GUJARAT ELECTRICITY REGULATORY COMMISSION Tariff Order Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22 For Madhya Gujarat Vij Company Limited (MGVCL) Case No. 1913 of 2020 31st March, 2021 6th Floor, GIFT ONE, Road 5C, Zone 5, GIFT CITY Gandhinagar-382 355 (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 2019-20, Determination of ARR and Tariff for FY 2021-22 For Madhya Gujarat Vij Company Limited (MGVCL) Case No. 1913 of 2020 31st March, 2021 Madhya Gujarat Vij Company Limited Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22 CONTENTS 1. Background and Brief History......................................................................................... 2 1.1. Madhya Gujarat Vij Company Limited (MGVCL) ..................................................... 2 1.2. Background............................................................................................................. 2 1.3. Commission’s Orders Approved under MYT Control Period for FY 2016-17 to FY 2020-21 ............................................................................................................................. 3 1.4. Background of the Present petition ......................................................................... 4 1.5. Registration of the Petition and Public Hearing Process.......................................... 5 1.6. Approach of this Order ............................................................................................ 7 1.7. Contents of this Order ............................................................................................. 8 2. Summary of MGVCL’s Petition ....................................................................................... 9 2.1. Introduction ............................................................................................................. 9 2.2. True-Up for FY 2019-20 .......................................................................................... 9 2.3. Revenue gap for FY 2019-20 ................................................................................ 10 2.4. Aggregate Revenue Requirement for FY 2021-22 ................................................ 10 2.5. Summary of projected Revenue Surplus/(Gap) for FY 2021-22 ............................ 11 2.6. Request of MGVCL ............................................................................................... 12 3. Brief Outline of objections raised, response from MGVCL and Commission’s view ...... 13 3.1. Public Response to the Petition ............................................................................ 13 3.2. Suggestions/ Objections pertaining to all DISCOMs .............................................. 13 4. Truing up of FY 2019-20 .............................................................................................. 51 4.1. Energy Sales ........................................................................................................ 51 4.2. Distribution Losses ................................................................................................ 53 4.3. Energy requirement .............................................................................................. 54 4.4. Power Purchase Cost ........................................................................................... 55 4.5. Renewable Purchase Obligation (RPO) for FY 2019-20........................................ 61 4.5.1 RPO compliance for FY 2019-20 ....................................................................... 61 4.6. Fixed Cost ............................................................................................................ 61 Gujarat Electricity Regulatory Commission Page i March 2021 Madhya Gujarat Vij Company Limited Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22 4.6.1 Operations and Maintenance (O&M) Expenses for FY 2019-20 ........................ 61 4.6.1.1 Employee Cost .............................................................................................. 63 4.6.1.2 Repairs & Maintenance (R&M) Expenses ...................................................... 67 4.6.1.3 Administration & General (A&G) Expenses .................................................... 68 4.6.1.4 Other Expenses Capitalised ........................................................................... 69 4.6.2 Capital Expenditure and Capitalization .............................................................. 71 4.6.2.1 Funding of Capitalisation ............................................................................... 76 4.6.3 Depreciation ...................................................................................................... 77 4.6.4 Interest and Finance charges ............................................................................ 79 4.6.5 Interest on Working Capital ............................................................................... 82 4.6.6 Bad Debts Written Off........................................................................................ 83 4.6.7 Return on Equity ................................................................................................ 85 4.6.8 Income Tax ....................................................................................................... 87 4.6.9 Non-Tariff Income .............................................................................................. 88 4.7. ARR approved in the Truing up for FY 2019-20 .................................................... 89 4.8. GUVNL Profit/ (Loss) Allocation ............................................................................ 90 4.9. Revenue for FY 2019-20 ....................................................................................... 93 4.10. Revenue (Gap) / Surplus for FY 2019-20 .......................................................... 94 4.11. Consolidated True-Up ARR Summary for FY 2019-20 for State DISCOMs ....... 97 4.12. Consolidated Revenue (Gap)/ Surplus for FY 2019-20 for State DISCOMs ....... 98 5. ARR and Tariff Determination for FY 2021-22 ............................................................ 100 5.1 ARR for FY 2021-22 ........................................................................................... 100 5.2 Submission of MGVCL ........................................................................................ 100 5.2.1 Summary of the Petition for determination of Tariff and Aggregate Revenue Requirement for FY 2021-22 ......................................................................................... 100 5.3 Estimation of ARR for FY 2021-22 ...................................................................... 101 5.4 Energy Sales ...................................................................................................... 102 5.4.1 Projection of Energy sales for FY 2021-22 ...................................................... 102 5.4.2 Consumer Profile ............................................................................................. 103 Gujarat Electricity Regulatory Commission Page ii March 2021 Madhya Gujarat Vij Company Limited Truing up for FY 2019-20, Determination of ARR and Tariff for FY 2021-22 5.4.3 Category-wise Connected Load ...................................................................... 104 5.4.4 Category-wise Projected Growth rates ............................................................ 106 5.4.5 Category wise projections for Sales, consumers and connected load for FY 2021- 22 106 5.4.6 Detailed Analysis of Energy Sales projected ................................................... 107 5.4.7 Total Energy Sales .......................................................................................... 112 5.5 Distribution Losses .............................................................................................. 112 5.6 Energy Requirement and Energy Balance .......................................................... 113 5.6.1 Energy Requirement ....................................................................................... 114 5.6.2 Energy Balance ............................................................................................... 114 5.7 Power Purchase Cost- Petitioner’s Submission .................................................. 115 5.7.1 Power Purchase Sources ................................................................................ 115 5.7.2 Power Purchase Cost ...................................................................................... 120 5.7.3 Transmission and other Cost ........................................................................... 123 5.7.3.1 Transmission Charges ................................................................................. 124 5.7.3.2 GUVNL Cost ................................................................................................ 124 5.7.4 Total Power Purchase Cost ............................................................................. 125 5.7.5 Net Power Purchase Cost ............................................................................... 125 5.7.6 Bulk Supply Tariff (BST) .................................................................................. 125 5.8 Power Purchase Cost– Commission’s Analysis .................................................. 126 5.8.1 Power Purchase Sources ...............................................................................