Haryana Vidyut Prasaran Nigam
Limited
Petition for
True up for 2015-16,
Review of FY 2016-17 and
Aggregate Revenue Requirement for FY 2017-18
Submitted to
Hon’ble Haryana Electricity
Regulatory Commission
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
THIS SPACE IS INTENTIONALLY LEFT BLANK
Haryana Vidyut Prasaran Nigam
Page 2
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Contents
1. INTRODUCTION ......................................................................................................................... 5
1.1
Background ......................................................................................................................................5
2. TRUE-UP FOR FY 2015-16 ..................................................................................................... 7
2.1
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Principles for True-up .....................................................................................................................7
Operations and Maintenance Cost ...............................................................................................8
Employee Cost ................................................................................................................................8
Terminal Benefits of Employees ...................................................................................................9
Repair and Maintenance Cost ......................................................................................................9
Administrative and General Expenses ...................................................................................... 10
Return on Equity ........................................................................................................................... 10
Depreciation................................................................................................................................... 11
Interest and Finance Charges..................................................................................................... 12
Interest on Working Capital ......................................................................................................... 13
Incentives and Penalty: System Availability .............................................................................. 13
Foreign Exchange Rate Variation .............................................................................................. 15
Approved and Proposed ARR for True Up of FY 2015-16 ..................................................... 17
True Up of ARR of SLDC Business for FY 2015-16 ................................................................ 17
3. REVIEW OF AGGREGATE REVENUE REQUIREMENT FOR FY 2016-17 AND AGGREGATE
REVENUE REQUIREMENT PETITION FOR FY 17-18 .............................................................. 19
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
BACKGROUND ............................................................................................................................ 19
Capital Expenditure and Capitalization for FY 2016-17 and FY 2017-18 ............................ 20
Operation & Maintenance Expenditure...................................................................................... 25
Depreciation................................................................................................................................... 27
Interest and Finance Charges..................................................................................................... 27
Interest on Working Capital ......................................................................................................... 29
Return on Equity ........................................................................................................................... 29
Non-Tariff Income ......................................................................................................................... 29
Aggregate Revenue Requirement .............................................................................................. 30
Revenue Gap and Carrying Cost ............................................................................................... 30
Unitary charges ............................................................................................................................. 31
Yearly Transmission Charges For Transmission Lines Incidental to Inter-State
Transmission of Electricity ........................................................................................................... 32
Review of State Load Dispatch Centre ARR ............................................................................ 32
4. ANNUAL TRANSMISSION CHARGES AND SLDC CHARGES.................................................. 34
4.1
4.2
4.3
Annual Transmission charges for FY 2017-18 ......................................................................... 34
Share of SLDC Charges as per HERC MYT Regulations 2012, (1st Amendment)
Regulations, 2016 –...................................................................................................................... 35
Prospective Short Term Open Access Charges ...................................................................... 37
5
COMPLIANCE OF DIRECTIVES ................................................................................................ 39
6
7
PRAYERS ............................................................................................................................... 46
ANNEXURES ........................................................................................................................... 47
Haryana Vidyut Prasaran Nigam
Page 3
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Haryana Vidyut Prasaran Nigam
Page 4
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
1. INTRODUCTION
Haryana Vidyut Prasaran Nigam Ltd, hereafter referred to as “the Petitioner”, is a Company incorporated
under the provisions of the Companies Act, 1956 and is wholly owned by the Government of Haryana. The
Company, having its registered office at Shakti Bhawan, Sector 6, Panchkula, Haryana files this Petition
seeking True up of FY2015-16 based on the annual audited accounts and Annual Performance Review of
FY 2016-17 and ARR for FY 2017-18, based on the revised capital expenditure estimated for FY 2016-17
and FY 2017-18
1.1
BACKGROUND
Hon’ble Commission issued Tariff Regulations i.e. HERC (Terms and Conditions for Determination of Tariff
for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff
Framework) Regulations, 2012 (hereinafter referred to as “HERC Tariff Regulations, 2012” or “MYT
Regulations 2012”) which have been notified on December 05, 2012. As per this tariff regulations, the
transmission licensee is required to submit an MYT Petition for the three year Control Period i.e. FY 201415 to FY 2016-17. In compliance to the MYT Regulations, HVPN submitted business plan and MYT petition
for the Control Period on 15thJanuary 2014. Based on the scrutiny and prudence check, the Hon’ble
Commission issued the Tariff Order on approval of Business Plan and MYT Petition for HVPN for First
Control Period on 29th May, 2014.
Hon’ble Commission issued 1st Amendment to above Tariff Regulation i.e. Haryana Electricity Regulatory
Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and
Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 (1st Amendment)
Regulations, 2016 which have been notified on November 07, 2016. As per this latest tariff regulations, the
Control Period has been extended till FY 2017-18 i.e. 31st March 2018. As per this tariff regulation, the
transmission licensee is required to submit a petition(s) for True-up of the FY 2015-16, Annual (Mid-year)
Performance Review for the FY 2016-17 & ARR/Tariff proposal for the FY 2017-18.
HVPN is required to file a True Up petition for previous year, an Annual Performance Review (APR) petition
for ensuing year. Accordingly, the Petitioner is filing this Petition for true-up of FY 2015-16 and Review of
ARR for FY 2016-17 and approval of transmission charges for FY 2017-18. In the current petition HVPN
has proposed revision in the components of the ARR primarily based on two aspects i.e. actual audited
figures for FY 2015-16 and change in opening gross fixed assets for FY 2016-17 on account of actual
capitalization during FY 2015-16.
The Petitioner also submits the status of capital expenditure approved vis-à-vis the envisaged capital
expenditure for the Period FY 2016-17 and envisaged capital expenditure for the period FY 2017-18, as
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
part of MYT Business Plan, including the Capital Expenditure Plan. The result of change in envisaged
capital expenditure and the impact thereof on the elements of tariff are provided in details in this Petition.
The Petitioner prays to the Hon’ble Commission to consider its submission for true-up of FY 2015-16, based
on the audited annual accounts, annexed with this Petition, as well as proposed revision in ARR for the FY
2016-17 and proposed ARR for FY 2017-18 and pass appropriate order in this regard.
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
2. TRUE-UP FOR FY 2015-16
2.1
PRINCIPLES FOR TRUE-UP
HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and
Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 under Regulation 13
provides that(1) “Truing-up of the ARR of the previous year shall be carried out along with mid-year performance
review of each year of the control period only when the audited accounts in respect of the year(s)
under consideration is submitted along with the application. In case audited accounts pertaining to
the year, of which truing-up is to be undertaken, are not available, the generating company or the
licensee as the case may be, shall submit the provisional account duly approved by the Board of
Directors of the company/licensee.”
(2) “Truing-up of uncontrollable items shall be carried out at the end of each year of the control
period through tariff resetting for the ensuing year and for controllable items shall be done only on
account of force majeure conditions and for variations attributable to uncontrollable factors.”
(3) “The Commission shall allow carrying costs for the trued–up amount (positive or negative) at
the interest rates specified in these regulations by adjusting the interest allowed on the working
capital requirement for the relevant year of the control period. Provided that no carrying cost shall
be allowed on account of delay in filing for true-up due to unavailability of the audited accounts;
Provided further that if the Commission determines an over recovery during the true-up, funding
cost for such trued up amount shall be considered for the delayed period and adjusted accordingly
as per provisions of this regulation.”
(4) “Over or under recoveries of trued-up amount in previous year(s) of the control period shall be
allowed to be adjusted in the ensuing year of the control period by appropriate resetting of tariff.
The unrecovered amount in the one control period shall be adjusted in the subsequent control
period.”
It is submitted that as per Regulation 8 of MYT Regulations 2012, the Hon’ble Commission has discussed
the principle for setting the baseline for MYT period, to be actual average of past 3 years audited accounts.
It is submitted that while passing the True up Order for FY 2014-15, the Hon’ble Commission has
considered the audited annual accounts for most of the elements of ARR. Therefore, it is humbly prayed
that based on the same principle, the true up exercise for FY 2015-16 may also be undertaken, as the
audited annual accounts are truly reflective of the actual costs incurred by the Petitioner.
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
In the following sub-sections, the components of ARR are discussed in detail for the true- up exercise for
FY 2015-16.
2.2
OPERATIONS AND MAINTENANCE COST
The Employees’ cost, administration & general expenses and repair & maintenance expenses, which
together comprise the O & M expenditure, are analysed under this sub-head, for kind consideration of the
Hon’ble Commission. The Regulation 45.3 of HERC MYT Regulations 2012 provides for determination of
O&M Cost as below:
The actual audited Employee cost (excluding terminal liabilities) and A&G expenses for the financial
year preceding the base year, subject to prudence check, shall be escalated at the escalation factor
of 4% to arrive at the Employee cost (excluding terminal liabilities) and A&G expenses for the base
year of the control period. The O&M expenses for the nth year of the control period shall be
approved based on the formula given below:
O&Mn = (R&Mn + EMPn + A&Gn)* (1-Xn) + Terminal Liabilities
Where,
R&Mn – Repair and maintenance costs of the transmission licensee for the nth year;
EMPn – Employee costs of the transmission licensee for the nth year excluding terminal liabilities;
A&Gn – Administrative and general costs of the transmission licensee for the nth year;
2.2.1 EMPLOYEE COST
The Hon’ble Commission in its True up Order for FY 2014-15 has considered annual accounts of FY 201415 to approve the revised employee cost. It is submitted that the based on the same principle, the Hon’ble
Commission may true up the actual employee cost for FY 2015-16.
It is submitted that the Hon’ble Commission while allowing the actual employee cost for FY 2014-15,
projected the employee cost for FY2015-16, considering an inflation factor of only 2.47% only, however the
actual increase in employee cost has been higher than the rate considered. The details of approved vis-àvis actual employee cost incurred by the Petitioner is provided below.
Particulars (Rs. Million)
Employee Cost
Approved (FY 15-16) –
Order Dt. 31.03.2015
2,060.81
Actual
Difference
2,600.59
(539.78)
The increase in employee cost is mainly on account of increase in dearness allowance during FY2015-16,
which is purely guided by the instructions of Government of Haryana and beyond the control of Petitioner.
The component wise break up of employee cost during FY2015-16 and preceding year has been provided
in the table below.
Haryana Vidyut Prasaran Nigam
Page 8
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Particulars (In Rs Million)
Actual 2015-16
Actual 2014-15
863.24
915.73
1,002.03
921.07
349.75
317.06
Contract employees
Contribution to new pension scheme (NPS)
Total Employee Cost
Employee cost capitalized
521.61
48.71
2,784.34
-150.75
394.10
43.47
2,591.44
-172.95
Net Employee Cost Expensed
2,634.60
2,418.49
• For Transmission Business – Excl. SLDC business
2,600.59
2,387.11
Basic
DA
Other allowances
It is further submitted that in line with the directive of Hon’ble Commission the petitioner has not undertaken
any recruitment of employees during FY 2015-16 and the increase in actual cost as against the approved
employee cost is purely on account of factors beyond the control of the Petitioner. The Petitioner has relied
completely on the directions of the Hon’ble Commission to increase the contractual employees, thus limiting
the financial burden.
Therefore, it is submitted that the Hon’ble Commission may consider the actual employee cost of FY 201516, as reflected in the annual audited accounts, which must be approved and set as a base for the projection
of employee cost for the MYT Control Period.
2.2.2 TERMINAL BENEFITS OF EMPLOYEES
The MYT Regulations 2012 has particularly considered the terminal liability to be uncontrollable element of
ARR, as provided under Regulation 8, represented in the section 2.2 above. It is submitted that the Hon’ble
Appellate in its order dated 30.04.2013 in the matter of Appeal No. 100 of 2012, has held that the terminal
benefits may be trued up based on the actuals as per the audited accounts. The terminal benefits liability
for the FY 2015-16 has been of Rs.1,976.39 million for which the Petitioner has also obtained an actuarial
valuation report, Annexed herewith this Petition for the kind consideration of the Hon’ble Commission.
Thus, the Petitioner hereby seeks the true up of terminal liability based on the actual terminal benefits
expenses incurred.
Particulars (Rs. Million)
Approved (FY 15-16) –
Order Dt. 31.03.2015
Terminal Liability
1,189.04
Actual 2015-16
1,976.39
Difference
(787.35)
2.2.3 REPAIR AND M AINTENANCE COST
A brief of R&M expenses approved by the Hon’ble Commission and Actual R&M Cost incurred by the
Petitioner is provided below. It may be noticed that the actual R&M cost incurred is lower than the approved
R&M cost. Thus, the Petitioner itself requests the Hon’ble Commission to pass on the benefit of lower R&M
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
expenditure incurred vis-à-vis that of approved in the Tariff Order. It is submitted that every element of R&M
expenses incurred are related to works which are recurring in nature and the Petitioner has applied
significant prudence in undertaking these works, the benefit of which can be passed on the beneficiaries.
This is in line with the principle adopted by Hon’ble Commission in previous True up order dated 31.03.2016.
Particulars (Rs. Million)
R&M Cost
Approved (FY 15-16) –
Order Dt. 31.03.2015
366.45
Actual
Difference
181.21
185.24
2.2.4 ADMINISTRATIVE AND GENERAL EXPENSES
A brief of A&G expenses approved by the Hon’ble Commission and Actual A & G expense incurred by the
Petitioner is provided below.
Particulars (Rs. Million)
A&G Expenses
Approved (FY 15-16) –
Order Dt. 31.03.2015
161.12
Actual
153.85
Difference
7.27
It is submitted that the increase in A&G cost is due to the actual rate of inflation in the economy and certain
expenditure items such as rates and taxes, legal and professional fees are unavoidable in nature, which
have largely contributed to the increase in A&G expenses. Therefore, it is prayed that the actual A&G
expenses may kindly be approved for true up.
2.3
RETURN ON EQUITY
In line with the MYT Tariff Order, the Petitioner has proposed the return on equity for the FY 15-16
considering the equity pending allotment. The Petitioner has estimated RoE, completely in line with the
approach adopted by the Hon’ble Commission in its previous True up Order dated 31.03.2016, as provided
in the table below.
Particulars (Rs. Million)
Paid up equity in beginning
Add: share application money pending allotment
Less: SLDC equity
Less: Generation equity
Equity to be considered for Transmission business
Less: Equity related to transmission works not yet commissioned (opening
CWIP)
Add: 50% of Equity portion of GFA – Note 12A to Balance Sheet
Closing equity for RoE
Rate of Return
RoE - Proposed
Proposed for True
up of FY 15-16
19,367
2,120
56.0
1,595.4
19,836
2,235.2
922.4
18,522.8
10.0%
1,852,28
The 50% of the equity portion of assets capitalized is considered for estimating the amount of equity eligible
for return on equity. The rate of return considered for the return on equity is 10% in line with the office memo
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
no. Ch 65/SE/RAU/F122/Volume-II dated 04/12/2014 which considers the approach adopted by the Hon’ble
Commission in its MYT Order dated 29 May 2014.
Particulars (Rs. Million)
Approved (FY 15-16) –
Order Dt. 31.03.2015
Proposed for FY2015-16
Difference
Return On Equity
1,832.23
1,852.28
(20.05)
Hence, it is submitted and prayed to the Hon’ble Commission that the revised return on equity, based on
actual figures, may kindly be approved for true up.
2.4
DEPRECIATION
The Hon’ble Commission in its Order for FY 2015-16 has provided for depreciation based on the GFA of
FY 2015-16 with certain estimates. In line with the above approach the Petitioner submits the details of
depreciation as provided in the table below.
Particulars (Rs. Million)
Actual FY 15-16
Opening
Additions
Retirements
Closing
Depreciation
Less: Depreciation on SLDC assets
Less: Depreciation on Assets financed through consumer contribution
Depreciation for True up
70,353.04
6,149.38
121.79
76,380.63
3,239.85
22.60
178.1
3,039
The Petitioner has followed the principle adopted by the Hon’ble Commission in its True up order and
deducted the depreciation chargeable to SLDC assets and towards assets financed through consumer
contribution.
It is submitted that the average actual rate of depreciation is different from average depreciation rate
considered by the Hon’ble Commission, mainly due to the change in composition of assets as a substantial
share of assets added during the year are depreciable at rate different from 5.28% as provided in MYT
Regulations 2012. Further, the impact of asset addition being different from the approved asset addition is
reflected in the slightly lower actual depreciation during FY 15-16.
Particulars (Rs. Million)
Approved (FY 15-16) –
Order Dt. 31.03.2015
Actual
Difference
3,147.64
3,039
108
Depreciation
Thus the petitioner requests the Hon’ble Commission to approve the depreciation for the FY 2015-16 on
actual basis, as detailed in the table above.
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
2.5
INTEREST AND FINANCE CHARGES
The following table presents the actual interest cost incurred by the petitioner as per accounts of FY15-16
which is duly audited by statutory auditors as well as CAG. The breakup of finance cost (interest expenses)
of transmission business as per audited annual accounts is provided below.
Interest Cost
Incurred
2,376.74
Particulars (In Rs Million)
Interest on Cap-Ex Loan
Interest on Bank loans & Working capital loan
398.07
Interest on Pension Bond
673
Interest on PF Bond
162.18
Interest on bonds issued by HVPN on behalf of Discoms
1,427.27
Other Finance Charges
51.61
Total interest incurred by HVPN
5,094.9
The actual interest and finance charges for capital expenditure borrowings incurred by the Petitioner vis-àvis as approved by the Hon’ble Commission are considerably higher, as presented below.
Interest Cost (Capex Loan)
Interest (In Rs Million)
Approved (FY 15-16) –
Order Dt. 31.03.2015
Actual
Difference
1,706.37
2,376.74
(670.37)
The higher interest cost of capital expenditure loan is on account of following reasons;

Consideration lower opening and closing balance of loan for FY2015-16, as the actual figures have
changed due to the difference in loan drawn, loan repayments and assets capitalized.

Excess capitalization of interest by the Hon’ble Commission by taking the CWIP relating to World
Bank loan projects. It is submitted that the interest on World Bank loan is directly capitalized by
HVPNL after taking the same as part of CWIP and while calculating the capitalization of interest
HVPNL excludes the interest on World Bank loan as well as CWIP (World Bank) amount pertaining
to World Bank loan.
Therefore, it is prayed that the Hon’ble Commission may allow the same based on the actual
interest cost from the audited annual accounts.
The other interest cost, comprising of interest on pension bonds and PF bonds, approved by the Hon’ble
Commission vis-à-vis actual incurred by the Petitioner is provided in the table below. It is submitted that the
above interest on PF and Pension bonds are actually incurred by the Petitioner which must be allowed to
be recovered, as it is a financial burden on the Petitioner.
Interest Cost (Bond) (In Rs Million)
Interest on Pension Bonds
Interest on PF Bonds
Haryana Vidyut Prasaran Nigam
Approved (FY 15-16) –
Order Dt. 31.03.2015
7.0
18.40
Actual
673.0
162.17
Difference
(666)
(143.77)
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
2.6
INTEREST ON WORKING CAPITAL
The interest on working capital approved by the Hon’ble Commission on the ARR were in line with the MYT
Regulations 2012. It is submitted that the working capital requirement approved by the Hon’ble Commission
was on lower side owing to lesser approved annual revenue requirement considered for FY 15-16. Also,
there is a significant impact of actual receivable days and normative considered receivable days, with actual
receivable days being significantly higher. Hence, the petitioner had to raise excess amount to bridge
requisite working capital requirements.
Therefore, the Petitioner prays to the Hon’ble Commission to kindly approve the actual interest on working
capital incurred by the Petitioner, which is based on the actual audited accounts of FY 2015-16.
Working Capital/Bank Loans (Rs.
Million)
Approved (FY 15-16) –
Order Dt. 31.03.2015
Proposed Based
Actual
Difference
206.73
398.07
(191.34)
Interest
It is submitted that the short term interest rate allowed by the Hon’ble Commission in its MYT Tariff Order
for FY 2015-16, was lower than the actual short term interest rates prevailing in the market, due to which
the higher short term borrowing interest burden has arisen.
2.7
INCENTIVES AND PENALTY: SYSTEM AVAILABILITY
The relevant extracts of HERC (Terms and Conditions for Determination of Tariff for Generation,
Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations,
2012 under section 12 (INCENTIVE AND PENALTY FRAMEWORK) are reproduced as follows:12.1 “Various elements of the ARR of the generating company and the licensee will be subject to
incentive and penalty framework as per the terms specified in this regulation. The overall aim
is to incentivize better performance and penalize poor performance, with the base level as per
the norms / benchmarks specified by the Commission.”
12.2 “The elements of ARR of generating company and licensees to which incentive and penalty
framework shall apply are as follows:
(c) Only for Transmission Licensee
(i) Availability- Applicable when actual availability falls below or exceeds the level specified by
the Commission. The incentive for actual availability above target availability shall be worked out
as per the following formula:
I = ATC X (AA – TA) / TA
Where
I = Incentive
Haryana Vidyut Prasaran Nigam
Page 13
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
ATC = Annual transmission charges
AA = Annual availability achieved (actual)
TA = Normative target availability.
Note 1: The incentive mechanism for availability shall be applicable only when the transmission licensee
submits detailed computation of the availability figures to the Commission and the Commission
approves the same. The detailed computation will include all details of the input data, methods of
recording the data (manual or through electronic modes), formula used for computation and all
other details required to establish the current level of availability. While reporting the level of
availability to the Commission, the transmission licensee shall enclose a certificate from the SLDC
validating the indicated level of availability.
Note 2: For all purposes the ‘normative target availability factor’ shall be considered for recovery of fixed
charges. Any fall in the actual availability from the normative target availability shall result in prorata reduction of fixed charges.”
Brief Description of Methodology used for Calculation of System Availability
The availability has been calculated circle wise for all circles month wise and then the average has been
taken to arrive at the system availability for the year. The month wise availability of each circle is calculated
with the help of the formula prescribed in MYT Regulations.
Month
Total of Lines &
transformers
capacity during
month (C*D)
Numerator
(H*C*D)
Availability
during
Month {100100*(S/R*U)}
Hours in
the
Month
Denominator
(R*U)
P
Q
R
S
T
U
V
1
Apr - 15
103039.7115
1023973.031
98.6198
720
74188592.29
2
May - 15
103368.0217
1408166.271
98.169
744
76905808.17
3
Jun - 15
103462.6312
1410998.265
98.1059
720
74493094.45
4
Jul - 15
103533.3362
1276825.374
98.3424
744
77028802.13
5
Aug - 15
103897.4216
1232090.413
98.4061
744
77299681.66
6
Sep - 15
104930.7963
1524770.356
97.9818
720
75550173.32
7
Oct - 15
105014.1132
1559281.248
98.0043
744
78130500.25
8
Nov - 15
105185.7154
1203783.257
98.4105
720
75733715.08
9
Dec - 15
105051.4913
1385705.891
98.2271
744
78158309.55
10
Jan - 16
106018.4625
1337850.823
98.3039
744
78877736.13
11
Feb - 16
106395.6164
1102735.293
98.5109
696
74051348.99
12
Mar - 16
106233.4719
1178600.526
98.5088
744
79037703.06
15644780.7449
1179.5903
8784
919455465.1
S.
No
Total
Annual TSA for the year 2015-16
Haryana Vidyut Prasaran Nigam
98.2985
Page 14
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Legend
C = length of line in ckt. KM/MVA Rating of T/F
D = No of Sub-conductors per phase /constant factor = 2.5 for T/F
H = Total Outage hours (Planned Outage + Forced Outage)
Annual TSA for the year 2015-16 as per HERC Formula is
=100 – 100*{Total Numerator H*C*D/Total Denominator R*U}
=100 – 100*{15644780.7449/919455465.0795}
=98.2985
Particulars
(Rs Million)
Annual Transmission Charges (ATC)
15,120.34
Annual Availability Achieved (Actual) (AA)
98.30
Normative Target Availability (TA)
99.00
(AA-TA)/TA
(0.007071)
Incentive (I) (Rs. Million)
(106.91)
Proposed Incentive Sharing
Licensee
Beneficiary
50%
50%
(53.46)
(53.46)
The Petitioner admits that the system availability has been lower than the normative availability during FY
15-16, for which the penalty is to be levied. The penalty of Rs. 53.46 million for the FY 2015-16 based upon
system availability has been estimated above and the Petitioner proposes to pass on the impact of such
penalty levied on the ARR of HVPNL to the consumers by reduction of its ARR. The remaining 50% share
of Rs 53.46 million shall be passed on to the beneficiaries.
2.8
FOREIGN EXCHANGE RATE VARIATION
The Petitioner has proposed recovery of FERV, in line with the Hon’ble Commission’s order dated
31.03.2016, Clause 3.4.11, whereby the principle of recovery based on cash loss due to FERV has been
considered, as reproduced below:
“…However, in order to spread the incidence of recovering FERV, the cash payment basis can be adopted
for the purpose of regulatory practice. Under this methodology, the Licensee will claim the FERV as and
when the repayment of loan is made. However, care should be taken that the FERV which has been
capitalized should not be recovered again while making payment of the loan. Accordingly, the capitalized
Haryana Vidyut Prasaran Nigam
Page 15
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
value of FERV will be divided into 50 instalments (based on the number of instalments of loan repayment)
and while calculating the FERV on the each repayment instalment, the additional FERV will be reduced by
1/50th of the FERV already capitalized.”
Accordingly, in order to estimate the incidence of FERV to be capitalized, the Petitioner has considered
recovery of Rs.3.6 Cr up to previous year, while for the FERV capitalized during FY 15-16, is Rs. 17.68 Cr.,
the amount has been spread over 47 instalments, as only 47 instalments are yet to be paid. The details are
provided as below:
FERV
Capitalized (in
Rs . Cr.)
42.42
Year
2011-12
FERV Charged
to P&L (in Rs
Cr.)
15.9
Total
FERV
58.32
2012-13
27.77
6.6
34.37
2013-14
79.16
15.8
94.96
2014-15
30.72
13.43
44.15
Total
180.07
51.73
231.8
43.77
61.16
Capitalization recovery for 50 Instalments (for
amount till FY 14-15)
3.60
2015-16
17.38
Capitalization recovery (for 47 instalments)
0.37
Total FERV Capitalization to recovered in
current year
3.97
The details of calculation of FERV, considered to form part of true up is provided in the table below:
Calculation of FERV on 1st instalment Paid in 2015-16 in February 2016
Amount received (1st Instalment of loan drawl)
USD
Repayment - 1st instalment for FY 15-16
USD
Amount Paid - 2nd instalment for FY 15-16
USD
Exchange Rate at the time of receipt of instalment
Figure (in Crore)
2.76
0.34
0.37
INR
45.82
INR
63.87
INR
68.19
FERV on 1st instalment
INR
6.15
FERV on 2nd instalment
INR
8.32
Less: Recovery of capitalized FERV
INR
3.97
10.50
Exchange Rate at the time of Payment of 1st instalment - in
FY15-16
Exchange Rate at the time of Payment of 2nd instalment - in
FY15-16
Net FERV on
1st
and
2nd
Instalment of loan
INR
From the aforesaid, it is prayed to Hon’ble Commission to kindly allow the recovery of FERV as per above
table.
Haryana Vidyut Prasaran Nigam
Page 16
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
2.9
APPROVED AND PROPOSED ARR FOR TRUE UP OF FY 2015-16
Based on the above discussed elements of ARR, the ARR approved by the Hon’ble Commission and
revised ARR submitted for True up are summarized below.
ARR - Transmission (In Rs Million)
Employees’ cost
Terminal benefits
R&M expenses
A & G Expenses
Interest on Capital Expenditure
Borrowings
Debenture Interest (PF Bonds)
Debenture Interest (Pension Bonds)
Interest on bonds – Others
Interest on Working Capital/Bank
Loans
Depreciation
Return On Equity
Non-Tariff Income
Holding Cost for True Up
Total
Add: True up for FY13-14
Add: Loss Due to Foreign Exchange
Rate Variation (FERV)
Total ARR
Add: Incentive based on
Transmission Availability passed on
to beneficiary
Total ARR - Including incentive
Approved (FY 1516) –
Order Dt. 31.03.2015
2,060.81
1,189.04
366.45
161.12
Proposed for
True Up
Surplus/(Gap)
2,600.59
1,976.39
181.21
153.85
(539.78)
(787.35)
185.24
7.27
1,706.37
2,376.74
(670.37)
18.4
7
162.17
673
(143.77)
(666)
206.73
398.07
(191.34)
3,147.64
1,832.23
(241.87)
256.7
10,710.62
1,577.25
3,039
1,852.28
(232.07)
256.7
13,438
1,577.25
108
(20.05)
(9.8)
(2,727.47)
-
105
(105)
15,120.34
(2,832.47)
(53.46)
53.46
15,066.89
(2,779.02)
12,287.87
12,287.87
Based on the above comparison of approved and actual ARR parameters, a revenue gap of Rs. 2,779.02
million is computed for FY 2015-16 which is proposed to be carried forward and may kindly be allowed
during FY 2017-18. The Hon’ble Commission is requested to approve the same along with carrying cost
which is computed in the subsequent chapter.
2.10
TRUE UP OF ARR OF SLDC BUSINESS FOR FY 2015-16
The table below provides the details of ARR approved for SLDC business by the Hon’ble Commission in
its Tariff Order for FY 2015-16. However, in line with the revised ARR for Transmission business it is
submitted that the true up for SLDC business may also be considered by the Hon’ble Commission and it
may approve the same.
Haryana Vidyut Prasaran Nigam
Page 17
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Approved
Actual
Surplus/
(gap)
Employees’ cost
A & G Expenses
R&M expenses
Depreciation
Interest & Finance Charges on Capital Expenditure
Interest on Working Capital
36.13
10.06
7.03
69.73
85.66
3.17
34.02
9.93
5.45
22.60
5.87
2.46
2.11
0.13
1.58
47.13
79.79
0.71
True Up for Actual Interest Cost for FY 13-14
(2.87)
(2.87)
-
Non-Tariff Income
(0.76)
(0.76)
-
Total Expenditure (including special appropriation)
208.15
76.7
131.46
SLDC ARR (Rs. Million)
Haryana Vidyut Prasaran Nigam
Page 18
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
3. REVIEW OF AGGREGATE
REVENUE REQUIREMENT FOR FY
2016-17 AND AGGREGATE
REVENUE REQUIREMENT
PETITION FOR FY 17-18
3.1
BACKGROUND
On 29th May, 2014, the Hon’ble Commission had issued the MYT Order for HVPN for the Control Period
FY 2014-15 to FY 2016-17. HVPN is required to file for Annual Performance Review (APR) in line with
Regulation 11(5) of the MYT Regulations, 2012.The Clause (3) of Regulation 13 of MYT Regulations, 2012
states that:
The scope of the mid-year performance review shall be a comparison of the performance of the
generation company and the licensees for the relevant financial year with the approved forecast of
ARR for their respective businesses and the performance targets specified by the Commission.
Upon completion of the mid-year performance review and truing up as per regulation 13, the
Commission shall pass an order recording:
(a) The revised approved ARR for such financial year including approved modifications, if any;
(b) The approved aggregate gain or loss on account of controllable items and sharing of such gains
or losses;
(c) Truing-up or pass through of uncontrollable items of ARR of previous year(s);
(d) Pass through of variations in controllable items due to force majeure events, if any.
(e) Pass through of variations in controllable items attributable to uncontrollable factors.
(f) Tariff applicable for the ensuing year.
The Petitioner has proposed a review of capital expenditure for the last year of the Control Period, based
on the expenditure incurred so far in the current FY 2016-17 and also presently envisaged for the last year
of the Control Period.
Haryana Vidyut Prasaran Nigam
Page 19
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
In the following sections, the Petitioner humbly requests the Commission to kindly consider the revised
estimates for FY 2016-17 and proposed estimates for FY 2017-18 based on the audited financial accounts
of FY 2015-16 as it would provide more realistic estimates for the Control Period.
3.2
CAPITAL EXPENDITURE AND CAPITALIZATION FOR FY 2016-17 AND FY 2017-18
Capital expenditure is essential for meeting demand growth and prompt upkeep of the network on sustained
basis. Capital expenditure is incurred when a business spends money either to buy fixed assets or to add
to the value of an existing fixed asset with a useful life extending to deter investments. The Capex schemes
have been integral part of the transmission planning and are core to the business of the utility. Keeping this
in mind, utilities aim to invest in the right schemes, which have higher returns.
HVPN has invested capital each year with a single minded focus to improve the existing system through
addition of additional load capacity along with augmentation, maintenance and strengthening to improve
the existing system. In line with the Capital expenditure requirements the petitioner had submitted a Capital
Expenditure plan for the control period FY 2014-15 to FY 2016-17 in March 2014. Further, Capital
Expenditure Requirement for the period FY 17-18 is also submitted for the kind consideration of Hon’ble
Commission.
REVISED CAPITAL INVESTMENT PLAN FOR FY 2016-17 AND CIP FOR FY 2017-18
HVPN, being the State transmission utility of Haryana, has to manage a large transmission system which
is expected to increase rapidly in the years that follow. To ease the monitoring of the system, the
administration and management of the transmission system of HVPNL has been divided into two zones,
namely Hisar and Panchkula, with each zone comprising of three circles. The Hisar Zone comprises of
Hisar, Gurgaon and Faridabad Circles, while the Panchkula Zone is divided in Panchkula, Karnal and
Rohtak circles. The circles are further divided into divisions, detailed in the table below:
HVPNL
Zone
Hisar
Circle
Division
Hisar




Hisar
Bhiwani
Sirsa
Jind
Panchkula
Faridabad
Gurgaon
Panchkula
Karnal
Rohtak
 Faridabad
 Palwal
 Gurgaon
 Manesar
 Rewari
 Ambala
 Madanpur
 Yamunanagar
 Karnal
 Kaithal
 Kurukshetra
 Rohtak
 Panipat
HVPNL had prepared the capex plan taking into consideration all the factors which would affect the
operations of the company. The capex plan included the details of various capital expenditure schemes in
the above identified areas and their respective estimates for year FY 2016-17 and FY 2017-18.
The capital investments of HVPNL can largely be categorized in following areas
Haryana Vidyut Prasaran Nigam
–
Page 20
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
1. Investments in New Transmission Infrastructure to support the demand requirements or power
evacuation from generation projects.
2. System augmentation and strengthening including renovation and modernization to maintain the
performance of the existing system and to deter investments.
The planning department of HVPN receives inputs from field officers and the Distribution Companies on
investment requirement for organic growth on annual basis which formulate core of the capital expenditure
plan. The capacity addition requirements for in-organic growth are incorporated by planning wing of HVPN
in the capital investment plan. The transmission planning wing of HVPN consistently monitors loading of
transformers and transmission lines so as to promptly address any constraints. Further load flow analysis
is also being carried out to derive scientific evidences to strengthen capital investment plan proposals.
In order to address the requirement of consumers, the petitioner intends to revise the Capex plan approved
for the FY 16-17 based upon the latest available data from the field and system operations. The petitioner
hereby requests the Hon’ble commission to review the Capex for the FY16-17 and approve the revised
capex plan for FY 16-17. The petitioner also requests the Hon’ble Commission to approve the Capital
expenditure plan for the FY17-18 as submitted in the Business cum Capital Expenditure Plan for the period.
The sub-sections below detail out the revised capital expenditure.
TRANSMISSION SYSTEM BUSINESS
The capital investment plan for the transmission business has been divided in the following key areas,
based on the nature of capital works:
i.
Transmission lines
ii.
Sub station
iii.
Information technology initiatives
iv.
Land & Right of Way expenses
v.
Miscellaneous works including civil works, procurement of thermo-vision cameras, testing
equipment, contingency capital works.
The following table provides the work wise expenditure for the control period. The details of the works are
provided as part of the Annexures to this Petition.
FY 2016-17
(Approved T.O.
dated 31st March
16)
FY 2016-17
(Envisaged)
FY 2017-18
(Envisaged)
Substation
4,479
4,246
6,034
Lines
2,175
1,243
2,567
Information Technology
30
91
59
Land
72
659
300
Works (in Rs Million)
Haryana Vidyut Prasaran Nigam
Page 21
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Miscellaneous
Total
427
340
340
7,182
6,579
9,300
Considering the efficient performance of HVPN in past, with low transmission loss and high system
availability, HVPNL has focused on catering to the increasing demand in the State. The Licensee is
committed towards making quality power supply available and further improving the reliability by
augmenting or strengthening of the existing transmission system. New substations have been planned
along with the requisite lines, while older, inefficient equipment at the existing stations has been considered
for replacement with modern and efficient equipment. New transmission lines are planned for power
evacuation, meeting the load demand, and the current lines will be strengthened and renovated as required.
It is planned that the capital expenditure will be focused mainly on meeting the increasing demand and after
meeting the demand, the focus will shift towards the maintenance and upkeep of the network for
uninterrupted transmission of power. Further meticulous planning has been put in to ensure effective
modernization of the system through IT implementation and negotiate problems and delays faced on
account of Land and Right of Way issues.
In the following sub-sections, the details of the capital expenditure in the five broad categories, discussed
above, are presented with key objectives.
SUBSTATIONS
In the two zones, many new substations have been planned to augment the existing system and make it
robust. It is submitted that adequate infrastructure is required to ensure that unforeseen breakdowns in few
parts of the system do not have any adverse impact on the availability of overall transmission system.
Therefore, the capacity addition and the necessary expenditure are planned in manner to create sufficient
redundancies in the system considering the state of existing infrastructure and growth in power demand.
The revised expenditure related to proposed substations in two transmission zones is summarized in the
table below:
The capital expenditure proposed above is likely to be incurred not only towards strengthening the existing
substation infrastructure but also to create new substation capacities.
Substations (in Rs Million)
FY 2016-17
(Approved T.O.
dated 31st
March 16)
FY 2016-17
(Envisaged)
FY 2017-18
(Envisaged)
Hisar
2,742
2,615.6
3,821.4
Panchkula
1,737
1,630.2
2,212.1
Total
4,479
4,246
6,034
Haryana Vidyut Prasaran Nigam
Page 22
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
TRANSMISSION LINES
A number of new transmission lines have been proposed together with repair and maintenance activities
for the existing lines. The year-wise expenditure planned on the transmission lines in the two zones has
been presented in the table below:
Lines (in Rs Million)
FY 2016-17
(Approved
T.O. dated 31st
March 16)
Hisar
Panchkula
Total
FY 2016-17
(Envisaged)
FY 2017-18
(Envisaged)
1,379
679.2
1,596.2
796
563.5
970.4
2,175
1,243
2,567
The main purposes for the expenditures on transmission line is to deport bulk amount of power near to load
centers with focus on creating redundancy by means of improvement/strengthening, supporting the load
growth and facilitating the evacuation of power from the newly Commissioned generating plants.
INFORMATION TECHNOLOGY
The expenditure on information technology is planned with the intention of equipping the personnel with
tools to monitor and handle the transmission system efficiently and to access real time data for online
system monitoring.
Information Technology (in Rs Million)
FY 2016-17
(Approved
T.O. dated 31st
March 16)
Total
FY 2016-17
(Envisaged)
30
91
FY 2017-18
(Envisaged)
59
LAND
Land acquisition and RoW settlements occupies major proportion of total capital investment plan. The
yearly expenditure is presented in the table below.
Land (in Rs Million)
Hisar
Panchkula
Total
FY 2016-17
(Approved
T.O. dated 31st
March 16)
FY 2016-17
(Envisaged)
FY 2017-18
(Envisaged)
67
447.5
102.9
5
212
197.2
72
659
300
MISCELLANEOUS ITEMS
Miscellaneous works include civil works, one-time procurement of testing and T&P equipment and Thermovision Cameras for hot spot detection.
Haryana Vidyut Prasaran Nigam
Page 23
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Miscellaneous (in Rs Million)
FY 2016-17
(Approved
T.O. dated 31st
March 16)
Total
FY 2016-17
(Envisaged)
427
FY 2017-18
(Envisaged)
340
340
COMMISSIONING SCHEDULE
A number of schemes had been/to be commissioned in the previous/upcoming years, but minor
expenditures are likely to be undertaken during FY 2016-17 & FY 2017-18 and the schedule of capitalization
is as detailed below in the table.
Year of Commissioning/Proposed year
of commissioning of Scheme
Capital Expenditure in the financial year (in Rs Million)
FY 16-17
FY 17-18
2009-10
4.5
-
2010-11
17.0
19.5
2011-12
41.1
13.9
2012-13
108.4
17.1
2013-14
176.3
10.0
2014-15
310.6
27.0
2015-16
1,127.5
141.8
2016-17
3,200.9
1,516.7
2017-18
818.6
5,759.8
2018-19
53.8
1,104.6
2019-20
-
34.0
5,858.7
8,644.4
Total
The above table provides the expenditure break up for the control period, for all the schemes that have
been represented in the first column.
SOURCES OF FUNDING
HVPN has sought to utilize debt that is available at a low cost to ensure that the burden on the beneficiaries
can be minimized. HVPNL has negotiated with the financing institutions and ensured that the cost of capital
is low and the terms of debt are favourable to the Company. A number of financing institutions have tied up
with the Company to provide the necessary funding for the capital works.
Financial Institution
FY 16-17
FY 17-18
Debt
Ratio (%)
Interest Rate
(%)
Schemes with tied up financing
NABARD
Haryana Vidyut Prasaran Nigam
134.3
53.7
80
11
Page 24
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Financial Institution
FY 16-17
FY 17-18
Debt
Ratio (%)
Interest Rate
(%)
PFC
136.4
48.2
80
11.25
REC
1,572.4
3,323.5
90
11.25
World Bank
1,783.3
1,215.9
80
10
JICA
474.3
56.3
100
12
Total
4,100.7
4,697.6
650.2
865.8
90
11.25
937.8
70
7
70
11.25
Loans pending Approval
REC (Proposed
NCRPB (Proposed)
Total
650.2
1,803.6
Capex Schemes awaiting Loan (Proposal)
Expenditure
737.6
2,099.0
Grand Total
5,488.5
8,600.1
Debt Ratio for the year
84.43
81.47
Wt. Avg. Interest Rate
(%)
10.96%
10.69%
The main sources of loan for the expenditure are World Bank and the REC. Other works are being funded
by domestic financial sources like Power Finance Corporation, National Bank for Agricultural and Rural
Development etc. Some schemes are in the process of attaining funding as they have been proposed to
the financing institutions and approval for the requisite loans is awaited. A few schemes have been
approved by HVPNL and are in the process of being proposed for loans. A number of schemes have also
been undertaken from the grants and deposits provided by HSIIDC; therefore no investment is being made
by HVPNL for such projects.
3.3
OPERATION & MAINTENANCE EXPENDITURE
The Hon’ble Commission in its order dated 31st March 2016 had approved the various components of O&M
expense i.e. employee cost, R&M expenses and A&G expenses. Since the FY 2015-16 is complete and
audited actual accounts of FY 2015-16 as well as CPI & WPI indices for the year are available, HVPN is
proposing the revised O&M components for FY 2016-17. Further, the petitioner in line with amended MYT
regulations is hereby proposing the O&M components for the extended year of the control period i.e. for
FY2017-18 .The projections for the period FY2016-17 and FY 2017-18 are made considering FY 2015-16
as the baseline.
Haryana Vidyut Prasaran Nigam
Page 25
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Employee Cost
For employee cost, actual employee cost of FY 2015-16 exclusive of capitalization and SLDC employee
cost as per audited accounts has been considered. The inflation factor growth has been considered as
7.96%, as per methodology, approved by the Hon’ble Commission in the MYT regulations and no further
addition in manpower has been considered. The terminal benefits estimate for the MYT control period is
based on the actuarial valuation report, Annexed herewith this petition. It is submitted that there expected
a significant increase in the terminal benefit liability for HVPNL as the impact to 7th pay commission has
been factored while doing the actuarial valuation.
It is pertinent to mention here that while carrying out the projections for Employee Cost, the future impact
of 7th pay Commission has not been considered. Thus, the petitioner requests the Hon’ble Commission to
consider the same as and when it is implemented.
Particulars (Rs. Million)
2016-17 Revised
2017-18 Proposed
2,807.70
3,031.84
7.96%
7.98%
Terminal Benefits
3,531.10
5,561.29
Revised HVPN Employee Cost
6,338.8
8,593.13
Employee cost (excluding Terminal benefits)
Inflation
Approved Employee Cost
As per 31st March 2016
Order
4,599.6
Therefore, it is humbly prayed that the Hon’ble Commission may revise the employee cost for the MYT
Control period as per above table.
R&M Expense
In the MYT Regulations 2012, the R&M expenses have been approved as percentage of GFA with K factor
being 0.5% for the entire control period. The R&M expenses have been revised considering the revised
opening GFA for FY 2016-17.
Particulars (Rs. Million)
2016-17 Revised
2017-18 Proposed
Revised GFA (Average)
78,851.86
88,169.14
Revised R&M Expense
425.66
476.04
Approved R&M Cost
As per 31st March
2016 Order
414.56
*The allocated SLDC assets have been reduced from the HVPN GFA for FY 2015-16 while determining the
R&M Expense.
Haryana Vidyut Prasaran Nigam
Page 26
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
A&G Expense
In line with the amended MYT Regulations 2012, the Petitioner has projected the A&G expenses for the
remaining period of Control Period based on the actual A&G expenses incurred during FY15-16, as below.
It is humbly submitted that the proposed A&G expenses may be allowed by the Hon’ble Commission, as
these are reflective of true A&G expenses likely to be incurred.
Particulars (Rs. Million)
Revised HVPN A&G Cost
Approved A&G Cost
2016-17 Revised
166.10
As per 31st March
2016 Order
151.69
2017-18 Proposed
179.36
Further, the Hon’ble Commission is requested to approve the revised O&M expenses for FY16-17 and FY
2017-18 as proposed by the Petitioner, in the above tables.
3.4
DEPRECIATION
The Petitioner has proposed the depreciation for the FY2016-17 and FY2017-18 separately for the existing
assets and assets likely to be added in the extended one of the control period, considering the revised
capital expenditure schedule.
Existing Assets (Rs. Million)
Depreciation during the year
Less: Depreciation on assets through consumer contribution
Less: Depreciation on SLDC Assets
Total depreciation on existing assets
2016-17
Revised
3,239.85
178.10
22.6
3,039
2017-18
Proposed
3,239.85
178.10
22.6
3,039
The computation of depreciation on new assets is provided below:
New Assets (Rs. Million)
Opening GFA
Additions
Closing GFA
Rate of Depreciation
Depreciation during the year
2016-17
Revised
5,796
5,796
5.25%
168
2017-18
Proposed
5,796
12,839
18,635
5.24%
608
It is pertinent to mention here that while estimating the depreciation for the new assets, the Petitioner has
considered the weighted average rate of depreciation as derived based on the proportion of different
category of assets being added.
3.5
INTEREST AND FINANCE CHARGES
The interest and finance charges for existing borrowings likely to be incurred by the Petitioner are presented
below, for kind consideration of the Hon’ble Commission.
Haryana Vidyut Prasaran Nigam
Page 27
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Loan Schedule (Existing Borrowings, Rs. Million)
Opening
Addition
Repayments
Closing
Interest Capitalized
Interest
2016-17
Revised
31,576
-
2017-18
Proposed
28,952
-
2,624
2,624
28,952
239
26,328
219
2,500
2,283
Apart from the above loans, as the Petitioner plans for significant capital expenditure for the FY2017-18, as
well. There are additional loans which are required to be drawn, most of which have been already tied up
with funding agencies, as discussed in section related to capital expenditure above. The interest cost has
been estimated based on the loans proposed to be drawn during FY16-17 and FY17-18, based on the
funding requirements, while the interest capitalized has been based on the average of last 3 years interest
capitalized. Therefore, it is requested that the Hon’ble Commission may kindly allow the interest cost for
the as proposed by the Petitioner, presented in the table below:
Loan Schedule (New Borrowings, Rs. Million)
Opening
Addition
Repayments
Closing
Interest capitalized
Interest cost
2016-17 Revised
5,780
5,780
27.67
289.07
2017-18 Proposed
5,780
7,826
578
13,028
87.82
917.40
The petitioner has submitted the Interest on Bonds comprising of interest on pension/PF bonds and UDAY
Bonds as below –
The estimation of interest cost below considers the likely redemption of bonds as per schedule. The pension
and PF bonds has been redeemed and swapped with the UDAY bonds on 15.06.2016, in light of this the
petitioner hereby has computed the interest on Pension/PF Bonds only for the duration of 2.5 months during
FY 16-17 i.e. from 01.04.2016 to 15.06.2016. The petitioner has also computed the Interest on UDAY Bonds
for the remaining duration of FY 2016-17 i.e. from 15.06.2016 to 31.03.2017 and for the entire period of FY
17-18.
Interest on Bonds (In Rs Million)
2016-17 Revised
2017-18 Proposed
32
0
Interest on Pension Bonds
141
0
Interest on UDAY Bonds
333
280
Total Interest
507
280
Interest on PF Bonds
It is submitted that the above interest on Pension/PF bonds and Interest on UDAY Bonds are to be incurred
by the Petitioner which must be allowed to be recovered, as it is a financial burden on the Petitioner.
Haryana Vidyut Prasaran Nigam
Page 28
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
3.6
INTEREST ON WORKING CAPITAL
The interest on working capital based on the principles set out in the MYT Regulations 2012, revised for
the Control Period are provided below.
Working Capital (Rs. Million)
O&M
Maintenance spares
Receivables
Total
Interest Rate
Interest on Working Capital
2016-17 Revised 2017-18 Proposed
578
771
1,040
1,388
1,294.76
1,547.26
2,912
3,705
12.80%
12.80%
372.72
474.27
The base rate prevailing based on the SBI’s website during the 1st April 2016 is 9.3% and adding a margin
of 350bps, the interest rate on working capital is estimated to be 12.8%, which may be considered by the
Hon’ble Commission while approving the revised ARR for the Control Period.
3.7
RETURN ON EQUITY
The revised return on equity has been estimated based on the expected equity contribution on the new
capex proposed to be incurred by the Petitioner. The rate of return considered for the return on equity is
10% in line with the office memo no. Ch 65/SE/RAU/F122/Volume-II dated 04/12/2014 which considers the
approach adopted by the Hon’ble Commission in its MYT Order dated 29 May 2014.
Particulars (Rs. Million)
Paid up equity in beginning
Add: share application money pending
allotment
Equity to be considered for Transmission
business
Less: Equity related to transmission works
not yet commissioned (opening CWIP)
Add: 50% of Equity portion of GFA
Closing equity for RoE
Rate of Return
RoE - Proposed
2016-17 Revised
18,522.82
2017-18 Revised
19,632.38
2,000.00
20,522.82
19,632.38
1,759.8
2,075.0
869.4
19,632.4
10.0%
1,963.24
1,925.8
19,483.2
10.0%
1,948.32
As evident from above, the equity base considered for revised proposal of return on equity is adjusted for
the CWIP, as Hon’ble Commission has established in its approach for approval of ARR that such returns
shall not be provided on the equity invested in the capital works in progress. Therefore, it is prayed that the
above RoE may be allowed in the revised ARR for MYT Control Period.
3.8
NON-TARIFF INCOME
The non-tariff income has been considered in line with the actual non-tariff income during FY 2015-16, to
the tune of Rs. 232 million for the extended control period.
Haryana Vidyut Prasaran Nigam
Page 29
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
3.9
AGGREGATE REVENUE REQUIREMENT
As per the parameters discussed above, the revised ARR of HVPN for FY 2016-17 and FY 2017-18 as
revised by the Petitioner and earlier approved by the Hon’ble Commission is summarized in the table below:
Financial Year
Particulars
2017-18 (Rs
Million)
2016-17 (Rs Million)
Approved as per
Order dated 31st
March 2016
Revised
Proposed
Proposed
O&M Cost
5,165.85
6,931
9,249
Interest on Loan
2,655.75
2,789
3,200
6.72
141
0
Interest on PF Bonds
0
32
0
Interest on UDAY Bonds
0
333
280
3,285.91
3,207
3,647
253.80
373
474
1,704.60
1,963
1,948
0
13.36
14.50
(314.38)
(232)
(232)
Interest on Pension Bonds
Depreciation
Interest on Working Capital
Return on Equity
Share of SLDC Charges
Non-Tariff Income
Less SLDC Expenses forming part of O&M
expenses
True-up for FY 2014-15 for Transmission
Carrying cost on true-up for FY 2014-15
Total ARR
(69.0)
827.19
827.19
89.75
89.75
13,606.19
16,467
18,582
The Petitioner humbly requests the Hon’ble Commission to approve the Revised Aggregate Revenue
Requirement of HVPN for FY 2016-17 and projected ARR for FY 2017-18 as estimated in the table above
and allow recovery of the variation in the transmission charges for FY 2015-16 in the revised ARR for FY
2017-18.
3.10 REVENUE GAP AND CARRYING COST
Based on the true-up of FY 2015-16 and revised ARR for FY 2016-17 the revenue gap computed for the
respective years are provided in table below:Financial Year
Approved ARR
Proposed Revised ARR
Revenue Surplus /(Gap)
FY 2015-16 (In Rs Million)
2016-17 (In Rs Million)
12,288
15,067
(2,779)
13,606
16,467
(2,861)
The Petitioner requests the Hon’ble Commission to allow recovery of the revenue gap of FY 2015-16 and
gap on account of proposed revision in ARR of FY 2016-17 in the transmission charge to be approved by
Haryana Vidyut Prasaran Nigam
Page 30
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
the Hon’ble Commission for FY 2017-18 and also allow for carrying cost on the under-recovered amount in
line with HERC MYT Regulations, 2012.
Accordingly, the Petitioner has computed the carrying cost on the revenue gap for FY 2015-16 and FY
2016-17 considering the applicable SBI base rate and appropriate margin rate which is provided in the table
below:
Particulars (In Rs Million)
FY 2015-16
Opening Revenue Gap (including carrying cost)
FY 2016-17
-
2,779
Addition
2,779
2,861
Closing Revenue Gap
2,779
5,640
12.80%
12.80%
178
539
Interest Rate
Carrying Cost
Total
5,640
717
HVPN requests the Hon’ble Commission to include the carrying cost of Rs 717 Million in the ARR for FY
2017-18 for recovery through transmission charges. It is to be noted that while calculating carrying cost it
is assumed that full cost will be recovered at the beginning of the FY17-18.
3.11 UNITARY CHARGES
HERC has granted transmission license to M/s Jhajjar KT Transco Private Ltd on 26 th October, 2010. The
above transmission works stands completed and concessionaire has achieved the Commercial Operation
Date on 12th March 2012.
As per Transmission Agreement (clause 26.8.2); the applicable monthly Unitary Charges is being paid by
HVPNL to Concessionaire. The base Unitary Charge for the Accounting Year, in which COD occurs (i.e
2011-12), was Rs. 4,50,00,000/-, and the same is being revised annually by decreasing the Base Unitary
Charge for the immediately preceding Accounting Year by 3% thereof and to reflect 40% of the variation in
WPI in accordance with the provisions of Transmission Agreement.
According to above, the calculation of monthly Unitary Charges for current financial year (2016-17) is as
under:
Sl.
No.
1
Description
4
5
6
Monthly Base Unitary Charge as per Clause 26.2.1 of TA
for 2011-12
Yearly reduction (%)
Monthly Base Unitary Charge for FY 2016-17
WPI for Jan 2010 (Base Accounting Year)
7
WPI for Jan 2016 preceding the Accounting Year
8
Increase in WPI (%)
Haryana Vidyut Prasaran Nigam
Amount in Rs.
45,000,000
3%
38643029
135.2
(published by the Ministry of
Industry, GOI
175.4
(published by the Ministry of
Industry, GOI
29.73%
Page 31
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
9
WPI Index (40 % of WPI increase) (%)
11.89%
10
Increase in Base Unitary Charge linked with WPI
4596009
11
Indexed Unitary Charge (Rs) (Sl.No.5+10)
43239038
12
13
14
System Availability (%)
Normative Availability (%)
Incentive due to System Availability
15
Incentive due to less Transmission Losses
16
17
18
Unitary Charge + Incentives (Sl.No.11+14+15)
Total Unitary charges for the month
Monthly Unitary Charges (In Millions)
100% (Assuming)
98
864781
168395
44272214
Rs. 44272214 (i.e. 4.42 crore)
44.2
The expected Unitary Charges for the next Financial Year (2017-18) would likely to remain around Rs 44.5
Million per month (approx.) keeping in view the expected increase in WPI and yearly reduction of Base
Unitary Charge by 3%.
In line with above, the Petitioner, therefore, prays to the Hon’ble Commission to kindly consider the above
proposed unitary charges as part of annual transmission charges to be approved for FY 2017-18.
3.12 YEARLY TRANSMISSION CHARGES FOR TRANSMISSION LINES INCIDENTAL TO INTER-STATE
TRANSMISSION OF ELECTRICITY
The Hon’ble Commission in its order dated 31st March 2016 had adjusted YTC charges for the
corresponding years. It is also to be noted that, in line with the methodology applied by the CERC in its
order dated 23.09.2015, the petitioner has also calculated and included Yearly Transmission Charges for
FY17-18 based on tentative line lengths (ckm.) to be added in corresponding year. Further, in line with the
approach adopted by Hon’ble HERC in its order dated 31.03.2016, the petitioner hereby proposes to adjust
the YTC charges against the ARR for the period FY 2017-18.
Name of Lines
220 kV S/C Bhiwadi-Rewari line Rajasthan-Haryana)
220 kV D/C Madanpur Panchkula)-Kunihar (HP) line
with LILO one Ckt. At 220 kV S/S Baddi (HP) [Haryana
Portion 40.5 Km=81 Ckt. kM ]
Total
Length (ckt
kms.)
23.76
YTC 2017-18 (Rs Million)
81.00
78.29
29.73
108.01
In line with above, the Petitioner prays to Hon’ble Commission to kindly allow the above YTC for intra-state
lines operating as ISTS.
3.13 REVIEW OF STATE LOAD DISPATCH CENTRE ARR
The Petitioner seeks to revise the capital expenditure envisaged during the remaining MYT control period.
The table below provides the details of proposed capital expenditure for the SLDC for the FY 16-17 and FY
17-18.
Haryana Vidyut Prasaran Nigam
Page 32
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Year
Capital Expenditure (In Rs
Million)
FY16-17 (Revised)
FY17-18 (Proposed)
370
44
Based on the above revised capital expenditure plan for the remaining years of the MYT period and actual
expenses for the FY15-16, the revised annual revenue requirement for the SLDC has been estimated as
presented in the table below:
Particulars (Rs Million)
FY16-17 (Revised)
FY17-18 (Proposed)
O&M Cost
69
76
Interest on Loan
47
62
Depreciation
50
35
Interest on Working Capital
3
3
Non-Tariff Income
1
1
Annual Revenue Requirement
167
175
The petitioner requests the Hon’ble Commission to approve the same for the remaining years of the MYT
period.
RECOVERY OF REVENUE LOSS ON ACCOUNT OF SLDC CHARGES TO CRCPCL FOR FY 15-16
The Hon’ble Commission in its recent order dated 29.11.2016, has provided for recovery of market
operation charges by inclusion in the true up, as reproduced below:
“The levy of Market Operation Function charges on the Petitioner, being RE Power producer for
captive consumption, is imposing undue financial hardship. Therefore, in view of the anomaly in
the HERC MYT Regulations, 2012, as already discussed, HVPNL is directed to withdraw the claim
raised on the Petitioner on account of Market Operation function charges since the FY 2014-15 till
date. HVPNL may claim the loss of revenue on account of Market Operation function charges, so
withdrawn, in its true up petition for the FY 2016-17.”
The Petitioner has provided details of bills raised against Chanderpur Renewable Power Co. Pvt. Ltd.
(CRPCPL) for FY 15-16 in table below.
Description
Transmission
Bill
Surcharge
Surcharge
-
Bill 03/16
41,905.00
Total
41,905.00
System Operation
Market Operation
3,156.00
207.00
488.00
5,947,140.00
390,281.00
-
5,950,296.00
390,488.00
488.00
-
41,905.00
6,337,421.00
6,383,177.00
3,851.00
Total (in Rs.)
From the aforesaid, it is prayed to Hon’ble Commission to kindly allow the recovery of market operation
charges raised to CRPCPL of Rs 6.33 Million along with the SLDC Charges of FY 17-18.
Haryana Vidyut Prasaran Nigam
Page 33
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
4. ANNUAL TRANSMISSION CHARGES
AND SLDC CHARGES
4.1
ANNUAL TRANSMISSION CHARGES FOR FY 2017-18
The annual transmission charges shall be determined as stated under Regulation 50 of the MYT
Regulations 2012:
“Transmission licensee shall recover the transmission charges at the normative annual
transmission system availability factor specified for it by the Commission.”
The details of the annual transmission charges are summarized in table below:
Amount
(Rs. Million)
Particulars
Aggregate Revenue Requirement for FY 2017-18
18,582
Gap on account of True-up for FY 2015-16
2,779
Gap on account of Review of FY 2016-17
2,861
Carrying Cost on Gap for FY 2015-16 & FY 2016-17
717
Adjusted ARR
24,939
Unitary Charges for JKTPL
534
Less YTC for Lines Operating As ISTS Lines FY 17-18
108.01
Total Transmission Charges
25,365
Monthly Transmission Tariff
2,113.72
Ratio Of Average Transformation Capacity
UHBVNL
45.65626%
DHBVNL
53.67112%
TPTCL
0.64287%
NTPC Ltd
0.02592%
CRPCPL
0.00384%
Monthly Transmission Tariff - UHBVN (based on ratio of Transmission capacity)
965.0476
Monthly Transmission Tariff - DHBVN (based on ratio of Transmission capacity)
1,134.4598
Monthly Transmission Tariff - TPTCL (based on ratio of Transmission capacity)
13.5885
Monthly Transmission Tariff - NTPC (based on ratio of Transmission capacity)
0.5478
Monthly Transmission Tariff - CRPCPL (based on ratio of Transmission capacity)
0.0811
Haryana Vidyut Prasaran Nigam
Page 34
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
In case of any addition of new beneficiary, the transmission charges would be charged in proportion of the
allotted capacity.
4.2
SHARE OF SLDC CHARGES AS PER HERC MYT REGULATIONS 2012, (1ST AMENDMENT)
REGULATIONS, 2016 –
As per the amended Regulation 52 of the HERC MYT Regulations 2012. “The annual charges of SLDC
determined as per regulations 6 and 16, shall be recovered as a single composite charge from the
beneficiaries as under:Intra – State Transmission Licensee
8% of the Annual SLDC Charges
Generating Stations and Sellers
46% of the Annual SLDC Charges
Distribution Licensees and Buyers
46% of the Annual SLDC Charges
(i) The SLDC charges shall be levied by the Transmission licensees / STU, also designated as the
SLDC, on the basis of weighted average of the lines (Ckt. km) owned by the Intra State
Transmission Licensee(s) as on the last day of the month prior to billing of the month.
Ckt. km
Ckt. km
Ckt. km
Ckt. km
400 kV
220 kV
132 kV
66 kV
MF 4
MF 2.2
MF 1.32
MF 0.66
product
product
product
product
Total __XXX___
Therefore, the SLDC charges for transmission
Licensee =
8% x (annual SLDC charges X weighted Ckt Km
of concerned transmission licensee) / total
weighted Ckt. Km of all transmission licensees
(ii)
The SLDC charges from the generating companies and sellers (which exclude short term
open access consumers) shall be collected in proportion to their installed capacity
/contracted capacity as on the last day of the month prior to billing of the month.
(iii)
The SLDC charges from distribution licensees and buyers (which exclude short term open
access consumers) shall be collected in proportion to the sum of their allocated
transmission capacity in MVA as on the last day of the month prior to billing of the month.
The Hon’ble commission in its Order dated 31st March 2016, seeks the further deliberation on SLDC
Charges for FY 2016-17 worked out by petitioner. In line with the above and HERC MYT Regulation 2012
(1st Amendment), Regulation 2016, petitioner has examined the entire matter of apportionment of SLDC
Charges for FY 16-17 and apportioned the SLDC Charges among the different beneficiaries as per the
table below:
Haryana Vidyut Prasaran Nigam
Page 35
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Beneficiaries
HVPN @ 8%
Generating Companies
& Sellers @ 46%
HPGCL
Faridabad Gas Power
Plant
Mahatma Gandhi Super
Thermal Power Station
Gemco Biomass
Star Wire India Ltd
Sri Jyoti
Shahbad Co-operative
Sugar Mills
Distribution Licensees
and Buyers @ 46%
UHBVN
DHBVN
TPTCL
NTPC
CRPCPL
Total (HVPN + Gencos +
Discoms)
Installed Capacity /
Capacity (in MW)
Amount (in Rs
Million)
Total (Rs. Millions)
FY 16-17
-
Amount
9.2816
Amount
53.3692
2,782.4
Sub-Amount
32.3814
432.0
Sub-Amount
5.0276
1,320.0
Sub-Amount
15.3621
8.0
9.9
9.5
Sub-Amount
Sub-Amount
Sub-Amount
0.0931
0.1152
0.1106
24.0
Sub-Amount
0.2793
Amount
53.3692
Sub-Amount
Sub-Amount
Sub-Amount
Sub-Amount
Sub-Amount
24.3664
28.6438
0.3431
0.0138
0.0020
Transformation Ratio
(in %)
45.65626%
53.67112%
0.64287%
0.02592%
0.00384%
116.02
The SLDC Charges for FY 17-18 to be recovered from the beneficiaries will be the summation of the
Proposed ARR for FY 17-18 and revenue loss on account of Market Operation charges of Rs. 6.33 Million
to CRPCPL, these are to be recovered along with the SLDC Charges of FY 17-18. The same will be as per
below depicted table:
Particulars (Rs Million)
FY17-18
Annual Revenue Requirement
175
Recovery of Revenue Loss on Account of SLDC Charges raised to CRPCPL
6.33
Total SLDC Charges to be recovered
181.33
Thus the SLDC Charges apportioned among the different beneficiaries will be as per the table below:
Beneficiaries
HVPN @ 8%
Generating Companies
& Sellers @ 46%
HPGCL
Faridabad Gas Power
Plant
Haryana Vidyut Prasaran Nigam
Installed Capacity /
Capacity (in MW)
Amount (in Rs
Million)
Total (Rs. Millions)
FY 17-18
-
Amount
14.5064
Amount
83.4118
2,782.4
Sub-Amount
50.6494
432.0
Sub-Amount
7.8577
Page 36
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Beneficiaries
Mahatma Gandhi Super
Thermal Power Station
Gemco Biomass
Star Wire India Ltd
Sri Jyoti
Shahbad Co-operative
Sugar Mills
Distribution Licensees
and Buyers @ 46%
UHBVN
DHBVN
TPTCL
NTPC
CRPCPL
Total (HVPN + Gencos +
Discoms)
Installed Capacity /
Capacity (in MW)
Amount (in Rs
Million)
Total (Rs. Millions)
FY 17-18
1,320.0
Sub-Amount
24.0097
8.0
9.9
9.5
Sub-Amount
Sub-Amount
Sub-Amount
0.1455
0.1801
0.1728
24.0
Sub-Amount
0.4365
Amount
83.4118
Sub-Amount
Sub-Amount
Sub-Amount
Sub-Amount
Sub-Amount
38.0827
44.7680
0.5362
0.0216
0.0032
Transformation Ratio
(in %)
45.65626%
53.67112%
0.64287%
0.02592%
0.00384%
181.33
The petitioner humbly prays to the Hon’ble Commission to approve the apportionment of SLDC
Charges for FY 16-17 and FY 17-18 among the different beneficiaries as stated above.
4.3
PROSPECTIVE SHORT TERM OPEN ACCESS CHARGES
MYT Regulation Provides that the transmission charges shall be payable by the short term open access
consumers for the scheduled energy drawl at per kWh rate as worked out by dividing the annual
transmission charges by the total volume of energy sales by the distribution licensee(s) during the previous
year.
As such Hon’ble commission is requested to decide the Transmission Charges to be recovered from
Prospective Short Term Open Access consumers
Details of Calculations:
Particulars
Transmission Cost for FY 2017-18 ( Rs. Million)
Unitary Charges
FY 2017-18
18,582
534
Projected Sales for the FY2016-17 for the distribution Licensee (MU)
(based on the submissions made by the UHBVNL & DHBVNL in their APR
Petition for FY 16-17)
Proposed Transmission Charge (Rs./kWh) from STOA Consumer
Haryana Vidyut Prasaran Nigam
35,713
0.535
Page 37
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
It is to be mentioned that Projected Sales for FY 16-17 for distribution Licensee is based on the submissions
made by the Distribution companies of Haryana (UHBVNL & DHBVNL) in their Annual Performance Review
(APR) Petition for FY 16-17.
RECOVERY OF SLDC CHARGES FROM SHORT TERM OPEN ACCESS CONSUMERS
The short term open access consumers shall pay composite SLDC charges as provided in HERC (Terms
and conditions for grant of connectivity and open access for intra–State transmission and distribution
system), Regulations, 2012 as amended from time to time. As such Hon’ble commission is requested to
decide the SLDC Charges to be recovered from Prospective Short Term Open Access consumers
Reactive Energy Charges: As per MYT regulation:The reactive energy charges payable by the distribution licensee to the transmission licensee shall be
payable as per regulation 5.5.1 of the Haryana Grid Code (HGC) as amended from time to time. The
reactive energy charges paid by the distribution licensee however shall not be recovered through ARR.
A generating station shall inject/absorb the reactive energy into the grid as per the directions of State Load
Despatch Centre. Such injection/absorption may be undertaken on the basis of machine capability and in
accordance with the directions issued by SLDC as per the provisions of Haryana Grid Code as amended
from time to time.
The reactive energy charges from embedded open access consumers shall be recovered by the distribution
licensee. Reactive energy account shall be maintained and operated as per the intra-State ABT regulations
to be notified by the Commission and as amended from time to time. Until the intra-State ABT regulations
are notified by the Commission, CERC ABT regulations shall be applicable;
As such DISCOMs, Generators /Long Term Open Access Customers are expected to provide adequate
reactive compensation in order to ensure that they do not draw / inject VArs during low /high voltage
conditions, in line with the criteria laid under Clause 6.6 of Indian Electricity Grid Code.
The beneficiaries are expected to provide local VAr compensation such that they do not draw VAr from
EHV grid, particularly under low voltage conditions. Accordingly the Grid Code provides VAr exchanges as
under: 
The beneficiary pays for VAr drawl when voltage at metering point is below 97%.

The beneficiary gets paid for VAr return when voltage is below 97%.

The beneficiary gets paid for VAr drawn when voltage is above 103%.

The beneficiary pays for VAr return when voltage is above 103%.
According to Clause-6.6(2) of Indian Electricity Grid Code the VArh shall be @ 10 paise per KVArh w.e.f.
1.4.2010. The above charges are to be escalated at the rate of 0.5 paise per KVArh per year thereafter.
Accordingly, HVPN is raising reactive energy bills on Discoms at rates fixed by CERC for the FY2017-18,
HVPNL proposed to charge UHBVN & DHBVN at a rate of 13.5 paise /KVArh from 1.4.2017 on the basis
of recording made by existing SEMs interface.
Haryana Vidyut Prasaran Nigam
Page 38
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
5 COMPLIANCE OF DIRECTIVES
In the Tariff Order for FY 2016-17, the Hon’ble Commission had issued certain directives to HVPN. The reply/status of the directives has already been
submitted to Hon’ble Commission as given below. Further, Hon’ble Commission is requested to allow more time for submission of requisite information
sought in respect of some of the directives by Hon’ble Commission please.
Sr.
1.
2.
Directives
3.1.3. Funding Sources
It is observed that in the revised capital expenditure plan a large number
of works which were targeted to be completed in the FY 2014-15 have
spilled over to the next financial year. Also, there are quite a few capital
works which were commissioned in the past but are still appearing in the
capital expenditure plan despite the fact that these works have been
completed and are in operation since last more than one year. The
Commission directs HVPNL to review all such works at the highest level
and classify them appropriately by taking decisions in the pending
disputes/difference related to these works, if any
HVPNL is directed to analyze and take immediate corrective steps to
improve its management of implementation of capital works/schemes
covered under the approved capital investment plan, so that the benefit
of the Capex flows to this electricity Consumers timely and the cost
overrun is avoided.
3.2.1 Intra State transmission Losses
It has been observed that there are significant number of transmission
lines which are running on full load or in some of the cases in overloaded
condition which result in to the increased number of tripping and the
higher line losses. The Licensee needs to pay special attention on these
lines to take immediate steps for appropriate loading of these lines.
The HVPNL has submitted the report of load balancing in 8 sub stations
under Palwal Division in TS Circle, Faridabad. However, such action is
also required to be taken in all the Circles of HVPN and report to this
effect be submitted to the Commission within 45 days of the Order.
Haryana Vidyut Prasaran Nigam
Page
no.
38
40
46
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
Some of the works have spilled over due to various
contractual problems as well as ROW problems of lines.
Some of the works which have been commissioned are
still appearing in Capital Expenditure Plan as the proposed
expenditure shown in future financial years has been
taken to meet the pending contractual obligations and
miscellaneous petty left over transmission works and the
same has also been shown in the remarks column of
detailed Capital Expenditure Schemes submitted at the
time of filing of ARR petition.
Generally the transmission lines run with appropriate
loading/load balancing except radial transmission lines for
which remedial measures such as augmentation of
conductor with high current capacity conductor, loop-in
loop-out (LILO) and creation of new transmission lines is
being undertaken to avoid overloading.
Page 39
PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
Sr.
Directives
Page
no.
It has been observed that in some of the sub-station of HVPNL the
parallel operation of power transformers is not feasible (for instance 220
KV sub- station at Palla and Palwal) due to non-availability of bus
couplers. Licensee is directed to check up the position in all other TS
divisions and to arrange the requisite material and put such transformers
in parallel operation in its transmission system within six months to avoid
losses due to overloading of transmission elements and inconvenience
to the consumers due to loaded shading etc.
3.
4.
The Commission observes that the power transformers and the lines
working with very low loading conditions do not justify the capital
investments made by the Licensee. Despite the fact that these works
have been commissioned since long but the capacity so created by the
Licensee is not being utilized optimally, may be the system down the
level has not been created at the distribution end to service their load.
The Commission directs the Licensee to identity and pay special
attention on such assets and ensure that the loads are connected on
these sub-stations without any further loss of time and to ensure that the
transmission and the distribution system are developed in perfect
coordination so that the investment made on such works are optimally
utilized. The Commission does not appreciate the fact that no proper
attention is given on the issue by the Licensee. HVPN should have
demonstrated its effort to take specific steps for curtailing these losses
3.2.2 Transmission System Availability
HVPNL needs to analyze the reasons behind the recent decline in the
Transmission System availability and submit a report to the Commission
within 45 days. The Licensee is further directed to provide the monthwise number of tripping and break downs at various voltage levels in the
system for the FY 2013-14, FY 2014-15 and FY 2015-16 with detailed
analysis report giving the reasons for such break downs in the
transmission system leading to decline in the transmission system
availability within 45 days.
3.2.3 Failure of Power Transformers
The HVPN was asked to provide the number of sick power transformers
in the system along with rating, age and location and action plan for
replacement but the same has not been provided. It was further directed
to monitor the above work at the senior level for timely replacement of
Haryana Vidyut Prasaran Nigam
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
The details of T/F put in parallel is as under: No. of 220/132 KV, No. of T/F No. of T/Fs not feasible
220/66 KV and running in for parallel operation
parallel
220/33 KV T/F
62 Nos.
49 Nos.
13 Nos.
47
Presently, all the lines / transformers are optimally loaded.
Special attention is being paid in respect of Transformers
and lines working with very low loading condition for their
appropriate loading.
48
The detailed analysis report giving the reasons for
breakdowns in the transmission system has already been
submitted.
50
The sick transformers have been identified as problematic
transformers and maintenance is being done as per
requirement. Most of the sick transformers have out lived
their life. Mainly the power transformers got damaged due
to tripping of 33 kV and 11 kV feeders on close faults.
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PETITION FOR TRUE-UP OF FY 2015-16 &
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Directives
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the sick powers transformers and submit report quarterly but no report
has been received in this regard.
5.
6.
The Commission observed from the information supplied with reference
to the damaged transformers by HVPN that 10/16 MVA, 132/11 KV
transformer damaged at Julana Sub-station on 02.11.2015 had
experienced 19117 trippings and 2239 break downs in last 12 years
which shows that no serious importance is given by the field officers to
improve upon such conditions which are leading to damage of power
transformer.
The Commission noted that, no serious efforts are being made on this
account. The Licensee is again directed to get the detailed analysis done
for the damage of its power transformers in the FY 2015-16 and take all
remedial steps to save the power transformers from further damage. It
is further added that the information w.r.t. to the nos. of sick power
transformers location and capacity wise with action plan to replace such
sick power transformers in a given timeframe be provided to the
Commission within 45 days.
3.2.4 Provision of Polymer Insulators
The HVPN has submitted that the work of replacement of insulators is in
progress and will be completed as soon as the material is available.
However, the supply of above material has been delayed due to dispute
in procurement as a purchase order no. HDP-2035/QPD-959/XEN/MM
dated 21.11.2014 was issued to M/s G.K XIANGHE Electricals Pvt. for
the supply of 220KV, 120KN Composite Polymer long rod string insulator
& 220 KV, 90 KN Composite Polymer long rod string Insulator. The
material supplied by the Firm, M/s G.K. XIANGHE Electricals Pvt., is
under dispute.
The Commission feels that such disputes of the suppliers must be
resolved on priority where the material required for security and safety
of the system is required urgently or alternatively the material may be
arranged from the other alternative sources. HVPN is directed to send
the status report within 90 days of its Order.
3.2.5 Safety Standards
The Licensee is directed to investigate the causes of these accidents
and circulate these cases in the field advising the appropriate preventive
actions to avoid recurrence of such incidents in future. Further, the status
Haryana Vidyut Prasaran Nigam
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
However, efforts are being made to reduce the damage
rate of power transformers by constant pursuance with
distribution companies at appropriate level for proper and
timely maintenance of their 33kV and 11 kV feeders.
Due to the efforts made by HVPNL, the transformer
damage rate has decreased to 0.48% during the current
financial year i.e. 2016-17 up to July, 2016 against 1.39%
in the corresponding period last year.
51
The work of replacement of insulators is in progress and
likely to be completed by 31.10.2016.
52
The revision /up-dation of safety instructions is under
finalization.
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7.
8.
Directives
of revision/up-dation of safety instructions is to be intimated to the
Commission within 45 days of the order.
3.2.6 Installation of Capacitor Banks
The Licensee is directed to expedite the rehabilitation of the defective
capacitors banks in its sub stations by replacing some of these and
cannibalizing the others from spared healthy capacitor units and other
allied equipments as a result of providing replacement and to submit the
progress report within 90 days.
3.2.7 Special Energy Meters
The License is required to provide the pendency in providing of the
SEM’s at new location or where conventional energy meters are required
to be replaced and directed to ensure that in future no transmission
element forming interface point with any utility is energized without
installation and commissioning of SEMs as per CEA Regulations.
9.
3.2.8 Efficiency Factor
It is observed that though, there had been some improvement in the
expenditure per ckt-km and expenditure per MVA of transformation
capacity during the FY 2011-12. However, the same have been
increasing year by year which is a matter of concern. The Licensee is
directed to examine the above issue and submit a report to the
Commission within 45 days.
10.
3.3 Unitary Charges
The Commission, in its earlier Order, had directed HVPNL that incentive
on account of availability of the transmission system and the
transmission losses shall be subject to ensuring fulfillment of the terms
and the conditions and other provisions in the transmission service
agreement regarding the same. The calculations details/ methodology
adopted by the Independent Engineer was also required to be
scrutinized before the incentive on both these account are paid.
However, it is observed that, so far, no such report has been submitted
to the Commission by HVPNL. The Licensee is once again directed that
incentive on account of availability and transmission losses shall be
allowed to the concessionaire only after ensuring the conditions and
Haryana Vidyut Prasaran Nigam
Page
no.
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
54
Almost all the capacitor banks are working in healthy
condition. However, continuous efforts are being made for
rehabilitation of defective capacitor cells by replacement/
cannibalization.
55
Every transmission element forming interface point with
any utility is being commissioned/energized with provision
of SEMs only.
Further, the instructions have been reiterated in field vide
memo no. Ch-2/EAC-24/Vol-V dated 09.06.2016.
56
The matter has been examined and it has been observed
that there is a consistency in the expenditure per circuit km
and expenditure per MVA of transformation capacity year
on year w.e.f FY 2010-11 till FY 2015-16 except FY 201112 which is mainly due to reduction in employee cost
during FY 2011-12 due to lower actuary valuation by the
actuary which constitute the part of employee cost. The
reduction in employee cost lead to reduction in O&M
charges during FY 2011-12 and thus the expenditure
during FY 2011-12 is not comparable with remaining years
expenditure.
57
The incentive on account of availability and transmission
losses is being paid to the concessionaire as per the
provisions of Transmission Service Agreement (TSA).
Copy of provision in TSA and detailed calculation has
already been submitted.
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PETITION FOR TRUE-UP OF FY 2015-16 &
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11.
12.
13.
Directives
provisions in the Transmission Service Agreement are met and after
thoroughly examining the calculations and methodology adopted for
computing the incentive amount.
3.4.1 Employees Cost
The Licensee is directed to immediately restrict the employee strength
to the sanctioned posts only. They are further directed to ensure that in
accordance with the Commission’s directions, any post that has
remained vacant for three years as on 29.05.2014 should be abolished.
HVPNL may also consider utilizing the employees rendered surplus after
phasing out of HVPNL’s PTPS Units (1-4) on deputation after identifying
the eligible employees that can be gainfully utilized. The Licensee is
directed to submit action taken report in the matter within three months
from the date of this Order and on similar intervals thereafter.
3.4.6 Return on Equity (RoE)
The Commission has considered the above and given the fact that
additional Equity amounting to Rs. 1626 million has actually been
infused in the transmission business, as certified by HVPNL, the same
shall be considered for RoE for the FY 2014-15 as part of true-up.
However, while allowing RoE on the said additional Equity, the
Commission observes that excess corresponding loan and interest
thereto also needs to be trued-up. The Commission, therefore, directs
the Licensee to file statement of utilization of funds (both Equity and
Debt) including HERC order for HVPNL’s Transmission Tariff and SLDC
Charges for FY 2016-17, annual performance review for the FY 2015-16
& true-up for the FY 2014-15 capitalization of Interest during construction
for CWIP for generation, transmission and SLDC from the FY 2011-12
onwards within one month. The Commission shall review the details and
accordingly adjust the amount i.e. excess loan and interest thereto in the
true-up for the FY 2015-16.
3.4.10 Reactive Energy Charges
The Licensee is directed to submit the details of the reactive energy Pool
Account including the amount received by HVPNL from NRLDC within
45 days of the present Order. It may also inform the Commission about
the details of fixed deposits held by it out of balance funds of the Pool
Account.
Haryana Vidyut Prasaran Nigam
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no.
59
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
The reply of HVPNL has already been submitted.
62 & 63
The statement of utilization of funds (both Equity and
Debts) including capitalization of Interest during
construction for CWIP for generation, transmission and
SLDC from the FY 2011-12 to FY 2014-15 has already
been submitted.
68
At present no reactive energy pool account is being
maintained in HVPNL. The detail of reactive energy
charges receivable and payable has already been
submitted.
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PETITION FOR TRUE-UP OF FY 2015-16 &
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14.
15.
Directives
4.3 SLDC Charges
HVPNL may examine the entire matter of apportionment of SLDC
charges keeping in view its financial impact and Regulations of various
States and file its observations in the Commission within three months
of the issue of this Order. The Commission shall separately determine
the apportionment of SLDC charges after holding hearing in the matter.
Meanwhile, HVPNL may continue recovering SLDC Charges as per the
previous Order of the Commission.
GENERAL INSTRUCTIONS/DIRECTIVES
COMPLIANCE OF DIRECTIVES
In addition to the directives contained in the preceding paragraphs, the
Commission further directs as under:a) That HVPNL shall abolish all non-technical posts continuously lying
vacant during the last three years as on 29.05.2014 as has already been
ordered by this Commission in the ARR of the FY 2014-15. Further, nontechnical posts may not be filled-up from any source except promotions.
If required, HVPNL shall obtain prior approval of the State Government
and the Commission before initiating the process of filling-up of any nontechnical posts. In case of any violation, the Appointing Authority shall
be held responsible. The Commission shall not allow any extra
expenditure incurred in this regard in the ARR / Tariff.
b) That HVPNL shall implement Aadhaar Enabled Biometric Attendance
System (AEBAS) for all regular/contractual officers /officials as per State
Government notification.
c) That HVPNL shall centralize its Pay and Pension cell as soon as
possible. HVPNL shall submit action taken report in this regard within 45
days from the date of issue of this Order.
d) That HVPNL shall take all necessary steps for implementation
economy measures as per Haryana Government instructions issued
vide letter no. 5/6/2002-IB&C dated 15.02.2016.
e) That HVPNL shall implement the Haryana Government instructions
issued vide letter no. 28/9/2016-5 B&C dated 11.02.2016 regarding
payment through Real Time Gross Settlement system (RTGS). Further,
the Haryana Government instructions issued vide letter no. 28/14/2011Haryana Vidyut Prasaran Nigam
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Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
90
The requisite comments have already been submitted to
Hon’ble Commission separately vide memo no. Ch7/STU/OA-694 dated 12.09.2016.
a) The reply of HVPNL has already been submitted.
95
95
b) The instructions regarding the attendance to be marked
by all employees including contractual, work charged,
Outsourced etc. of Chief Secretary to Government
Haryana vide letter no. 6/14/2015-MC dated 27.3.2015
& 6/14/2015-MC dated 11.5.2015, has been adopted by
the Nigam vide memo no. Ch-78/GBM-582/Vol-I dated
24.04.2015 & memo no. Ch-122/GBM-582/Vol-I dated
24.06.2015.
c) More than 14000 pensioners are getting pension
from office of all Haryana Power Utilities and
banks. The templates are in the process of
finalization. After finalization of the templates and
the process to get alive certificate of the
pensioners, the process of centralization of
pension could be started accordingly.
d) HVPNL has already adopted the State
Government instruction no. 5/6/2002-IB&C dated
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5B&C dated 15.02.2016 regarding payment of salaries of all contractual
employees be implemented in true letter and spirit.
f) In order to ensure transparency in procurement of material and award
of works contract, HVPNL is directed to implement open e-tendering.
Such invitation of tenders shall be given wide publicity i.e. by way of
notice issued in two national newspapers each in Hindi & English and
one in local newspaper having wide circulation and tender document be
hoisted on the website. Further, all information relating to the tender
document be hosted on the website, otherwise the tenders shall be
treated as invalid/void.
95 & 96
g) In order to rein in the Employees cost and also to facilitate gainful
training to the Engineering Graduates of Haryana, HVPNL is directed to
provide first opportunity as trainee/apprentice to Haryana domicile
Engineering Graduates (B.Tech.) from the recognized Engineering
Colleges located in Haryana, after obtaining necessary approval of the
State Government, if required. This, the Commission believes, shall
facilitate reduction in employees cost for HVPNL and also open up some
employment avenues for the un-employed engineering graduates of
Haryana.
96
Haryana Vidyut Prasaran Nigam
Status / Action Taken Report submitted to Hon’ble
Commission by HVPNL vide memo dated 14.09.2016
15.02.2016 vide memo no. Ch-145/NGE/G-421
dated 03.03.2016 for strict compliance.
e) HVPNL has already adopted the State Government
instruction no. 28/9/2016-5B&C dated 11.02.2016 vide
memo no. 6539/FA/HQ/Bkg. dated 01.03.2016 for strict
compliance
f) HVPNL has already adopted Haryana Govt.Eprocurement policy issued by the Principal Secretary to
Govt. of Haryana, Electronics & Information
Technology Department letter no. 2/347/05/2SIT/1927
dated 12.01.2015 vide memo No. Ch-Spl-1/WBC12/Vol-I/XEN/IT&C dated 22.01.2015.
Further, the selection of newspapers, No. of
newspapers and their editions for publication of NIT are
decided by Director General, Information, Public
Relation & Cultural affairs Haryana office and the NIT
are being published by the DIPR Haryana in various
newspapers as per DIPR Print Media Advertisement
Policy Guidelines. However, DIPR vide letter dated
08.03.2016 has already been requested to get it
published in one Hindi & one English newspaper as per
direction of Hon’ble HERC. The copy of DIPR policy
and letter dated 08.03.2016 has already been
submitted.
g) The reply of HVPNL has already been submitted
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
6 PRAYERS
The Petitioner respectfully prays the Hon’ble Commission to:
a. Admit this Petition
b. Grant an expeditious hearing of the Petition
c.
Allow true-up of ARR for FY 2015-16 based on the audited annual accounts
d. Approve Revision of Aggregate Revenue Requirement for FY 2016-17 and Aggregate Revenue
Requirement for FY 2017-18 based on audited financial accounts of previous year i.e. FY 2015-16
e. Allow recovery of the gap on account of truing up of FY 2015-16 and revised ARR for FY 2016-17
in the ARR for FY 2017-18
f.
Allow carrying cost on the revenue gap amount as per the computations and rates provided by the
Petitioner.
g. Condone any inadvertent omissions / errors / short comings and permit the applicant to add
/change /modify / alter this Petition and make further submissions as may be required at later stages
h. Pass such orders as Hon’ble Commission may deem fit and proper and necessary in the facts and
circumstances of the case, to grant relief to the petitioner.
Haryana Vidyut Prasaran Nigam
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PETITION FOR TRUE-UP OF FY 2015-16 &
APR FOR FY 2016-17
7 ANNEXURES
1. Audited Annual Accounts for FY2015-16
2. Report of Actuarial Valuation of Terminal Liabilities for FY 2015-16
3. Report of Actuarial Valuation of Terminal Liabilities for FY 2016-17 & FY 2017-18
4. Details of Capital Expenditure Schemes
Haryana Vidyut Prasaran Nigam
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