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Central Electricity Regulatory Commission New Delhi CENTRAL ELECTRICITY REGULATORY COMMISSION NEW DELHI Petition No. 403/TT/2014 Coram: Shri A.K. Singhal, Member Shri A.S. Bakshi, Member Shri M.K. Iyer, Member Date of Hearing : 26.02.2015 Date of Order : 19.07.2016 In the matter of: Approval of transmission tariff for Gooty-Madhugiri 400 kV D/C line along with the associated bays and establishment of new 400/220 kV Sub-station at Madhugiri with 2x500 MVA transformers (COD: 1.12.2015) under “Transmission System associated with System Strengthening-XIII in Southern Regional Grid” from COD to 31.3.2019, under Regulation 86 of Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 and Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014. And in the matter of: Power Grid Corporation of India Limited, "Saudamini", Plot No.2, Sector-29, Gurgaon -122 001 …….Petitioner Vs 1. Karnataka Power Transmission Corporation Limited (KPTCL), Kaveri Bhawan, Bangalore-560 009 2. Transmission Corporation of Andhra Pradesh Limited (APTRANSCO), Vidyut Soudha, Hyderabad-500 082 3. Kerala State Electricity Board (KSEB), Vaidyuthi Bhavanam, Pattom, Thiruvananthapuram-695 004 4. Tamilnadu Generation and Distribution Corporation Limited NPKRR Maaligai, 800, Anna Salai, Chennai-600 002 5. Electricity Department, Government of Goa, Vidyuti Bhawan, Panaji, Goa 403 001 Page 1 of 43 Order in Petition No. 403/TT/2014 6. Electricity Department, Government of Pondicherry, Pondicherry-605 001 7. Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL), APEPDCL, P&T Colony, Seethmmadhara, Vishakhapatnam, Andhra Pradesh 8. Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL), Srinivasasa Kalyana Mandapam Backside, Tiruchanoor Road, Kesavayana Gunta, Tirupati-517 501, Chittoor District, Andhra Pradesh 9. Central Power Distribution Company of Andhra Pradesh Limited (APCPDCL), Corporate Office, Mint Compound, Hyderabad-500 063 10. Northern Power Distribution Company of Andhra Pradesh Limited (APNPDCL), Opp. NIT Petrol Pump, Chaitanyapuri, Kazipet, Warangal-506 004, Andhra Pradesh 11. Bangalore Electricity Supply Company Limited (BESCOM), Corporate Office, K.R. Circle, Bangalore-560 001, Karnataka 12. Gulbarga Electricity Supply Company Limited (GESCOM), Station Main Road, Gulbarga, Karnataka 13. Hubli Electricity Supply Company Limited (HESCOM), Navanagar, PB Road, Hubli, Karnataka 14. MESCOM Corporate Office, Paradigm Plaza, AB Shetty Circle, Mangalore-575 001, Karnataka 15. Chamundeswari Electricity Supply Corporation Limited (CESC), # 927, L J Avenue, Ground Floor, New Kantharaj Urs Road, Saraswatipuram, Mysore-570 009, Karnataka …..Respondents For Petitioner : Ms Swapna Seshadri, Advocate for PGCIL Shri S.S. Raju, PGCIL Shri Jasbir Singh, PGCIL Smt. Sangeeta Edwards, PGCIL Shri M.M. Mondal, PGCIL Page 2 of 43 Order in Petition No. 403/TT/2014 For Respondents : Sh. S. Vallinayagam, Advocate for TANGEDCO ORDER The instant petition has been filed by Power Grid Corporation of India Limited. (PGCIL) for approval of the transmission tariff for Gooty-Madhugiri 400 kV D/C line along with the associated bays and establishment of new 400/220 kV Sub- station at Madhugiri with 2x500 MVA transformers under “Transmission System associated with System Strengthening-XIII in Southern Regional Grid” (hereinafter referred to as “transmission asset”) for the tariff block 2014-19, in terms of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (hereinafter "the 2014 Tariff Regulations"). 2. This order has been issued after considering PGCIL‟s affidavit dated 20.5.2015, 25.2.2016, 2.3.2016 and 27.4.2016. 3. The petitioner was entrusted with the implementation of System strengthening-XII in Southern Regional Grid. The scope of the scheme was discussed and agreed in 28th SCM meeting dated 15.6.2009 and 10th SRPC meeting dated 2.7.2009. The Investment Approval (IA) for the project was accorded by the Board of Directors of the petitioner vide Memorandum No. C/CP/SRSS-XIII dated 27.10.2011 for 261st meeting held on 22.10.2011, for "System Strengthening- XIII in Southern Region Grid" at an estimated cost of `48749 lakh including IDC of `1940 lakh (based on 2nd quarter, 2011 price level). The project was scheduled to be commissioned within 32 months from the date of IA of Board of Directors i.e. Page 3 of 43 Order in Petition No. 403/TT/2014 27.10.2011. Therefore, the scheduled date of commissioning of the transmission system was 27.6.2014. The Board of Directors of the petitioner company has accorded approval for Revised Cost Estimates (RCE) at an estimated cost of `63946 lakh including IDC of `3667 lakh (based on April 2015 price level). 4. The scope of work covered under the project approved in Investment Approval dated 27.10.2011 has been modified vide RCE dated 22.12.2015. The revised scope of the project as per the RCE dated 22.12.2015 is as follows:- Transmission Line: (i) Gooty-Madhugiri 400 kV D/C line; (ii) Madhugiri-Yelahanka 400 kV D/C (Quad) line with a small portion to be strung on multi-circuit tower of the SRSS-XII scheme with high ampacity conductor in Bengaluru Area; Sub-Station: (i) 400/220 kV Sub-station (New) at Madhugiri with 2x500 MVA transformers with provision of establishing a 765/400 kV Sub-station in future in the same switchyard; (ii) Extension of Gooty 400/220 kV Sub-station; (iii) Extension of Yelahanka 400/220 kV Sub-station; Reactive Compensation: (i) 1x63 MVAR Bus Reactor at 400/220 kV Sub-station at Madhugiri. 5. The petitioner vide affidavit dated 25.2.2016 has submitted the actual date of commercial operation of the instant transmission asset. The actual date of commercial operation of the instant asset is as follows:- Page 4 of 43 Order in Petition No. 403/TT/2014 Particulars Scheduled Actual Delay COD COD Gooty-Madhugiri 400 kV D/C line along with the associated bays and establishment of new 400/220 kV 27.6.2014 1.12.2015 17 months Sub-station at Madhugiri with 2x500 MVA transformers 6. Annual Fixed Charges for the instant asset were approved by the Commission vide its order dated 22.12.2014, subject to adjustment as per Regulation 7 (7) (iii) and (iv) of the 2014 Tariff Regulations, as per the petitioner‟s initial claim of tariff for the instant assets from the anticipated COD of 1.2.2015 in the instant petition for 2014-15 and 2015-16. However, during the hearing dated 6.10.2015, the petitioner submitted the revised anticipated date of commercial operation as 1.11.2015. As such, vide order dated 6.4.2016 in the instant petition, the applicability of PoC tariff was extended till 30.9.2016 or till the issue of final tariff, whichever is earlier. 7. The petitioner has claimed transmission charges for the instant asset as under:- (` in lakh) Parti culars 2015 - 16 2016 -17 2017-18 2018-19 Depreciation 594.58 1867.52 1946.50 1961.59 Interest on Loan 328.76 995.79 989.21 943.77 Return on equity 717.01 2253.60 2354.67 2377.51 Interest on Working Capital 55.02 171.29 177.06 178.72 O & M Expenses 312.50 968.59 1000.70 1033.93 Total 2007.87 6256.79 6468.14 6495.52 8. The details submitted by the petitioner in support of its claim for interest on working capital are as given under:- Page 5 of 43 Order in Petition No. 403/TT/2014 (` in lakh) Particulars 2015-16 2016-17 2017-18 2018-19 (pro-rata) Maintenance Spares 140.63 145.29 150.11 155.09 O & M expenses 78.13 80.72 83.39 86.16 Receivables 1003.94 1042.80 1078.02 1082.59 Total 1222.70 1268.81 1311.52 1323.84 Rate of Interest 13.50% 13.50% 13.50% 13.50% Interest 55.02 171.29 177.06 178.72 9. No comments or suggestions have been received from the general public in response to the notices published by the petitioner under Section 64 of the Electricity Act, 2003. Tamil Nadu Generation and Distribution Corporation Limited, (TANGEDCO), a subsidiary of TNEB Limited and one of the successor entities to the erstwhile Tamil Nadu Electricity Board (TNEB), Respondent No. 4 and Kerala State Electricity Board Limited (KSEBL), Respondent No. 3 have filed reply dated 24.11.2014 and 1.12.2014 respectively. The respondents have submitted that there is anomaly in original approved cost, wherein the petitioner has indicated cost of `39760 lakh for Gooty-Madhugiri 400 kV D/C line and establishment of new 400/220 kV substation at Madhugiri with 2x500 MVA transformer as against the total original approved cost of `48749 lakh for the whole project and as such checking of cost is required and cost over-run. The respondents have further raised the issues of additional capitalisation, delay in commissioning, claim for revision in O&M Expenses with reference to any wage hike. The petitioner has filed rejoinder to the reply of TANGEDCO and KSEBL vide affidavits dated 29.1.2015 and 13.2.2015. The issues raised by TANGEDCO and KSEBL and the clarification given by the petitioner are addressed in the relevant paragraphs of this order. Page 6 of 43 Order in Petition No. 403/TT/2014 10. Having heard the representatives of the parties and perused the material available on record we proceed to dispose of the petition. Date of Commercial operation (COD) 11. The petitioner has claimed the date of the commercial operation of the instant transmission asset as 1.12.2015. However, as the instant asset is only a part of the system as per the Investment Approval, the petitioner was directed to submit status of 220 kV lines i.e. Madhugiri-Antharasanahalli, Madhugiri-Nittur and Madhugiri-Madhugiri-II.
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