO. Since CPPA has not entered into sale/purchase agreement with the DISCOs therefore in the absence of such agreements the Authority is constrained to continue with previous practice. Accordingly, the Authority has evaluated the Petitioner's request of Rs.3,400 million for Other Income including late payment surcharge as reasonable. As soon as the Petitioner signs an agreement with the CPPA, the Authority will consider for revision of assessment of Other Income to the extent of late payment surcharge for the FY 2011-12. In view thereof, the Authority has decided to
9 32 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
accept the proposed figure of Rs.3,400 million on account of Other Income for the FY 2011- 12.
16. Issue # 9: Whether the aging of Receivables as shown in the Audited Financial Statements is justified?
16.1 The Petitioner's Audited Financials Statement of the last 3 years reveal that the Trade Debts were Rs.4,597 million, Rs.5,980 million and Rs. 11,969 million during FY 2008-09, FY 2009- 10 and FY 2010-11 respectively showing an increase of 30 % and 100% in last two years. The information provided at Form 14 of the Petition regarding aging of receivables is also incomplete and do not reconcile with the Audited Financial Statements of previous years.
16.2 The Petitioner was unable to justify the sharp increase in the receivables in the last two years. The Petitioner also did not provide any evidence indicating action being taken or strategy for the recovery of these receivables . The Authority considers that the Petitioner needs to provide the reasons and justification for sharp increase in receivables over the past few years along with action plan for recovery of these receivables.
17. Issue # 10: Whether the Miscellaneous Issues regarding Introduction of Separate Tariff for Seasonal Industries, Wheeling Charges and rationalization of Fixed Minimum Charges are justified?
17.1 Introduction of Seasonal Tariff:
17.1.1 The Petitioner has proposed to introduce a separate tariff for seasonal industries. Seasonal Industry works only for part of the year to meet demand for goods or services arising during a particular season of the year like ice factories, cotton & ginning factories, rice & oil mills etc. In the schedule of electricity tariff, seasonal industry is being billed on the basis of 125% of relevant industrial tariff and having the option to convert to the regular tariff and vice versa. By introducing uniform rate of minimum fixed charges for industrial tariff charged in the non operative period, seasonal industries are switching to permanent tariff to avoid the additional payment of 25% seasonal charge.
17.1.2 MEPCO has 2674 Nos. of seasonal nature connections out of which 2313 are permanent connections whereby 24% of these permanent connections are functioning within 1-4 months, 28% are functioning from 4-6 months, 17% from 6-9 months and 31% from 9-12 months. Due to their work for the part of season, a huge revenue is reduced which is borne by the other consumer categories. The impact of this switchover is estimated to be Rs.360 million annually. Therefore, the Petitioner proposed that instead of recovery of additional
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9- Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/7RF-175/MEPCO-2011
25% of seasonal charges from seasonal nature industries, these should be brought under a separate Seasonal Tariff - F with their prescribed rates of variable, fixed and fixed minimum charges.
17.1.3 The Authority considered the suggestion by the Petitioner and justification for introduction of separate tariff for seasonal industries. The Authority feels that there is already a separate tariff category-F for season industries which is 125% of relevant industrial tariff, therefore, the Petitioner's proposal for introducing a separate tariff for seasonal industries is not valid.
17.2 Wheeling Charges:
17.2.1 The Petitioner submitted that its network is being used for export of electric power to its neighboring DISCOS/ IPPS and almost 20%-25% of power received by it is being exported. An amount of Rs. 8.317 billion has accrued on account of Wheeling Charges/ Use of System Charges and receivable from DISCOS/ IPPs since 2006. However the amount accrued since last 18 months is Rs.2.5 billion on this account. None of the DISCOs have objected nor have accepted or paid any amount on account of Wheeling Charges except PESCO which has committed paying wheeling charges from current year i.e. FY 2011-12. The Petitioner further submitted that as per Performance Audit report of MEPCO, it has requested CPPA to withdraw liability of Rs.6.720 billion on account of wrong wheeling charges charged to MEPCO and requested to debit this amount to NTDC.
17.2.2 The Authority feels that the issue of wheeling charges is between MEPCO and DISCOs therefore the impact of wheeling charges on this account is not made part of MEPCO's other income for the purpose of calculation of its Distribution Margin. Thus, by not considering wheeling charges as part of other income, the Petitioner will be compensated for its 1.1% losses pertaining to export of power from its system to other DISCOS/ IPPs. The Authority considers that in case any dispute arises between MEPCO and DISCOs on wheeling charges, MEPCO should bring it separately with documentary evidences. Similarly on the issue of wrong wheeling charges charged by CPPA to MEPCO, if there is any dispute between MEPCO and CPPA, MEPCO should also substantiate it separately with documentary evidences to NEPRA.
17.3 Fixed minimum charges for the Agriculture Consumer, in case no energy is consumed
17.3.1 MEPCO in its tariff petition pertaining to the FY 2011-12, submitted that Commercial Tariff A-2 (c) and Agricultural TOU tariff has been introduced but fixed minimum charges has not been designated like other tariffs , in case no energy is consumed. The Petitioner submitted that Rs. 100/KW of higher of sanctioned load or running load for commercial and Agriculture TOU billing may be introduced by the Authority.
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V Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
17.3.2 The Authority observed that there is already minimum monthly charge applicable to Commercial Categories A-2 in case no energy is consumed. However, MEPCO's contention with respect to fixed minimum charges for Agricultural consumers, consuming no energy is valid. Thus, accordingly the Authority has decided to assess Rs. 350/- per consumer per month, as fixed minimum charges for Agricultural consumers in case no energy is consumed. Considering the rationale of uniformity the same assessment is made in the instant case. (Annex - III).
17.4 Increase of Minimum Charges for Residential Consumers:
17.4.1 It has been contended on behalf of the Petitioner that tariff rates of General Consumers have been increased from February 2007 to March 2011 by 16.8% and 57 .58% but minimum monthly charges have not been increased with the same proportion . Therefore, the Petitioner requested that keeping in view the inflated cost of electricity ; the following minimum monthly charges should be allowed:
Category Load Minimum Charges per month (Rs.) Existing Proposed Single Phase 75 90 Domestic 3-Phase 150 175 Single Phase 175 275 Commercial 3-Phase 350 550
17.4.2 The Authority feels that the Petitioner's request in this regard is not comprehensive and without any justification and it is merely a suggestion; therefore, the Authority declined the Petitioner's request to increase the minimum fixed charges for Domestic and Commercial Categories.
18. Issue # 11. Whether the Petitioner's Proposed Revenue Requirement for FY 2011-12 is justified?
18.1 Annual Revenue Requirement comprises of the following:
1. Power Purchase Price
2. Impact of T&D Losses
3. Distribution Margin
i) O&M Expenses
ii) Depreciation, RORB and Other Income
4. Prior Year Adjustment
35 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
18.2 For the assessment of annual Revenue Requirement, each of the components of average tariff is discussed in detail in the succeeding paragraphs.
18.3 Power Purchase Price (PPP)
18.3.1 Ministry of Water & Power vide its letter dated 14th November, 2011 requested the Authority to incorporate its Business Plan for the FY 2011-12 while determining the Consumer-End tariff of DISCOs pertaining to the same period. According to MoWP, this Business Plan was approved by the Government in August 2011 and NEPRA was requested that this decision may be kept in view as a policy decision of the Government while determining Consumer- End Tariff for DISCOs pertaining to the FY 2011-12.
18.3.2 The Authority has considered the above mentioned policy decision of MoWP in the light of Provisions of NEPRA Act and Rules made there under. The Authority considers that the policy decision is not consistent with the following provisions of NEPRA Act:
7(1) The Authority shall be exclusively responsible for regulating the provision of electric power services."
7(3) a The Authority shall determine tariff, rates, charges and other terms and conditions for supply of electric power services by the generation, transmission and distribution companies and recommend to the Federal Government for notification.
7(6) The Authority shall, as far as practicable, protect the interests of consumers and companies providing electric power services in accordance with guidelines, not inconsistent with the provisions of this Act, laid down by the Government".
31(2) The Authority, while determining the tariff, shall;
a) Protect consumers against monopolistic and oligopolistic practices; c) Encourage efficiency in licensees' operations and quality of service; d) Encourage economic efficiency in the electric power industry; f) Determine tariffs so as to eliminate exploitation and minimize economic distortions.
18.3.3 The Authority has further noted that the Furnace Oil prices assumed in the said Business Plan is Rs.46,000/ M. Ton which is not realistic . Moreover no generation on HSD fuel in the above Business Plan has been projected. The factual position is that the RFO prices over the last year have shown an increasing trend and the average RFO prices from July 2011 to December 2011were around Rs. 66,000 [excluding Sales Tax] per metric ton. Furthermore, the RFO
36 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
prices in Pakistan are not only affected by the international market but also by the Pak Rupee devaluation.
18.3.4 While making assessment for generation cost for the FY 2011-12, NEPRA has assumed RFO prices in the range of Rs. 66,723 per metric ton to Rs. 63,000 per metric ton [excluding Sales Tax] after incorporating the possible determinants of RFO prices. Unlike FY 2010-11, during FY 2011-12, approximately 2.00% generation is expected to be generated on HSD due to the ongoing shortage of gas supply which has not been accounted for by MoWP in its above Business Plan. The aforementioned generation on HSD is assumed by NEPRA in the light of ECC decision in the matter of Sapphire, Halmore, Orient and Saif whereby one turbine of these plants would run on HSD throughout the year. For the FY 2011-12, the HSD prices are being assumed within the range of Rs. 88.23 per liter to Rs. 83.18 per liter [excluding Sales Tax]. In view thereof, accepting the aforementioned Business Plan being based on unrealistic assumptions would not only be misleading but will be inconsistent with the following provisions of Rule 17(3) of NEPRA Tariff Standards and Procedure Rules 1998;
i) Tariff should allow licensees the recovery of any and all costs prudently incurred to meet the demonstrated needs of their customers, provided that, assessments of licensees, prudence may not be required where tariffs are set on other than cost - of - service basis such as formula-based tariffs that are designed to be in place for more than one year;
v) Tariff should reflect marginal cost principles to the extent feasible, keeping in view the financial stability of the sector;
ix) Tariff should, to the extent feasible, reflect the full cost of service to consumer groups with similar service requirements;
xii) Tariffs should seek to provide stability and predictability for consumers; and
xiii) Tariffs should be comprehensible, free of misinterpretation and shall state explicitly each component thereof;
18.3.5 In view of the above legal position, the Authority is constrained not to accept the above policy decision of MoWP being inconsistent with the provisions of NEPRA Act and Rules made there under.
37 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
18.3.6 All the power generated from different sources is procured by the Central Power Purchasing Agency (CPPA) on behalf of DISCOs at the rates as per the Power Purchase Agreements (PPAs). The overall power purchase cost constitutes a pool price which is transferred to the DISCOs according to a mechanism prescribed by the Authority and notified by the Federal Government in its Official Gazette. The Power Purchase Price for FY 2011-12 has been projected, which in turn formulates the reference values for the monthly fuel adjustments & quarterly adjustments with respect to Capacity and Transmission Charges.
18.3.7 From all the available sources i.e. hydel, thermal-gas, thermal-oil, nuclear, coal and imports, a total of 93,014 GWh power is expected to be generated during the FY 2011-12. The estimated/projected source wise generation and cost of electricity is given in the following table:
Generation Energy Charges Description GWh Share Rs. Million Share Hydel 28,114 30.23% 4,833 0.77% Coal 76 0.08% 232 0.04% HSD 1,863 2.00% 33,610 5.30% Thermal - RFO 33,329 35.83% 491,711 76.36% Thermal - Gas 23,978 25.78% 96,902 15.41% Nuclear 4,803 5.16% 5,375 0.85% Mixed 585 0.63% 6,724 1.07% Import from Iran 260 0.28% 2,261 0.19% Wind 8 0.01% 69 0.01% Total 93,014 100% 641,717 100% Capacity Charge 169,582
Total Generation Cost 811,299
18.3.8 From the above table it is clear that 36% of total generation is expected on Residual Fuel oil (RFO) but its share in overall energy cost is to be 77%, which means that variation in generation mix and oil prices will have great impact on the cost of generation and will ultimately affect the consumer-end tariff. The RFO prices over the last year have shown an increasing trend. During the FY 2010-11, the average RFO price was projected as Rs. 47,000 [excluding Sales Tax] per metric ton, whereby the average RFO prices from July 2011 to December 2011were around Rs. 66,000 [excluding Sales Tax] per metric ton. The RFO prices in Pakistan are not only affected by the international market but also by the Pak Rupee devaluation. For the FY 2011-12, RFO prices have been assumed within the range of Rs. 66,723 per metric ton to Rs. 63,000 per metric ton [excluding Sales Tax] after incorporating
38 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
the possible determinants of RFO prices. Unlike FY 2010-11, during FY 2011-12, approximately 2.00% generation is expected to be generated on HSD due to the ongoing shortage of gas supply. The aforementioned generation is assumed in the light of ECC decision in the matter of Sapphire, Halmore, Orient and Saif whereby one turbine of these plants would run on HSD throughout the year. For the FY 2011-12, the HSD prices are being assumed within the range of Rs. 88.23 per liter to Rs. 83.18 per liter [excluding Sales Tax].
18.3.9 The generation cost is transferred to the DISCOS according to the Transfer Price Mechanism (TPM) as prescribed by the Authority and notified vide SRO 1130(1)/2008 dated October 30, 2008 in the Official Gazette:
18.3.10NTDC shall charge the Ex-WAPDA DISCOS and KESC, a transfer charge for procuring power from approved generating companies (termed as CPGENCOs) and its delivery to XWDISCOs for a billing period as per following mechanism/formula: -
XTC = XCTC + XETC
Where: XTC = Transfer charge to XWDISCOS & KESC XCTC = Capacity Transfer Charge to XWDISCOS & KESC XETC = Energy Transfer Charge to XWDISCOS & KESC XCTC = CpGenCap + USCF XWD Where: (i) CPGen Cap = the summation of the capacity cost in respect of all CPGencos in Rs for a billing period minus the amount ofliquidated damages received during the month.
(V) XWD the sum of the maximum demand of the XWDISCOs & KESC in kW recorded during a billing period at all the delivery metering points at which power is received by the XWDISCOs & KESC.
(iii) USCF = the fixed charge part of the use ofsystem charges in Rs perk Wper month.
XETC CpGenE (Rs) XWUs (kWh) Where:
39 9- Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
(i) CPGenE = the summation of the variable charge rate (Rs per kWh) approved for each of the CPGenCOs times the energy in kWh procured from the respective CPGENCO during the billing period.
(ii) XWUs = the summation of the energy units (kWh) recorded at the delivery metering point of all the XWDISCOs & KESC during a billing period.
Note. The transfer charge shall be calculated on the basis of units delivered after adjusting target transmission losses of 2.5%. NTDCshall, for the purpose of clarity, intimate to all Ex- WAPDA DISCOs & KESC the generation part of the Transfer Charge during a billing period, by deducting from the Transfer Charge the Transmission Charge or Use of System Charge.
18.3.11 According to the above mechanism Rs.90,791 million, Rs.26,913 million and Rs.2,837 million is the share of the Petitioner on account of CpGenE, CpGenCap and USCF respectively for the FY 2011-12. The overall fixed charges comprising of CpGenCap and USCF in the instant case work out as Rs. 29,750 million which translate into Rs.2.26/kWh.
18.3.12 The annual PPP for the FY 2011-12 in the instant case works out as Rs.120,541 million. With the projected purchase of 12,879 GWh for the same period the average PPP turns out to be as Rs. 9.35/ kWh. On the basis of 15.0 % T&D losses, the PPP per kWh is assessed as Rs. 11.01/kWh.
19. Distribution Margin (DM):
19.1 The Petitioner has requested to allow a Distribution Margin of Rs. 12,867 million for the FY 2011-12 which is inclusive of O&M Cost, Depreciation, RORB and Other income and Interest on Short Term Loans. The assessment of O&M Cost and Other Income has been discussed in the preceding paragraphs. The remaining two items depreciation and RORB are being discussed in the following paragraphs;
20. Depreciation:
20.1 The Petitioner has estimated a depreciation charge of Rs 2,658 million for the FY 2011-12 as compared to the depreciation charge of Rs.2,046 million estimated by the Authority for FY 2010-11. The Petitioner has not taken into account the impact of amortization of deferred credit on depreciation. The actual depreciation charge for FY 2010-11 is estimated as Rs.2,165 million.
20.2 In order to make fair assessment the Authority keeps in view the investment approved by the Authority. After taking into account new investments, the Gross Fixed Assets in
40 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
Operation for the FY 2011-12 will be Rs.67,018 million. Accordingly the depreciation charge for the FY 2011-12 has been assessed as Rs. 2,373 million.
20.3 After carefully examining the relevant details and information pertaining to the deferred credit and amortization as per the accounts for the FY 2010-11 & 2011-12, the amortization of deferred credit is assessed to the tune of Rs.1,453 million for the FY 2011-12, thus passing on the benefit to this extent to the consumers. Accordingly, the consumers would bear net depreciation of Rs. 920 million (Rs.2,373 - Rs.1,453).
21. Return on Rate Base (RORB):
21.1 The Petitioner has estimated the RORB as Rs 3,992 million assuming a Weighted Average Cost of Capital (WACC) of 16.31% and average regulatory asset base of Rs.24,474 million in accordance with the following formula: RORB = Rate Base x WACC
21.2 The RORB is calculated by the Petitioner on the basis of addition of Rs.11,178 million in fixed assets in FY 2011 - 12 however the last three years trend of investments show that the additions in fixed assets were Rs.5,872 million, Rs.5,295 million and Rs.5132 million for FY 2008-09, FY 2009- 10 and FY 2010- 11 respectively.
21.3 According to Rule 17(3)(iii) of the Tariff Standards and Procedure Rules 1998, tariffs should allow licensee a rate of return which promotes continued reasonable investment in equipment and facilities for improved and efficient service. For reliable supply of electricity the company has to be made viable for which the company should be allowed comparable return of similar business . In the earlier determination the Rate of Return allowed to the investor was the Weighted Average Cost of Capital (WACC) comprising of two components (i) cost of debt & (ii) cost of equity.
21.4 The Authority has been allowing a Pre- tax rate of return to the Petitioner, which inherently allowed a provision for taxation to the Petitioner. An analysis of its draft accounts for the FY 2010-11, showed that being a loss making company , no actual payment had been made on that account . Again by using Pre- tax rate, the Authority would be allowing provision for tax which the Petitioner may or may not pay for the FY 2011-12 which will unnecessarily burden the consumers In view thereof, the Authority has decided to use a post tax rate of return , which would guarantee interest payments and return on the assumed optimum capital structure of 80 :20 (Debt : Equity).
21.5 The Authority's calculation of WACC was based on the following assumptions: Asset Beta 0.37 Debt: Equity Ratio 80:20 Tax Rate 35%
41 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
Risk Free Rate 9.2% Market premium 8% Equity Beta 1.33 Cost of Equity 19.86% Pre-tax cost of Debt 12.75% 21.6 The cost of equity was calculated according to the following formula: ke=RF+(RM-RF)x(3 = 9.2% + (8% x 1.33) = 19.86% The cost of debt was taken as post tax.
kd= Cost of debt x (1- Tax Rate) = 12.75% x (1- 0.35%) = 8.2875%
21.7 In the above calculations the asset beta of developed market was used because in the local market no distribution company is listed on the stock market. Since the company has negative equity therefore a notional debt equity ratio of 80:20 had been adopted based on the above assumptions. The Weighted Average Cost of Capital (post tax) is worked out according to the following formula: WACC=[kex(E/V)) +[kdx(D/V))
Where ke and kd are cost of equity and debt; E / V and D / V are equity and debt ratios respectively. WACC = [19.86% x (20%)) + (8.2875% x 80%) = 10.60%
21.8 In the Authority's opinion the Rate of Return should be reasonable enough, sufficient to assure the confidence in the financial soundness of the utility, and should be adequate to maintain and support its credit and enable it to raise money necessary for the proper discharge of its public service. The Authority considers that from the investor or the company point of view it is important that there be enough revenue not only for operating expenses but also for the capital cost of the business including the service of its debt. The Authority further considers that return to the equity owner should commensurate with the return on investment of other enterprises having comparable risks. In view thereof, the Authority considers that 10 .60% WACC in the instant case is reasonable as well as comparable with the businesses having comparable risks.
21.9 Using the aforementioned WACC, the Authority has assessed Rs.2,167 million as return on rate base as per the following calculations:
42 Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011
Rupees in Million Description FY 2010-11 FY 2011-12 Provisional Projected Opening fixed assets in operation 56,009 61,142 Assets Transferred during the year 5,132 5,876 Closing Fixed Assets in Operation 61,142 67,018 Less: Accumulated Depreciation 19,382 21,755 Net Fixed Assets in operation 41,760 45,263 + Capital Work in Progress (Closing) 6,240 7,296 Total Fixed Assets 48,000 52,558 Less: Deferred Credit ( including share of 29,244 30,429 deposit works in CWIP ) Total 18,756 22,130 Average Regulatory Assets Base 20,443 Return on Rate Base @ 10.60% 2,167
21.10 Based on the proposed assessments made in the preceding paragraphs the Revenue Requirement for the FY 2011-12 may be assessed as per the following details;
1 Power Purchase Price Rs.120,541 Million CpGenE Rs.90,791 Million CpGenCap Rs.26,913 Million USCF Rs. 2,837 Million
2. Distribution Margin Rs. 7,514 Million O&M Cost Rs. 6,374 Million Depreciation Rs. 2,373 Million RORB Rs. 2,167 Million Gross DM Rs.10,914 Million Less: Other Income Rs. 3,400 Million Net DM Rs. 7,514 Million Prior Year Adjustment Rs. 2,784 Million Total Assessed Revenue Requirement Rs. 130,839 Million
21.11 Based on the targeted sales of 10,947 GWh for the FY 2011-12, the Petitioner's average sale rate works out Rs. 11 .9520/kWh, consisting of Rs.11.0113/kWh of adjusted PPP, Rs. 0.6864 /kWh of DM and Rs.0.2543 of prior year adjustment.
21.12 The assessed Revenue Requirement of Rs.130,839 would be recovered from the consumers during the FY2011-12, through the projected units of 10,947 GWh, as per Annex - II.
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i 9 v Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRAITRF-175/MEPCO-2011
22. Decision of the Authority with respect to the restricting slab benefit to the previous one slab only in case of Residential Consumers.
22.1 Ministry of Water & Power vide its letter dated 4th August, 2011 proposed the Authority to revert back to previous system of all slab benefit for the domestic consumers for the tariff determinations of the FY 2011-12. The Authority has considered the communication from MoWP and is of the view that the Authority while assessing the tariff petitions pertaining to the 1st quarter of the FY 2010-11, decided that the residential consumers will be given the benefit of only one previous slab. The decision was based on the rationale that the residential consumers having consumption more than 300 units, come mostly from affording class of society. If these consumers are also given the benefit of subsidized slabs, which are meant for low income group of people, the tariff of lower slabs will have to be increased further.
22.2 The Authority is still of the view that the benefit of subsidized residential rates should be restricted to low income groups only. In view thereof, the Authority is constrained not to accept the above proposal of MoWP and has decided to maintain its previous decision allowing only one slab benefit, which is indicated as Annex -IL
23. Changing of Terms & Conditions with respect to the application of D-1 (b) Agricultural Consumers
23.1 The Authority while determining the consumer -end tariff of PESCO pertaining to the 2nd 3rd and 4th quarter of the FY 2010- 11, also decided a complaint filed by Energy Monitoring Cell (EMC) under the Finance Dept . of Govt. of Khyber Pakhtunkhwa against PESCO with respect to the application of tariff D-2.
23.2 The Authority in the said determination ( Para 9, Issue # 3) , decided to change the Terms & Conditions with respect to the application of D-1 (b) Agricultural Consumers, in order to protect consumers regarding the application of higher tariff as a result of non - provision of TOU meters. Since, this decision was of principle nature and its application would affect all the DISCOs of Pakistan, accordingly, the Authority has decided to modify the Terms & Conditions pertaining to D-1 (b) clause 3 (Annex - V) as
All the exiting consumers having sanctioned load 5 kW and above shall be provided T. O. U metering arrangements by 31st October, 2011 and shall be governed by D-1(a) for SCARP and D2 forAgricultural Supply, till that time.
44 ffl- Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRA/TRF-175/MEPCO-2011 11
24. GUIDELINES/ DIRECTIONS:
24.1 While determining the tariff for Petitioner Company for the FY 2011-12, following guidelines are hereby issued for strict compliance by the Petitioner;
1. 100% installation of TOU meters shall be completed by 31s, October, 2011 which will not be extended further and legal action/ penalties may be imposed in case the above deadline is not achieved.
2. Keeping in view the low number of consumers qualifying for TOU meters, MEPCO will re-evaluate those consumers whose sanctioned load is less than 5 kW but their actual load is more than 5 kW.
3. A presentation from M/S BARQAAB Consulting Services Pvt. Ltd on the line losses study report will be arranged by MEPCO. The Authority would communicate the date and venue of the presentation in due course of time.
4. The Petitioner is required to submit detailed cost/ benefit analysis of the Investment Program, details of undergoing investments with their status and expected completion dates and expected improvement in the system.
5. The Authority again maintains its previous stance on new recruitments. In order to get theses approved, the Petitioner has to justify these on the basis of efficient utility practices and functions.
6. In order to ensure that the Petitioner fulfils its legal liability with respect to the post retirement benefits, the Petitioner is directed to create a separate fund in this regard before 30th June 2012.
25. ORDER:
From what has been discussed above, the Authority hereby determines the tariff of the petitioner Company for the Financial Year 2011-12 as under:- I. Multan Electric Power Company (MEPCO) is allowed to charge its consumers such tariff as set out in the schedule of tariff for MEPCO annexed to the determination.
II. The actual variation in fuel cost component of power purchase price against the reference fuel cost component shall be adjusted on monthly basis without taking into account the T&D losses. The monthly fuel price adjustment shall be based on the actual information submitted by CPPA.
45 Decision of the Authority in the matter of Multan Electric Power Company Limited No. NEPRAI RF-175/MEPCO-2011
III. MEPCO is allowed to charge the users of its system a "Use of system charge" (UOSC) equal to:
i) Where only 132 kV system is involved
UOSC = DM x (I L) Paisa / kWh (1-0.035 )
ii) Where only 11 kV distribution systems is involved..
_L)_ UOSC = DM x (I - Paisa / kWh (1-0.05 )
iii) Where both 132 kV and 11 kV distribution systems are involved.
UOSC = DM x (I L) Paisa / kWh (1-0.085 )
Where:
Distribution Margin for FY 2011- 12 is set at Rs 0.6864/kWh. `L' will be the overall percentage loss assessment for the year set at 15.00 % or FY 2011-12.
IV. The residential consumers will be given the benefit of only one previous slab.
V. The Terms and Conditions clause 3, with respect to the application of D-1 (b) Agricultural Consumers has been changed as ;
All the exiting consumers having sanctioned load 5 k W and above shall be provided
T. O. Umetering arrangements by 31St October, 2011 and shall be governed by D-1(a)
for SCARPand D2forAgricultural Supply, till that time.
VI Fixed minimum charges for Agricultural consumers in case no energy is consumed, is assessed as Rs. 350/- per consumer per month. 3Z, * VII. Annex-I, III &V annexed with determination is intimated to the Federal Government for notification in the official gazette under Section 31(4) of the NEPRA Act. Decision of the Authority in the matter ofMultan Electric Power Company Limited No. NEPRA/lRF-175/MEPCO-2011
25.1 GUIDELINES/ DIRECTIONS:
25.2 While determining the tariff for Petitioner Company for the FY 2011-12, following guidelines are hereby issued for strict compliance by the Petitioner;
1. 100% installation of TOU meters shall be completed by 31st October, 2011 which will not be extended further and legal action/ penalties may be imposed in case the above deadline is not achieved.
2. Keeping in view the low number of consumers qualifying for TOU meters, MEPCO will re-evaluate those consumers whose sanctioned load is less than 5 kW but their actual load is more than 5 kW.
3. A presentation from M/S BARQAAB Consulting Services Pvt. Ltd on the line losses study report will be arranged by MEPCO. The Authority would communicate the date and venue of the presentation in due course of time.
4. The Petitioner is required to submit detailed cost/ benefit analysis of the Investment Program, details of undergoing investments with their status and expected completion dates and expected improvement in the system.
5. The Authority again maintains its previous stance on new recruitments. In order to get theses approved, the Petitioner has to justify these on the basis of efficient utility practices and functions.
6. In order to ensure that the Petitioner fulfils its legal liability with respect to the post retirement benefits, the Petitioner is directed to create a separate fund in this regard before 30th June 2012.
47 Annex-I
FUEL PRICE ADJUSTMENT MECHANISM
Actual variation in fuel cost component against the reference fuel cost component for the corresponding months will be determined according to the following formula;
Fuel Price variation = Actual Fuel Cost Component - Reference Fuel Cost Component
Where:
Fuel Price variation is the difference between actual and reference fuel cost component
Actual fuel cost component is the fuel cost component in the pool price on which the DISCOs will be charged by CPPA in a particular month; and
Reference fuel cost component is the fuel cost component for the corresponding month projected for the purpose of tariff determination as per Annex-IV of the determination;
The fuel price adjustment determined by the Authority shall be shown separately in the bill of the consumer and the billing impact shall be worked out on the basis of consumption by the consumer in the respective month.
9- Annex-II
Multan Electric Power Company (MEPCO) Estimated Sales Revenue on the Basis of New Tariff
Tariff (NEPRA) Revenue (as per NEPRA) Fixed Variable Fixed Variable Total Charge Description Sales GWh Sales Mix Charge Charge Charge Rs./kW/ Month Rs./ kWh Rs.Million Rs.Million Rs. Million
Residential Up to 50 Units 630 5.75% 3.00 1,892 1,892 For peak load requirement less than 5 kW - 01-100 Units 2,327 21.26% 10.00 - 23,282 23,282 101-300 Units 1,780 16.26% 14.50 - 25,814 25,814 301-700Units 464 4.24% 16.40 - 7,619 7,619 Above 700 Units 130 1.19% 18.00 - 2,342 2,342 For peak load requirement exceeding 5 kW) - - - - Time of Use (TOU) - Peak 3 0.03% 17.00 52 52 Time of Use (TOU) - Off-Peak 18 0.16% 10.00 - 178 178 Total Residential 5,352 48.89% - 61,178 61,178
Commercial - A2 For peak load requirement less than 5 kW 421 3.85% 18.50 - 7,789 7,789
For peak load requirement exceeding 5 kW - Regular 21 0.20% 400.00 16.00 118 343 461 Time of Use (TOU) - Peak 39 0.35% 17.00 - 661 661 Time of Use (TOU) - Off-Peak 175 1.60% 400.00 10.00 1,174 1,755 2,930 Total Commercial 657 6. 00% 1,292 10,548 11,840
Industrial IR0 RF 131 204 1.87% 13.00 - 2,657 2,657 B2 0 236 2.15% 400.00 11.50 497 2,710 3,207 B2 - TOU (Peak) W RA 88 0.81% 16.00 - 1,413 1,413 B2 - TOU (Off-peak) -1 > 537 4.90% 400.00 9.70 1,241 5,208 6,449 HORI Y B3 - TOU (Peak) AUT y 125 1.14% 15.70 - 1,962 1,962 B3 - TOU (Off-peak) 42 808 7.38% 380.00 9.60 893 7,760 8,653 B4 - TOU (Peak) 79 0.72% 15.50 - 1,218 1,218 O^1 B4 - TOU (Off-peak) bN * 397 3.63% 360.00 9.50 377 3,774 4,151 Total In ustrial 2 ,474 22 .60% 3,007 26, 701 29,708
Single Point Supply for further distribution C1(a) Supply at 400 Volts-less than 5 kW 1 0.01% 14.00 - 20 20 C1(b) Supply at 400 Volts-exceeding 5 kW 20 0.18% 400.00 12.50 20 246 266 Time of Use (TOU) - Peak 2 0.02% 16.00 - 35 35 Time of Use (TOU) - Off-Peak 10 0.09% 400.00 9.70 12 94 106 C2 Supply at 11 kV 34 0.31% 380.00 12.40 32 420 453 Time of Use (TOU) - Peak 18 0.16% 15.70 - 279 279 Time of Use (TOU) - Off-Peak 80 0.73% 380.00 9.60 87 764 852 C3 Supply above 11 kV 4 0.03% 360.00 12.30 3 45 48 Time of Use (TOU) - Peak 0 0.00% 15.50 - 7 7 Time of Use (TOU) - Off-Peak 2 0.02% 360.00 9.50 2 19 21 Total Single Point Supply 170 1. 56% 157 1 ,929 2,087
Agricultural Tube-wells - Tariff D Scarp 148 1.35% 12.00 1,773 1,773 Agricultual Tube-wells 8 0.07% 200.00 10.00 5 80 85 Time of Use (TOU) - Peak 379 3.46% 15.50 - 5,871 5,871 Time of Use (TOU) - Off-Peak 1,727 15.78% 200.00 9.50 1,390 16,411 17,801 Total Agricultural 2,261 20.66% 1,395 24, 135 25,530 Public Lighting - Tariff G 26 0.24% 15.50 - 400 400 Tariff H - Residential Colonies attached to industries 6 0.06% 15.00 - 93 93 Tariff I- Railway Traction 0 0.00% 11.00 - 3 3 Sub-Total 32 100.00% - 496 496 Total Revenue 10,947 100.00% 5,851 124,988 130,839 k+/ Annex-III SCHEDULE OF ELECTRICITY TARIFFS FOR MULTAN ELECTRIC POWER COMPANY (MEPCO)
A-1 GENERAL SUPPLY TARIFF RESIDENTIAL
FIXED VARIABLE CHARGES Sr. No . TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh a) For Sanctioned load less than 5 kW i Up to 50 Units - 3.00 For Consumption exceeding 50 Units ii 001 - 100 Units - 10.00 iii 101 - 300 Units - 14.50 iv 301 - 700 Units - 16.40 v Above 700 Units - 18.00 b) For Sanctioned load 5 kW & above Peak Off-Peak Time Of Use - 17.00 10.00 As per the Authority' s decision residential consumers will be given the benellts of only one previous sli Under tariff A-1, there shall be minimum monthly charges at the following rates even if no energy is consumed. a) Single Phase Connections: Rs. 75/- per consumer per month b) Three Phase Connections : Rs. 150/- per consumer per month
A-2 GENERAL SUPPLY TARIFF - COMMERCIAL
FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh
a) For Sanctioned load less than 5 kW - 18.50
b) For Sanctioned load 5 kW & above 400.00 16.00 Peak Off-Peak c) Time Of Use 400.00 17.00 10.00
Under tariff A-2, there shall be minimum monthly charges at the following rates even if no energy is consumed.
a) Single Phase Connections; Rs. 175/- per consumer per month b) Three Phase Connections: Rs. 350 /- per consumer per month
Page 1 of 4 e_ (.J Annex-III SCHEDULE OF ELECTRICITY TARIFFS FOR MULTAN ELECTRIC POWER COMPANY (MEPCO)
B INDUSTRIAL SUPPLY TARIFFS FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh B1 Upto 25 kW (at 400/230 Volts) - 13.00 B2(a) exceeding 25-500 kW (at 400 Volts) 400.00 11.50
Time Of Use Peak Off-Peak B1 (b) Up to 25 KW 17.00 10.00 B2(b) exceeding 25-500 kW (at 400 Volts) 400.00 16.00 9.70 B3 For All Loads up to 5000 kW (at 11,33 kV ) 380.00 15. 70 9.60 B4 For All Loads (at 66,132 kV & above ) 360.00 15.50 9.50 For B1 consumers there shall be a fixed minimum charge of Rs . 350 per month. For B2 consumers there shall be a fixed minimum charge of Rs . 2,000 per month. For B3 consumers there shall be a fixed minimum charge of Rs . 50,000 per month. For B4 consumers there shall be a fixed minimum charge of Rs . 500,000 per month. C - SINGLE-POINT SUPPLY FOR PURCHASE IN BULK BY A DISTRIBUTION LICENSEE AND MIXED LOAD CONSUMERS NOT FALLING IN ANY OTHER CONSUMER CLASS FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh C -1 For supply at 400/230 Volts a) Sanctioned load less than 5 kW - 14.00 b) Sanctioned load 5 kW & up to 500 kW 400.00 12.50 C -2(a) For supply at 11,33 kV up to and including 5000 kW 380.00 12.40 C -3(a) For supply at 66 kV & above and sanctioned load above 5000 kW 360.00 12.30
Time Of Use Peak Off-Peak C -1(c) For supply at 400/230 Volts 5 kW & up to 500 kW 400.00 16.00 9.70 C -2(b) For supply at 11,33 kV up to and including 5000 kW 380.00 15.70 9.60 C -3(b) For supply at 66 kV & above and sanctioned load above 5000 kW 360.00 15.50 9.50
Page 2 of 4 ANN e
"5 i Annex-III SCHEDULE OF ELECTRICITY TARIFFS FOR MULTAN ELECTRIC POWER COMPANY (MEPCO)
D - AGRICULTURE TARIFF
FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/ M Rs/kWh D-1(a) SCARP less than 5 kW - 12.00 D-2 Agricultural Tube Wells 200.00 10.00 Peak Off-Peak D-1(b) SCARP and Agricultural 5 kW & above 200.00 15. 50 9.50 Under this tariff, there shall be minimum monthly charges of Rs.350/- per consumer per month, even if no energy is consumed. Note :- The consumers having sanctioned load less than 5 kW can opt for TOU metering.
E - TEMPORARY SUPPLY TARIFFS
FIXED VARIABLE CHARGES Sr. No . TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh E-1(i) Residential Supply - 18.00 E-1(ii) Commercial Supply - 18.50 E-2 Industrial Supply - 13.00
For the categories of E-l(i&ii) above, the minimum bill of the consumers shall be Rs. 50 /- per day subject to a minimum of Rs . 500/- for the entire period of supply , even if no energy is consumed.
F - SEASONAL INDUSTRIAL SUPPLY TARIFF
125% of relevant industrial tariff Note: Tariff-F consumers will have the option to convert to Regular Tariff and vice versa. This option can be exercised at the time of a new connection or at the beginning of the season. Once exercised , the option remains in force for at least one year.
G- PUBLIC LIGHTING
FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh Street Lighting 15.50
Under Tariff G, there shall be a minimum monthly charge of Rs.500 /- per month per kW of lamp capacity installed.
Page 3 of 4 rf^L z
52 Annex-III SCHEDULE OF ELECTRICITY TARIFFS FOR MULTAN ELECTRIC POWER COMPANY (MEPCO)
H - RESIDENTIAL COLONIES ATTACHED TO INDUSTRIAL PREMISES
FIXED VARIABLE CHARGES Sr. No . TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/M Rs/kWh Residential Colonies attached to industrial premises 15.00
I - RAILWAY TRACTION
FIXED VARIABLE CHARGES Sr. No. TARIFF CATEGORY / PARTICULARS CHARGES Rs/kW/ M Rs/kWh Railway Traction - 11.00
q_
Page 4 of 4
77 Annex IV MEPCO Power Purchase Price FY 2011-12
Name July August September October November December January February March April May June Total Units Purchased by DISCO (GWh) 1,456 1,111 1,213 1,110 1,016 868 812 797 1,031 908 1,223 1,333 12,879 kWh CpGenE 6.4390 6.6965 6.5484 6.9909 6.3129 7.5902 8.9561 7.6419 7.7601 7.6842 6.5407 6.6956 7.0496 CpGenCap 1.5567 1.7681 1.6888 1.8185 2.2526 2.3367 2.7508 2.6639 2.6372 3.0207 1.8052 1.7032 2.0897 USCF 0.1775 0.1708 0.1762 0.1939 0.2452 0.2190 0.2495 0.2859 0.2892 0.3412 0.1898 0.1878 0.2203 Total PPP in Rs./kWh 8.1732 8.6354 8.4134 9.0033 8.8107 10.1458 11.9564 10.5917 10.6865 11.0461 8.5358 8.5866 9.3596
Rs. Million CpGenE 9,378 7,440 7,946 7,757 6,417 6,589 7,269 6,092 8,003 6,976 7,996 8,928 90,791 CpGenCap 2,267 1,964 2,049 2,018 2,290 2,028 2,232 2,123 2,720 2,742 2,207 2,271 26,913 USCF 258 190 214 215 249 190 203 228 298 310 232 250 2,837 11,450 120,541 1 ppp 11 ,904 9,594 10,209 9,990 8,956 8,807 9,704 8,443 11,021 10,028 10,435 Annex-V
TERMS AND CONDITIONS OF TARIFF (FOR SUPPLY OF ELECTRIC POWER TO CONSUMERS BY DISTRIBUTION LICENSEES)
PART-I
GENERAL DEFINITIONS
The Company, for the purposes of these terms and conditions means Multan Electric Power Company (MEPCO) engaged in the business of distribution of electricity within the territory mentioned in the license granted to it for this purpose.
1. "Month or Billing Period", unless otherwise defined for any particular tariff category, means a billing month of 30 days or less reckoned from the date of last meter reading. 2. "Minimum Charge", means a charge to recover the costs for providing customer service to consumers even if no energy is consumed during the month. 3. "Fixed Charge" means the part of sale rate in a two-part tariff to be recovered on the basis of "Billing Demand" in kilowatt on monthly basis. 4. "Billing Demand" means the highest of maximum demand recorded in a month except in the case of agriculture tariff D2 where "Billing Demand" shall mean the sanctioned load. 5. "Variable Charge" means the sale rate per kilowatt-hour (kWh) as a single rate or part of a two- part tariff applicable to the actual kWh consumed by the consumer during a billing period. 6. "Maximum Demand" where applicable , means the maximum of the demand obtained in any month measured over successive periods each of 30 minutes duration except in the case of consumption related to Arc Furnaces, where "Maximum Demand" shall mean the maximum of the demand obtained in any month measured over successive periods each of 15 minutes duration. 7. "Sanctioned Load" where applicable means the load in kilowatt as applied for by the consumer and allowed/authorized by the Company for usage by the consumer. 8. "Power Factor" means the ratio of kWh to KVAh recorded during the month or the ratio of kWh to the square root of sum of square of kWh and kVARh,. 9. Point of supply means metering point where electricity is delivered to the consumer. 10. Peak and Off Peak hours for the application of Time Of Use (TOU) Tariff shall be the following time periods in a day: ' PEAK TIMING OFF-PEAK TIMING Dec to Feb (inclusive) 5 PM to 9 PM Remaining 20 hours of the day Mar to May (inclusive) 6 PM to 10 PM -do- June to Aug (inclusive) 7 PM to 11 PM -do- Sept to Nov (inclusive) 6 PM to 10 PM -do-
To be duly adjusted in case of day light time saving
Page 1 of 10
V 11. "Supply", means the supply for single-phase/three-phase appliances inclusive of both general and motive loads subject to the conditions that in case of connected or sanctioned load exceeding 4 kW supply shall be given at three-phase. 12. "Consumer" means a person of his successor-in-interest as defined under Section 2(iv) of the Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997). 13. "Charitable Institution" means an institution , which works for the general welfare of the public on no profit basis and is registered with the Federal or Provincial Government as such and has been issued tax exemption certificate by Federal Board of Revenue (FBR). 14. NTDC means the National Transmission and Dispatch Company. 15. CPPA means Central Power Purchasing Agency (CPPA). 16. The "Authority" means "The National Electric Power Regulatory Authority (NEPRA)" constituted under the Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997).
GENERAL CONDITIONS
1. "The Company shall render bills to the consumers on a monthly basis or less on the specific request of a consumer for payment by the due date. 2. The Company shall ensure that bills are delivered to consumers at least seven days before the due date. If any bill is not paid by the consumer in full within the due date, a Late Payment Surcharge of 10% (ten percent) shall be levied on the amount billed excluding Govt. tax and duties etc. In case bill is not served at least seven days before the due date then late payment surcharge will be levied after 7th day from the date of delivery of bill. 3. The supply provided to the consumers shall not be available for resale. 4. In the case of two-part tariff average Power Factor of a consumer at the point of supply shall not be less than 90%. In the event of the said Power factor falling below 90%, the consumer shall pay a penalty of two percent increase in the fixed charges determined with reference to maximum demand during the month corresponding to one percent decrease in the power factor below 90%.
PART-II
(Definitions and Conditions for supply of power specific to each consumer category)
A-1 RESIDENTIAL AND GENERAL SERVICES
1. This Tariff is applicable for supply to;
i) Residences, ii) Places of worship, iii) Approved religious and charitable institutions, iv) Government and Semi-Government Offices and institutions, v) Government Hospitals and Dispensaries, vi) Educational institutions.
Page 2 of 10
0 6 2. Consumers having sanctioned load less than 5 kW shall be billed on single-part kWh rate i.e. A-1 (a) tariff. 3. All new consumers having sanctioned load 5 kW and above shall be provided T.O.U metering arrangement and shall be billed on the basis of tariff A-l(b) as set out in the Schedule of Tariff. 4. All existing consumers having sanctioned load 5 kW and above shall be provided T.O.U metering arrangement and converted to A- 1(b) Tariff by the Company no later than 31St October, 2011.
A-2 COMMERCIAL 1. This tariff is applicable for supply to commercial offices and commercial establishments such as: i) Shops, ii) Hotels and Restaurants, iii) Petrol Pumps and Service Stations, iv) Compressed Natural Gas filling stations, v) Private Hospitals/Clinics/Dispensaries, vi) Places of Entertainment, Cinemas, Theaters, Clubs; vii) Guest Houses/Rest Houses, viii) Office of Lawyers, Solicitors, Law Associates and Consultants etc.
2. Consumers under tariff A-2 having sanctioned load of less than 5 kW shall be billed under a Single-Part kWh rate A-2(a) 3. All existing consumers under tariff A-2 having sanctioned load 5 kW and above shall be billed on A-2(b) tariff till such time that they are provided T.O.U metering arrangement; thereafter such consumers shall be billed on T.O.U tariff A-2(c). 4. The existing and prospective consumers having load of 5 kW and above can opt for T.O.U metering arrangement and A-2(c) tariff. 5. All existing consumers under tariff A-2 shall be provided T.O.U metering arrangement by the Company-and converted to-A-2 (c) Tariff no later than 31St October 2011. 6. All new connections having load requirement 5 kW and above shall be provided T.O.U meters and shall be billed under tariff A-2(c).
B INDUSTRIAL SUPPLY Definitions
1. "Industrial Supply" means the supply for bona fide industrial purposes in factories including the supply required for the offices and for normal working of the industry and also for water pumps and tube-wells operating on three phase 400 volts, other than those meant for the irrigation or reclamation of agricultural land. 2. For the purposes of application of this tariff an "Industry" means a bona fide undertaking or establishment engaged in manufacturing, value addition and/or processing of goods. 3. This Tariff shall also be available for consumers having single-metering arrangement such as;
i) Poultry Farms ii) Fish Hatcheries and Breeding Farms and iii) Software houses
Page 3 of 10
9- cJ 57 Conditions:
An industrial consumer shall have the option, to switch over to seasonal Tariff-F, provided his connection is seasonal in nature as defined under Tariff-F, and he undertakes to abide by the terms and conditions of Tariff-F and pays the difference of security deposit rates previously deposited and those applicable to tariff-F at the time of acceptance of option for seasonal tariff. Seasonal tariff will be applicable from the date of commencement of the season, as specified by the customers at the time of submitting the option for Tariff-F. Tariff-F consumers will have the option to convert to corresponding Regular Industrial Tariff category and vice versa. This option can be exercised at the time of obtaining a new connection or at the beginning of the season. Once exercised, the option will remain in force for at least one year.
B -1 SUPPLY AT 400 VOLTS THREEPHASE AND/OR 230 VOLTS SINGLE PHASE
1. This tariff is applicable for supply to Industries having sanctioned load upto a 25 kW. 2. Consumers having sanctioned load less than 25 kW shall be billed on single-part kWh rate.
B-2 SUPPLY AT 400 VOLTS 1. This tariff is applicable for supply to Industries having sanctioned load of more than 25 kW up to and including 500 kW. 2. All existing consumers under tariff B-2 shall be provided T.O.U metering arrangement by the Company and converted to B-2(b) Tariff no later than 31st October 2011. 3. All new applicants i.e. prospective consumers applying for service to the Company shall be provided T.O.U metering arrangement and charged according to the applicable T.O.U tariff.
B-3 SUPPLY AT 11 kV AND 33 kV
1. This tariff is applicable for supply to Industries having sanctioned load of more than 500 kW up to and including 5000 kW and also for Industries having sanctioned load of 500 kW or below who opt for receiving supply at 11 kV or 33 W. 2. If, for any reason, the meter reading date of a consumer is altered and the acceleration/retardation in the date is up to 4 days, no notice shall be taken of this acceleration or retardation. But if the date is accelerated or retarded by more than 4 days, the fixed charges shall be assessed on proportionate basis for the actual number of days between the date of the old reading and the new reading. 3. The supply under this Tariff shall not be available to a prospective consumer unless he provides, to the satisfaction and approval of the Company, his own Transformer, Circuit Breakers and other necessary equipment as part of the dedicated distribution system for receiving and controlling the supply, or, alternatively pays to the Company for all apparatus and equipment if so provided and installed by the Company. The recovery of the cost of service connection shall be regulated by the NEPRA eligibility criteria. 4. All B-3 Industrial Consumers shall be billed on the basis of T.O.U tariff given in the Schedule of Tariff.
Page 4 of 10 lp^v B-4 SUPPLY AT 66 kV, 132 kV AND ABOVE
1. This tariff is applicable for supply to Industries for all loads of more than 5000 kW receiving supply at 66 kV, 132 kV and above and also for Industries having load of 5000 kW or below who opt to receive supply at 66 kV or 132 kV and above.
2. If, for any reason, the meter reading date of a consumer is altered and the acceleration/retardation in the date is up to 4 days, no notice shall be taken of this acceleration or retardation. But if the date is accelerated or retarded by more than 4 days, the fixed charges shall be assessed on proportionate basis for the actual number of days between the date of the old reading and the new reading.
3. If the Grid Station required for provision of supply falls within the purview of the dedicated system under the NEPRA Eligibility Criteria, the supply under this Tariff shall not be available to such a prospective consumer unless he provides, to the satisfaction and approval of the Company, an independent grid station of his own including Land, Building, Transformers, Circuit Breakers and other necessary equipment and apparatus as part of the dedicated distribution system for receiving and controlling the supply, or, alternatively, pays to the Company for all such Land, Building, Transformers, Circuit Breakers and other necessary equipment and apparatus if so provided and installed by the Company. The recovery of cost of service connection shall be regulated by NEPRA Eligibility Criteria.
4. All B-4 Industrial Consumers shall be billed on the basis of two-part T.O.U tariff.
C SINGLE PO1NT (SINGLE-METERING) SUPPLY :
"Single-Point Supply" for the purpose of this Tariff, means the supply given at one point:
i) To a licensee converted from a bulk supply status (who was procuring power from MEPCO as a consumer prior to grant of license to MEPCO) for the purpose of further distribution within its respective exclusive territory and jurisdiction. ii) To a mix-load consumer not reselling to any other consumer such as residential, commercial, tube-well and others.
General Conditions:
If, for any reason, the meter reading date of a consumer is altered and the acceleration/retardation in the date is up to 4 days no notice will be taken of this acceleration or retardation. But if the date is accelerated or retarded by more than 4 days the fixed charges shall be assessed on proportionate basis for actual number of days between the date of old reading and the new reading.
C-I SUPPLY AT 400/230 VOLTS :
1. This Tariff is applicable to a consumer having mix-load at a single metering arrangement at 400 volts, having sanctioned load of up to and including 500 kW.
Page S of IO 0
59 2. Consumers having sanctioned load less than 5 kW shall be billed on single-part kWh rate i.e. C- I(a) tariff. 3. All new consumers having sanctioned load 5 kW and above shall be provided T.O.U metering arrangement and shall be billed on the basis of Time-of-Use (T.O.U) tariff C-1(c) given in the Schedule of Tariff. 4. All the existing consumers governed by this tariff having sanctioned load 5 kW and above shall be provided T.O.U metering arrangements by 31st October, 2011.
C-2 SUPPLY AT 11 kV AND 33 kV
1. This tariff is applicable to consumers receiving supply at 11 kV or 33 kV at one-point metering arrangement and having sanctioned load of up to and including 5000 kW. 2. The supply under this Tariff shall not be available to a prospective consumer unless he provides, to the satisfaction and approval of the Company, his own Transformer, Circuit Breakers and other necessary equipment as part of the dedicated distribution system for receiving and controlling the supply, or, alternatively pays to the Company for all apparatus and equipment if so provided and installed by the Company. The recovery of the cost of service connection shall be regulated by the NEPRA eligibility criteria. 3. All new consumers shall be provided TOU metering arrangement and shall be billed on the basis of tariff C-2(b) as set out in the Schedule of Tariff. 4. Existing consumers governed by this tariff shall be provided with T.O.U metering arrangement and converted to C-2(b) by 311t October, 2011.
C-3 SUPPLY AT 66 kV AND ABOVE
1. This tariff is applicable to consumers having sanctioned load of more than 5000 kW receiving supply at 66 kV and above. 2. If the Grid Station required for provision of supply falls within the purview of the dedicated system under the NEPRA Eligibility Criteria , the supply under this Tariff shall not be available to such a prospective consumer unless he provides , to the satisfaction and approval of the Company, an independent grid station of his own including Land, Building, Transformers, Circuit Breakers and other necessary equipment and apparatus as part of the dedicated distribution system for receiving and controlling the supply, or, alternatively , pays to the Company for all such Land, Building, Transformers, Circuit Breakers and other necessary equipment and apparatus if so provided and installed by the Company. The recovery of cost of service connection shall be regulated by NEPRA Eligibility Criteria. 3. Existing consumers governed by this tariff shall be provided with T.O.U metering arrangement and converted to C-3(b) by 31St October, 2011. 4. All new consumers shall be provided TOU metering arrangement and shall be billed on the basis of tariff C-3(b) as set out in the Schedule of Tariff.
D AGRICULTURAL SUPPLY
"Agricultural Supply" means the supply for Lift Irrigation Pumps and/or pumps installed on Tube-wells intended solely for irrigation or reclamation of agricultural land or forests, and include supply for lighting of the tube-well chamber.
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60 Special Conditions of Supply
1. This tariff shall apply to:
i) Reclamation and Drainage Operation under Salinity Control and Reclamation Projects (SCARP): ii) Bona fide forests, agricultural tube-wells and lift irrigation pumps for the irrigation of agricultural land. iii) Tube-wells meant for aqua-culture, viz. fish farms, fish hatcheries and fish nurseries. iv) Tube-wells installed in a dairy farm meant for cultivating crops as fodder and for upkeep of cattle.
2. If, for any reason, the meter reading date of a consumer is altered and the acceleration/retardation in the date is up to 4 days, no notice shall be taken of this acceleration or retardation. But if the date is accelerated or retarded by more than 4 days, the fixed charges shall be assessed on proportionate basis for the actual number of days between the date of the old reading and the new reading.
3. The lamps and fans consumption in the residential quarters, if any, attached to the tube-wells shall be charged entirely under Tariff A-1 for which separate metering arrangements should be installed.
4. The supply under this Tariff shall not be available to consumer using pumps for the irrigation of parks, meadows, gardens, orchards, attached to and forming part of the residential, commercial or industrial premises in which case the corresponding Tariff A-1, A-2 or Industrial Tariff B-l, B-2 shall be respectively applicable.
D-1 (a)
1. This tariff is applicable to all Reclamation and Drainage Operation pumping under SCARP related installation having sanctioned load of less than 5 kW.
2. Consumers having sanctioned load less than 5 kW shall be billed on single-part kWh rate i.e. D- 1(a) tariff given in the Schedule of Tariff.
D-1 (b)
1. This tariff is applicable to all Reclamation and Drainage Operation pumping under SCARP related installation and other consumers falling under Agriculture Supply having sanctioned load of 5 kW and above. 2. All new consumers having sanctioned load 5 kW and above shall be provided TOU metering arrangement and shall be charged on the basis of Time-of - Use (T.O.U) tariff D- 1(b) given in the Schedule of Tariff. 3. All the existing consumers having sanctioned load 5 kW and above shall be provided T.O.U metering arrangements by 315, October, 2011 and shall be governed by D-1 (a) for SCARP and D2 for Agriculture Supply, till that time.
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6,1 D-2
1. This tariff is applicable to consumers falling under Agriculture Supply having sanctioned load less than 5 kW excluding SCARP related installations. 2. The fixed charges under this Tariff shall be recovered on the basis of sanctioned load in kilowatt as the billing demand and such charges will be applicable even if no energy is consumed during a month.
E -1 TEMPORARY RESIDENTLAI/COMMERCIAL SUPPLY
Temporary Residential/Commercial Supply means a supply given to persons temporarily on special occasions such as ceremonial, religious gatherings, festivals, fairs, marriages and other civil or military functions. This also includes supply to touring cinemas and persons engaged in construction works for all kinds of single phase loads. For connected load exceeding 4 kW, supply may be given at 400 volts (3 phase) to allow a balanced distribution of load on the 3 phases. Normally, temporary connections shall be allowed for a period of 3 months which can be extended on three months basis subject to clearance of outstanding dues.
Special Conditions of Supply
1. This tariff shall apply to Residential and Commercial consumers for temporary supply. 2. Ordinarily the supply under this Tariff shall not be given by the Company without first obtaining security equal to the anticipated supply charges and other miscellaneous charges for the period of temporary supply.
E -2 TEMPORARY INDUSTRIAL SUPPLY
"Temporary Industrial Supply" means the supply given to an Industry for the bonafide purposes mentioned under the respective definitions of "Industrial Supply", during the construction phase prior to the commercial operation of the Industrial concern. SPECIAL CONDITIONS OF SUPPLY
1. Ordinarily the supply under this Tariff shall not be given by the Company without first obtaining security equal to the anticipated supply charges and other miscellaneous charges for the period of temporary supply. 2. Normally, temporary connections shall be allowed for a period of 3 months, which may be extended on three months basis subject to clearance of outstanding dues.
F SEASONAL INDUSTRIAL SUPPLY
"Seasonal Industry" for the purpose of application of this Tariff, means an industry which works only for part of the year to meet demand for goods or services arising during a particular season of the year. However, any seasonal industry running in combination with one or more seasonal industries, against one connection, in a manner that the former works in one season while the latter works in the other season (thus running throughout the year) will not be classified as a seasonal industry for the purpose of the application of this Tariff.
Page 8 of 10 Definitions
1. "Year" means any period comprising twelve consecutive months. 2. All "Definitions" and "Special Conditions of Supply" as laid down under the corresponding Industrial Tariffs shall also form part of this Tariff so far as they may be relevant.
Special Conditions of Supply
1. This tariff is applicable to seasonal industry. 2. Fixed Charges per kilowatt per month under this tariff shall be levied at the rate of 125% of the corresponding regular Industrial Supply Tariff Rates and shall be recovered only for the period that the seasonal industry actually runs subject to minimum period of six consecutive months during any twelve consecutive months. The condition for recovery of Fixed Charges for a minimum period of six months shall not, however, apply to the seasonal industries, which are connected to the Company's Supply System for the first time during the course of a season. 3. The consumers falling within the purview of this Tariff shall have the option to change over to the corresponding industrial Supply Tariff, provided they undertake to abide by all the conditions and restrictions, which may, from time to time, be prescribed as an integral part of those Tariffs. The consumers under this Tariff will have the option to convert to Regular Tariff and vice versa. This option can be exercised at the time of obtaining a new connection or at the beginning of the season. Once exercised, the option will remain in force for at least one year. 4. All seasonal loads shall be disconnected from the Company's Supply System at the end of the season, specified by the consumer at the time of getting connection, for which the supply is given. In case, however, a consumer requires running the non-seasonal part of his load (e.g., lights, fans, tube-wells, etc.) throughout the year, he shall have to bring out separate circuits for such load so as to enable installation of separate meters for each type of load and charging the same at the relevant Tariff. 5. Where a "Seasonal Supply" consumer does not come forward to have his seasonal industry re- connected with the Company's Supply System in any ensuing season, the service line and equipment belonging to the Company and installed at his premises shall be removed after expiry of 60 days of the date of commencement of season previously specified by the consumer at the time of his obtaining new connection/re-connection. However, at least ten clear days notice in writing under registered post shall be necessary to be given to the consumer before removal of service line and equipment from his premises as aforesaid, to enable him to decide about the retention of connection or otherwise. No Supply Charges shall be recovered from a disconnected seasonal consumer for any season during which he does not come forward to have his seasonal industry re-connected with the Company's Supply System.
G PUBLIC LIGHTING SUPPLY
"Public Lighting Supply" means the supply for the purpose of illuminating public lamps.
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63 Definitions
"Month" means a calendar month or a part thereof in excess of 15 days.
Special Conditions of Supply
The supply under this Tariff shall be used exclusively for public lighting installed on roads or premises used by General Public.
H RESIDENTIAL COLONIES ATTACHED TO INDUSTRIES
This tariff is applicable for one-point supply to residential colonies attached to the industrial supply consumers having their own distribution facilities.
Definitions
"One Point Supply" for the purpose of this Tariff, means the supply given ay one point to Industrial Supply Consumers for general and domestic consumption in the residential colonies attached to their factory premises for a load of 5 Kilowatts and above. The purpose is further distribution to various parsons residing in the attached residential colonies and also for perimeter lighting in the attached residential colonies.
"General and Domestic Consumption", for the purpose of this Tariff, means consumption for lamps, fans, domestic applications, including heated, cookers, radiators, air-conditioners, refrigerators and domestic tube-wells.
"Residential Colony" attached to the Industrial Supply Consumer, means a group of houses annexed with the factory premises constructed solely for residential purpose of the bonafide employees of the factory, the establishment or the factory owners or partners, etc.
Special Conditions of Supply
The supply under this Tariff shall not be available to persons who meet a part of their requirements from a separate source of supply at their premises.
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