Madhya Gujarat Vij Company Limited (MGVCL)

GUJARAT ELECTRICITY REGULATORY COMMISSION Tariff Order Truing up for FY 2017-18, Mid-Term Review of ARR for FY 2019-20 to 2020-21 and Determination of Tariff for FY 2019-20 For Madhya Gujarat Vij Company Limited (MGVCL) Case No. 1761 of 2018 24th April, 2019 6thFloor, GIFT ONE, Road 5 - C, Zone 5, GIFT CITY Gandhinagar-382335 (Gujarat), INDIA Phone: +91-79-23602000 Fax: +91-79-23602054/55 E-mail: [email protected]: Website www.gercin.org GUJARAT ELECTRICITY REGULATORY COMMISSION (GERC) GANDHINAGAR Tariff Order Truing up for FY 2017-18, Mid-Term Review of ARR for FY 2019-20 to 2020-21 and Determination of Tariff for FY 2019-20 For Madhya Gujarat Vij Company Limited (MGVCL) Case No. 1761 of 2018 24th April, 2019 Madhya Gujarat Vij Company Limited Truing up for FY 2017-18, Mid- Term Review of FY 2019-20 and FY 2020-21 and Determination of Tariff for FY 2019-20 ABBREVIATIONS A&G Administration and General Expenses ARR Aggregate Revenue Requirement CAGR Compound Annual Growth Rate CAPEX Capital Expenditure CERC Central Electricity Regulatory Commission Control Period FY 2016-17 to FY 2020-21 DGVCL Dakshin Gujarat Vij Company Limited DISCOM Distribution Company EHV Extra High Voltage FPPPA Fuel and Power Purchase Price Adjustment FY Financial Year GEB Gujarat Electricity Board GERC Gujarat Electricity Regulatory Commission GETCO Gujarat Energy Transmission Corporation Limited GFA Gross Fixed Assets GSECL Gujarat State Electricity Corporation Limited GUVNL Gujarat Urja Vikas Nigam Limited GoG Government of Gujarat HT High Tension JGY Jyoti Gram Yojna kV Kilo Volt kVA Kilo Volt Ampere kVAh Kilo Volt Ampere Hour kWh Kilo Watt Hour LT Low Tension Power MCLR Marginal Cost of Funds based Lending Rate MGVCL Madhya Gujarat Vij Company Limited MTR Mid-Term Review MUs Million Units (Million kWh) MW Mega Watt MYT Multi Year Tariff O&M Operation & Maintenance PGCIL Power Grid Corporation of India Limited PGVCL Paschim Gujarat Vij Company Limited PPA Power Purchase Agreement R&M Repair and Maintenance SLDC State Load Despatch Centre UGVCL Uttar Gujarat Vij Company Limited WRLDC Western Regional Load Despatch Centre YoY Year on Year Gujarat Electricity Regulatory Commission Page v April 2019 Madhya Gujarat Vij Company Limited Truing up for FY 2017-18, Mid-Term Review of FY 2019-20 and FY 2020-21 and Determination of Tariff for FY 2019-20 CONTENTS 1 Background and Brief History ...................................................................................................... 2 1.1 Background ........................................................................................................................... 2 1.2 Madhya Gujarat Vij Company Limited (MGVCL) .................................................................. 2 1.3 Commission’s Orders for the Second Control Period ........................................................... 3 1.4 Commission’s Order for approval of True Up for FY 2016-17 and determination of Tariff for FY 2018-19 ........................................................................................................................... 3 1.5 Background of the Present Petition ...................................................................................... 4 1.6 Admission of the Petition and Public Hearing Process ......................................................... 4 1.7 Approach of this Order .......................................................................................................... 6 1.8 Contents of this Order ........................................................................................................... 7 2 Summary of MGVCL’s Petition ..................................................................................................... 8 2.1 Introduction ........................................................................................................................... 8 2.2 True-Up for FY 2017-18 ........................................................................................................ 8 2.3 Revenue gap for FY 2017-18 ................................................................................................ 9 2.4 Mid-Term Review for FY 2019-20 and FY 2020-21 .............................................................. 9 2.5 Request of MGVCL ............................................................................................................. 10 3 Brief outline of objections raised, response from MGVCL and the Commission’s View ..... 11 3.1 Stakeholders’ suggestions / objections, Petitioner’s Response and Commission’s observation .......................................................................................................................... 11 3.2 Suggestions/ Objections common to all DISCOMs ............................................................ 11 3.3 Issues pertaining to MGVCL ............................................................................................... 46 4 Truing up of FY 2017-18 .............................................................................................................. 50 4.1 Energy Sales ....................................................................................................................... 50 4.2 Distribution Losses .............................................................................................................. 51 4.3 Energy Requirement ........................................................................................................... 52 4.4 Power Purchase Cost ......................................................................................................... 53 4.5 Gain / (loss) due to distribution loss .................................................................................... 56 4.6 Fixed Charges ..................................................................................................................... 58 4.6.1 Operation and Maintenance (O&M) Expenses for FY 2017-18 .............................. 58 4.6.2 Capital expenditure, Capitalisation and Funding of CAPEX ................................... 64 4.6.3 Depreciation ............................................................................................................ 68 4.6.4 Interest and Finance Charges ................................................................................ 71 4.6.5 Interest on Working Capital..................................................................................... 73 Gujarat Electricity Regulatory Commission Page vi April 2019 Madhya Gujarat Vij Company Limited Truing up for FY 2017-18, Mid- Term Review of FY 2019-20 and FY 2020-21 and Determination of Tariff for FY 2019-20 4.6.6 Bad Debts ............................................................................................................... 75 4.6.7 Return on Equity ..................................................................................................... 76 4.6.8 Taxes ...................................................................................................................... 78 4.6.9 Non-Tariff Income ................................................................................................... 79 4.7 Revenue from Sale of Power .............................................................................................. 80 4.8 ARR Approved in the Truing Up ......................................................................................... 81 4.9 Sharing of Gain / Loss for FY 2017-18 ............................................................................... 82 4.10 Revenue Gap / Surplus for FY 2017-18 .............................................................................. 83 5 Mid-Term Review of ARR for FY 2019-20 and FY 2020-21 ....................................................... 86 5.1 Introduction ......................................................................................................................... 86 5.2 Submission of MGVCL ........................................................................................................ 86 5.2.1 Summary of the petition for Mid-Term Review for the remaining control period, FY 2019-20 and FY 2020-21 ........................................................................................ 86 5.3 Estimation of ARR for the remaining years of control period FY 2019-20 and FY 2020- 21. ....................................................................................................................................... 87 5.4 Energy Sales ....................................................................................................................... 88 5.4.1 Projection of Energy sales for FY 2019-20 and FY 2020-21 .................................. 88 5.4.2 Consumer Profile .................................................................................................... 89 5.4.3 Category-wise Connected Load ............................................................................. 90 5.4.4 Category-wise Projected Growth rates of energy sales ......................................... 90 5.4.5 Detailed Analysis of Energy Sales projected .......................................................... 91 5.4.6 Total Energy Sales .................................................................................................. 99 5.5 Distribution Loss .................................................................................................................. 99 5.6 Energy Requirement and Energy Balance.......................................................................

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