gescom - karnataka orders/tariff 2017/ge… · · 2017-04-121.1 gescom at a glance 5 ... 3.3 list...

KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2017

OF

GESCOM

ANNUAL PERFORMANCE REVIEW FOR FY16

&

REVISION OF ANNUAL REVENUE REQUIREMENT

FOR FY18

&

REVISION OF RETAIL SUPPLY

TARIFF FOR FY18

11th April 2017

6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001

Phone: 080-25320213 / 25320214

Fax : 080-25320338

Website: www.karnataka.gov.in/kerc - E-mail: [email protected]

http://www.karnataka.gov.in/kerc

ii

C O N T E N T S

CHAPTER Page No. 1 Introduction 3

1.0 Gulbarga Electricity Supply Company Ltd., 3

1.1 GESCOM at a Glance 5

1.2 Numbers of Consumers, Sales in MU and revenue

details of GESCOM

5

2 Summary of Filing & Tariff Determination Process 7

2.0 Background for Current Filing 7

2.1 Preliminary Observations of the Commission 7

2.2 Public Hearing Process 8

2.3 Consultation with the Advisory Committee of the

Commission

9

3.0 Public Consultation 10

3.1 Suggestions / Objections and replies 10

3.2 List of Persons who filed written objections 11

3.3 List of the persons, who made oral submissions

during the public hearing

13

4 Annual Performance Review for FY16 14

4.0 GESCOM’s Application for APR for FY16 14

4.1 GESCOM’s Submission 14

4.2 GESCOM’s Financial Performance as per

Audited Accounts for FY16

16

4.2.1 Sales for FY16 17

4.2.2 Distribution Losses for FY16 24

4.2.3 Power Purchase for FY16 25

4.2.4 RPO Compliance by GESCOM for FY16 28

4.2.5 Operation and Maintenance Expenses 31

4.2.6 Depreciation 34

4.2.7 Capital Expenditure for FY16 35

4.2.8 Interest and Finance Charges 48

4.2.9 Other Debits 52

4.2.10 Net Prior Period Charges 52

4.2.11 Return on Equity 53

4.2.12 Income Tax 55

4.2.13 Other Income 55

4.2.14 Funds towards Consumer Relations /Consumer

Education

55

4.2.15 Carrying Cost on regulatory Asset 56

4.2.16 Revenue for FY16 57

4.2.17 Subsidy for FY16 57

4.3 Abstract of Approved ARR for FY16 57

4.3.1 Gap in Revenue for FY16 58

5.0 Annual Revenue Requirement for FY18

GESCOM’s Filing

60

5.1 Annual Performance Review for FY16 60

5.2 Revised Annual Revenue Requirement for FY18 61

5.2.1 Capital Investments for FY18 61

iii

5.2.2 Sales Forecast for FY18 65

5.2.3 Distribution Losses for FY18 75

5.2.4 Power Purchase for FY18 76

5.2.5 RPO Target for FY18 80

5.2.6 O & M Expenses for FY18 82

5.2.7 Depreciation 85

5.2.8 Interest on Capital Loans 87

5.2.9 Interest on Working Capital 88

5.2.10 Interest on Consumer Security Deposit 89

5.2.11 Interest and other expenses Capitalized 90

5.2.12 Other Debits and Prior period charges: 91

5.2.13 Return on Equity 91

5.2.14 Other Income 93

5.2.15 Fund towards Consumer Relations / Consumer

Education

93

5.2.16 Contribution towards Pension and Gratuity Trust 94

5.3 Abstract of Revised ARR for FY18 95

5.4 Segregation of ARR into ARR for Distribution

Business and ARR for Retail Supply Business

97

5.5 Gap in Revenue for FY18 98

6 Determination of Tariff for FY18 100

6.0 GESCOM’s Proposal and Commission’s Analysis

for FY18

100

6.1 Tariff Application 100

6.2 Statutory Provisions Guiding Determination of

Tariff

100

6.3 Consideration for Tariff setting 101

6.4 New Tariff Proposals by GESCOM 102

6.5 Revenue of existing tariff and deficit for FY18 108

6.6 Wheeling and Banking Charges 137

6.6.1 Wheeling within GESCOM area 138

6.6.2 Wheeling of Energy using Transmission network or

network of more than one licensee

139

6.6.3 Charges for Wheeling of energy by RE sources

(non REC route) to consumers in the State

140

6.6.4 Charges for Wheeling Energy by RE sources

wheeling energy from the state to a

consumer/others outside the State and for those

opting for renewable energy certificate

141

6.6.5 Banking Charges and Additional Surcharge 141

6.7 Cross Subsidy Charges(CSS) 142

6.8 Other Issues 145

6.8.1 Tariff for Green Power 145

6.9 Other tariff related issues 145

6.10 Cross Subsidy Levels for FY18 147

6.11 Effect of Revised Tariff 148

6.12 Summary of the Tariff Order 149

6.13 Commission’s Order 150

APPENDIX 152

APPENDIX – I 192

iv

LIST OF TABLES

Table

No.

Content Page

No.

4.1 ARR for FY15 – GESCOM’s Submission 15

4.2 Financial Performance of GESCOM for FY16 16

4.3 GESCOM’s Accumulated Profit / Losses 17

4.4 Approved & Actuals Sales for FY16 18

4.5 Format for IP set Consumption as per feeder-wise

data

21

4.6 Approved Sales for FY16 24

4.7 Penalty for exceeding targeted loss levels in FY16 25

4.8 Power Purchase for FY16-Approved and Actuals 26

4.9 Shortfall in Supply of Power from KPC/RE Sources 27

4.10 RPO Compliance by GESCOM for FY16 28

4.11 Non-solar RPO Compliance by GESCOM 29

4.12 Solar RPO Compliance by GESCOM 30

4.13 O & M Expenses – GESCOMS’s Submission 31

4.14 Approved O & M Expenses as per Tariff Ordered

dated 02.03.2015

31

4.15 Computation of Allowable inflation Rate 32

4.16 Normative O & M Expenses 33

4.17 Allowable O & M Expenses for FY16 33

4.18 Allowable Depreciation for FY16 35

4.19 Capital expenditure of GESCOM FY16 36

4.20 Summary of categories of works 39

4.21 Summary of sampling process for conducting

prudence check

40

4.22 Category wise details of the works in the selected

sample

40

4.23 Gist of Prudence check findings for FY16 42

4.24 Details of non-prudent project 42

4.25 Summary of works having cost overrun 43

4.26 Summary of cost over-run of projects in the category

of works

44

4.27 Summary of Works having time overrun 44

4.28 Summary of time over-run of projects in the category

of works

44

4.29 Details of Amounts disallowed in APR FY16 45

4.30 Inventory levels and utilization 47

4.31 Allowable Interest on Loan – FY16 49

4.32 Allowable Interest on Working Capital for FY16 50

4.33 Allowable Interest and Finance Charges 52

4.34 Allowable Other Debits 52

4.35 Status of Debt Equity Ratio for FY16 53

4.36 Allowable Return of Equity 54

4.37 Return on equity for the additional equity received

during FY16

54

v

4.38 Approved revised ARR for FY16 as per APR 57

5.1 Revised ARR for FY18 –GESCOM’s submission 60

5.2 Details of capex proposal of GESCOM for FY18 62

5.3 Approved Energy of IP sets installations 71

5.4 Format for furnishing IP set consumption 73

5.5 GESCOMs Approved Energy for FY18 74

5.6 Approved & Actual Distribution Losses –FY11 to FY16 75

5.7 Approved Distribution Losses for FY18 76

5.8 Power purchase cost filed by GESCOM for FY18 77

5.9 Approved Power Purchase Quantum & Cost for the

State

79

5.10 Approved Power Purchase Cost of GESCOM for FY18 80

5.11 Anticipated RE capacity in FY17 &FY18 81

5.12 Revised O&M Expenses for FY18 –GESCOM’s Proposal 83

5.13 Approved O&M Expenses for FY18 as per Tariff Order 83

5.14 Approved O&M expenses for FY18 85

5.15 Depreciation FY18 –GESCOM Submission 85

5.16 Approved Depreciation for FY18 86

5.17 Interest on capital Loan –GESCOM’s submission 87

5.18 Approved interest on Loans for FY 18 88

5.19 Approved interest on working Capital for FY18 89

5.20 Approved interest on consumer security deposits for

FY18

90

5.21 Approved interest and finance charges for FY18 90

5.22 Return on Equity –GESCOM’s Submission 91

5.23 Status of Debit Equity Ratio for FY18 92

5.24 Approved Return on Equity for FY18 93

5.25 Approved Revised ARR for FY18 96

5.26 Approved Segregation of ARR-FY18 97

5.27 Approved Revised ARR for Distribution Business-FY18 97

5.28 Approved ARR for Retail Supply Business-FY18 98

5.29 Revenue gap for FY18 99

6.1 Revenue Deficit for FY18 108

6.2 Wheeling Charges 138

vi

LIST OF ANNEXURES

SL.NO. DETAILS OF ANNEXURES Page

No.

I Total Approved Power Purchase Quantum and Cost

of all ESCOMs for FY18

204

II Approved Power Purchase quantum and cost of

GESCOM for FY18

207

III Proposed and approved Revenue for FY18 210

IV Electricity Tariff – 2018 211

vii

ABBREVIATIONS

AAD Advance Against Depreciation

AEH All Electric Home

ABT Availability Based Tariff

A & G Administrative & General Expenses

ARR Annual Revenue Requirement

ATE Appellate Tribunal for Electricity

BST Bulk Supply Tariff

CAPEX Capital Expenditure

CCS Consumer Care Society

CERC Central Electricity Regulatory Commission

CEA Central Electricity Authority

CPI Consumer Price Index

CWIP Capital Work in Progress

DA Dearness Allowance

DCB Demand Collection & Balance

DPR Detailed Project Report

EA Electricity Act

EC Energy Charges

ERC Expected Revenue From Charges

ESAAR Electricity Supply Annual Accounting Rules

ESCOMs Electricity Supply Companies

FA Financial Adviser

FKCCI Federation of Karnataka Chamber of Commerce & Industry

FR Feasibility Report

FoR Forum of Regulators

FY Financial Year

GESCOM Gulbarga Electricity Supply Company

GFA Gross Fixed Assets

GoI Government Of India

GoK Government Of Karnataka

GRIDCO Grid Corporation

HP Horse Power

HRIS Human Resource Information System

ICAI Institute of Chartered Accountants of India

IFC Interest and Finance Charges

IW Industrial Worker

IP SETS Irrigation Pump Sets

KASSIA Karnataka Small Scale Industries Association

KEB Karnataka Electricity Board

KER Act Karnataka Electricity Reform Act

KERC Karnataka Electricity Regulatory Commission

KM/Km Kilometre

KPCL Karnataka Power Corporation Limited

viii

KPTCL Karnataka Power Transmission Corporation Limited

KV Kilo Volts

KVA Kilo Volt Ampere

KW Kilo Watt

KWH Kilo Watt Hour

LDC Load Despatch Centre

MAT Minimum Alternate Tax

MD Managing Director

MFA Miscellaneous First Appeal

MIS Management Information System

MoP Ministry of Power

MU Million Units

MVA Mega Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

NFA Net Fixed Assets

NLC Neyveli Lignite Corporation

NCP Non Coincident Peak

NTP National Tariff Policy

O&M Operation & Maintenance

P & L Profit & Loss Account

PLR Prime Lending Rate

PPA Power Purchase Agreement

PRDC Power Research & Development Consultants

REL Reliance Energy Limited

R & M Repairs and Maintenance

ROE Return on Equity

ROR Rate of Return

ROW Right of Way

RPO Renewable Purchase Obligation

SBI State Bank of India

SCADA Supervisory Control and Data Acquisition System

SERCs State Electricity Regulatory Commissions

SLDC State Load Despatch Centre

SRLDC Southern Regional Load Dispatch Centre

STU State Transmission Utility

TAC Technical Advisory Committee

TCC Total Contracted Capacity

T&D Transmission & Distribution

TCs Transformer Centres

TPC Tanirbavi Power Company

TR Transmission Rate

VVNL Visvesvaraya Vidyuth Nigama Limited

WPI Wholesale Price Index

WC Working Capital

ix

KARNATAKA ELECTRICITY REGULATORY COMMISSION,

BENGALURU - 560 001

Dated 11th April, 2017

In the matter of:

Application of GESCOM in respect of the Annual Performance Review for

FY16, Revision of Annual Revenue Requirement for FY18 and Revision of Retail

Supply Tariff for FY18, under Multi Year Tariff framework.

Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member

Shri D.B.Manival Raju Member

O R D E R

The Gulbarga Electricity Supply Company Ltd., (hereinafter

referred to as GESCOM) is a Distribution Licensee under the

provisions of the Electricity Act, 2003, and has, on 30.11.2016, filed

the following applications for consideration and orders:

a) Review of Annual Performance for the financial year 2015-16

(FY16 ) and approval of revised ARR thereon.

b) Approval of Revised ARR for the financial year 2017-18 (FY18).

c) Approval for revision of Retail Supply Tariff, for the financial

year 2017-18 (FY18).

x

In exercise of the powers conferred under Sections 62, 64 and other

provisions of the Electricity Act, 2003, read with the KERC (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations 2006, as amended and other enabling

Regulations, the Commission has considered the applications and the

views and objections submitted by the consumers and other

stakeholders. The Commission’s decisions are brought out in the

subsequent Chapters of this Order.

xi

CHAPTER – 1

INTRODUCTION

1.0 Gulbarga Electricity Supply Company Ltd.:

The Gulbarga Electricity Supply Company Ltd., (GESCOM) is a

Distribution Licensee under Section 14 of the Electricity Act, 2003

(hereinafter referred to as the Act). The GESCOM is responsible for

purchase of power, distribution and retail supply of electricity to its

consumers and also providing infrastructure for Open Access,

Wheeling and Banking in its area of operation which includes six

Districts of the State as indicated below:

1. Bellary

2. Bidar

3.

Kalaburagi

4. Koppala

5. Raichur

6. Yadgir

The GESCOM is a company registered under the Companies Act, 1956,

incorporated on 30th April, 2002 and commenced its operations on

1stJune, 2002.

At present GESCOM’s area of operations is structured as follows:

xii

O&M Zones O&M Circles O&M Divisions

Gulbarga zone

Gulbarga Circle

Gulbarga CSC Division

Gulbarga Rural-I Division

Gulbarga Rural-II Division

Sedam Division

Bidar Circle

Bidar Division

Humnabad Division

Yadagir Division

Bellary Zone

Bellary Circle

Bellary CSC Division

Bellary Rural Division

Hospet Division

Rural Division

Raichur Circle

Raichur CSC Division

Raichur Rural Division

Sindanoor Division

Gangavathi Division

Koppal Division

The O & M divisions of GESCOM are further divided into sub-divisions.

Each sub-division is having two to three O& M section offices.

The section offices are the base level offices looking into operation

and maintenance of the distribution system in order to provide reliable

and quality power supply to GESCOM’s consumers.

xiii

1.1 GESCOM at a glance:

The profile of GESCOM is as indicated below:

1.2 Number of Consumers, Sales in MU and Revenue details of GESCOM in

FY16 is as follows:

CATEGORY

GESCOM for 2015-16

No. of

Installation

Sales in

MU

Revenue

in Rs.Crs.

Domestic 2080554 1151.25 609.95

Commercial 229654 345.21 283.26

Industrial 57362 1169.87 780.07

Agriculture 331139 3300.74 1481.15

Others 55667 540.72 332.62

Total 2754376 6507.79 3487.05

Sl.

No. Particulars (As on 30-09-2016) Statistics

1. Area Sq. km. 43861

2. Districts Nos. 6

3. Taluks Nos. 31

4. Population lakhs 121.10

5. Consumers lakhs 27,95,607

6. Energy Consumption for

FY16

MU 2,991.55

7. Zone Nos. 2

8. DTCs Nos. 81,457

9. Assets Rs. in

Crores 2994.73

10. HT lines Ckt. kms 53268.48

11. LT lines Ckt. kms 83395.79

12. Total employees

strength:

A Sanctioned Nos. 10330

B Working Nos. 6104

13. Revenue Demand Rs. in

Crores 1756.22

14. Revenue Collection Rs. in

Crores 1693.77

xiv

GESCOM has filed its application for approval of Annual Performance Review

for FY16, Revision of Annual Revenue Requirement (ARR) for FY18 and

revision of Retail Supply Tariff for FY18.

GESCOM’s application, the objections / views of stakeholders thereon and the

Commission’s decisions on the approval of Annual Performance Review for

FY16, Revision of ARR for FY18 and Revision of Retail Supply Tariff for FY18

are discussed in detail in the subsequent Chapters of this Order.

xv

CHAPTER – 2

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

The Commission in its Tariff Order dated 30th March, 2016 had

approved the ARR for FY17 to FY19 and Revised Retail Supply Tariff of

GESCOM for FY17 under the MYT principles for the control period of

FY17 to FY19. GESCOM in its present application filed on 30th

November, 2016, has sought approval for the Annual Performance

Review (APR) for FY16 based on the audited accounts, Revision of ARR

for the second year of the fourth control period i.e. FY18 and revision of

Retail Supply Tariff for FY18.

2.1 Preliminary Observations of the Commission:

After a preliminary scrutiny of applications the Commission had

communicated its observations to GESCOM on 21st December, 2016,

which were mainly on the following points:

Capital Expenditure

Sales Forecast

Projected IP set consumption for FY 18

RPO Compliance

Wheeling and Banking

Cross subsidy surcharge

Power Purchase

Issues pertaining to items of revenue and expenditure

Energy flow diagram

Compliance to Directives

xvi

In response, GESCOM had furnished its replies on 30th December, 2016. The

Commission had issued Rejoinders to the replies vide Commission letter

dated 10th January, 2017, the replies to the Rejoinder were received vide

letter dated 16th January 2017. The replies furnished by GESCOM are

considered in the respective Chapters of this Order.

2.2 Public Hearing Process:

As per the Karnataka Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations 2006, read with the KERC Tariff Regulations,

2000, and KERC (General and Conduct of Proceedings) Regulations,

2000, the Commission in its letter dated 04th January, 2017 treated the

application of GESCOM as a petition and directed GESCOM to publish

the summary of ARR and Tariff proposals in the newspapers calling for

objections, if any, from the interested persons.

Accordingly, the GESCOM has published the same in the following

newspapers:

Name of the News Paper Language Date of Publication

The Hindu English 08-1-2017

&

09-1-2017

Times of India

Samyukta Karnataka Kannada

Prajavani

The GESCOM’s application on APR of FY16, Revision of ARR for FY18 and

revision of retail supply tariff for FY18 was also hosted on the web-sites of the

GESCOM and the Commission for the ready reference and information of the

general public.

In response to the application of GESCOM, the Commission has received

eight statements / letters of objections. GESCOM has furnished its replies to

all these objections. The Commission has held a Public Hearing on 6th

March, 2017, at Gulbarga. The details of the written / oral submissions made

by various stakeholders and the responses from GESCOM thereon have

been discussed in Chapter – 3 / Appendix to this Order.

xvii

2.3 Consultation with the Advisory Committee of the Commission:

The Commission has also discussed the proposals of KPTCL and all

ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.

During the meeting the following important issues were also discussed:

Performance of KPTCL / ESCOMs during FY16

Major items of expenditure of KPTCL / ESCOMs for FY18

Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while

passing the Order.

xviii

CHAPTER – 3

PUBLIC CONSULTATION

SUGGESTIONS / OBJECTIONS & REPLIES

3.1 As per the provisions of Section 64 of the Electricity Act, 2003, the

Commission undertook the process of public consultation, in order to

obtain suggestions/views/objections from the interested stake-

holders, on the application filed by GESCOM for Annual Performance

Review for FY16 and approval of Revised Annual Revenue

Requirement for FY18 revised retail supply tariff for FY18 under the MYT

Principles. In the written submissions as well as during the public

hearing, the stake-holders and the general public have raised several

objections/ made suggestions, on the Tariff Application.

The names of the persons who have filed written objections and

made oral submissions are given below:

List of persons who filed written objections

Sl.

No

Application

No. Name & Address of Objectors

1 AE-01 Sri. Prem Chand, Chief Electrical Traction Engineer,

South Western Railway.

2 AE-02 Smt. Shroti Bhatia, VP (Regulatory Affairs &

Communication), Indian Energy Exchange.

3 GB-01 Hyderabad Karnataka Chamber of Commerce &

Industry.

4 GB-02 Sri. Ramu B. Pawar, Rajapur, Kalaburagi.

5 GA-01 Hyderabad Karnataka Environment Awareness &

Protection Organization.

6 GA-02 Laghu Udyog Bharati - Karnataka

7 GA-03 Sri. Prem Chand, Chief Electrical Traction Engineer,

South Western Railway.

8 GA-04 Sri. B. Praveen, Hon General Secretary, KASSIA.

3.2 List of the persons, who made oral submissions during the Public

Hearing, held on 06-03-2017.

xix

List of persons who made oral submissions during the

Public Hearing

SL No Names & Addresses of Objectors

1 Sri. Deepak G. Gala, Hyderabad Karnataka Environment Awareness &

Protection Organization, Kalaburagi.

2 Sri. Maruthi P. Manpade, President, Karnataka Regional Farmers Sangha,

Kalaburagi.

3 Sri. Ramu B. Pawar, Hyderabad Karnataka RTI Activist, Kalaburagi.

4 Sri. Nirupadappa Jolada Rashi , Bharatiya Kissan Sangha, Sindhanoor.

5 Sri. Yogesh Rao, Renew Power Ventures Pvt Ltd, Bengaluru

6 Sri. Siddu, Bhaaratiya Kissan Sanghaa, Pattan, Gulbarga Taluk.

7 Sri. Siddaramayya Hiremath, President, RTI Activist Association Kalaburagi.

8 Sri. Deepak Nag Punyashetti, Ex- Zilla Parashid President, Kalaburagi.

9 Smt. Anuradha, BCIC, Bengaluru.

10 Sri. Chennaveerappa Salagar, Kalaburagi.

11 Sri. Gundappa Ankalagi, Kalaburagi.

12 Sri. Suryakanth Guddadagi, Kalaburagi..

13 Sri. Lakshmikanth Ganacharya, Kalaburagi.

14 Sri. Ranga Rao, Gangavathi.

15 Sri. S. Basavaraj, Gangavathi

16 Sri. K.Sesha Rao, Gangavathi.

17 Sri B. Umapathi, Sedam.

The gist of the submissions made during the Public Hearing, held on

06.03.2017.

1. Though the distribution loss of GESCOM is stated as 18%, it is as high as

42% in some areas and 11kV feeders have loss in the range of 20 to 39%.

2. The Power purchase from Jurala Hydro station and Sharavathi

generating station at high cost needs to be checked by the

Commission.

3. GESCOM has not levied interest on the receivables of Rs.1148 Crores,

whereas, for the loans availed interest is paid and passed on to the

consumers.

4. IP Set arrears prior to 2008 have to be collected with interest.

5. The excess Capital expenditure increased without the approval of the

Commission should not be allowed.

6. Even though the DTC metering is stated to be carried out, the energy

audit is carried out for only 7% of DTCs.

7. GESCOM has not quantified the results of NJY.

xx

8. GESCOM should install consumer help line service and educate

consumers about the procedures for availing power supply, metering,

etc.

9. The proposal of GESCOM to reduce the Banking to three months is not to

be considered, as it discourages renewable energy.

10. Power supply to the IP sets to should be provided during the day time to

help farmers and avoid accidents.

11. The transformer failure rate is very high and the repairs and replacement

is not happening within time.

12. The GESCOM has not complied with the Directives issued by the

Commission. The rules and regulations are not implemented properly.

13. The GESCOM has not taken any action against the corrupt officers in

spite of complaints quoting specific instances.

14. The subsidy to the IP Sets should be given directly to the farmers.

15. The GESCOM should note that, the HT consumption has reduced by 4%

due to highest energy charges, as compared to other States in South

India.

16. The women appointed for carrying out the works as linemen, are

assigned some other duties other than linemen.

17. The GESCOM is not conducting consumer meetings as per the

requirement in the directives. The Commission should penalize the

companies which are not conducting such meetings.

18. In case of BJ connections, some people are using air conditioners also,

such installations should be billed appropriately.

19. Action should be taken to link the high employee cost to performance

and productivity.

20. The concessional electricity extended to the employees of GESCOM

xxi

should be stopped.

21. The GESCOM has not supplied safety equipment to linemen, resulting in

increased accidents.

22. The farmers of Gangavathi who have invested 25% of the cost of HT Lines

for their IP Sets are being billed under LT4(c) instead of billing under LT4

(a). The Commission should verify and change the tariff.

23. The GESCOM should explore the possibility of providing group meters to

the BJ/KJ installations.

The Managing Director, GESCOM has replied to some of the points raised as

follows:

i. The High cost of power supply was due to fire accident in Sharavathy

station and purchase of power under section 11 of Electricity Act.

ii. If the transformers are not replaced by the concerned officers, they will

be penalized as per SoP.

iii. Toll free No.1912 is in operation which can be utilized for complaints as

well as help.

iv. The theft cases are being registered by the Vigilance officers.

v. A number of DTC meters have become defective and action is being

taken to replace them.

vi. The substandard works will be checked by the TA & QC wing.

vii. Administrative action will be taken against the concerned in cases of

corruption.

viii. The consumer meetings are being held once in three months.

ix. The issue of IP Set installation of farmers of Gangavathi, the

Government has to take a decision.

x. The Group metering for BJ/KJ installations as suggested will be

analyzed. The GESCOM shall furnish replies as other points directly to

the concerned issues relating to tariff and dealt appropriately by the

Commission in the relevant chapters of this Tariff Order.

xxii

3.3 The gist of the written objections, Replies by GESCOM and the

Commission’s Views is appended to this order as Appendix-1.

xxiii

CHAPTER – 4

ANNUAL PERFORMANCE REVIEW FOR FY16

4.0 GESCOM’s Application for APR for FY16:

GESCOM has filed its application for Annual Performance Review (APR)

for FY16 and revision of Annual Revenue Requirement (ARR) along with

revision of retail supply tariff for FY18 on 30th November, 2016. The

GESCOM has sought the Annual Performance Review (APR) for FY16

based on the Audited Accounts and approval of a revised ARR

thereon.

The Commission in its letter dated 20th December, 2016 had

communicated its preliminary observations on the application of the

GESCOM. In its letter dated 30th December, 2016, the GESCOM has

furnished its replies to the preliminary observations of the Commission.

Further, the Commission had sought additional information /details,

through a rejoinder, vide its letter dated 10th January, 2017. The

GESCOM has furnished its replies in its letters dated 16th and 31st

January, 2017.

The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013

had approved the GESCOM’s Annual Revenue Requirement (ARR) for

FY14 – FY16. Further, in its Tariff Order dated 2nd March, 2015, the

Commission had approved the APR for FY14 and had revised the ARR

along with Retail Supply Tariff for FY16.

As per the application filed by the GESCOM, the Annual Performance

Review to revise the Annual Revenue Requirement of the GESCOM for

FY16, based on the audited accounts, is discussed in this Chapter.

4.1 GESCOM’s Submission:

The GESCOM has submitted its proposals for revision of ARR as per APR

for FY16 based on the Audited Accounts as follows:

xxiv

TABLE – 4.1

ARR for FY16 – GESCOM’s Submission Amount in Rs. Crores

Sl.

No Particulars As Filed

1 Energy at Gen Bus in MU 8260.75

2 Energy at Interface in MU 7946.02

3 Distribution Losses in % 18.10

Sales in MU

4 Sales to other than IP & BJ/KJ 3159.39

5 Sales to BJ/KJ 123.85

6 Sales to IP 3224.55

Total Sales 6507.79

Revenue

7

Revenue from other than IP & BJ/KJ and

Misc. Charges 2514.03

8 Tariff Subsidy to BJ/KJ 63.54

9 Tariff Subsidy to IP 1492.13

Total Revenue 4069.70

Expenditure

10 Power Purchase Cost 2971.91

11 Transmission charges of KPTCL 331.53

12 SLDC Charges 2.65

Power Purchase Cost including cost of

transmission 3306.09

13 Employee Cost 312.40

14 Repairs & Maintenance 37.68

15 Admin. & General Expenses 70.99

Total O&M Expenses 421.07

16 Depreciation 97.62

Interest & Finance charges

17 Interest on Loans 89.98

18 Interest on Working capital 99.83

19 Interest on belated payment of PP Cost 126.60

20 Interest on consumer deposits 36.66

21 Other Interest & Finance charges 2.82

22 Less: interest & other expenses capitalised 0.00

Total Interest & Finance charges 355.89

23 Other Debits 28.09

24 Net Prior period Debit/Credit 33.69

25 Return on Equity 0.00

26 Provision for taxation 0.00

27

Funds towards Consumer

Relations/Consumer Education 0.00

28 Other Income 39.31

Net ARR 4203.14

xxv

Considering the revenue of Rs.4069.70 Crores against the net ARR of

Rs.4203.14 Crores, the GESCOM has reported a gap in revenue of

Rs.133.44 Crores for FY16.

4.2 GESCOM’s Financial Performance as per the Audited Accounts for

FY16:

An overview of the financial performance of the GESCOM for FY16 as

per its Audited Accounts is given below:

TABLE – 4.2

Financial Performance of GESCOM for FY16 Amount in Rs. Crores

Sl. No. Particulars FY16

Receipts

1 Revenue from Tariff and misc. charges 1975.80

2 Tariff Subsidy 1524.97

Income on account of Regulatory Asset/Truing

up Subsidy 577.39

Total Revenue 4078.16

Expenditure



5 SLDC Charges 2.65


transmission 3306.62

6 O&M Expenses 422.65



8 Interest on Loans 89.96

9 Interest on Working capital 0.82

Interest on belated payment of power purchase 225.62

10 Interest on consumer deposits 36.66


12 Less: Interest and other expenses capitalized 0.00



14 Net Prior Period Debit/Credit 33.28

15 Other income 39.31

16 Income tax 0.00

Total Expenditure 4209.41

As per the Audited Accounts, the GESCOM has incurred loss of

Rs.131.25 Crores for FY16. The yearly profits / losses reported by the

GESCOM in its audited accounts in the previous years are as follows:

xxvi

TABLE – 4.3

GESCOM’s Accumulated Profit / Losses

Particulars

Amount in

Rs. Crs

Accumulated losses as at the end of

FY10

(216.60)

Profit earned in FY11 61.30

Losses incurred in FY12 (4.62)


Profits earned in FY14 37.52


Losses incurred in FY 16 (131.25)

Accumulated losses as at the end of

FY16

(552.10)

As seen from the above table, the GESCOM has accumulated losses of

Rs. 552.10 Crores, as at the end of FY16.

Commission’s analysis and decisions:

The Annual Performance Review for FY16 has been taken up duly

considering the actual revenue and expenditure as per the Audited

Accounts, vis-à-vis the revenue and expenditure approved by the

Commission in its Tariff Order dated 2nd March, 2015. The item-wise

review of expenditure and the decisions of the Commission thereon

are as discussed in the following paragraphs:

4.2.1 Sales for FY16:

I. Sales other than IP sets:

The Commission in its Tariff Order 2015 dated 02.03.2015 had approved

total sales to various consumer categories at 6435.91 MU as against the

GESCOM’s proposal of 6542.05 MU. The actual sales of the GESCOM as

xxvii

per the current APR filing [D-2 Format] is 6507.78 MU indicating an

increase in sales to the extent of 71.87 MU as against the approved

sales. There is an increase in sales to LT-categories by 158.61 MU and

there is a reduction in sales to HT-categories by 86.74 MU. As against

the approved sales of 3172.41 MU to categories other than BJ/KJ and

IP sets, the GESCOM has achieved actual sales of 3174.99 MU, resulting

in marginal increase of sales to these categories by 2.58 MU. Further,

the GESCOM is stated to have sold 3332.79 MU to BJ/KJ and IP set

categories against approved sales of 3263.50 MU resulting in increased

sales to these categories by 69.29 MU.

The category-wise sales approved by Commission in its Tariff Order

dated 02.03.2015 and the actuals for FY 16 are indicated in the table

below:

TABLE-4.4

Approved and Actual Sales for FY16

Million Units

Category

Approved

as per

2015 Tariff

Order

Actuals Difference

LT-2a* 1000.68 1043.01 42.33

LT-2b 9.04 9.64 0.60

LT-3 264.41 274.89 10.48

LT-4b 24.67 2.98 -21.69

LT-4c 0.78 1.28 0.50

LT-5 158.39 166.37 7.98

LT-6 172.10 183.23 11.13

LT-6 174.39 210.84 36.45

LT-7 15.91 17.45 1.54

HT-1 78.72 84.14 5.42

HT-2a 1047.88 1003.50 -44.38

HT-2b 66.10 70.32 4.22

HT-2c 21.74 13.27 -8.47

HT-3a & b 118.70 76.19 -42.51

HT-4 12.07 12.87 0.80

HT-5 6.83 5.01 -1.82

Sub total 3172.41 3174.99 2.58

BJ/KJ** 124.13 108.24 -15.89

IP 3139.37 3224.55 85.18

Sub total 3263.50 3332.79 69.29

Grand total 6435.91 6507.78 71.87 *Including BJ/KJ installations consuming more than 18 units/month

**BJ/KJ break-up as per replies furnished to observations.

xxviii

The major categories contributing to the reduction in sales with respect

to the estimates are HT industries (44.38 MU), HT-3(42.51 MU) and LT -

4(b) (21.69 MU). Further, it is observed that there is increase in sales to

LT-6(Street Lights) (36.45 MU), LT-2a (42.33 MU) and IP sets (85.18 MU).

The observations of the Commission on sales for FY16 and the replies

furnished by the GESCOM are discussed below:

i. The GESCOM was directed to analyze the reasons for reduction in

sales to HT industries (44.38 MU), HT-3(42.51 MU) and LT-4(b) (21.69

MU) and increase in sales to LT-6 SL (36.45 MU), LT-2a (42.33 MU)

and IP sets (85.18 MU).

The GESCOM in its replies has stated that sale to HT-2a has

decreased due to consumers opting for open access and in the

case of HT-3 and LT-4b, the sales depend on water availability and

usage and that HT-5 sales depend on usage.

The Commission notes that the above statements made by the

GESCOM are not substantiated by any data analysis.

ii. In order to analyze reduction in HT sales, the GESCOM was

requested to furnish the data of sales to HT2(a) and HT2(b)

categories along with the consumption from open access /

wheeling for the period 2011-12 to 2014-16 in the specified format.

The GESCOM in its replies to the preliminary observations has

furnished the details. But it has not furnished the breakup of

wheeled energy between HT-2a and HT-2b. In the absence of

break up, the Commission has attributed the wheeled energy to

HT-2a category.

iii. The GESCOM was asked to furnish the number of installations

shifted from HT2a, HT2b and HT-4 categories to HT-2c category and

the corresponding sales figures for FY14, FY15 and FY16, in order to

estimate the impact of shifting of these installations.

xxix

The GESCOM has furnished the above information in its replies to

the rejoinder and the Commission has considered the same for the

purpose of analysis.

iv. The GESCOM was requested to furnish, the breakup of installations

for FY16 to FY18, consuming less than or equal to 18 units and

above 18 units to assess the sales in BJ/KJ category in the specified

format and the same was furnished by the GESCOM.

II. Sales to IP-sets :

i) The Commission in its Tariff Order dated 2nd March, 2015, had

approved the specific consumption of IP-sets at 9,503

units/installation/annum for FY16, whereas as per the data of IP-

sets’ consumption submitted by the GESCOM in its Tariff filing for

APR of FY16, the specific consumption works out to 10,131 units /

installation / annum, which corresponds to an increase in the

specific consumption by 628 units/installation / annum. The total IP-

set consumption reported for FY16 as per the Format D-2 is 3,224.55

MU, whereas the IP-set consumption approved by the Commission

is 3,139.37 MU. The difference in consumption between the

approved and reported for FY16 is 85.18 MU. Thus, the quantum of

sales to the IP-sets has exceeded the approved quantum by 2.7

per cent and the specific consumption has also increased by 6.6

per cent for FY16.

ii) Further, the Commission had approved 3,38,881 as the number of

IP-set installations for the FY16, but, the actual number of

installations existing, as reported by the GESCOM, is 3,30,873. The

difference in the number of installations is 8,008 and this

corresponds to decrease in the number of installations by about 2.4

per cent as against the approved number of installations for the

FY16.

xxx

iii) The Commission in its Tariff Order dated 2nd March, 2015, had

directed the GESCOM to furnish to the Commission, the month-wise

IP-set consumption based on the specific consumption arrived at

as per the data from 11 kV feeders’ energy meter, in respect of

exclusive agricultural feeders segregated under NJY scheme, for

the reason that the energy consumed by the IP-sets can be

accurately measured at the 11 kV level at the substations after

allowing the losses prevailing in the distribution system, as per the

following format prescribed by the Commission.

TABLE-4.5

Format for IP set Consumption as per feeder-wise data

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

.

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral

fee

de

rs a

t

the

su

bst

atio

ns

pe

rta

inin

g

to t

he

div

isio

n

Dis

trib

utio

n lo

ss(1

1k

V lin

e,

DTC

s,&

LT

lin

e)

Plu

s sa

les

to o

the

r c

on

sum

ers

if

an

y,

in M

U (

lo

sse

s in

all t

he

ag

ric

ultu

ral fe

ed

ers

on

ly

to b

e c

on

sid

ere

d)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g t

he

Dis

trib

utio

n

loss

(1

1k

V &

LT)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts c

on

ne

cte

d

to t

he

ag

ric

ultu

ral fe

ed

ers

in t

he

su

bd

ivis

ion

Av

era

ge

co

nsu

mp

tio

n o

f

IP /

mo

nth

(sp

ec

ific

co

ns

in u

nits

/IP

/mo

nth

)

Tota

l n

o o

f IP

se

ts in

th

e

sub

div

isio

n (

as

pe

r D

CB

)

Tota

l sa

les

of

IP s

ets

in

MU

1 2 3 4 5 6=(4-5) 7 8 9 10=8*9

April to

March

Subdivision-1

Subdivision-2

Subdivision….

iv) The Commission has been following this methodology since 2015

(Tariff Order dated 12th May, 2014, for FY15), considering the fact

that ESCOMs have bifurcated the 11 KV feeders into separate rural

and agricultural feeders. Earlier to the year 2015, in the absence of

universal metering of IP-set installations, the Commission had

allowed the ESCOMs to assess the IP-set consumption, based on

the specific consumption arrived at from the readings of the

sample meters fixed to the distribution transformer Centers (DTCs)

feeding predominantly IP-set loads. The sample was selected in

such a way that, per O&M section, two to three DTCs feeding

predominantly IP-set loads, were covered so that in each

subdivision about ten such DTCs were covered. As per the

methodology, the overall IP- set consumption for the Company

was being assessed on the basis of specific consumption arrived at

xxxi

from the meter reading data of such sample meters provided to

the DTCs.

v) As per the IP-set data for FY13 submitted to the Commission by the

GESCOM, total 388 DTCs covering 3,872 IP-sets of the total 2,77,707

IP-sets in its jurisdiction was considered for assessing the overall IP-

set consumption for the Company. The Commission notes that the

sample IP-sets considered to arrive at the specific consumption

and in-turn to assess the total IP-consumption for FY13, based on

the sample DTCs meter readings, constituted only 1.4 per cent. This

means a smaller number of IP-sets were considered while

computing the total list consumption as compared to a large

sample (47.34% of the feeders in March 2016) being considered

now after segregating the feeders under NJY. Therefore, there is a

better representation of samples in terms of metered consumption

for arriving at the specific consumption and the overall IP-set

consumption, as compared to the methodology followed earlier.

vi) Accordingly, the GESCOM was directed to furnish month-wise, 11

kV feeder-wise IP-set consumption based on the energy meter

reading data in respect of agriculture feeders segregated under

NJY scheme, duly deducting the prevailing distribution loss in 11 kV

lines distribution transformers and LT system, to the Commission.

However, the GESCOM has not submitted the month-wise IP-set

consumption based on the feeder-wise meter reading data of 11

kV lines from the segregated agricultural feeders regularly, to the

Commission. Also, the GESCOM did not submit, in its Tariff filing,

the data indicating as to the amount of loss in 11 kV lines,

distribution transformers & LT system, has been deducted from the

gross consumption to arrive at the net IP sets consumption and the

methodology adopted to arrive at the loss figures for FY 16.

vii) The Commission, in its preliminary observations, had raised the issue

of increase in both sales and the specific consumption of IP-set

category and had also directed the GESCOM to furnish necessary

month-wise feeder-wise consumption data as per the energy

xxxii

recorded in the segregated agricultural feeders, in support of its

claims of IP-set consumption for the FY16.

viii) The GESCOM, in its reply to the preliminary observations, has

submitted the consolidated month-wise IP-set consumption data

in respect of the exclusive agricultural feeders segregated under

NJY but it has not indicated the basis for arriving at the energy

losses in feeders while computing the IP-set consumption. Further,

in its data furnished by the GESCOM, many inconsistencies have

been observed in the subdivision-wise computation and the

company’s overall IP-set consumption.

ix) Accordingly, the Commission’s observations were communicated

to the GESCOM through rejoinders vide Commission’s letter dated

10th January,2017, directing it to rectify the discrepancies pointed

out duly computing the overall IP-set consumption on the basis of

specific consumption arrived at from the meter readings of

segregated agricultural feeders by deducting the allowable

losses in its distribution system.

x) In response, the GESCOM has submitted the consolidated month-

wise IP-set consumption data in respect of the exclusive

agricultural feeders segregated under NJY. On a verification of

the said data, it is observed that the percentage of distribution

loss in the feeders’/LT lines reckoned to compute the net IP-set

consumption, is not based on actual calculation considering the

distribution network sketches. Further, there were inconsistencies

in the IP-set consumption data of agricultural feeders.

xi) Subsequently, the GESCOM vide its communication No. GESCOM

/ CEE(CP)/SEE(MIS)/EE(RA)/AEE-1/16-17/54000-04, dated 31st

January 2017, has submitted the revised IP-set consumption for

FY16 as 3,167.91 MU, based on segregated agricultural feeders

duly revising the energy losses instead of 3,224.55 MU claimed in

the Format D-2 of its Tariff application. On a verification of the

month-wise IP-set consumption based on the segregated

agricultural feeders’ meter readings, submitted by the GESCOM,

xxxiii

it is found that the overall IP-consumption is 3,167.91 MU. This

results in a difference in consumption to an extent of 56.64 MU for

which the GESCOM did not submit any justification in support of it.

Hence, the Commission decides to disallow the consumption of

56.64 MU out of 3,224.55 MU claimed by the GESCOM in its Tariff

filing for APR of FY16.

xii) In view of the above, the Commission decides to approve

3,167.91 MU towards sales to IP-sets on the basis of the revised

meter readings data of the segregated agricultural feeders,

reported for the FY16, as against 3,224.55 MU claimed by the

GESCOM, in its Tariff filing dated 30th November, 2016, after

disallowing sales to an extent of 56.64 MU,

In the light of the above discussion, the Commission approves

total sales of 6451.15 MU for FY16 against the category wise sales

as indicated in the following:

TABLE-4.6

Approved Sales for FY16

Million Units

Category Approved as

per T.O.2015

Approved-as per

APR for FY16

LT-2a* 1000.68 1043.01

LT-2b 9.04 9.64

LT-3 264.41 274.89

LT-4b 24.67 2.98

LT-4c 0.78 1.28

LT-5 158.39 166.37

LT-6 172.10 183.23

LT-6 174.39 210.84

LT-7 15.91 17.45

HT-1 78.72 84.14

HT-2a 1047.88 1003.50

HT-2b 66.10 70.32

HT-2c 21.74 13.27

HT-3a & b 118.7 76.19

HT-4 12.07 12.87

HT-5 6.83 5.01

xxxiv

Sub total 3172.41 3174.99

BJ/KJ** 124.13 108.24

IP 3139.37 3167.91

Sub total 3263.50 3276.15

Grand total 6435.91 6451.15

4.2.2 Distribution Losses for FY16:

GESCOM’s Submission:

The Commission in its Tariff Order dated 2nd March,2015 had

approved distribution losses for FY16 as follows:

Range FY16

Upper limit 17.00%

Average 16.50%

Lower Limit 16.00%

GESCOM, in its annual accounts, has reported the distribution

losses at 18.10% for FY16 as under:

1 Energy at Interface Points in MU 7936.21

2 Total sales in MU including wheeled energy 6507.80

3 Distribution losses as a percentage of input

energy at IF points 18.00%


The distribution loss of 18.00% reported by GESCOM is above the

targeted losses fixed by the Commission for FY16 by 1.50%. percentage

points. Further, as per the revised consumption of IP sets as discussed in

the preceding paragraphs of this Chapter, the distribution loss works

out to 18.71%.

In the above context, the Commission notes that the overall actual

distribution losses of 18.71% exceeds the approved upper limit of losses

for FY16. Hence, in terms of the MYT Regulations, the penalty for

exceeding the targeted loss levels is computed below:

TABLE-4.7

xxxv

Penalty for exceeding targeted loss levels in FY16

Particulars FY14

Actual input at IP points as per audited accounts in MU 7936.21

Retail sales as per audited accounts in MU 6451.15

Percentage distribution losses 18.71%

Target upper limit of distribution loss 17.00%

Increase in percentage points loss 1.71%

Input at target loss for actual sales in MU 7772.47

Increase in input due to increase in distribution losses in

MU 163.74

Average cost of power purchase at IF points in Rs./unit 4.00

Penalty for Increase in power purchase cost due to

increased losses 65.67

Thus, the Commission decides to levy penalty of Rs.65.67 Crores for

exceeding the distribution loss levels targeted for FY16. This has been

factored in the APR for FY16.

4.2.3 Power Purchase for FY16:

GESCOM Submission:

The Commission in its Tariff order dated 30th March,2016, had approved

source-wise quantum and cost of power purchase for FY16. GESCOM,

in its application has submitted the details of actual power purchase

for FY16 for the purpose of Annual Performance Review. The details of

power purchase is detailed hereunder:

TABLE – 4.8

Power Purchase for FY16- Approved and Actuals

xxxvi

* Source : D1 format

Commission’s analysis and decisions;

1. The actual power purchase for FY16 as filed by GESCOM for approval

of Annual Performance Review is 8244.38 MU amounting to Rs.3306.62

Crores, as against the approved quantum of 8012.14MU amounting

to Rs.2728.71 Crores. This represents a reduction in the quantum of

power purchase to an extent of 232.24 MU and an increase in the

cost by Rs.577.38 Crores.

2. As against the approved quantum of 8012.13 MU, the actual power

purchased by GESCOM is 8244.38 MU for FY16, which is about 2.90 %

more than the approved quantum.

Source of Generation

Actuals for FY16 Approved for FY16 Difference-between Actuals

and Approved-for FY16

% increase

(+)/decrease (-)

over an approved

figures

Energy

in MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy in

MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy in

MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy Cost

KPCL Hydel

Stations 1247.89 122.27 0.98 1995.04 144.9 0.73 -747.15 -22.63 0.25 -37.45 -15.62

KPCL-

Thermal

Stations 2932.32 1196.35 4.08 3147.2 1220.36 3.88 -214.88 -24.01 0.20 -6.83 -1.97

CGS 2258.97 693.05 3.07 1995.75 594.62 2.98 263.22 98.43 0.09 13.19 16.55

Major IPPs 83.92 35.09 4.18 82.09 33.92 4.13 1.83 1.17 0.05 2.23 3.45

IPPs -Minor

(NCE

Projects) 350.67 138.64 3.95 587.31 221.19 3.77 -236.64 -82.55 0.19 -40.29 -37.32

Other

States

Projects 0.95 4.85 51.05 21.96 3.95 1.80 -21.01 0.90 49.25 -95.67 22.78

Short

/Medium

term 560.17 283.74 5.07 182.79 95.96 5.25 377.38 187.78 -0.18 206.46 195.69

Section 11 475.31 241.46 5.08

475.31 241.46 5.08

UI Charges 80.66 24.37 3.02

80.66 24.37 3.02

Transmissio

n Charges

(KPTCL &

PGCIL)

459.00

409.55

49.45

SLDC

Charges

(POSOOC

& SLDC)

2.65

4.23

-1.58

Energy

Balancing 225.47 96.05 4.26

Others

Charges 28.04 9.10

TOTAL 8244.38 3306.62 4.01 8012.14 2728.71 3.41 232.24 577.38 0.60 2.90 21.16

xxxvii

3. On an analysis of the source-wise approved and actual power

purchases, the following deviations in the quantum of energy and its

cost of purchase are observed:

i. There is shortfall in supply from sources of power like KPCL Hydel,

KPCL Thermal and RE/NCE to an extent of:

TABLE-4.9

Shortfall in Supply of Power from KPCL/ RE Sources

Source of Generation

Energy

Difference

(shortfall)

between actual

and approved in

MU

Cost Difference

between actual

and approved in

Rs Cr.

KPCL Hydel -747.15 -22.63

KPCL Thermal -214.88 -24.01

RE/NCE -236.64 -82.55

To make good the shortfall from the conventional /RE sources, the

GESCOM has sourced power form un-requisitioned surplus power

from CGS and major IPPs apart from purchases through short-

term / medium-term procurement besides procurement under

Section 11 of the EA,2003 to a tune of 560.17 MU and 475.31 MU

respectively, at a cost of Rs.283.74 Crores and Rs.241.46 Crores

respectively. GESCOM has incurred an additional cost Rs.577.38

Crores towards meeting the overall deficit in the availability of

power, resulting in an increase in per unit cost by 60 Paise.

ii. The change in the source-wise mix of supply, reconciliation of

energy and its cost among the ESCOMs have resulted in higher

average power purchase cost of the GESCOM at the rate of

Rs.4.01 per KWh as against the approved rate of Rs.3.41 per KWh.

4. To ensure proper accounting of energy and its cost, the GESCOM is

directed to reconcile the inter-ESCOM energy exchanges and its

costs every month. It shall collect/pay the amounts due to from other

ESCOMs out of the tariff subsidy received from the Government of

xxxviii

Karnataka, with a view to avoid accumulation of large balances

under Inter-ESCOMs Receivable/ Payable accounts.

5. The Commission notes that, the SLDC has not implemented the intra-

state ABT. As per the directions issued by the Government of

Karnataka vide its letter dated 28th January, 2016, intra-state ABT has

to be implemented

6. The Commission therefore directs the SLDC, the KPCL and the

GESCOM to take appropriate action immediately to implement intra-

state ABT and to host the details thereof, on their respective websites.

The Commission decides to approve the power purchases of 8244.38

MU at a cost of Rs.3306.62 Crores, for the purpose of Annual

Performance Review for FY16.

4.2.4 Renewable Purchase Obligation (RPO) compliance by GESCOM for

FY16:

GESCOM submission:

The GESCOM in its replies to the rejoinder has filed the details of RPO

compliance for solar and non-solar RPO for 2015-16 as indicated

below:

TABLE-4.10

RPO Compliance by GESCOM for FY16

Energy Purchased-MU 8244.385

Non-Solar energy required to be procured at 5%

target-MU

412.22

Non-Solar energy actually procured -MU 560.95

Non-Solar compliance as percentage of energy

purchased

6.80%

Solar energy required to be procured at 0.25%

target-MU

20.61

Solar energy actually procured -MU 45.28

Solar compliance as percentage of energy

purchased

0.55%

xxxix

The Commission in its preliminary observations had noted that the

quantum of energy purchased is indicated as 8244.385 MU in page 110

of the filing, whereas the same is indicated as 8260.75 MU in the A-1

Format. Therefore, the GESCOM was directed to reconcile the figures.

Further for validating the RPO compliance, the Commission had

directed the GESCOM to furnish the data as per prescribed format,

duly reconciling the data with the audited accounts.

The GESCOM, duly reconciling the data with energy balance account,

in list replies have furnished the following data:

TABLE-4.11

Non-solar RPO Compliance by GESCOM:

No. Particulars Quantum in MU Cost- Rs. Crs.

1 Total Power Purchase quantum from all

sources

8244.385 3291.27

2 Non–solar Renewable energy purchased

under PPA route at Generic tariff including

Non-solar RE purchased from KPCL

289.736* 110.24

3 Non –solar Short-Term purchase from RE

sources, excluding sec-11 purchase

107.124 56.04

4 Non –solar Short-Term purchase from RE

sources under sec-11

164.086 86.46

5 Non-solar RE purchased at APPC 8.920 2.76

6 Non-solar RE pertaining to green energy sold

to consumers under green tariff

0 0

7 Non-solar RE purchased from other ESCOMs 0 0

8 Non-solar RE sold to other ESCOMs 0 0

9 Non-solar RE purchased from any other

source like banked energy purchased at

85% of Generic tariff

0 0

10 Total Non-Solar RE Energy Purchased

[No 2+ No.3+No.4+No.5 +No.7+No.9]

569.866 255.50

11 Non-Solar RE accounted for the purpose of

RPO

[ No.10- No.5-No.6-No.8]

560.946 252.74

12 Non-solar RPO complied in %

[No11/No1]*100

6.804

* As per D-1 Format, the total non-solar RE purchased is 310.94 MU. After deducting 8.92 MU of purchases

under APPC, the Commission has reckoned 302.02 MU for the purpose of Non-solar RPO.

xl

TABLE-4.12 Solar RPO Compliance by GESCOM

No. Particulars Quantum in

MU

Cost- Rs. Crs.

1 Total Power Purchase quantum from all

sources

8244.385 3291.270

2 Solar energy purchased under PPA route

at Generic tariff including solar energy

purchased from KPCL

28.998 22.53

3 Solar energy purchased under Short-

Term, excluding Sec-11 purchase

0 0

4 Solar Short-Term purchase from RE under

Sec-11

0 0

5 Solar energy purchased under APPC 0 0

6 Solar energy pertaining to green energy

sold to consumers under green tariff

0 0

7 Solar energy purchased from other

ESCOMs

0 0

8 Solar energy sold to other ESCOMs 0 0

9 Solar energy purchased from NTPC (or

others) as bundled power

16.282 17.270

10 Solar energy purchased from any other

source like banked energy purchased at

85% of Generic tariff

0 0

11 Total Solar Energy Purchased

[No2+

No.3+No.4+No.5+No.7+No.9+No.10]

45.280 39.80

12 Solar energy accounted for the purpose

of RPO

[ No.11- No.5-No.6-No.8]

45.280 39.80

13 Solar RPO complied in %

[No12/No.1]*100

0.549

The Commission has considered the data and the explanation

submitted by the GESCOM. The Commission has approved total input

energy of 8244.38 MU for FY16 in its APR. Thus, the GESCOM was

required to purchase 412.22 MU of Non-solar energy and 20.61 MU of

solar energy to meet its RPO targets. Based on the information furnished

as per the revised D-1 Format, the Commission notes that GESCOM has

purchased 573.23 MU of Non-Solar energy (302.02 MU of Non-Solar

energy under PPA after deducting 8.92 MU purchased under

APPC,164.09 MU under Sec-11 and 107.12 MU under Short-term

purchase, including purchase from Tata Power Trading Company). Thus

the GESCOM has achieved 6.95% of non-solar RPO.

xli

Further, as per the revised D-1 Format, the Solar energy purchased by

GESCOM is 45.28 MU resulting in achievement of 0.55% of solar RPO for

FY16. Thus, GESCOM has over-achieved its non-solar and solar RPO

targets by 1.95 percentage points and 0.30 percentage points

respectively.

4.2.5 Operation and Maintenance Expenses:


In its application, GESCOM, as per its provisional accounts has

sought approval of O&M expenditure of Rs.421.07 Crores for

FY16. The break-up of O&M expenses are as follows:

TABLE – 4.13

O & M Expenses – GESCOM’s submission

Amount in Rs. Crores

Particulars FY16

Employee cost 312.40

Administrative & General Expenses 70.99

Repairs and Maintenance 37.68

Total O & M Expenses 421.07


The Commission in its Tariff Order dated 2nd March, 2015 had approved

O&M expenses for FY16 as detailed below:

TABLE – 4.14

Approved O&M Expenses as per Tariff Order dated 02.03.2015

Particulars FY16

No. of installations as per actuals as per Audited Accts 2812302

Weighted Inflation Index 6.69%

CGI based on 3 Year CAGR 4.86%

Actual O&M expenses for FY13 - in Rs. Crs. 364.39

Total approved O&M Expenses for FY16 – in Rs .Crs. 416.86

The Commission in its preliminary and subsequent observations, on the

application of GESCOM, had sought the details of certain expenses

booked under A & G expenses during FY16 and has noted the replies

furnished. As per the audited accounts of GESCOM has incurred actual

O&M expenses of Rs.422.65 Crores for FY16.

xlii

The Commission notes that the actual O&M expenses reported by

GESCOM are more than the approved O&M expenses by Rs.1.58

Crores. The Commission, in accordance with the methodology

adopted while approving the ARR for FY14-16 and subsequent APRs,

proceeds with the determination of normative O&M expenses based

on the 12 Year data of WPI and CPI besides considering 3 year

compounded annual growth rate (CAGR) of consumers. Considering

the Wholesale Price Index (WPI) as per the data available from the

Ministry of Commerce & Industry, Government of India and Consumer

Price Index (CPI) as per the data available from the Labour Bureau,

Government of India and adopting the methodology followed by the

CERC with CPI and WPI in a ratio of 80: 20, the allowable rate of

inflation for FY16 is computed as follows:

TABLE-4.15

Computation of Allowable Inflation Rate

Year WPI CPI

Compo

site

Series

Yt/Y1=

Rt Ln Rt Year (t-1)

Product

[(t-1)*

(LnRt)]

2004 98.72 111.1 108.624

2005 103.37 115.8 113.314 1.04 0.04 1 0.04

2006 109.59 122.9 120.238 1.11 0.10 2 0.20

2007 114.94 130.8 127.628 1.17 0.16 3 0.48

2008 124.92 141.7 138.344 1.27 0.24 4 0.97

2009 127.86 157.1 151.252 1.39 0.33 5 1.66

2010 140.08 175.9 168.736 1.55 0.44 6 2.64

2011 153.35 191.5 183.87 1.69 0.53 7 3.68

2012 164.93 209.3 200.426 1.85 0.61 8 4.90

2013 175.35 232.2 220.83 2.03 0.71 9 6.39

2014 182.00 246.90 233.92 2.15 0.77 10 7.67

2015 177.03 261.42 244.542 2.25 0.81 11 8.93

A= Sum of the product column 37.56

B= 6 Times of A 225.37

C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00

D=B/C 0.07

g(Exponential factor)= Exponential (D)-1 0.0771

e=Annual Escalation Rate (%)=g*100 7.71

For the purpose of determining the normative O & M expenses for FY16,

the Commission has considered the following:

a) The actual O & M expenses allowed for FY13 excluding contribution

to Pension and Gratuity Trust.

xliii

b) The three year compounded annual growth rate (CAGR) at 4.13%

of the number of installations considering the actual number of

installations as per the audited accounts upto FY16.

c) The weighted inflation index (WII) at 7.71% as computed above.

d) Efficiency factor at 2% as considered in the earlier two control

periods.

Thus, the normative O & M expenses for FY16 are computed as

follows:

TABLE-4.16

Normative O & M Expenses

Particulars FY16

No. of Installations As per actuals as per

Audited Accts 2754376

Weighted Inflation Index 7.71%

Consumer Growth Index (CGI) based on 3

Year CAGR

4.13%

Base year O & M expenses for FY13

excluding P&G contribution - Rs. Crores 272.62

O&M Index= 0&M (t-1) *(1+WII+CGI-X)- Rs.

Crores. 350.74

The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust for FY 16.

The Commission has treated the employee costs on account of

contribution to P&G Trust as uncontrollable O&M expenses. This

component has been allowed beyond the normative O&M expenses

to enable the ESCOMs to meet their actual employee costs.

The GESCOM has incurred an amount of Rs.60.38 Crores towards

contribution to the Pension and Gratuity Trust for FY16. Considering the

request of the GESCOM to treat the pension and gratuity contribution

as uncontrollable O & M expenses and as per the provisions of the MYT

Regulations, the computation of the allowable O & M expenses for

FY16, is as under:

xliv

TABLE – 4.17

Allowable O & M Expenses for FY16


Sl.

No. Particulars FY16

1 Normative O & M expenses 350.74

2 Additional employee cost (uncontrollable O

& M expenses)

60.38

Allowable O & M expenses for FY16 411.12

Thus, the Commission decides to allow an amount of Rs.411.12 Crores

as O&M expenses for FY16.

4.2.6 Depreciation:


The GESCOM in its application, as per the provisional accounts for

FY16, has claimed an amount of Rs.97.62 Crores as the net

depreciation, after deducting an amount of Rs.30.14 Crores towards

the depreciation on account of assets created out of consumers’

contributions / grants as per Accounting Standards (AS) – 12.


The Commission notes that, as per the audited accounts of GESCOM

for FY16, the amount of depreciation factored is Rs.132.36 Crores and

depreciation withdrawn on assets created out of consumer

contribution and grants is Rs.30.14 Crores.

In accordance with the provisions of the KERC (Terms and Conditions

for Determination of Tariff) Regulations, 2006 and amendments

thereon, the Commission has determined the depreciation for FY16.

Based on the opening and closing balances of gross blocks of fixed

assets for FY16 and the depreciation as per the audited accounts, the

weighted average rate of depreciation works out to 4.68%.

Further, the Commission as per the Accounting Standards (AS) – 12,

has recognized an amount, of Rs.30.14 Crores of depreciation on

assets created out of consumer contribution / grants.

xlv

The computation of asset-wise depreciation is as follows:

TABLE – 4.18

Allowable Depreciation for FY16


Particulars

Opening

Balance of

Asset as on

01.04.2015

Closing

Balance of

Asset as on

31.03.2016

Depreciation

for FY16

Buildings 31.55 48.77 1.46

Civil 5.89 6.69 0.07

Plant & M/c 471.63 526.67 23.95

Line, Cable Network 2082.46 2448.34 106.27

Vehicles 5.38 5.38 0.19

Furniture 4.28 4.81 0.20

Office Equipment 2.91 6.01 0.22

Sub Total 2604.10 3046.67 132.36

Less: Depreciation on account of Assets created

out of grants/Consumer contribution

30.14

Net Depreciation 102.22

Based on the above, the Commission decides to allow a net

depreciation of Rs.102.22 Crores for FY16.

4.2.7 Capital Expenditure for FY16:

a) Capital Investments-GESCOM Submission

As per the tariff application filed by the GESCOM, it has incurred a

capex of Rs. 299.70 Crores, as against the approved capex of Rs.376

Crores, for FY16. The details of category-wise capital expenditure

submitted by GESCOM for FY16 is shown below:

xlvi

Table –4.19

Capital expenditure of GESCOM for FY16: Amount in Rs. Crores

Sl.No. Details of Works

Approved

capex for

FY16

Actual

Expenditure

for FY16

1 33 kV Sub-Stations, 33 kV Line works &

Augmentation of 33 kV Sub-Station. 25 5.92

2 RGGVY Works 75 0

3 RAPDRP Works 0 13.6

4 Non-RAPDRP Works 0 36.55

5 Reconductoring works 18 3.2

6 DTC Metering works 2 4.22

7 Water Supply Works. 5 19.84

8 Additional DTC's Works. 9 16.31

9 Replacement failed 11 kV Transformers &

33 kV Power Transformers. 5 4.99

10 Replacement of MNR Meters. 5 7.26

11 Providing ETV Meters. 1 0

12 Providing HT Metering Cubicles for Ring

Fencing. 0.5 0

13 Service Connection Works. 17 4.38

14

System Improvement (SI) Works (33kV Link

Line / Express Feeders) & (11kV Link Line /

Express Feeders).

22 10.54

15 Nirantara Jyothi Works. 0 33.6

16

a) Major Replacement in Sub-Stations &

Lines, R&M to 33kV Stations & Lines, 11kV

DTC's & Lines.

10.5 0

17 Civil Engineering works. 8 2.92

18 IT Initiatives 5 0.27

19 HVDS works. 75 0

20 Providing ABC, UG Cables & RMUs. 1 0

21 SCADA Works 1 0

22 SCP & TSP Works. 3.5 1.81

23 Ganga Kalyan Scheme works. 25 41.41

24 T&P Articles. 0.5 1.07

25 Replacing of Electro Magnetic Meters by

Static Meters 1 5.03

26 Metering of IP / Street Lights/ BJ & KJ Sets. 1 1.30

27 Providing Infrastructure to Regularization of

Unauthorized IP Sets. 30 15.64

28 R.E. General Works. 20 0

29 Prevention of Electrical Accident & Safety. 5 60.96

30 Electrification of Rehabilitation Villages. 5 0

31 LT Line Conversion, Fixing of SMC Box to

DTC and Replacement of Broken Poles. 0 7.76

32 Energization of IP Sets General

Electrification of HB/JC's and KJ's 0 1.12

33 Providing Times Switches to Street Lights. 0 0

34 Shifting of Meters to Outside Premises. 0 0

35 Taluka Wise Segregation. 0 0

Total 376 299.70

Commission’s analysis and decision:

xlvii

It is seen from the above data that the overall capital expenditure of

the GESCOM for FY16 is within the approved capex of Rs.376 Crores.

But, in respect of a few major categories of works, the GESCOM has

exceeded its approved capex as indicated below:

i. In respect of “DTC Metering, water supply works and additional DTCs

works”, the GESCOM has achieved capex exceeding the approved

figures. The GESCOM has not explained the reasons for such excess

capex. The GESCOM is yet to conduct energy audit in all the

feeders covering all the areas in its jurisdiction. The Commission has

been directing GESCOM to complete DTC metering and conduct

DTC-wise energy audit and reduce the distribution losses. The

GESCOM in its replies to the preliminary observations has stated that,

the energy audit of 11 kV feeders has been conducted and DTC-

wise energy audit is also being conducted and the information in

Format A and B is being submitted to the Commission.

ii. In respect of “Nirantara Jyothi Works”, the GESCOM has achieved a

capex of Rs.33.60 Crores. The GESCOM in its replies to the

preliminary observations has stated that, there is a saving in the

energy sent out in the segregated feeders as compared to the

original mixed feeder, the failure rate of distribution transformers has

come down, interruptions have been reduced, there is reduction in

the distribution loss level and the voltage at the tail end has

improved.

iii. In respect of “System Improvement (SI) Works (33kV Link Line / Express

Feeders) & (11kV Link Line / Express Feeders)”, the GESCOM has

achieved a capex of Rs.10.54 Crores as against the approved

capex of Rs.22 Crores. The GESCOM should note that, the system

improvement works are to be completed on priority as they help in

network strengthening and expansion as well as loss reduction and

improvement of system reliability. The GESCOM in its replies to the

preliminary observations has stated that, the works which were

expected to be completed during FY16, have spilled over to FY17,

due to which the capex could not be achieved as expected.

xlviii

iv. In respect of “Ganga Kalyan Scheme works”, the GESCOM has

incurred a capex of Rs.41.41 Crores as against the approved capex

of Rs.25 crores. The GESCOM in its replies to the preliminary

observations has stated that, the excess capex achievement is

attributed to the target of completion given by the Government of

Karnataka.

v. In respect of “Providing Infrastructure to Regularization of Unauthorized

IP Sets”, the GESCOM has achieved capex of only Rs.15.64 Crores

against the approved capex of Rs.30 Crores. Creation of

infrastructure to regularize the Un-authorized IP Sets should have

been taken up on priority by the GESCOM to provide reliable and

quality power supply to the IP Set consumers and reduce the losses.

But, GESCOM has not achieved its own target of capex. The

GESCOM in its replies to the preliminary observations, has stated

that, around 4342 Nos of IP set applicants have not paid the

charges, but, the GESCOM is taking action to complete all the

infrastructure works, in order to reduce the losses and improve the

reliability.

vi. In the case of capex on “Prevention of Electrical Accident & Safety”,

the GESCOM has achieved a capex of Rs.60.96 Crores as against

the approved capex of Rs.5 Crores. The GESCOM in its replies to the

preliminary observations, has stated that, the budget re-

appropriation has been approved by the GESCOM Board with a

provision of Rs.103.06 Crores for prevention of accidents, based on

which the capex has been achieved.

In light of the above discussions, the Commission accepts the

reasons furnished by the GESCOM for excess capex achieved in

respect of the above categories of works. Further, recognizing the

fact that the GESCOM’s capex is well within the approved limit of

Rs.376 Crore for FY16, the Commission decides to consider the

capital expenditure of Rs.299.7 Crores as indicated by the GESCOM

xlix

for APR of FY16, subject to disallowance if any, as per the prudence

check conducted for FY16, indicated in the following paragraphs.

b) The prudence check of capital expenditure and material

procurement of GESCOM for FY16:

The Commission has got the Prudence check of capital expenditure

for FY16, done through third party verification of the capital works

categorized and also the material procurement of GESCOM during

FY16. This was taken up in two parts:

i. Prudence check of execution of the capital works of FY16:

ii. Prudence check of material Procurement process of FY16:

i. Prudence check of execution of the capital works of FY16:

The Commission has taken up prudence check of the capital

expenditure incurred by GESCOM for the period FY16, by engaging the

services of M/s. Deloitte Touche Tohmatsu India Private Limited (M/s.

Deloitte) as consultant, being the lowest bidder for the said job,

through a transparent process of e-tendering to evaluate the

prudence of the capital expenditure incurred by the GESCOM for

FY16, in respect of categorized works.

M/s Deloitte, after necessary validations on the data made available

by GESCOM, has found 3542 numbers of capital works amounting to a

total cost of Rs.20864 Lakh for the prudence check of capital

expenditure for FY16. The break-up of the works is shown below:

TABLE -4.20

Summary of categories of works

Type of work Number of

works

Cost of works

Rs.Lakh

Ganga

Kalyan 1,102 1,981

E&I 753 4,263

NJY 151 7,238

RAPDRP 77 2,000

Civil 290 1,500

Meter 106 2,127

UNIP 151 245

Emergency 47 67

Others 865 1,443

Total 3,542 20,864

l

M/s Deloitte has selected the samples as per the guidelines and the

requirements specified in the bid documents. The summary of sampling

process is stated as follows:

TABLE -4.21

Summary of sampling process for conducting prudence check

Category

Master List Sample List

Number

of works

Cost of works

Rs.Lakh

Number

of works

Cost of

works

Rs. Lakh

Work costing

above Rs.6

Lakh

305 15,602 127 12,744

Work costing

between Rs.3

– 6 Lakh

279 1,115 58 302

Work costing

below Rs.3

Lakh

2,958 4,147 24 57

Total 3,542 20,864 209 13,102

Also, the comparison of the samples considered with respect to the

category of works in the master list is as below:

TABLE -4.22

Category wise details of the works in the selected sample

Type of

work

Master List of Works Sample List of Works

Number of

works

Cost of

works

[Rs. Lakh]

Number of

works

Cost of

works

[Rs. Lakh]

Ganga

Kalyan 1,102 1,981 15 86

E&I 753 4,263 40 2,337

NJY 151 7,238 64 6,821

RAPDRP 77 2,000 26 1,528

Civil 290 1,500 12 515

Meter 106 2,127 28 1,251

UNIP 151 245 6 25

Emergency 47 67 2 4

Others 865 1,443 16 535

Total 3,542 20,864 209 13,102

M/s Deloitte has stated that, based on the prudence check guidelines and

the scope of the work as per the bid document, a methodology consisting of

five stages was adopted for conducting prudence check of capital

expenditure of GESCOM as mentioned below:

li

Stage I: Collection of master list of projects from GESCOM through KERC:

In the initial stage, the collection of the full list of categorized works for

FY16 from GESCOM with the assistance of KERC carried out. The list

provides various details such as category of capital work, actual date,

cost of completion etc.

Stage II: Preparation of representative sample of projects as per KERC

guidelines:

In the second stage, with the master list as base, projects were

arranged in the descending order of cost and the samples were

prepared as per KERC guidelines and the terms mentioned in the letter

of award.

Stage III: Collection of data for selected projects as per KERC format from

GESCOM:

In the third stage, the project specific details were collected in the

detailed format which was already prepared by KERC. Wherever

required, copies of various supporting documents were also collected

such as approved estimates, detailed work award, C register entries

etc.

Stage IV: Physical inspection of projects:

The fourth stage, comprised of the field visit and verification exercise

which was conducted to analyse the achievement of objectives after

the execution of the capital works are actually met or not.

Stage V: Analysis of data and preparation of report:

In the final stage, the projects were assigned a score based on various

parameters such as planning, implementation, achievement of

primary objectives and achievement of secondary objectives. Based

on the score obtained by each project, the project’s status of meeting

with the norms of prudence was calculated by following guidelines

issued by KERC.

lii

As per the report submitted by the consultant, the following are the salient

features of prudence check:

TABLE –4.23

Gist of Prudence check findings for FY16

Particulars Numbers Amount

in Rs. Lakhs

Works costing Rs.6 Lakhs and above considered

as samples for validation 127 12,744

Works costing between than Rs.6 Lakhs and Rs.3

Lakhs considered as samples 58 302

Works costing below Rs.3 Lakhs considered as

samples 24 57

Works not meeting

the norms of

prudence

Rs.6 Lakhs and above 01 153.14

Rs.6 Lakhs and Rs.3 Lakhs Nil -

below Rs.3 Lakhs Nil -

Total works not meeting the norms of prudence 01 153.14

The following project was found to be not meeting the norms of prudence:

TABLE -4.24

Details of non-prudent project

No. Division Work Category

Actual

Cost

Rs. Lakh

Actual

Completion

Categorizatio

n

1 Raichur

Rural

Establishment

of Mamadoddi

substation

E&I 153.14 - 31-03-16

Further, M/s Deloitte has stated that, there are 30 numbers of projects, which

include establishment of 33/11kV substation, Water works and DTC metering

treated as conditionally prudent due to reasons stated below:

1. Establishment of Idapnur substation in Raichur Rural division at a cost

of Rs.526.79 Lakh;

The substation was commissioned on 17th November, 2016. However, in

spite of the substation not being commissioned in FY16, the amount

corresponding to expenditure passed in FY16 was categorized by the

division. This categorisation is to be reversed and posted to the

relevant year.

liii

2. Establishment of Thappanadagagi substation in Shorapur subdivision of

Yadgir division at a cost of Rs.317.79 Lakh (DWA No 42365-74 Dt

19.01.2012);

It was noticed that, out of the two 5 MVA transformers present in the

substation, only one was utilized, while the second one was on idle

charge. The station currently has only two outgoing feeders with the

station peak load of only 2 MW. GESCOM should utilise the 2nd

transformer, by drawing 11kV lines to the nearest load centres to reap

the benefit.

3. A-42890/09.10.15: Water Works in Bidar division at a cost of Rs.2.91

Lakh;

The infrastructure (extension of HT line and installation of transformer)

was created to supply power to the water service connection is

currently idle. The bore well has now been connected from a newly

extended LT line emanating from another nearby feeder. GESCOM

should monitor such cases and should make use of the infrastructure to

avoid wasteful expenditure.

4. 27 Number of DTC Metering works at 5 divisions at a total cost of

Rs.851.96 Lakh;

In FY14, GESCOM had started wide-spread implementation of DTC

metering with AMR using thread-through meters. During the field

inspections, it was observed that though the DTC Meters with modems

are working satisfactorily and energy audit reports are being compiled,

the reports are not being utilized to their full potential. GESCOM needs

to take necessary action to make use of the energy audit reports.

Some of the other findings of the prudence check are summarized

below:

TABLE -4.25

Summary of Works having cost overrun

Particulars Within 10% 10-25% Above 25%

liv

Rs.6 Lakhs and above 1 0 5

Rs.6 Lakhs and Rs.3 Lakhs 7 0 1

below Rs.3 Lakhs 8 2 6

TABLE -4.26

Summary of cost over-run of projects in the category of works

Type of Work No cost

overrun

Cost

overrun

up to 10%

Cost

overrun of

10-25%

Cost

overrun of

25-50%

Cost overrun

beyond 50%

Ganga Kalyan 9 5 - - -

E&I 23 1 - - 1

NJY 4 - - - 5

RAPDRP 3 - - - -

Civil 6 - - - -

Meter 12 - - - -

UNIP 3 - 1 - -

Emergency 2 - - - -

Others 7 2 1 - -

Total 69 8 2 - 6

TABLE –4.27

Summary of Works having Time overrun

Particulars Time overrun up

to 3 months

Time overrun of

3-6 months

Time overrun

beyond 6 months

Rs.6 Lakhs and above 1 0 5

Rs.6 Lakhs and Rs.3 Lakhs 8 2 3

below Rs.3 Lakhs 4 0 1

TABLE – 4.28

Summary of time over-run of projects in the category of works

Type of work No

time overrun

Time overrun

up to 3

months

Time overrun

of 3-6 months

Time overrun

beyond 6

months

Ganga Kalyan 7 4 2 2

E&I 20 2 - 1

NJY 26 - - 5

RAPDRP 10 - - 1

Civil 6 - - -

Meter 25 1 - -

UNIP 5 1 - -

Emergency 2 - - -

Others 5 5 - -

Total 106 13 2 9

lv

The Commission has forwarded the copy of the Report on the

Prudence check to the GESCOM for its views/comments and

justification if any on the non-prudent works as meeting to norms of

prudence on or before 20th March, 2017. But, GESCOM has not

furnished the replies as sought by the Commission.

The Commission after verifying the project termed as not meeting the

prudence norms by the consultant, has decided to disallow the capex

and the weighted average interest and weighted average

depreciation is disallowed as stated below:

TABLE -4.29

Details of Amounts disallowed in APR FY16

Sl

No Particulars

Amount

in Rs.

Crores

1 Total cost of categorized works eligible for prudence check 208.64

2 Total cost of the sample works 131.02

3 Cost of sample works not meeting prudence norms (01 work

with cost of Rs.48.59 Lakh) in E& I category 1.5314

4

Cost of sample works not meeting prudence norms (01 work

with cost of Rs.153.14Lakh against a sample basket of 40

works with Rs.2337 Lakhs in the category of E&I works of 753

Nos. of works and total cost of Rs.4263 Lakhs)

2.793

8

Amount to be disallowed towards works not meeting

prudence norms calculated on the basis of weighted

average interest & weighted average depreciation on the

capex to be disallowed.

0.343

Thus, the Commission decides to deduct an amount of Rs.0.343 Crores

towards disallowance of interest and depreciation on the imprudent

capital works for FY16 in the revised approved ARR for FY18 as

discussed in the subsequent chapter of this Order.

ii. Prudence check of material Procurement process of FY16:

The GESCOM has been executing capital works both on turnkey as

well as partial turnkey contracts. In the process, the GESCOM procures

lvi

major materials like, distribution transformers, poles and conductor etc.

and issues them to the partial turnkey contractor for carrying out the

labour contract work as per award. The contractor would also invest

on some of the smaller materials associated with the works viz., cross

arm, bolt & nuts, earthing materials etc., if necessary.

In view of the fact that, a large quantity of major materials is being

procured by the ESCOMs, the Commission decided to review material

procurement process of major materials as a part of prudence check

carried out, to ensure that, the procurement is carried out in a cost

effective manner without compromising with the operational needs.

Hence, the consultant was directed to look into the procurement

process of the GESCOM, and analyze the process.

The Commission suggests that, the GESCOM has to take steps to utilize

the materials in a systematic way and reduce inventory by planning

the delivery schedule of the material to synchronize with the work

execution. The inventory level should be around 25% of the

consumption, at any given time, to avoid idle stock.

M/s Deloitte has stated that, the analysis of procurements in FY16

revealed that a considerably higher level of inventory with respect to

actual requirement seems to be maintained in the case of

BEE 3 star rated Distribution Transformers

Insulators

Cross Arms

Transformer Oil

In some of the divisions, it was revealed that there was an increase in

inventory due to non-completion / abandonment of NJY works by

some contractors. For example, in Humnabad, there were a

significantly large number of new distribution transformers in the store.

Some of materials with huge stock are shown below:

TABLE –4.30

Inventory levels and utilization

lvii

Material Unit Averag

e

Inventor

y

Utilization Inventory as

% of

utilization

RCC Pole 9 Mtrs.long Nos. 4,383 9,815 45%

RCC Pole 9.5 Mtr long Nos. 58 108 54%

Pin Insulator Shell 11 KV Nos. 76,254 2,292 3327%

45 KN Disc Insulator Nos. 65,821 1,642 4009%

Guy Strain Insulator No. 08 Nos. 3,687 2,612 141%

Weasel ACSR Conductor Kms 3,029 8,753 35%

Rabbit ACSR Conductor Kms 2,535 7,400 34%

DTC 25 KVA 3 Star Nos. 3,172 875 362%

DTC 63 KVA 3 Star Nos. 1,947 313 622%

DTC 100 KVA 3 Star Nos. 583 92 634%

Cross Arm - 2 Pin Nos. 8,198 1,676 489%

Cross Arm - 4 Pin Nos. 20,612 28,298 73%

Transformer oil KL 929 608 153%

It may be noted that, the critical items may have been overstocked if

their order lead time is higher, so as to avoid affecting the continuity of

supply. Therefore, mere existence of higher stock of some of the items

may not by itself be treated as a proof of inefficiency.

Prudence of procurement costs:

The study of purchase costs in FY16 reveals that on an overall basis, the

purchases were at an average of 0.29% below the Schedule of Rates.

However, it has to be noted that the ESCOMs are still using the

Schedule of Rates prepared in December, 2014 as the reference,

which has not been updated further in the last two years.

GESCOM has gone for open tendering under e-procurement mode for

all the purchases, except in case of the orders placed with Govt.

owned firms, for which exemption is made under KTPP. Though

purchase under KTPP exemption for Govt. owned firms may be Govt.

policy, the purchase rates in such cases are mutually negotiated and

seem to be at higher side. Probably, some savings can be realised if

competitive procurement of transformers is conducted.

lviii

The Commission based on the above discussions on the prudence

check of GESCOM:

a) Directs, GESCOM to properly plan, execute and monitor the

projects to see that, there will not be any slippage in terms of time

overrun, cost overrun and also, the works are completed and

categorized to reap the objectives set out by the company. Also,

there should not be any instance, by which, the works will have to

be treated as not meeting the prudence norms.

b) Directs, GESCOM to analyze and bring 30 numbers of projects to

meet prudence norms, which have been treated as conditionally

prudent as mentioned above.

c) Directs, GESCOM to monitor the material procurement,

deployment to the field and track the stock position to see that,

no idle stock of materials is kept for a longer period.

4.2.8 Interest and Finance Charges:

a) Interest on Capital loan:


The GESCOM in its application has claimed an amount of

Rs.89.98 Crores towards interest on capital loans drawn from

Banks/Financial Institutions for FY16.


The status of opening and closing balances of capital loans as per the

audited accounts for FY16 and Format D-9 as filed by the GESCOM, is

shown below:

lix

TABLE – 4.31

Allowable Interest on Loans – FY16 Amount in Rs. Crores

Particulars FY16

Opening balance of capital loans 695.28

Add: New Loans 133.18

Less: Repayments 63.65

Total loan at the end of the year 764.81

Average Loan 730.05

Allowable Interest on Capital Loans 89.96

As per the audited accounts of the GESCOM for FY16, the actual

interest on both capital and short term loans is Rs.90.79 Crores. The

interest on capital loan is Rs.89.96 Crores and interest on short term loan

is Rs.0.83 Crores. Considering the average loan of Rs.730.05 Crores and

an amount of Rs.89.96 Crores incurred towards interest on capital

loans, the weighted average of interest works out to 12.32%.


towards interest on capital loans for FY16.

b) Interest on Working Capital:


The GESCOM in its application has claimed an amount of

Rs.99.83 Crores as interest on short term loans and overdrafts for

FY16.


As per the audited accounts and replies to the preliminary

observations of the Commission, the GESCOM has incurred an interest

of Rs.0.83 Crores on short term loans for FY16. The Commission notes

that the GESCOM has claimed the interest on working capital on

normative basis.

As decided in the Tariff Order dated 2nd March, 2015 while approving

the revised ARR for FY16, the Commission decides to allow working

capital loans at a normative interest rate of 11.75% for FY16.

lx

As per the KERC (Terms and Conditions for Determination of Tariff for

Distribution and Retail sale of electricity) Regulations, 2006 and

amendments thereon, the Commission has computed the allowable

interest on working capital for FY16 as follows:

TABLE – 4.32

Allowable Interest on Working Capital for FY16 Amount in Rs. Crores

Particulars FY16

One-twelfth of the amount of O&M Expenses 34.26

Opening GFA 2610.55

Stores, materials and supplies 1% of Opening balance of GFA 26.11

One-sixth of the Revenue 579.17

Total Working Capital 639.54

Rate of Interest (% p.a.) 11.75

Normative Interest on Working Capital 75.15

Actual interest on WC as per audited accounts for FY16 0.83

Allowable Interest on Working Capital 37.98

The Commission, therefore, decides to allow an amount of Rs.37.98

Crores towards interest on working capital for FY16.

c) Interest on Consumers’ Security Deposits:


The GESCOM in its application as per provisional accounts has

claimed an amount of Rs.36.66 Crores towards payment of

interest on consumers’ security deposits for FY16.


The Commission notes that, based on the average amount of

consumer security deposits, the interest on consumer security deposits

amounting to Rs.36.66 Crores claimed by the GESCOM as per its

audited accounts works out to a weighted average rate of interest of

8.80%. As per the KERC (Interest on Security Deposit) Regulations, 2005,

the interest on consumers’ security deposits is to be allowed as per the

bank rate prevailing on the 1st of April of the relevant year. The bank

lxi

rate as on 1st April, 2015 was 8.50%. The weighted average rate of

interest claimed by the GESCOM as per the audited accounts is above

the applicable bank rate. Hence, the allowable interest on consumers’

security deposits is limited to 8.50% of the average amount of deposits

held by the GESCOM for FY16.


towards interest on consumers’ security deposits for FY16.

d) Other Interest and Finance charges:

The GESCOM has claimed an amount of Rs.2.82 Crores towards other

interest and finance charges for FY16, paid to banks / financial

institutions. The Commission decides to allow the same for FY16.

Interest on belated payment of Power Purchase Cost:

The GESCOM in its application has claimed an amount of Rs.126.60

Crores towards Interest on belated payment of Power Purchase Cost

for FY16. As per the audited accounts, an amount of Rs.225.62 Crores is

indicated as interest on power purchase dues. The Commission has

been consistently allowing the interest on working capital as per the

norms under MYT Regulations to meet the day to day expenses of the

ESCOMs. Therefore, there is no justification for claiming interest on

power purchase dues separately. The Commission notes that, inspite of

providing adequate working capital to meet its power purchase

commitments, GESCOM has been incurring substantial amount of

interest on belated payment of power purchase bills in the present and

previous years. The Commission directs GESCOM to initiate action to

settle power purchase bills in time by availing the working capital and

avoid any interest burden thereon. Hence, the Commission decides

not to allow any interest on power purchase dues in the APR for FY16.

The total allowable interest and finance charges for FY16 are as

follows:

lxii

TABLE – 4.33

Allowable Interest and Finance Charges


Sl.


1. Interest on Loan capital 89.96

2. Interest on working capital 37.98

3. Interest on consumers’ security deposits 35.43

4. Interest on Power Purchase dues 0.00

5. Other interest and finance charges 2.82

Total interest and finance charges 166.19

4.2.9 Other Debits:


The GESCOM, in its application has claimed an amount of

Rs.28.09 Crores towards other debits for FY16.


As per the audited accounts, the allowable other debits excluding the

provision for bad and doubtful debts for FY16 are as detailed below:

TABLE – 4.34

Allowable Other Debits Amount in Rs. Crores

Sl No Particulars FY16

1 Compensation for death, injuries and

damages 2.17

3 Assets decommissioning cost (1.21)

4 Miscellaneous losses and write offs 0.20

Total 1.16

Thus, the Commission decides to consider an amount of Rs.1.16 Crores

as other debits for FY16.

4.2.10 Net Prior Period Charges:


lxiii

GESCOM in its application has claimed Prior Period credit of Rs.33.69

Crores for FY16.


As per the Audited Accounts for FY16, the prior period expenses (debit)

are shown as Rs.42.75 Crores on account of employee costs, under-

provision of depreciation, A&G expenses, interest and finance charges

and expenses in the previous years. Further the prior period income

(credit) of Rs.9.47 Crores is on account of income relating to prior

period.

The Commission therefore decides to allow a net prior period credit of


4.2.11 Return on Equity:


The GESCOM in its application has not claimed any Return on

Equity for FY16.


The closing balances of gross fixed assets along with break-up of equity

and loan component and the details of GFA, debt and equity (net-

worth) for FY16 as per the actual data as per the audited accounts are

indicated as follows:

TABLE – 4.35

Status of Debt Equity Ratio for FY16 Amount in Rs.

Crores

GFA

(Closing

Balance)

Debt

(Closing

Balance)

Equity (Net-

worth)

(Closing

Balance)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of GFA

%age of

actual

debt on

GFA

%age of actual

equity on GFA

3053.29 764.81 202.67 2137.30 915.99 25.05 6.64

From the above table it is evident that the amounts of debt equity are

within the normative debt equity amounts in of 70:30 ratio on the

closing balances of GFA for FY16.

As per the KERC (Terms and Conditions for Determination of Tariff for

Distribution and Retail sale of electricity) Regulations, 2006 and

amendments thereto, the Commission has computed the allowable

lxiv

Return on Equity at 15.5% on equity plus reserves and surplus as at the

beginning of the year and also factoring the recapitalization of

consumers’ security deposit of Rs.22.00 Crores in compliance with the

Orders of the Hon’ble ATE in appeal No.46/2014. The allowable RoE for

FY16 is determined as follows:

TABLE – 4.36

Allowable Return on Equity


Particulars FY16

Paid Up Share Capital 305.14

Share deposit 372.02

Accumulated losses as on 01.04.2015 (420.84)

Recapitalization of Consumers’ security

deposit (22.00)

Total Equity 234.32

Allowable RoE @ 15.50% 36.32

Further, as reported by the GESCOM an additional equity of Rs.92.05 Crores

has been received during the year from Government of Karnataka.

Considering the actual date of receipt of this additional equity as reported and

as per the documents furnished by the GESCOM, the Commission as per

provisions of the MYT Regulations has determined the allowable return on

additional equity as detailed below:

TABLE-4.37

Return on equity for the additional equity received during FY16

Additional Equity received

during FY16

Amount

in Rs.

Crores

Date of

Receipt

No. of

Months

Equity put

to use

RoE allowed

Rs. Crores

EN 11 PSR 2015 dated

25.08.2015

20.00 9.9.2015 6 1.55

EN 16 PSR 2015 P1

dated3.12.2015 15.00 15.12.2015 3

0.58

EN 13 PSR 2015

dated10.12.2015 22.05 29.12.2015 3

0.85


30.12.2015 10.00 8.1.2016 2

0.26

EN 11 PSR 2015 P1

dated18.02.2016 10.00 5.3.2016 0

0.00


29.02.2017 15.00 10.03.2016 0

0.00

lxv

TOTAL 92.05 3.24

Return on Equity allowed on Additional Equity Infusion in FY16 3.24

Thus, the Commission decides to allow Return on Equity of Rs.39.56

Crores for FY16.

4.2.12 Income Tax:

GESCOM, in its application has not factored any Income Tax liability for

FY16. Hence, the Commission has also not considered any income tax

liability in the APR for FY16.

4.2.13 Other Income:


The GESCOM in its application has claimed an amount of Rs.39.31

Crores as Other Income for FY16.


As per the audited accounts, the other income is Rs.39.31 Crores for

FY16. This amount includes income from sale of scrap, income from

rent, rebate for collection of electricity duty, income relating to prior

period, and miscellaneous recoveries. Also an amount of Rs.17.00

Crores pertaining to incentive received for early payment of power

purchase bills is considered as other income. Further, as decided in the

earlier Tariff Orders, to encourage and bring in financial discipline by

ensuring timely payment of monthly power purchase bills, the

Commission continues to allow10% of the total incentive amounting to

Rs.1.70 Crores towards early payment of power purchase bills, to be

retained by GESCOM for FY16.

Thus, the Commission decides to allow an amount of Rs.37.61 Crores as

other income for FY16.

4.2.14 Fund towards Consumer Relations / Consumer Education:

lxvi

The Commission has been allowing an amount of Rs.0.50 Crore per year

towards consumer relations / consumer education. The GESCOM in its filing

has not claimed any expenditure for FY16. Hence, the Commission has not

considered any expenditure towards Consumer Relations / Consumer

Education for FY16.

4.2.15 Carrying Cost on Regulatory Asset:

GESCOM in its application has not claimed any amount towards carrying cost

on the Regulatory Assets kept by the Commission in its earlier Tariff Orders.

The Commission in its Tariff Order dated 12.05.2014 had kept an unmet gap

in revenue of Rs.151.73 Crores as Regulatory asset to be recovered in FY16

and FY17 and also decided to allow carrying cost at 12% per annum on the

Regulatory Asset to be assessed at the time of APRs of FY16 and FY17.

Accordingly, the Commission had factored Rs.75.87 Crores being the 50% of

Regulatory Asset in the ARR of FY16 and allowed it to be recovered in the

revised retail supply tariff.

The Commission in allowing the Carrying cost of Rs.9.10 Crores at 12% per

annum on the Regulatory Asset of Rs. 75.87 Crores kept for FY16, and

carried forward the gap in revenue to the ARR of FY18 and recover in the

retail supply tariff for FY18.

4.2.16 Revenue for FY16:

The GESCOM, in its application has considered Rs.4069.70 Crores as

revenue from sale of power from consumers and miscellaneous charges and

Regulatory income. As per the audited accounts for FY16, the revenue from

sale of power is Rs. 4078.16 Crores. However, as discussed earlier, the sale

to IP sets is reckoned as 3167.91 MU instead of 3224.55 MU, a reduction of

56.64 MU. Based on the approved CDT of Rs.4.55 per unit, an amount of

Rs.25.77 Crs is deducted from the earlier approved revenue from sale to IP

Sets. Also, the Commission has not considered the notional regulatory

income of Rs.577.39 Crores factored by the GESCOM in its audited accounts

for FY16 as the same is not actually realized by GESCOM during FY16.

lxvii

Accordingly, the Commission decides to consider Rs.3475.00 Crores as

revenue from sale of power to consumers in the approval of revised ARR as

per APR of GESCOM for FY16.

4.2.17 Subsidy for FY16:

The Commission in its tariff order dated 2nd March, 2016 has approved

tariff subsidy of Rs. 1494.70 Crores towards sale of power to BJ/KJ and IP

sets for FY16 in accordance with the prevailing Government Order. The

Commission in computation of APR for FY16 has approved the revised

tariff subsidy of Rs.1499.20 Crores towards sale of power to BJ/KJ and IP

sets for FY16.

4.3 Abstract of Approved ARR for FY16:

As per the above item-wise decisions of the Commission, the

consolidated Statement of revised ARR for FY16 is as follows:

TABLE – 4.38

Approved revised ARR for FY16 as per APR

Amount in Rs.

Crores

Sl.

No Particulars

FY16

As Appd.

02.03.2015

As filed

30.11.2016 As per APR

1 Energy at Gen Bus in MU 8012.14 8260.75 8244.38

2 Transmission Losses in % 3.80% 3.81% 3.93%

3 Energy at Interface in MU 7707.66 7946.02 7936.21

4 Distribution Losses in % 16.50% 18.10% 18.71%

5 Sales in MU

6 Sales to other than IP & BJ/KJ 3172.40 3159.39 3175.00

7 Sales to BJ/KJ 124.13 123.85 108.24

8 Sales to IP 3139.37 3224.55 3167.91

11 Total Sales 6435.90 6507.79 6451.15

Revenue at existing tariff in Rs Crs

12

Revenue from tariff and Misc.

Charges 1941.17 2514.03 1975.80

13 Tariff Subsidy for BJ/KJ 66.29 63.54 57.80

14 Tariff Subsidy for IP 1428.41 1492.13 1441.40

15 Total Existing Revenue 3435.87 4069.70 3475.00

Expenditure in Rs Crs

16 Power Purchase Cost 2393.33 2971.91 2972.44

17 Transmission charges of KPTCL 331.53 331.53 331.53

18 SLDC Charges 3.85 2.65 2.65

lxviii

Power Purchase Cost including

cost of transmission 2728.71 3306.09 3306.62



21 Admin & General Expenses 70.99

Total O&M Expenses 416.86 421.07 411.12

22 Depreciation 105.04 97.62 102.22


23 Interest on Loans 100.20 89.98 89.96

24 Interest on Working capital 72.19 99.83 37.98

25

Interest on belated payment on

PP Cost 0.00 126.60 0.00

26 Interest on consumer deposits 38.45 36.66 35.43

27 Other Interest & Finance charges 0 2.82 2.82

28 Less : interest capitalised 8.00 0.00 0.00

Total Interest & Finance charges 202.84 355.89 166.19

29 Other Debits 0.00 28.09 1.16

18 Net Prior Period Debit/Credit 0.00 33.69 33.28

30 Return on Equity 61.49 0.00 39.56

31 Provision for taxation 0.00 0.00 0.00

32

Funds towards Consumer

Relations/Consumer Education 0.50 0.00 0.00

33 Less : Other Income 50.00 39.31 37.61

ARR 3465.44 4203.14 4022.54

34 Surplus/Deficit -133.44 -547.54

35 Surplus for FY14 carried forward 43.37 0.00 0.00

36

Carrying Cost on Regulatory asset

of FY13 to be recovered in FY16 &

FY17 151.74 0.00 9.10

37

Net of Disallowance on account

of prudence check of capex and

incentives for loss reduction in

FY14 14.99 0.00

38

Regulatory asset carried forward

to FY17 152.94 0.00

39

Less : Penalty for excess losses

beyond target loss levels 65.67

40 Net ARR 3435.87 4203.14 3965.97

4.3.1 Gap in Revenue for FY16:

As against an approved ARR of Rs.3435.87 Crores, the Commission,

after the Annual Performance Review of GESCOM, decides to allow a

revised ARR of Rs.3965.97 Crores for FY16. Considering the revenue of

Rs.3475.00 Crores, the deficit in revenue of Rs.490.97 Crores is

determined for the year FY16.

lxix

The Commission decides to carry forward the deficit of Rs.490.97 Crores

of FY16 to the proposed ARR for FY18 as discussed in the subsequent

Chapter of this Order.

lxx

CHAPTER – 5

REVISED ANNUAL REVENUE REQUIREMENT FOR FY18 5.0 Revised Annual Revenue Requirement (ARR) for FY18:

GESCOM’s Application:

The GESCOM in its application dated 30th November, 2016, has sought

approval of the Commission for the revised ARR for FY18. The summary

of the proposed revised ARR for FY18 is as follows:

TABLE – 5.1

Revised ARR for FY18-GESCOM’s Submission


Sl.No. Particulars FY18

1 Energy at Gen Bus in MU 9059.54

2 Transmission Losses in % 3.37%

3 Energy at Interface in MU 8754.23

4 Distribution Losses in % 17.00%

Sales in MU

5 Sales to other than IP & BJ/KJ 3668.98

6 Sales to BJ/KJ 145.15

7 Sales to IP sets 3451.88

Total Sales 7266.01

Revenue at existing tariff in Rs Crs

8 Revenue from tariff and Misc. Charges 2450.45

9 Tariff Subsidy from BJ/KJ 83.75

10 Tariff Subsidy from IP sets 1736.30

Total Existing Revenue 4270.50




13 SLDC Charges 3.16


transmission

3470.34




Total O&M Expenses 649.30



18 Interest on Capital Loans 152.10

19 Interest on Working capital loans 108.14

20 Interest on belated payment on PP Cost 216.86

21 Interest on consumer security deposits 37.75


23 Less interest & other expenses capitalised 4.49

lxxi



25 Net Prior Period Debit/ Credit 20.00

26 Return on Equity 146.29

27 Funds towards Consumer

Relations/Consumer Education

0.00

28 Provision for contribution to P&G Trust (GoK

Liability)

262.49


ARR 5212.39

30 Surplus/ Deficit for FY16 carried forward (133.44)

Net ARR 5345.83

The GESCOM has requested the Commission to approve the revised

Annual Revenue Requirement of Rs.5345.83 Crores for FY18.

Considering the estimated revenue of Rs. 4270.50 Crores based on the

existing retail supply tariff, GESCOM has projected a revenue gap of Rs.

1075.33 Crores for FY18 inclusive of the carried forward gap of revenue

of Rs. 133.44 Crores of FY16. In order to bridge this gap in revenue,

GESCOM, in its application has proposed an increase in retail supply

tariff by 148 paise per unit in respect of all the categories of consumers

including BJ/KJ and IP set consumers for FY18.

5.1 Annual Performance Review for FY16:

As discussed in the preceding chapter of this Order, the Commission

has carried out the Annual Performance Review for FY16 based on the

audited accounts furnished by GESCOM. Accordingly, a deficit of

Rs.490.97 Crores of FY16 is carried forward in to the ARR of FY18.

5.2 Revised Annual Revenue Requirement for FY18:

The item-wise expenditure proposed by the GESCOM and approved

by the Commission for FY18 is discussed in this Chapter as follows:

5.2.1 Capital Investments for FY18:


The GESCOM has indicated a capex of Rs.698 Crores for FY18 as

against the approved capex of Rs.834 Crores for FY18 as per the MYT

Order. The category -wise details of the capex submitted by GESCOM

for FY18 is as shown below:

lxxii

Table -5.2

Details of capex proposal of GESCOM for FY18 are as below


lxxiii

Sl. NO. Categories of works

Approved

Capex as

per MYT

for FY18

Revised

Capes

for of

FY18

1 33kV Sub-station, 33kV line works &

Augmentation of 33kV S/S's 10 10

2 RGGVY works REC 40 40

3

RAPDRP works

Part-A 3 3

Part-B 20 20

IPDS 100 100

4

Reconductoring works:

a) 33kV lines 2 2

b) 11kV lines 4 4

c) L.T Lines 4

5 DTC metering works (RAPDRP area) 20 2

6 Water supply works 3 3

7

Additional DTC's works:

a) New DTC's 4 4

b) Enhancement of DTC's 2 2

8 Replacement failed 11 KV

transformers 10 10

9 Replacement of Power transformers 1 1

10 Replacement of MNR meters 3 3

11 Providing ETV meters 0.5 0.5

12 Providing HT metering Cubicles for

ring fencing 0.5 0.5

13

Service Connection works

a) General works 10 10

b) IP set works 1 1

14

SI works (33KV link line /Express

feeders) 1 1

SI works (11KV Link line /Express

feeders,) 10 10

15

a) Nirantara Jyoti works 80 80

b) Deen Dayal Upadhay Gram Jyothi

Yojane 138 138

16

a) Major Replacements in S/S's & lines 0.5 0.5

b) Replacement of Age old

Equipment in existing S/S & lines 4 4

17 Civil Engineering works 6 6

lxxiv


The GESCOM, in its MYT application had proposed a capex of Rs.834

Crores. It was stated that though the GESCOM had planned a capex

of Rs.1618 Crores for FY18, it was likely to achieve Rs.834. Taking into

consideration the past capex performance of GESCOM and its own

statement on capex achievements envisaged for FY18 at Rs.834

Crores, the Commission, at the time of passing the MYT order, had

recognized the capex of Rs.834 Crores for FY18. Now, the GESCOM

has proposed a capex of Rs.698 Crores (actual total of the categories

though indicated in the table by GESCOM in its application for capex

of FY18 as Rs.694 Crores works out to Rs.698 Crores) which is less than

Rs.834 Crores, already approved in the MYT order. The Commission had

sought to know the reason for reducing the capex further down from

the approved figures. The GESCOM in its replies to the preliminary

observations has stated that, it has reduced the capex in respect of

DTC metering works and providing ABC, UG cables and RMUs works for

FY18, due to which the overall capex is reduced to Rs.698 Crores.

In respect of the scheme for providing ABC, UG Cables & RMUs, the

GESCOM has proposed a capex of Rs.100 Crores. But, the GESCOM

has not furnished the present status such as planning of the works,

preparation of DPRs, tendering process etc., to implement the scheme

during FY18. The GESCOM should note that, while proposing any

capital expenditure it should subject such proposal to rigorous

planning to ensure that the likely benefits the project is going to accrue

are evaluated properly before taking up any scheme and ensure its

execution in a time bound and phased manner.

In respect of Prevention of electrical accident & safety, the GESCOM

has proposed a capex of Rs.3 Crores only for FY18, whereas the it has

incurred a huge expenditure of Rs.60.96 is FY16, indicating that the

approved limits are not kept in mind while incurring the actual

expenditure. The GESCOM should judiciously spread its capex year on

year, on the schemes it proposes to take up and wherever the

amounts to be incurred exceed the approved amounts, it should

obtain prior approval of the Commission.

lxxv

Though the GESCOM has proposed a revised capex for FY18, it has not

indicated as to whether it has followed the “Capital Expenditure

Guidelines for ESCOMs” issued by the Commission. If so, the GESCOM

needs to project its capex commensurate with:

a) The network strengthening and expansion requirement,

b) Improvement of power supply reliability.

c) The target date for each of the project.

d) Loss reduction trajectory.

Further, the GESCOM should mandatorily follow the “Capital

Expenditure Guidelines for ESCOMs” in which the capital investment

planning process, prioritization and post-commissioning analysis to be

adopted by the ESCOMs are elaborated. Further, the Commission has

been directing the ESCOMs to conduct energy audit by listing out high

loss making 11kV feeders and take up strengthening works to reduce

losses. Prioritizing of such projects to be taken up for execution are to

be based on payback period and benefit to cost ratio the GESCOM

should also move in this direction and list the high loss making feeders

based on the input energy to each of the feeders and sale of energy

in that feeder. The GESCOM should mandatorily adhere to the

guidelines and plan its capex carefully to reap the benefits.

With the above observations, the Commission decides to consider the

proposed capex of Rs.698 Crores for FY18, subject to prudence check

and directs that, the GESCOM should meet any additional capex

required during FY18, only through re-appropriation of approved

amounts within the overall capex and should not to seek the approval

of the Commission in the middle of the year for additional/higher

capex.

5.2.2 Sales Forecast for FY18:

I. Sales other than IP sets/BJ KJ:

GESCOM, in its filing has stated that the energy sales for the FY18 has

been estimated on the basis of actual consumption available for

FY15 to FY16 for metered categories and for LT4(a) on the basis of

lxxvi

sample studies and for BJ/KJ installations based on 17 units per

installation per month.

1. The observations of the Commission on sales forecast for FY18

and the replies of GESCOM are discussed below:

i. The Commission had observed that, the GESCOM had

considered only one-year data for estimating the sales, which

does not capture the trend in the category-wise sales. The

Commission further observed that, while forecasting for the

future period, a minimum period of three to five years past

data need to be considered. The GESCOM had also not

indicated the category-wise working details of estimates made

for the number of installations and the sales along with their

growth rates. Therefore, GESCOM was directed to furnish the

same. Further, the Commission had also furnished data

pertaining to the CAGR for the period 2010-11 to 2015-16 and

2012-13 to 2015-16 towards number of installations and sales, for

reference of the GESCOM.

The GESCOM in its replies has furnished the category-wise

growth rates considered for estimating the number of

installations and sales. Further in its replies to the Rejoinder, the

GESCOM has stated that the growth rates considered by them

are more or less similar to the CAGR furnished by the

Commission.

The Commission notes that the GESCOM has not furnished a

satisfactory reply in the matter, as GESCOM did not furnish

justifiable reasons for considering only one-year growth rate.

ii. The Commission had observed that growth rate considered for

the number of installations for LT-6, HT-1, HT-3 and HT-4

categories is higher as compared to the normal growth rates

and that the GESCOM may reconsider revising its estimates for

these categories. The GESCOM has stated that growth rates

considered by it are more or less similar to CAGR furnished by

lxxvii

the Commission. The Commission notes that GESCOM has not

furnished justifiable reasons.

iii. The Commission had observed that while the sales growth rate

considered for LT-5, HT-2a, HT-3 and HT-4 categories is higher, it

is lower for LT2a, LT2b and LT-3 categories compared to the

normal growth rates indicated above. That GESCOM may

reconsider revising its estimates for these categories.

The GESCOM has stated that growth rates considered by it are

more or less similar to CAGR furnished by the Commission. The

Commission notes that the GESCOM has not furnished

justifiable reasons.

iv. To validate the sales, the Commission had requested the

GESCOM to furnish category-wise information in the prescribed

format both for number of installations and energy sales. The

GESCOM has furnished the required details.

2. Commission’s approach for estimating the number of

installations and sales for FY18:

The methodology adopted by the Commission to estimate the

number of installations and sales to categories other than BJ/KJ

and IP sets is discussed below:

i) No. of Installations:

While estimating the number of installations (Excluding BJ/KJ

and IP), the following approach is adopted:

a. The base year number of installations for FY17 is modified

duly validating the revised estimate furnished by the

GESCOM in the current filing and the data available as on

30.11.2016. The Commission has validated both the number

of installations and sales to various categories considering

the actuals as on 30.11.2016 and has estimated the number

of installations and sales for the remaining period

reasonably, keeping in view the number of installations and

lxxviii

also sales as on 31.03.2016. Accordingly, the base year

estimation has been revised which has an impact on the

estimates on the number of installations and sales for the

year FY18.

b. Wherever the number of installations estimated by the

GESCOM for the FY18 is within the range of the estimates

based on the CAGR for the period FY11 – FY16 and for the

period FY13 - FY16, the estimates of the GESCOM are

retained.

c. Wherever the number of installations estimated by the

GESCOM for the FY18 is lower than the estimates based on

the CAGRs for the period FY11 – FY16 and for the period

FY13 - FY16, the estimates based on the lower of the CAGRs

are considered.

d. Wherever the number of installations estimated by the

GESCOM for FY18 is higher than the estimates based on the

CAGRs for the period FY11 – FY16 and for the period FY13 -

FY16, the estimates based on the higher of the CAGRs are

considered.

e. For LT 4(b), 4(c), LT-6 WS, LT-7, HT-2(c), and HT-5 categories,

the estimates of GESCOM are retained, as the growth rate

for these categories is not consistent.

Based on the above approach, the total number of installations

(excluding BJ/KJ and IP) estimated by the Commission for FY 18

is 2011919 as against 2015492 proposed by GESCOM.

ii) Energy Sales:

For categories other than BJ/KJ and IP sets, generally the sales

are estimated considering the following approach:

a. The base year sales for FY17 as estimated by GESCOM are

validated duly considering the actual sales upto

November, 2016 and modified suitably as stated earlier.

lxxix

b. Wherever the sales estimated by GESCOM for the FY18 is

within the range of the estimates based on the CAGR for

the period FY11 – FY16 and for the period FY13 - FY16, the

estimates of GESCOM are retained.

c. Wherever the sales estimated by GESCOM for the FY18 is

lower than the estimates based on the CAGRs for the

period FY11 – FY16 and for the period FY13- FY16, the

estimates based on the lower of the CAGRs are

considered.

d. Wherever sales estimated by GESCOM for the FY18 is

higher than the estimates based on the CAGRs for the

period FY11 – FY16 and for the period FY13 - FY16, the

estimates based on the higher of the CAGRs are

considered.

e. For LT4(b), LT 4(c), LT-7, HT-2(c) and HT-5 categories, the

estimates of GESCOM are retained, as the growth rate for

these categories is not consistent.

f. For HT2(a) category, the sales estimate based on the

methodology specified at paras b, c and d above is not

reasonable and therefore, the sales estimate based on the

analysis of open access impact is considered for FY18.

Based on the above approach, the sales (excluding BJ/KJ

and IP) estimated by the Commission for FY 18 is 3608.26

MU, as against 3668.99 MU proposed by GESCOM.

3. Sales to BJ/KJ and IP sets:

The electricity consumption to this category upto 18 units per

installation per month hitherto was being subsidized by the

Government of Karnataka and any installation under this

category consuming more than 18 units per month was billed

under relevant LT 2(a) category. However, the Government of

Karnataka in its Budget for 2017-18 has announced that it would

extend the subsidy to BJ/KJ installations consuming upto 40 units

per installation per month. Therefore, the Commission has

lxxx

reckoned the above and has worked out the subsidy

accordingly.

Considering the specific consumption and the number of

installations, for FY16, for installations consuming upto 18 units

and above 18 units as per the actual data furnished by

GESCOM, the total sales estimated for this category for FY18

works out to 128.44 MU. Considering the total number of BJ/KJ

installations of 618687 for FY18 as proposed by GESCOM, the

specific consumption works out to 17.30 units per installation per

month which is less than 40 units per installation per month

announced by the Government for the purpose of subsidy.

Thus, the entire consumption of 128.44 MU is considered for the

purpose of estimating the subsidy for this category. However,

the GESCOM while claiming the subsidy shall consider only such

installations which consume upto 40 units per installation per

month and any installation under this category consuming more

than 40 units shall be billed under the relevant LT 2(a) category.

II. IP set sales projections:

The Commission, in its Tariff Order dated 30th March, 2016, had

approved a specific consumption of IP-sets as 9,503

units/installation/annum for the control period FY17 to FY19. The

IP-set sales reported as per the format D2 of its Tariff filing by the

GESCOM was 3,224.55 MU, as against the approved sales

quantity of 3,139.37 MU, for FY16. However, the GESCOM in its

subsequent communication dated 30th January, 2017, to the

Commission, has submitted the revised sales of IP-sets, based on

the meter readings of segregated agricultural feeders as

3,167.91 MU for FY16 instead of 3,224.55 MU as claimed in the

format D2 of its Tariff filing. However, on verification of the

month-wise IP-set consumption based on the segregated

agricultural feeders’ meter readings reported by the GESCOM, it

is found that the overall IP-set consumption is 3,167.01 MU and

not 3,167.91 MU as reported subsequently. The Commission

lxxxi

observes that this indicates a decrease in sales to an extent of

57.54 MU between the IP-set consumption reported in its Tariff

filing and its subsequent reporting to the Commission. Also, it is

noted that the GESCOM has already segregated significant

number of feeders under NJY as exclusive agricultural feeders

and rural feeders, which means that regulated power supply to

IP-sets should have contributed to substantial reduction in the

agricultural consumption during the FY16. However, in reality

there is not much reduction in the IP-set consumption mentioned

above.

Further, it is noted that during FY15, the GESCOM’s specific

consumption of IP sets was 9,503 units/installation/annum and

the specific consumption worked out on the basis of the revised

consumption of 3,167.01 MU for FY16 as reported by the

GESCOM is 9,951 units/installation/annum. However, the specific

consumption of 9,951 units / installation /annum based on the

revised consumption of 3,167.01 MU for FY16, is rather high

perhaps due to presence of number of dried-up/defunct/not-in-

use installations, that are yet to be identified in the field and

deleted from its account by the GESCOM. Therefore, till the GPS

survey is completed to identify such installations, it is proper to

consider the specific consumption of 9,743

units/installation/annum for projections of FY18 as proposed by

the GESCOM. In view of this, the Commission decides to

approve the specific consumption of 9,743 units / installation /

annum for the ARR of FY18.

Further, it is noted that the GESCOM has estimated the number

of IP-set installations as 3,62,821 for the FY18 in the current Tariff

filing. In view of this, the Commission has considered the number

of IP-sets as reported by the GESCOM for the ARR of FY18

without any modifications. Hence, based on the estimated

number of installations for the FY17 and the FY18 as reported by

the GESCOM, the mid-year number of installations is determined

and the sales to IP-set consumers are indicated as below:

lxxxii

TABLE-5.3

Approved Energy of IP sets Installations

Particulars

As filed by the

GESCOM

As approved by

the Commission

FY17 FY18 FY18

No of installations 3,45,792 3,62,821 3,62,821

Mid-Year no. of

installations

3,54,307 3,54,307

Specific consumption in

units/installation/annum

9,743 9,743

Sales in MU 3,451.88 3,451.88

Accordingly, the Commission approves 3,451.88 MU as energy

sales to IP-sets as proposed by the GESCOM for the FY18. The

number of installations approved for FY18 is 3,62,821. This

approved IP-set consumption for FY18 is with the assumption that

the Government of Karnataka would release subsidy to fully

cover the approved quantum of IP-sales. However, if there is any

reduction in the subsidy allocation by the GoK, the quantum of

sales to IP-sets of 10 HP and below shall be proportionately

regulated.

During the course of Public hearing held by the Commission, the

representatives of certain Farmers’ Association have suggested

that the Government may consider paying the subsidy directly

to the farmers against their IP Set consumption. They have also

expressed that meters could be installed to their IP Sets, by the

ESCOMs to whom energy charges would be paid by the

farmers.

The Commission is of the view that implementing the suggestion

of direct remittance of subsidy to the farmers would encourage

metering of the IP Sets enabling proper accounting of energy

and also facilitate accurate computation of losses in the

distribution system. The Commission notes that the Government

of Karnataka would have to formulate suitable policy in the

matter.

Further, as discussed above, the GESCOM was directed to take

up GPS survey of IP-sets in order to identify the defunct/dried

up/not-in-use installations in the field and to take further

lxxxiii

necessary action to arrive at correct number of IP-sets by

deducting such IP-sets from its account, on the basis of GPS

survey report. The GESCOM has reported that it has completed

GPS survey of one feeder covering 405 IP-sets in its Bidar division

and has identified seven as not-in-use installations and two as

unauthorized installations. It has sought time upto May 2017 to

complete the survey of remaining IP-set installations, to enable it

to arrive at correct number of dried up/defunct/not-in-use wells,

and to take further action to deduct such IP-set installations

from its accounts.

The GESCOM is directed to complete the GPS survey of IP-sets

within the targeted time as agreed by it and compliance

thereon shall be submitted to the Commission. In view of the

pendency of GPS survey of IP-sets, the number of installations

estimated for FY17 as well as for FY18 are subject to change

based on the GPS survey. Hence, on completion of the GPS

survey, the GESCOM shall arrive at correct number of IP-sets in

the field duly deducting from its account the number of dried

up/defunct/not-in-use wells based on the GPS survey results.

Therefore, Accordingly, any variation in sales due to change in

number of installations would be trued up during the Annual

Performance Review, for the FY18.

Further, it is noted that the GESCOM has already segregated 223

agriculture feeders from rural loads under NJY Phase1 & 2 and

implementation of balance feeders’ works is in progress.

Therefore, energy consumed by the IP-sets could be more

accurately measured at the 11 KV feeder level at the sub-

stations after allowing for distribution system losses in 11 KV lines,

distribution transformers and LT lines.

Hence, the Commission reiterates that the GESCOM shall report

the total IP-set consumption on the basis of specific

consumption arrived at from the data of energy meters in

respect of agriculture feeders segregated under NJY only, to the

Commission, every month regularly, as per the following format:

lxxxiv

TABLE-5.4

Format for furnishing IP set Consumption

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

. o

f

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral fe

ed

ers

at

the

sub

sta

tio

ns

pe

rta

inin

g t

o t

he

sub

-div

isio

n

Dis

trib

utio

n lo

ss(1

1k

V lin

e,

DTC

s,&

LT

lin

e)

Plu

s sa

les

to

oth

er

co

nsu

me

rs if a

ny

, in

MU

(

loss

es

in a

ll t

he

ag

ric

ultu

ral

fee

de

rs o

nly

to

be

co

nsi

de

red

)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g t

he

Dis

trib

utio

n lo

ss

(11k

V lin

e, D

TCs

&LT

lin

e)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts

(to

tal-

dri

ed

up

) c

on

ne

cte

d

to t

he

ag

ric

ultu

ral

fee

de

rs in

th

e

sub

div

isio

n

Ave

rag

e

co

nsu

mp

tio

n o

f

IP s

ets

/ m

on

th

(sp

ec

ific

co

ns

in u

nits

/IP/m

on

th)

Tota

l n

o o

f IP

sets

(to

tal-

dri

ed

up

) in

the

su

bd

ivis

ion

(as

pe

r D

CB

)

Tota

l sa

les

of IP

sets

in

MU

Beginni

ng of

the

Month

Service

d during

Month

Mid-

Month

Begi

nnin

g of

the

Mon

th

Servic

ed

during

Month

Mid-

Month

1 2 3 4 5 6=(4-5) 7 a 7 b 7c

=

(7a+7

b)/2

8=6/7c 9

a 9 b

9c =

(9a+9

b)/2

10=

8*9

c April to

March

Subdivisi

on-1

Subdivisi

on-2

Subdivisi

on….

Note:

(1) If the agricultural feeders are not yet segregated under NJY in any sub-division, then the

specific consumption of the division / circle / zone / company (where NJY is taken up)

shall be considered to compute the IP consumption of such sub-division.

(2) No. of dried up IP-set installations shall be deducted from the accounts, while arriving at

the month-wise and subdivision-wise specific consumption and total sales.

Based on the above discussions, the category- wise approved number

of installations and sales for the year FY 18 vis-à-vis the estimates made

by GESCOM are indicated as follows:

TABLE-5.5

GESCOM’s Approved Energy for FY18

Category

GESCOM’s estimate Approved by the

Commission

Installations Sales Installations Sales

No. MU No. MU

LT-2a 1622293 1191.35 1618948 1205.26

LT-2b 4510 11.15 4512 11.54

LT-3 255312 321.25 255348 321.72

LT-4 (b) 3304 3.61 3304 3.61

LT-4 (c) 548 1.51 548 1.51

LT-5 62099 170.38 62376 168.67

LT-6-WS 17181 221.47 17181 227.63

LT-6-PL 14476 245.39 13938 245.39

LT-7 33155 21.12 33155 21.12

HT-1 160 93.37 148 93.86

HT-2 (a) 1502 1183.31 1502 1106.17

HT-2 (b) 392 83.21 392 83.31

lxxxv

HT2C 138 16.06 138 16.06

HT-3(a)& (b) 356 87.11 366 83.82

HT-4 34 13.27 32 13.16

HT-5 32 5.43 32 5.43

Sub-total other than BJ/KJ

and IP sets 2015492 3668.98 2011919 3608.26

BJ/KJ 618687 145.15 618687 128.44

IP Sets 362821 3451.88 362821 3451.88

Sub-total BJ/KJ and IP sets 981508 3597.03 981508 3580.32

Total 2997000 7266.02 2993427 7188.58

Thus, the Commission approves 7188.58 MU as sales for FY18.

5.2.3 Distribution Losses for FY18:


As per the audited accounts for FY16, the GESCOM has reported

distribution losses of 18.10% as against an approved loss level of 16.50%.

However, as discussed in the previous chapter of this Order, based on

the revised consumption of IP Sets, furnished by the GESCOM in its

replies to the preliminary observations of the Commission on the filing,

the distribution losses for FY16 is 18.71%. The Commission in its Tariff

Order dated 30th March, 2016 had fixed the target level of distribution

losses for FY18 at 16.00%. GESCOM in its application has proposed to

achieve the loss levels of 17.00% for FY18.

Commission’s Analysis and Decisions:

The performance of GESCOM in achieving the loss targets set by the

Commission in the past six years is as follows:

TABLE – 5.6

Approved & Actual Distribution Losses-FY11 to FY16

Figures in % Losses

Particulars FY11 FY12 FY13 FY14 FY15 FY16

Approved

Distribution losses

23.00 21.00 19.50 20.00 18.50 16.50

Actual

distribution losses

22.03 21.71 18.97 17.77 18.93 18.10

*Actual losses for FY16 are reported as 18.10%. As per APR the losses for FY16 is 18.71% after validation of sales.

lxxxvi

The Commission has allowed the capex as proposed by GESCOM and

substantial capital expenditure is consistently being incurred by the

GESCOM. Investments in improvements of the existing distribution

system should enable the GESCOM to reduce the distribution losses

besides increasing the reliability and quality of power supply to end

consumers.

The Commission, in its preliminary observations had stressed on the

need of further reduction in the distribution loss levels proposed by the

GESCOM, for FY18, duly considering the past and the present capex.

However, the GESCOM has not proposed any changes to its proposed

loss levels.

Based on the achievement made by the GESCOM in reduction of

losses in the previous years besides considering the capex incurred so

far along with the proposed capex for FY18, the Commission decides

to retain the distribution loss targets levels as approved in the Tariff

Order dated 30th March, 2016 for FY18.

TABLE – 5.7

Approved Distribution Losses for FY18

Figures in % Losses

Particulars FY18

Upper limit 16.50

Average 16.00

Lower limit 15.50

5.2.4 Power Purchase for FY18


The GESCOM has submitted the power purchase requirement along

with its cost including the transmission charges and SLDC charges, in D-

1 Format. The GESCOM has sought approval of the Commission for

purchase of power to an extent of 9059.54 MU at Cost of Rs 3470.34

lxxxvii

Crores for the FY18, which includes transmission charges and SLDC

charges

The cost of power purchase has been considered by the GESCOM as

per the norms defined in the contracts (PPAs)/Regulations and based

on the Tariff indicated by the KPCL, for its Stations. In respect of Central

Generating Stations, DVC Stations and UPCL Stations, the cost is

considered as per the tariff determined by the CERC.

Table-5.8

Power Purchase Cost as filed by GESCOM for FY18

Source of Power

Power Purchase Cost as filed by GESCOM

Energy in MU Cost in Rs. Crs

Cost Per

Unit in

Rupees

KPCL Hydel Energy 2487.87 174 0.69

KPCL Thermal

Energy

1669.90 732.37 4.38

CGS Energy 2779.87 988.26 4.20

IPP 1021.12 432.98 4.24

NCE 913.98 479.62 5.24

Other State Hydel 4.22 7.34 17.38

Short Term/Medium

term

182.58 82.16

KPTCL Transmission

charges

391.74

PGCIL Charges 181.39

POSOCO Charges 0.48

Total 9059.54 3470.34 3.83

Commission’s Analysis and Decisions:

The energy requirement of the ESCOMs, including GESCOM is being

met by The Karnataka Power Corporation Limited (KPCL) Generating

Stations, Central Generating Stations(CGS), Major Independent Power

Producers(IPPs) and Minor Independent Power Producers (RE sources)

through long term Power Purchase Agreements.

The Commission has considered the availability of energy as furnished

by KPCL for its generation and by SRPC/CEA in respect of Central

Generating Stations (CGS). The availability of CGS stations is based on

the share of Karnataka, as notified by MoP from time to time. However,

the availability of energy from CGS thermal Generating units has been

lxxxviii

considered duly limiting the quantum of energy as per the requirement

of ESCOMs, to meet the sales target on the basis of merit Order

dispatch.

The energy availability for FY18 from the upcoming thermal projects of

750MW unit#3 of BTPS, 2X800 MW units of YTPS and 1X800MW of

Kudagiplant of NTPC, has not been considered by the GESCOM, since

these units are under trial Operation and are yet to stabilize.

The Commission has decided to consider the energy availability from

these units in line with the LGBR furnished by the NTPC for the 1X800

MW unit of Kudagi Power Plant for the FY18. However, the energy has

been considered from these units by limiting the quantum of energy as

per the requirement of ESCOMs, to meet the sales target on the basis

of merit order despatch. It is expected that any surplus energy

available from tied up sources of energy would be traded by the

ESCOMs through PCKL on commercial principles. Similarly, any

requirement over and above the quantum approved in this Tariff Order

shall be procured from the tied up sources only.

While approving the cost of power purchase, the Commission has

determined the quantum of power from various sources in

accordance with the principles of merit order schedule and despatch

based on the ranking of all approved sources of supply, according to

the merit order of the variable cost.

After a detailed Analysis of the rates claimed by the GESCOM, the

Commission has arrived at the power purchase cost to be allowed in

the ARR for the FY18.

The fixed charges and the variable charges for the Central Generating

Stations, UPCL Stations and the DVC Stations are reckoned based on

the Tariff determined by the CERC and the CERC norms. The

transmission charges payable to PGCIL are arrived at with 5% annual

escalation on the base figure of FY16.

The fixed charges and the variable charges for the State owned

Thermal and Hydel Power Stations are based on the tariff approved by

the Commission and the norms in the PPAs wherever the tariff is

lxxxix

regulated as per the PPAs. In respect of upcoming new stations only

variable charge has been considered.

The variable costs of State thermal stations and UPCL are considered

based on the recent power purchase bills passed by the BESCOM duly

keeping in view the substantial increase in the fuel costs. This is subject

to adjustment in the FAC exercise/Annual Performance Review of FY18.

The ESCOM-wise share of the quantum of power from different sources

of generation is as per the allocation given by the Government of

Karnataka.

The Source-wise approved power purchase quantum for the State (all

ESCOMs) and its cost is as under:

TABLE-5.9

Approved Power Purchase Quantum & Cost- For the State

Source of Power

Power Purchase

Energy

(MU)

Amount in

Rs. Crores

Cost/Unit

in Rs.

KPCL Thermal Energy 16071.68 6963.89 4.33

CGS Energy 20542.91 7283.67 3.55

IPP 6712.00 3288.88 4.90

KPCL Hydel Energy 11668.46 926.33 0.79

OTHER HYDRO 119.37 49.54 4.15

NCE 7165.41 2980.86 4.16

NTPC Bundled power 582.21 258.46 4.44

Power purchase from Co gen 1300.00 451.10 3.47

Short term Power Purchase 1120.00 467.04 4.17

Short term Purchase from MSEDCL 294.00 106.43 3.62

TRANSMISSION CHARGES

PGCIL CHARGES

1066.00

KPTCL CHARGES

2753.70 SLDC

24.77

POSOCO CHARGES

3.48

TOTAL INCLUDING TRANSMISSION

& SLDC CHARGES 65576.04 26624.15 4.06

The Source-wise approved Power Purchase quantum and cost of

GESCOM is as follows:

xc

TABLE-5.10

Approved Power Purchase Cost of GESCOM for FY18

Source of Power

Power Purchase Cost as filed

by GESCOM

Power Purchase Cost as

approved by the

Commission

Energy in

MU

Cost in

Rs Cr

Per

Unit

Cost in

RS

Energy in

MU

Cost in

Rs Cr

Per

Unit

Cost

in RS

KPCL Hydel Energy 2487.87 174 0.69 2852.9 175.86 0.62

KPCL Thermal Energy 1669.90 732.37 4.38 1522.1 658.43 4.33

CGS Energy 2779.87 988.26 4.20 2774.94 983.88 3.55

UPCL 1021.12 432.98 4.24 606.05 296.96 4.9

Renewable Energy 913.98 479.62 5.24 726.07 354.64 4.88

Other State Hydel 4.22 7.34 17.38 16.12 6.69 4.15

Short Term/Medium

term

182.58 82.16 358.11 134.67

PGCIL Charges 391.74 153.42

KPTCL Charges 181.39 352.75

SLDC & POSOCO

Charges

0.48 3.45

Total 9059.54 3470.34 3.83 8856.29 3120.75 3.524

The details of station wise / Source wise power purchased quantum & cost for

the State and GESCOM are shown in Annexure-I & Annexure-II respectively.

5.2.5 GESCOM RPO target for FY18:

1. The Commission had directed GESCOM to submit the estimates for

complying with solar and non-solar RPO for 2017-18, including cost

implication for purchasing RECs, if any.

In its replies to the Rejoinders, the GESCOM has stated that it has

estimated purchase of 354.19 MU from non-solar projects and that

it would achieve 3.91% of non-solar RPO against the target of 6%

for FY18. Further, it is stated that the short fall in non-solar RPO

would be met with excess of solar energy. Regarding solar RPO, the

GESCOM has estimated purchase of 516.93 MU from solar projects

and stated that it would achieve 5.71% solar RPO against the

target of 1.25% for FY18.

2. Further, the Commission had directed the GESCOM to furnish

certain details, with respect to the renewable energy purchase

xci

estimates for the FY18. GESCOM in its replies has furnished the

following details:

TABLE-5.11

Anticipated RE Capacity in FY17 & FY18

Source

Capacity

under PPA in

MW as on

30.11.2016

Anticipated MW

capacity addition

under PPA during

the remaining

period of FY17

Anticipated

MW

capacity

addition

under PPA

during FY18

Wind 95.15 60 0

Mini-hydel 75.04 0 0

Co-generation 57 0 0

Biomass 27.50 0 0

Waste to Energy 0 0 0

Solar 29 109 183

3. The Commission had directed GESCOM to furnish certain additional

data on solar power projects. GESCOM has not furnished the

details.

Commission’s observations on GESCOM ’s RPO Submissions:

As regards Non-Solar RPO, the Commission notes that:

a. As per D-1 Format, the non-solar renewable energy is estimated as

356.19 MU.

b. The GESCOM has considered addition of wind projects to the extent

of 60MW by 2017-18, which should generate around 142 MU at 27%

CUF, whereas the GESCOM has considered only 38.26 MU in its D-1

format.

c. With the estimated total energy purchase of 9059.54 MU for FY18

and considering excess solar energy of 416.99 MU, the GESCOM as

per its filing would meet 8.53% of Non-solar RPO against target of 6%

for FY18.

As far as solar RPO is concerned, the Commission notes that:

xcii

a. As per D-1 format, the solar renewable energy is estimated

as 530.24 MU including 16.28 MU solar power out of NTPC

bundled power of 33.10 MU.

b. With its estimated total energy power of 9059.54 MU, the

GESCOM would meet 5.85% of solar RPO against target of

1.25% for FY18.

Commission’s Analysis:

The Commission has approved power purchase quantum of 8856.29

MU for FY18. The Non-solar RPO target at 6% would be 531.38 MU. The

Commission has approved purchase of 507.77 MU from non-solar RE

sources. Thus, the GESCOM would be able to procure 507.77 MU as

against an estimated RPO of 531.38 MU, resulting in shortfall of 23.61

MU, which could be met by the anticipated surplus of solar energy of

268.57 MU, as discussed in this Chapter. Therefore, the need for

purchasing RECs may not arise. Thus, in case there is a shortfall based

on the actuals, the GESCOM may purchase RECs at the market rates,

which would be considered by the Commission in the APR of FY18.

The Commission has approved power purchase quantum of 8856.29

MU for FY18. The Solar RPO target at 1.25 % would be 110.70 MU. The

Commission has approved purchase of 379.27 MU of Solar energy.

Thus, GESCOM would exceed the solar RPO by 268.57 MU, which shall

be utilized to meet the shortfall in non-solar RPO. In case, there is any

need to buy Solar RECs to fully meet the solar RPO, the cost thereon

would be factored in the APR of FY18.

5.2.6 O & M Expenses for FY18:

GESCOM’s Proposal:

The GESCOM, in its application, has claimed the O&M expenses of

Rs.649.30 Crores for FY18 which includes contribution to the P&G Trust,

additional employee cost of Rs.32.76 Crores on account of recruitment

of employees and increase in employee cost due to pay scale

revision. GESCOM has projected the O&M expenses based on the

actual expenses incurred in the past three years, by increasing with

xciii

2.5% in basic pay, 15% increase on account of pay revision, 2.4%

increase in terminal benefit and other allowances by 15% for FY18.

Based on the above, the GESCOM has sought the O & M expenses for

FY18 as detailed below:

TABLE – 5.12

Revised O&M Expenses for FY18- GESCOM’s Proposal

Amount in Rs.Crores

Sl.


1 Employee cost 499.47

2 Administrative and General expenses 102.35

3 Repairs and Maintenance expenses 47.48

Total O & M Expenses 649.30

Commission’s analysis &decision:

The Commission in its MYT Order dated 30th March, 2016, while

deciding the ARR for each year of the control period FY17-19, had

approved O&M expenses of Rs. 484.22 Crores for FY18 based on the

base year O&M expenses which was determined on the basis of

actual O&M expenses inclusive of contribution to P&G trust as per the

audited accounts of FY15. , three years compounded annual growth

rate (CAGR) of consumers of 4.69% and weighted inflation index of

7.24%. The approved O&M expenses for FY18 were as follows:

TABLE-5.13

Approved O&M Expenses for FY18 as per Tariff Order dated 30th March,

2016

Particulars FY16 FY17 FY18

No. of Installations 2858887 2976522

CGI based on 3 Year CAGR 4.61% 4.69%

Weighted Inflation index 7.24% 7.24%

Base Year O&M expenses (as per

actuals of FY15 )-Rs.Crs 400.99

Total O&M Expenses-Rs.Crs 440.47 484.22

xciv

As per the norms specified under the MYT Regulations, the O & M

expenses are controllable expenses and the distribution licensee is

required to incur these expenses within the approved limits.

The Commission notes that, the GESCOM has claimed additional O&M

expenses of Rs.32.76 Crores for the proposed recruitment of employees

during FY18.

The Commission is of the view that additional employee cost due to

recruitment and the revision of pay scale for FY18 could be factored

only after being incurred by the distribution licensee.

In view of the above discussion, the Commission has computed the O

& M expenses for FY18 duly considering the actual O & M expenses of

FY16 as per the audited accounts (being the latest data available as

per the audited accounts) to arrive at the O & M expenses for the

base year i.e. FY16. The actual O& M expense for FY16 is Rs.422.65

Crores inclusive of contribution to P&G Trust. Considering the

Wholesale Price Index (WPI) as per the data available from the Ministry

of Commerce & Industry, Government of India and Consumer Price

Index (CPI) as per the data available from the Labour Bureau,

Government of India and adopting the methodology followed by the

CERC with CPI and WPI in a ratio of 80 : 20, the allowable annual

escalation rate for FY18 is 7.71%.

For the purpose of determining the normative O & M expenses for FY18,

the Commission has considered the following:

e) The actual O & M expenses incurred as per the audited accounts

inclusive of contribution to the Pension and Gratuity Trust to

determine the O & M expenses for the base year FY16.

f) The three year compounded annual growth rate (CAGR) of 4.89%

of the number of installations considering the actual number of

installations as per the audited accounts upto FY16 and as

projected by the Commission for FY17 and FY18.

g) The weighted inflation index (WII) at 7.71%.

h) Efficiency factor at 2% as considered in the MYT Order.

xcv

The above said parameters are computed duly considering the same

methodology as being followed in the earlier Tariff Orders of the

Commission and the relevant Orders issued by the Commission on

Review Petitions. Accordingly, the normative O & M expenses for

FY18 are as follows:

TABLE – 5.14

Approved O & M expenses for FY18

Particulars FY16 FY17 FY18

No. of Installations 2868856 2993427

CGI based on 3 Year CAGR 4.73% 4.89%

Weighted Inflation index 7.71% 7.71%

Base Year O&M expenses (as per

actuals of FY16 )-Rs. Crs 422.65

Total allowable O&M Expenses-Rs. Crs 516.20

Since, the base year data includes the O & M expenses inclusive of

contribution to the P & G Trust, the Commission has not considered

allowing contribution to the P & G Trust separately.

Thus, the Commission decides to approve O&M expenses of Rs.516.20

Crores for FY18.

5.2.7 Depreciation:


The GESCOM, in its application has claimed the net depreciation of

Rs.164.94 Crores for FY18 after deducting the depreciation of Rs. 26.45

Crores on assets created out of consumer contribution and grants as

detailed below:

TABLE – 5.15

Depreciation-FY18- GESCOM’s Submission


Particulars FY18

Buildings 2.22

Civil 0.00

Other Civil 0.00

Plant & M/c 32.21

Line, Cable Network 155.51

Vehicles 0.64

Furniture 0.38

xcvi

Office Equipments 0.44

Less: Deprecation on assets created out

of grants and consumer contribution 26.45

Total 164.94


The Commission, in accordance with the provisions of the MYT

Regulations and amendments issued thereon, has determined the

depreciation for FY18 considering the following:

a) The actual rate of depreciation of category-wise assets has been

determined considering the depreciation and gross block of

opening and closing balance of fixed assets, as per the audited

accounts for FY16.

b) The actual rate of depreciation, so arrived at, is considered to allow

the depreciation on the gross block of opening and closing

balances of fixed assets projected by GESCOM, duly factoring the

retirement of assets value in its application for FY18.

c) The depreciation on account of assets created out of consumers

contribution / grants are deducted based on the opening and

closing balance of such assets duly considering the addition of

assets as proposed by the GESCOM, at the weighted average rate

of depreciation as per actuals in FY16.

Accordingly, the depreciation for FY18 is arrived at as follows:

TABLE – 5.16

Approved Depreciation for FY18 Amount in Rs. Crores

Particulars FY18

Buildings 2.22

Civil 0.00

Other Civil 0.07

Plant & M/c 28.62

Line, Cable Network 141.81

Vehicles 0.25

Furniture 0.27

Office Equipments 0.35

Less: Deprecation on assets created out of

grants and consumer contribution 26.15

Total 147.43

xcvii

Thus, the Commission decides to approve an amount of Rs.147.43

Crores towards depreciation for FY18.

5.2.8 Interest on Capital Loans:

GESCOM’s proposal:

The GESCOM in its application has proposed revised capex of

Rs.694.00 Crores for FY18 as against Rs.834.00 Crores proposed earlier in

its MYT filing and the capital loan requirement is projected at Rs.439.90

Crores. Considering the existing loans, new loans and projected

repayments, the GESCOM has claimed interest on capital loan of

Rs.152.10 Crores at weighted average rate of interest of 13.32% for

FY18.

The GESCOM has requested to approve interest on capital loan for

FY18 as follows:

TABLE – 5.17

Interest on Capital Loan– GESCOM’s Submission Amount in Rs. Crores


The Commission in its Order dated 30th March, 2016 had reckoned

capex of Rs.500.00 Crores as against the proposed capex of Rs.834.00

Crores made by GESCOM for FY18. The Commission notes that the

GESCOM has revised capex proposal of Rs.694.00 Crores for FY18 and

has factored the same for computation of interest on capital loan and

depreciation for FY18.

As per the audited accounts and as per the APR of FY16, the GESCOM

had incurred interest on capital loan at a weighted average rate of

interest of 12.32% p.a. This rate of interest is considered for the existing

Particulars FY18

Opening Balance of Capital Loans 992.58

Add New Loans 439.90

Less Repayments 140.77

Total Loan at the end of the year 1291.71

Average Loan for the year 1142.15

Rate of Interest 13.32%

Total Interest on Capital Loans 152.10

xcviii

loan balances for which interest has to be factored during FY17.

Further, for the year FY18, the weighted average rate of interest of the

preceding year has been considered on the existing loan balances.

The Commission has considered new loan, the special debt equity

ratio of 70:30 as in the MYT Regulations.

The present interest rates by commercial banks and financial

institutions are charged mainly on the basis of Marginal Cost of fund

based Lending Rates (MCLR). These rates are comparatively lower

than the base rates considered earlier. Further, in view of the changing

economic situation, it is observed that there is a considerable

reduction in the MCLR and also downward trend is evident in the

interest rates. Hence, in such a situation, the Commission is of the view

that, the ESCOMs can avail Capital loans at competitive interest rates.

The Commission notes that, the present SBI MCLR rate for capital loans

with tenure of 3 years is 8.15%. Considering the present rate of interest

on the new loan availed during FY17 MCLR, the Commission decides to

allow an interest rate of 12.00% for FY18 for new Capital loans. It shall

be noted that, the rate of interest now considered by the Commission

on the new capital loans is subject to review during APR. Accordingly,

the approved interest on loans for FY18 is as follows:

TABLE – 5.18

Approved Interest on Loans for FY18 Amount in Rs. Crores

Particulars FY18

Opening Balance long term loans 984.78

Add new Loans 350.00

Less: Repayments 140.77

Total loan at the end of the year 1194.01

Average Loan 1089.40

Weighted average rate of interest in % 12.22%

Interest on long term loans 133.09

Thus, the Commission decides to approve an interest of Rs.133.09

Crores on Capital loans for FY18.

xcix

5.2.9 Interest on Working Capital:


GESCOM has claimed interest on working capital of Rs.108.14 Crores

for FY18.


The Commission in its MYT Order dated 30th March, 2016 while deciding

the ARR for each year of the control period FY17-19, had approved

Interest on working capital of Rs. 86.67 Crores for FY18.

The Commission has been computing the interest on working capital as

per the norms specified under the MYT Regulations and amendments

thereon, which consists of one month’s O & M expenses, 1% of opening

GFA and two months’ revenue. As discussed earlier, the interest regime

is based on MCLR. The present MCLR for loans with tenure of one year

is 8.00%. Therefore, the Commission decides to considered interest on

working capital at 11% p.a. for FY18. Accordingly, the approved

interest on working capital for FY18 is as follows:

TABLE – 5.19

Approved Interest on Working Capital for FY18

Amount in Rs. Crs

Particulars FY 18

One-twelfth of the amount of O&M Expenses 43.02

Opening Gross Fixed Assets (GFA) 3503.03

Stores, materials and supplies 1% of Opening

balance of GFA 35.03

One-sixth of the Revenue 696.33

Total Working Capital 774.38

Rate of Interest (% p.a.) 11.00%

Interest on Working Capital 85.18

Thus, the Commission hereby approves interest on working capital of


c

5.2.10 Interest on Consumer Security Deposit:


The GESCOM in its application has claimed interest on consumer

security deposit of Rs.37.75 Crores on the opening balance of

consumer security deposit for FY18 based on Bank rate of 8.00 %.


In accordance with the KERC (Interest on Security Deposit) Regulations

2005, the interest rate on consumer security deposit to be allowed is

the bank rate prevailing on the 1st of April of the financial year for

which interest is due. As per the Reserve Bank of India Notification

dated 4th October, 2016, the applicable bank rate is 6.75%. The

Commission has considered the same, for computation of interest on

consumer security deposits for FY18.

The Commission has considered the consumer security deposits as per

the audited accounts of FY16 for onward projection for FY18. Also, the

Commission is considering the average of the opening and closing

balances of consumers’ deposits of the relevant year. Accordingly,

the interest on consumer deposits for FY18 is as follows:

TABLE – 5.20

Approved Interest on Consumer Security Deposits for FY18


Particulars FY18

Opening balance of consumer security deposits 453.65

Addition of deposits during FY18 27.00

Closing balance of consumer security deposits 480.65

Average Consumer Security Deposits for FY18 467.15

Bank rate to be allowed as per Regulations 6.75%

Interest on Consumer Security Deposit 31.53

Thus, the Commission decides to approve interest on the consumer

security deposits of Rs.31.53 for FY18.

5.2.11 Interest and other expenses Capitalized:

ci

The GESCOM has claimed an amount of Rs.4.49 Crores towards

capitalization of interest and other expenses during FY18. Considering,

the capital expenditure incurred and capitalized in the previous years,

the Commission decides to allow capitalization of interest and other

expenses of Rs.4.49 Crores as proposed by the GESCOM for FY18. The

abstract of approved interest and finance charges for FY18 are as

follows:

TABLE – 5.21

Approved Interest and finance charges for FY18


Particulars FY18

Interest on Loan Capital 133.09

Interest on Working Capital 85.18

Interest on Consumers Security Deposit 31.53

Less Interest & other expenses capitalized (4.49)

Total Interest & Finance Charges 245.31

5.2.12 Other Debits and Prior period charges:

GESCOM, in its application has claimed an amount of Rs.37.66 Crores

towards other debits and Rs.20 Crores towards net prior period debit /

credit for FY18.


The Commission notes that, GESCOM has claimed expenditure of

Rs.37.66 Crores towards Other Debits and Rs.20.00 Crores towards Prior

period debit/credit for FY18. It is to be noted that, these items of

expenditures/income cannot be estimated upfront and included in

the proposed ARR for FY18. However, as per the provisions of the MYT

Regulations, the Commission would consider the same based on the

actuals as per the audited accounts while approving APR for FY18.

5.2.13 Return on Equity:


GESCOM in its application has claimed RoE of Rs. 146.29 Crores for FY18

based on the Share Capital, Share Deposit, accumulated balance of

surplus/deficit under Reserves and surplus account as detailed below:

cii

TABLE-5.22

Return on Equity- GESCOM Submission


Particulars FY18

Opening balance of share capital 896.77

Reserves and Surplus (141.81)

Total Equity 754.96

Return on Equity @ 19.377% 146.29


The Commission has considered the actual amount of share capital,

share deposits and accumulated surplus / deficit under reserves &

surplus account as per the audited accounts for FY16 for arriving at the

allowable equity base for the control period FY18.

The Commission, in accordance with the provisions of the MYT

Regulations and amendments there on, has considered 15.5% of

Return on Equity duly grossed up with the applicable Minimum

Alternate Tax (MAT) of 21.342%. This works out to 19.706% per annum.

Further, as per the decision of the Commission in the Review Petition

No.6/2013 and Review Petition 5/2014 and the provisions of amended

MYT Regulations, the Return on Equity is to be computed based on the

opening balances of share capital, share deposits and accumulated

surplus / deficit under reserve and surplus account. Further, an

amount of Rs.22.00 Crores of recapitalized consumer security deposit

as net-worth is considered as per the orders of the Hon’ble Appellate

Tribunal for Electricity in Appeal No.46/2014.

Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing

balances of gross fixed assets along with break-up of equity and loan

component in the Tariff Order henceforth, the details of GFA, debt and

equity (net-worth) for FY18 are indicated as follows:

ciii

TABLE – 5.23

Status of Debt Equity Ratio for FY18


Year Particulars GFA Debt

Equity

(Net-

worth)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age of

actual

debt on

GFA

%age

of

actual

equity

on GFA

FY18 Opening

Balance

3503.03 984.78 234.08

Closing

Balance

3928.91 1194.01 270.36 2750.24 1178.67 30.39% 6.88%

From the above table it is seen that the amounts of debt and equity

are within the normative levels with reference to the closing balances

of GFA for FY18. Further, the Commission would review the same during

the Annual Performance Review, for FY18, based on the actual data,

as per the audited accounts. Accordingly, the Return on Equity that

could be approved for FY18, works out as follows:

TABLE – 5.24

Approved Return on Equity for FY18

Amount in Rs. Crores Particulars FY18

Opening Balance of Paid Up Share Capital 305.14

Share Deposit 471.63

Reserves and Surplus (520.69)

Less Recapitalised Security Deposit (22.00)

Total Equity 234.08

Approved Return on Equity with MAT 46.13

Thus, the Commission decides to approve a Return on Equity of Rs.46.13

Crores, for FY18.

5.2.14 Other Income:


GESCOM has claimed an amount of Rs.48.99 Crores as other income

for the FY18.

civ


The Commission notes that, the other income received by the

GESCOM mainly includes rebate from collection of electricity duty,

income from miscellaneous recoveries, interest on bank deposits, rent

from staff quarters and sale of scrap, profit on sale of stores besides

incentives for timely payment of power purchase bills. The actual

‘other income’ as per the audited accounts for FY16 is Rs.39.31 Crores.

Considering the other income earned by the GESCOM in the past

three years, the Commission decides to approve other income of


5.2.15 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per

year towards consumer relations / consumer education. This amount

is earmarked to conduct consumer awareness and grievance

redressal meetings periodically and institutionalize a mechanism for

addressing common problems of the consumers. The Commission has

already issued guidelines for consumer education and grievance

redressal activities.

The Commission decides to continue providing an amount of Rs.0.50

Crore for FY18, towards meeting the expenditure on consumer relations

/ consumer education.

The Commission directs GESCOM to furnish a detailed plan of action

for utilization of this amount and also maintain a separate account of

these funds and furnish the same at the time of APR.

5.2.16 Contribution towards Pension and Gratuity Trust :

GESCOM in its application has claimed under O&M expenses an

amount of Rs.262.49 Crores being the arrears of contribution to P&G

Trust not released by the Government of Karnataka.

cv

The Commission in its preliminary observations had requested the

GESCOM to furnish reasons /justifications for inclusion of this amount in

the proposed ARR for FY18 to be recovered from the consumers as

part of the retail supply tariff during FY18 in contravention to the

Commission’s decision in Tariff Order 2016.

In its replies to the Commission’s preliminary observations, the GESCOM

has stated that it has included an amount of Rs. 262.49 Crores towards

GESCOM portion of arrears of contribution to P&G Trust not released by

the Government of Karnataka, in accordance to the instructions issued

by the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3

dated 16.09.2016.

It is to be noted that, the Commission in its Order dated 30th March,

2016 has already dealt with this issue and has observed that,

“a) As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution

and Retail Supply Companies) Rules, 2002, notified by the

Government on 31.05.2002, the State Government is liable for

funding the pension and gratuity liability of existing pensioners as

on the effective date of Second Transfer Scheme.

b) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity

requirements of existing pensioners on the effective date of

second transfer Scheme. With this arrangement, the GoK is liable

to meet the pension and gratuity requirement of existing

pensioners.”

In the above context, as per the provisions of the prevailing Rules and

Government Orders issued thereon, the Commission had earlier

decided that this liability cannot be passed on to the consumers,

through tariff.

In spite of this Order of the Commission, GESCOM has gone ahead to

claim this liability (in the proposed ARR for FY18) that should have been

borne by the Government of Karnataka.

cvi

The Commission reiterates its earlier decision that, as per Rule 4(13) of

the Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL

and its Personnel to Electricity Distribution and Retail Supply

Companies) Rules, 2002, notified by the Government on 31.05.2002

and Government Order No. DE 15 PSR 2002 Dated 19.12.2002, the

amount in question is liable to be borne by the Government of

Karnataka only and cannot be passed on to the consumers, through

tariff.

In view of the above, the Commission is unable to accept the claims

of GESCOM to allow an amount of Rs.262.49 Crores being the GoK

liability towards arrears of contribution to P&G Trust in the ARR for FY18.

5.3 Abstract of revised ARR for FY18:

In the light of the above analysis and decisions of the Commission, the

following is the approved revised ARR for the control period FY18:

TABLE – 5.25

Approved Revised ARR for FY18 Amount in Rs. Crores

Sl.

No. Particulars

FY18

As Appd. in

Tariff Order

dated

30.03.2016

As per

revised

filing on

30.11.2016

As

Revised

and

Approved

Revenue at existing Tariff in Rs Crs

1 Revenue from Tariff and Misc.

Charges 2450.45 2376.94

2 Tariff Subsidy from BJ/KJ 83.75 64.77

3 Tariff Subsidy from IP Sets 1736.30 1736.30

4 Total Existing Revenue

4270.50 4178.00


5 Power Purchase Cost 3190.79 3078.60 2765.03

6 Transmission charges of KPTCL 388.58 388.58 352.75

7 SLDC Charges 3.16 3.16 2.97

8 Power Purchase Cost including

cost of transmission 3582.53 3470.34 3120.75




12 Total O&M Expenses 484.22 649.30 516.20

13 Depreciation 143.35 164.94 147.43


14 Interest on Capital Loans 143.91 152.10 133.09

15 Interest on Working Capital Loans 86.67 108.14 85.18

cvii

16 Interest on belated payment on

PP Cost 0.00 216.86 0.00

16 Interest on consumer security

deposits 38.08 37.75 31.53

17 Other Interest & Finance charges 0.00 0.00 0.00

18 Less interest & other expenses

capitalised 4.49 4.49 4.49

19 Total Interest & Finance charges 264.17 510.36 245.31

20 Other Debits 0.00 37.66 0.00

21 Net Prior Period Debit/Credit 0.00 20.00 0.00

22 Return on Equity 61.60 146.29 46.13

23 Funds towards Consumer

Relations/Consumer Education 0.50 0.00 0.50

24 Other Income 48.00 48.99 43.66

25 P&G Trust (GoK Liability) 262.49 0.00

Disallowance of Interest and

Depreciation on imprudent

investments in FY16 0.34

26 ARR 4488.36 5212.39 4032.32

27 Surplus/Deficit for FY16 carried

forward -133.44 -490.97

28 Net ARR 4488.36 5345.83 4523.29

5.4 Segregation of ARR into ARR for Distribution Business and ARR for Retail

Supply Business:

GESCOM in its application has proposed the segregation of ARR into

ARR for Distribution Business and ARR for Retail Supply Business as

approved by the Commission in its Tariff Order dated 30th March, 2016.

The Commission decides to continue with the same ratio of

segregation of ARR as detailed below:

TABLE – 5.26

Approved Segregation of ARR – FY18

Particulars Distribution

Business

Retail Supply

Business

O&M 70% 30%

Depreciation 84% 16%

Interest on Loans 100% 0%

Interest on Consumer Deposits 0% 100%

RoE 84% 16%

GFA 84% 16%

Non-Tariff Income 0% 100%

cviii

Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:

TABLE – 5.27

APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18 Amount in Rs. Crores

Sl.

No Particulars FY18

1 R&M Expenses 361.34

2 Employee Expenses

3 A&G Expenses


5 Interest & Finance Charges



8 Less interest & other expenses

capitalised

4.49

9 Total 634.03

10 ROE 38.75

11 NET ARR 672.78

TABLE – 5.28

APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18


Sl.

No Particulars FY18

1 Power Purchase 2765.03

2 Transmission Charges 355.72

3 R&M Expenses 154.86

4 Employee Expenses

5 A&G Expenses


Interest & Finance Charges



9 Interest on consumer security deposits 31.53

Total 3395.32

11 ROE 7.38


13 Fund towards Consumer Relations /

Consumer Education

0.50

14 NET ARR 3359.54

cix

5.5 Gap in Revenue for FY18:

As discussed above, the Commission decides to approve the revised

Annual Revenue Requirement (ARR) of GESCOM for its operations in

FY18 at Rs.4523.29 Crores as against GESCOM’s application proposing

the revised ARR of Rs.5345.83 Crores which included a revenue deficit

of Rs.133.44 Crores for FY16. This approved revised ARR includes an

amount of Rs.490.97 Crores which is determined as the deficit in FY16

as discussed in Chapter-4. Based on the existing retail supply tariff, the

total realization of revenue will be Rs.4178.00 Crores which is Rs.345.29

Crores less than the projected revenue requirement for FY18.

The net ARR and the gap in revenue for FY18 are shown in the following

table:

TABLE – 5.29

Revenue gap for FY18

Particulars FY18

Net ARR including carry forward gap of FY16 (in Rs.

Crores)

4523.29

Approved sales (in MU) 7188.58

Average cost of supply (in Rs./unit) 6.29

Revenue at existing tariff (in Rs. Crores) 4178.00

Gap in revenue (in Rs. Crores) (345.29)

The determination of revised retail supply tariff on the basis of the

above approved ARR is detailed in the following Chapter.

cx

CHAPTER – 6

DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18

6.0 Revision of Retail Supply Tariff for FY18-GESCOM’s Proposals and

Commission’s Decisions:

6.1 Tariff Application

As per the Tariff application filed by the GESCOM, it has projected an

unmet gap in revenue of Rs.1075.33 Crores for FY18, which also

includes the gap in revenue of Rs.133.44 Crores for FY16. In order to

bridge this gap in revenue, GESCOM has proposed a uniform tariff

increase of 148 paise per unit, in respect of all the categories of

consumers.

In the previous chapters of this order, the Annual Performance

Review(APR) for FY16 and the revision of ARR for FY18 has been

discussed. The various aspects of determination of tariff for FY18 are

discussed in this Chapter.

6.2 Statutory Provisions guiding determination of Tariff

As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the

following factors, while, determining the tariff so that,

the distribution and supply of electricity are conducted on

commercial basis;

competition, efficiency, economical use of resources, good

performance, and optimum investment are encouraged;

the tariff progressively reflects the cost of supply of electricity, and

also reduces and eliminates cross subsidies within the period to be

specified by the Commission;

efficiency in performance is to be rewarded: and

a multi-year tariff framework is adopted.

cxi

Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the

Karnataka Electricity Reform Act 1999, empowers the Commission to

specify, from time to time, the methodologies and the procedure to be

observed by the licensees in calculating the Expected Revenue from

Charges (ERC). The Commission determines the Tariff in accordance

with the Regulations and the Orders issued by the Commission from time

to time.

6.3 Factors Considered for Tariff setting:

The Commission has considered the following relevant factors for

determination of retail supply tariff:

a) Tariff Philosophy:

As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply in respect of consumers

whose ability to pay is considered inadequate and also fix tariff at

or above the average cost of supply for categories of consumers

whose ability to pay is considered to be higher. Thus, the system of

cross subsidy continues. However, the Commission has taken due

care to progressively bring down the cross subsidy levels as

envisaged in the Tariff Policy 2016, issued by the Government of

India.

b) Average Cost of Supply:

The Commission has been determining the retail supply tariff on the

basis of the average cost of supply. The KERC (Tariff) Regulations,

2000, as amended from time to time, require the licensees to

provide details of embedded cost of electricity voltage / consumer

category-wise. The distribution network of Karnataka is such that, it

is difficult to segregate the common cost between voltage levels.

Therefore, the Commission has decided to continue the average

cost of supply approach for recovery of the ARR. With regard to

the indication of voltage- wise cross subsidy with reference to the

cxii

voltage-wise cost of supply, the same is indicated in the Annexure

to this Order.

c) Differential Tariff:

The Commission has been determining differential retail supply tariff

for consumers in urban and rural areas, beginning with its Tariff

Order dated 25th November, 2009. The Commission decides to

continue the same in the present order also.

6.4 New Tariff Proposals by GESCOM’s:

i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-

stations:

ESCOMs, in their tariff application dated 30th November, 2016,

besides seeking revision of retail supply tariff for all the

categories of consumers, has prayed for determination tariff for

the Auxiliary Consumption of KPTCL Stations. CESC has also filed

separate Petitions before this Commission seeking tariff

determination for auxiliary consumption of KPTCL’s substations.

GESCOM Submission:

ESCOMs have requested fixation of tariff for KPTCL’s Auxiliary

consumption on the following grounds:

1. The power utilized by KPTCL Substations for auxiliary

consumption purpose is supplied by ESCOMs through a

separate feeder or local feeder. The power so supplied by

ESCOMs is from the pooled purchase of power from different

sources at different rates. The cost incurred in procurement

of power by the ESCOMs, need to be paid by the KPTCL.

2. The auxiliary consumption of PGCIL stations, being the

transmission utility, is being billed under commercial tariff.

cxiii

3. The auxiliary consumption of KPTCL Substations is being billed

at average power purchase cost of the ESCOMs where the

substations are geographically located, from June, 2005 to

October 2016 as per the KPTCL’s letter dated 15.12.2005.


The treatment of the electricity consumption of KPTCL’s substations

has been a matter of contention between KPTCL and ESCOMs.

While the KPTCL has been urging the Commission to treat the

consumption of its substations as transmission loss, the ESCOMs

have been requesting the Commission to fix a commercial tariff.

The BESCOM in its letter dated 29.05.2015, had requested the

Commission to approve the Commercial tariff to the auxiliary

consumptions in respect of KPTCL Sub-stations. After examining the

issue in detail, the Commission had clarified that as per the

provisions of Regulation 3.3 of the KERC (Terms and Conditions for

Determination of Transmission Tariff) Regulations, 2006, the charges

for the auxiliary consumptions of KPTCL substations used for the

purpose of air-conditioning, lighting etc. are part of the normative

operation and maintenance expenses of KPTCL and hence the

charges for the same have to be borne by KPTCL. Further, the

Commission also notes that, the KPTCL while computing the

transmission losses, is not considering the electricity consumption of

its sub-stations as part of the transmission loss. Accordingly, the

Commission vide its letter No. B/07/05/451 dated 23.06.2015, had

clarified that since there is no specific category in the present tariff

schedule for billing the auxiliary consumption of KPTCL Substations,

the ESCOMs should seek determination of tariff in respect of sale of

power to KPTCL substations under the provisions of clause 3.05 of

the Conditions of Supply of Electricity by Distribution Licensees in

the State of Karnataka. Accordingly, the ESCOMs have filed the

petitions.

From the submissions made by ESCOMs, it is clear that, the power

utilized by KPTCL Sub-stations for the consumption purpose is being

supplied by the ESCOMs through a separate / local feeder. Since,

cxiv

KPTCL is responsible for accounting the energy purchased by the

ESCOMs upto the interface point of the ESCOM’s and the energy

utilized by KPTCL Substations for auxiliary consumption purpose has

not been recognized in computation of transmission losses, the

energy supplied from the distribution network of the ESCOMs for

the consumption of the KPTCL Sub stations has to be accounted

and charged in accordance with the provisions of the KERC (Terms

and Conditions for Determination of Transmission Tariff)

Regulations, 2006.

Now, keeping in view the request of the ESCOMs, the issue before

the Commission is whether to fix a commercial tariff or a tariff

equal to the State’s average power purchase cost, to bill the

auxiliary consumption of KTPCL Sub-stations. The Commission notes

that any tariff charged to bill the KPTCL’s substations consumption,

shall have to be ultimately recovered through transmission tariff,

which in turn, is passed on to the end consumers in the form of

retail supply tariff. In order to minimise the burden on the retail

supply consumers, the Commission decides as follows:

In accordance with the provisions of Regulation 3.3 of the KERC

(Terms and Conditions for Determination of Transmission Tariff),

Regulations, 2006 and amendment thereon and Clause 3.05 of the

Conditions of Supply of Electricity by Distribution Licensees in the

State of Karnataka, the power supplied by the ESCOMs to the

KPTCL’s Substations for auxiliary consumption purposes, the

Commission decides to fix a single part tariff rate at the State

Average Power Purchase Cost, as approved by the Commission, in

the Tariff Orders issued from time to time.

Further, for the energy consumption by KPTCL’s Sub-stations for

auxiliary purposes, during the previous periods, the ESCOMs shall

bill it at the average power purchase cost of the State, as

determined by the Commission in the Tariff Order issued from time

to time.

cxv

ii) Petition seeking increase in Demand Charges and reduction in energy

charges to HT consumers.

Some of the ESCOMs in their application and also in the petitions has

proposed increase in Demand Charges (Fixed Cost) and reduction in

energy charges to HT-1, HT-2(a)(b) (c) and HT4 consumers for the

following reasons:

i) The ratio of fixed and variable cost of power purchase cost

payable to the private generators is 33: 67

ii) All the ESCOMs in the state are recovering the fixed cost of their

distribution network only 9% of the ARR, the balance 24%. of the

fixed cost through energy charge (variable charge)

iii) ESCOM, it is not able to recover the variable costs which include

the fixed cost by Rs.10/- (Rupees Ten only) Per KVA/HP/KW from

the HT consumer opting for open access.

iv) The contribution of Fixed cost is only 9% of the ARR and the

remaining fixed cost is camouflaged in the energy charges,

which are higher.

With the above justification, the ESCOMs have proposed to increase

the Demand charges upto Rs.250 per KVA of the billing demand from

the existing Demand Charge of Rs.180 -200 per KVA. GESCOM has also

proposed reduction in energy charges ranging between 20 Paise to 85

paise per unit to the various categories of HT consumers.

Consumers’ Response:

The representatives of small-scale industries have opposed the

proposal for increasing the Demand Charges. They have contended

that ESCOM has not furnished the working details of fixed charges and

its percentage to the total fixed charges being incurred. It is submitted

that as per the provisions of the Electricity Act, 2003, the ESCOMs

should realise the cost of supply from all the categories of consumers

and should not confine recovery of fixed cost only to a specific

category of consumers.

cxvi


ESCOM’s, in their petitions have considered the recovery of Fixed Cost

(FC) of generation sources and the distribution network. It has not

considered the FC involved in transmission of power and the SLDC

charges which one of the major components of the ARR. Further,

seeking increase in demand charges and reduction in the energy

charges to HT consumers only does not appear to a proper approach.

Any proposal to encourage sale or to improve the ESCOM’s finances

should be made by keeping the interest of all the consumers in mind

and the treatment to various class of consumers across the ESCOM

should be just and equitable. Hence, the Commission is unable to

accept the proposal of ESCOM’s to increase the Demand Charges of

its HT consumers in total.

The Commission in its Tariff Order dated 30th March, 2016 had

considered increase in demand charges to the consumers of all

consumer in the State. While doing so it had observed that:

“As per the new Tariff Policy issued by the Ministry of Power,

Government of India, dated 28th January, 2016, two-part Tariff

featuring separate fixed and variable charges shall be

introduced for all consumers. In order to ensure their financial

viability, it is imperative that the fixed expenditure incurred by

the ESCOMs are recovered in the form of fixed charges. On a

study of the existing rate of fixed charges levied on the

consumers and the amount collected thereon, it is observed

that fixed charges needs to be increased gradually to meet the

above objective”.

In pursuance of the above, the Commission has again reviewed the

status of recovery of fixed charges while revising the tariff for FY18. The

fixed costs to be incurred by GESCOM to supply power to its consumers

for FY18, consists of the following components:

Activity Total Fixed Cost to be

incurred -Rs. Crs.

Generation 571.11

Transmission including SLDC charges 509.62

Distribution network cost 673.12

Total Fixed cost of GESCOM 1753.85

cxvii

The approved Net ARR of GESCOM is Rs.4523.29 Crores out of which,

RS.1753.85 Crores is towards fixed cost. As per the existing Revenue

rates, GESCOM recovers an amount of Rs.249.95 Crores towards the

fixed cost, which accounts for recovery of 14.25% of the fixed cost,

incurred by the GESCOM.

Since the Commission has decided to increase the FC year on year

gradually, an increase ranging between Rs.10 to Rs.20 has been

considered while approving the tariff to various categories of

consumers. The details of the actual increase is indicated in the tariff

schedule of each of the consumer categories.

iv) Introduction of morning peak from 6 AM to 10 AM under ToD billing:

In respect of HT consumers, the GESCOM in its petition No.58 /2017

dated 31st March,2017 has proposed to introduce ToD billing for

morning peak between 6 AM to 10AM in addition to the prevailing ToD

billing for usage of energy during evening peak (6 p.m. to 10 p.m.) and

to remove the existing incentive of Rs.1.25 per unit for off peak period

usage from 22.00 Hours to 6.00 Hours (during night hours).

GESCOM has submitted that the ToD billing is to encourage the HT

consumers to shift their load from peak hours to non-peak hours by

incentivising them and also to levy a penalty to discourage usage of

energy during peak hours. They have also cited the examples of Delhi,

Mumbai and Gujarat where ToD billing is prevailing for both morning

and evening peak usage as compared to the State’s single ToD billing

for evening peak usage. The off peak incentive helps in shifting the

load curve to night hours which is helpful for optimum power

generation during night hours.

Consumers across the State have opposed this proposal and have

requested the Commission to make the ToD billing optional instead of

making it mandatory.

The Commission has examined the issue in detail. It is found that during

most part of the year, the morning peak usage is higher than the

cxviii

evening peak usage. In the absence of penal charges during the

morning peak, the tendency to use the power in the morning peak is

more as compared to the evening peak. The system of ToD billing for

morning peak is also prevalent in the States referred to above. Hence,

the Commission decides to introduce ToD billing in respect of HT

consumers for morning peak between 6 AM to 10AM in addition to the

prevailing ToD billing for usage of energy during evening peak (6 p.m.

to 10 p.m.) and also to reduce the incentive for off-peak usage (during

night hours) to Rs.1/ per unit as against the existing rate of Rs.1.25 per

unit. The necessary changes in the ToD billing are indicated in the

respective Tariff schedule of the HT Consumers, in this Tariff Order.

6.5 Revenue at existing tariff and deficit for FY18:

The Commission in its preceding Chapters has decided to carry

forward the gap in revenue of Rs.490.97 Crores of FY16 to the ARR of

FY18. The gap in revenue for FY18 is proposed to be filled up by revision

of Retail Supply Tariff, as discussed in the following paragraphs of this

Chapter.

Considering the approved ARR for FY18 and the revenue as per the

existing tariff, the gap in revenue for FY18 is as follows:

TABLE – 6.1

Revenue Deficit for FY18

Amount Rs. in Crores

Particulars Amount

Approved Net ARR for FY18 including gap of FY16 4523.29

Revenue at existing tariff 4178.00

Surplus / (- )Deficit (345.30)

Additional Revenue to be realised by Revision of

Tariff

345.30

Accordingly, in this Chapter, the Commission has proceeded to

determine the Revised Retail Supply Tariff for FY18. The category-wise

tariff as existing, as proposed by GESCOM and as approved by the

Commission are as follows:

cxix

1. LT-1 Bhagya Jyothi:

The existing tariff and the tariff proposed by GESCOM are given below:

Sl.

No

Details Existing as per 2016

Tariff Order

Proposed by GESCOM

1 Energy charges

(including recovery

towards service main

charges)

577 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

725 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

Commission’s Views/ Decision

The Government of Karnataka has continued its policy of providing

free power to all BJ/KJ consumers with a single outlet, whose

consumption is not more than 40 units per month, vide Government

Order No. EN12 PSR 2017 dated 20th March, 2017 (instead of the earlier

limit of 18 units per month). Based on the present average cost of

supply, the tariff payable by these BJ/KJ consumers is revised to Rs.6.29

per unit.

Further, the ESCOMs have to claim subsidy for only those consumers

who consume 40 units or less per month per installation. If the

consumption exceeds 40 units per month or if any BJ/KJ installation is

found to have more than one outlet, it shall be billed as per the Tariff

Schedule LT 2(a).

The Commission determines the tariff (CDT) in respect of BJ / KJ of

GESCOM installations as follows:

LT – 1 Approved Tariff for BJ / KJ installations

Commission determined Tariff Retail Supply Tariff determined

by the Commission

629 paise per unit,

Subject to a monthly minimum of

Rs.30 per installation per month.

-Nil-*

Fully subsidized by GoK

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff

payable by these Consumers is shown as nil. However, if the

GOK does not release the subsidy in advance, a Tariff of Rs.6.29

per unit subject to a monthly minimum of Rs.30 per installation

cxx

per month, shall be demanded and collected from these

consumers.

2. LT2 - Domestic Consumers:


The details of the existing and proposed tariff under this category are

given in the Table below:

Proposed Tariff for LT-2 (a)

LT-2 a (i) Domestic Consumers Category

Applicable to areas coming under City Municipal Corporations and all

Urban Local Bodies


Tariff Order

Proposed by GESCOM

Fixed Charges per

Month

For the first KW Rs.30 For the first KW Rs.30

For every additional KW

Rs.40

For every additional

KW Rs.40

Energy Charges

0-30 units

(life line

Consumption )

0 to 30 units: 300

paise/unit

0 to 30 units: 448

paise/unit

Energy Charges

exceeding 30 units

per month

31 to 100 units: 440

paise/unit

31 to 100 units: 588

paise / unit

101 to 200 units: 590

paise/ unit

101 to 200 units:738

paise/ unit

Above 200 units: 690

paise/ unit


paise / unit

LT-2(a)(ii) Domestic Consumers Category

Applicable to Areas under Village Panchayats

Details Existing as per 2016 Tariff Order

Proposed by GESCOM

Fixed charges

per Month

For the first KW Rs.20 For the first KW Rs.20


KW Rs.30


KW Rs.30

Energy Charges

0-30 units (life line

Consumption )

Upto 30 units: 290 paise

/ unit

0 to 30 units: 438

paise/unit

Energy Charges

exceeding 30

Units per month

31 to 100 units: 410

paise/ unit

31 to 100 units: 558

paise/ unit

101 to 200 units: 560

paise/ unit

101 to 200 units: 708

paise

/unit


paise/ unit


paise/ unit

Commission’s decision

cxxi

The decides to continue with the two tier tariff structure in respect of

the domestic consumers as shown below:

(i) Areas coming under City Municipal Corporations and all Urban

Local Bodies.

(ii) Areas under Village Panchayats.

The Commission approves the tariff for this category as follows:

Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:

Applicable to Areas coming under City Municipal Corporations and all

Urban Local Bodies

Details Tariff approved by the

Commission

Fixed charges per Month For the first KW: Rs.40/-

For every additional KW Rs.50/-

Energy Charges up to 30 units per

month (0-30 units)-life line consumption.

Upto 30 units: 325 paise/unit

Energy Charges in case the

consumption exceeds 30 units per

month

31 to 100 units: 470 paise/unit


Above 200 units: 730 paise/unit

Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats

Details Tariff approved by the

Commission

Fixed Charges per Month For the first KW: Rs.25/-

For every additional KW Rs.40/-

Energy Charges up to 30 units per

month (0-30 Units)-Lifeline

Consumption

Up to 30 units: 315 paise/unit

Energy Charges in case the

consumption exceeds 30 units

per month




LT2 (b) Private and Professional Educational Institutions& Private

Hospitals and Nursing Homes:


cxxii

The details of the existing and the proposed tariff by GESCOM under

this category are given in the Table below:

LT 2 (b) (i)Applicable to areas under City Municipal Corporations Areas

and all urban Local Bodies

Details Existing as per 2016 Tariff

Order

Proposed by GESCOM

Fixed Charges

per Month

Rs.45 Per KW subject to a

minimum of Rs.75 per month

Rs.45 Per KW subject to a

minimum of Rs.75 per month

Energy Charges For the first 200 units: 625

paise per unit

For the first 200 units: 773 paise

per unit

Above 200 units : 745 paise

per unit

For the balance units: 893

paise per unit

LT 2 (b)(ii) Applicable to Areas under Village Panchayats


Order

Proposed by GESCOM

Fixed Charges

per Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Energy

Charges

For the first 200 units: 570

paise per unit


per unit

Above 200 units: 690 paise

per unit


paise per unit


As in the previous Tariff Order the Commission decides to continue the

two tier tariff structure as follows:

(i) Areas coming under City Municipal Corporation and all urban local

bodies.


Approved Tariff for LT 2 (b) (i)

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable to areas under City Municipal Corporations and all other

urban Local Bodies.

Details Tariff approved by the Commission

Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85

per Month

Energy Charges 0-200 units: 650 paise/unit


Approved Tariff for LT 2 (b) (ii)

cxxiii

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable in Areas under Village Panchayats


Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per

Month

Energy Charges 0-200 units: 595 paise/unit


3. LT3- Commercial Lighting, Heating& Motive Power:


The existing and proposed tariff are as follows:

LT- 3 (i) Commercial Lighting, Heating& Motive Power

Applicable to Areas coming under City Municipal Corporation and

urban local bodies


Order

Proposed by GESCOM

Fixed charges per

Month

Rs.50 per KW Rs.50 per KW


paise per unit


per unit


paise per unit


paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW but

below 50 KW.

Details Existing as per 2016 Tariff Order Proposed by GESCOM

Fixed

charges


Energy

Charges

For the first 50 units:715paise

per unit

For the first 50 units: 863paise

per unit


paise per unit


paise per unit

LT-3 (ii) Commercial Lighting, Heating & Motive

Applicable to areas under Village Panchayats


Order

Proposed by GESCOM

Fixed Charges per

Month



paise per unit


paise per unit

For the balance units:

765paise per unit


paise per unit

cxxiv

Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW


Tariff Order

Proposed by GESCOM

Fixed Charges

per Month



paise per unit


paise per unit


765 paise per unit


913 paise per unit

Commission’s Views/ Decision

As in the previous Tariff Order, the Commission decides to continue

with the two tier tariff structure as below:

(i) Areas coming under City Municipal Corporations and other

urban local bodies.


Approved Tariff for LT- 3 (i)Commercial Lighting, Heating& Motive

Applicable to areas under City Municipal Corporations and other Urban

Local Bodies

Details Approved by the Commission

Fixed Charges per Month Rs.60 per KW

Energy Charges For the first 50 units: 750 paise/ unit

For the balance units: 850 paise/unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW



Energy Charges For the first 50 units: 750 paise /unit

For the balance units: 850 paise/unit

Approved Tariff forLT-3 (ii) Commercial Lighting, Heating and Motive

Applicable to areas under Village Panchayats


Fixed charges per Month Rs.50 per KW

Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

Approved Tariff for Demand based tariff (Optional)where sanctioned

load is above 5 kW but below 50 kW

cxxv



Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

4. LT4-Irrigation Pump Sets:


The existing and proposed tariff for LT4 (a) are as follows:

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets upto and inclusive of 10 HP


Order

Proposed by GESCOM

Fixed charges per

Month

Nil Nil

Energy charges CDT 503 paise per unit Free (In case GoK does not

release the subsidy in

advance, CDT of 651 paise

per unit will be demanded

and collected from

consumers)

Commission’s Decision

The Government of Karnataka has extended free supply of power to

farmers as per Government Order No. EN 55 PSR 2008 dated

04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets

up to and inclusive of 10 HP is being borne by the GoK through tariff

subsidy. In view of this, all the consumers under the existing LT-4(a) tariff

are covered under free supply of power.

Considering the cross subsidy contribution from categories other than

IP Sets and BJ/KJ Categories, the Commission determines the tariff for

IP Sets under LT4(a) category as follows:

Approved CDT for IP Sets for FY18

Particulars GESCOM

Approved ARR in Rs. Crore 4523.29

Revenue from other than IP & BJ/KJ

installations in Rs. Crore 2540.51

Amount to be recovered from IP & BJ/KJ

installations in Rs. Crore 1982.78

Approved Sales to BJ/KJ installations in MU 128.44

cxxvi

Revenue from BJ/KJ installations at

Average Cost of supply in Rs. crore 80.79

Amount to be recovered from IP Sets

category in Rs. crore 1901.99

Approved Sale to IP Sets in MU 3451.88

Commission Determined Tariff (CDT) for IP

set Category for FY18 in Rs/Unit 5.51

Accordingly, the Commission decides to approve tariff of Rs.5.51 per

unit as CDT for FY18 for IP Set category under LT4 (a). In case the GoK

does not release the subsidy in advance, a tariff of Rs.5.51 per unit shall

be demanded and collected from these consumers.

Approved by the Commission

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets up to and inclusive of 10 HP


Fixed charges per Month

Energy charges

Nil*

CDT (Commission Determined Tariff):

551 paise per unit

* In case the GoK does not release the subsidy in advance, a tariff of

Rs.5.51 per unit shall be demanded and collected from these

consumers.

The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level

for properly assessment of distribution losses and to enable detection

and prevention of commercial loss. In view of substantial progress in

implementation of feeder segregation under NJY scheme, the ESCOMs

were also directed to submit IP set consumption on the basis of the

meter readings of the 11 kV feeders at the substation level duly

deducting the energy losses in 11kV lines, distribution transformers & LT

lines, in order to compute the consumption of power by IP sets

accurately. Further, in the Tariff Order 2016, the ESCOMs were also

directed to take up enumeration of IP sets, 11 KV feeder-wise by

capturing the GPS co-ordinates of each live IP set in their

jurisdiction. In this regard, the Commission has noted that the ESCOMs

have complied partly with these directions and they have initiated

measures to achieve full compliance. The ESCOMs need to ensure full

cxxvii

compliance as this has direct impact on their revenues and tariff

payable by other categories of consumers.

For the forgoing reasons, the Commission directs the ESCOMs as

follows:

The ESCOMs shall manage supply of power to the IP sets for the FY18,

so as to ensure that it is within the quantum of subsidy committed by

the GoK. They shall procure power which is proportional to such supply.

In case the ESCOMs opt to supply power to the IP sets in excess of the

quantum corresponding to the amount of subsidy the GoK has assured

to be released for FY18, the difference in the amount of subsidy relating

to such supply shall be claimed from the GoK. If the difference in

subsidy is not paid by the GoK, the same has to be collected from the

IP set consumers.

LT4 (b) Irrigation Pump Sets above 10 HP:

GESCOM’s Proposal

The Existing and proposed tariff for LT-4(b) are as follows:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP


Order

Proposed by GESCOM

Fixed charges per

Month

Rs.40 per HP Rs.40 per HP

Energy charges for

the entire

consumption

280 paise per unit 428 paise per unit

The existing and proposed tariff for LT4(c) are as follows:

LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea

& Rubber plantations up to & inclusive of 10 HP


Order

Proposed by GESCOM

Fixed charges per

Month


Energy charges for

the entire

consumption


cxxviii

LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &

Rubber plantations above 10 HP


Order

Proposed by GESCOM

Fixed charges per

Month


Energy charges for the

entire consumption

280paise per unit 428 paise per unit

Approved Tariff:

The Commission decides to revise the tariff in respect of these

categories as shown below:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP

Fixed charges per Month Rs.50 per HP

Energy charges for the entire

consumption

300 paise/unit

LT4(c) (i) - Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber plantations up to & inclusive of 10 HP


Energy charges 300 paise / unit

LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea&

Rubber plantations above 10 HP


Energy charges 300 paise/unit

5. LT5 Installations-LT Industries:


The existing and proposed tariffs are given below:

LT-5 (a) LT Industries:

Applicable to areas under City Municipal Corporation

i) Fixed charges


Fixed i) Rs. 30 per HP for 5 HP & i) Rs. 30 per HP for 5 HP & below

cxxix

charges

per Month

below

ii) Rs. 35 per HP for above 5 HP

& below 40 HP

iii) Rs. 40 per HP for 40 HP &

above but below 67 HP

iv)Rs. 100 per HP for 67 HP &

above

ii) Rs. 35 per HP for above 5 HP &

below 40 HP

iii) Rs. 40 per HP for 40 HP &


iv)Rs. 100 per HP for 67 HP &

above

Demand based Tariff (Optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by

GESCOM

Fixed

Charg

es per

Month

Above 5 HP and less

than 40 HP

Rs.50 per KW of billing

demand

Rs.50 per KW of

billing demand

40 HP and above but

less than 67 HP


demand

Rs.65 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

ii) Energy Charges


Tariff Order

Proposed by GESCOM

For the first 500 units 495 paise per unit 643 paise/ unit

For next 500 units 585 paise per unit 733 paise /unit

For the balance unit 615 paise per unit 763 paise /unit

LT-5 (b) LT Industries:

Applicable to all areas other than those covered under LT-5(a)

i) Fixed charges


Fixed

Charges per

Month

i) Rs.30 per HP for 5 HP &

below

ii) Rs.35 per HP for above 5 HP

& below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

i) Rs.30 per HP for 5 HP & below

ii) Rs.35 per HP for above 5 HP &

below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

cxxx

Demand based Tariff (optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by

GESCOM

Fixed Charges per Month

Above 5 HP and

less than 40 HP

Rs.50 per KW of

billing demand

Rs.50 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.65 per KW of

billing demand

Rs.65 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

ii) Energy Charges


Tariff Order

Proposed by GESCOM

For the first 500 units 485 paise per unit 633 paise/ unit

For the next 500

units

570 paise per unit 718 paise/ unit

For the balance

units

600 paise per unit 748 paise/ unit

Existing ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy

charges over the normal tariff applicable

22.00 Hrs to 06.00 Hrs (-) 125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff

Time of day Increase (+) / reduction (-) in the energy


06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit

10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

Commission’s Decision:

Time of the Day Tariff:

The decision of the Commission in its earlier Tariff Orders, providing for

mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers

with a contract demand of 500 KVA and above is continued. The

optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)

consumers with contract demand of less than 500 KVA. Further, for LT5

and HT1 consumers, the optional ToD is continued as existing.

cxxxi

The Commission has decided to continue with two tier tariff structure

introduced in the previous Tariff Orders, which are as follows:

i) LT5 (a): For areas falling under City Municipal Corporations

ii) LT5 (b): For areas other than those covered under LT5 (a) above.

Approved Tariff:

The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given

below:

Approved Tariff for LT 5 (a):

Applicable to areas under City Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month


ii) Rs.45 per HP for above 5 HP & below 40 HP

iii) Rs.60 per HP for 40 HP & above but below 67 HP

iv) Rs.120 per HP for 67 HP & above


Fixed

Charges per

Month

Above 5 HP and less than 40

HP


demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.170 per KW of billing

demand

ii) Energy Charges


For the first 500 units 510 paise/unit

For the next 500 units 605 paise/ unit

For the balance units 635 paise/ unit

Approved Tariff for LT 5 (b):


i) Fixed charges

Details Approved Tariff

Fixed

Charges

per Month





cxxxii

ii) Demand based Tariff (optional)

Details Description Approved Tariff

Fixed Charges per Month Above 5 HP and

less than 40 HP


demand

40 HP and above

but less than 67 HP


demand


demand

iii) Energy Charges

Details Approved tariff

For the first 500 units 500 paise/ unit


For the balance units 620 paise/unit

As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy


06.00 Hrs to 10.00 Hrs (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 hrs (+) 100 paise per unit

22.00 Hrs to 06.00 Hrs (-) 100 paise per unit

6. LT-6 Water Supply Installations and Street Lights:


The existing and the proposed tariffs are given below:

LT-6(a) : Water Supply


Order

Proposed by GESCOM

Fixed charges per Month Rs.45/HP/month Rs.45/HP/month

Energy charges 390 paise/unit 538 paise/unit

LT-6 (b) : Public Lighting


Fixed charges

per Month

Rs.60/KW/month Rs.60/KW/month

Energy charges

without LED bulbs

550 paise/unit 698 paise/unit

Energy charges

for LED/Induction

450 paise/unit 598 paise/unit

cxxxiii

The Commission approves the tariff for these categories are as follows:

Tariff Approved by the Commission for LT-6 (a): Water supply


Fixed Charges per Month Rs.55/HP/month


Tariff Approved by the Commission for LT-6 (b): Public Lighting


Fixed charges per Month Rs.70 /KW/month


Energy charges for LED /

Induction Lighting

485 paise/unit

7. LT 7- Temporary Supply & Permanent supply to Advertising Hoardings:


The existing rate and the proposed rate are given below:

Tariff Schedule LT-7(a) Applicable to Temporary Power Supply for all purposes.

a) Less than 67

HP:

Energy charge at 950

paise per unit subject

to a weekly minimum

of Rs.170 per KW of

the sanctioned load.

Energy charge at 1098 paise

per unit subject to a weekly

minimum of Rs.170 per KW of

the sanctioned load.

TARIFF SCHEDULE LT-7(b)

Applicable to power supply to Hoardings & Advertisement boards

on Permanent connection basis.

a) Less than 67

HP:

Fixed Charge Rs.50 per

KW/ month of the

sanctioned load.

Fixed Charge Rs.50 per KW/

month of the sanctioned load.

Energy charge at 950

paise per unit

Energy charge at 1098 paise

per unit



Tariff Order

Proposed by GESCOM


Tariff Order

Proposed by GESCOM

cxxxiv

As decided in the previous Tariff Order, the tariff specified for

installations with sanctioned load / contract demand above 67 HP

shall be covered under the HT temporary tariff category under HT5.

With this, the Commission decides to approve the tariff for LT-7

category as follows:

TARIFF SCHEDULE LT-7(a)

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 1000 paise / unit

subject to a weekly minimum of Rs.190

per KW of the sanctioned load.


Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

[

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW / month


H.T. Categories:

Time of Day Tariff (ToD)

The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a), HT-2(b) and HT2(c) consumers with a contract demand

of 500 KVA and above. Further, the optional ToD will continue as

existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract

demand of less than 500 KVA. The details of ToD tariff are indicated

under the respective tariff category.

8. HT1- Water Supply & Sewerage


The existing and proposed tariff are as given below:

The Existing and the proposed tariff – HT-1 Water Supply and Sewerage

Installations

cxxxv

Details Existing tariff as per 2016

Tariff Order

Proposed Tariffs by

GESCOM

Demand

charges

Rs.190 / kVA of billing

demand / month

Rs.190 / kVA for billing

demand / month

Energy

charges


Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff to HT-1 category:




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

Commission’s decision:

As discussed earlier in this Chapter, the Commission approves the tariff for HT 1 Water Supply & Sewerage

category as below:

Details Approved Tariff for HT 1

Demand

charges

Rs.200 / kVA of billing demand / month

Energy charges 485 paise/ unit

As discussed earlier in this Chapter, the approved ToD tariff to HT-1 tariff to

Water Supply & Sewerage installations at the option of the consumer is as

follows

06.00 Hrs. to 10.00 hours (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit

9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial






cxxxvi


HT – 2 (a) HT Industries

Applicable to all areas of GESCOM

Details Existing tariff as per

Tariff Order 2016

Proposed Tariff by

GESCOM

Demand charges Rs. 180 / kVA of billing

demand / month

Rs. 180 / kVA of billing

demand / month

Energy charges

(i) For the first one

lakh units

(ii) For the balance

units

620 paise per unit

660 paise per unit

768 paise per unit

808 paise per unit

Railway traction and Effluent Plants under HT2 (a).


Tariff order 2016

Tariff Proposed by GESCOM

Demand charges Rs. 190 / kVA at billing

demand / month


demand / month

Energy charges 590paise per unit for all

the units

738 paise per unit for all the

units

Existing ToD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(a)




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0


Approved Tariff for HT – 2 (a):

As discussed earlier in this chapter, the Commission approves the tariff for HT 2(a) category as below:

i) Approved Tariff for HT2(a)

Applicable to all areas under GESCOM


Demand charges Rs.200 / kVA of billing demand / month

cxxxvii

Energy charges

For the first one lakh units 660 paise/ unit

For the balance units 680 paise/ unit

As discussed earlier in this Chapter, the approved ToD tariff to HT2(a)(i) &

(ii) tariff.


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs (-)100 paise per unit

ii) Railway Traction & Effluent Treatment Plants under both HT2(a)


Demand charges Rs. 210 / kVA of billing demand / month

Energy charges 620 paise / unit for all the units

10. HT-2 (b) HT Commercial



Existing and proposed tariff HT – 2 (b) HT Commercial



Tariff Order 2016

Tariff Proposed by GESCOM

Demand charges Rs.200 / kVA of billing

demand / month


demand / month

Energy charges

(i) For the first two

lakh units

785paise per unit

933paise per unit

(ii)For the balance

units

815paise per unit 963paise per unit

Existing ToD Tariff for HT-2(b)




06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(b)




cxxxviii



10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0


The Commission notes the issue raised by the consumer of Diagnostic

centres and their request to classify under HT-2(c)(ii) category. The

Commission has examined the issue in detail and decided to classify

the HT power supply to Diagnostic centres running on commercial lines

under HT-2(b) category.

As discussed earlier in this chapter, the Commission approves the

following tariff for HT 2 (b) consumers:

Approved tariff for HT – 2 (b) - HT Commercial




Energy charges

(i) For the first two lakh units 825 paise per unit

(ii) For the balance units 835 paise per unit Note: The above tariff under HT2 (b) is not applicable for construction of new industries. Such

power

1supply shall be availed only under the temporary category HT5.

Approved ToD Tariff for HT-2(b)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit

11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:

The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 2 (c) (i)

Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI

Hospitals

and



cxxxix

Universities, Educational Institutions belonging to Government, Local Bodies and

Aided Institutions and Hostels of all Educational Institutions


Tariff Order 2016

Tariff Proposed by

GESCOM

Demand charges Rs.180 / kVA of billing

demand / month


demand / month

Energy charges


lakh units



units


Existing and proposed tariff for HT – 2 (c) (ii) –

Applicable to Hospitals and Educational Institutions other than those covered under

HT2(c) (i)


Tariff Order 2016

Tariff Proposed by

GESCOM dated

30.11.2016

Demand charges Rs. 180 / kVA of

billing demand /

month


demand / month

Energy charges


lakh units

700 paise per unit 848paise per unit


units

750 paise per unit 898paise per unit

Existing ToD Tariff for HT-2(c)(i) & (ii)




06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

cxl


The Commission approves the following tariff for HT2(c) consumers.

Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI

Hospitals,

Universities and Educational Institutions belonging to Government& Local Bodies,

Aided Educational Institutions and Hostels of all Educational Institutions


Demand charges Rs.200/ kVA of billing demand / month

Energy charges

(i) For the first one lakh units 640 paise per unit

(ii) For the balance units 680 paise per unit

Approved tariff for HT – 2 (c) (ii)

Applicable to Hospitals/Educational Institutions other than those covered under

HT2(c) (i)



Energy charges

(i) For the first one lakh units 740 paise per unit

(ii) For the balance units 780 paise per unit

As discussed earlier in this Chapter approved ToD for Tariff to HT-2(c)

(i) & (ii)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit

12. HT-3(a) Lift Irrigation Schemes under Government Departments /

Government owned Corporations/ Lift Irrigation Schemes under Pvt

./Societies:

The existing and proposed tariff are given below:



cxli

Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes

HT 3(a) (i) Applicable to LI Schemes under Government Departments /

Government owned Corporations

Details Existing charges as per Tariff

Order 2016

Proposed charges by

GESCOM

Energy

charges/

Minimum

charges

200 paise / unit

Subject to an annual minimum

of Rs.1120 per HP / annum

348 paise / unit

Subject to an annual

minimum of Rs. 1120

per HP / annum

HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

Fed through Express / Urban feeders

Details Existing Tariff as per Tariff

Order 2016

Proposed by GESCOM

Fixed charges Rs. 40 / HP / Month of

sanctioned load

Rs. 40 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348 paise / unit

HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

other than those covered under HT-3 (a)(ii)

Details Existing Tariff as per Tariff

Order 2016

Proposed by GESCOM

Fixed charges Rs.20 / HP / Month of

sanctioned load

Rs.20 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348paise / unit


The Commission approves the following tariff for HT3(a) consumers:

Approved tariff for HT 3 (a) (i)

Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations

Energy charges /

Minimum charges

225 paise/ unit subject to an annual

minimum of Rs. 1240 per HP / annum

cxlii

Approved tariff for HT 3 (a) (ii)

Applicable to Private LI Schemes and Lift Irrigation Societies fed through

express / urban feeders

Fixed charges Rs.50 / HP / Month of sanctioned load


Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies

other than those covered under HT 3 (a) (ii)

Fixed charges Rs.30 / HP / Month of sanctioned load


13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:


The existing and the proposed tariff are given below:

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:

Details Existing Tariff Order 2016 Proposed tariff by GESCOM

Energy charges /

minimum

charges

400 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load

548 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load


The Commission approves the tariff for this category as indicated

below:

Approved Tariff

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut

Plantations:


Energy charges /

minimum charges

425 paise / unit subject to an

annual minimum of Rs.1240 per

HP of sanctioned load

cxliii

14. HT4- Residential Apartments/ Colonies:


The existing and the proposed tariff for this category are given below:

Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies HT – 4 Applicable to all areas.

Details Existing Tariff Order 2016 Tariff Proposed by

GESCOM

Demand

charges


demand

Rs.110 / kVA of

billing demand

Energy charges 585 paise per unit 733 paise/ unit


As discussed earlier in this chapter, the Commission approves the tariff

for this category as indicated below:

Approved tariff

HT – 4 Residential Apartments/ Colonies Applicable to all areas

Demand charges Rs.120 / kVA of billing demand

Energy charges 620 paise/ unit

15. TARIFF SCHEDULE HT-5


The existing and the proposed tariffs are given below:

HT – 5 – Temporary supply

67 HP and above: Existing Proposed

Fixed charges /

Demand Charges

Rs.220/HP/month for the

entire sanction load /

contract demand

Rs.220/HP/month for the

entire sanction load /

contract demand

Energy Charge 950 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)

1098 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)

Commission’s Views/Decisions:

TARIFF SCHEDULE HT-5

(i) As approved in the Commission’s Tariff Order dated 6th May,

2013, this Tariff is applicable to 67 HP and above hoardings and

advertisement boards and construction power for industries

cxliv

excluding those category of consumers covered under HT2(b)

Tariff schedule availing power supply for construction power for

irrigation and power projects and also applicable to power

supply availed on temporary basis with the contract demand of

67 HP and above of all categories.

Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff

Fixed Charges /

Demand Charges

Rs.240 /HP/month for the entire

sanction load / contract demand

Energy Charges 1000 paise / unit

The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this

Order.

6.6 Wheeling and Banking Charges:

GESCOM in their filing have proposed the following Wheeling charges:

Paise/unit

Injection Point HT LT

Drawal Point

HT 84.28 283.00

LT 283.00 205.57

HT-loss 4.36%

LT-loss 6.32%.

Further, GESCOM in its tariff filing has requested the Commission to

maintain parity in wheeling charges and not to allow banking

during summer months.

The Commission in its preliminary observations had noted that

GESCOM while computing wheeling charges at page 146 of the

filing has indicated distribution network cost as Rs. 4978.90 Crores,

whereas the same is indicated as Rs.1198.05 Crores. for FY18. It is

noted that the distribution ARR indicated at Page -147 does not

tally with the figures indicated at page-120. GESCOM was directed

to reconcile the figures.

Subsequently in their replies to preliminary observations, GESCOM

reconciling the data has proposed the following Wheeling charges:

cxlv

Paise/unit

Injection Point HT LT

Drawal Point

HT 49.97(4.36%) 115.41(10.68%)

LT 115.41(10.68%) 49.47(4.36%)

Note: Figures in brackets are losses

The approach of the Commission regarding wheeling &

banking charges is discussed in the following paragraphs:

The Commission has considered the approved ARR pertaining

to distribution wires business and has proceeded determining

the wheeling charges as detailed below:

6.6.1 Wheeling within GESCOM Area:

The allocation of the distribution network costs to HT and LT networks

for determining wheeling charges is done in the ratio of 30:70, as

was being done earlier. Based on the approved ARR for distribution

business, the wheeling charges to each voltage level is worked out

as under:

TABLE – 6.2

Wheeling Charges

Distribution ARR-Rs. Crs 672.78

Sales-MU 7188.58

Wheeling charges- paise/unit 93.59

Paise/unit

HT-network 28.08

LT-network 65.51

In addition to the above, the following technical losses are

applicable to all open access/wheeling transactions:

Loss allocation % loss

HT 4.54

LT 6.03 Note: Total loss is allocated to HT, LT & Commercial

loss based on energy flow diagram furnished by GESCOM.

cxlvi

The actual wheeling charges payable (after rounding off) will

depend upon the point of injection & point of drawal as under:

Paise/unit

Injection point

Drawal point

HT LT

HT 28(4.54%) 94(10.57%)

LT 94(10.57%) 66(6.03%)

Note: Figures in brackets are applicable loss

The wheeling charges as determined above are applicable to

all the open access or wheeling transactions for using the

GESCOM network, except for energy transmitted or wheeled

from Renewable sources to the consumers within the State.

6.6.2 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK

OF MORE THAN ONE LICENSEE

In case the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or

network of more than one licensee, the charges shall be as

indicated below:

i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the

Transmission Licensee.

ii. If the Transmission network and the ESCOMs’ network is used,

Transmission Charges shall be payable to the Transmission

Licensee. Wheeling Charges payable to the ESCOM where

the power is drawn shall be shared equally among the

ESCOMs whose networks are used.

Illustration:

If a transaction involves transmission network & GESCOM’s

network and 100 units is injected, then at the drawal point the

consumer is entitled for 86.42 units, after accounting for

Transmission loss of 3.37% &GESCOM technical loss of 10.57%.

The Transmission charge in cash as determined in the

Transmission Tariff Order shall be payable to KPTCL & Wheeling

cxlvii

charge of 94 paise per unit shall be payable to GESCOM. In

case more than one ESCOM is involved the above 94 paise shall

be shared by all the ESCOMs involved.

iii. If ESCOMs’ network only is used, the Wheeling Charges is

payable to the ESCOM where the power is drawn and shall

be shared equally among the ESCOMs whose networks are

used.

Illustration:

If a transaction involves injection to BESCOM’s network & drawal

at GESCOM’s network, and 100 units is injected, then at the

drawal point, the consumer is entitled for 89.43 units, after

accounting GESCOM’s technical loss of 10.57%.

The Wheeling charge of 94 paise per unit payable to GESCOM

shall be equally shared between GESCOM& BESCOM.

6.6.3 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-

REC ROUTE) TO CONSUMERS IN THE STATE

The separate Orders issued by the Commission from time to time in

the matter of wheeling and banking charges for RE sources (non-

rec route) wheeling energy to consumers in the State shall be

applicable.

6.6.4 CHARGES FOR WHEELING ENERGY BY RE SOURCS WHEELING

ENERGY FROM THE STATE TO A CONSUMER/OTHERS OUTSIDE THE

STATE AND FOR THOSE OPTING FOR RENEWABLE ENERGY

CERTIFICATE[REC]

In case the renewable energy is wheeled from the State to a

consumer or others outside the State, the normal wheeling charges

as determined in para 6.6.1 and 6.6.2 of this Order shall be

applicable. For Captive RE generators including solar power

projects opting for RECs, the wheeling and banking charges as

specified in the Orders issued by the Commission from time to time

shall be applicable.

6.6.5 BANKING CHARGES AND ADDITIONAL SURCHARGE

cxlviii

GESCOM has prayed for the following on Open Access

Transactions:

a. To allow banking facility for a period of 3-months from the

date of generation

b. Not to allow withdrawal of banked power during peak and

ToD hours

c. If banked energy is not utilized within the period of three

months from the date of power banked, it shall automatically

lapse and no charges shall be paid in view of that power.

d. To levy additional surcharge on OA consumers who draw

power from utility even after opting for OA.

The Commission in its preliminary observations had directed

GESCOM to justify the above requests in terms of detailed financial

impact analysis.

GESCOM in its replies to the preliminary observations had replied

that the financial impact analysis regarding banking and

additional surcharges could be submitted within a week. However,

GESCOM did not furnish any financial impact analysis.

The Commission notes that all the ESCOMs except CESC, have filed

separate petitions seeking modifications to the existing banking

facility. Further, all the ESCOMs have filed petitions separately to

introduce additional surcharge. The above issues pertaining to

banking facility and additional surcharge are being dealt

separately by the Commission in those petitions. Till such time the

Orders are passed in those petitions, the existing banking facility

shall be continued and no additional surcharge is payable.

6.7 CROSS SUBSIDY SURCHARGE[CSS]:

GESCOM in its tariff petition has worked out the Cross Subsidy

surcharge as per the MYT Regulations (the methodology as per

Tariff Policy-2006). However, in its replies to preliminary observations

GESCOM has stated that it has worked out the CSS as per Tariff

cxlix

Policy-2016, which is not correct. GESCOM has proposed the CSS

as indicated below:

Paise/unit

Voltage Level HT-1 HT-2a HT-2b HT-2C HT-4 HT-5

66kV & above 150.95 355.32 463.58 301.74 153.85 1222.27

HT level-

33kV/11kV

23.27 227.64 335.90 174.06 26.17 1094.59

The Commission notes that as per the calculations submitted to

preliminary observations the CSS considering 80% criteria would be as

indicated below:

Paise/unit


66kV & above 49.52 194.36 310.09 -73.18 109.40 850.15

HT level-

33kV/11kV

47.53 192.13 308.10 -83.74 107.39 875.67

Subsequently, in its replies to rejoinder, GESCOM has submitted

revised CSS considering 75% of the CSS worked out as per the

formula as indicated below:

Paise/unit


66kV & above 44.56 180.35 288.84 -78.50 100.68 795.15

HT level-

33kV/11kV

46.42 182.21 290.71 -68.61 102.55 797.02

The Commission notes that in the above proposal, the GESCOM

has interchanged the CSS applicable for 66 kV& above and for HT-

categories.

The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs: -

The Commission in its MYT Regulations has specified the

methodology for calculating the CSS as per Tariff Policy 2006.

Meanwhile, the Central Government has issued the new Tariff

Policy 2016, wherein a revised methodology has been specified for

determining CSS. So far, the Commission, for determining the CSS

had adopted the methodology specified in the earlier Tariff Policy

of 2006. However, considering that such Tariff Policy has been

replaced now by the Tariff Policy-2016 and that a few ESCOMs

have sought determination of CSS under such new Tariff Policy, the

Commission decides to adopt the methodology specified in the

latest Tariff Policy 2016 for determination of CSS in this Tariff Order

cl

for FY18. Action shall be taken to amend the relevant Regulations

for adoption of the revised methodology for determination of CSS.

Based on this methodology, the category-wise cross subsidy will be

as indicated below:

Paise/unit

Particulars Category

Tariff

Average Cost

of supply @

66 kV and

above level*

Average

Cost of

supply at

HT level**

Cross subsidy

surcharge

paise/unit @ 66 kV &

above level as per

formula

Cross subsidy

surcharge

paise/unit @

HT level as per

formula

20% of tariff

payable by

relevant

category

1 2 3 4 8 9 10

HT-1

Water Supply 536.76 410.53 445.45 126.23 91.32 107.35

HT-2a

Industries 762.23 410.53 445.45 351.70 316.79 152.45

HT-2b

Commercial 962.09 410.53 445.45 551.56 516.64 192.42

HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17

HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94

HT3 (a)(i)

Lift Irrigation 225.48 410.53 445.45 -185.05 -219.97 45.10

HT3 (a)(ii)

Lift Irrigation 318.06 410.53 445.45 -92.47 -127.38 63.61

HT3 (a)(iii)

Lift Irrigation 262.67 410.53 445.45 -147.86 -182.77 52.53

HT3 (b)

Irrigation &

Agricultural Farms

426.55 410.53 445.45 16.02 -18.90 85.31

HT-4

Residential

Apartments

662.71 410.53 445.45 252.18 217.27 132.54

HT5

Temporary 1642.58 410.53 445.45 1232.05 1197.14 328.52

*Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09/unit and transmission losses of 3.37%.

** Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09Ps/unit and transmission losses of 3.37%, HT distribution network / wheeling charges of

20.81Ps/unit and HT distribution losses of 3.77%.

Note: The carrying cost of regulatory asset for the current year is zero.

As per the Tariff Policy 2016, while limiting the CSS so as not to exceed

20% of the tariff applicable to relevant category, the CSS (after

rounding off to nearest paise) is determined as under:

Cross Subsidy Surcharge for FY18

Paise/unit

Particulars

66 kV

&

above

HT level-11

kV/33kV

HT-1 Water Supply 107 91

HT-2a Industries 152 152

cli

HT-2b Commercial 192 192

HT-2 (C)(i) 147 147

HT-2 (C)(ii) 164 164

HT3 (a)(i) Lift Irrigation 0 0

HT3 (a)(ii) Lift Irrigation 0 0

HT3 (a)(iii) Lift Irrigation 0 0

HT3 (b) Irrigation &

Agricultural Farms 16 0

HT-4 Residential Apartments 133 133

HT5 Temporary 329 329 Note: wherever CSS is negative, it is made zero

The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area

coming under GESCOM. However, the above CSS shall not be

applicable to captive generating plant for carrying electricity to

the destination of its own use and for those renewable energy

generators who have been exempted from CSS by the specific

Orders of the Commission.

The Commission directs the Licensees to account the transactions

under open access separately.

6.8 Other Issues:

6.8.1 Tariff for Green Power:

In order to encourage generation and use of green power in the

State, the Commission decides to continue the existing Green Tariff

of 50 paise per unit as the additional tariff over and above the

normal tariff to be paid by HT-consumers, who opt for supply of

green power from out of the renewable energy procured by

distribution utilities over and above their Renewable Purchase

Obligation (RPO).

6.9 Other tariff related issues:

i) Rebate for use of Solar Water Heater:

While some of the ESCOMs have requested to discontinue the

Solar rebate to consumers, the consumers have requested to

increase the Solar Rebate. Since the use of Solar Water Heaters is

advantageous to both the ESCOMs and the consumers, the

Commission has decided to retain the existing rebate of 50 paise

clii

per unit subject to a maximum of Rs.50 per installation per month

for use of solar water heaters.

ii) Prompt payment incentive:

The Commission had approved a prompt payment incentive at

the rate of 0.25% of the bills amount (i) in all cases of payment

through ECS; and (ii) in the case of monthly bill exceeding

Rs.1,00,000/- (Rs.one lakh), where payment is made 10 days in

advance of due date and (iii) advance payment of exceeding

Rs.1000 made by the consumers towards monthly bills. The

Commission decides to continue the same.

iii) Relief to Sick Industries:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial

Policy 2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001.

Further, the Government of Karnataka has issued G.O No.CI2 BIF

2010, dated 21.10.2010. The Commission, in its Tariff Order 2002,

had accorded approval for implementation of reliefs to the sick

industries as per the Government policy and the same was

continued in the subsequent Tariff Orders. However, in view of issue

of the G.O No.CI2 BIF 2010, dated 21.10.2010, the Commission has

accorded approval to the ESCOMs for implementation of the

reliefs extended to sick industrial units for their revival /

rehabilitation on the basis of the orders issued by the Commissioner

for Industrial Development and Director of Industries & Commerce,

Government of Karnataka.

iv) Power Factor:

The Commission in its previous order had retained the PF threshold

limit and surcharge, both for LT and HT installations at the levels

existing as in the Tariff Order 2005. The Commission has decided to

continue the same in the present order as indicated below:

cliii

LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive

power is involved): 0.85

HT Category: 0.90

v) Rounding off of KW / HP:

In its Tariff Order 2005, the Commission had approved rounding off

of fractions of KW / HP to the nearest quarter KW / HP for the

purpose of billing and the minimum billing being for 1 KW / 1HP in

respect of all the categories of LT installations including IP sets. This

shall continue to be followed. In the case of street light installations,

fractions of KW shall be rounded off to the nearest quarter KW for

the purpose of billing and the minimum billing shall be for a quarter

KW.

vi) Interest on delayed payment of bills by consumers:

The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission

decides to continue the same in this Order also.

vii) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued the K.E.R.C. (Security Deposit)

Regulations, 2007 on 01.10.2007and the same has been notified in

the Official Gazette on 11.10.2007. The payment of security deposit

shall be regulated accordingly, pending orders of the Hon’ble High

Court in WP No.18215/2007.

viii) Mode of Payment by consumers:

The Commission, in its previous Order had approved bill payment

in cash/cheque/DD of amounts up to and inclusive of Rs.10,000/-

and payment of amounts above Rs.10,000 to be made only

through cheque. The consumers can also make payment of power

bills through Electronic Clearing System(ECS)/ Credit card/ online

E-payment up to the limit prescribed by the RBI, RTGS / NEFT / on

line E-Payment / Digital mode of payments as per the guidelines

issued by the RBI wherever such facility is provided by the Licensee

in respect of bill payments up to the limit prescribed by the RBI.

cliv

ESCOM in their application had proposed to consider the

collection of power supply bills above One lakh rupees, through

RTGS/NEFT. The Commission has examined the request and

decides to approve the payment of power supply bills above One

lakh rupees, through RTGS/NEFT, at the option of the consumer.

6.10 Cross Subsidy Levels for FY18:

The Hon’ble Appellate Tribunal for Electricity (ATE), in its order

dated 8th October, 2014, in Appeal No.42 of 2014, has directed the

Commission to clearly indicate the variation of anticipated

category-wise average revenue realization with respect to overall

average cost of supply in order to implement the requirement of

the Tariff Policy that tariffs are within ±20% of the average cost of

supply, in the tariff orders being passed in the future. It has further

directed the Commission to also indicate category-wise cross

subsidy with reference to voltage-wise cost of supply so as to show

the cross subsidies transparently.

In the light of the above directions, the variations of the

anticipated category-wise average realization with respect to the

overall average cost of supply and also with respect to the

voltage-wise cost of supply of GESCOM and the cross subsidy

thereon, is Indicated in ANNEXURE- III of this Order. It is the

Commission’s endeavour to reduce the cross subsidies gradually as

per the Tariff policy.

6.11 Effect of Revised Tariff:

As per the KERC (Tariff) Regulations 2000, read with the MYT

Regulations 2006, the ESCOMs have to file their applications for

ERC/Tariff before 120 days of the close of each financial year in the

control period. The Commission observes that the ESCOMs have

filed their applications for revision of tariff on 30th November, 2016.

As the tariff revision is effective from 1st April, 2017 onwards, the

ESCOMs would be recovering revenue as per the revised tariff for

clv

eleven months of the Financial Year (Except in case where the

billing cycle is lesser than a month).

A statement indicating the proposed revenue and approved

revenue is enclosed vide Annexure-III and detailed tariff schedule

is enclosed vide Annexure IV.

6.12 Summary of the Tariff Order:

The Commission has approved an ARR of Rs.4523.29 Crores for

FY18, which includes the deficit for FY16 of Rs.490.97 Crores with

a net gap in revenue of Rs.345.30 Crores as against GESCOM’s

proposed ARR of Rs.5345.83 Crores.

The Commission has allowed recovery of entire gap in revenue

with additional revenue of Rs.345.30 Crores on Tariff Revision as

against the additional revenue of Rs.1075.33 Crores proposed

by GESCOM for FY18.

GESCOM in its filing dated 30.11.2016 had proposed an increase

of 148 paise per unit for all categories of consumers resulting in

average increase in retail supply tariff by 25.18%. The

Commission has approved an average increase of 48 paise per

unit. The average increase in retail supply tariff of all the

consumers for FY18 is 8%.

The Commission has allowed for recovery of additional

revenue partly by increase in fixed charges ranging from

Rs.5 per KW/HP/KVA to Rs.20 per KW/HP/KVA.

The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the

range of 15 paise per unit to 50 paise per unit.

The increase in the energy charges for domestic category

upto 30 and from 30 to 100 units is 25 to 30 paise per unit.

The increase in the LT industries category is in the range of

15 paise per unit to 20 paise per unit and for other

clvi

categories, the increase is in the range of 20 paise per

unit to 50 paise per unit.

In order to increase the sales under HT industry and HT

commercial category, the increase made in energy

charges in 2nd slab is 20 paise per unit as against the 40

paise per unit increase under 1st slab for consumption

upto 1 lakh / 2 lakh units per month.

Time of the day tariff which was made mandatory in the previous

Tariff Orders for installations under HT2 (a), HT2 (b) and HT2(c)

with contract demand of 500KVA and above is continued in this

Order.

The Commission has introduced Time of Day billing for

morning peak period from 06.00 hours to 10.00 hours in

respect of LT/ HT consumers in addition to the prevailing

ToD billing.

A rebate of 50 paise per unit is allowed for Effluent

Treatment Plant installed within the industrial premises

under HT-2(a) tariff schedule.

Green tariff of additional 50 paise per unit over and above

the normal tariff which was introduced a few year ago

for HT industries and HT commercial consumers at their

option, to promote purchase of renewable energy from

ESCOMs, is continued in this Order.

As in the previous Orders, the Commission has continued

to provide a separate fund for facilitating better

Consumer Relations /Consumer Education Programmes.

The Commission has decided to impose penalty upto

Rs.one lakh per sub division of GESCOM who fail to

clvii

conduct Consumer Interaction Meetings at least once in

three months and such penalty would be payable by the

concerned officers of the GESCOM.

6.13 Commission’s Order

1. In exercise of the powers conferred on the Commission under

Sections 62, 64 and other provisions of the Electricity Act, 2003,

the Commission hereby determines and notifies the retail

supply tariff of GESCOM for FY18 as stated in Chapter-6 of this

Order.

2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling

on or after 1st April, 2017.

3. Consequent to issue of this Tariff Order, the petition filed by

GESCOM vide OP.No.58 of 2017 stand disposed of.

4. This Order is signed dated and issued by the Karnataka

Electricity Regulatory Commission at Bengaluru this day, the

11th April, 2017.

Sd/- Sd/- Sd/-

(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)

Chairman Member Member

clviii

APPENDIX

NEW DIRECTIVES

AND

REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED

BY THE COMMISSION

1. The following new directives are issued by the Commission:

i. Directive on conducting Consumers’ Interaction Meetings in the O

& M sub-divisions for redressal of consumer complaints:

During the Public Hearings held by the Commission to hear the

views, comments & suggestions of the consumers and other

stakeholders on the ESCOMs’ Tariff applications, it was brought to

the notice of the Commission by the consumers that the Consumer

Interaction Meetings chaired by the Superintending Engineers, in

the O&M sub-divisions of ESCOMs are not being conducted

regularly, thus denying them of the opportunity to attend such

meetings to air their complaints/ grievances pertaining to supply of

electricity and any others issues. The consumers have urged the

Commission to ensure that ECOMS take necessary action to make

the sub-divisions conduct Consumer Interaction meetings regularly

to hear and address the consumer grievances.

The Commission strongly opines that if the ESCOMs conduct

consumer interaction meetings regularly, not only most of the

grievances of the consumers could be redressed in such meetings,

the ESCOMS could also redesign/realign their operations and

investments on capital and other works to optimally deliver better

and satisfactory service to the consumers. Such development

could also increase the efficiency and revenues of the ESCOMs.

Hence, the Commission hereby directs the GESCOM to ensure that

Consumer Interaction Meetings chaired by the Superintending

clix

Engineers, are conducted in each O&M sub-division according to

a pre-published schedule, at least once in every three months.

Further, the consumers shall be invited to such meetings in

advance through emails, letters, notices on GESCOM’s website,

local newspapers etc., to facilitate participation of maximum

number of consumers in such meetings. The GESCOM should

ensure that the proceedings of such meetings are recorded and

uploaded on its website, for the information of consumers.

Compliance in this regard shall be reported once in three months

to the Commission, indicating the date, the number of consumers

attending such meetings and the status of redressal of their

complaints.

If the GESCOM fails to ensure conduct of the Consumer Interaction

Meetings as directed, the Commission would consider imposing a

penalty of up to Rs one lakh per O&M sub-division per quarter for

each instance of non-compliance, and also direct that such

penalty shall be recovered from the concerned Superintending

Engineer who fails to conduct such meetings.

ii. Directive on preparation of energy bills on monthly basis by

considering 15 minute’s time block period in respect of EHT/HT

consumers importing power through power exchange under Open

Access

The Commission has noticed that, year on year, there has been a

substantial increase in the number of EHT and HT consumers of the

distribution licensees opting for open access resulting in substantial

volume of energy being procured through Power Exchanges,

which imposes a burden on the SLDC, in grid management.

Further, in accordance with the stipulations in Clause 6.3 (f) of the

Karnataka Electricity Grid Code (KEGC),2015, under the chapter

on Operation Planning, in order to facilitate demand estimation

for operational purpose, the distribution licensee (ESCOM) is

required to provide to the SLDC, on a day ahead basis, at 09.00

clx

hours each day, its estimated demand for each 15-minute block,

for the ensuing day. The distribution licensee is also required to

provide to the SLDC, the estimates of loads that may be shed,

when required, in discrete blocks, with the details of arrangements

of such load shedding. Consequent to such stipulation the ESCOMs

are required to prepare monthly energy bills in respect of EHT/HT

consumers importing power through power exchange under Open

Access, by considering 15 minute’s time block. However, it is

observed that except in rare cases, this billing requirement is not

being complied with the ESCOMs.

In view of this, the Commission directs the GESCOM to ensure

preparation of energy bills on monthly basis by considering the 15

minute’s time block period in respect of EHT/HT consumers

importing power through power exchange under Open Access.

The GESCOM shall implement the directive forthwith and the

compliance regarding the same shall be submitted monthly from

May, 2017 onwards, to the Commission, regularly.

2. Review of Compliance of Existing Directives:

The Commission had in its earlier Tariff Orders and other

communications issued several directives for compliance by the

GESCOM. While reproducing such directives, the compliance of

the directives as reported by the GESCOM is analyzed in this

Section.

i. Directive on Energy Conservation:

The Commission had directed the ESCOMs to service all the new

installations only after ensuring that the BEE ***** (Bureau of Energy

Efficiency five-star rating) rated Air Conditioners, Fans,

Refrigerators, etc., are being installed in the applicant consumers’

premises.

Similarly, ESCOMs were directed to ensure that all new

streetlight/high mast installations including extensions made to the

clxi

existing streetlight circuits shall be serviced only with LED

lamps/energy efficient lamps like induction lamps.

Further, the Commission had directed the ESCOMs to take up

programmes to educate all the existing domestic, commercial and

industrial consumers, through media and distribution of pamphlets

along with monthly bills, regarding the benefits of using five-star

rated equipment certified by the Bureau of Energy Efficiency in

reduction of their monthly electricity bills and conservation of

precious energy.

Compliance by the GESCOM:

The Commission has issued the directive on energy conservation

and the GESCOM has taken action to service all the new

installation only after ensuing that the BEE ***** rated Air conditions,

Fans, Refrigerators, etc., are being installed in the applicant

consumers’ premises. Further, new streetlight/high mast installations

including extensions made to existing streetlight circuits are being

serviced with LED lamps/energy efficient lamps.

Further, the GESCOM has conducted awareness programme to all

the existing domestic commercial and industrial consumer

regarding the benefits of using five star rated equipment certified

by the Bureau of Energy Efficiency in reduction of their monthly

electricity bills and conserving precious energy during consumer

interaction meetings at sub-divisions. Also, continuous awareness is

being carried out by distributing the pamphlets, through print &

digital media and in the monthly electricity bills also.

Commission’s Views:

The Commission observes that the GESCOM has not submitted the

compliance regularly on implementation of the directive. It is also

observed from the GESCOM’s report that it has merely issued a

circular to all its officers to use BEE five-star rated Energy Efficient

clxii

Appliances, and has not taken any further effective steps in the

field to ensue service to all new installations only with BEE five-star

rated Air Conditioners, Fans, Refrigerators, etc., in the applicant

consumers’ premises. The GESCOM should focus on effective

implementation of this directive by reviewing periodically the

progress/status of implementation of its circular instructions by its

field officers and take corrective action wherever necessary.

Further, it is also important that the GESCOM draws up a

continuous awareness programme to educate the consumers

about the benefits of using the energy efficient appliances in their

premises and ensure increase in use of energy efficient appliances.

The Commission reiterates that the GESCOM shall service all the

new installations only after ensuring that the BEE ***** (Bureau of

Energy Efficiency five-star rating) rated Air Conditioners, Fans,

Refrigerators, etc., are being installed in the applicant consumers’

premises and the compliance thereon shall be reported to the

Commission once in a quarter regularly.

ii. Directive on implementation of Standards of Performance (SoP):

The Directive issued was as follows:

“The GESCOM is directed to strictly implement the specified

Standards of Performance while rendering services related to

supply of power as per the KERC (Licensee’s Standards of

Performance) Regulations, 2004. Further, the GESCOM is directed

to display prominently both in Kannada and English the details of

various critical services such as replacing the failed transformers,

attending to fuse off call / line breakdown complaints, arranging

new services, change of faulty energy meters, reconnection of

power supply, etc., rendered by it as per Schedule-1 of the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and

Annexure-1 of the KERC (Consumer Complaints Handling

clxiii

Procedure) Regulations, 2004, on the notice boards in all the O & M

sections and O & M sub-divisions in its jurisdiction for the information

of consumers as per the following format:

Nature of

Service

Standards of

performance

(indicative

minimum time limit

for rendering

services)

Primary

responsibility

centers where

to lodge

complaint

Next

higher

Authority

Amount

payable to

affected

consumer

The GESCOM shall implement the above directives within one

month from the date of this order and report compliance to the

Commission regarding the implementation of the directives.”


The GESCOM has implemented the specified Standards of

Performance while renderings services related to supply of power

as per the KERC (Licensee’s Standards of Performance)

Regulations, 2004 and has displayed the details of specified

standards of performance on the notice boards in all its O&M

section and sub-division offices for the information of the

consumers.

Further, the GESCOM has conducted interaction meetings for

educating the consumers about standards of performance. The

compliance on the above is being submitted to the Commission

regularly.

The status of implementation of the above directive in the

GESCOM is as follows:

O&M sub-divisions O&M sections

Total

sub-

divisions

No. of sub-

divisions

where SoP

parameters

have been

displayed

Balance

Likely date

of

completion

Total

sections

No. of

sections

where SoP

parameters

have been

displayed

Balance

Likely date

of

Completion

53 53 0 - 245 245 0 -

clxiv

Monitoring of Overall Performance Standards Relating to Distribution and

Supply of Power for the month from April to September 2016 is given below: Sl.N

o.

Na

ture

of

Serv

ice

Sta

nd

ard

s O

f

Pe

rfo

rma

nc

e

(Ma

xim

um

tim

e li

mit

for

re

nd

erin

g

serv

ice

)

Nu

mb

er

of

Ca

ses

pe

nd

ing

at

the

be

gin

nin

g o

f th

e

mo

nth

Nu

mb

er

of

Ca

ses

rec

eiv

ed

du

rin

g t

he

mo

nth

Tota

l

Ca

ses

att

en

de

d t

o

with

in t

he

Tim

e li

mit

pre

scrib

ed

in t

he

Re

gu

latio

n

Ca

ses

att

en

de

d t

o

be

yo

nd

th

e T

ime

limit p

resc

rib

ed

in

the

Re

gu

latio

n

Ba

lan

ce

at

the

en

d o

f

the

mo

nth

Re

aso

ns

for

the

de

lay

in a

tte

nd

ing

th

e

ca

ses

1 2 3 4 5 6=4+5 7 8 9 10

1

Normal Fuse Off

Cities & Towns Within 6 Hrs 16 89773 89789 88497 1243 49

Rural Areas Within 24 Hrs 15 89926 89941 85273 4635 33

2

Line Break downs

0

Cities & Towns

Within 6

Hrs(10 hrs if

poles are

broken

down)

14 1874 1888 1767 107 14 Major line

fault.

Rural Areas Within 24 Hrs

(in all cases) 14 6967 6981 5300 1639 42

3

Distribution

Transformer failure

Cities & Towns Within 24 Hrs 3 756 759 723 16 20

Rural Areas Within 72 Hrs 156 5607 5763 5113 523 127

4

Period of

Scheduled

Outages

0

Maximum duration

in single stretch

Restoration of

supply

Not to

exceed 12

hrs By 6 PM

on any day

0 147 147 142 5 0

5

Voltages

variations

Where no

expansion or

enhancement of

network is involved

Within 7 days 7 1018 1025 977 44 4

Where up

gradation or

distribution system

is required

Within 120

days 0 304 304 258 41 5

Opening of

neutral and

neutral voltage

exceeding 2% of

supply voltage

Within 6 Hrs.in

cities 0 258 258 238 20 0

Within 24 hrs.

in Rural areas 1 352 353 318 35 0

6

Meter Complaints

Inspect and

check

correctness

Within 7 days 0 4115 4115 3898 207 10

Replace slow

creeping or stuck

meters

Within 10

days 16 1435 1451 1385 44 22

Replace burnt

meters if cause

not attributable

to consumer

Within 7 days

of receipt of

complaint

302 1270 1572 1115 76 381

Replace burnt

meter in all other

cases

Within 24 hrs.

of payment

of charges by

consumer

73 1098 1171 1012 132 27

clxv

7

Application for

new connection

/additional load

0

Release of supply

where service is

feasible from

existing network

Within one

month 7125 39029 46154 36481 1239

843

4

Due to

network

problem

Release of supply

where network

expansion/

enhancement

required for

providing

connection

As specified

by KERC

(Duty of the

Licensee to

supply

electricity on

request)Regul

ations 2004

367 703 1070 997 9 64

Deposit

not paid

by

applicant.

IP Sets

Within 30

days after

attaining

seniority (The

number of

new

connections

shall be

limited to the

target fixed in

the year)

123 3446 3569 2177 157 123

5

Deposit

not paid/

work is

being

carried

out as per

the

seniority.

8 Erection of Sub-

station NA 1 32 33 32 0 1

WUP at

Nittur

33/11 KV

(Bidar Div)

9

Transfer of

ownership &

conversion of

service

Within 7 days

of receipt of

application

6 866 872 863 6 3

10

Conversion of LT

single phase to LT

three phase

Conversion from

LT to HT and vice-

versa

Within 30

days from the

date of

payment of

charges

3 169 172 163 5 4 _

11

Resolution of

complaints on

consumer's Bills

0

If no additional

information is

required

Within 24 Hrs

of receipt of

complaint

26 31420 31446 22356 9066 24

Due to

insufficient

/wrong

data

furnished

by the

applicant

If additional

information is

required

Within 7 days

of receipt of

complaint

6 15696 15702 9551 6143 8

12

Reconnection of

supply following

disconnection

0

Towns and cities On the same

day of

receipt of

request

2387 256743 21286 235457 20682 299

1

Due to

non-

payment

of arrears

by

consumer.

Rural Areas

Within 24 hrs

of receipt of

payment

from

consumer

514 164356 21286 143211 19604 205

5

clxvi

13

Payment of

solarium in cases

of electric

accidents

0

Cases where it is

established

beyond doubt

that the accident

is not due to the

fault of the victim

Within 7 days

without

waiting for

report from

Chief

Electrical

Inspector to

Govt.(CEIG)

6 1 7 0 4 3

Documen

ts not

submitted

by owner

of the

animal

In other cases

Within 30

days after

receipt of

report from

CEIG

2 0 2 0 0 2 work

under

process 14

Refund of

Deposits

Within 60

days receipt

of request

4 0 4 1 0 3

15 Issue of

certificates

On the same

day of

receipt of

request

0 2036 2036 1785 103 148

As seen above, the reason for pendency is due to delay in

payment of deposits/ other charges by the applicants/consumers.

Further, there is also delay in replacement of failed transformers

and the GESCOM will take steps to repair the transformers in the

transformer repair centers and make it available to the needy sub-

divisions.


The Commission while noting the compliance furnished, reiterates

that the GESCOM shall continue to comply with its earlier directive

by displaying the details of SoP in all its O&M section and sub-

division offices for the information of the consumers, and also to

adhere to the specified standards of performance in rendering

various services to consumers in a time bound manner.

The Commission notes that, during the Public Hearings held on the

ESCOMs’ Tariff petitions, the consumers participating in the hearing

have stated that, the ESCOMs, contrary to their submission before

the Commission on compliance of the directive issued by the

Commission, have not displayed the SoP parameters on the notice

boards in the O&M offices and also not adhered to the timelines

stipulated in the SoP. They have sought the intervention of the

clxvii

Commission to ensure that the ESCOMs comply with the directive

on SoP.

The Commission notes that the situation indicates that there is lack

of effective supervision over the functioning of field offices by the

ESCOMs especially in rendering services relating to supply of

power to the consumers.

Therefore, the Commission once again reiterates its directive to the

GESCOM to continue to strictly implement the specified SoP while

rendering services related to supply of power as per the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and

directs the GESCOM to monitor effective implementation of the

directive on SoP in all its O&M offices. The Commission shall initiate

appropriate action on any instance of breach of its directive.

iii Directive on use of safety gear by linemen:

The directive issued was as follows:

The Commission directs the GESCOM to ensure that all the linemen

in its jurisdiction are provided with proper and adequate safety gear

and also ensure that the linemen use such safety gear provided

while working on the network. The GESCOM should sensitise the

linemen about the need for adoption of safety aspects in their work

through suitably designed training and awareness programmes. The

GESCOM is also directed to device suitable reporting system on the

use of safety gear and mandate supervisory/higher officers to

regularly cross check the compliance by the linemen and take

disciplinary action on the concerned if violations are noticed. The

GESCOM shall implement this directive within one month from the

date of this order and submit compliance report to the Commission.

clxviii

Compliance of the GESCOM:

The GESCOM has provided safety gadgets to 2,000 linemen and

further action is being taken to provide the safety gadgets to

newly recruited 1,491 linemen by January 2017.

The GESCOM is monitoring the use of safety gear by linemen and

also the supervisory / higher officers are regularly cross checking

the use of safety gadgets by its staff. Further, the GESCOM is

frequently imparting training to all the linemen and other field staff

regularly under various mandatory technical training program on

safety aspects. The compliance on the directive is being

submitted to the Commission once in a quarter regularly.


The Commission notes that the GESCOM has already issued

required safety gear to its existing linemen and also taken

necessary action to provide the safety gear to its newly recruited

linemen. It is important that the GESCOM should continue to focus

on safety aspects to reduce the electrical accidents occurring

due to negligence and non-adherence of safety procedures by

the field staff, while working on the distribution network. Further,

the linemen should be given training on adherence to safety

aspects, so that it becomes part of their routine.

The Commission reiterates its directive that the GESCOM shall

ensure that, all the linemen in its jurisdiction are provided with

proper and adequate safety gear and that they use such safety

gear provided to them while working on the network. The

compliance in this regard shall be submitted once in a quarter to

the Commission regularly.

iv Directive on providing Timer Switches to Streetlights by the ESCOMs

The directive issued was as follows:

The Commission directs the GESCOM to install timer switches using

own funds to all the streetlight installations in its jurisdiction

clxix

wherever the local bodies have not provided the same and later

recover the cost from them. The GESCOM shall also take up

periodical inspection of timer switches installed and ensure that

they are in working conditions. They shall undertake necessary

repairs / replacement work, if required and later recover the cost

from the local bodies. The compliance regarding the progress of

installation of timer switches to streetlight installations shall be

reported to the Commission within three months of the issue of the

order.


The GESCOM has conducted a meeting with the urban local

bodies on 22.10.2016 regarding providing timer switches to all

streetlight control points. The local bodies have agreed to take up

the work under DCW/self-execution basis. All the field officers of

GESCOM have been instructed to prepare the necessary

estimates for providing timer switches and submit it to division

offices. The divisional officers will sanction such estimates and

inform the concerned local bodies to take up the works in their

jurisdiction. Further, the concerned divisional officers have been

directed to complete the work before March 2017.


The Commission observes that, the GESCOM, so far has not taken

any concrete steps to provide timer switches to the streetlight

installations in its jurisdiction. The GESCOM has also not initiated any

action except conducting one meeting that too as late as

October 2016, with the concerned local authorities, for installation

of timer switches. This inaction by the GESCOM has resulted in

wastage of electricity by indiscriminate use of streetlights in its

jurisdiction, during day time.

Further, wherever feasible, the GESCOM should install the timer

switches at its cost and later recover the cost from the concerned

local bodies. The GESCOM is also directed to persuade the local

bodies to install timer switches at their cost availing funds / grants

clxx

received from Government and other agencies for such

programmes.


ensure that, all the new streetlight installations and any

extension/modification to be carried out to the existing streetlight

installations, shall be serviced only with timer switches.

v. Directive on Load Shedding:

The Commission had directed that:

(1) Load shedding required for planned maintenance of

transmission /

distribution networks should be notified in daily newspapers at

least 24 hours in advance for the information of consumers.

(2) The ESCOMs shall on a daily basis estimate the hourly

requirement of

power for each sub-station in their jurisdiction based on the

seasonal

conditions and other factors affecting demand.

(3) Any likelihood of shortfall in the availability during the course

of the

day should be anticipated and the quantum of load

shedding should be estimated in advance. Specific sub-

stations and feeders should be identified for load shedding for

the minimum required period with due intimation to the

concerned sub-divisions and sub-stations.

(4) The likelihood of interruption in power supply with time and

duration of such interruption may be intimated to consumers

through SMS and other means.

(5) Where load shedding has to be resorted due to unforeseen

reduction in the availability of power, or for other reasons,

consumers may be informed of the likely time of restoration of

supply through SMS and other means.

clxxi

(6) Load shedding should be carried out in different sub-stations /

feeders to avoid frequent load shedding affecting the same

sub-stations feeders.

(7) The ESCOMs should review the availability of power with

respect to the projected demand for every month in the last

week of the previous month and forecast any unavoidable

load shedding after consulting other ESCOMs in the State

about the possibility of inter-ESCOM load adjustment during

the month.

(8) The ESCOMs shall submit to the KERC their projections of

availability and demand for power and any unavoidable

load shedding for every succeeding month in the last week of

the preceding month for approval.

(9) The ESCOMs shall also propose specific measures for

minimizing load

shedding by spot purchase of power in the power exchanges

or

bridging the gap by other means.

(10) The ESCOMs shall submit to the Commission sub-station wise

and feeder wise data on interruptions in power supply every

month before the 5th day of the succeeding month.

The Commission had directed that the ESCOMs shall make every

effort to minimize inconvenience to consumers strictly complying

with the above directions. The Commission will review the

compliance of the directions on a monthly basis for appropriate

orders.


During the planned outages, the GESCOM will intimate the

affected consumers well in advance regarding load shedding to

be carried out through newspapers.

The GESCOM is submitting 15 minute’s block-wise week ahead

requirement of power and energy for one week in advance to

clxxii

SLDC, KPTCL. Also, the block-wise day ahead requirement of

power based on seasonal condition and other factor affecting

the demand is being submitted daily to the SLDC through e-mail.

In turn, everyday SLDC will issue availability of power and energy

one day in advance for GESCOM. Accordingly re-scheduling of

power and energy will be done at 220 KV Receiving Stations.

Whenever there is loss of generation, SLDC will intimate the

GESCOM for restricting the load. Accordingly, the GESCOM will

restrict the load based on the real time schedule given by the

SLDC. The load will be restricted based on the 220KV Receiving

station-wise percentage of allocation chart and by

communicating all the sub-stations and the concerned nodal

officers for proper monitoring of power supply timings in batches

with intimation to the concerned sub-division officers.

Whenever advance intimation received from the SLDC regarding

loss of generation, in that case, information will be given to the

high yielding consumers such as HT and EHT.

The load shedding is being carried out in all the sub-

stations/feeders by maintaining load shedding chart in batches

with category-wise feeders by strict monitoring by the concerned

nodal officers to avoid frequent load shedding of the same sub-

stations/feeders.

The GESCOM is reviewing the availability of power with respect to

the projected demand for every month in the last week of the

previous month and forecasting any unavoidable load shedding.

The GESCOM has submitted the projection of demand of power

and energy, month-wise for the year 2016-17, 2017-18 and 2018-

19. The revised power supply/load shedding timings is being

intimated to the Commission regularly.

clxxiii

Further, for informing consumers through SMS regarding likely time

of restoration, incase of unforeseen reductions in supply, the

implementation of SMS gateway is in progress.

The GESCOM is submitting feeder-wise interruption details such as,

number of interruptions and duration of scheduled and

unscheduled interruptions to KERC every month (PQM-1 {a}, {b}

and {c}). The GESCOM is taking all possible measures, based on

the real time schedule allocation by SLDC to minimize the

inconvenience to the consumers.


The Commission notes that the GESCOM, so far has not taken any

definite action to put in place a system for providing information to

the consumers through SMS regarding the schedule of load

shedding. There is no progress in this regard as the status is the

same as compared to the previous year. The Commission notes

that the GESCOM has not effectively and satisfactorily complied

with the directive on load shedding. The GESCOM shall expedite

development of necessary software and other process required to

inform consumers through SMS regarding both scheduled and un-

scheduled load shedding due to reasons such as system

constraints, breakdowns of lines/equipment, maintenance etc., This

would significantly address the “consumers’ dissatisfaction” on this

issue and prevent inconvenience/disruption caused to industrial

consumers.

Further, the Commission observes that the GESCOM is not

submitting its projections of availability and demand for power and

any unavoidable load shedding for every succeeding month in the

last week of the preceding month to the Commission regularly. The

GESCOM shall henceforth submit the same regularly to the

Commission without fail.

clxxiv

The Commission reiterates that the GESCOM shall comply with the

directive on load shedding and submit monthly compliance

reports thereon to the Commission regularly.

vi. Directive on Establishing a 24X7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:

The directive was as below:

“The GESCOM is directed to put in place a 24x7 fully equipped

centralized Consumer Service Center at its Headquarters with state

of the art facility/ system for receiving consumer complaints and

monitoring their redressal so that electricity consumers in its area of

supply are able to seek and obtain timely and efficient services /

redressal in the matter of their grievances. Such a Service Center

shall have adequate number of desk operators in each shift so that

consumers across the jurisdiction of the GESCOM are able to lodge

their complaints directly with this Centre.

Every complaint shall be received on a helpline telephone number

by the

desk operator and registered with a docket number which shall be

intimated to the Consumer. Thereafter, the complaints shall be

transferred

online / communicated to the concerned field staff for resolving

the

same. The concerned O&M / local service station staff shall visit the

complainant’s premises / fault location at the earliest to attend to

the complaints and then inform the Centralized Service Centre

that the

complaint is attended. In turn, the call centre shall call the

complainant

and confirm with him whether the complaint has been attended

to. The

complaints shall be closed only after receiving consumer’s /

complainant’s confirmation. Such a system should also generate

clxxv

daily

reports indicating the number / nature of complaints received,

complaints attended, complaints pending and reasons for not

attending to the complaints.

The GESCOM shall publish the details of the complaint handling

procedure Mechanism with contact numbers in the local media

periodically for the information of the consumers. The compliance

of the action taken in the matter shall be submitted to the

Commission within two months from the date of this Order.

Further, the Commission directs the GESCOM to

establish/strengthen 24x7 service stations, equipping them with

separate vehicles & adequate line crew, safety kits and

maintenance materials at all its sub-divisions including rural areas

for effective redressal of consumer complaints”.

Compliance of the GESCOM :

A 24X7 Customer Care Centre(CCC) was established on 18-01-

2012 with a Toll Free number 1800-42558585 in the Corporate Office

premises, with all the necessary infrastructures for registering the

complaints on fuse off calls, billing problems, transformer failure,

power supply failure etc. by the consumers.

On registering a complaint, the consumer will be given complaint

number and the same will be informed to the concerned service

station of the sub-division for attending to the complaint at the

earliest. The complaints, which are attended by the service

stations, will be confirmed by the consumers over phone.

Further, short code ‘1912’ was implemented at CCC w.e.f 01-02-

2015 for complaints on electricity, with ‘Calling Party Pays Mode

Basis’. The short code ‘1912’ has been made Toll-Free successfully

w.e.f. 01-09-2016.

clxxvi

The statement showing the details of calls received and answered

/ complaints registered and attended at the centralized Customer

Care Centre from August to October 2016 and consumer

interaction meetings conducted from April to September16 are as

under:

The details of interaction meetings held with consumers are as below:

Sl.

No

Name of the

O&M division

Name of the

sub-division

No. of consumers

interaction meetings

held in O&M sub-

division from April to

Sept’16

No. of

consumers

participated

in every

meeting

1 Gulbarga

Urban

CSD-I&II 2 33+35 (65)

CSD-III&IV 2 40+36 (76)

2 Gulbarga

Rural-1

RSD 2 27+27 (54)

Aland 2 17+22 (39)

3 Gulbarga

Rural-2

Jewargi 2 16+17 (33)

Yadrami 2 26+22 (48)

Kalgi 1 11

4 Sedam Sedam 1 13

Chincholi 1 26

5 Yadgir Yadgir 1 39

Gurmitkal 1 29

6 Bidar Bidar 1 50

Kamthana 1 40

7 Ballari Urban CSD-I 2 18+20 (38)

8 Hosapete

Urban

CSD-I 2 16+18 (34)

CSD-II 2 11+15 (26)

9 Hosapete Rural

RSD,

Hosapete 4

26+20+22+26

(92)

Hadagali 1 25

H.B.Halli 1 80

Kudligi 3 52+32+15

(99)

SI.

No. Month

No. of calls

received &

answered

No. of

complaints

registered

No. of

complaints

attended

No. of

complaints

pending

1 Aug’16 24,160 2,821 2,821 Nil

2 Sept’16 30,168 3,489 3,489 Nil

3 Oct’16 26,876 2,134 2,134 Nil

Total 81,204 8,444 8,444 Nil

clxxvii

10 Raichur Rural Devadurga 2 16+31 (47)

11 Sindhanur Maski 1 30

12 Koppal Yelburga 1 29

Koppal 1 24

13 Gangavathi Karatagi 3 5+22+5 (32)

Gangavathi 2 12+8 (20)

Total 44 1067


The Commission notes that the GESCOM has established a 24x7

Customer Care Centre and has taken various measures for

redressal of consumer complaints. The GESCOM should continue its

efforts in improving delivery of consumer services to reduce the

consumer complaint downtime so as to ensure delivery of prompt

services to them. The GESCOM effective should develop necessary

capacity and infrastructure for prompt and effective response to

consumer complaints on breakdown of lines/equipment, failure of

transformers etc., resulting in interruptions in power supply. In

addition to this, GESCOM should take up steps to continuously

sensitize its field staff that they need to discharge their work

efficiently.

The Commission reiterates its directive to the GESCOM to publish

the complaint handling procedures / contact number of the

centralized Consumer Service Centre in the local media and other

modes periodically for the information of the public and ensure

that all the complaints of consumers are registered only through

the centralized Consumer Service Centre for proper monitoring of

disposal of complaints registered. The compliance in this regard

shall be furnished regularly once in a quarter, to the Commission.

vii. Directive on Energy Audit:

The Commission had directed all the GESCOM to prepare a

metering plan for energy audit to measure the energy received in

each of the interface points and to account for the energy sales.

The Commission had also directed the GESCOM to conduct

clxxviii

energy audit and chalk out an Action Plan to reduce distribution

losses to a maximum of 15 per cent, wherever it was above this

level, in towns/ cities having a population of over 50,000.

The Commission had earlier directed the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this

regard, the ESCOMs were required to furnish to the Commission the

following information on a monthly basis:

a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.

c) Number of DTCs yet to be metered.

d) Time bound monthly programme for completion of work.

Compliance by GESCOM:

The GESCOM has initiated various measures for metering of DTC and

energy audit at DTC level and the results are as follows:

The details of DTC meters and energy audit carried out are as

under:

Sl.

No Particulars

Progress as on

30.09.2016

1 Number of DTCs existing in the

Company. 81,457

2 Number of DTCs already metered. 60,123

3 Number of DTCs yet to be metered. 21,334

4 Time bound monthly programme for

completion. March, 2017

The details of average 33kV line losses in GESCOM:

Sl.

No.

Name of 33 kV feeder

(name of 110 kV MUSS)

Conducto

r used

Length

of line

Sending end

energy at 110

kV MUSS in

KWH

Receiving

end

energy in

KWH

Loss in

KWH

%

age

loss

1 33KV Emmiganur(110KV

Kurugodu) Coyote 15.23 2298000 2264600 33400 1.5

2 33KV Gududur(110KV

Shridaragada) Coyote 14.3 1340000 1312100 27900 2.1

3 33KV Hospete(110KV

Munirabad) Rabbit 9 3772600 3690520 82080 2.2

clxxix

4 33KV Kampli(110KV

Kampli Coyote 3.1 1283600 1255100 28500 2.2

5 Byalahalli Coyote 9 2034120 2030800 3320 0.2

6 Yelburga-Bandi Coyote 15 1092500 1066900 25600 2.3

7 Kanakgiri-Muslapur Coyote 10 1746900 1723900 23000 1.3

8 33Kv Azadpur (North

110Kv MUSS) Coyote 13 2570000 2530000 40000 1.6

9 33Kv Jambaga (North

MUSS) Coyote 14 700000 690000 10000 1.4

10 33Kv Udchan

(Karajagi 110Kv MUSS) Coyote 8 700000 690000 10000 1.4

11

33Kv V.K.Salgar

(Mahagaon 110Kv

MUSS)

Coyote 22 760000 740000 20000 2.6

12 33Kv Khajuri

(Aland 110Kv MUSS) Coyote 16 720000 690000 30000 4.2

13 33Kv Nimbarga

(Madiyal 110Kv MUSS) Coyote 11 480000 470000 10000 2.1

14 33Kv Sarsamba

(Aland 110 Kv MUSS) Coyote 25 670000 660000 10000 1.5

GESCOM Avg. 20167720 19813920 353800 1.75

The Details of average 33kV Power Transformer losses:

Sl.No

Name of 33 kV

feeder (name of

110 kV MUSS)

Transformer

capacity

Energy

recorde

d at HV

side (33

kV)

Energy

recorded

at LV side

(11 kV)

Loss

in

KWH

% age Loss

1 33KV Erragudi

(110KV S/S Moka)

5MVA

Power Tr-1 974600 955300

1930

0 2.0

2

33KV Rudrapada

(110KV S/S

Thekkalkote)

5MVA

Power Tr-1 2393200 2371195

2200

5 0.9

3 33Kv Azadpur

(North 110Kv MUSS) 2x5 MVA 2570000 2530000

4000

0 1.6

4 33Kv HadgilHaruthi

(West 110Kv MUSS) 2x5 MVA 936300 915780

2052

0 2.2

5 33Kv

MadanHipparga

(Aland 110Kv

MUSS)

2x5 MVA 630000 620000 1000

0 1.6

6 33Kv Khajuri

(Aland 110Kv

MUSS)

2x5 MVA 819000 808200 1080

0 1.3

7 33Kv Jidaga

(Aland 110 Kv

MUSS)

1x5 MVA 522000 517950 4050 0.8

clxxx

GESCOM Avg. 8845100 8718425 1266

75 1.43

The GESCOM has initiated various measures to reduce the losses on 11

kV feeders of the 21 towns.

The details of 11 kV energy audit are as under:

Sl.

No. Name of city/town

Average percentage distribution

losses recorded

FY16 FY17 (up to

Sept’ 16)

1 Kalaburagi 18.90 10.30

2 Aland 16.71 16.69

3 Shahabad 25.47 16.28

4 Wadi 26.52 16.57

5 Yadgir 19.92 17.77

6 Shahapur 20.47 17.93

7 Shorapur 19.05 17.09

8 Sedam 14.48 11.16

9 Bidar 13.53 9.76

10 Bhalaki 22.43 15.29

11 Basavakalyana 12.97 17.05

12 Humnabad 15.99 10.96

13 Raichur 19.87 21.46

14 Manavi 16.30 21.35

15 Sindhanoor 17.92 19.37

16 Koppal 16.56 15.56

17 Gangavathi 16.47 14.88

18 Hospet 16.12 13.19

19 Kampli 17.35 17.90

20 Ballari CSC 19.95 18.49

21 Siruguppa 29.37 17.67

GESCOM 18.87 16.03

clxxxi

SI.

No. Year

Towns / cities with percentage distribution losses

<10% <15% 15-20% 20-25% >25%

1 FY16 0 3 14 2 2

2 FY17 ( up to

Sept’16) 1 4 14 2 0

Abstract

1 33 kV line losses 1.75

2 33 kV transformer losses 1.43

3 11 kV line losses 4.36

4 11/0.433 kV DTC losses (assumed) 1.62

5 LT line losses 6.32

6 Commercial 7.39

Total 22.87

The energy audit conducted as per the approved formats

(Annexure A & B) has been furnished up to June, 2016 to the

Commission. Presently energy audit is being carried out for 12,677

DTCs. The tagging of installations with DTCs is in progress, and

instructions have been issued to the Executive Engineers to

complete the tagging before March 2017.


It is observed that the monthly energy audit reports of cities/towns

with detailed analysis are not being submitted by the GESCOM

regularly to the Commission. As seen from the consolidated energy

audit statement for the FY16, 18 of the 21 towns have AT&C losses

more than the mandated 15 percent. Similarly, the energy audit

for the FY17 (upto Sept’16) reveals that 16 towns have AT&C losses

more than 15 percentage with the Raichur town topping the list

with the highest losses at 21.46 per cent. The GESCOM is directed

to initiate urgent remedial measures to bring down the losses

below the targeted levels.

The Commission directs the GESCOM to conduct energy audit of

identified cities/towns and initiate necessary measures on the basis

clxxxii

of energy audit results to reduce the technical losses and

improving collection efficiency to achieve the mandated A T & C

loss of less than 15 per cent. The GESCOM is directed to submit

compliance thereon regularly to the Commission.

The Commission further notes that the GESCOM despite

completing metering of 60,123 (74%) DTCs, it has taken up energy

audit of only 12,677 DTCs and even it has not submitted the details

of energy conducted in respect of such DTCs also. The GESCOM

has failed to take up DTC-wise energy audit, citing non-completion

of tagging of consumer installations with the concerned

feeders/DTCs. The stand repeatedly taken by the GESCOM for the

last three years that tagging of consumer details with the

concerned feeders/DTCs is not completed, does not augur well for

the Company which wants to run its business on commercial

principles. This shows that the GESCOM is not serious about

conducting energy audit and taking remedial measures to reduce

losses in order to run its business efficiently. The Commission views

with displeasure, the delay on the part of the GESCOM to

complete the tagging of consumer installations and take up the

DTC-wise energy audit.

The Commission directs the GESCOM to take up energy audit of

60,123 DTCs for which meters have already been provided and to

initiate remedial measures for reducing energy losses in the

distribution system based on the results of energy audit. The

compliance in respect of DTC-wise energy audit conducted with

detailed analysis and the remedial measures initiated to reduce

loss levels shall be submitted every month regularly to the

Commission.

Further, the GESCOM is directed to submit to the Commission, the

consolidated energy audit report for the FY17, as per the formats

prescribed by the Commission, vide its letter No: KERC/D/137/14/91

dated 20.04.2015, before 15th May, 2017.

viii Directive on Implementation of HVDS:

clxxxiii

In view of the obvious benefits in the introduction of HVDS in

reducing distribution losses, the Commission had directed the

GESCOM to implement High Voltage Distribution System in at least

one O&M division in a rural area in its jurisdiction by utilizing the

capex provision allowed in the ARR for the year.


The Commission has directed the GESCOM to submit the DPR of

HVDS project in respect of Turuvihal Hobli in Sindhanur taluk for

approval of the commission. The cost of implementation of HVDS

project is Rs 11.89 crore. However, the Agavani Committee has

recommended that the HVDS scheme is not viable for the

GESCOM. Therefore, the scheme is under study and a decision will

be taken after completing the study.

. Commission’s Views:

The Commission has been directing the ESCOMs to identify one

sub-division in each ESCOM with high LT / HT ratio and high

distribution loss levels, so that substantial loss reduction could be

achieved by implementing the HVDS in such sub-divisions.

Further, the Commission, with a view to bring down the cost of

implementation of HVDS, had issued revised guidelines to all the

ESCOMs directing them to implement the HVDS in their sub-

divisions/feeders having the highest distribution losses.

The Commission notes that the GESCOM has not taken up

implementation of HVDS in its jurisdiction contending that the

Agavani Committee has recommended that the HVDS scheme is

not viable for the GESCOM.

The Commission is of the view that implementation of the HVDS for

the agricultural feeders segregated under NJY scheme, wherever

high losses are prevailing, is necessary to reduce the distribution

losses significantly. The Commission directs the GESCOM to take a

final call whether to implement HVDS or not in its sub-divisions. In

clxxxiv

the event of GESCOM decides to take up HVDS in any of its sub-

divisions/feeders, the DPR of the same shall be submitted to the

Commission for its approval before taking up implementation and

the compliance in this regard shall be submitted to the Commission

at the earliest.

ix. Directive on Niranthara Jyothi – Feeder Separation:

The ESCOMs were directed to furnish to the Commission the

programme of implementing 11 KV taluk wise feeders’ segregation

with the following details:

a) Number of 11 KV feeders considered for segregation.

b) Month wise time schedule for completion of envisaged work.

c) Improvement achieved in supply after segregation of

feeders.


Progress of Niranthara Jyothi Work

Phas

e

No.

of

Taluk

s

Villages

covered

11 kV

NJY

feeder

s

propos

ed

DPR

cost

in Rs.

Cr.

feeders

commis

-sioned

feeders

complete

d

Work

under

progress

Short

closed

feeder

s

Work

to be

take

n up

Probabl

e date

of

comple

tion

Ph-I 20 2,765 235 286.8

9 207 13 15 0 0

Mar’17 Ph-II 10 1,087 109 153.8 87 6 2 14 0

Total 30 3,852 344 440.6

9 294 19 17 14 0

clxxxv

Benefits accrued to the system after implementation of NJY

Parameters

Before

implementation

of NJY

After implementation of NJY

Mixed load

feeder NJY feeder

Residual IP

set feeder Total

Input energy into the system in MU 229.25 58.58 134.96 193.53

Average failure of transformers per

feeder 6 0 1 1

Average No. of (un-scheduled)

interruptions per feeder 68 13 20 33

Average peak load during peak

hours in Amps 189 41 106 148

Percentage dist. loss per feeder 45 22 11 33.00

Improvement in Tail end voltage 340 410 395 403


The Commission notes that the GESCOM has commissioned totally

291 feeders under both NJY phase 1 & 2. But, it has not expedited

the said works for commissioning as can be seen from its

compliance that work in respect of 19 feeders is completed but

despite this, GESCOM has failed to commission them. Further, the

works in respect of 17 feeders are still in progress. The delay on the

part of GESCOM to implement the NJY works across its jurisdiction

has only resulted in non-realization of envisaged benefits set out in

the DPR when the project was initiated.

The GESCOM is hereby directed to complete and commission the

remaining 36 feeders expediously and after that to carry out the

analysis of those feeders so as to ensure that the objectives set out

as per the DPR are accomplished. Further, the GESCOM shall

continue to ensure that NJY feeders are not tapped illegally for

running IP-sets which would defeat the very purpose of feeder

segregation scheme undertaken at huge cost. The consumers who

are found to be tapping the NJY feeders need to be dealt with

seriously for theft of energy. The field officers/officials who fail to

note and curb illegal tapping shall be personally held responsible

for these irregularities.

clxxxvi

Further, the Commission notes that the GESCOM has carried out

the analysis of feeders commissioned under NJY indicating the

benefits accrued to the system in terms of reduction in failures of

distribution transformers, improvement in tail-end voltage and

improvement in supply/reduction in interruptions and reduction in

peak load. The analysis reveals that there is overall improvement in

supply condition after implementation of NJY. However, there is no

mention of obtaining consumer feedback post implementation of

NJY. Therefore, it is important to know as to whether such analysis

reveals that, the consumers are satisfied in the wake of increased

number of hours of availability of quality power, post

implementation of NJY. The GESCOM is directed to conduct

analysis of NJY feeders covering the consumers in the project area

to obtain their feedback.

Further, it is noted that the GESCOM has already segregated 294

feeders under NJY phase1 & 2 works and consequent to this,

agricultural feeders are exclusive from rural loads and the energy

consumed by the IP-sets could be more accurately measured at

the 11 KV feeders at the sub-stations after duly allowing for

distribution losses in 11 KV lines, distribution transformers and LT lines.

The GESCOM is directed to report every month, specific

consumption and the overall IP-set consumption only on the basis

of reading data obtained from agricultural feeders’ energy meters

as per the formats prescribed by the Commission.

The Commission reiterates its directive to the GESCOM to continue

to furnish feeder-wise IP-set consumption based on meter reading

data of the meters installed to the 11 KV feeders, to the Commission

every month, in respect of agriculture feeders segregated under

NJY.

x. Directive on Demand Side Management in Agriculture:

In view of the urgent need for conserving energy for the benefit of

the consumers in the State, the Commission had directed the

GESCOM to take up replacement of inefficient pumps with energy

efficient pumps approved by the Bureau of Energy Efficiency, at

clxxxvii

least in one sub-division in its jurisdiction and report compliance

thereon to the Commission.


The GESCOM has selected two feeders exclusively feeding to the

IP-sets in Aland taluka of Kalaburagi district for implementation of

DSM and has requested M/s EESSL to prepare the DPR in this

regard. In this regard, the EESL team is expected to visit GESCOM in

January 17.


The Commission notes that there is no progress in implementation

of DSM in agriculture by the GESCOM. In fact, the status is same as

that of the last three years only. Further, the Commission observes

that, the GESCOM has not taken any concrete action in the field

to take forward the implementation of DSM measures in its

jurisdiction, seriously. The GESCOM needs to expedite DSM

measures otherwise its action taken so far on this can be termed as

merely rhetoric without any action on the ground. The Commission

is of the view that there is a huge potential for energy saving in the

agricultural sector which needs to be tapped by implementing the

scheme as early as possible and to derive the optimum benefits on

completion of the same. In this regard, strong emphasis should be

given for implementation of DSM measures to conserve energy

and also precious water for the benefit of farmers.

Further, the Commission while emphasizing the need for

implementation of DSM in agriculture during its review meetings

held with the ESCOMs, has been directing them to initiate DSM

measures in any one sub-division/taluk in order to assess the results

of such measures before the same is scaled up in whole of its

jurisdiction.

clxxxviii

The Commission directs the GESCOM to expedite the

implementation of DSM measures in its jurisdiction and complete

the same at the earliest and compliance thereon shall be submitted

to the Commission within three months from the date of this Order.

xi. Directive on Lifeline Supply to Un-Electrified households:

The Commission has directed the ESCOMs to prepare a detailed

and time bound action plan to provide electricity to all the un-

electrified villages, Hamlets and Habitations in every taluk and to

every household therein. The action plan was required to spell out

the details of additional requirement of power, infrastructure and

manpower along with the shortest possible time frame (not

exceeding three years) for achieving the target in every taluk and

district. The Commission has directed that the data of un-electrified

households could be obtained from the concerned gram

panchayaths and the action plan be prepared based on the data

of un-electrified households.


The RGGVY scheme was envisaged for providing access to all rural

households by the end of 12th Five-Year-Plan. Accordingly, RGGVY

scheme under 10th and 11th Plans were formulated to provide

access to rural households including BPL households and 12th

RGGVY scheme covered balance left over rural houses including

BPL. Following are the details:

Sl. No Name of the

district

No. of BPL

households

already

electrified

No. of rural

households

already electrified

Total BPL covered

under the XII plan

scheme

Rural households

covered under

the XII plan

scheme

1 Bidar 22,948 31,466 5,965 34,810

2 Raichur 28,335 34,514 2,5387 34,583

3 Koppal 26,946 32,506 7,995 32,027

4 Bellary 43,300 40,857 7,152 29,106

5 Kalaburagi 35,135 48,752 26,518 45,665

6 Yadgir 23,838 32,501 15,780 39,564

Total 1,80,502 2,20,597 88,797 2,15,755

After completion of 12th Plan scheme, all the rural households

including BPL households would be electrified in GESCOM.

clxxxix

Sl.

No

Name of

the district

Total rural

households

Total

electrified

Total un-

electrified

households

Total

covered for

electrification

under XII

plan RGGVY

Progress

1 Bidar 2,37,789 2,02,865 34,924 34,810 0

2 Raichur 2,58,604 2,23,793 34,811 34,583 0

3 Koppal 2,13,549 1,81,490 32,059 32,027 0

4 Ballary 2,94,445 2,65,304 29,141 29,106 0

5 Kalaburagi 3,14,905 2,69,135 45,770 45,665 0

6 Yadgir 1,62,755 1,23,137 39,618 39,564 0

Total 14,82,047 12,65,724 2,16,323 2,15,755 0

Further, 88,797 BPL households and 2,15,755 rural households were

included in XII Plan RGGVY scheme covering six districts of the

GESCOM. In GESCOM, the scheme was sanctioned for Kalaburagi

district only. The works of Kalaburagi district has been awarded

and the same are in progress. The Chief Executive Officer, Zilla

Panchayat of Kalaburagi district was requested to furnish a list of

BPL beneficiaries for electrification. The list is yet to be received.

The RGGVY scheme was subsumed in DDUGJY for balance five

districts, tenders for the same are under evaluation.


The Commission expresses its displeasure over the GESCOM’s tardy

progress and apparent lack of seriousness in electrification of

un-electrified households in its jurisdiction. Even after so many

years, there are a large number of households remain without

electricity, which is of serious concern.

Further, the Commission concerned with the slow pace of progress

in this programme, in its previous Tariff Orders had directed the

GESCOM to cover electrification of 5 per cent of the total

identified un-electrified households every month beginning from

April, 2015 so as to complete this programme in about twenty

months. However, the progress achieved in electrification of

households so far by the GESCOM remains much to be desired.

cxc

The Commission directs the GESCOM to expedite action to provide

electricity to the un-electrified households and cover all the

remaining households at the earliest and report compliance

thereon to the Commission regarding the monthly progress

achieved from May, 2017 onwards. The Commission as already

indicated in the earlier Tariff Orders would be constrained to initiate

penalty proceedings under section 142 of the Electricity Act, 2003,

against GESCOM in the event of non-compliance in the matter.

xii. Directive on Implementation of Financial Management Framework:

The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented towards maintenance of power

supply without a corresponding emphasis on realization of

revenue. This has resulted in a serious mismatch between the

power supplied, expenditure incurred and the revenue realized in

many cases. The continued inability of ESCOMs to effectively

account the input energy and its sale in different sub-divisions of

the ESCOM in line with the revenue realization rate fixed by the

Commission, urgently calls for a change of approach by the

ESCOMs, so that the field level functionaries are made

accountable for ensuring realization of revenues vis-à-vis the input

energy supplied to the jurisdiction of sub-division/ division.

The Commission has directed the GESCOM to introduce the system

of Cost-Revenue Centre Oriented sub-divisions at least in two

divisions in its operational area and report results of the experiment

to the Commission.


Strategic Business Units in eleven sub-divisions have been already

introduced. However, the data furnished by the field staff is not in

proper format. The staff will be educated to prepare proper

cxci

information of SBUs. Further, SBUs will be introduced in balance sub-

divisions before March 2017.

Further, as directed by the Commission, the GESCOM has

implemented the model suggested by the consultant i.e., M/s PWC

in GESCOM’s jurisdiction covering divisions and sub-divisions to

bring accountability on the performance of the divisions and sub-

divisions in relation to the quantum of energy received, sold and its

cost in order to conduct the business on commercial principles.

To implement the directive on Financial Management Framework

at subdivision-wise needs asset categorization, which is presently

not available with the sub-divisions, hence, it requires some time for

implementation. This process is in progress and will be completed

by March 2017.


The Commission has forwarded a report prepared by the

consultants, M/s PWC regarding implementation on Financial

Management Framework to bring in accountability on the

performance of the divisions / sub-divisions by analyzing the

quantum of energy received, sold and recovery of costs through

revenue, so that the ESCOMs conduct their business on

commercial principles.

However, it is observed from the GESCOM’s compliance on the

directive that, it has not taken any action for implementing this

directive. The GESCOM, without actually taking any measurable

action, has only repeated whatever it has submitted to the

Commission last year on the directive of formation of SBUs. The

Commission directs GESCOM to review the performance of the

divisions & sub-divisions in respect of energy received, sold,

average revenue realization and average cost of supply using the

financial framework Model without giving lengthy explanation.

Further, the GESCOM is directed to analyze the following

parameters each month to monitor the performance of the

divisions/sub-divisions at corporate level.

cxcii

a) Target losses fixed and the achievement at each stage.

b) Target revenue to be billed and achievement at each

category.

c) Target revenue to be collected and achievement at all

categories.

d) Targeted distribution loss reduction when compared to

previous years’ losses.

e) Comparison of high performance divisions in sales with low

performance divisions.

Therefore, based on the above analysis, the GESCOM needs to

take corrective measures to ensure 100 per cent meter reading,

billing, and collection; analysis of sub-normal consumption;

replacement of non-recording meters; etc.


implement the financial management framework model in its

jurisdiction at the earliest to bring in accountability on the

performance of the divisions / sub-divisions in the matter of the

quantum of energy received, sold and its cost so as to conduct its

business on commercial principles. Compliance in this regard

shall be submitted to the Commission on a quarterly basis,

regularly.

xiii Directive on Prevention of Electrical Accidents:

The directive was as follows:

“The Commission has reviewed the electrical accidents that have

taken place in the State during the year 2015-16 and with regret

noted that as many as 430 people and 520 animals have died due

to these accidents.

From the analysis, it is seen that the major causes of these accidents

are due to snapping of LT/HT lines, accidental contact with live

LT/HT/EHT lines, hanging live wires around the electric poles

/transformers etc., in the Streets posing great danger to human lives.

cxciii

Having considered the above matter, the Commission hereby directs

to prepare an action plan to effect improvements in the Transmission

and Distribution Networks and implement safety measures to prevent

electrical accidents. Detailed division-wise action plans shall be

submitted by the GESCOM to the Commission.”


To reduce electrical accidents GESCOM has taken following measures:

i. To carry out periodical and preventive maintenance works on

distribution system.

ii. Providing intermediate poles on LT/ HT lines.

iii. Replacement of deteriorated conductors / broken poles in

LT/HT lines and setting right the slanted poles by providing

foot concreting.

iv. Re-stringing of loose spans in HT/LT lines.

v. Rectification of hazardous installations identified in lines and

equipment.

vi. Providing clearance to the LT/HT Lines which are passing close

to the buildings.

vii. Procurement of safety materials for field staff

viii. Educating the field staff and public about the use of safety

electric equipment and measures to be taken to prevent

accidents.

Particular

No. of accidents

during FY 2015-

16

No. of accidents

during

FY 2016-17

( up to Sept’ 16)

Fatal 59 66

Departmental 1 2

Non-Departmental 58 64

Animal 158 177

Non-Fatal 50 54

Departmental 14 19

Non-Departmental 36 35

cxciv

The details of number of hazardous installations identified and

rectified in the distribution system for FY16 and FY17 and the action

plan is furnished in Annexure-XII.

As per the direction by the Commission vide letter No.

KERC/D/47/2016-17/ 1884, dated 28.10.2016, all the field

engineers/staff are instructed vide No. GESCOM/CEE(CP)/SEE(MIS)/

EE(RA)/2016-17/ 40890-931, dated 24.11.2016 to implement the

safety measures as indicated in the safety manual and this manual

will be used as a guide in the field in maintaining the power

distribution system in an efficient manner.

Further, the GESCOM is conducting consumer interaction meetings

at O&M sub-divisions for creating awareness on safety among

public.

Further, instructions have been issued to the TA&QC, GESCOM

wing vide letter No. GESCOM/CEE(CP)/SEE(MIS)/ EE(RA)/2016-

17/42566-600, dated 03.12.2016, to inspect one feeder in each sub-

division as per the manual for conducting safety/technical audit of

distribution system.


The Commission notes that the GESCOM has taken certain

remedial measures including rectification of hazardous installations

in its jurisdiction. However, these measures are totally inadequate

considering the increased number of fatal electrical accidents

involving both human and livestock which is a serious concern. The

Commission would like to impress upon the GESCOM that the

identification and rectification of hazardous installations is a

continuous process, which should be regularly carried out without

any let up. Therefore, the GESCOM should make more concerted

efforts for continuous identification and rectification of all the

hazardous installations including streetlight installations / other

electrical works under the control of local bodies to prevent

electrical accidents. In addition, it is also important that the

cxcv

GESCOM takes up awareness campaigns through visual/print

media continuously to spread about safety aspects among public.

During the ESCOMs’ Review meetings held, the Commission has

been emphasizing that the ESCOMs should take up periodical

preventive maintenance works, install LT protection to distribution

transformers, conduct regular awareness programme for public on

electrical safety aspects in use of electricity and also ensure use of

safety tools & tackles by the field staff besides imparting necessary

training to the field staff at regular intervals.

Further, the Commission is of the view that the hazardous

installations in the distribution network is the result of shabby works

carried out without adhering to the best construction practices as

per the standards, while taking up construction/expansion of the

distribution network. Therefore, the GESCOM shall take adequate

and effective steps to ensure that distribution network is hazardous

free. In addition to this, the GESCOM also needs to conduct regular

safety audit of its distribution system and to carryout preventive

maintenance works as per schedule in order to keep the network

equipment in healthy condition.

The Commission has already forwarded the Safety Technical

Manual to the ESCOMs, the said manual enumerates detailed

account of the steps to be taken on each element of the

distribution system which would help the engineers in the field to

identify and attend to the defects. In this context, it is necessary

that the ESCOMs are required to continuously monitor the

implementation of the suggestions / recommendations contained

in the Safety Technical Manual to ensure that distribution network is

maintained properly.

The Commission, therefore, reiterates its directive that the GESCOM

shall continue to take adequate measures to identify & rectify all

the hazardous locations/installations existing in its distribution

cxcvi

system under an action plan to prevent and reduce the number of

electrical accidents occurring in its distribution system. The

compliance thereon shall be submitted to the Commission every

month, regularly.

cxcvii

APPENDIX - 1

Gist of the Objections of the Stakeholders/Public, GESCOM’s response and

the Commission’s Views

Objections on Tariff Issues:

Objections Replies by GESCOM

1) As per Regulation 2.7.1 of MYT

Regulations 2006, the application

for determination of Tariff, for any

financial year shall be made not

less than 120 days before the

commencement of such financial

year. GESCOM should have filed on

or before 30th Nov 2016 which has

not been done (petition filed on 08-

01-2017) and hence, the

Application is not maintainable.

GESCOM has filed Tariff Application

for FY18 in time i.e. on 30.11.2016.

Commission's Views: The GESCOM has filed the application on 30.11.2017 and

hence the petition is maintainable.

2) The GESCOM has failed to arrest the

pilferage of power due to its

inefficient management of power

situation and it is trying to pass on

the loss on account of this, to the

consumers and have applied for

revision of tariff to cover up

inefficiency and miss-management.

The distribution loss of GESCOM is

increasing over the years.

Vigilance activities have been

increased to arrest the pilferage of

power. The distribution loss has been

reduced from 18.93% during FY-15 to

18.10% during FY16 and action will be

taken to reduce the loss to 17.60 % in

FY-17 and projected to reduce the

loss to 17.00 % in FY-18.

Commission's Views: The issue of distribution loss is dealt in the relevant

chapter of this Tariff Order.

3) GESCOM has procured short term

power at rates higher than the

Commission fixed rate of Rs.4.50

per unit. The amount in excess of

the approved limit should to be

disallowed.

The GESCOM has stated that, the

PCKL has purchased short term

source energy on behalf of the

GESCOM to an extent of 467.42 MU

during FY16 and payment of

Rs.235.81 Crores is made at an

average cost of power purchase

that works out to Rs.5.04 per unit.

However, KERC has approved the

contingent power purchase cost

(Short Term/Medium term) for Rs.5.50

per unit.

Commission's Views: The reply of GESCOM is noted and the power purchase

isuue has been dealt in the relevant chapter of this Tariff Order.

4) The P&G trust contribution is to be

borne by GoK and hence, the

Commission has to reject the claim

of P&G trust contributions.

The amount pertains to the prior

period (i.e. before formation of

GESCOM), hence same has been

claimed in FY18 as it was already

cxcviii

claimed in previous tariff

application and rejected by the

Commission. GESCOM once again

prays the Commission to consider

Rs.262.49 Crores for Pension &

Gratuity Trust to reduce the

financial burden for GESCOM.

Commission's Views: The Commission has dealt with the matter appropriately

in the relevant chapter of this Tariff Order.

5) GESCOM collects interest on all its

dues from the consumers. But, it

has not collected interest for the

outstanding dues of subsidy to an

amount of Rs.1110.48 Crores which

is due from 2008-2016 and the

interest works out to Rs.916.52

Crores at simple interest of 12%.

The tariff hike would not be

required, if this interest is collected

by GESCOM.

GESCOM has stated that, 12 %

interest is levied and same yard stick

is applied to all installations except

IP Set installations.

Commission's Views: The reply of GESCOM is noted and the Commission

would examine the issue and take appropriate action in the matter.

6) GESCOM has stopped levying

interest for the outstanding arrears

of IP Set consumers prior to 2008

which is Rs.774.12 Crores (principal

+ Interest) from 1st April, 2013. This

clearly shows that, GESCOM is

passing the burden to the

consumers through tariff.

GESCOM has stated that, in view of

the observations by the audit and

instructions from the GoK not to levy

interest on belated payments vide

G.O. dated 12.05.2011 on IP Set

dues/subsidy releases, change in the

accounting policy in the Financial

year 2013 was proposed and

approved by GESCOM Board.

Subsequent to this, the levy of interest

on arrear of the IP sets consumers

having load up to and inclusive of 10

HP was discontinued and stopped

from 01.04.2013.

Commission's Views: Commission's Views: The reply of GESCOM is noted and

the Commission would examine the issue and take appropriate action in the

matter.

7) GESCOM has invested Rs.508.68

Crores on NJY programme, but,

the distribution loss reduction has

not been achieved to the level

required. There is hooking of NJY

feeders for running the IP sets in the

GESCOM area.

The details of benefits and

improvement in power supply such as

reduction in failure of Distribution

Transformers, number of (Un-

scheduled) Interruptions, reduction in

peak load during peak hours in

Amps, reduction of T&D loss and

improvement in tail end voltage, has

already been furnished in the Tariff

petition dated 30.11.2016 vide page

cxcix

No. 79.

Commission's Views: This issue has been dealt in the relevant chapter of the

Tariff Order.

8) GESCOM has not indicated the

number of BJ/KJ installations which

are metered and which are not

metered.

Most of the consumers are

consuming more than 18 units, but

GESCOM is not able to bill them as

they do not have the meters fixed.

A third party should be made to

quantify the exact sale to BJ/KJ.

Out of 5,96,571 Nos. of BJ/KJ

installations, 4,24,379 Nos. are

metered and balance 1,72,192 Nos.

are unmetered. The % of metering of

BJ/KJ installations is 71.14%. The BJ/KJ

installation power supply up to an

extent of 18 units is subsidized. In

case of BJ/KJ installations are

consuming more than 18 units,

GESCOM is taking action to bill them

under LT-2(a) tariff.

Commission's Views: The reply furnished by the GESCOM is noted. The

Commission directs GESCOM to complete the metering of all BJ/KJ

installations at the earliest.

9) The Commission has been

allowing Rs.1.00 Crore to each

ESCOM for consumer education

programs in successful tariff

orders. There is no proper

consumer education/ awareness

created. The Commission should

issue suitable direction to

GESCOM for effective and

meaningful education

programme. Laghu Udyog Bharati

- Karnataka is willing to organize

these kind of awareness programs

in the state.

It is conducting interaction meeting

at sub-division level and would

accept the suggestion made.


GESCOM shall enhance its consumer education programs so that consumer

education is effectively implemented. If required GESCOM may seek the

assistance of Laghu Udyog Bharati – Karnataka.

10) As per the Tariff Order of 2016,

level of cross subsidy by HT2a

consumers stood at 35.04% and

HT2a(ii) at 29.92% and HT

commercial consumers are

paying 65% over and above the

tariff. As per the Tariff Policy, the

cross subsidy should be brought

within +/-20% of the cost of supply.

Hence, the tariff determination

should be based on the cost of

supply.

The IP Sets are subsidized by the

other category of consumers,

GESCOM has stated that, the

preparation of Cost of supply has to

be done, the fixation of Tariff has

been arrived depending upon the

expenditure and Revenue of

GESCOM. The Gap in the expenditure

and income for the Year-2017-18 is

working out at Rs.1075.34 Crores.

Accordingly, the hike of Rs.1.48 /Unit

in the Tariff is proposed for existing

tariff to cover up the gap of

Rs.1075.34 Crores.

cc

mainly Industrial sector. Hence,

cross subsidy payable by industrial

consumers should be reduced.

At least the cost to serve of HT2(a)

category should be worked out

and the cost per unit is to be

reduced.


Commission is indicating the cross subsidy levels based on cost to serve as

well as average cost of supply in its Tariff Order. The Commission’s endeavor is

to reduce cross subsidies gradually.

11) The Fixed charges are to be

based on the assets created for

each type of consumers, but,

GESCOM has not furnished the

details except seeking increase in

Fixed charges just to increase its

revenue. This should not be

allowed.

GESCOM has stated that, the fixed

charges are being claimed on

investment made for infrastructure

created for the consumers.

Commission's Views: The Commission has dealt with this issue appropriately in

the relevant chapters of this Tariff Order.

12) GESCOM has spent Rs.60.96

Crores capex for safety measures

to prevent accidents, but, the

accidents have not come down,

which shows that, the planning for

taking safety measures is not

proper. The Commission should to

conduct safety audit by an

independent agency and take

suitable action.

GESCOM has taken following

measures:

a) To carry out periodical and

preventive maintenance works

on distribution system.

b) Providing intermediate poles on

LT/ HT lines.

c) Replacement of deteriorated

conductors/broken poles in LT/HT

lines and setting right the slanted

poles by foot concreting.

d) Re-stringing of loose spans in HT/LT

lines.

e) Providing clearance to the LT/HT

Lines which are passing close to

the buildings.

f) Procurement of safety materials

for field staff

g) Educating the field staff and

public about the use of safety

equipment and measures to be

taken.

h) Rectification of hazardous

installations identified in lines and

equipment.

GESCOM is continuously taking

cci

remedial measures towards

prevention and minimization of

electrical accidents such as

providing protective gears to the

maintenance staff, identifying

hazardous locations and

rectifications, educating the staff

and the general public regarding

safety precautions to be taken in

handling electrical installations.


Commission directs GESCOM to take all precautionary and safety

measures and also take up periodical maintenance to reduce the

accidents.

13) Introducing the morning peak

tariff would hamper the industries

and hence should not to be

allowed.

Most of the consumers including

industries are seeking supply in

morning hours and GESCOM is unable

to sustain the required peak. Hence it

has proposed charges to curtail

usage of supply in the morning and

evening peak hours.

Commission's Views: The Commission has dealt with the matter appropriately

in the relevant chapter of the Tariff Order.

14) A gap of Rs.133.44 Crores for FY16

should not be considered for tariff

determination as it will burden the

consumers. Any expenditure over

and above the approved limit has

to be absorbed by the

Government and not to be

passed on to the consumers.

The expenditure such as Power

purchase, repair & maintenance,

employs cost, A&G Expenses,

depreciation and Interest and

finance charges have increased. The

fixation of tariff depends on the

expenditure and Revenue of

GESCOM. The gap in the expenditure

and income for the Year-2017-18 is

worked out at Rs.1075.34 Crores.

Accordingly, the hike of Rs.1.48 /Unit

in the tariff is proposed from the

existing tariff to cover the gap for

Rs.1075.34 Crores.


Commission has dealt with the matter appropriately in the relevant chapters

of the Tariff Orders.

15) Though the average cost of

supply is Rs.5.69 per unit, IP Set is

charged at Rs.2.38 per unit and

the difference of Rs.3.22 per unit is

charged to the other consumers

through cross subsidy.

The average cost of electricity for

FY17 works out Rs.6.93 per unit and

GESCOM is claiming at Rs.5.03 per

unit only for IP sets. So the difference

works out Rs.1.90 per unit only and not

Rs.3.22 per unit.

Commission's Views: The reply furnished by the GESCOM is noted. The cross

subsidy levels have to be gradually reduced as stated earlier.

ccii

16) GESCOM has procured 71.89 MU

excess of the approved quantum

of 6435.9 MU, hence, the cost

incurred for additional energy

should not be allowed.

The power purchases were made

according to the actual demand

required by the consumers.

Commission's Views: The reply furnished by the GESCOM is noted and the

quantum of power purchased is discussed in the relevant chapter of this Tariff

Order.

17) The cross subsidy surcharge

proposed by the ESCOMs is higher

than the previous year and is

against the principles set out by

the Commission.

GESCOM has applied the Cross

Subsidy Surcharge Formula as

notified in the Tariff Policy dated 28-

01-2016 for FY-18.

Commission's Views: The Commission has dealt with this matter suitably in the

relevant chapter of this Tariff Order.

18) The Open Access Consumers are

already paying demand charges

(fixed charges) as per their

contract demand. As demand

charges are already inbuilt while

calculating T as revenue

realization from the particular

category of consumer, the

demand charges ought to be

deducted from T while calculating

CSS to avoid double charging of

demand charges.

As per the formula the component ‘T’

is the tariff applicable to the relevant

category of consumers and since the

average cost per unit for a particular

category also includes the demand

charges GESCOM has considered the

same.

Commission's Views: : GESCOM’s reply is noted. The Commission has already

issued Orders in the matter in RP4/2016 and the decision is binding.

19) The Wheeling Charges proposed

by the DISCOMs have been

increased to the tune of 39%

(BESCOM), 95% (CESC), 94%

(GESCOM), 106% (HESCOM) and

54% (MESCOM) for FY18

compared to FY17 which is

consequent to increase of

Distribution ARR to the tune of

Rs.2500 Crores.

The Commission should do

prudence check of these

allocations which are not in line

with the principle set out by the

Commission in its earlier tariff

orders. Calculation of Wheeling

charges proposed by ESCOMs

seems erroneous as the quantum

of energy considered for

calculation is only the quantum of

It is following the tariff orders of the

Commission for proposing the

wheeling charges.

cciii

sales by BESCOM to the

consumers excluding quantum of

Open Access. For calculation of

wheeling charges, total energy to

be wheeled in the BESCOM

system (ESCOM sale+ Open

Access Sale) should be

considered.

Commission's Views: The reply of GESCOM is noted and computation of

wheeling charges is discussed in the relevant chapter of this Tariff Order.

20) The DISCOMs must buy power

from Exchange/Short term

markets when prices are lower

than energy charge of generators

tied up in long term PPA. At such

low prices there is huge potential

to replace costlier power. The

DISCOMs may continue to pay

fixed charges irrespective of their

schedule from generator and

replace costlier power with

exchange power to ensure most

efficient merit order dispatch.

Commission's Views: The purchase from exchange may not arise due to

commissioning of new power projects in the near future. However, GESCOM

may consider the suggestion made by the objector, if it is financially viable.

Objections on the Quality of Service: 21) With 18.10% loss the GESCOM has

exceeded the Distribution loss limit

of 16.50% approved by the

Commission the impact of losses

beyond the approved figure

should not be passed on to the

consumers. GESCOM has

indicated 675 11kV feeders out of

1595 feeders having loss between

20%-39.7%., this shows that, around

42% of the feeders have high

distribution losses. The distribution

losses should be brought below

15% as per the directives of the

Commission.

In order to reduce the distribution

losses, system improvement works

are being taken up and vigilance

activities are conducted to curb

the pilferage. The distribution loss

has been reduced from 18.93%

during FY15 to 18.10% during FY-16

and initiation will be taken to further

reduce the losses to 17.60 % in FY17.

The projected loss reduction for

FY18 is at 17.00 %.

Commission's Views: This matter has been dealt suitably in the relevant

chapters in this Tariff Order.

22) Apart from detection of Power

theft cases GESCOM should

identify the cases of

disproportionate load against the

sanctioned loads leading to

For detection of connected load,

new metering arrangements are

being made which will record the

connected load of the installation

i.e. maximum demand. Routine

cciv

nonpayment of fixed charges.

GESCOM should address this, by

identifying the consumers who are

paying only for the electricity

charges, but not for the loads

connected. The fixed charges are

also to be levied on such

consumers by properly identifying

them.

inspection of installation is also being

carried out and action is being taken

to penalize the consumers who have

connected more than the

sanctioned load. The information

about usage of more than

sanctioned load attracts penalty

and the same is being brought to the

notice of the consumers in the

monthly electricity bills or through

notices.

Commission's Views: The Reply furnished by GESCOM is acceptable.

23) GESCOM has not implemented

the model of Financial

Management Frame works to

bring in accountability on

performance of the divisions.

GESCOM has stated that, to

implement the directive on Financial

Management Framework (FMFW) at

subdivision wise, GESCOM needs

asset categorization which is presently

not available with sub-division, hence

it requires some time for

implementation and this process is

under progress.


Commission directs GESCOM to educate its staff about the guidelines and

adopt the Financial frame work guidelines to create awareness among the

O&M Divisions and downstream work units, keeping in view the commercial

principles in the electricity distribution business.

24) GESCOM should have indicated

steps taken for the improvement

of efficiency and indicate the

efficiency gains.

GESCOM has taken various steps for

improving the efficiency by carrying

the various improvement measures in

its jurisdiction and as a result of the

efforts put forth by GESCOM,

distribution losses for the past years

have come down from 26% in FY08 to

18.93 % at end FY15. Further it is

planned to reduce the distribution loss

to 17.6 % at end of FY17 and in FY18

17.00 %.

Commission's Views: The reply furnished by GESCOM is noted. The issue of

losses is discussed in the relevant chapter of this Tariff Order.

25) GESCOM is not conducting

energy audit and segregating the

technical and commercial losses.

The distribution losses declared

without proper energy audit is

doubtful. The GESCOM has not

given the number of IP set based

on the enumeration.

GESCOM has stated that, the Energy

Audit for FY16 and FY17 (Up to

September, 2016) of 21 Towns has

been furnished in the Tariff Filing

Application (Page No. 76) along with

the Voltage-wise and Commercial

losses. The feeder/DTC-wise

enumeration of IP sets using GI survey

method in GESCOM area has been

awarded to M/s. Steslite. The work has

commenced in the month of

December 2016 and the period of

ccv

completion is for 24 months.

Commission's Views: The reply furnished by the GESCOM is noted. However,

the Commission emphasizes that, conducting energy audit is the only way for

plugging leakage and to make the GESCOM viable both technically and

financially.

26) The vigilance officers are booking

cases by treating some of the

Industrial establishments as

commercial entities, though they

are not competent to book cases

under section 126 of the Electricity

Act 2003. The competent officer

as per the Act is assessing officer

(AEE Ele of the subdivision). This

needs to be stopped.

As per clause 42.02 of Condition of

supply issued under section 126 of the

Electricity Act, 2003, the demand

notice in respect of unauthorized use

of electricity is being issued by the

local authority i.e. Assistant Executive

Engineer, O&M subdivision of

GESCOM. The vigilance staff detect

the case, prepare the assessment

and inform the respective Asst.

Executive Engineer, along with details

of case and relevant document for

billing and serving notice to the

consumer.

Commission's Views: : The GESCOM is directed to strictly adhere to the

provisions of the Electricity Act, 2003 and the relevant Regulations thereon. .

27) GESCOM is carrying out load

shedding without publishing it in

advance through newspaper.

Unscheduled shedding is resorted to,

only in case of sudden generation

loss, emergency repair works and

unforeseen situations.

Commission's Views: The reply furnished by the GESCOM is noted.

28) GESCOM is not complying to the

directives like, energy

conservation, ToD meters, Timer

switches, NJY, HVDS, DSM in

Agriculture, metering of DTCs and

Energy audit and has not tried to

improve the efficiency of

operation and hence the tariff

petition is not maintainable.

GESCOM is implementing the

directives issued by the Commission.

GESCOM is submitting the

compliance to the Commission

promptly which are being reviewed

regularly. Further, providing timer

switches to street lights is being taken

by EESL through Union Ministry of

Power, The estimates have been

prepared for Gulbarga City Municipal

Area.

ccvi

Commission's Views: The reply furnished by the GESCOM is noted and the

issues pertaining to compliance of directives is dealt in the relevant chapter

of this Tariff Order.

29) GESCOM has not furnished the

details of reliability indices. The

consumers will not be able to

know the quality of power supply

given by GESCOM.

The annual abstract of reliability index

of the feeders for the year FY16 has

been submitted to KERC vide e-mail

dated 24.09.2016

Commission's Views: The reply furnished by the GESCOM is acceptable.

30) In the case of Un-authorized IP

sets, GESCOM do not know the

connected load in HP and the

consumption of each IP set.

GESCOM has not taken any

action to regularize the IP sets.

To arrive at an accurate number of IP

Set consumer GESCOM has

bifurcated 11 kV feeders and is

arriving at the specific consumption

of IP Sets. GESCOM is taking action

for regularizing balance 4342 nos. of

Unauthorized IP Sets.


Specific Requests: 31) HKCCI, requests that, GESCOM

should

a) Levy uniform tariff across all the

consumers on par with telephone

tariff, price of fuel such as petrol,

diesel price of milk and so on.

b) The slab rates should not be

levied and the classification of

categories to stop cross

subsidization by various

categories of consumers.

c) Average cost of power supply

per unit should be the power tariff

per unit irrespective number of

units consumed by the consumer.

d) The subsidies in the power tariff to

eligible categories of consumers

can be extended on the lines of

DBT followed by Oil Companies in

the matter of cooking gas other

benefits by the Central Govt.

The tariff is determined by the

Commission based on the type of

consumers.

The slab-wise tariff has been

designed to reduce the burden on

the poor people and loaded with

higher tariff for sustainable

categories of consumers, Hence slab

and category wise system cannot

be removed due to social

obligation.

Instead of subsidies, the slab rates

are designed such that, consumers

get the benefit of the subsidy in the

slab rate tariff itself.

Commission's Views: The reply furnished by the GESCOM is noted. The tariff for

various categories is discussed in the relevant chapter of this order. Further,

the Commission notes that cross subsidies cannot be eliminated. However,

the Commission’s endeavor is to reduce cross subsidies gradually. Therefore,

uniform tariff across all consumers is not a possibility.

32) The Commission should direct the

GESCOM to display all power

purchase Agreements (PPAs) and

monthly bills of power purchase on

their website.

GESCOM will initiate action for

displaying all PPA of power

purchases on GESCOM website.


ccvii

33) There is a huge requirement to

improve the awareness among the

consumers on the CGRF

mechanism and redress the

complaints within the time frame

stipulated.

Paper notifications are already

published about CGRF Members

and Chairman of the CGRF for

applying and get their problems and

the grievances redressed. GESCOM,

while conducting interaction

meeting at Sub-division level, has

created awareness on the

importance of CGRF and its function

in solving the grievances.


34) Laghu Udyog Bharati, requests

that, the officers at the field level

are to be trained on the

Regulations issued by the

Commission to carry out the day to

day activities.

Training for the Officers and Work

men is being conducted regularly

post examination are also being

suitable subject under taken.

Commission's Views: The reply furnished by the GESCOM is noted. GESCOM is

directed to improve the effectiveness of training.

35) Independent feeders are to be

provided to the industries to get

quality and uninterrupted power

supply.

Out of 1637 No. of 11 kV feeders

existing in GESCOM 399 independent

feeders are feeding Urban and

industrial areas. Wherever

independent industrial feeder are

required, GESCOM is ready to

construct separate industrial feeders.


36) Railways, serving utility and an

essential part of the transport

system, and should have a single

part tariff instead of two part tariff

and a lower tariff than the

prevailing tariff and should be

exempted from tariff hike.

The tariff applicable to the railway

traction is less as compared to HT-

2(a) and HT-2(b). The tariff proposed

for the railways is Rs.7.38 per unit for

the usage of all units, whereas the

tariff proposed for HT-2(a) is Rs.7.68

per unit for usage up to 1 Lakhs units

and Rs.8.08 per Unit for the balance.

In respect of HT-2(b) the tariff is

Rs.9.33 per Unit for usage up to 1

Lakhs units and Rs.9.63 per Unit for

the balance units. Hence, the tariff

of Railways is comparatively lower

than other HT tariffs.

Commission's Views: The tariff policy envisages two-part tariff so that fixed

costs and variable costs are recovered separately. The category-wise tariff is

discussed in the relevant chapter of this Tariff Order.

37) Major part of the Energy

purchased by Railways is under

HT2(b) and is consumed for

providing passenger amenities like

Platform lighting, waiting halls,

GESCOM has stated that, the

expenditure such as Power

purchase, Repair & Maintenance,

Employs cost, A&G Expenses,

Depreciation and related DTS and

ccviii

Approach area, Water coolers,

Water pumping, Concourse etc., to

bring perceptible improvements in

the quality of services by giving

different inputs with substantial

financial burden despite hardly any

increase in the passenger fares.

Hence, Railways should be

exempted from proposed tariff

hike.

Interest and finance charges have

increased. The revision of Tariff is

based on the expenditure and

Revenue of GESCOM. The gap in

revenue for the Year-2017-18 is

worked out at Rs.1075.34 Crores.

Accordingly, the hike of Rs.1.48 per

unit in the Tariff is proposed to cover

up the gap for Rs.1075.34 Crores.

Commission's Views: The activities in the station are considered as

commercial and non-domestic. Hence there cannot be any discrimination

between the consumers who are similarly placed.

38) Railways should be given

incentives for maintaining the

power factor (P.F) above, 0.9.

The penalty has been proposed for

the consumers who are maintaining

less than 0.9 PF. If the consumers

maintain PF more than 0.9 there will

be gain to the consumer i.e., utilizing

less units for the same output which is

resulting as incentive. Hence it is a

duty of consumer to use electricity in

economical way by maintaining PF

above 0.9 and nearer to 1.0.

Commission's Views: The maintenance of proper PF is in the interest of

consumer only. PF above the threshold levels would improve the voltage of

the supply to the consumers and also enables optimizing the power

consumption.

39) There should be substantial

reduction in tariff for the Foundries,

Forging Shops, Heat treatment

shops, Blow Moulding units and

Steel mills in Karnataka.

The electricity consumed by the

small scale industries will be less

compared to large scale industries.

GESCOM has proposed reduced

slab benefits in the Tariff for the users

who are consuming less than One

Lakh units. Hence tariff proposed is

reasonable.

Commission's Views: Commission's Views The Commission has considered the

Foundries, Forging Shops, Heat treatment shops, Blow Moulding units and

Steel mills as industries and is categorized under HT-2a or LT-5, as the case

may be.

40) Open access facility should be

extended for the consumers having

load below 1MW also.

This is not acceptable to GESCOM.

Commission's Views: The Commission, for the present, has extended ‘Open

Access’ only to consumers with contract demand of 1MW and above in line

with the provisions of the Electricity Act, 2003.

ccix

ESCOM's Total Approved Power Purchase For FY18

NAME OF THE GENERATING STATION

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER

STATION_RTPS 1-7 (7x210) 7850.68 792.92 3.34 2622.13 3415.05 4.35

RAICHUR THERMAL POWER

STATION_RTPS 8 (1x250) 1269.00 227.15 2.88 365.47 592.62 4.67

BELLARY THERMAL POWER

STATIONS_BTPS-1 (1x500) 2516.00 274.36 3.52 885.63 1159.99 4.61


STATIONS_BTPS-2 (1x500) 2516.00 470.49 3.06 769.90 1240.39 4.93


STATIONS_BTPS-3 (1x700) 960.00 0.00 2.87 275.52 275.52 2.87

YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92

TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II

(3X200MW+3X500MW) 3214.00 198.82 2.29 735.65 934.48 2.91

N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36

NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47

Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43

NTPC Tamilnadu Energy

Company Ltd (NTECL)_Vallur TPS

Stage I &2 &3 (3X500MW)

702.21 125.25 2.64 185.34 310.60 4.42

Neyveli Lignite Corporation_NLC

TPS-II STAGE I (3X210MW) 710.08 82.73 2.82 200.24 282.97 3.99


TPS-II STAGE 2 (4X210MW) 1126.00 135.83 2.82 317.53 453.36 4.03


TPS I EXP (2X210MW) 698.00 98.92 2.61 182.07 281.00 4.03


TPS2 EXP (2X250MW) 520.98 111.33 2.55 132.67 244.00 4.68

NLC TAMINADU POWER LIMITED

(NTPL) (TUTICORIN) (2X500MW) 1153.11 216.03 2.50 288.28 504.30 4.37

MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15

Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19

Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP U1 (1X1000MW)

1511.00 0.00 623.16 623.16 4.12

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP) U2(1X1000MW)

345.77 0.00 142.60 142.60

4.12


ENERGY

ALLOWED

MU

CAPACITY

CHARGES

Rs Cr

ENERGY

CHARGES

PER UNIT

RATE

RS/Kwh

ENERGY

CHARGES

Rs Cr

TOTAL COST

Rs Cr

PER UNIT

RATE

RS/Kwh

ccx

DVC-Unit-1 &2 Meja TPS

(2x500MW) 1402.48 208.22 2.38 333.59 541.82 3.86

DVC-Unit-7 & 8-KODERMA TPS

(2x500MW) 1753.58 321.82 2.19 383.48 705.30 4.02

Kudgi 750.04 0.00 3.02 226.51 226.51 3.02

TOTAL CGS Energy @ KPTCL

periphery 20542.92 1963.88 5319.80 7283.68 3.55

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION

LIMITED_UPCL (2x600) 6712.00 1141.04 3.20 2147.84 3288.88 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY

PROJECT_SVP (10x103.5+2x27.5) 4914.10 21.27 0.35 173.40 194.67 0.40

MAHATMA GANDHI HYDRO

ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2)

279.58 2.32 0.45 12.60 14.92 0.53

GERUSOPPA_GPH (SHARAVATHI

TAIL RACE_STR) (4x60) 521.59 24.43 1.11 57.94 82.37 1.58

KALI VALLEY PROJECT_KVP

(2x50+6x150) 3172.76 21.36 0.55 174.31 195.67 0.62

VARAHI VALLEY PROJECT_VVP

(4x115+2x4.5) 1068.73 40.64 1.18 125.65 166.29 1.56

ALMATTI DAM POWER

HOUSE_ADPH (1x15+5x55) 481.63 31.50 0.97 46.73 78.23 1.62

BHADRA HYDRO ELECTRIC

POWER HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6))

60.65 1.50 3.36 20.39 21.89 3.61

KADRA POWER HOUSE_KPH

(3x50) 362.80 19.38 1.46 53.13 72.51 2.00

KODASALLI DAM POWER

HOUSE_KDPH (3x40) 340.17 12.01 1.14 38.86 50.87 1.50

GHATAPRABHA DAM POWER

HOUSE_GDPH (2x16) 82.75 2.18 1.68 13.92 16.10 1.95

SHIVASAMUDRAM (4x4+6x3) &

SHIMSHAPURA (2x8.6) HYDRO

STATIONS.

292.24 3.54 0.80 23.52 27.06 0.93

MUNIRABAD POWER HOUSE

(2x9+1x10) 91.46 0.43 0.58 5.32 5.75 0.63

TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79

OTHER HYDRO

PRIYADARSHINI JURALA HYDRO

ESLECTRIC STATION (6x39) 110.00 4.35 47.82 47.82 4.35

TUNGABHADRA DAM POWER

HOUSE_TBPH (4x9+4x9) 9.37 1.83 1.72 1.72 1.83

TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15

RENEWABLE ENERGY SOURCES

WIND-IPPS 3704.87 1343.76 1343.76 3.63

KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71

MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29

CO-GEN 160.01 74.30 74.30 4.64


ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

CAPPTIVE 13.17 3.74 3.74 2.84

BIOMASS 119.71 59.23 59.23 4.95

SOLAR-existing (anticipated as

on 31.03.2017) 932.00 618.10 618.10 6.63

ccxi

Solar-New Park 535.96 187.59 187.59 3.50

Solar-KREDL 672.16 353.29 353.29 5.26

SOLAR-KPCL

(YELESANDRA,ITNAL,YAPALDINNI,

SHIMSHA) (3x1+3x1+1x3x1x5)

10.61 6.37 6.37 6.00

TOTAL RE 7165.41 2980.86 2980.86 4.16

NTPC Bundled power 582.21 258.46 258.46 4.44

Power purchase from Co gen 1300.00 451.10 451.10 3.47

Short term power purchase 1120.00 467.04 467.04 4.17

Short term Purchase from

MSEDCL 294.00 106.43 106.43 3.62

TRANSMISSION CHARGES 0.00

PGCIL CHARGES 1066.00 1066.00

KPTCL CHARGES 2753.70 2753.70

SLDC 24.77 24.77

POSOCO CHARGES 3.48 3.48

TOTAL INCLUDING

TRANSMISSION & SLDC CHARGES 65576.04 8898.35 17725.80 26624.15 4.06

ccxii

GESCOM’s Approved Power Purchase For FY18

NAME OF THE

GENERATING STATION

% SHARE OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES PER

UNIT RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER UNIT RATE

(RS/Kwh)

KPCL THERMAL

STATIONS

RAICHUR THERMAL

POWER STATION_RTPS

1-7 (7x210)

5.243 411.61 41.57 3.34 137.48 179.01 4.35

RAICHUR THERMAL

POWER STATION_RTPS 8

(1x250)

13.508 171.42 30.68 2.88 49.37 80.05 4.67

BELLARY THERMAL

POWER STATIONS_BTPS-

1 (1x500)

13.508 339.86 37.05 3.52 119.63 156.73 4.61

BELLARY THERMAL


2 (1x500)

13.508 339.86 63.55 3.06 104.00 167.55 4.93

BELLARY THERMAL


3 (1x700)

13.508 129.68 0.00 2.87 37.22 37.22 2.87

YTPS (1x 800) 13.508 129.68 0.00 2.92 37.87 37.87 2.92

TOTAL KPCL THERMAL

1522.10 172.86 3.19 485.56 658.43 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II

(3X200MW+3X500MW) 13.508 434.15 26.86 2.29 99.37 126.23 2.91

N.T.P.C-RSTP-III

(1X500MW) 13.508 106.98 10.26 2.40 25.68 35.93 3.36

NTPC-Talcher

(4X500MW) 13.508 384.30 30.51 1.68 64.59 95.09 2.47

Simhadri Unit -1 &2

(2X500MW) 13.508 133.42 22.03 2.77 37.01 59.05 4.43

NTPC Tamilnadu

Energy Company Ltd

(NTECL)_Vallur TPS

Stage I &2 &3

(3X500MW)

13.508 94.85 16.92 2.64 25.04 41.96 4.42

Neyveli Lignite

Corporation_NLC TPS-II

STAGE I (3X210MW)

13.508 95.92 11.18 2.82 27.05 38.22 3.99

Neyveli Lignite

Corporation_NLC TPS-II

STAGE 2 (4X210MW)

13.508 152.10 18.35 2.82 42.89 61.24 4.03

Neyveli Lignite

Corporation_NLC TPS I

EXP (2X210MW)

13.508 94.29 13.36 2.61 24.59 37.96 4.03

Neyveli Lignite

Corporation_NLC TPS2

EXP (2X250MW)

13.508 70.37 15.04 2.55 17.92 32.96 4.68

NLC TAMINADU

POWER LIMITED (NTPL)

(TUTICORIN)

(2X500MW)

13.508 155.76 29.18 2.50 38.94 68.12 4.37

MAPS (2X220MW) 13.508 26.88 2.15 5.78 5.78 2.15

Kaiga Unit 1&2 13.508 124.27 3.19 39.59 39.59 3.19

ccxiii

(2X220MW)

Kaiga Unit 3 &4

(2X220MW) 13.508 123.19 3.19 39.25 39.25 3.19

NPCIL-KudanKulam

Atomic Power

Generating Station

(KKNPP U1 (1X1000MW)

13.508 204.11 4.12 84.18 84.18 4.12

NPCIL-KudanKulam

Atomic Power

Generating Station

(KKNPP)

U2(1X1000MW)

13.508 46.71 4.12 19.26 19.26 4.12

NAME OF THE

GENERATING STATION

% SHARE OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES PER

UNIT RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER UNIT RATE

(RS/Kwh)

DVC-Unit-1 &2 Meja

TPS (2x500MW) 13.508 189.45 28.13 2.38 45.06 73.19 3.86

DVC-Unit-7 & 8-

KODERMA TPS

(2x500MW)

13.508 236.87 43.47 2.19 51.80 95.27 4.02

Kudgi 13.508 101.32 0.00 3.02 30.60 30.60 3.02

TOTAL CGS Energy @

KPTCl periphery 2774.94 265.28 2.59 718.60 983.88 3.55

TOTAL MAJOR IPPS

UDUPI POWER

CORPORATION

LIMITED_UPCL (2x600)

9.029 606.05 103.03 3.20 193.94 296.96 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY

PROJECT_SVP

(10x103.5+2x27.5)

39.343 1933.37 8.37 0.35 68.22 76.59 0.40

MAHATMA GANDHI

HYDRO ELECTRIC

POWER HOUSE_MGHE

(4x21.6+4x13.2)

13.508 37.77 0.31 0.45 1.70 2.02 0.53

GERUSOPPA_GPH

(SHARAVATHI TAIL

RACE_STR) (4x60)

13.508 70.46 3.30 1.11 7.83 11.13 1.58

KALI VALLEY

PROJECT_KVP

(2x50+6x150)

13.733 435.73 2.93 0.55 23.94 26.87 0.62

VARAHI VALLEY

PROJECT_VVP

(4x115+2x4.5)

13.508 144.36 5.49 1.18 16.97 22.46 1.56

ALMATTI DAM POWER

HOUSE_ADPH

(1x15+5x55)

13.508 65.06 4.26 0.97 6.31 10.57 1.62

BHADRA HYDRO

ELECTRIC POWER

HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6

))

13.508 8.19 0.20 3.36 2.75 2.96 3.61

KADRA POWER

HOUSE_KPH (3x50) 13.508 49.01 2.62 1.46 7.18 9.79 2.00

KODASALLI DAM

POWER HOUSE_KDPH

(3x40)

13.508 45.95 1.62 1.14 5.25 6.87 1.50

GHATAPRABHA DAM

POWER HOUSE_GDPH

(2x16)

13.508 11.18 0.29 1.68 1.88 2.17 1.95

ccxiv

SHIVASAMUDRAM

(4x4+6x3) &

SHIMSHAPURA (2x8.6)

HYDRO STATIONS.

13.508 39.48 0.48 0.80 3.18 3.66 0.93

MUNIRABAD POWER

HOUSE (2x9+1x10) 13.508 12.35 0.06 0.58 0.72 0.78 0.63

TOTAL KPCL HYDRO

2852.90 29.93 0.51 145.93 175.86 0.62

OTHER HYDRO

PRIYADARSHINI JURALA

HYDRO ESLECTRIC

STATION (6x39)

13.508 14.86 4.35 6.46 6.46 4.35

TUNGABHADRA DAM

POWER HOUSE_TBPH

(4x9+4x9)

13.508 1.27 1.83 0.23 0.23 1.83

TOTAL OTHER HYDRO 13.508 16.12 4.15 6.69 6.69 4.15

RENEWABLE ENERGY

SOURCES

WIND-IPPS 203.57 73.83 73.83 3.63

NAME OF THE

GENERATING STATION

% SHARE OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES PER

UNIT RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER UNIT RATE

(RS/Kwh)

KPCL-WIND

(9x0.225+10x0.230) 0.00 0.00 0.00 3.71

MINI HYDEL-IPPS 33.15 10.89 10.89 3.29

CO-GEN 6.52 3.03 3.03 4.64

CAPPTIVE 10.73 3.05 3.05 2.84

BIOMASS 75.92 37.57 37.57 4.95

SOLAR-existing

(anticipated as on

31.03.2017)

242.95 161.12 161.12 6.63

Solar-New Park 13.686 73.35 25.67 25.67 3.50

Solar-KREDL 43.98 23.12 23.12 5.26

SOLAR-KPCL

(YELESANDRA,ITNAL,YA

PALDINNI,SHIMSHA)

(3x1+3x1+1x3x1x5)

2.71 1.63 1.63 6.00

TOTAL RE 692.88 339.91 339.91

NTPC Bundled power 5.701 33.19 14.73 14.73 4.44

Power purchase from

Co gen 13.683 177.88 61.72 61.72 3.47

Short term power

purchase 12.500 140.00 58.38 58.38 4.17

Short term Purchase

from MSEDCL 13.683 40.227 14.56 14.56 3.62

TRANSMISSION

CHARGES

PGCIL CHARGES 153.42 153.42

KPTCL CHARGES 352.75 352.75

SLDC 2.97 2.97

POSOCO CHARGES 0.48 0.48

TOTAL INCLUDING

TRANSMISSION & SLDC

CHARGES

8856.29 1080.73 2040.02 3120.75 3.52

ccxv

With ref. to

ACS

Sales-MURevenue

Rs. crores

Sales-MURevenue

Rs. crores

1

LT-1[fully

subsidised by

GoK]*

Bhagya Jyothi/Kutir Jyothi

145.15 105.24 128.44 80.79 6.29 0.00 -1.87

2

LT-2(a)(i) Dom. / AEH - Applicable to City

Municipal Corporations areas and all

area under Urban Local Bodies. 873.73 668.37 883.94 499.62 5.65 -10.14 -11.82

4

LT-2(a)(ii) Dom. / AEH - Applicable to areas

under Village Panchayats 317.61 200.29 321.32 165.70 5.16 -18.02 -19.55

5

LT-2(b)(i) Pvt. Educational Institutions

Applicable to all areas of Local

Bodies including City Corporations 9.40 6.79 9.74 7.55 7.75 23.28 20.97

6

LT-2(b)(ii) Pvt. Educational Institutions

Applicable to areas under Village

Panchayats 1.74 1.57 1.80 1.35 7.50 18.56 16.34

7

LT-3(i) Commercial - Applicable in areas

under all ULBs including City

Corporations. 237.44 237.96 237.78 209.65 8.82 40.17 37.55

8

LT-3(ii) Commercial - Applicable to areas

under Village Panchayats 83.82 83.84 83.94 67.78 8.07 28.38 25.98

9 LT-4(a)* IP<=10HP 3451.88 2247.18 3451.88 1901.99 5.51 -12.40 -14.04

10 LT-4(b) IP>10HP 3.61 1.54 3.61 2.76 7.65 21.47 19.19

11

LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of 10

HP & below 0.54 0.33 1.26 0.48 3.81 -38.85 -39.99

12

LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of

above 10 HP 0.97 0.42 0.25 0.13 0.00 -15.42 -17.00

13 LT-5(a) LT Industrial 114.69 81.71 113.53 90.74 7.99 27.07 24.69

LT-5 (b) 55.70 50 55.14 41.38 7.50 19.32 17.09

14 LT-6 Water supply 221.47 125.92 227.63 104.87 4.61 -26.75 -28.13

15 LT-6 Public lighting 245.39 173.83 245.39 152.68 6.22 -1.08 -2.94

16 LT-7(a) Temporary supply 21.12 23.19 21.12 21.12 10.00 58.98 56.01

17

LT-7(b) Permanent Supply to Adversiting &

Holding 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00

5784.26 4008.19 5786.77 3348.59 5.79 -8.00 -9.73

1 HT-1 Water supply & sew erage 93.37 64.33 93.86 53.23 5.67 -9.84 -4.69 0.37

2 HT-2(a) Industrial - 1183.31 1034.73 1106.17 841.83 7.61 20.99 27.90 34.70

3 HT-2(b) Commercial 83.21 84.43 83.31 77.87 9.35 48.60 57.10 65.44

4

HT-2 ( c) (i) Govt./ Aided Hospitals & Educational

Institutions 16.06 7.10 9.78 8.93 9.13 45.16 53.45 61.60

5

HT-2 ( c) (ii) Hospitals and Educational Institutions

other than covered under HT-2( c)

(i) 0.00 0.00 6.28 5.12 8.15 0.00 0.00 0.00

6

HT-3(a)(i) Lift Irrigation - Applicable to lif t

irrigation schemes under Govt Dept,

/ Govt. ow ned Corporations 77.38 26.93 74.46 16.75 2.25 -64.23 -62.18 -60.18

7

HT-3(a)(ii) Lift Irrigation - Applicable to Private

lif t irrigation schemes Lift Irrigaton

societies on urban/express feeders 9.73 5.22 9.36 7.77 8.30 31.93 39.46 46.87

8

HT-3(a)(iii) LI schemes other than those

covered under HT 3(a)(ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

9

HT - 3b Irrigation & Agriculture Farms,Govt.

Horticultural Farms, Pvt.Horticulture

Nurseries, Coffee, Tea,Cocanut &

Arecanut Plantations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10 HT-4 Residential Apartments -Colonies 13.27 10.14 13.16 8.58 6.52 3.66 9.59 15.41

11 HT-5 Temporary supply 5.43 9.18 5.43 6.58 12.12 92.71 103.72 114.54

1481.76 1242.06 1401.81 1026.66 7.32 16.44 23.09 29.63

7266.01 5250.25 7188.58 4375.25 6.09

95.60 148.04

7266.01 5345.85 7188.58 4,523.29 6.29 0.00

0.00

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in adv ance, GESCOM

shall raise demand & collect CDT of Rs.6.29/unit by BJ/KJ &Rs.5.51/unit from IP set Consumers.

* Voltage w ise cost of supply per unit to: LT Rs: 6.41, HT Rs.5.95 & EHT- Rs.5.65 Page - 210

Level of

Cross

Subsidy in %

(LT&HT)

Average

Realisation in

Rs. Per Kwh

Level o f

C ro ss Subsidy

in %

Approved as per RST

Sl No Category Description

Level of

Cross

Subsidy in

% (EHT)

With ref. to voltage wise

COS*

PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF GESCOM

Annexure-III

Grand Total

LT - TOTAL

HT - TOTAL

TOTAL

Misc. Revenue

Proposed by GESCOM

ccxvi

ANNEX - IV

ELECTRICITY TARIFF - 2018

K.E.R.C. ORDER DATED: 11th April, 2017

Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2017

Gulbarga

Electricity Supply Company Ltd.,

ccxvii

ELECTRICITY TARIFF-2018

GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)

1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed

deposits and compliance of terms and conditions as stipulated

in the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka and Regulations issued

under the Electricity Act, 2003 at the time of supply and

continuation of power supply is subject to compliance of the

said Conditions of Supply / Regulations as amended from time

to time.

2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.

3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The

minimum charge is the power supply charges in accordance

with the tariff in force from time to time. This shall be payable by

the Consumer until power supply agreement is terminated,

irrespective of the installation being in service or under

disconnection.

4. The tariffs in the schedule are applicable to power supply within

the area of operation of the licensee.

5. The tariffs are subject to levy of Tax and Surcharges thereon as

may be decided by the State Government from time to time.

6. For the purpose of these tariffs, the following conversion table would

be used:

ccxviii

1 HP=0.746 KW. 1HP=0.878 KVA.

7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill

amount of 50 Paise and above will be rounded off to the next higher

Rupee and the amount less than 50 Paise will be ignored.

8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales

promotions etc., is limited to sanctioned load at the applicable

permanent power supply tariff rates. Temporary tariff rates will be

applicable in case the load exceeds sanctioned load as per the

Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka.

9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations

serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for

supply of Electricity) Regulations, 2004 and its amendments from time

to time. The applicant is however at liberty to avail HT supply for lesser

loads. The minimum contract demand for HT supply shall be 25 KVA or

as amended from time to time by the Licensee with the approval of

KERC.

10. The Consumer shall not resell electricity purchased from the Licensee

to a third party except -

(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,

(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.

11. Non-receipt of the bill by the Consumer is not a valid reason for non-

payment. The Consumer shall notify the office of issue of the bill, if the

same is not received within 7 days from the meter reading date.

Otherwise, it will be deemed that the bills have reached the Consumer

in due time.

12. The Licensee will levy the following charges for non-realization of each

Cheque

ccxix

1 Cheque amount upto

Rs. 10,000/-

5% of the amount subject to a

minimum of Rs100/-

2 Cheque amount of

Rs. 10,001/- and upto

Rs. 1,00,000/-


minimum of Rs500/-

3 Cheque amount above

Rs. 1 Lakh:


minimum of Rs3000/-

13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the

Consumer has to collect the same.

14. In case of any belated payment, simple interest at the rate of 1 % per

month will be levied on the actual No. of days of delay subject to a

minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No

interest is however levied for arrears of Rs.10/- and less.

15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall

provide current limiter/Circuit Breakers of capacity prescribed by the

Licensee depending upon the sanctioned load.

16. All payments made by the Consumer will be adjusted in the following

order of priority: -

(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax

(c) Arrears of Interest on Electricity charges

(d) Arrears of Electricity charges

(e) Current month’s dues

17. For the purpose of billing,

(i) the higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector

meter.

(ii) sanctioned load or MD recorded, whichever is higher, in respect

of installations provided with static meters or Electronic Tri-Vector

meter will be considered.

Penalty and other clauses shall apply if sanctioned load is

exceeded.

18. The bill amount shall be paid within 15 days from the date of presentation

of the bill failing which the interest becomes payable.

ccxx

19. For individual installations, more than one meter shall not be provided

under the same tariff. Wherever two or more meters are existing for

individual installation, the sum of the consumption recorded by the meters

shall be taken for billing, till they are merged.

20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.

21. Reconnection charges: The following reconnection charges shall be

levied in case of disconnection and included in the monthly bill.

For reconnection of:

a Single Phase Domestic installations

under Tariff schedule LT 1 & LT2 (a)

Rs.20/- per installation

b Three Phase Domestic installations

under Tariff schedule LT2 (a) and

Single Phase Commercial & Power

installations.

Rs.50/- per installation

c All LT installations with 3 Phase supply

other than LT2 (a)

Rs.100/- per

installation

d All HT& EHT installations Rs.500/-per

Installation.

22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by

cash or cheque or D.D and payments above Rs.10, 000/- shall be made

by cheque or D.D only. Payments under other heads of account shall be

made by cash or D.D up to and inclusive of Rs.10, 000/- and

payment above Rs.10, 000/-shall be by D.D only.

Note: The Consumers can avail the facility of payment of monthly power

supply bill through Electronic clearing system (ECS)/ Credit cards /

RTGS/ NEFT/ on-line E-Payment / Digital mode of payments in line

with the guidelines issued by the RBI wherever such facility is

provided by the Licensee in respect of revenue payments up to the

limit prescribed by the RBI.

23. For the types of installations not covered under any Tariff schedules, the

Licensee is permitted to classify such installations under appropriate Tariff

schedule under intimation to the K.E.R.C.

24. Seasonal Industries

Applicable to all Seasonal Industries

i) The industries that intend to avail this benefit shall have Electronic Tri-

Vector Meter fitted to their installations.

ccxxi

ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the

concerned O&M Division of the Licensee as per the request of the

Consumer and will continue from year to year unless otherwise

altered. The Consumer shall give a clear one month’s notice in

case he intends to change his ‘ working season’.

iii) The consumption during any month of the declared off-season shall

not be more than 25% of the average consumption of the previous

working season.

iv) The ‘Working season’ months and ‘off-season’ months shall be full–

calendar months. If the power availed during a month exceeds

the allotment for the ‘off-season’ month, it shall be taken for

calculating the billing demand as if the month is the ‘working

season’ month.

v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During

the ‘off-season period, the Consumer may use power for

administrative offices etc., and for overhauling and repairing plant

and machinery.

25 Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the

production of certificate Form-12 A from the Income Tax

department.

26 Time of the Tariff (ToD)

The Commission as decides in the earlier tariff order, decide to

continue compulsory Time of Day Tariff for HT2 (a,) and HT2 (b) and

HT2(c) consumers with a contract demand of 500 KVA and above.

Further, the optional ToD would continue as existing earlier for HT2(a),

HT2(b) and HT2(c) consumers with contract demand of less than 500

KVA. Also the ToD for HT1 consumers on optional basis would continue

as existing earlier. Details of ToD tariff are indicated under the

respective tariff category.

27. SICK INDUSTRIES:

ccxxii

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis ofthe orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by way

of adjustment in the subsequent month’s bill:

(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/-

(Rs. one lakh), if the payment is made 10 days in

advance of the due date.

(iii) Advance Payment exceeding Rs.1000/- made by the

Consumers towards monthly bills

29. Conditions of Supply of Electricity of the Distribution Licensees in the State

of Karnataka and amendments issued thereon from time to time and

Regulations issued under the Electricity Act, 2003 will prevail over the

extract given in this tariff book in the event of any discrepancy.

30. Self-Reading of Meters:

The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the

Licensee shall take the reading at least once in six months and

reconcile the difference, if any and raise the bills accordingly. This

procedure may be implemented by the Licensee as stipulated under

Section 26.01 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

ccxxiii

---0---

ELECTRICITY TARIFF - 2018

PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply of Voltages

at 11KV (including 2.3/4.6 KV) and above at

Standard High Voltage or Extra High Voltages

when the Contract Demand is 50 KW / 67 HP

and above.

ccxxiv

CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:

1. Billing Demand

A) The billing demand during unrestricted period shall be the

maximum demand recorded during the month or 75% of the

CD, whichever is higher.

B) When the Licensee has imposed demand cut of 25% or less, the

conditions stipulated in (A) shall apply.

C) When the demand cut is in excess of 25%, the billing demand

shall be the maximum demand recorded or 75% of the

restricted demand, whichever is higher.

D) If at any time the maximum demand recorded exceeds the CD

or the demand entitlement, or opted demand entitlement

during the period of restrictions, if any, the Consumer shall pay

for the quantum of excess demand at two times the normal rate

per KVA per month as deterrent charges as per Section 126(6)

of the Electricity Act, 2003. For over-drawal during the billing

period, the penalty shall be two times the normal rate.

E) During the periods of disconnection, the billing demand shall be

75% of CD, or 75% of the demand entitlement that would have

been applicable, had the installation been in service, whichever

is less. This provision is applicable only, if the installation is under

disconnection for the entire billing month.

F) During the period of energy cut, the Consumer may get his

demand entitlement lowered, but not below the percentage of

energy entitlement, (For example, In case the energy

entitlement is 40% and the demand entitlement is 80%, the re-

fixation of demand entitlement cannot be lower than 40% of the

CD). The benefit of lower demand entitlement will be given

effect to from the meter reading date of the same month, if the

option is exercised on or before 15th of the month. If the option is

exercised on or after 16th of the month, the benefit will be given

ccxxv

effect to from the next meter reading date. The Consumer shall

register such option by paying a processing fee of Rs.100/- at

the Jurisdictional sub-division office.

(i) The billing demand in such cases, shall be the “Revised

(Opted) Demand Entitlement” or, the recorded demand,

whichever is higher. Such option for reduction of demand

entitlement, is allowed only once during the entire span

of that particular “Energy Cut Period”. The Consumer,

can however opt for a higher demand entitlement upto

the level permissible under the demand cut notification,

and the benefit will be given effect to from the next

meter reading date. Once the Consumer opts for

enhancement of demand, which has been reduced

under Clause (F), no further revision is permitted during

that particular energy cut period.

(ii) The opted reduced demand entitlement will

automatically cease to be effective, when the energy

cut is revised. The facility for reduction and enhancement

can however be exercised afresh by the Consumer as

indicated in the previous paras.

G) For the purpose of billing, the billing demand of 0.5 KVA and

above will be rounded off to the next higher KVA, and billing

demand of less than 0.5 KVA shall be ignored.

2. Power factor (PF)

It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF

of not less than 0.90.

(i) The specified P.F. is 0.90. If the power factor goes below 0.90

Lag, a surcharge of 3 Paise per unit consumed will be levied

for every reduction of P.F. by 0.01 below 0.90 Lag.

(ii) T

he power factor when computed as the ratio of KWh /

KVAh will be determined upto 3 decimals (ignoring figures in

ccxxvi

the other decimal places), and then rounded off to the

nearest second decimal as illustrated below:

(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90

In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the

same is not available, the ratio of KWh to KVAh consumed in the

billing month shall be considered.

3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will

be entitled to a rebate as indicated below:

Supply Voltage: Rebate

A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed

C) 220 KV 5 Paise/unit of energy consumed

The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also

for installations converted from 13.2 KV and below to 33 KV and above

and also for installations converted from 33/66 KV to 110/220 KV, from

the next meter reading date after conversion / service / date of

notification of this Tariff order, as the case may be. The above rebate is

applicable only on the normal energy consumed by the Consumer,

including the consumption under TOD Tariff, and is not applicable on

any other energy allotted and consumed, if any, viz.,

i) Wheeled Energy.

ii) Any energy, including the special energy allotted over and above

normal entitlement.

iii) Energy drawal under special incentive scheme, if any.

The above rebate is not applicable for Railway Traction.

4. In respect of Residential Quarters/ Colonies availing Bulk power supply

by tapping the main HT supply, the energy consumed by such Colony

loads, metered at single point, shall be billed under HT-4 tariff schedule.

No reduction in demand recorded in the main HT meter will be

allowed.

ccxxvii

5. Energy supplied may be utilized for all purposes associated with the

working of the installations, such as, Office, Stores, Canteens, Yard

Lighting, Water Supply and Advertisements within the premises.

6. Energy can also be used for construction, modification and expansion

purposes within the premises.

7. Power supply under HT-4 tariff schedule may be used for Commercial

and other purposes inside the colony, for installations such as Canteen,

Club, Shop, Auditorium etc., provided, this load is less than 10% of the

CD.

8. In respect of Residential Apartments availing HT Power supply under HT-

4 tariff schedule, the supply availed for Commercial and other

purposes like Shops, Hotels, etc., will be billed under appropriate tariff

schedule, (Only Energy charges) duly deducting such consumption in

the main HT supply bill. No reduction in the recorded demand of the

main HT meter is allowed. Common areas shall be billed at Tariff

applicable to that of the predominant Consumer category. [

9. Seasonal Industries

a. The industries, which intend to utilize seasonal industry benefit,

shall conform to the conditionalities under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT &

LT).

b. The industries that intend to avail this benefit, shall have

Electronic Tri-Vector Meter fitted to the installation.

c. Monthly charges during the working season shall be the

demand charges on 75% of the contract demand or the

recorded maximum demand during the month, whichever is

higher, plus the energy charges

d. Monthly charges during the off season, shall be demand

charges on the maximum demand recorded during the month,

or 50% of the CD whichever is higher plus the energy charges.

TARIFF SCHEDULE HT 1

Applicable to Water Supply, Drainage / Sewerage water treatment plant and

Sewerage Pumping installations, belonging to Karnataka Urban Water Supply

and Sewerage Board, other local bodies, State and Central Government.

ccxxviii

RATE SCHEDULE

Demand charges Rs.200/-KVA of billing demand/month


TOD Tariff at the option of the Consumer Time of Day Increase + / reduction (-) in energy


06.00 Hrs to 10.00 Hrs + 100 paise per unit

10.00 Hrs to 18.00 Hrs 0



Note: Energy supplied to residential quarters availing bulk supply by the

above category of Consumer, shall be metered separately at a

single point, and the energy consumed shall be billed at HT-4

Tariff. No reduction in the demand recorded in the main HT meter

will be allowed.

TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research &

Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova

Mills, Roller Flour Mills, News Papers, Printing Press, Railway

Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,

Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water

Supply Installations of KIADB and other industries, all Defence

Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green

House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone

Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore

Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,

Developing and Recording Theaters, Tissue Culture, Aqua Culture,

Prawn Culture, Information Technology Industries engaged in

development of Hardware & Software, Information Technology (IT)

enabled Services / Start-ups (As defined in GOI notification dated

17.04.2015)/ Animation / Gaming / Computer Graphics as certified by

the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.

Units, Tyre retreading units, Nuclear Power Projects, Stadiums

maintained by Government and local bodies, also Railway Traction,

Effluent treatment plants and Drainage water treatment plants owned

other than by the local bodies, LPG bottling plants, petroleum pipeline

projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw

Mills, Toy/wood industries, Satellite communication centres, and

Mineral water processing plants / drinking water bottling plants.

ccxxix

RATE SCHEDULE

HT-2(a): Applicable to all areas of GESCOM.

Demand charges Rs.200/kVA of billing demand/month

Energy charges

For the first one lakh units 660 paise per unit

For the balance units 680 paise per unit

Railway Traction and Effluent Treatment Plants


Energy Charges 620 paise per unit for all the units

TARIFF SCHEDULE HT-2(b)

Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,

Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V. Station, All

India Radio, Railway Stations, Air Port, KSRTC bus stations, All offices, Banks,

Commercial Multi-storied buildings.

APMC Yards, Stadiums other than those maintained by Government and Local

Bodies, Construction power for irrigation, Power Projects and Konkan Railway

Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription

centers, telecom, call centers, BPO/KPO, Diagnostic centres, concrete mixture

(Ready Mix Concrete) units.

RATE SCHEDULE

HT-2 (b): Applicable to all areas of GESCOM

Energy charges

For the first two lakh units 825 paise per unit


TARIFF SCHEDULE HT-2(c)

RATE SCHEDULE

HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable

Institutions, ESI hospitals, Universities and Educational Institutions belonging to

Government and Local bodies, Aided Educational Institutions andHostels of

all Educational Institutions.


Energy charges



RATE SCHEDULE

HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than

those covered under HT-2 (c)(i).

Demand charges Rs.220 /kVA of billing demand/month

ccxxx


Energy charges



Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.

1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,

canteens, yard lighting, water pumping and

advertisement within the premises.

2. Energy can be used for construction, modification and

expansion purposes within the premises.

3. In respect of industries availing HT power supply under HT2

(a) tariff schedule, the supply availed for Effluent Treatment

Plant situated within the premises by fixing the separate

sub-meter, a rebate of 50 paise per unit of electricity

consumed by such Effluent Treatment Plant shall be given

to the applicable tariff schedule. No reduction in the

recorded demand of the main HT supply is allowed.

TOD Tariff applicable to HT-2(a), HT-2(b) and HT-2(c) category.

Time of Day Increase + / reduction (-) in energy



10.00 Hrs to 18.00 Hrs 0



TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,

RATE SCHEDULE

HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.

owned Corporations

Energy charges/ Minimum Charges 225 paise per unit subject to an

annual minimum of Rs.1240 per

HP/Annum

HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:

Connected to Urban/Express feeders

ccxxxi

Fixed Charges Rs.50 /HP/ per month of sanctioned

load


HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

other than those covered under HT-3 (a)(ii)

Fixed Charges Rs.30 /HP/ per month of sanctioned

load


TARIFF SCHEDULE HT-3 (b)

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,

Rubber, Coconut &Arecanut Plantations.

RATE SCHEDULE

Energy charges / Minimum Charges 425 paise per unit subject to an

annual minimum of Rs.1240/- per HP

of sanctioned load.

Note: These installations are to be billed on quarter yearly basis.


Applicable to Residential apartments and colonies (whether situated outside

or inside the premises of the main HT Installation) availing power supply

independently or by tapping the main H.T. line. Power supply can be used for

residences, theatres, shopping facility, club, hospital, guest house, yard/street

lighting, canteen located within the colony.

RATE SCHEDULE

Applicable to all areas

Demand charges Rs.120/- per KVA of billing demand/

month


NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads

metered at a single point, is to be billed at the above energy

rate. No reduction in the recorded demand of the main H.T.

supply is allowed.

(2) Energy under this tariff may be used for commercial and other

purposes inside the colonies for installations such as, Canteens,

ccxxxii

Clubs, Shops, Auditorium etc., provided, this commercial load is

less than 10% of the Contract demand. [

(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and

other purposes like Shops, Hotels, etc., will be billed under

appropriate tariff schedule (Only Energy charges), duly deducting

such consumption in the main HT supply bill. No reduction in the

recorded demand of the main HT meter is allowed. Common

areas shall be billed at Tariff applicable to the predominant

Consumer category.


Tariff applicable to sanctioned load of 67 HP and above for

hoardings and advertisement boards and construction power for

industries excluding those category of consumers covered under

HT2(b) Tariff schedule availing power supply for construction

power for irrigation, power projects and Konkan Railway Projects

and also applicable to power supply availed on temporary basis

with the contract demand of 67 HP and above of all categories.

HT – 5 – Temporary supply

RATE SCHEDULE

67 HP and above:

Fixed charges /

Demand Charges

Rs240/HP/month for the entire sanction load /

contract demand

Energy Charges 1000 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having license for a duration

of less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 the Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka shall be complied with before service.

------

ccxxxiii

ELECTRICITY TARIFF-2018

PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

GESCOM

ccxxxiv

CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:

1. In the case of LT Industrial / Commercial Consumers, Demand based Tariff

at the option of the Consumer, can be adopted. The Consumer is

permitted to have more connected load than the sanctioned load. The

billing demand will be the sanctioned load, or Maximum Demand recorded

in the Tri-Vector Meter during the month, whichever is higher. If the

Maximum Demand recorded is more than the sanctioned load, penal

charges at two times the normal rate shall apply.

2. Use of power within the Consumer premises for bonafide temporary

purpose is permitted subject to the conditions that, total load of the

installation on the system does not exceed the sanctioned load.

3. Where it is intended to use power supply temporarily, for floor polishing and

such other portable equipments, in a premises having permanent power

supply, such equipments shall be provided with earth leakage circuit

breakers of adequate capacity.

4. The laboratory installations in educational institutions are allowed to install

connected machineries up to 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

5.Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,

Refrigerators and other household appliances, including domestic water

pumps and air conditioners, provided, they are under single meter

connection. If a separate meter is provided for Air-conditioner load, the

Consumer shall be served with a notice to merge this load and to have a

single meter for the entire load. Till such time, the air conditioner load will be

billed under Commercial Tariff.

6. Bulk LT supply:

If power supply for lighting / combined lighting & heating {LT 2(a)}, is availed

through a bulk Meter for group of houses belonging to one Consumer, (ie,

Where bulk LT supply is availed), the billing for energy shall be done at the

slab rate for energy charges matching the consumption obtained by

dividing the bulk consumption by number of houses. In addition, fixed

charges for the entire sanctioned load shall be charged as per Tariff

schedule.

ccxxxv

7. A rebate of 25 paise per unit will be given for the House/ School/Hostels

meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation

Centres under Tariff schedule LT 2(a).

8. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed subject

to a maximum of Rs. 50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the capacity

of Solar Water Heater in such apartment / group housing shall be a

minimum capacity of 100 Ltr. per household.

9. A rebate of 20% on fixed charges and energy charges will be allowed in

the monthly bill in respect of public Telephone booths having STD/ISD/ FAX

facility run by handicapped persons, under Tariff schedule LT 3.

10. A rebate of 2 paise per unit will be allowed if capacitors are installed as

per Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka in respect of all metered IP Set

Installations.

11. Power Factor (PF):

Capacitors of appropriate capacity shall be installed in accordance with

Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees

in the State of Karnataka, in the case of installations covered under Tariff

category LT 3, LT4, LT 5, & LT 6, where motive power is involved.

(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a

surcharge of 2 paise per unit consumed will be levied for every

reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,

however, this is subject to a maximum surcharge of 30 paise per unit.

(ii) The power factor when computed as the ratio of KWh/KVAh will be

determined up to 3 decimals (ignoring figures in the other decimal

places) and then rounded off to the nearest second decimal as

illustrated below:

(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85

ccxxxvi

(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.

(iv) During inspection, if the capacity of capacitors provided is found to be

less than what is stipulated in Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka, a surcharge of 30

Paise/unit will be levied in the case of installations covered under Tariff

categories LT 3, LT 5, & LT 6 where motive power is involved.

(v) In the case of installations without electronic Tri-vector meters even

after providing capacitors as recommended in Clause 23.01 and 23.03

of Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka, if during any periodical or other testing / rating of

the installation by the Licensee, the PF of the installation is found to be

lesser than 0.85, a surcharge determined as above shall be levied from

the billing month following the expiry of Three months’ notice given by

the Licensee, till such time, the additional capacitors are installed and

informed to the Licensee in writing by the Consumer. This is also

applicable for LT installations provided with electronic Tri-vector meters.

12. All new IP set applicants shall fix capacitors of adequate capacity in

accordance with Clause 23 of Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka before taking service. [

13. All the existing IP set Consumers shall also fix capacitors of adequate

capacity in accordance with Clause 23 of Conditions of Supply of

Electricity of the Distribution Licensees in the State of Karnataka, failing

which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If the

capacitors are found to be removed / not installed, a penalty at the same

rate as above (Rs. 60/-per HP / Year) shall be levied.

14.The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and licence of not less than one year, will be billed

under commercial tariff schedule i.e., LT 3.

15.Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of cinematography

films, and also outdoor shooting units, will be billed under Temporary Tariff

schedule i.e., LT 7.

ccxxxvii

16.The Consumers under IP set tariff schedule, shall use the energy only for

pumping water to irrigate their own land as stated in the IP set application / water

right certificate and for bonafide agriculture use. Otherwise, such installations

shall be billed under appropriate Industrial / Commercial tariff, based on the

recorded consumption if available, or on the consumption computed as per the

Table given under Clause 42.06 of the Conditions of Supply of Electricity of the


17. The water pumped for agricultural purposes may also be used by the

Consumer for his bonafide drinking purposes and for supplying water to

animals, birds, Poultry farms, Dairy farms and fish farms maintained by the

Consumer in addition to agriculture.

18. The motor of IP set installations can be used with an alternative drive for

other agricultural operations like sugar cane crusher, coffee pulping,

arecanut cutting etc., with the approval of the Licensee. The energy used

for such operation, shall be metered separately by providing alternate

switch and charged at LT Industrial Tariff (Only Energy charges) during the

period of alternative use. However, if the energy used both for IP Set and

alternative operation is measured together by one energy meter, the

energy used for alternate drive shall be estimated by deducting the

average IP Set consumption for that month as per the IP sample meter

readings for the sub-division, as certified by the sub-divisional Officer.

19. The IP Consumer is permitted to use energy for lighting the pump house

and well limited to two lighting points of 40 Watts each.

20. Billing shall be made at least once in a quarter year for all IP sets.

21. In the case of welding transformers, the connected load shall be taken

as:

a) Half the maximum capacity in KVA as per the nameplate specified

under IS: 1851

OR

b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.

22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating and

Air-conditioning, Yard-Lighting, water supply in the respective premises of

Commercial / Industrial Units.

ccxxxviii

23. Fluorescent fittings shall be provided by the Licensee for the Streetlights in

the case of villages covered under the Licensee’s electrification

programme for initial installation.

In all other cases, the entire cost of fittings including Brackets, Clamps,

etc., and labour for replacement, additions and modifications shall be met

by the organizations making such a request. Labour charges shall be paid

at the standard rates fixed by the Licensee for each type of fitting.

24. Lamps, fittings and replacements for defective components of fittings shall

be supplied by the concerned Village Panchayaths, Town Panchayaths or

Municipalities for replacement.

25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP for

purpose of billing and the minimum billing being for 1 KW / 1HP in respect

of all categories of LT installations including I.P. sets. In the case of street

lighting installations, fraction of KW shall be rounded off to nearest quarter

KW for the purpose of billing and the minimum billing shall be quarter KW.

26. Seasonal Industries.

a) The industries which intend to utilize seasonal industry benefit, shall

comply with the conditionalities specified under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT & LT).

b) The industries that intend to avail this benefit, shall have Electronic

Tri-Vector Meter fitted to their installation.

c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal

months, shall be the energy charges plus 50% of the fixed charges.

TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira

Jyothi (BJ/KJ) schemes.

RATE SCHEDULE

Energy charges

(including recovery towards

service main charges)

Nil*

Fully subsidized by the GOK

Commission Determined Tariff for the above category i.e., LT-1 is Rs.6.29 per unit.

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by

these Consumers is shown as Nil. However, if the GOK does not release the

ccxxxix

subsidy in advance, a Tariff of Rs.6.29 per unit subject to monthly minimum of Rs.

30/- per Installation per month shall be demanded and collected from these

Consumers.

Note: If the consumption exceeds 40 units per month or any BJ/KJ installation

is found to have more than one out let, it shall be billed as per Tariff

Schedule LT 2(a).


Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a portion is

used by the occupant for (a) Handloom weaving (b) Silk rearing and reeling

and artisans using motors up to 200 watts (c) Consultancy in, (i) Engineering

(ii) Architecture (iii) Medicine (iv) Astrology (v) Legal matters (vi) Income Tax

(vii)Chartered Accountants (d) Job typing (e) Tailoring (f) Post Office (g)

Gold smithy (h) Chawki rearing (i) Paying guests/Home stay guests (j) personal

Computers (k) Dhobis (l) Hand operated printing press (m) Beauty Parlours (n)

Water Supply installations, Lift which is independently serviced for bonafide

use of residential complexes/residence, (o) Farm Houses and yard lighting

limiting to 120 Watts,(p) Fodder Choppers & Milking Machines with a

connected load upto 1 HP.

Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centres run by State/Central Govt. and local bodies; (ii) Houses, schools and

Hostels meant for handicapped, aged, destitute and orphans; (iii)

Rehabilitation Centres run by charitable institutions, AIDS and drug addicts

Rehabilitation Centres; (iv) Railway staff Quarters with single meter (v) fire

service stations.

It is also applicable to the installations of (a) Temples, Mosques, Churches,

Gurudwaras, Ashrams, Mutts and religious/Charitable institutions; (b) Hospitals,

Dispensaries and Health Centres run by Charitable institutions including X-ray

units; (c) Jails and Prisons (d) Schools, Colleges, Educational institutions run by

State/Central Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the

Government, Educational Institutions, Cultural, Scientific and Charitable

Institutions (g) Guest Houses/Travelers Bungalows run in Government buildings

or by State/Central Govt./Religious/Charitable institutions; (h) Public libraries;

(i) Silk rearing; (j) Museums; (k) Installations of Historical Monuments of

ccxl

Archeology Departments; (l) Public Telephone Booths without STD/ISD/FAX

facility run by handicapped people; (m) Sulabh/ Nirmal Souchalayas; (n)

Viswa Sheds having Lighting Loads only.

RATE SCHEDULE

LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations

and all other urban local bodies

Fixed charges per month For the first KW Rs.40/- per KW

For every additional KW Rs.50/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

325 paise/unit

31 to 100 units 470 paise/unit


Above 200 units 730 paise/unit

LT-2(a)(ii): Applicable to Areas under Village Panchayats

Fixed charges per month For the first KW Rs.25/- per KW

For every additional KW Rs.40/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

315 paise/unit

31 to 100 units 440paise/unit


Above 200 units 680paise/unit


Applicable to the installations of Private Professional and other Private

Educational Institutions including aided, unaided institutions, Nursing

Homes and Private Hospitals having only lighting or combined lighting

& heating, and motive power. [[[[[

RATE SCHEDULE

LT 2 (b) (i): Applicable to City Municipal Corporations and all other urban

local bodies

Fixed charges Rs.55 Per KW subject to a minimum of Rs.85 per

month

Energy charges



LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.45 per KW subject to a minimum of Rs.70 per

month

Energy charges



Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.

ccxli

1 A rebate of 25 paise. Per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,

Rehabilitation Centres run by Charitable Institutions.

2 (a) Use of power within the consumer’s premises for temporary purposes

for bonafide use is permitted subject to the condition that, the total

load of the installation on the system does not exceed the

sanctioned load.

(b) Where it is intended to use floor polishing and such other portable

equipment temporarily, in the premises having permanent supply,

such equipment shall be provided with an earth leakage circuit

breaker of adequate capacity.

3 The laboratory installations in educational institutions are allowed to

install connected machinery upto 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

4. Besides lighting and heating, electricity supply under this schedule can be

used for fans, Televisions, Radios, Refrigerators and other house-hold

appliances including domestic water pump and air conditioners,

provided, they are under single meter connection. If a separate meter is

provided for Air conditioner Load, the consumption shall be under

commercial tariff till it is merged with the main meter.

5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a

maximum of Rs.50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the

capacity of Solar Water Heater in such apartment / group housing shall

be a minimum capacity of 100 Ltr, per household.


Applicable to Commercial Lighting, Heating and Motive Power installations of

Clinics, Diagnostic Centres, X Ray units, Shops, Stores,

Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest Houses,

Mess, Clubs, KalyanMantaps / Choultry, permanent Cinemas/ Semi

Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage

Plants, Service Stations/ Garages, Banks, Telephone Exchanges. T.V.Stations,

ccxlii

Microwave Stations, All India Radio, Dish Antenna, Public Telephone Booths/

STD, ISD, FAX Communication Centers, Stud Farms, Race Course, Ice Cream

Parlours, Computer Centres, Photo Studio / colour Laboratory, Photo Copiers,

Railway Installation excepting Railway workshop, KSRTC Bus Stations

excepting Workshop, All offices, Police Stations, Commercial Complexes, Lifts

of Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres,

Post Offices, Bakery shops, Beauty Parlours, Stadiums other than those

maintained by Govt. and Local Bodies. It is also applicable to water supply

pumps and street lights not covered under LT 6, Cyber cafés, Internet surfing

cafés, Call centres, BPO/KPO, telecom I.T. based medical transcription

centres, Private Hostels not covered under LT -2 (a), Paying guests

accommodation provided in an independent / exclusive premises, concrete

mixtures (Ready Mix Concrete) units .

RATE SCHEDULE

LT-3 (i): Applicable to City Municipal Corporations and all other urban local

bodies.

Fixed charges Rs.60 per KW per month

Energy charges

For 0 - 50 units 750 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.75 per KW

Energy charges As above

RATE SCHEDULE

LT-3 (ii): Applicable in Areas under Village Panchayats


Energy charges For 0 - 50 units 700 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW


Energy charges As above

Note: 1. Besides Lighting, Heating and Motive power, Electricity supply under

this Tariff can also be used for Yard lighting/ air

Conditioning/water supply in the premises.

2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for a duration of not

less than one year.

ccxliii

3. Touring Cinemas having an outfit comprising Cinema apparatus

and accessories taken from place to place for exhibition of

cinematography film and also outdoor shooting units shall be

billed under LT- 7 Tariff.

4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths having

STD / ISD/FAX facility run by handicapped persons.

5. Demand based Tariff at the option of the Consumer can be

adopted as per Para 1 of the conditions applicable to LT

installations.

TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets

used in, (i) Nurseries of forest and Horticultural Departments; (ii) Grass

Farms and Gardens; (iii) Plantations other than Coffee, Tea, Rubber and

Private Horticulture Nurseries

TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets up to and inclusive of 10 HP

RATE SCHEDULE

Fixed charges Free

Energy charges

Commission Determined Tariff (CDT) for LT4 (a) category is 551 paise per

unit. In case the GOK does not release the subsidy in advance in the

manner specified by the Commission in K.E.R.C. (Manner of Payment of

subsidy) Regulations, 2008, CDT of 551 paise per unit shall be demanded

and collected from these Consumers.

Note: This Tariff is applicable for Coconut and Areca nut plantations

also.

TARIFF SCHEDULE LT-4 (b):

Applicable to IP sets above 10 HP

RATE SCHEDULE

Fixed charges Rs.50 per HP per month.

Energy charges 300 paise per unit

TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load upto and inclusive of 10 HP.

RATE SCHEDULE



TARIFF SCHEDULE LT-4 (c)(ii):

ccxliv

Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber

plantations of sanctioned load above 10 HP.

RATE SCHEDULE



Note: 1) The energy supplied under this tariff shall be used by the consumers only for

pumping water to irrigate their own land as stated in the I.P. Set application /

water right certificate and for bonafide agriculture use. Otherwise, such

installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the

recorded consumption if available, or on the consumption computed as per the

Table given under Clause 42.06 of the Conditions of Supply of Electricity of the


2) The motor of IP set installations can be used with an alternative drive for other

agricultural operations like sugar cane crusher, coffee pulping, arecanut

cutting etc., with the approval of the Licensee. The energy used for such

operation shall be metered separately by providing alternate switch and charged

at LT Industrial Tariff (Only Energy charges) during the period of alternative use.

If the energy used both for IP Set and alternative operation, is however measured

together by one energy meter, the energy used for alternate drive shall be

estimated by deducting the average IP Set consumption for that month as per the

IP sample meter readings for the sub-division as certified by the sub-divisional

Officer.

3) The Consumer is permitted to use the energy for lighting the pump house and

well limited to 2 lighting points of 40 W each.

4) The water pumped for agricultural purposes may also be used by the Consumer

for his bonafide drinking purposes and for supplying water to animals, birds,

Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition

to agriculture.

5) Billing shall be made at least once in a quarter year for all IP sets. 6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per

Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka in respect of all metered IP Set Installations.

7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be

collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and

LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or

not.


Applicable to Heating & Motive power (including lighting) installations of

industrial Units, Workshops, Poultry Farms, Sugarcane Crushers, Coffee Pulping,

Cardamom drying, Mushroom raising installations, Flour, Huller & Rice Mills,

Wet Grinders, Milk dairies, Ironing, Dry Cleaners and Laundries having

ccxlv

washing, Drying, Ironing etc., ExclusiveTailoring shop , Bulk Ice Cream and Ice

manufacturing Units, Coffee Roasting and Grinding Works, Cold Storage

Plants, Bakery Product Mfg. Units, KSRTC workshops/Depots, Railway

workshops, Drug manufacturing units and Testing laboratories, Printing Presses,

Garment manufacturing units, Bulk Milk vending Booths, Swimming Pools of

local Bodies, Tyre retreading units, Stone crushers, Stone cutting, Chilly

Grinders, Phova Mills, pulverizing Mills, Decorticators, Iron & Red-Oxide

crushing units, crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood

industries, Viswa Sheds with mixed load sanctioned under Viswa Scheme,

Cinematic activities such as Processing, Printing, Developing, Recording

theatres, Dubbing Theatres and film studios, Agarbathi manufacturing unit.,

Water supply installations of KIADB & industrial units, Gem & Diamond cutting

Units, Floriculture, Green House, Biotech Labs., Hybrid seed processing units.

Information Technology industries engaged in development of hardware &

Software, Information Technology (IT) enabled Services / Start-ups(As defined

in GOI notification dated 17.04.2015)/ Animation / Gaming / Computer

Graphics as certified by the IT & BT Department of GOK/GOI, Silk filature units,

Aqua Culture, Prawn Culture, Brick manufacturing units, Silk / Cotton colour

dying, Stadiums maintained by Govt. and local bodies, Fire service stations,

Gold / Silver ornament manufacturing units, Effluent treatment plants,

Drainage water treatment plants, LPG bottling plants and petroleum pipeline

projects, Piggery farms, Analytical Lab. for analysis of ore metals, Satellite

communication centres, Mineral water processing plants / drinking water

bottling plants and soda fountain units.

Tariff for LT 5 :

Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month






ccxlvi

Fixed

Charges per

Month

Above 5 HP and less than 40

HP


demand

40 HP and above but less

than 67 HP


demand


demand

ii) Energy Charges


For the first 500 units 510 paise/unit


For the balance units 635 paise/unit

Tariff for LT 5 (b):


i. Fixed charges

Fixed Charges

per Month




iv)Rs.110 per HP for 67 HP & above

ii. Demand based Tariff (optional)

Fixed

Charges

per Month

Above 5 HP and less than 40 HP Rs.55 per KW of billing demand

40 HP and above but less than

67 HP

Rs.80 per KW of billing demand

67 HP and above Rs.160 per KW of billing demand

iii. Energy Charges




TOD Tariff applicable to LT-5:At the option of the Consumer

Time of Day Increase + / reduction (-) in energy



10.00 Hrs to 18.00 Hrs 0



NOTE:

1. DEMAND BASED TARIFF

In the case of LT Industrial Consumers, Demand based Tariff at the option of

the Consumer can be adopted. The Consumer is permitted to have more

connected load than the sanctioned load. The billing demand will be the

sanctioned load or Maximum Demand recorded in the Tri-Vector Meter

during the month whichever is higher. If the Maximum Demand recorded is

ccxlvii

more than the sanctioned load, penal charges at two times the normal rate

shall apply.

2. Seasonal Industries: The industries which intend to utilize seasonal industry

benefit shall comply with the conditionalities under para no. 24 of general

terms and conditions applicable to LT.

3. Electricity can also be used for lighting, heating, and air-conditioning in the

premises.

4. In the case of welding transformers, the connected load shall be taken as,

(a) Half the maximum capacity in KVA as per the name plate specified

under-IS1851, or (b) Half the maximum capacity in KVA as recorded

during rating by the Licensee, whichever is higher.


Applicable to water supply and sewerage pumping installations and also

applicable to water purifying plants maintained by Government and Urban

Local Bodies/ Grama Panchayats for supplying pure drinking water to

residential areas, Public Street lights/Park lights of village Panchayat, Town

Panchayat, Town Municipalities, City Municipalities / Corporations / State and

Central Govt. / APMC, Traffic signals, Surveillance Cameras at traffic locations

belonging to Government Department, subways, water fountains of local

bodies. Also applicable to Streetlights of residential Campus of universities,

other educational institutions, housing colonies approved by local

bodies/development authority, religious institutions, organizations run on

charitable basis, industrial area / estate and notified areas, also Applicable to

water supply installations in residential Layouts, Street lights along with signal

lights and associated load of the gateman hut provided at the Railway level

crossing High Mast street lights, Lifts/ Escalators installed in pedestrian road

crossing maintained by Government and Urban local bodies/ Grama

Panchayats independently serviced.

RATE SCHEDULE

Water Supply- LT-6 (a)

Fixed charges Rs.55/HP/month


Public lighting- LT-6 (b)

Fixed charges Rs.70/KW/month


Energy Charges for LED/ Induction

Lighting

485 paise/unit


Temporary Supply and Permanent Supply to Advertising Hoardings


ccxlviii

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:


subject to a weekly minimum of Rs.190

per KW of the sanctioned load.


Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW/month

& Energy charges at 1000 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main

shall be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the


2. This Tariff is also applicable to touring cinemas having licence for

duration less than one year.

3. All the conditions regarding temporary power supply as stipulated in

Clause 12 of the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka shall be complied with before

service.

- O -

gescom - karnataka orders/tariff 2017/ge… · · 2017-04-121.1 gescom at a glance 5 ... 3.3 list...

Documents