Retail Supply Tariff Order FY 2020-21 MADHYA PRADESH ELECTRICITY REGULATORY COMMISSION 5th Floor, Metro Plaza, Bittan Market, Bhopal - 462 016 AGGREGATE REVENUE REQUIREMENT AND RETAIL SUPPLY TARIFF ORDER FOR FY 2020-21 Petition Nos. Petition No. 49/2019 PRESENT: Mukul Dhariwal, Member Shashi Bhushan Pathak, Member IN THE MATTER OF: Determination of Aggregate Revenue Requirement (ARR) and Retail Supply Tariff for FY 2020-21 based on the ARR & Tariff Petition filed by the Distribution Licensees namely Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (East DISCOM), Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited (West DISCOM), Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (Central DISCOM), and M.P. Power Management Company Limited (MPPMCL). Madhya Pradesh Electricity Regulatory Commission Page 1 Retail Supply Tariff Order FY 2020-21 Table of Contents A1: ORDER ....................................................................................................................... 10 A2: AGGREGATE REVENUE REQUIREMENT FOR PETITIONERS ................. 18 Sales forecast as projected by the Petitioners ...................................................................... 18 Commission’s Analysis .......................................................................................................... 20 Energy Balance....................................................................................................................... 22 Petitioners’ Submission ...........................................................................................................22 Commission’s Analysis ............................................................................................................23 Assessment of Energy Availability ...........................................................................................24 Assessment of Power Purchase Cost .......................................................................................34 Petitioners’ Submission ...........................................................................................................34 Renewable Purchase Obligation (RPO) ..................................................................................59 Inter State Transmission Charges associated with existing capacities ...................................64 Capitalization and CWIP ...................................................................................................... 70 Commission’s Analysis on Asset Capitalization.................................................................. 70 Operations and Maintenance Expenses ............................................................................... 71 Petitioners’ Submission ...........................................................................................................71 Employee Expenses ..................................................................................................................72 A&G Expenses .........................................................................................................................72 R&M Expenses .........................................................................................................................73 Commission’s Analysis on O&M Expenses ......................................................................... 73 Depreciation............................................................................................................................ 75 Petitioners’ Submission ...........................................................................................................75 Commission’s Analysis of Depreciation ............................................................................... 76 Interest and Finance Charges ............................................................................................... 77 Petitioner submission ...............................................................................................................77 Commission’s Analysis of Interest and Finance Charges .................................................. 79 Interest on Working Capital ................................................................................................. 82 Petitioners Submission .............................................................................................................82 Commission’s Analysis of Interest on Working Capital .................................................... 83 Interest on Consumer Security Deposit ............................................................................... 84 Petitioners Submission .............................................................................................................84 Commission’s Analysis of Consumer Security Deposit ...................................................... 85 Return on Equity.................................................................................................................... 85 Petitioners submission .............................................................................................................85 Commission’s Analysis of Return on Equity ....................................................................... 85 Bad and doubtful debts ......................................................................................................... 86 Petitioners’ submission ............................................................................................................86 Commission’s Analysis on Bad and Doubtful debts ........................................................... 87 Other Income .......................................................................................................................... 87 Petitioners’ submission ............................................................................................................87 Commission’s Analysis on Other Income ............................................................................ 88 Revenue from existing tariffs and Gap/Surplus .................................................................. 92 A3: WHEELING CHARGES, CROSS SUBSIDY SURCHARGE AND ADDITIONAL SURCHARGE ............................................................................................. 96 Madhya Pradesh Electricity Regulatory Commission Page 2 Retail Supply Tariff Order FY 2020-21 A4: FUEL COST ADJUSTMENT CHARGE .............................................................. 104 A5: RETAIL TARIFF DESIGN .................................................................................... 110 Legal Position ....................................................................................................................... 110 Commission’s Approach to Tariff Determination ............................................................ 110 Linkage to Average Cost of Supply .................................................................................... 110 A6: COMPLIANCE ON DIRECTIVES ISSUED IN TARIFF ORDER FOR FY 2019- 20 116 A7: PUBLIC SUGGESTIONS AND COMMENTS ON LICENSEES’ PETITIONS 128 A. PRE-COVID ............................................................................................................. 130 B. POST-COVID .......................................................................................................... 181 Annexure-1 (List of Stakeholders) ..................................................................................... 193 Annexure-2 (Tariff Schedules for Low Tension Consumers) .......................................... 212 Annexure-3 (Tariff Schedules for High Tension Consumers) ......................................... 240 Madhya Pradesh Electricity Regulatory Commission Page 3 Retail Supply Tariff Order FY 2020-21 List of Tables Table 1 : Snapshot of the Petition for FY 2020-21 (Rs. Crore) ............................................... 11 Table 2 : Snapshot of the revised submission for FY 2020-21 (Rs. Crore) ............................. 11 Table 3: Status of meterisation of un-metered rural domestic consumers ............................... 13 Table 4: Status of meterisation of agricultural DTRs .............................................................. 13 Table 5: Distribution Loss Trajectory specified in the Regulations ........................................ 14 Table 6: Actual Distribution Loss for FY 2016-17to FY 2019-20 .......................................... 14 Table 7: Rebate allowed by Ministry of Power (Rs. Crore) .................................................... 15 Table 8: ARR admitted by the Commission for FY 2020-21 (Rs. Crore) ............................... 15 Table 9: Category wise sales projected by Petitioners for FY 2020-21 (MU) ........................ 19 Table 10: Category wise sales projected by Petitioners for FY 2020-21 (MU) ...................... 20 Table 11: Category wise sales admitted by the Commission for FY 2020-21 (MUs) ............. 21 Table 12: Revised Energy requirement for FY 2020-21 as proposed by Petitioners .............. 22 Table 13: Loss targets as per Regulations (in %) .................................................................... 23 Table 14: Energy requirement projected by the Commission for FY 2020-21 ....................... 23 Table 15: Upcoming Stations and Technical Parameters ........................................................ 25 Table 16: MPPMCL allocated stations submitted by the Petitioners for FY 2020-21 ............ 25 Table 17: Stations which are considered by the Petitioners