ladakh revised approval of june 22

BEFORE

JOINT ELEGTRICITY REGULATORY COMMISSION J&K andLadakh

AMBEDKAR ROAD, PANAMA CHOWK, JAMMU - 180016

Revised

PETITION

FOR

APPROVAL OF

TRUE.UP OF FY 2019-20, ANNUAL PERFORMANCE REVIEW

OF FY 2O2O-21, ANNUAL PERFORMANCE REVIEW OF FY

2021.22, AGGREGATE REVENUE REQUIREMENT OF FY

2022-23; AND TARIFF PROPOSAL FOR FY 2022-23

JAMMU AND KASHMIR POWER TRANSMISSIONCORPORATION LIMITED

June 22

BEFORE THE JOINT ELECTRICITY BEGULATORY COMMISSION J&KAND LADAKH

File No

Jammu and Kashmii Power Transmission Corporation Limited

BY

WXNffiXA Nffiffi JUPTCSAI-

Government of Jammu and KastffiW

e-$tamp

lN-JK67685807283050U

13-Jun-2022 03:30 PM

uffi

NEWTMPACC (SVy jk12621804/ DTSTRTCT COURT COMPLEX/ JK.JM

s u B I N -J KJ K 1 2621 80430361 7 521 95908U

BAVINDER KUNDAL

Article 4 Affidavit

Not Applicable

0(Zero)

ffi**#

fift/F

Certificate No.

Certificate lssued Date

Account Reference

Unique Doc. Reference

Purchased by

Description of Document

Property Description

Ct-x-rsideration Price (Rs.)

Fi:si Party

Second Party

Stamp Duty Paid By

Stanrp Duty Arnount(Rs.)

: BAVINDER KUNDAL

: Not Applicable

: BAVINDER KUNDAL

: 100(One Hundred only)

------.Pleasewriteortypebelowthisline------ "1-"----

(Transmission)'JKPTCL

000502 4L24

Petition for True up of FY 2019-2O,APR of FY 2A20'21, APR of FY 2021'22, ARR of FY

2022-23 and Tariff Proposal for FY 2022'23

File No..

IN THE MATTER OF:

AND

IN THE MATTER OF:

Petition for approval of True'up of FY 2O19'2O

APR of FY 2O2O-21, APR of FY 2021-22 and ARR of FY

2022-23 and tariff proposal for FY 2022'23

Jammu and Kashmir Power Transmission CorporationLimited,Office of the Chief Engineer (fransmission), JKPTCL220 kV Grid Station Complex, Narwal Bala, Gladni'

Jammu

Case No............

...........Petitioner

Chief Engineer, fammu and Kashmir Power Transmission Corporation

Limited, files petition for approYal of True'up of FY 2019'20, APR of

Fy 2O2O-21, APR of FY 2021-22 and ARR of FY 2O22-23i and tariff

proposal for FY 2022-23 for the Jammu and Kashmir Power

Transmission Corporation Limited under section 45r 461 61r 621 64 and

86 of the Electricity Act, 2003 (EA 2003).

lammu and Kashmir Power Transmission corporation Limited

Petition for True up of FY 2O19-2O, APR of FY 2O2O-21, APR of FY 2021'21 ARR of FY

2022-23 and Tariff Proposalfor FY 2022'21

iu,

*

of True-up of FY 2019'20, APR of

23 and tariff proposal for tY 2022'23.

I further say that the statements made, and financial data Presented

Petition are as per records of the Corporation and believe that to

best of my knowledge.

Place: Jammu

ef Et'Eng

Jat

chihief

AFFIDAVIT VERIFYING THE PETITION

t sn.fuson or,t" t s .h l: i*, \agedfi1ears), (Qccupation)

Seryice, residing at Jammu), the deponent named above do hereby s&6mn[ affirni and state on

oath as under:-

1 . That the deponent is the Chief Engineer who is authorized rePresentative of, Jamnru and

Kashmir Power Transmission Corporation Limited.

Z. That the deponent is authorised to sign and submit the said Petition and am acquainted

with the facts deposed to below.

3. I say that on behalf of Jammu and Kashmir Power Transmission Corporation Limited,

I am now filing this Petition under The Electricity Act, 2003, Petition for approval

FY 2o2o-21, APR of FY 2021-zz; n{n of FY 2022'

in the afcrresaid

be true to the

, to my knowledge and belief, no material information concealed in the

Petition.

clare0

3olemlttyPUBL':

.r t.r,

9"I .ra/\'

Jammu and Kashmir Power Transmission corporation Limited

ion),

o;oB;P^ggja,l \,'rI.u n ^ --llnluJ'l\c. tua.T4t

-"j'e R Exoi-a

Date:

Petition for True up of FY 2019-2[ APR of FY 2O2O-21, APR of FY 2021'22. ARR of FY

2022-23 and Tariff Proposal for FY 2022'2?

VERIFICATION

l, Shri c). Advocate and

Notary having office at Jammu, do hereby that the person making this affidavit is known

to me through the perusal of records and I am satisfied that he is the same Person alleging to

be deponent himself.

Advocate

. i,"!,i;';""" ' , ^,r-.. -. . l1J/ir- ';'- Solemnly affirmed before me on rhis ,' day of June 22 by the deponent who has been

identified by the aforesaid Advocate. I have satisfied myself by examining the deponent that he

understood the contents of the affidavit which has been read over and explained to him. He has

also been explained about section 193 of lndian Penal Code that whoever intentionally gives false

evidence in any of the proceedings of the Commission or fabricates evidence for PUrPose

of being used in any of the proceedings shall be liable for punishment as per law'

@nty

L,1//


Petition for True up of FY 2019-2Q APR of FY 2O2O-21, APR of FY 2021'22. ARR of FY


BEFORE THE JOINT ELECTRICITY REGULATORY COMMISSION FOR IAMMU &

KASHMIR AND LADAKH,

'AMMU

File No.

Case No.

lN THE I'i/ITTER OF: Petition for approval of True-up of FY 2q9'2OAPR of FY 2O2O-21, APR of FY 2021'22 and AIRR of FY

2022-23; and tariff proposal for FY 2022'23. IAND I

lN THE MATTER OF: fammu and Kashmir Powen Transmission CorlRoration

Limited, I

Office of the Chief Engineef (Transmission)' |!(PTCL220 kV Grid Station ComplEx, Nar"rval Bala' Gfadni,

tammu I

........... Fetitioner

pET;TIONER, UNDER SECTIONS 45, 46, 61,62 AND 64 OF THE EIFECTRICITY

ACT, 2OO3 FILES FOR INITIATION OF PROCEEDINGS BY THE HON'BLE

COMMISSION FOR DECIDING ON THE MATTERS CONCERNING T}E PETITION

FOR APPROVAL OF TRUE-UP OF FY 2019-20, APR FOR FY 2O2O'211APR OF FY

2O21-22;ARR OF FY 2022-23 AND TARIFF PROPOSAL FOR 7t1 2Q/).+2t.

The Petitioner respectfully submits as under: -

1. The petitioner, Jammu and Kashmir Power Transmission Corporation Limited (IKPTCL)

is deemed Transmission Licensee for the Union Territory of Jammu and Kashmir.


Petition for True up of FY 2O19-2O, APR of FY 2020-21, APR of FY 2021-22' ARR of FY

2022-2? and Tariff Proposalfor FY 2022-23

2. Pursuant to the enactment of the Electricity Act, 2003, JKPTCL is required to

submit its Annual Revenue Requirement and Tariff Petition as per the procedures

outlined in section 61, 62 & 64 of EA 2003, JERC for UT of Jammu & Kashmir and UT of

Ladakh Gazette Notification No. JERC-JKU Tech-1312021 and Regulation 9 of JERC

(Generation, Transmission and Distribution Multi Year Tariff) Regulations, 2018 (herein

referred as MYT Regulations, 2018).

3. JKPTCL hereby submits the present Petition for approval of True-up of FY 2019-20, APR

of FY 2020-21, APR of FY 2021-22, ARR and tariff proposal for FY 2022-?3 is based on

the principles outlined in the JERC MYT Regulations 2018, adopted, and notified by the

Hon'ble Commission.

Prayers:

A. Accept and admit the petition for True-up of FY 2019-20 (from the date of incorporation

of JKPTCL till 31', March 2O2O), APR of FY 2020-21and FY 2021-22, ARR of FY 2C172-23

and Tariff proposal for FY 2077-23 which is in line with the principles laid by JERC MYT

Regulations 2018 as adopted and notified by the Hon'ble Commission,

B. Approve the total recovery and revenue gap of Final True up of FY 2019-20,

Annual Performance Review for FY 2070-21, and FY 2021'22, Aggregate Revenue

Requirement for FY 2022-73 and other claims as proposed byJKPTCL.

C. Altow the Petitioner to recover any past dues in future )rears Pertaining to FY 2019-20

post Audit of Annual Accounts for FY 7019-70.

D. Approve the proposed transmission system tariff and recovery from the Transnrission

system users.

E. Grant any other relief as the Hon'ble Commission ma), consider appropriate.

F. The Petitioner craves leave of the Hon'ble Commission to allow further submission,

addition and alteration to this petition as may be necessary from time to time.


Petition for True up of FY 2019-20, APR of FY 2O2O-21

2022-23 and Tariff Proposalfor

G. Condone an), inadvertent omissions/errors/r

add/change/modify/alter this filing and make further

future date.

To pass any other Order as the Hon'ble Commission

the circumstances of the case and in the interest of

tammu and Kashmir Power Transmission

Petitioner

Place: Jammu

ldentified Bv

Jammu and Kashmir Power Corporation

'l '!'

APR of FY 20212022-21

and

as may

deem fit and

Limited

ARR of FY

JKPTCL to

required at a

u/.,-,Q-

bilr tNDe{- KU

sl, bb 5t

o.r'i

4nd-)

e?

't-" "no

EolemnlYnd 0ecrar$o

L

Petition for True up of FY 2O19-2O, APR of FY 2020-21, APR of FY 2021-22, ARR of FY

2022-23 and Tariff Proposal for FY 2022-23

1 Table of Contents1 Table of Contents .......................7

2 List of Tables ....... .'.10

3 ListofAbbreviations............ ....'..11

1. Chapter 1 lntroduction................ ..-----.--.--..'.12

1.1. Background............. '.......-.........'12

1.1.1. J&K Reorganization Act,2019.... -----. ---..-12

1.1.2. Unbundling of erstwhilejKPDD..'.... ,'....'13

1.1.3. Jammu and Kashmir Power Development Department (Re-organisation) First Transfer

Scheme 2020.......... ' """16

1.1.4. Revised Structure of Power Utilities in the UT of Jammu and Kashmir and UT of Ladakh-....17

't .2. Profile of Jammu and Kashmir Power Transmission Corporation Limited -.--.-...-.-..-.-18

1.3. Projection of load growth in transmission network. """""'19

1.3.1. Present load in the transmission network....'.....--... """"""""""191.3.2. Projection for load growth in the transmission network '..."..'..... """""""""'201.4. Regulatory Regime """""'-""-"221.5. Basis for current Petition """"""23

2. Chapter 2 Truing Up of FY 2019-20....-. -"""252.1. lntroduction.......... .....'..."""""'25

2.2. Operations and Maintenance Expenses.'.'. """26

2.3. Capital Expenditure, Capitalisation and CWIP """""""""'272.4. Depreciation.......... """"""""""282.5. lnterest on Long Term loans """'28

2.6. lnterest on Working Capital """"29

2.7. Return on Equity.... ."""""""""'31

2.8. lncome Tax ............ """""""""'322.9. Contribution to Contingency Reserves..... """32

2.lO.Performance Parameters.."........ """""""""'322.10.1. Transmission Losses """"""32

2.10.2. Transmission System Availability.. """""'32

2.11.Non-Tariff lncome... """""""""'322.12.Aggregate Revenue Requirement for FY 2019-20....'. """"'32

1fammu and Kashmir Power Transmission corporation Limited

Petition for True up of FY 2O19-2O,APR of FY 2070-21, APR of FY 2021'22, ARR of FY


3. Chapter 3 Annual Performance Review of FY 2020-21 ......'.......'. .........34

3.1. lntroduction .......... ..".....'..'-"....'34

3.2. Operations and Maintenance Expenses..... ,....'35

3.3. Capital Expenditure, Capitalisation and CWIP .'....-....'.......35

3.4. Depreciation.......... """"""""""36

3,5. lnterest on Long Term loans """'37

3.6. lnterest on Working Capital.'...... """""""""37

3.7. Return on Equity.... """"""""""39

3.8. lncome Tax ............ """""""""'40

3.9. Contribution to Contingency Reserves.".. """4O

3.10.Performance Parameters...'.'..'... """""""""'40

3.10.1. Transmission Losses """"""40

3.10.2. Transmission System Availability """"""'40

3.11.Non-Tariff lncome... """""""""'403.12.Aggregate Revenue Requirementfor FY 2A2O-21 """""""'40

4. Chapter 4 Annual Pedormance Review of FY 2021-22 """""""" """"'42

4.1. lntroduction .......... """"""""""42

4.2. Operations and Maintenance Expenses..... """43

4.3. Capital Expenditure, Capitalisation and CWIP """""""""'45

4.4. Depreciation.......... """"""""""454.5. lnterest on Long Term loans """'46

4.6. lnterest on Working Capital """"47

4.7. Return on Equity...' """"""""""49

4.8. lncome Tax ............ "".''49

4.9. Contribution to Contingency Reserves..... """49

4.1O.Performance Parameters..-'.....'.' """""""""'50

4.10.'1. Transmission Losses """"""50

4.10.2. Transmission System Availability """"""'50

4.11.Non-Tariff lncome". """""""""'50

4.12.Aggregate Revenue Requirement for FY 2021-22""" """"'50

5. Chapter 5 Aggregate Revenue Requirement otFY 2022'23 """"".'"" """"""""""52

fammu and Kashmir Power Transmission corporation Limited

Petition for True up of FY 2019-20, APR of FY 2O2O-22022-23 and Tariff Proposal for

5.1. lntroduction ..........

5.2. Operations and Maintenance Expenses.....

5.3. Capital Expenditure, Capitalisation and CWIP

5.4. Depreciation..........

5.5. lnterest on Long Term loans

5.6. lnterest on Working Capital..."...

5.7. Return on Equity....

5.8. lncome Tax ............

5.9. Contribution to Contingency Reserves.....

5.1 0. Performance Parameters.........'..

5.10.1 . Transmission Losses

5.'10.2. Transmission System Availability..

5.1 1. Non-Tariff lncome...

5.12.Aggregate Revenue Requirement for FY 2022-23......

6. Chapter 6 Tariff Proposalfor FY 2027-23

6.1. Context

6.2. Tariff Proposalfor FY 7022-23......

7. Chapter 7 Prayers

4 List of Annexures:.........'.....

lammu and Kashmir Power Corporation

, APR of FY 2021- ARR of FY2022-2t

...58

...59

.....59

.52

.52

.53

.56

.57

.58

.58

.58

.59

.60

.60

.61

.65

.66

....................54

Petition for True up of FY 2O19-2O. APR of FY 2O2O-21, APR of FY 2021'22, ARR of FY


2 List of TablesTable l: Details of/KPTCL's Grid stations-

Table 2: Details ofJKPTCL's transmission lines

Table 3: Actual Power supply position in uT of J&K and UT of Ladakh as per CEA\ LGBR reports

Table 5: Load growth proiection for the control period-

Table 6: Basis for current Petition-

Table Z O&M expenses for FY 201?-20

Tabte 8: Details ofcapex during FY 20/9-20 (Rs. crore)

Table 9: Normative lnterest on Working Capital for FY 2019-20

Tabte t0: True-up of Expenses of JKPTCL for FY 2019-20 (Nov 2019-March 2020) (in Rs CrorQ

Table I /: O&M expenses for FY 2020-21

-

Tabte l2: Details ofcapex during FY 2020-21 (Rs- crore)

Tabte 13: Normative lnterest on Working Capital for FY 2020-21

Table 14: APR summary of/KPTCL for FY 2020-21 (in Rs Crore)

Table 15: Wholesale Price lnflation (WPI) escalation factor

Table 16: Consumer Price lnflation (CPI) escalation factor.

Tabte 17: Projected Operation and Maintenance Expenses for FY 2021-22 (in Rs' CrorQ

Table 18: Details of capex during FY 2021-22 (actuals up to December 2021) (Rs' crores).

Tabte 19: Normative Working Capital for FY 2021-22

Table 20: APR summary of /KPTCL for FY 2021-22 (in Rs Crore)

Tabte 2l: projected Operation and Maintenance Expenses for FY 2022-23 (in Rs. Crore)

-

53

Tabte 22: Deails of proiected capex during FY 2022-23 (Rs' crores) 53

Tabte 23: Normative lnterest on Wo*ing Capital for FY 2022-23 57

Table 24: summarT of/KPTCL',s ARR proiection for FY 2022-23 (in Rs CrorQ

Table 25: Approved lntn-state Transmission charges byJKSERC for/KPDD-

Table 26: Computation of cumulative revenue gap including carrTing cost for recovety (All figures in Rs. crores) 62

19

19

20

21

22

2427

27

30

33

35

3538

41

44

44

44

45

48

50

5960


Petition for True up of FY 2O19-2O, APR of FY 2O2O-21, APR of FY 2021-22, ARR of FY

2022-23 and Tariff Proposal for FY 7022-21

3 List of Abbreviations

Arcicle of Association AoA

Administration and General A&G

Annual Performance Review APR

AggreEate Revenue Requirement ARR

Central Electricity Authority CEA

Central Electricity Regulatory Commission CERC

Consumer Price lndex CPI

Capital Works in Progress CWIP

Financial Year FY

Gross Fixed Asset GFA

loint Electricity Regulatory Commission JERC

lammu and Kashmir Power Corporation Limited JKPCL

lammu and Kashmir Power Development DePqtmS!! JKPDD

t'*, and Kashmir State Electricity Regulatory Commission JKSERC

Load Despatch Center for UT of Jammu and Kashmir LDC-J&K

lammu Power Distribution Corporation Limited JPDCL

Kashmir Power Distribution Corporation Limited KPDCL

Load Generation and Balancing Report LGBR

Ladakh Power Corporation Limited LPCL

Marsinal Cost Lending Rate MCLR

Memorandum of Association MoA

Million Units MU

Million Volt Ampere MVA

Operations and Maintenance o&M

Prime Minister's Development Package PMDP

Prime Minister's Reconstruction Program PMRP

Power System Development Fund PSDF

Repairs and Maintenance R&M

Reserve Bank of lndia RBI

Return on Equity RoE

State Bank of lndia SBI

Union Territory UT

Wholesale Price lndex WPI

11tammu and Kashmir Power Transmission corporation Limited

Abbreviation meaning Abbreviation

petition for True up of FY 2O19-2O,APR of FY 2O2O-21, APR of FY 2021-22, ARR of FY

2022-23 and Tariff Proposalfor FY 2022'23

1. Chapter 1 lntroduction

1.1. Background

The erstwhile state of Jammu and Kashmir consisted unbundled utilityJammu and Kashmir

Power Development Department (KPDD) which was resPonsible for Trading, Transmission

and Distribution of electricity within whole of the state of Jammu and Kashmir'

1.1.1. J&K Reorganization Act' 2019

The J&K Reorganization Act, 2019 was enacted by the Parliament of lndia on 9'h August 2019

wherein the State of Jammu and Kashmir was divided into Union Territory of Jammu and Kashmir

& Union Territory of Ladakh. Upon the reorganization the distribution of electricity supply in

underwent changes. The relevant Portion of /&K Reorganization Act' 2019 is given below:

As per Section 85(1) of J&K Reorganization Act, 2019

(1) The Central Government may by order, establish one or more Advisory

committees within a period of 90 days from the appointed day, for the

purposes of:

a) apporcionment of assets, righ* and liabilities of the companies and

corporations constituted for the existing state of Jammu and Kashmir

between Union territorT of /ammu and Kashmir and Union territory of

Ladakh;

b) issues relating to continuance of arrantements in regard to generation

and supply of electric power and supply of water

|ammuandKashmirPowerTransmissionCorporationLimited 12

,,

A committee vide Government Order No: 164 PDD of 2019 dated 20.09.2019 was constituted

by CommissioneriSecretary Power Development Department, Govt. of J&K for the purpose of

preparing and presenting a comprehensive proposal for apporcionment/reorganization of J&K

Power Development department, J&K State Power Development CorPoration and J&K State

Trading Company between Union Territory (UT) of J&K and UT of Ladakh.

Terms of reference, as specified in the above order, clearly suggest preparing the model for

successful functioning of new unbundled successor utilities on unbundling/reorganization of

JKPDD. Changed scenario postJ&K reorganization Act,2019 especially bifurcation of J&K State

into two separate UTs necessitate remodeling of existing JKPDD to work out a ProPosal best

suited for unbundled successor utilities.

Relevant, terms of reference of this committee were as follows:

"1.3.3. To study the transfer scheme of unbundled utilities in other States where

reforms have been implemented successfully and to suggest the scheme most

suitable to the power sector of J&K State for transfer of assets, employees, and

terminal benefits.

1.1.2. Unbundling of erstwhile fKPDD

The Erstwhile Power Development Department, Government of J&K 0KPDD) was responsible

for transmission, distribution, and related activities in Power Sector in entire Jammu & Kashmir.

Consequent to the approval of State Administrative Council of J&K, the Power Development

Deparcment was unbundled into several Power Corporations on 23'd October 2019 via

Government Order No. 191-PDD of 2019 and JKPTCL was created on 23'10-2019 as

Transmission Licensee for UT of J&K. Government Order No. 191-PDD o12019 is annexed as

Annexure-'1.

lammu and Kashmir Power Transmission corporation Limited

The relevant extract from Government order is given below:

According to Government Order No. 191- PDD of 2019,

"Sanction is hereby accorded to the:-

(ii) To transfer all the shares, held by Hon'ble Governon Jammu, and Kashmir in

Jammu and Kashmir State Power Development Corporation Limited, Jammu and

Kashmir State Power Trading Company Limited (renamed as Jammu and Kashmir

Power Corporation Limited) and

tammu and Kashmir State Power Transmission Company Limited

(renamed as lammu and Kashmir Power Transmission Corporation

Limited) to the Administrative Secretary to the Govt., Power

Deve lop m ent Departm en t... )

(iii) Jammu and Kashmir State Power Trading Company Limited (renamed as

Jammu and Kashmir Power Corporation Limited) shall control the composition

of the Board of Directors of the following Companies:

(a) Jammu and Kashmir State Power Development Corporation Limited (renamed

as Jammu and Kashmir Power Development CorPoration Limited)-

(b)lammu and Kashmir state Power Transmission company Limited.

(renamed aslammu and Kashmir Power Transmission Corporation

Limited)

(c) Jammu Power Distribution Company Limited (renamed as Jammu Power

Distribution Corporation Lim ited)

(d) Kashmir Power Distribution Company Limited (renamed as Kashmir Power

Distribution Corporation Limited).


(u) change in the name of/ammu Power Distribution company Limited toJammu

Power Distribution Corporation Limited. Accordingly, all necessary changes

shall be made in the MoA and AoA with regard to functions and name

of the Corporation.

(w) change in the name of Kashmir Power Distribution company Limited to

Kashmir Power Distribution Corporation Limited. Accordingly, all necessary

changes shall be made in the MOA and AOA with regard to functions, name, and

furisdiction of the Corporation. The iurisdiction of the Ladakh shall be deleted

from the mandate of the Corporation.

(*06) Apportionment, Re-organisation and transfer scheme o(JKPDD, /KSPDC,

as given in the report submitted by the Committee constituted vide Government

Order No: /64-PDD of 2019 dated 20-09-2019.

(D) Wherever in this report, framing of new rules, policies, modification/

amendment in the existing rules etc. is required, the approval of the competent

authority shall be sought before notification. Accordingly, sanction is also granted

to the following: -

(h) Transfer of Assets and Liabilities of EM & RE Wing Kashmin Project Wing

Kashmir& PMM Wing Kashmir Division to Kashmir Power Distribution

Corporation Limited on as is and where is basis.

(i) Transfer of Assets and Liabilities of DCP office of lammu and

Kashmir Power Transmission Corporation Limited on as is and where

is basis.

Jammu and Kashmir Power Transmission Corporation Limited

(j) Transfer of Assets and Liabilities of System & Operation Wing and

Planning and Design Wing totammu and Kashmir Power Transmission

Corporation Limited on as is and where is basis.

..."

1.1.3. Jammu and Kashmir Power Development Department (Re-organisation)First Transfer Scheme 2020

The Lt. Governor of Jammu and Kashmir made and gave effect to the'Jammu and Kashmir Power

Development Department (Re-organisation) First Transfer Scheme 2020" vide Notification dated

20'h March 2020. The First Transfer Scheme 2020 is annexed as Annexure-2.

The key provisions from the First Transfer Scheme 2020 are as follows:

5. Transfer of Undertakings by Department:-

(a) The Undertakings of the Department classified in the following schedules shall

stand transferred to and vested in the Transferee on and from Appointed Date

subject to the terms and conditions specified in the Act and the Scheme:

(i) Trading cum Holding Undertakings for UT of/&K as set out in Schedule-A';

(i,) Distribution Undertakings for /ammu Province, UT of /&K as set out in

Schedule-B; and

(ii, Distribution L/ndertakings for Kashmir Province, UT of JAK as set out in

Schedule-C;and

(iu) Generation and Distribution Undercakings for Ladakh Region, UT of Ladakh

as set out in Schedule-D;

(v) Transmission [Jndercaking with Load Despatch Centre function for Jammu

as well as Kashmir Province, IJT ofJ&K as set out in Schedule-E

(f) The transfer rc and vesting of the undercaking to the transferee in terms of this

Scheme shall take effect immediately on the appointed date notwithstanding that


the value of undercakings have not been determined and shall be determined at alater date;

I S. G ove rn m e n t S uppo rt. _

(1) The Transferees shall be ettgibte for and shall continue to receive suppon fromthe Government in the form of revenue support, equity support, capital subsidies,loans' interest subsidies and such other monetary and linancial assistance, whetherunder a Central or State scheme or otherwise, as ma)/ be necessary for the dueand effective performance of their functions until the time Transferees achievecommercial viability on their own.

(2) The Government suPPort indicated in sub section (/) above shizll beconditional uPon the Transferees submitting a detailed and time-bound financialfeasibility plan within 6 (srg months of the Appointed date and duty comptyingwith the same- The feasibility plan shatt be reviewed at least once evety )/ear toa'tse'ss and evaluate the fulfilment of the performance urgets set out therein. Thefinancial feasibility ptan would include profections related to reduction in variouslosses, revenue reguirement and capital support, per capia availability ofelectrkrty in the nr and matters incidentar thereto.

1'1'4. Revised Structure of Power Utilities in the UT of Jammu and Kashmir andUT of Ladakh

The revised structure of Power utilities in the UT of Jammu and Kashmir and UT of Ladakh is as

follows:

Jammu and Kashmir Power Transmission corporation Limited ., :

Jammu & Kashmir Power Development Department

J&KPowerDevelopmentDepartment (UT of Jammu &

Kashmir)

J&K Power

Transmission

CorporationLimited

0KPrcL)

Figure 1: Revised existing structure of power utilities in UT of J&K and UT of

1.2. Profile of fammu and Kashmir Power Transmission Corporation Limited

It may be noted that, currently the State Load Despatch Center for UT of J&K (LDC-J&K) is a

department within JKPTCL and it operates as a unit within JKPTCL. Further, there are no

bifurcation of assets of the LDC-J&K, costs/ expenses incurred by JKSLDC and no separate

budget for LDC-J&K.

Assets of JKPTCL consist of transmission sub-stations and transmission lines. The region-wise

details of JKPTCL's assets as on '1" March 2022are as follows:

Ladakh Power Development

Department (UT of Ladakh)

Jammu & Kashmir Power

Corporation Limited (KPCL) (Trust

& Holding Function)

Kashmir

Power

DistributionCorporation

Limited(KPDCL)

Jammu Power

Distribution

CorporationLimited

0PDCL)

J&K Power

Development

CorporationLimited

0KPDCL)


Table 1: Details oftKpTCL,s Grid stations

Nos. lnstalledCapacity(in MvA)

rlos. lnstalledCapacity(in MVA)

220t132&220t66& 8 25502?0133 kV Grid Station

7 2495

132166 kV Grid Station 3 320 NA NA132133 kV Grid Starion 78 2384.50 31 3026

Table 2: Details oftKPTCL's transmission lines

Transmission Lines Jammu Region Kashmir RegionLine Length(km)

LineLength(ckt. Km.)

LineLength(km)

LineLength(ckt. Km.)

220 kV Transmission Lines 404.296 636722 203.27 405 t4

132 kV Transmission Lines 844.338 137s.483 506.08 972 t6

1.3. Projection of load gro\ /th in transmission ne

1.3.1. Present load in the transmission network:

The present installed generation capacityl in UT of J&K ar

comprising of 1230 MW of Hydropower based generation capi

Energy based generation (small hydro and solar).

fhe power supply position in terms of peak demand vis-i-vi

'egion (Comprising UT of J&K and UT of Ladakh) as per the

:he past 3 years (relevant pages of LGBR reporrs attached ar

L021-22 as per the Load Generation and Balance Report publ

Source: Minutes of 4th meeting of Northern Regional Power Cot

'rRPC(TP)1.

Jammu and Kashmir Power Transmission

d UT of Ladakh is 1360.98 l

city and 130.98 MW of Renew:

; Peak Met for Jammu & Kash

CEA Load Generation reporr

Annexure-3) and anticipated

shed by CEA is given below:

(Transmission Planning)

Limited

1.3.'

The

comprising

Energy basr

The power

region (Cor

the past 3'

2021-22 as

60.98 MW

Renewable

Kashmir

port for

ated for

1 Source: Mir

INRPC(rP)1.

19

Grid Stations

Table 3: Actual power suppty position in IJT of,CEA's LGBR reports

and UT of

Year Peak Demand peak

(Mw) (Mw)2018-19 (actuat)

2464

2019-20 (actual) 3405 2724

2020-21(actuat) 3280

2021-22 (actuat) 3460 3460

2027-23 (anticipated) 3670 3530

(Source: Load Generation Balance Report, CEA website)

It is observed that there is no (continuous increasing/

peak demand and peak demand met.

(Y.)

-20.0

in the actual

Further, it is observed that, there was around - Z}%deficit the 3 years from 2018-19 to 2020-21, no acrual surplus/ deficit was obsenred for -22and CEA has deficitof only 3.8% for 2O2Z-21.

1.?.2. Proiection for load grou/th in the network:

The peak demand (in MW) and peak met (in M\A/) for the 4 years 2018 is plottedto understand the actual peak demand and actual peak met.

Jammu and Kashmir power Transmission

Peak demand vs. peak met 2018- for UT of J&KtrPeak Demand (MW) r peak

34053080

2018 (3080 MW), in 2019

in 2020 the peak demand was

was reached in January 2021

was recorded in the month of

(Mw)

32803500

3000

i rsooe! zooooE

E rsoo

faE roooL

500

0oJ1

3500

3000

2500 Izooo 5

0)

rsoo i(do(L

I 000

500

0@6@@@@O\O.o

iix+Liliisff=-32-sffooooooT;qnqqlo->cL>:32efgj'

OOctdC{ryC{aldNNdara-ia_ i . i jt+ A i : Is2sSStE2qS

Figure 2: Peak demand (MW) vs. Peak Met (MW) for IJT of J&K since 2018

It observed that in 2018 the peak demand was reached in

the peak demand was reached in December 2019 (3104

reached in March 2020 (3405 MW) while in 2021the peak

(3280 MVy). ln 2022 till March the peak demand of 3095


March 2022. Thus, from the above chart it is clear that is no continuous increasing/

decreasing trend observed in the actual peak demand for UT J&K.

Table 4: Actual peak demand (Mlfl) in last few years

2022 (till March 2022) 3095

From the above table it is clear that the maximum peak was recorded in 2020 (3405

has increased from 3080 MWMW). For the 3-year period 2018 to 2020 the actual peak d

2018

2019

2020

2021

3080

3104

3405

Limited21

Actual peal< demand (MW)

to 3405 MW which is 10.55% absolute increase (point to point). A 3-year CAGR of actual peak

demand from 2018 to 2020 is 3.40%.

ln order to Proiect the peak demand for FY 2027-23 we assume acrual peak demand in 2021 i.e.

3280 MW as base and growth rate of 3.40% (assuming this trend over the 3 years is susrained

over the next few years).

Accordingly, the load growth profection for FY 2022-23 is as follows:

Table 5: Load growth proiection for the control period

1.4. Regulatory Regime

ln exercise of the powers conferred by sub section 5 of sectfon 83 of the Electricity Act 2003

(36 of 2003), the Central Government constituted Joint ElecJricity Regulatory Cornmission for

the Union Territories ofJammu and Kashmir and Ladakf, 1f,".!in referred as "Commission") vide

S.O. 1984(E) dated 18'hJune 2020.

The Commission is a statutory body with quasi-judicial status, constituted under the first proviso

of Section 83 Electricity Act 2003. The Commission is a three-member body designated to

function as an autonomous authority responsible for regulation of the power sector in the Union

Territories of Jammu & Kashmir and Ladakh.

All proceedings before the Commission are deemed to be judicial proceedings within the meaning

of sections'193 and 278of the lndian Penal Code and the Commission is deemed to be a Civil

court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973. The

Commission has the power to act as arbitrator or nominate arbitrators to adjudicate and settle

disputes arising between licensees.

22

Projected Peak Load (MW) 3280.00


Year FY 2020-21 FY 2022-233506.83

The commission vide Gazette Notification No. JERC-JK Llrech-1312021 dated 31,, March 2021,notified 'JERC for UT ofJ&K and UT of Ladakh (Adoption of various Regutations of JERC for thestate of Goa and UTs) Regulations, 2021". vide these Regulations, the commission acroptedvarious Regulations of JERC for the state of Goa and UTs with amendments up to date for oneyear or till replacement of corresponding regulation framed by the commission. The commissionadopted 'JERC MYT Goa and UTs (Generation, Transmission and Distribution) Regulations,2018" applicable for determination of tariff for all the Generation companies, TransrnissionLicensees and Distribution Licensees in UT of J&K and UT of Ladakh.

The commission vide suo-Motu order No. 57 of 2021dated 1 December 2021 byexercisingits powers to amend (Regulation 70.1 of the Joint Electricity Regutatory commission for theState of Goa and Union Territories (Generation, Transmission and Distribution Multi year-l-ariff)

Regulations' 2018), extended the adopted Joint Electricity Regulatory commission for the stateof Goa and Union Territories (Generation, Transmission and Distribution Multi year T-ariff)Regulations,Z0lB till Fy 2025_26.

The commission vide letter no. JERcirEcH - I 2021-22146-54 dated 22 February 2022, direrctedall the utilities in the UT of J&K and UT of Ladakh to submit Tariff petitions for True Up of Fy2019-20 and FY 2o2o-21, Annual Performance Review of Fy 2021-22 andAggregate RevenueRequirement and determination of Tariff for FY 2022-23 in line with commission,s suo-MotuOrder No. 57 of 2021.

1.5. Basis for current petition

The current Petition is fited at Hon'ble Commission in compliance to Hon,ble Commission,s

letter dated 22"d February 2022 and Suo-Motu order No. 57 of 2021dated 1.. December

2021. The Current Petition covers following:

Jammu and Kashmir power Transmission corporation Limited

Truing Up of ARR for FY 2019-20 Based on Financial Statements for FY

2019-20 (from the date of incorporation of

JKPTCL till 31" March 2020)

Annual Performance Review of Fy

2020-21

of FY 2020-2'l are under

preparation and are yet to be audited therr_.fore,

for FY 2020-21Annual Performance Review

(APR) is filed insread of True Up (which is

normally based on Audited Financial Accounts).

3 Annual Performance Review of FY Based on actual data tilt December 2021 and

2021-22 prolected till end of Fy 2021-22

4 Aggregate Revenue Requirement Based on past year data and certain assumptions.

5 Tariff Proposal for FY 7022-23 Based on ARR of FY 2A72-23 and ceftain

assumPtion.

Table 6: Basis for current petition

The current Petition does not cover LDC-J&K as separate independent entity but, as a

department within JKPTCL.


Sr. No. Component of Current petirion Basis

I

2

Petition for True up of FY 2019-10,APR of Fy 2ozo-21, ApR of Fy zozl-22,ARR of Fy2022-23 and Tariff Proposatfor Fy 2022-29

2. Chapter 2 Truing Up of FY 2019-20

2.l.lntroduction

2.1.1.The Hon'ble Commission vide gazette notification dated 31" March 2021 issuedJERC for UT

of J&K and UT of Ladakh (Adoption of various Regulations of JERC for the state of Goa and

UTs) Regulations, 2021 through which JERC Goa and UTs (Generation, Transmission and

Distribution) Regulations, 20't8 are adopted by the Hon'ble Commission up to one year or

till replacement of corresponding regulation are framed by the Hon'ble Commission for the

purpose of tariff determination for the UT of J&K and UT of Ladakh.

2.1.2.4s specified in the regulation of 11.2 of the prevailing JERC Goa and UTs (Generation,

Transmission and Distribution) Regulations 2018, JKPTCL is submitting true-up petition as

part of the instant petition for the purpose of truing up exercise, relevant excerpt is

reproduced here as follows:

"The Generating Company, Transmission Licensee and Distribution Licensee shall file an

application for the annual performance review of the current )/ean truing up of the previous

Year or the Year for which the audited accounts are available and determination of tariff

for the ensuing Year on or before 30th November of each Yean in formats specified by the

Commission from time to time:

Provided that the Genenting Company, Transmission Licensee or Distribution Licensee,

as the case mal be, shall submit to the Commission information in such form as may be

specified by the Commission, totether with the audited accounts, extracts of books ofaccount and such other details as the Commission may reguire to assess the reasons for

and extent of any variation in financial performance from the approved forecast ofAggregate Revenue Requirement and Expected Revenue from Tariffand Charges."

2.1.3.Further, as specified in the above said regulation, JKPTCL has to submit the application for

truing up of the previous year or the year for which audited accounts are available along with

audited accounts, extract of books of account and other details as the Hon'ble Commission

Jammu and Kashmir Power Transmission Corporation Limited25

may require to assess the reasons for variation from the approved forecasts at the time ofARR for the applicable year.

2'1'4')KPTCL was incorporated on 23.10.2019 and financiat accounts of JKpTCL for Fy zolg-zocan only be available for the period from November 2019 to March 2020 detailing rhe financial

performance of JKPTCL during the said period. JKPTCL is submitting the rrue-up i, the

instant petition based on the Audited Annual Accounrs of Fy 2019-20 for the purpose oftruing up exercise for Fy 2019-20.

2'1.5.Further, since the approved ARR of JKPTCL for FY 2o1g-2a is not available, variation from

approved comPonents of FY 2019-20 for JKPTCL cannot be determined in the instant

petition.

2.1.6.The Audited Annual Accounts for Fy zolg-20 are annexed as Annexure-4.

2.1'7.k is submitted that, all the components of ARR are covered only from the date JKpTCL was

formed. Expenses incurred byJKPDD prior to formation of JKPTCL are not covered irr the

instant Petition.

2.1.8.|n line with the above, true-up petition for FY 2019-20 is submitted based on the Annual

Audited Accounts for the approval of the Hon'ble Commission. The actual expenditures,

corresponding revenue, and resultant revenue gap for FY 2019-20 are detailed in subsequent

sections.

T.2.Operations and Maintenance Expenses

2.2.1.As specified in regulation 41 of the JERC Goa and UTs (Generation, Transmission and

Distribution) Regulations 2018, operation, and maintenance expenses of a Transmission

licensee comprises of employee expenses, administrative and general expenses and repairs

and maintenance exPenses. The excerpts from the Regulation are as fotlows:

"41. Operation and Maintenance (O&M) expenses for Transmission Licensees

41.1 Operation and Maintenance (O&M) expenses shallcomprise of the follow,ing:

a) Employee exPenses - salaries, wages, pension contribution and other employee

costs;


b) Administrative and General expenses

c) Repairs and tlaintenance expenses."

2.2.2.1n line with above, the O&M expense incurred byJKpTCL

2019 to March 2020 of F,y ZO19-ZO are as follows:

Table 7: O&l+1 expenses for Fy 2Ot9-2O (November 2otg

insurance charges ifany; and

the period from Novernber

March 2O2O)

2.

Administrative and Generat Expenses

Repairs and Maintenance Expenses

Nov'19 to Mar'20

2.2.3.The Hon'ble Commission is requested to approve the

expenses incurred byJKPTCL during Fy Z01g_20.

58.87

2.41

9.20

during t0.4g I

said operation and maintenance

3.1, F 3.2

re, works

2.3.Capital Expenditure, Capitalisation and CWlp

2.3.2.


3.1.The details of Capital expenditure ln Fy 2019-20 are as r

Table 8: Details of capex during Fy 2Org-2O (Rs. crores)

LanguisEng Projects 0.00 12.74 12.74PMDP 61.90 15.06 8L.96PMRP 5.63 36.95 42.60PM's Package for Restoration 0.97of Flood affected lnfrastructurein J&K

4.01 4.99

PSDF 23.53 35.35 s8.90State Plan 2-49 4.67 7.17Total 100.52 108.78 209.36

.2.The details of Capital expenditure, capitalization and C

and F 3.3 respectively.

.3.The Hon'ble Commission is requested to approve the

capitalized and CWIP of JKPTCL during FY 2019-20.

are provided in Form F

e said capital expenditu2.3

27

Name of capex scheme Jammu Region Kashnrir Region Totat

Sr. No. Particulars

2.4. Depreciation

2.4.1.|t is submitted that GFA transferred to JKprcL as well

funded through grant only and JKpTCL has not raken

to create assets till FY 2019-20.

2.4.2.As specified in regulation25.4 (c) and additional proviso

and UTs (Generation, Transmission and Distribution)

assets created from grant is not allowed. Relevant

Regulation 25.4 (c)

't) depreciation to the extent of works

deposit work, capital subsidy or grant

Regulation 30;"

Resulation 30.1

"30.1 The value base forthe purpose of

admitted by the Commission:

Provided that the depreciation shalt be

original cost of the retired or replaced or

Provided also that the no depreciation

through consumer contribution, deposit

2.4.3.1n line with the above said provisions, JKPTCL has claimed

per regulatory accounrs) on assets during FY 2019-20 in

2.4.4.The Hon'ble Commission is requested to approve nil

JKPTCL.

2.5.lnterest on Long Term loans

2.5.1.The assets created/ capitalized by JKPTCL in FY 2019-20

loans of long-term nature.


not financed by

-J* 28 -.i

additions during 2019-20 is

capital loan and/or equity

regulation 30.1 of JERC Goa

2018,

are reproduced as follows:

through consumer

not be allowed specilied in

shall be the capital of the asset

after reducing appr<>ved

erssets:

be allowed on the linanced

capital subsidy or

depreciation

instant petition.

during FY 9-20 for

of capital

2'5'2'As specified in regulation 25.a (e) and regulati on28.7 of theJERC Goa and UTs (Generation,Transmission and Distribution) Regulations 2018, interest on roan capital on financial supportcorresponding to grant. Relevant excerpt is reproduced here as foltows:

"BeSulacilsn_25J_(g

"e) provisions related to interest on loan capital, as specified in Regulation 2g, shatt notbe applicabte rc the extent of linancial support provided through consumercontribution, deposit work, caphal subsidy or grant.,,

Regulation 28.7

"The above interest computation shall exclude the nterest on roan amount, norrnativeor otherwise, to the extent of capital cost funded by consumer contribution, depositwork caPital subsidy or granc carried out by Transmission Licensee or DistributionLicensee.,,

2'5'3'Accordingly, JKPTCL vide instant petition claims nil inrerest on loan capital for Fy 2o1g-zo.2'5'4'The Hon'ble commission is requested to approve nil inrerest on toan capitat during Fy 2919-

1n r^- tvrlT?t2A for JKPTCL.

2.6.lnterest on Working Capital

2'6'1'As per Regulatron 42.1of the JERC Goa and UTs (Generation, Transmission and Distribution)Regulations 2018, the transmission licensee shall be allowed interest on the estimated level

of working capital for the Financiat year in accordance with prevalent cERC Tariff Regularions.

2'6'2'Regulation 34 (1) (c) of the CERC (Terms and conditions of Tariff) Regulations ,zolgspecifiesfollowing components of working capital for transmission licensee:

" (c) For Hydro Generating Station (including Pumped Storage Hydro Generating

Station) and Transmission S)/s tem:

(i) Receivables equiualent to 45 days of annual fixed cost;

(ii) Maintenance spares @ ls% of operation and maintenance expenses

including security expenses; and

(iii) Operation and maintenance expenses, including security expenses for one month.',


2.6.3.Accordingly, the Licensee has considered the of normative working capital toarrive at the normative working capital requirement. , Regulation 34 (Z) of the CERC(Terms and conditions of Tariff) Regutations, ZOlg

considered for calculating interest on working capital.

reproduced below:

" (3) Rate of interest on working capital shall

be considered as the bank rate as on 1.4.2019 or on / st April of the year during

station or a unit therectf orthe tariffperiod 20/9-24 in which the

the transmission slstem including s)/stem or element thereot as

the case may be, is declared under commercial whichever is later:

Provided that in case oftruing-up, the rate ofconsidered at bank rate as on lst April of each ofperiod 2019-24:'

2.6.4.The cERc rariff Regulations 2019 defines Bank rate as 1 SBI MCLR as on 1', April ofFinancial year plus 350 basis points. Accordingly, the has considered the SBI MCLR

of 12.05% (8.55%+3.5%). Theof 8.55% as on 1" April 20192 and accordingly, bank

normative interest on working capital for Fy 2019_20 is as

Table 9: Normative lnterest on Wo*ing Capital for Fy 9-20

2 Source: https://sbi.co.in/web/i

the rate of interest to be

excerpts of the Regulation are

on normative basis and shall

on working capital shall be

linancial year during the tariff

1 O&M Expenses equivalent to 1 month2 Maintenance Spares @15"/o of the O&M expenses

including security deposit3 Receivables equivalent to 45 days of AFC4 Working Capital Requirement5 Less: Amount of security deposit from Transm

System Users

6 Net Working Capital Requirement (yearly)

14.10

25.37

22.07

61.540.00

61.4212.05%

jarrr rru aiid Kasii i-rri r" Fower Transmissi on .-!!--- a a---al l'at.tc,n LtlrttLe(l 30

Particulars

lnterest Rate

Amount (in Rs.

crore

h7 Jammu and Kashmir power Transmission Limited

Normative lnterest on WortirrgEpitJrated for 5 months)

2'6'5' lt is pertinent to mention thatJKprcL has not avaired actual loan towards working capital.Further, Regulation 14 (4) of the CERC (Terms and of Tariff) Regulations, ZOlgspecifies that the interest on working capital

notwithstanding actual loan to fund the working

Regulations is as follows:

" (4) lnterest on working capital shall

notwithstanding that the generating company

be payable on normative basis

requirement. The excerpt ,cf the

payable on normative basis

the transmission /icensee has

2019-20.

not taken loan for working capital from any agency."

2.6.6.Accordingly, the Licensee requests the Hon,ble ission to approve the normativeinterest on working capital (pro_rated for 5 months) for

2.7. Return on Eguity

2.7.1-The assets created/ capitarized byJKprcL in Fy 2019-20 not financed by way of equity.

2.7.2.As specified in reguratio n 2s.4 (d) of the JERC Goa and 's (Generation, Transmission and

Distribution) Regulations 2018, return on equity is

corresponding to grant. Relevant excerpt is reproduced

applicable on financial support

'd) provisions related to return on eguity, as in Regulation 2Z shatt not be

applicable to the extent of frnancial support

deposit work capial subsidy orgnnt;"

through consumer contribution,

2.7.3.Accordingly, JKPTCL claims nil Return on Equity (RoE) FY 2019-20.

2.7.4.The Hon'ble Commission is requested to approve nil on Equity (RoE) duringFy 2019-

2O for JKPTCL.

31

Sr.

No.

2.8.lncome Tax

2.8.1.!t is submitted that, JKpTCL has not filed income taxcase in the future is there is any tax demand from theto claim the reimbursement of such income tax

2.9. Contribution to Contingency Reserves

2.9.1.1t is submitted that, JKpTCL being a new Corporation

and currently it is comptetely dependent on Gran

functioning. Therefore, no contribution has been made

20. Therefore, there is no interest income from con

2019-20.

2.10. Performance parameters

2.10.1. Transmission Losses

In FY 2019-20JKPTCL recorded total transmissionmonth-wise details of transmission system losses are

2.10.2. Transmission System Availabilityln FY 2019-20 JKpTCL's transmission system

2.11. Non-Tariff lncome

2.11.1. ln FY 2019-20JKPTCL earned nil income from

2.12. Aggregate Revenue Requirement for Fy ZOlg-

2.12.1. ln line with above, summary of expenses of JKpTCL

Goa and UTs (Generation, Transmission and Distribution)

Hon'ble Commission vide JERC for UT of J&K and UT

Regulations of JERC for the state of Goa and UTs)

q,-^ Jammu and Kashmir power Transmission Limited32

turns for FY Z01}-ZO. However, in

thorities, JKPTCL reseryes its right

paid in the future.

no sources of revenue of its own

revenue from Government for its

contingency reseryes in Fy 2019_

to contingency reserves in Fy

level losses at 1.78%. Thein Form F10.

availability of 98%.

sources.

FY 2019-20 as per theJERC

2018 adopted by the

Ladakh (Adoption of various

2021 is tabulated as fotlows:

ck'/' Jammu and Kashmir Power Transmission33

1 Operation & Maintenance Expenses2 Depreciation3 lnterest on long term loans

4 lnterest on Working Capital and deposits from T5 Contribution to Contingency reserves6 Return on Equity Capital7 lncome Tax8 Aggregate Revenue Requirement9 Less: Non-Tariff lncome10 Less: lncome from Other Business

1/ Less: Revenue from short-term transmission

70.48

3.0;

n.5;

12 Aggregate Revenue Requirement fromTransmission Tariff

Table 1A: Tnte-up of Expenses oflKpTCL for Fy 2Ol9-20 2o|9-March 2O2O) (in Rs Crore)

The Hon'ble Commission is requested to approve the above

JKPTCL for FY 2019-20.

true-up of expenses of

Particulars Amount (in Rs.

Crore

3. chapter 3 Annual performance Review of Fy zozo-21

3.l.lntroduction

3'1'1'The Hon'ble Commission vide gazette notification dated 31st March 2021 issuedJERC forUT of J&K and UT of Ladakh (Adoption of various Regulations of JERC for the state of Goa

and UTs) Regulations,2021 through which JERC Goa and UTs (Generation, Transmission

and Distribution) Regulations,2018 are adopted bythe Hon'ble Commission up ro one year

or till replacement of corresponding regulation are framed by the Hon'ble Commissiorr for

the purpose of tariff determination for the UT of J&K and UT of Ladakh.

3-1.2.As specified in the regulation of 11.2 of the prevailing JERC Goa and UTs (Generarion,

Transmission and Distribution) Regulations 2018, JKPTCL is submitting annual performance

review of FY 2020-21 as part of the instant petition for the purpose of annual performance

review exercise, relevant excerpt is reproduced here as follows:

"The Generating Company, Transmission Licensee and Distribution Licensee shall filean application for the annual performance review of the current yean truing up ol'theprevious Year or the Year for which the audited accounts are available anddetermination of tariff for the ensuing Year on or before 30th November of each ybar,

in formats specified by the Commission from time to time:

Provided that the Generating Company, Transmission Licensee or DistributionLicensee, as the case may be, shall submit to the Commission informailon in such f<>rm

as may be specified by the Commission, together with the audited accounts, extri?ctsof books of account and such other details as the Commission may reguire to assess

the reasons for and extent of any variation in financial performance from the approvedforecast of Aggregate Revenue Requirement and Expected Revenue from Tariff and

Charges."

3.1.3.1t is submitted that approved ARR for JKPTCL for FY 2020-21 is not available. Further at the

time of filing of the instant petition, FY 2020-21 is over and JKPTCL's Audited Accounts for

FY 7020-21 are under preparation. Therefore, JKPTCL is filing Annuat Performance Review

for FY 2020-21 based on provisional data/ information. The details of consolidated

G-- Jammu and Kashmir Power Transmission Corporation Limited

exPenditure of JKPTCL as on 31'03 ,2021 arethe basis for provisionalfigures of expenditureconsidered for bifurcation of o&M expenses which are annexed as Annexure_S.

3'1'4'The provisionat expenditures, corresponding revenue, and resultant provisionat revenue gapfor FY 2020-21are detailed in subsequenr sections.

3.2. Operations and Maintenance Expenses

3'2'1'During FY 2020-21 JKPTCL has incurred Rs. 155.41 crore towards o&M expenses. Thedetails of o&M exPenses are provided in Form F7.1, F2.3, F2.4 andF2.S of the Forms.

3'2'2'ln line with above, the actual o&M expense incurred by JKprcL during Fy 2o2o-z1are as

follows:

142.15,

3.66

9.59

155.4X

3'2'3'The Hon'ble commission is requested to approve the above said operation and maintenance

expenses incurred by jKpTCL during Fy ZOZO_21.


3.3.1.The details of capitat expenditure ln Fy 2020-21 areas follows:

Table 12: Details of capex during Fy 2020-21 (Rs. crores)


l_ __ ]!{,'",*eg.e!g_G_"ietr!E@_ _----

|

I - -:=9tn:UIu=ss::*:ur:_:::::: L-4_____,I9ta1g*pSt*jglanaUaintenan-ceexpense-i:'f

Table ll: O&l,f expenses for Fy 2020_21

0.07 7.10

0.18 29.61 29.7912.02 29.23 41.26

tEJ zol4- ooo ole -0.1e11.14 37.23 48.38zts.U 22.54 51.3852..26 125.90 178.18

0x;

Sr. No. Particulars

Name of Capex Scheme Jammu Kashmir Total

PMRP

PSDF

3'3'2'The details of Capital expenditure, capitalization and CWlp are provided in Form F 3.1, F l.zand F 3.3 respectively.

3'3'3.The Hon'ble Commission is requested to approve the above said capital expenditure, works

capitalized and CWIP of JKpTCL during Fy 2OZO-21.

3.4. Depreciation

3.4.1.|t is submitted that asset additions/ capitalized assets during FY 2O2O-21are funded through

capital grants from the Government only and JKPTCL has not taken any capital loan anrl/or

infused equity to create assets till FY 2020-21.

3.4.2.As specified in regulation25.4 (c) and additional proviso of regulation 30.1 of theJERC Goa

and UTs (Generation, Transmission and Distribution) Regulations 2018, depreciation on

assets created from grant is not allowed. Relevant excerpts are reproduced here as follows:

Regulation 25.4 (c)

"c) depreciation to the extent of work performed through consumer contribution,

deposit work, capital subsidy or grant shall not be allowed as specilied in

Regulation 30;"

Regulation 30.1

"30.1 The ualue base forthe purpose ofdepreciation shatt be the capital cost ofthe asset


Provided that the depreciation shall be allowed after reducing the approved

orQinal cost of the retired or replaced or decapitalized assets:

Provided also that the no depreciation shall be allowed on the assets financed

through consumer contribution, deposit work, capital subsidy or trant."

3.4.3.1n line with the above said provisions,JKPTCL has claimed nil depreciation (Depreciation as

per regulaton/ accounts) on assets during FY 2019-20 in the instant petition.

3.4.4.The Hon'ble Commission is requested to approve nil depreciation during FY 2A20-21 for

JKPTCL.

Ant U\ Jammu and Kashmir Power Transmission Corporation Limiteds;


3'5'1'The assets created/ capitalized byJKPTCL in FY 2020-21 are not funded by capital loans oflong-term tenure.

3.5.2.As specified in regulation 25.4 (e) and regulation 28.7 of the JERC Goa and UTs (Generation,

Transmission and Distribution) Regulations 2018, interest on loan capital on financial support

corresponding to grant. Relevant excerpt is reproduced here as follows:

"Be8slatlsn25.4{e)

"e) provisions related to interest on loan capital, as specified in Regulation 20 shatt not

be applicable to the extent of linancial suppoft provided through consu,mer

contribution, deposit work, capital subsidy or grant.,,

Regulatlqn 2gJ

"The above interest computation shall exclude the inrcrest on loan amount, normative

or otherwise, to the extent of capital cost funded by consumer contribution, deposit

work caPital subsidy or grant, carried out by Transmission Licensee or Distribution

Licensee."

3.5.3.Accordingly,JKPTCL vide instant petition claims nil interest on loan capitalfor FY ZO2O-21.

3.5.4.The Hon'ble Commission is requested to approve nil interest on loan capital during FY 2O2O-

21for JKPTCL.


3.5.'l.As per Regulation42.l of theJERC Goaand UTs (Generation, Transmission and Distribution)

Regulations 2018, the transmission licensee shall be allowed interest on the estimated level

of working capital for the Financial year in accordance with prevalent CERC Tariff Regulations.

3.6.2. Regulation 34 (1) (c) of the CERC (Terms and conditions of Tariff) Regulations ,2019 specifies

following components of working capital for transmission licensee:

" (c) For Hydro Generating Station (including Pumped Storage Hydro Generating

Station) and Transmission System:

(i) Receivables eguivalent to 45 days of annual fixed cost;

AtrJammu and Kashmir Power Transmission Corporation Limited

(it) Maintenance sPares @ /5% of operation and maintenance expenses


(iii) operation and maintenance expenses, including security expenses for one month.,,

3'6'3'Accordingly, the Licensee has considered the components of normative working capitirl toarrive at the normative working capital reguirement. Furrher, Regulation 34 (Z) of the CERC

(Terms and conditions of Tariff) Regulations, 2019 specifies the rate of interest to be

considered for calculating interest on working capital. The excerpts of the Regulation are

reproduced below:

" (3) Rate of interest on working capkal shatl be on normative basis and :shall

be considered as the bank rate as on /.4.20/9 or as on I st Apritof the year during

the tariffperiod 2019-24 in which the generating station or a unit thereof orthe transmission system including communication system or element thereof as

the case may be, is declared under commercialoperation, whichever is later:

Provided that in case of truing-up, the rate of interest on working capital shatt be

considered at bank rate as on lst April of each of the financial year during the tariff

period 20/9-24;'

3'6'4.The CERC Tariff Regulations 2019 defines Bank rate as 1-year SBI MCLR as on '1,. April of

Financial year plus 350 basis points. Accordingly, the Licensee has considered the SBI MCLR

of 8.55% as on 1" April 20193 (which is the True up year) and accordingly, bank rate of 12.C15%

(8.55%+3.5%). The normative interest on working capital for FY 2O2O-21is as follows:

Table 13: Normative lnterest on Working Capitat for Fy 2O2O-21

3 Source: https://sbi.co.in/web/interest-rates/interest-rates/mclr-historical-data

O&M Expenses equivalent to 1 monrhMaintenance Spares @15% of the O&M expensesincluding security depositReceivables equivalent to 45 days of AFC

12.95

23.31

20.00

56.26

a--------- ^-- J ar- -l----! - h----,-- ----,-

---' 2- _2- -- A - L2- - a a_-_2L- !

Jarnrrru anq ]\asnrnrr rower I ransrntsst(,lt \,orporafloit LamiteG 3B

u1

2

3

4

Particulars AmountRs.

ek'

5 Less: Amount of security deposit from TransmissionJ Lcs). ,.\rrlounf, oT securfiy oepostt lrom lransmission 0.00System Users

6 Net Working Capital Requirement (yearly) 56.267 lnterest Rate (%) ,l2.OS%

3.6.5.|t is pertinent to mention thatJKPTCL has not availed any actual loan towards working capital.

Further, Regulation 34 (4) of the CERC (Terms and conditions of Tariff) Regulations ,2019

specifies that the interest on working capital shall be payable on normative basis

notwithstanding actual loan to fund the working capital requirement. The excerpr of the

Regulations is as follows:

" (4) lnterest on working capital shatt be payable on normative basis

notwithstanding that the generating company or the transmission licensee has

not taken loan for working capital from any outside agency."

Accordingly, the Licensee requests the Hon'ble Commission to approve the normative intereston working capital for FY 2020-21.

3.7. Return on Equity

3.7.1. The assets created/ capitalized by JKPTCL in FY 2020-21 are not financed by way of equiry.

3.7.2.As specified in regulation25.4 (d) of theJERC Goa and UTs (Generation, Transmission and

Distribution) Regulations 2018, return on equity is not applicable on financial support

corresponding to grant, Relevant excerpt is reproduced here as follows:

"d) provisions related to return on eguity, as specilied in Regulation 2Z shall not be

applicable to the extent of financial suppoft provided through consumer contribut,ion,

deposit work, capkal subsidy or grant;"

3.7.3.Accordingly, JKPTCL claims nil Return on Equity (RoE) for FY 2020-21.

3.7.4.The Hon'ble Commission is requested to approve nil Return on Equity (RoE) during FY 2020-

21for JKPTCL.

\,Jammu and Kashmir Power Transmission Corporation Limited

Sr.

No.

Normative lnterest on 6.78

3.8.lncome Tax

3'8'1'lt is submitted that,JKPTCL has not filed income tax returns for Fy 2o2o-z,l.However, incase in the future is there is any tax demand from the Authorities, JKprcL reseryes its rightto claim the reimbursement of such income tax expenses paid in the future.

3.9.Contribution to Contingency Reserves

3'9"t'lt is submitted that'JKPTGL beinga new corporation has no sources of revenue of its ownand currently it is completely dependent on Gran-in-aid revenue from Government for itsfunctioning' Therefore, no contribution has been made towards contingency reserves in Fy2020-21' Therefore, there is no interest income from contribution to contingency reservesin fY2020-21.

3.10. Per{ormance parameters


ln FY 2020-21 JKPTCL recorded total transmission system level losses at 3.06%. Themonth-wise details of transmission system losses are provided in Form F10.

3.10.2. Transmission System Availabilityln FY 2020-21 JKPTCL's transmission system recorded availability of 9g%.


3'11'1' As per the provisional Accounts information, in Fy zo2o-21 JKpTcL earned nil incomefrom non-tariff sources. JKPTCL would submit the actual value of non-tariff income (if any)at the time of True up of Fy 2020_21.

3.12. Aggregate Revenue Requirement for Fy 2OZO_21

3'12'1' ln line with above, summaD/ of expenses of JKPTCL during Fy 2o2o-21as per the JERCGoa and UTs (Generation, Transmission and Distribution) Regulations 201g adopted by the

Jammu and Kashmir power Transmission corporation Limited40

Hon'ble commission vide JERC for UT of J&K and UT of Ladakh (Adoption of variousRegulations of JERC for the state of Goa and UTs) Regulations, 2021 is tabulated as follows:

Table 14: ApR summar)/ of IK?TCL for Fy 2O20-21 (in Rs Cror|

1

2

3

4

5

6

7

I9

10//

Operation & Maintenance ExpensesDepreciationlnterest on long term loans

lnterest on Working Capital and deposits from TSUsContribution to Contingency reseryesReturn on Equity Capitallncome TaxAggregate Revenue RequirementLess: Non-Tariff lncomeLess: lncome from Other BusinessLess: Revenue from short-term transmission

155.41

6.7;

$2.1;

Aggregate Revenue Requirement fromTransmission Tariff 162.19

3'12-2. The Hon'ble Commission is requested to approve APR of JKpTCL for Fy ZOZO-21.

Jammu and Kashmir Power Transmission corporation Limited41

AmountRs. Cror

Sr.No.

Petition for True up olll zo1g-2o,ApR of Fy 2O2O-21 ApR of Fy 2021-22,ARR of Fy2022-23 and Tariff proposat tor Fy 2022-21

4. chapter 4 Annuat performance Review of Fy zozl_zz

4.l.lntroducrion

4'1'1'The Hon'ble commission vide g:rzette notification dated 31,. March 2021 issuedJERC for UTof J&K and UT of Ladakh (Adoption of various Regutations of JERC for the srare of Goa and

UTs) Regulations, 2021 through which JERC Goa and UTs (Generation, Transmission and

Distribution) Regulations, 2018 are adopted by the Hon'bte commission up to one year ortill replacement of corresponding regulation are framed by the Hon'ble commission for thepurpose of tariff determination for the UT of J&K and UT of Ladakh.

4'1'2'As specified in the regulation of 11.2 of the prevailing JERC Goa and UTs (Generation,

Transmission and Distribution) Regutations 2018, JKPTCL is submitting annual performance

review of FY 2020-21 as part of the instant petition for the purpose of annual performance

review exercise, relevant excerpt is reproduced here as foltows:

"The Generating Company, Transmission Licensee and Distribution Licensee shall filean application for the annual performance review of the current yean truing up ol'theprevious Year or the Year for which the audited accounts are available anddetermination of tarifffor the ensuing Year on or before Jhth November of each y'ean

in formats specified by the commission from time to time:

Provided that the Generating Company, Transmission Licensee or DistributionLicensee, as the case may be, shall submft rc the Commission information in such formas may be specified by the Commission, together with the audited accounts, extractsof books of account and such other details as the Commission may require to assessthe reasons for and extent of any variation in financial performance from the approvedforecast of Aggregate Revenue Requirement and Expected Revenue from Tariff ,tndCharges."

4.1.3.1t is submitted that approved ARR foTJKPTCL for FY 2021-72 is not available. The ApR for

FY 2021-22 is filed based on data/ information for FY 2O2O-21,actual data as on 28 February


2022' estimates and ceftain assumptions- The provisionar expenditures, correspondingrevenue, for Fy 2021_Z}are detailed in subsequent sections.


4.2.1.The Operations and Maintenance

Regulations 41 of the JERC Goa

Regulations 2018.

4'2'2'The Employee exPenses for FY 2021'22 are estimated by escalating the Employee expensesfor FY 2020-21 by average of Cpl lnflation of past 3 years.

4'2'3'The Administration and General Expenses (A&G Expenses) for Fy zo21-22are estimatr:d byescalating the A&G exPenses for FY 2o2o-21by average of cpl lnflation of past 3 years.

4'2'4'The Repair and Maintenance Expenses (R&M Expenses) for Fy zozl-2zare estimated byescalating by average of Wpl lnflation of past 3 years.

4'2'5'wPl has been considered as Per the WPI lndex available on the official website of office ofEconomic Advisor of Government of tndia.

4'2'6'cPl has been considered as Per the cPt for lndustrial Workers (all lndia) available on theofficial website of Labour Bureau, Government of tndia. lt is submitted here that LabourBureau, Government of lndia has revised the base year of cpl from 2001 to 2016 from themonth of september 2020 onwards. However, Shri D.P.s. Negi, Director General, LabourBureau' Government of tndia through Press lnformation Bureau, Government of lndia release

dated 22'10'2020 released the linking factor of new index series of 2016=100 to old series ofcPl (2001=100) as 2.88, rerevanr excerpt is reproduced here as fortows:

"""Shri Negi said the All'tndia Consumer pnce lndex Numbers for lndustrial Workers(cPl-lvu) for the month of september 2020 is released on New Base: 2016=100. Themaiden index on new base for September 2020 stands at the level of llg and tinkEhctor for the conversion of new series index to previous series on base 200/=100 is2.99...."

Expenses (O&M Expenses) are estimated based on

and UTs (Generation, Transmission and Distribution)


4.2.7.Accordingly, CPI from Sep'20 to Mar'21 has been determined for base 2001=100 from the

CPI as available on the official website of Labour Bureau, Government of lndia with base

2016=100 by multiplying the same with the linking factor 2.g9.

4.2.8.The values of WPI and CPI for past 3 years considered for escalation are as fotlowed:

Table 15: Wholesale Price lnflation (WPI) escalation factor

Table 16: Consumer Price lnflation (CPI) escalation factor

4.2.9.|n line with above, total O&M expenses estimated byJKPTCL during FY 2021-22are tabulated

as follows:

Table 17: Projected Operation and Maintenance Expenses for FY 2O21-22 (in Rs. Crore)

4.2.10. The Hon'ble Commission is requested to approve the estimated operation and

maintenance expenses for JKPTCL during FY 2021-22.

FY FY FY FY FY2017-18 2018-19 2019-20 2020-21 2021-22

Annual Average WPI lndex 114.88 119.79 121.80 '123.38

lncrease (%) 4.28% 1.68% 1.29% 2.42%

FY FY FY FY FY2017-18 20r8-r9 2019-20 2020-21 2021-22

AnnualAverage CPI lndex 284.42 299.92 322.50 338.69

lncrease (%) 5.45% 7.53% 5.02% 6.00%

1

2

3

Employee Expenses

Administrative and General Expenses


150.68

3.88

9.83

Total Operation and Maintenance Expenses 164.39

\Jammu and Kashmir Power Transmission Corporation Limited

Sr. No. Particulars


4.3.1.The details of Capital expenditure lnFY 2021-22 (updated up to 31'. December 2021) are as

follows:

Table 18: Details of capex during FY 2021-22 (actuats up to December 2O2r) (Rs. crores)

4.3.2.The details of Capitalexpenditure, capitalization and CWIP are provided in Form F 3.1, F 3.2

and F 3.3 respectively.

4.3.3.The Hon'ble Commission is requested to approve the above said capital expenditure, works

capitalized and CWIP of JKPTCL during FY 2021-22.

4.4. Depreciation

4.4.1.|t is submitted that asset additions/ capitalized assets during FY 2021-22 are projected to be

funded through capital grants from the Government only and JKPTCL has not taken any

capital loan and/ or infused equity to create assets till FY 2021-22.

4.4.2.As specified in regulation2S.4 (c) and additional proviso of regulation 30.1 of theJERC Goa


assets created from grant is not allowed. Relevant excerpts are reproduced here as follows:

Regulation 25.4 (c)

't) depreciation to the extent of works per{ormed through consumer contribution,

deposk work, capital subsidy or grant shall not be allowed as specified in

Regulation 30;"

Reeulation 30.1


0.02 2.90 2.92

38.13 5't.83

0.35 9.56PM's Package for Flood

State Plan 't0.25 31.07 41.32Total 38.75 83.11 12t.86

Ok-

Name of capex Scheme fammu Region Kashmir Region Total

PMDP

PMRP

0.00 0.11

0.11PSDF 5.57 10.55 16.12

'30' / The value base for the purpose of depreciation shalt be the capihl cost of the assetadmitted by the Commission:

Provided that the depreciation shan be arowed after reducing the approvedorigrnar cost of the retired or repraced or decapitarized assets:

Provided also that the no depreciation shatt be allowed on the assets financedthrough consumer contribution, deposit work capital subsidy orgrant.,,

4'4'3'1n line with the above said provisions' JKPTCL has claimed nir depreciation (Depreciation asper regulatory accounts) on assets during FY 2o1g-20 in the instant petition.

4'4'4'The Hon'ble commission is requested to approve nil depreciation during F( 2021-zz forJKPTCL.


4'5'1'lt is projected that, the assets created/ capitalized byJKprcl in Fy 2021-22arenot fundedby capital loans of long-term tenure.

4'5'2'As specified in regulation 25.a (e) and regulati on 28.7 of the JERC Goa and UTs (Generation,

Transmission and Distribution) Regutations 2018, interest on loan capitalon financiat suppoftcorresponding to grant. Relevant excerpt is reproduced here as foilows:

"BeSula(lsn25.4_(e)

"e) provisions related to interest on loan capitat, as specified in Regulation 2g shalt notbe applicable to the extent of financial support provided through consumer

contribution, deposh work, capital subsidy or grant.,,

Regutation 28.7

"The above interest computation shall exclude the interest on loan amount, normative

or otherwise, to the extent of capital cost funded by consumer contribution, dep<>sit

work, capital subsidy or grant, carried out by Transmission Licensee or Distribution

Licensee."

4.5.3.Accordingly,JKPTCL vide instant petition claims nil interest on loan capitalfor Fy 2OZ1-ZZ.

tammu and Kashmir Power Transmission corporation Limited\,

The Hon'ble commission is requested to approve nil interest on roan capital during Fy 2oz1-22foTJKPTCL.


4'6'1'As per Regulation 42.1of theJERC Goa and UTs (Generation, Transmission and Distribution)Regulations 2018, the transmission ticensee shatl be allowed interesr on the estimated levelof working capital for the Financial year in accordance with prevalent cERC Tariff Regutations.

4'6'2'Regulation 34 (1) (c) of the cERc (Terms and conditions of rariff) Regulations ,zo19sper:ifiesfollowing components of working capitar for transmission ricensee:

" (c) For Hydro Generating station (inctuding Pumped storage Hydro Generating


(t) Receivabres equivarent to 4s days of annuar fixed cost;

(ii) Maintenance sPares @ /5% of operation and maintenance expenses


(iit) operation and maintenance expenses, including security expenses for one month.,,4'6'3'Accordingly, the Licensee has considered the components of normative working capital to

arrive at the normative working capital requirement. Fufther, Regulation 34 (2)of the CERC(Terms and conditions of rariff) Regulations, 2o1g specifies the rate of interest to be


reproduced below:

" (3) Rate of interest on working capital shatl be on normative basis and s,hall

be considered as the bank rate as on 1.4.2019 or as on lst April of the year during

the tarrffperiod 20/9-24 in which the generating station or a unit thereof orthe transmission ,lstem including communication system or element thereof, as

the case may be, is declared under commercialoperation, whichever is later:

Provided that in case of truing-up, the rate of interest on working capital shall be

considered at bank rate as on lst April of each of the financial year during the tariffperiod 2019-24;'


4'6-4'The cERc rariff Regutations 2019 defines Bank rate as l-year sBl MCLR as on 1,. April ofFinancial year plus 350 basis points. Accordingly, the Licensee has considered the SBI MCLR

of 8'55% as on'1" Aprit 2019a (True up year) and accordingly, bank rate of 1z.os%

(8j5%+3.5%). The normative interest on working capital for Fy zo21-2zis as follows:

Table 19: Normative Working Capitat for Fy 2O2t-22

4.6.5.!t is pertinent to mention that JKPTCL has not avaited any actual loan towards funding

working capital. Further, Regulation 34 (4) of the CERC (Terms and conditions of Tariff)

Regulations,2019 specifies that the interest on working capital shall be payable on normative

basis notwithstanding actual loan to fund the working capital requirement. The excerpt of

the Regulations is as follows:

" (4) lnterest on working capital shall be payable on normative basis

notwithstanding that the generating compan)/ or the ransmission licensee has

not taken loan for working capital from any outside agency.,'

4.6.6.Accordingly, the Licensee requests the Hon'ble Commission to approve the normative

interest on working capital for FY 2021-22.

a Source: https://sbi.co.in/web/interest-rates/interest-rates/mclr-historical-data

O&M Expenses equivalent to .l monthMaintenance Spares @15% of the O&M expensesincluding security depositReceirrables equivalent to 45 days of AFCWorking Capital RequirementLess: Amount of security deposit from TransmissionSystem Users

Net Working Capital Requirement (yearty)lnterest Rate (%)

13.70

24.66

21.15

59.510.00

59.5112.05%

Normative lnterest on

!-=--..--.-.. - ---) tr- -a----!-- h_-,--_- +___ --jaminu and Kashmii- irowei' Transmission corpo.,ation Linriteri 4B

Sr.No.

3

45

67

4.7. Return on Eguity

4'7'1'lr is proiected that, the assets created/ capitalized by JKprcL in Fy 2021-22 wilt not befinanced by way of equity.

4'7'2'As specified in regutation2S.4 (d) of theJERC Goa and UTs (Generation, Transmission andDistribution) Regulations 2018, return on equity is not appticable on financial supportcorresponding to grant. Relevant excerpt is reproduced here as follows:

"d) provisions related to return on equity, as specilied in Regulation 2Z shatt not beapplicable to the extent of linancial support provided through consumer contribution,deposit work, capital subsidy or grant;,,

4.7.3.Accordingly, JKPTCL claims nit Return on Equity (RoE) for Fy 2021-22.

4'7 '4'The Hon'ble Commission is requested to approve nil Return on Equity (RoE) durin gFy ZOZI-

22for JKPTCL.

4.8.lncome Tax

4'8"t'lt is submitted that,JKPTCL has not filed income tix returns for Fy zo21-zz.However, in

case in the future is there is any tax demand from the Authorities, JKPTCL reserves its right

to claim the reimbursement of such income titx expenses paid in the future.

4.9. Contribution to Contingency Reserves

4'9'1'lt is submitted that,JKPTCL being a new Corporation has no sources of revenue of its own

and currently it is completely dependent on Gran-in-aid revenue from Government for itsfunctioning. Therefore, no contribution has projected to be made towards contingency

reseryes in FY 2021-22- Therefore, there is no interest income projected from contribution

to contingency reserves in FY 2021-22.


4.10. Performance parameters


ln FY 2021-22JKPTCL has estimated totat transmission system level losses at 3.3g% whichis based on actual data titl December 2021 andestimate for 3-month period. The month-wise details of transmission system losses tilt December2o2lare provided in Form F10.

The actual transmission system toss level will be submitted to the Hon,bte commissionat the time of True up of Fy 2021_22.

4.10.2. Transmission System Availability

ln FY 2021-22 JKPTCL has estimated transmission sysrem availability of around 9g7J.

The actual transmission system avaitability for FY 2021-zzwill be submitted to theHon'ble commission at the time of rrue up of Fy 2021-?2.


4'11'1' JKPTCL has projected nil income from non-tariff sources in Fy 2021-2. JKpTcL wouldsubmit the actual value of non-tariff income (if any) at the time of True up of Fy 2021-22.

4.12. Aggregate Revenue Requirement for Fy ZOZ|-22

4'12'1' ln line with above, summary of expenses of JKPTCL during Fy zozl-z2as per the JERC

Goa and UTs (Generation, Transmission and Distribution) Regulations 201g adopted by the

Hon'ble Commission vide JERC for UT of J&K and UT of Ladakh (Adoption of various

Regulations of JERC for the state of Goa and UTs) Regulations, 2021 is tabulated as follows:

Table 2o: APR summary oflKprcl for Fy 2o2r-22 (in Rs crore)

1

2

3

Operation & Maintenance ExpensesDepreciation

164.39


Particulars Amount (in Rs.

Crore

lnterest on long term loans

4

5

6

7

8

9

t011

lnterest on Working Capital and deposits from TSUsContribution to Contingency reservesReturn on Equity Capitallncome TaxAggregate Revenue RequirementLess: Non-Tariff lncomeLess: lncome from Other Business

Less: Revenue from short-term transmissionAggregate Revenue Requirement from

4'12.2. The Hon'ble Commission is requested to approve APR of JKpTCL for Fy 2021-22.

\,Jammu and Kashmir Power Transmission corporation Limited

51

Sr.

No.

7.17

ffi.5;

Petition for True up o! FY zolg-zo,APR of Fy 2O2O-21, ApR of Fy 2021-22,ARR of Fy2022-23 and Tariff proposalfor Fy ZOZ2-Z}

5. chapter 5 ,\ggregare Revenue Requirement of Fy zazz-z3

5.1. lntroduction

5'1'1'The Hon'ble Commission vide gazette notification dated 31st March 2021 issued JERC forUT of J&K and UT of Ladakh (Adoption of various Regulations of JERC for the srate of Goaand UTs) Regulations, 2021 through which JERC Goa and UTs (Generation, Transmission

and Distribution) Regulations,2olS are adopted by the Hon'bte Commission up to one year

or till replacement of corresponding regulation are framed by the Hon'ble Commission forthe purpose of tariff determination for the UT of J&K and UT of Ladakh.

5'1'2'As specified in the regulation of 11.3 of the prevailing JERC Goa and UTs (Generation,

Transmission and Distribution) Regulations 2o18, JKPTCL is submitting Aggregate Reyenue

Requirement of FY 2022-23 as Paft of the instant petition. The relevant excerpt is reproduced

here as follows:

"/ /.3 The scope of the annual petformance reviet truing up and tariffdetermination shall be......

,) Tariff determination for the ensuing Year of the Controt period based on,0" ,:,rU", forecast of the Aggregate Revenue Reguirement for the year;

5.1.3.The ARR for FY 2022-23 is projected based on data/ information for FY ZOZ1-22, estinlares

and certain assumptions which are specified in this petition.


5.2.1-The Operations and Maintenance Expenses (O&M Expenses) are estimated basecl on

Regulations 41 of the JERC Goa and UTs (Generation, Transmission and Distribution)

Regulations 2018.


5'2'2'Regulation 41'5 of the JERC Goa and urs (Generation, Transmission and Distribution)Regulations 2018 specifies that, for the purpose of estimation of the o&M expenses, thesame value of factors - cPl inflation and WPI inflation shafl be used for all years of thecontrol Period' Accordingly, cPl inflation and wPl inflation as derived at section 4.2 0f thisPetition are considered for projecting ARR of Fy ZOZ2-23.

5'2'3' ln line with above, totat o&M expenses estimated byJKprcL during Fy zoz2-z3are tabulatedas follows:

5'2'4'The Hon'ble commission is requested to approve the estimated operation and maintenance

expenses foTJKPTCL during Fy 2022_23.

5.3. Capital Expenditure, Capialisation and CWlp

5'3.'1.The details of projected Capital expenditure inFY 2022-23 are as follows:

Table 22: Details of projected capex during Fy 2o22-2J (Rs. crores)

53

Table 21: Proiected operation and Maintenance Expenses for Fy 2o22-23 (in Rs. crore)

1

2

3

Administrative and General Expenses


't59.72

4.12

10.06Total Operation ana U*nt

Creation of New 22O kV Grid Stations

at existing 220kV Grid StationsAugmentation of Transformation

220kY Transmission Lines

Creation of new 220kV LineCreation of New 132166-33 kV GridStations


Amount(in Rs. crores)

Name of Capex Scheme Kashmir Region Totat

Construction of Transformation

164 170

q_

Augmentation of 132165-33kV level at

1 32kV transmission tinesCreation of new 132kV Line Bays

Creation of new 66kV or 33kV line baysfor evacuation ofReactive compensation at 33 kV or 66

Other Miscellaneous Works

5'3'2'The details of Capitat expenditure, capitalization and cwlp are provided in Form F 3.1, F 3.2and F 3.3 respectively

5'3'3'The Hon'ble commission is requested to approve the above said capital expenditure, works

capitalized and CWlp of JKpTCL during Fy ZO22_21.

5.4. Depreciation

5'4'1'lt is submitted that asset additions/ capitatized assets during Fy 2o2z-23are projected to be

funded through capital trants from the Government onty and JKpTCL has not taken any

capital loan and/ or infused equity to create assets till Fy 2022-23.

5'4'2'As specified in regulation25.4 (c) and additional proviso of regulation 30.1 of theJERC Goa


assets created from capital grants are not allowed. Relevant excerpts are reproduced here as

follows:

*T#r"ciation to the extent of work performed through consumer contribution,

deposit work, capitat subsidy or grant shall not be allowed as specifictd in

Regulation 30;"

Regulation 30.1

"30. / The value base for the purpose of depreciation shall be the capital cost of the ,tsset



Provided that the depreciation shatt be ailowed after reducing the approvedorigtnal cost of the reilred or repraced or decapitarized assets:

Provided arso that the no depreciation sharl be arlowed on the assets r,inancedthrough consumer contribution, deposit work, capitar subsidy or grant ,,

5'4'3'ln line with the above said provisions,JKPTCL has ctaimed nir depreciation (Depreciarion asper reguratory accounts) on assets during Fy 2o1g_2oin the instant petition.

5'4'4'The Hon'ble commission is requested to approve nit depreciation during Fy 2022-23 forJKPTCL,

5.5.lnteresr on Long Term loans

5'5'1'lt is projected that, the assets created/ capitalized byJKprcL inFy 2022-23 are not fundedby capital loans of long-term tenure.

5'5'2'As specified in regulation 25.a (e) and regulation2S.T of theJERC Goaand urs (Generation,Transmission and Distribution) Regulations 2018, interesr on loan capital on financial suppoftcorresponding to grant. Rerevant excerpt is reproduced here as fo[ows:

'nesu!at!s25.4-(e)

"e) provisions related to interest on loan capial, as specified in Regulation 2g, shatt notbe applicable to the extent of financial support provided through consumercontribution, deposit work capital subsidy or grant.,,

Regulation 2BJ

"The above interest computation shall exclude the interest on loan amount, normative

or otherwise, to the extent of capital cost funded by consumer contribution, deposit

work, capital subsidy or ?rant, carried out by Transmission Licensee or DistributionLicensee.',

5'5'3'Accordingly, JKPTCL vide instant petition claims nil interest on loan capital for Fy zoz2-23.

5'5'4'The Hon'ble Commission is requested to approve nil interest on loan capital during ry 2o2z-23 foTJKPTCL.

JammuandKashmirPowerTransmissionCorporationLimited


5'6'1'As per Regulation 42-1of the JERC Goa and UTs (Generarion, Transmission and Distribution)Regulations 2018, the transmission ticensee shall be allowed interest on the estimated level

of working capital for the Financiat year in accordance with prevalent cERC Tariff Regutations.

5'6'2'Regulation 34 (1) (c)of the cERc (Terms and conditions of rariff) Regulations ,zolgspecifiesfollowing components of working capitar for transmission ticensee:

" (c) For Hydro Generating Station (including Pumped Storage Hydro Generaticg


(i) Receivabres equivarent to 45 days of annuar fixed cost;

(ii) Maintenance sPares @ 15% of operation and maintenance expenses


(iii) operation and maintenance expenses, including security expenses for one Dtor1th.,,

5'6'3'Accordingly, the Licensee has considered the components of normarive working capiitat toarrive at the normative working capital requirement. Further, Regutation 34 (2) of the CERC

(Terms and conditions of Tariff) Regulations, 2O1g specifies the rate of interest to be


reproduced below:

" (3) Rate of interest on working capital shatl be on normative basis and shall

be considered as the bank rate as on /.4.2019 or as on / st April of the year cluring

the tariff period 20/9-24 in which the generating station or a unit there<>f orthe transmission s/stem including communication system or element there<>f, xthe case may be, is declared under commercial operation, whichever is later:

Provided that in case of truing-up, the rate of interest on working capital shall be,

considered at bank rate as on lst April of each of the financial year during the tariff

period 2019-24;'

5.6.4.The CERC Tariff Regulations 2019 defines Bank rate as 1-year SBI MCLR as on 1,. April of

Financial year plus 350 basis points. Accordingly, the Licensee has considered the SBI MCLR


ladakh revised approval of june 22

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