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BEFORE THE HONOURABLE KERALA STATE ELECTRICITY REGULATORY COMMISSION AT THIRUVANANTHAPURAM

Filing No. /2012

Case No. ____________ IN THE MATTER OF: Application for approval of the Aggregate Revenue Requirement and Expected Revenue from Charges for the year 2013-14 And IN THE MATTER OF: Kerala State Electricity Board Vydyuthi Bhavanam, Pattom, Thiruvananthapuram 695 004

The petitioner named above respectfully submits as under: 1. This application for approval of the Aggregate Revenue Requirement (ARR) and the Expected Revenue from Charges (ERC) for the year 2013-14 is filed before the Honourable Kerala State Electricity Regulatory Commission, (herein after referred to as the Commission), in accordance with the provisions of the Electricity Act, 2003. 2. This application has been prepared as per the terms and conditions for determination of tariff under Section 61 of the Electricity Act, 2003 and the terms and conditions of the Kerala State Electricity Commission (Tariff) Regulations, 2003 issued by the Honble Commission. The relevant provisions of Indian Electricity Act 1910, Electricity (Supply) Act, 1948 and Electricity Regulatory Commission Act, 1998 which are not contradictory to the Electricity Act 2003, were taken into consideration while preparing this petition. Background 3. Kerala State Electricity Board (KSEB) is a statutory body constituted on 01-04-1957 under Section 5 of the Electricity Supply (Act), 1948 for the coordinated development of Generation, Transmission and Distribution of electricity in the State of Kerala. As per the provisions of the Electricity Act-2003, KSEB continued as a State Transmission Utility (STU) and Distribution Licensee till 24-09-2008, performing same functions of generation, transmission and distribution of electricity within the State of Kerala. In exercise of powers conferred under sub-sections (1), (2), (5), (6) and (7) of section 131 of the Electricity Act, 2003, State Government vide the notification G.O (Ms).37/2008/PD dated 25 th September, 2008 has vested all functions, properties, interests, rights, obligations and liabilities of KSEB with the State Government till it is revested in a corporate entity. State Government vide the order G.O (Ms)

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No. 31/2012/PD dated 18-12-2012 has extended the time limit for revesting the assets and liabilities of KSEB up to 31-03-2013. 4. Over the last fifty five years, the total installed capacity of 109 MW to an installed capacity of Board has grown from 2654 MW and created Transmission and Distribution networks of over 11195 and 324927 circuit kilometers respectively. At present, the Board caters to the needs of about 106 lakh consumers spread across the State. 5. This substantial growth in the power system has brought several changes in the characteristics of the system. The input cost structure and revenue composition have undergone significant changes. Until the recent past, the hydroelectric plants owned by the Board supplied a major portion of the energy requirement of the state. However, after the promulgation of the Forest Conservation Act in 1980, the implementation of new hydroelectric projects has been seriously affected and more costly thermal energy has to be generated / purchased to meet the increasing demand. At present, 70% of the total Revenue Requirement is for purchase of power. 6. A major factor affecting the power supply is the vagaries of monsoon. The failure of monsoon in the State during 2002-03, 2003-04, 2008-09 and 2012-13 has caused huge additional liability on KSEB for procuring energy from thermal plants/ short-term markets. 7. Over the years, the consumption of subsidized domestic sector has been increasing and now it accounts for approximately 49% of the total energy consumed in the State. As a consequence, the peak demand in the state is about 50% higher than that during off-peak hours. This has forced KSEB to invest more to meet the peak demand and also to purchase electricity from outside the State at higher rates. 8. The Board had been supplying electricity at the lowest price in the country for several decades mainly because of the substantial contribution from hydel resources. The changes in the power supply mix and increased demand during recent years has resulted in phenomenal increase in the cost of power purchase. The increase in cost of generation in all thermal projects due to dependence on imported coal as well as phenomenal rise in price of crude oil is adversely affecting the finances of the Board. The upward revision of tariff norms for all central generating stations by CERC as well as the new regulations for sharing of inter-state transmission charges has also resulted in adverse financial impact on KSEB. Moreover, the reigning inflationary trend in the economy is substantially impacting the expenses of the Board in all fronts. As a combined effect of all the above factors, there has been significant increase in the Boards expenditure. 9. Despite the increase in cost of supply, no major tariff revision had been made in the State during the period from October-2002 to June-2012. But, considering the excessive increase in cost of power purchase and inflationary factors, the tariff applicable to all categories of consumers had enhanced upto 25% to 30% with effect from 01-07-2012. However, the failure of monsoon during the year 2012-13 has resulted in an
2

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unprecedented increase in the cost of power purchase by about Rs 2500.00 crore over the same approved by the Honble Commission. The additional financial liability incurred by the Board to purchase the high cost energy has severely affected financial position and had forced the Board to resort to heavy borrowings from financial institutions. 10. The electricity demand in the State has been increasing by 7 to 8% annually and the demand for the ensuing year 2013-14 cannot be met with the energy availability from hydel and allocation from Central Generating Stations alone. A substantial part of the electricity requirement of the State has been met through procuring power from short-term market. However, due to the transmission constraints in the Southern grid, there is limitation in procuring power from traders and energy exchanges from outside the State. This has forced KSEB to depend heavily on the liquid fuel stations- RGCCPP Kayamkulam, BDPP and KDPP. The variable cost of energy from liquid fuel stations is about Rs 11.50 per unit. Out of the total cost of purchase, about 25% of the cost is account for procuring about 10% of the energy from liquid fuel stations. However, considering the gap between energy demand and availability, KSEB could not fully dispense with the electricity from liquid fuel stations during the ensuing year. 11. Though the Board has been statutorily enjoined to function as a commercial institution, it continues to function mainly as service oriented institution by providing infrastructure facility, reliefs and concessions to other sectors like industry, agriculture and so on. Aggregate Revenue Requirement for the year 2012-13 and 2013-14 12. The ARR for the year 2012-13 was submitted before the Commission on 31-12-2011, showing a revenue gap of Rs 3240.25 Crores. The Commission has issued orders on ARR&ERC for the year 2012-13 on 2804-2012 and approved the revenue gap as Rs 1889.15 crores. 13. The revised estimates for the year 2012-13 leaves a revenue deficit of Rs 3564.40 Crores and the estimate for the year 2013-14 accounts for a revenue deficit of Rs 2758.67 Crores. 14. Accordingly, the revised estimate of ARR & ERC for the year 2012-13 and estimate of ARR & ERC for the year 2013-14 are submitted as follows: Revised Estimate for the year 2012-13 a b c d=b+c e= a d Description Aggregate Revenue Requirement Non-tariff Income Revenue from sale of power Total income Revenue Gap Rs. in Crores FY 2012-13 11562.63 361.39 7636.84 7998.23 3564.40

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Estimate for 2013-14 A B C d= b + c e=ad Description Aggregate Revenue Requirement Non-tariff Income Revenue from sale of power Total income Revenue Gap

Rs. Crores FY 2013-14 11237.11 333.20 8145.24 8478.44 2758.67

Treatment of the Revenue Gap 15. As against the revenue gap of Rs. 1889.15 Crores approved for the year 2012-13, the revised estimated revenue gap is Rs. 3564.40 Crores. It is requested that the Honble Commission may approve the revised revenue gap for 2012-13 16. The projected revenue gap for the financial year 2013-14 is Rs 2758.67 Crores. This is based on expected revenue of Rs. 8478.44 Crores from the sale of power and the aggregate revenue requirement (i.e. all expenses plus ROE) of Rs 11237.11 Crores. 17. If the entire estimated revenue gap is bridge through tariff revision, it may results in an average increase in tariff for all categories of consumers by 34.40% and it may results in tariff shock to the consumers. Hence, it order to avoid tariff shock, KSEB may propose a moderate increase in tariff applicable to all categories to mobilize an additional revenue to the extent of Rs 1573.54 crore during the year 2013-14. The details of the proposals are given in Chapter-11. KSEB may request that, Honble Commission may allow to treat the balance unbridged revenue gap as regulatory asset and allowed to recover the same through tariff in the subsequent years. Other issues 18. The Board is in the transitory phase of implementing provisions of the Electricity Act 2003. Some of the future events/contingencies having major financial implications and will necessitate revision of the estimates for 2013-14. In view of this, the Board hereby submits before the Honble Commission to be pleased to allow the following four proposals for improving the Boards financial health and its ability to serve its consumers over a longer period. a. to allow the uncovered revenue gap, if any, as regulatory assets. b. to pass on the additional cost of generation and power purchase over the approved level, due to failure of monsoon, reduction in allocation from CGS, hydro-thermal mix change, price variation due to escalation in prices of liquid fuels, coal etc on a quarterly basis to the consumers. c. to file interim petition in the event of contingency. d. to allow to submit year end truing up of costs and revenues of the Board and to allow any unrecovered costs in the subsequent years, thereby, protecting the commercial viability of the Board

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19. The Board has made every effort to provide detailed information for computation of the revenue requirement and expected revenue. The Board is continuously updating its management information system, which would enable it to provide improved data / information in the subsequent filings as may be required by the Commission. 20. This application for approval of ARR and ERC for 2013-14 contains the following parts: Affidavit verifying the application Aggregate Revenue Requirement and Expected Revenue from Charges for the year 2013-14. The proposals to bridge the revenue gap for Rs 1572.90 crore. FORMS T1 to T5 accompanying the tariff proposals. Annexures and Data forms.

Prayer

21. The Board therefore prays to the Honble Commission that: (a) The accompanying ARR & ERC for 2013-14 containing the revised estimate for 2012-13 and estimate for 2013-14 may be approved; (b) The proposals to bride the revenue gap may also be approved; (c) Board may be allowed to revise the projections for 2013-14 in the event of poor monsoon, abnormal increase in fuel prices and other contingencies that may crop up during the course of implementation of the Electricity Act 2003 and also re-vesting the assets and liabilities in a company to be incorporated under the Indian Companies Act-1956. (d) The Board may be allowed to pass on the additional cost on generation and power purchase over the approved level due to failure of monsoon, reduction in allocation from CGS, hydrothermal mix change, price variation due to escalation in prices of liquid fuels, coal, lignite etc to the consumers during the financial year 2013-14 itself based on the actuals furnished by the Board on a quarterly basis. (e) The request for truing up of Boards costs and revenues at the end of the financial year concerned may be accepted and any revenue gap arising out of this truing up exercise be allowed to be recovered through tariffs etc. in the subsequent year.

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BEFORE THE KERALA STATE ELECTRICITY REGULATORY COMMISSION


at its office at Thiruvananthapuram. FILING NO. CASE No. IN THE MATTER OF: Application for approval of the Aggregate Revenue Requirement (ARR) and approval of the Expected Revenue from Charges (ERC) for the year 2013-14 under section 64 of the Electricity Act 2003 AND IN THE MATTER OF: Kerala State Electricity Thiruvananthapuram Board, Vydyuthi Bhavanam, Pattom, /2012 C.V. Raman Pillai Road, Vellayambalam,

Applicant

Special Officer, Manging Committee, Kerala State Electricity Board

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AFFIDAVIT VERIFYING THE APPLICATION ACCOMPANYING FILING THE ARR & ERC OF KSEB FOR THE YEAR 2012-13: I, M. Sivasankar, S/o N. D. Madhavan Nair aged 49 years, residing at, Devadarsana, Katturoad, Poojappura, Thiruvananthapuram do hereby solemnly affirm and state as follows: I am the Special Officer, Managing Committee of the Kerala State Electricity Board, Vydyuthi Bhavanam, Pattom, Thiruvananthapuram, and the petitioner in the above matter and I am duly authorized by the Board to make this affidavit on its behalf. I solemnly affirm at Thiruvananthapuram on this, the 2nd day of January-2013 that (i) (ii) the contents of the above petition are true to my information, knowledge and belief. I believe that no part of it is false and no material has been concealed there from. the statements made in paragraphs of the accompanying application are true to my knowledge and are derived from the official records made available to me and are based on information and advice received which I believe to be true and correct. Deponent Special Officer, Manging Committee Kerala State Electricity Board, Vydyuthi Bhavanam, Pattom Thiruvananthapuram 695 004 VERIFICATION I, the above named deponent, solemnly affirm at Thiruvananthapuram on this, 2nd day of January-2013 that the contents of the affidavit are true to my information, knowledge and belief, that no part of it is false and that no material has been concealed there from. Deponent Special Officer, Manging Committee Kerala State Electricity Board Vydyuthi Bhavanam, Pattom Thiruvananthapuram 695 004. Solemnly affirmed and signed before me. Advocate and Notary

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TABLE OF CONTENTS 1 2 INTRODUCTION PERFORMANCE OF THE BOARD 2.1 Introduction 2.2 Reduction in transmission and distribution losses 2.3 Anti-power theft activities 2.4 Efforts taken for collection of arrears 2.5 Trends in capital liabilities and interest and finance charges 2.6 Efforts in Generation and Power purchase 2.7 Computerization 2.8 Compliance of directives issued by the Honble Commission vide the order on ARR&ERC for the year 201213. CAPITAL INVESTMENTS 3.1 Strategy for Capital Investment during 12th plan 3.2 3.3 3.4 3.5 3.6 3.7 Generation Plan Transmission plan Distribution plan The details of the physical target of projects by KSEB The abstract of the financial target proposed for the 12th year plan Review of Capital Outlay for the year 2012-13 and proposal for the year 2013-14 Page No 11 16 16 16 17 17 19 19 20 20

22 22 22 25 25 26 27 27

ENERGY SALE FORECAST 4.1 Review of the energy consumption of different categories of consumers 4.2 Review of Energy Consumption for 2011-12 4.3 Revised estimate of energy sale for the year 2012-13 4.4 Energy sale forecast for the year 2013-14 REDUCTION OF AGGREGATE TECHNICAL & COMMERCIAL LOSSES 5.1 Introduction 5.2 Estimation of Transmission and Distribution losses 5.3 Efforts for T&D loss reduction for the year 2012-13 and 2013-14 REVIEW OF GENERATION AND POWER PURCHASE MADE DURING THE YEAR 2012-13
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30 30 32 33 35 38 38 39 42 47

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6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10

Introduction Failure of the south-west monsoon and consequent reduction in inflow and hydel generation. Excessive increase in energy demand over the same approved by the Commission. Energy availability from Central Generating Stations Arrangements already made to procure power through traders & energy exchanges and UI Demand and supply position during the period from December-2012 to May -2013 Anticipated increase in cost of generation and power purchase for the period from December-2012 to March2013 Increase in cost of generation and power purchase incurred over the approved level. Likely increase in cost of generation and power purchase for the year 2012-13. Regulations imposed in the State for reducing the additional liability on Generation and Power purchase.

47 48 50 52 53 54 55 55 56 57

GENERATION AND POWER PURCHASE FOR THE YEAR 2013-14 7.1 Introduction 7.2 Review of Energy Demand 7.3 Estimation of Hydel generation for 2013-14 7.4 Energy and Capacity available from Central Generating Stations for the Year 2013-14 7.5 Energy availability from Wind and other Small IPPs in the State 7.6 Power purchase proposed through the traders, energy exchanges etc. 7.7 7.8 7.9 Energy procurement from liquid fuel stations Summary of the energy demand and supply position for the year 2013-14. Summary of the cost of generation and power purchase for the year 2013-14

59 59 59 61 65 71 73 75 76 77

AGGREGATE REVENUE REQUIREMENT 8.1 Cost of Generation and Power Purchase for the Year 2013-14 8.2 Interest and Finance charges 8.3 Depreciation 8.4 Employee Costs 8.5 Repairs and Maintenance Cost (R&M) 8.6 Administration and General Expenses 8.7 Other Expenses

78 78 78 90 96 109 114 119

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8.8 8.9 9

Return on Equity Summary of the Aggregate Revenue Requirement

120 122 124 124 125 125 129 130 132 133

EXPECTED REVENUE FROM CHARGES 9.1 Introduction 9.2 Revenue from tariff for the year 2011-12 9.3 Estimate of revenue from sale of power for the year 201213 9.4 Estimate of the revenue from sale of power for the year 2013-14 9.5 Non Tariff Income 9.6 Total Expected Revenue from Charges SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR THE FINANCIAL YEAR 2013-14

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PROPOSALS TO BRIDGE THE REVENUE GAP FOR THE YEAR 2013-14

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10

INTRODUCTION
1.1. The Kerala State Electricity Board (KSEB) is a statutory body constituted on 01-04-1957 under Section 5 of the Electricity Supply (Act), 1948 for the co-ordinated development of Generation, Transmission and Distribution of electricity in the State of Kerala. As per the provisions of the Electricity Act-2003, KSEB continued as a State Transmission Utility (STU) and Distribution Licensee till 24-092008, performing the functions of generation, transmission and distribution of electricity within the State of Kerala. In exercise of powers conferred under sub-sections (1), (2), (5), (6) and (7) of section 131 of the Electricity Act, 2003, State Government vide the notification G.O (Ms).37/2008/PD dated 25 th September, 2008 has vested all functions, properties, interests, rights, obligations and liabilities of KSEB with the State Government till it is re-vested in a corporate entity. State Government vide the order G.O (Ms) No. 31/2012/PD dated 18-12-2012 has extended the time limit for revesting the assets and liabilities of KSEB upto 31-03-2013. Till now, KSEB is the generator and power procurer of all consumers of the State including the small and bulk consumers. KSEB has been directly providing power supply to 99.8% of the total consumers of the State and the remaining 0.2% is being served by other licensees. As on date, KSEB has been providing power supply to more than 106.90 lakh consumers of the State. KSEB has been performing the planning and development of the power system over the years by utilizing the resources of the Board and the Government. As a fully owned Government public utility, KSEB has been implementing all the policy directions of the State Government such as providing free electricity to consumers below poverty line, giving priorities for service connections to weaker sections in the society, subsidy to agricultural consumers, orphanages and similar other eligible consumers as decided by the Government from time to time, tariff concessions to industrial sector etc. KSEB has been implementing various schemes formulated by Central Government such as Restructured Accelerated Power Development and Reform Program (R-APDRP), Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) schemes in the State towards accomplishing the national goals such as cent percent household electrification, electrification of all dwellings, settlements etc. Further, KSEB has been taking steps for 100% electrification, implementing demand side management (DSM) activities etc. The growth of the Kerala power system during the last 55 years is given in the Table below.

CHAPTER-1

1.2.

1.3.

1.4.

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Table-1.1 Growth of Kerala Power System


Installed Capacity in MW Year 57-58 60-61 73-74 80-81 90-91 99-00 00-01 05-06 06-07 08-09 09-10 10-11 11-12 Hydel 109 133 622 1012 1477 1743 1793 1850 1850 1887 1889 1995 2001 Thermal Wind (Incl. IPPs) 0 0 0 0 0 594 615 592 592 592 609 617 617 0 0 0 Annual Consumer Per Capita EHT lines Sales in strength (in Conspn. (ckt.kms) Total MU Lakhs) (kWh) 109 133 622 363 518 2121 4499 5331 9812 10319 10906 11331 12414 13971 14548 16182 1.1 2 8 16 35 60 65 83 87 94 97 101 105 19 30 79 109 185 300 311 427 465 470 474 481 502 1600 1900 3378 4638 5885 7599 9085 10178 10593 10855 11060 11195 11282 S/s (Nos) 15 22 59 92 140 179 194 269 276 299 317 340 3550 HT lines LT lines (ckt .km) (ckt. Km) 3851 5449 9645 14189 20221 28672 30035 35060 37891 41245 44263 49232 52146 4980 8899 25968 55963 101834 180499 187169 215152 223370 241888 249524 266856 272781 Dist Trfrs (Nos) 1862 2898 8285 11656 17838 29551 31329 38193 39872 46510 50619 58427 64036

0 1012 0 1477 2 2339 2 2409 2 2443 2 2443 24 2502 28 2525 36 2647 36 2654

1.5

Kerala Power System differs from other States in many respects. The main features of the Kerala power system are detailed below. (i) Vagaries of monsoon: At present about 55% of the peak demand and 35% of the energy requirement is being met from hydel plants owned and operated by KSEB. The energy availability from hydel plants is being projected expecting normal monsoon. However, any failure of monsoon and the resultant increase in power purchase will severely affect the financial stability of KSEB. The failure of monsoon during the year 2012-13 alone has resulted additional liability of Rs 2500.00 crore on cost of power purchase. High dependence on costlier power: Though the State has abundant untapped hydel potential still to exploit, due to resistance from various quarters, new major hydel projects could not be developed in the State. To meet the increase in energy demand, KSEB has been depending heavily on the shortterm market and energy exchanges. At present about 15 to 20% of the energy requirement of the State is being met from short-term markets. Adverse consumer mix: About 51% of the total energy consumption is by the subsidized categories like domestic, agricultural categories etc. But considering the socio-economic reasons, providing electricity to them at subsidized rates may have to continue for few more years. Skewed peak off-peak demand in the state. Due to high consumption of the domestic and other LT categories, the peak demand in the State is about 50% higher than that of off-peak
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(ii)

(iii)

(iv)

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periods. This has resulted in power procurement at excessive rates during peak hours. (v) HT-LT ratio. Considering the Geographic and demographic features, KSEB has to develop more LT lines to provide the power supply to the consumers. The HT-LT ratio in the State is about 1:4 against the ideal level of 1:1. This contributes more technical losses in the LT distribution system. Lack of energy resources. The major energy resource available in the state suitable for commercial production of electricity is hydel sources, the development of which is greatly hampered after the enactment of Forest conservation Act, 1980. Exposure to global oil prices. The efforts of the state to overcome the primary energy resource deficit have resulted in heavy dependence on crude oil products such as Naphtha and LSHS. In fact Kerala is presently having the highest proportion of liquid fuel based installed capacity in the country with its 771 MW liquid fuel based generators. This is exposing the state and KSEB to the speculative fluctuations of global oil prices. For procuring just 6% of the energy requirement from liquid fuel power stations, KSEB has been spending more than 25% of its total power purchase cost.

(vi)

(vii)

(viii) Transmission constraints to import power from outside the State The transmission capability to import power through the interstate feeders of KSEB too is limited to 1800 MW only including the share from CGS. Further, due to the transmission corridor constraints, open access is being denied by SRLDC for importing power from outside the State. This has been hampering the possibility for procuring power through traders from outside the State at competitive rates, while inturn also resulted in increase in prices for power procurement. 1.6 The primary mission of KSEB is to provide quality power at affordable cost, on demand, to the consumers of the State and to act as a catalyst for total development of the State. The Electricity Act-2003 and other policies notified by the Central and State Governments are the governing laws and KSEB has to function on commercial principles. The State Government has constituted the Kerala State Electricity Regulatory Commission (KSERC) vide the G.O dated 14-11-2002, under the provisions of the Electricity Regulatory Commission Act 1998 (ERC act 1998) and continues as per the provisions of the Electricity Act2003. The Commission, as per the powers vested in the Electricity Act 2003, has formulated the Kerala State Electricity Regulatory Commission (Tariff) Regulations 2003. KSEB has been submitting the
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1.7

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Aggregate Revenue Requirement and Expected Revenue from Charges (ARR & ERC) since the year 2003-04. The present petition is the ARR & ERC for the year 2013-14 and is the eleventh one in the series. 1.8 As stated under paragraph-1.1 above, the Board is now passing through a transitional phase of reforms taking place in the electricity sector. Though the Electricity (supply) Act 1948, stands repealed with the enactment of Electricity Act 2003, as per the section 185(2) (d) of Electricity Act, all rules made under sub-section (1) of section 69 of the Electricity (Supply) Act 1948, shall continue to have effect until such rules are rescinded or modified as the case may be. KSEB has been following the Electricity (Supply) Annual Accounts Rules 1985 for preparation of the Annual Accounts of the Board as it is not yet rescinded or modified. The accounts of KSEB are being audited every year by the Comptroller and Auditor General of India. The statutory authority of the C & AG also has not been altered by the new Act (Electricity Act, 2003). Further, The Honble Commission is in the process of notifying the Tariff Regulations under section-61 of Electricity Act-2003, applicable to KSEB as a Generator, State Transmission Utility and a Distribution Licensee. Since the Tariff Regulation is yet to be notified, the present petition is prepared in consistence with the provisions of ESAAR-1985. Further, as per the section-61(a) of the Electricity Act2003, the tariff determination of the SERC shall be guided by the the principles and methodologies specified by the Central Commission for determination of tariff. In consistence with prudent utility practices, the principles specified by the Central Commission for tariff determinations-CERC (Terms and Conditions of Tariff) Regulations, 2009 have also been adopted while preparing the present petition wherever applicable. Therefore, this petition has been formulated under the assumption that the procedures and practices being followed will be continued until the new rules, regulations and procedures are fully implemented. If the regulations etc as envisaged in the Electricity Act 2003 are firmed up and come into operation in 2013-14, this petition might require revision as may be required. The present petition has been prepared considering the Board as a single entity as of today. This petition contains 11 Chapters. Chapter-2 of this petition describes the performance of the Board during the recent years. Chapter-4 of the petition deals with the estimate of demand projections of different categories of consumers. A review of the generation and power purchase made during the year 2012-13 is given as Chapter-6. The strategy on Generation and Power Purchase for the year 2013-14 is given under Chapter-7. The estimate of Aggregate Revenue Requirement and the estimate of the Expected Revenue from Charges are given in Chapter-8 and Chapter-9 respectively. The summary of the ARR & ERC including the prayer of the Board is given
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1.9

1.10

1.11

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in Chapter-10. The proposals to bridge the revenue gap have been detailed under Chapter-11. 1.12 The revised estimate of the revenue expenditure of the Board for the year 2012-13 is Rs. 11562.63 Crore and the revenue receipts is Rs. 7998.23 crore leaving a revenue gap of Rs. 3564.40 Crores. The ARR for the year 2013-14 is Rs 11237.11 Crores as against the estimated revenue receipts of Rs 8478.44 Crores leaving the estimated revenue deficit of Rs 2758.67 Crores. Though the estimated revenue gap for the year 2013-14 is Rs 2758.67 crores, in order to reduce the tariff shock to the consumers, KSEB propose to mobilize an additional revenue amounting to Rs 1573.54 crores through the tariff proposal during the ensuing year 2013-14. Honble Commission may kindly allow treating the balance gap as regulatory assets and allow carrying cost for the same till it is fully recovered through tariff. Considering the above, KSEB kindly request before the Honble Commission to: (1) To approve the revised estimated expenses amounting to Rs 11562.63 Crore, income of Rs 7998.23 Crore and the revenue gap of Rs. 3564.40 crore for the year 2012-13. (2) To approve the estimated expenses of Rs 11237.10 Crore, income of Rs. 8478.44 Crore and the revenue gap of Rs. 2758.67 Crore for the year 2013-14. (3) To allow the revenue gap as per the revised estimates for 2012-13 projected in this petition. (4) To approve the proposals to bridge the revenue gap as detailed in this petition. (5) To recognize the concept of Regulatory Asset and treat the balance unbridged revenue gaps as Regulatory Asset and allow carrying cost for the same till it is fully out the same. (6) To allow the Board to revise the present estimates in the event of abnormal increase in fuel price or failure of monsoon during 2013-14 or if there are major changes in the assumptions taken in this petition due to any contingency that may occur due to reasons beyond the control of the Board. (7) To allow the Board to submit a proposal for truing up of the cost at the end of financial year 2013-14 and any revenue gap arising out of such truing up be allowed separately. (8) To permit the Board to present the case in person and submit other details / information as may be necessary before the Commission to enable to take a final decision on the matter.

1.13

1.14

1.15

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CHAPTER-2

PERFORMANCE OF THE BOARD


2.1 Introduction KSEB is continuing as a single power utility, performing the functions of Generator, State Transmission Utility and Distribution Licensee in the State of Kerala. KSEB has been taking several initiatives to improve its physical and financial performances. Some of them are detailed in this chapter.

2.2 Reduction in transmission and distribution losses 2.2.1 KSEB has been consistently reducing the Transmission and Distribution losses in the Kerala power system. Since the year 2001-02, KSEB has been able to reduce the T&D loss from 30.76% to 15.11%. By way of consistently reducing the T&D losses, KSEB was able to make substantial savings on the cost of generation and power purchase since the year 2001-02. The details are given below.
Table 2.1 Reduction in cost of Generation and Power Purchase due to T&D loss reduction
T&D Loss within KSEB system Extent of reduction Savings in Savings in Total Energy (%) Generation & Power sales within Power purchase the State Purchase cost)* Yearly Cumulative (%) 1.68 1.64 2.49 1.99 1.49 1.45 1.19 1.12 1.62 0.44 (%) 1.68 3.32 5.81 7.8 9.29 10.74 11.93 13.05 14.67 15.11 (MU) 8667.32 8873.3 8910.84 9384.4 10269.8 11331.00 12049.85 12414.32 13971.09 14547.9 15980.53 (MU) (Rs.Cr) 106.3 206.1 367.2 525.6 677.6 817.9 922.3 1120.0 1285.6 1447.05

Year

(%) 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 30.76 29.08 27.44 24.95 22.96 21.47 20.02 18.83 17.71 16.09 15.65

303.57 588.84 1049.24 1501.70 1935.93 2336.93 2635.18 3199.90 3673.32 4134.40

@ average cost of power purchase Rs 3.50 per unit.

2.2.2 As detailed above, KSEB was able to make substantial savings on the cost of generation and power purchase since the year 2001-02. The total savings on cost of generation and power purchase for the year 2011-12 alone is about Rs 1447.05 crore through the reduction in T&D losses achieved since the year 2001-02.

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2.3 Anti-power theft activities 2.3.1 KSEB has been taking sincere efforts on Anti Power Theft Activities. The APTS wing of KSEB is being headed by an officer from the Police Department in the rank of Inspector General of Police. The performance of the APTS wing and the amount assessed in theft cases and the amount realized is detailed below.
Table 2.2 Performance of APTS No of theft No of cases Inspections Registered 6215 7888 14354 10287 15611 16221 18606 15792 17936 23479 24090 170479 52 93 275 365 981 1895 1144 504 369 2980 336 8994

Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Total

Amount Assessed (Rs.Cr) 5.69 17.48 12.27 40.46 21.69 12.73 16.93 29.58 30.63 15.56 17.39 220.41

Amount Realized (Rs. Cr) 3.45 3.82 5.24 8.11 9.82 11.04 10.50 18.97 20.47 11.85 11.35 114.62

2.4 Efforts taken for collection of arrears 2.4.1 The details of the arrears accumulated during the last three years are detailed below. Table 2.3 Details of the arrears accumulated during last three years
Arrear oust standing as on 31st of March HT &EHT LT consumers consumers Total Increase Increase Total arrears demand accumulated over over Amount Amount previous previous year year (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 295.57 298.96 368.23 325.29 3.39 69.27 -42.94 800.98 892.05 932.58 881.01 91.07 40.53 -51.57 94.46 109.8 5198.53 5593.02 Arrears accumulated as (%) of total demand (%) 1.82 1.96

Year

2009-10 2010-11 2011-12 2012-13 (up to sep-2012)

2.4.2 As detailed above, the total arrears accumulated during the year 2010-11 and 2011-12 was 1.82% and 1.96% of the total accumulated demand of these periods. Further, KSEB has been taking concise efforts for collection of arrears during the year 2012-13. 2.4.3 It is further submitted that, out of the total accumulated arrears the main defaulter is Kerala Water Authority. Since KWA is using

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electricity for water pumping, KSEB is not in a position to disconnect the power supply to KWA. As per the direction of the Honble High Court, a high level committee was constituted by the State Government under the chairmanship of Chief Secretary to sort out the payment of outstanding electricity dues to KSEB. However, there is no progress and the arrears of the KWA has been accumulating month over month at the rate of around Rs 12 crores per month. The details are given below.
Table 2-4 Accumulated arrears of KWA Arrear as on 31st of March LT consumers HT consumers Total arrears Increase Increase outstanding * over over (Rs.Cr) (Rs.Cr) previous previous year year 51.76 59.38 111.14 63.79 12.03 116.62 57.24 180.41 131.83 68.04 170.33 53.71 302.16 16.57 315.60

Year

2009-10 2010-11 2011-12 2012-13 upto September 128.70 -3.13 186.9 Arrears including interest for the delay in payment

KSEB request the Honourable Commission to give appropriate direction to the Government and KWA to settle the arrears. 2.4.4 Further, out of the total arrears of about Rs 1206.29 crore as on 31.09.2012, about Rs 568.00 crores is the arrears due from private consumers of which Rs 350 crore is being held by various court cases and balance Rs 178.00 crore is the arrear due from various closed units. KSEB has issued strict directions to the legal counsels to vacate the stay orders and to collect the arrears. 2.4.5 About Rs 690.00 crore is the arrears due from Public Sector Undertaking including KWA, Government Departments etc. Out of the above, Rs 315.60 crore is the arrears of KWA alone. Further, about Rs 235.00 crore is the past arrears due from Travancore Cochin Chemicals, Steel Complex Limited, Malabar Cements etc. However, not much arrears have accumulated from Government Departments and PSUs except KWA during the last few years. 2.4.6 Further, about Rs 20.00 crore is the outstanding dues from Bulk licensees including M/s Kanaan Devan Hill Plantations Lmited, Technopark, M/s KINESCO etc. 2.4.7 KSEB has announced one time settlement schemes vide the order dated 27-07-2012 and various concessions has been offered to the consumers for clearing the long outstanding dues within the time stipulated.

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2.5 Trends in capital liabilities and interest and finance charges. 2.5.1 During the period from 2003-04 to 2011-12, KSEB has considerably reduced the outstanding capital liabilities from Rs 5355.65 crore as on 31-03-2004 to Rs 1356.33 crore as on 31-03-2012. This has resulted in reducing the interest and finance charges from Rs 622.16 crore during the year 2003-04 to Rs 128.63 crore in 2011-2012. The year wise details of reduction on capital liabilities and interest & finance charges are detailed in the table below.
Table 2.5 Reduction on capital liabilities and interest and finance charges Outstanding Capital liabilities Year Interest & finance charges on capital liabilities

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Outstanding Reduction over Reduction over capital liabilities Amount the year 20032003-04 as on 31st March 04 (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 622.16 5355.65 535.54 4541.32 814.33 86.62 451.44 3713.62 1642.03 170.72 318.49 2498.52 2857.13 303.67 232.83 1856.71 3498.94 389.33 151.31 1100.35 4255.30 470.85 123.08 1409.48 3946.17 499.08 120.85 1066.49 4289.16 501.31 128.62 1356.33 3999.32 493.54

2.6 Efforts in Generation and Power purchase 2.6.1 KSEB has been taking all possible efforts to optimize the generation and power purchase through the following. (i) Scheduling the power strictly based on merit order. (ii) Taking all possible efforts to avail power through UI at competitive rates. (iii) Procuring power through energy exchanges. (iv) Taking efforts to procure power through traders at most competitive rates. (v) All possible efforts are being taken to reduce the power procurement from liquid fuel stations. 2.6.2 During the year 2012-13; from April-2012 to November-2012, KSEB had procured 2631 MU from short-term markets (1890 MU from traders & 741.05 MU from energy exchanges) at an average rate of Rs 5.22 per unit. This shows an increase by more than double from that of previous year and was warranted due to the failure of monsoon and consequent increase in demand. 2.6.3 KSEB has been taking all possible efforts to conserve maximum water in the storage reservoirs for use in summer.

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2.7

Computerization (i) All section offices have been computerized (ii) Accounting software SARAS implemented in all ARUs (iii) E-payment facility for HT&EHT consumers implemented (iv) Software for Supply Chain Management implemented in all Distribution offices (v) Computerization of Provident fund and payroll implementation completed in all ARUs (vi) SMS based compliant registration system (SMS CRS) implemented in distribution wing. (vii) Implementation of R-APDRP Part-A started in full swing (viii) In order to have a centralized data base for LT consumers a new version of ORUMA software (ORUMA net) is being rolled out during the period 2013-14. Compliance of directives issued by the Honble Commission vide the order on ARR&ERC for the year 2012-13. Honble Commission had issued a set of directives for compliance vide the order dated 28-04-2012 on ARR&ERC for the year 2012-13. The present status of the action taken is given below. 1. Directive-1. Demand side management Activities. Board has conducted high-level meeting on 23.08.2012 with all Chief Engineers of distribution wing, Chief Engineer (Corporate Planning) and officials from Energy Management Centre. Based on the decisions on the meeting the following activities are initiated. (a) Reduction of energy consumption in KSEB offices by 10% compared to corresponding month in the previous year. (b) Decided to implement of automatic street lighting in Municipalities and Corporations. Local bodies are also requested to adopt street light metering with automatic controller. Board has decided to bear 50% of cost of installation of controller. Energy conservation campaign utilizing the service of lady volunteers of National Savings Department:

2.8

(c)

Government has entrusted National Savings Department to carry out energy conservation activities in addition to their normal duties. It is proposed to utilize the services of Mahila pradhans /SAS agents for door to door campaigning, after imparting training to them by KSEB. The following are the messages spread through the NSD volunteers. (1) Replacement of inefficient lighting systems like ICL, ordinary tube lights. (2) Replacement of inefficient pump sets, air conditioners. refrigerators etc.

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(3) Avoiding the use of grid supply for illumination, advertisements etc. (4) Advantages of reducing the peak load consumption in view of the introduction of TOD tariff. (5) The need for switching over to Renewable power sources in view of the present power crisis. (6) Nalekkithiri Oorjam Programme which was conducted in government schools was extended among all aided schools and colleges and residential associations. 2. Directive-2. Website of Kerala state Load Despatch Centre to be revamped/remodeled The website of the Kerala State Load Despatch Centre has been modified; the system details are uploaded on a daily basis and are now available in www.sldckerala.com. Directive-3. Capital Investment Plan Detailed report on the revised capital expenditure program for the year 2012-13 was submitted to the Honble commission vide letter dated 01.10.2012. 4. Directive-4. Board has taken advance action for procurement of power through traders for the year 2013-14 and about 200 MW has already been tied up with traders and the MTOA has also been received. Tender for power procurement through case-1 bid was already floated and KSEB intends to place the order for procuring 300 MW RTC and 100 MW power from March-2014 onwards for three years. Directive-5. The report on the loss study was already submitted to the Honble Commission. Directive-6. The implementation of R-APDRP (Part-A&B) projects are already accorded on top priority and time bound action are being taken to ensure timely compliance. Directive-7. KSEB has scheduled an action plan for the replacement of faulty meters. KSEB has so far replaced 5.05 lakhs faulty meters as on 30-11-2012. KSEB has been targeting to replace about 4.00 lakhs faulty during the remaining months of the year 2012-13. Directive-8. The Government has yet to take the final decision on the revesting of the assets and liabilities of KSEB. The time for revesting has been extended upto 31st March 2013.

3.

5. 6.

7.

8.

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CAPITAL INVESTMENTS
3.1 3.1.1 Strategy for Capital Investment during 12th plan Electricity is one of the key drivers for the economic growth and poverty alleviation. The demand for electricity is increasing at a rate of about 8% in the State. It is the need of the hour to provide quality power at affordable rates to all needy consumers.

CHAPTER 3

3.1.2 As per the 18th power survey, the maximum peak demand as on 201617 is 4669 MW and the annual energy consumption 22410 MU. It is submitted that, the actual unrestricted demand of the State is slightly higher than the demand projection as per the 18 th power survey. 3.1.3 KSEB proposes to meet the anticipated energy requirement through its own capacity addition, additional allocation from ongoing CGS/ UMPPs, procuring power from renewable including solar, developing thermal power projects using LNG/gas. 3.1.4 In order to meet the emerging energy requirement of the State, KSEB proposes to add about 248 MW of new hydel capacity (with 741.85 MU annual generation) during 12th plan period. 3.1.5 The transmission system needs to be strengthened in tune with the capacity addition and additional power purchase from CGS. KSEB is giving due importance for enhancing the load handling capacity of the transmission system, avoiding bottlenecks/ congestion in power flow, providing adequate redundancy in transmission system to meet the system exigencies and ensuring availability of power in the State. 3.1.6 The distribution system also needs to be strengthened in tune with the capacity addition in generation and strengthening of transmission network. KSEB, with a view to improving consumer satisfaction, is giving due importance for strengthening the distribution network to provide uninterrupted quality power to the consumers, reduce the technical and commercial losses and to improve the quality of services rendered to the consumers. 3.1.7 A brief description of the generation plan, transmission plan and distribution plan proposed in the 12th plan period is detailed below.

3.2 Generation Plan HYDEL Projects 3.2.1 In order to meet the emerging demand of the State, KSEB proposes to add 179.85 MW installed capacity (546.39 MU annual generation) by completing 14 ongoing hydroelectric projects during the 12 th Plan
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period. It is also proposed that 37 new hydroelectric projects with a total capacity of 570.2 MW (1461.45 MU annual generation) will be tendered during the period, out of which 11 projects with a total capacity of 68.2 MW (195.46 MU generation) are expected to be completed by 2016-17 and the remaining schemes during 13 th Plan period. The details of the 12th plan schemes are given below.
Table-3.1 Hydel projects targeted for completion during 12th plan period
Sl. No. A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 B 15 16 17 18 19 20 21 22 23 24 25 Project Capacity (MW) Generation Target year of (MU) completion 2012-13 2013-14 2013-14 2013-14 2013-14 2013-14 2013-14 2013-14 2014-15 2014-15 2014-15 2014-15 2015-16 2016-17

Ongoing Schemes Peechi 1.25 3.21 Vilangad 7.50 22.63 Chathankottunada-II 6.00 14.76 Chimony 2.50 6.70 Perumthenaruvi 6.00 25.77 Barapole 15.00 36.00 Kakkayam 3.00 10.39 Sengulam Augmentation 85.00 Pallivasal Extension 60.00 153.90 Thottiyar 40.00 99.00 Adyanpara 3.50 9.01 Vellathooval 3.60 12.17 Poringalkuthu SHP 24.00 45.02 Anakkayam 7.50 22.83 Total 179.85 546.39 th New schemes to be tendered and completed during 12 Plan Olikkal 4.50 10.18 Poovaramthode 2.70 5.88 Upper Kallar 2.00 5.15 Chembukadavu-III 6.00 14.92 Ladrum 3.50 10.47 Peechad 3.00 7.73 Bhoothathankettu 16.00 60.00 Western Kallar 5.00 14.29 Marmala 7.00 16.72 Chathankottunada-I 3.50 7.98 Pazhassi Sagar 15.00 42.14 Total 68.20 195.46

2014-15 2014-15 2015-16 2015-16 2015-16 2015-16 2016-17 2016-17 2016-17 2016-17 2016-17

3.2.1 The year wise list of projects to be tendered during the 12 th plan period and to be completed during the 13 th plan period is given in the Table 3.2 below.

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Table 3-2 Hydroelectric projects to be tendered during 12 th plan period and expected to be completed during 13th plan
Sl. No 1 2 3 Name of project MW MU District To be tendered in 2012-13 Mankulam 40 82 Idukki Chinnar 24 76.45 Idukki Peruvannamoozhi 6 24.7 Kozhikode Total 70 183.15 To be tendered in 2013-14 Upper Sengulam-I 24 59.2 Idukki Kallar 4 11.36 Thiruvananthapuram Kakkadampoyil-I 20 55 Malappuram Kakkadampoyil-II 5 15 Kozhikode Arippara 3 8.03 Kozhikode Total 56 148.59 To be tendered in 2014-15 Achankovil 30 75.81 Pathanamthitta Pambar 40 84.79 Idukki Valanthode 7.5 16.82 Malappuram Maripuzha 6 14.84 Kozhikode Thoniyar 3 6.57 Idukki Thommankuthu 2.5 6.02 Idukki Total 89 204.85 To be tendered in 2015-16 Kanthanpara 66 162.23 Wayanad Palchuam-II 6 13.66 Kannur Palchuam-III 3.5 8.12 Kannur Anakkampoyil 7.5 22 Kozhikode Narangathode 9 24 Kozhikode Keezharkuthu 15 49.80 Idukki Moorikkadavu 2 5.92 Kannur Vythiri 60 167.47 Wayanad Thottiyar-II 30 88 Idukki Total 199 491.4 To be tendered in 2016-17 Upper Sengulam-II 24 72 Idukki Poringalkuthu-II 24 71 Thrissur Mankulam-II 40 95 Idukki Total 88 238 Total 13th Plan Projects 502 MW 1266

1 2 3 4 5

1 2 3 4 7 8

1 2 3 4 5 6 7 8 9

1 2 3

3.2.2 Wind projects Detailed studies have revealed the wind potential of Kerala to be about 600 MW. In order to augment the wind power capacity, Government has signed an MOU with NTPC to develop 200 MW capacity wind energy units in the State on a build, own and operate basis. Development of wind potential is hampered by lack of connectivity to potential sites by way of roads and transmission lines. Infrastructure needs to be developed to adequate level to harness a total capacity of 500 MW from the wind by 2030.

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3.2.3 Solar projects KSEB has been targeting to promote off-grid solar installation with battery backup as a possible alternate choice for meeting the power requirement of the State, especially the peak demand of the State. The target group is domestic consumers with monthly consumption above 200 units. KSEB with the support of the Government proposes to provide suitable Generation Based Incentive to the solar developers, in addition to the benefit of net metering- i.e., the savings attained through replacing the high cost grid power with the solar energy. KSEB targets to add 300MW from solar during the 12 th plan period. Further, KSEB on its own proposes to establish Solar Photo Voltaic on all Government Buildings/PSUs with the support of the Government, in addition to Solar PV installation at its buildings. KSEB is also exploring the possibility of installation of solar PV at its reservoirs, open channels etc. 3.2.4 Thermal projects. There are various proposals to develop thermal projects using gas/ LNG in the State. However, the proposals are yet to be firmed up. The details shall be submitted to the Honble Commission separately. 3.3 Transmission plan 3.3.1 In order to enhance the power transmission capacity and to avoid bottlenecks/congestions in power flow and to ensure power evacuation from new generating stations/ import points, KSEB proposes to construct a number of new substations as well as to upgrade existing substations. An abstract of the new substations and lines targeted to be completed during 12 th Plan is given in Table-3.3 below.
Table 3.3 Expected transmission capacity addition under 12th plan period Substations 220 kV substations 6 Nos Up gradation of 110 kV substations to 220 kV 5 Nos 110 kV substations 32 Nos Up gradation of 66 kV substations to 110 kV 33 Nos 66 kV substations 11 Nos Up gradation of 33 kV substations to 66 kV 1 No. 33 kV Substations 44 Nos Total 132 Nos. Lines (ckt km) 220 kV Lines 365 km 110 kV Lines 1225 km 66 kV Lines 86 km 33 kV Lines 540 km Total 2216km

3.4 Distribution plan 3.4.1 To meet the increasing requirement of electricity, reduce distribution losses and to improve the quality of power, the distribution infrastructure needs to be strengthened. It is expected that 17 Lakh
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new service connections will be effected during the 12 th Plan period. 14,825 km new 11 kV lines, 23,250 km LT lines and 18,093 Nos distribution transformers will also be installed during this period. With this, it is expected that the HT: LT ratio will improve from the existing figure of 1:5.27 to 1:4.44 by the end of 12th Plan period. 3.4.2 An abstract of various works targeted to be completed during the 12 th Plan is given in Table below. Table-3.4. Details of the distribution works proposed during 12 th plan period
Name of Work Service Connections (Nos) 11 kV lines (km) LT lines (km) Distribution Transformers (Nos) 1-ph. to 3-p. conversion (km) Re-conductoring HT (km) Re-conductoring LT (km) LT Arial Bunched Conductors (km) HT Arial Bunched Conductors (km) Meter changing (Nos) 2012-13 400000 3325 5000 3843 4405 659 5345 940 416 1030566 2013-14 350000 3250 5000 3750 4500 750 5500 1000 500 750000 2014-15 350000 3000 4500 3750 4500 850 5500 1000 500 700000 2015-16 300000 2750 4500 3500 4500 1000 5000 1500 600 700000 2016-17 300000 2500 4250 3250 4500 1000 5000 1500 750 650000 Total 1700000 14825 23250 18093 22405 4259 26345 5940 2766 3830566

3.5

The details of the physical target of projects by KSEB in the 12 th plan period are given below.
Table 3.5 Summary of the capital works proposed during 12th FY plan
2012-13 2013-14 40 201.25 2014-15 114.3 290.14 2015-16 38.5 83.3 2016-17 54 163.96 Total 248.05 741.86

A. Generation- own hydel MW Capacity Addition MU B. Transmission NEW UPGN NEW UPGN NEW UPGN NEW UPGN

1.25 3.21

Substations (No.) 1 5 2 3 12 1 10 10 6 16 1 8 7 3 10 220kV 110kV 66kV 33kV 1 3 6 10 3 1 3 4 6 5 32 33 12 44

220kV 110kV 66kV 33kV C. Distribution No. of Service connections 11 kV lines km LT lines km

60 155 4.5 158.8 400000 3325 5000

Lines ( Ckt-km) 0.5 91.5 300.55 298 0 81.5 154 141.5 350000 3000 4500

31 321.5 0 60.35

181.5 150.2 0 26.1

364.5 1225.25 86 540.75

350000 3250 5000

300000 2750 4500

300000 2500 4250

1700000 14825 23250

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Transformers (No.)

3843

3750

3750

3500

3250

18093

3.6

The abstract of the financial target proposed for the 12 th year plan is detailed below.
Table 3.6 Summary of the financial target proposed during 12th FY plan (Rs in crore) 12th Sector 2012-13 2013-14 2014-15 2015-16 2016-17 Plan Total Generation 375.62 372.87 613.71 1089.95 1294.85 3747.00 Transmission 305.00 293.00 300.00 315.00 325.00 1538.00 Distribution 710.00 851.58 740.00 550.00 500.00 3351.58 Others 6.50 4.00 4.70 5.15 5.60 25.95 Total 1397.12 1521.45 1658.41 1960.10 2125.45 8662.53

The capital investment program envisaged in the Generation sector for the years 2015-16 and 2016-17 also includes Rs 500.00 crore and Rs 750.00 crore respectively towards the Gas based thermal projects proposed at Brahmapuram. 3.7 Review of Capital Outlay for the year 2012-13 and proposal for the year 2013-14

3.7.1 As against the capital outlay of Rs 1036.00crores for the year 201112, the actual capital investment was Rs 1019.14 crores, i.e., KSEB was able to achieve 98.40% of the financial target proposed for the year 2011-12. 3.7.2 The revised target of capital outlay for 2012-13 as well as proposed capital outlay for 2013-14 is given below.
Table 3.7 Revised Capital outlay for the year 2012-13 and proposed outlay for 2013-14

Particulars Generation Transmission Distribution Others Total

Revised outlay for 2012-13 (Rs. Cr) 273.60 232.35 607.30 5.50 1118.75

Proposed outlay for 2013-14 (Rs. Cr) 372.87 293.00 851.58 4.00 1521.45

3.7.3 Generation projects (i) The summary of the capital outlay for Generation projects for the year 2012-13 and 2013-14 is detailed below.

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Table 3.8 Summary of the capital outlay for generation projects


Sl No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Particulars Ongoing projects New schemes proposed Completed Schemes Capital nature of maintenance work at BDPP & KDPP R&NM of existing hydro projects Survey and Investigation, Revamping of seismic network Dam saftey works (DRIP) R&D Civil works Construction of Administrative Complexes Mechanical Fabrication works Wind power projects Solar projects Coal based power projects Miscellaneous works Total 25.00 26.99 273.60 2.05 2.50 23.82 Revised for 2012-13 (Rs. Cr) 161.30 16.99 3.33 3.45 5.25 1.42 1.50 Proposed for 2013-14 (Rs. Cr) 230.80 29.95 24.02 7.30 16.10 2.00 2.00 10.00 1.20 2.50 35.00 2.00 8.00 1.00 1.00 372.87

The scheme wise details of the Capital investment program for the year 2013-14 shall be submitted before the Honble Commission by the end of January-2013. 3.7.4 Transmission: The revised physical target for the transmission works for the year 2012-13 and the target for the year 2013-14 is detailed below.
Table 3.9 Summary of the physical target of transmission works Revised target Target for the Particulars for 2012-13 year 2013-14 Substations (Numbers) 220 kV 1 1 110 kV 5 10 66 kV 3 3 33 kV 7 5 Sub total 16 19 Lines (Ckt . Kilometers) 220 kV 113.17 26 110 kV 97.17 129.74 66 kV 2.53 0.30 33 kV 68.6 72.95 Sub total 281.47 228.99

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The scheme-wise details of transmission works proposed for the year 2013-14 shall be submitted before the Honble Commission by the end of January-2013. 3.7.5 Distribution works: The details of the distribution works proposed for the year 2013-14 is given in the Table below. Table 3-10. Summary of the distribution works proposed for the year 2013-14
Particulars Unit Normal Work proposed through consumer contributio n 266857 241 718 6502 944 10610 RAPD RP RGGV Y Other funde d Total

1 2 3 4 5 6

New service connection 11 kV line extension Distribution transformer LT line extension Single phase to three phase conversion Faulty meter replacement

Nos Km Nos km km Nos 677785 46171 15434 55384 2093 2558 1537 3200 497 365 47 613 21831 264 6 1266 55 5928 105 108 1017 188

35000 0 3250 4354 10369 5000 75000 0

The Board is in the process of finalization of the capital works proposed for the year 2013-14. The financial outlay for the different distribution works proposed shall be submitted before the Honble Commission separately by the end of January-2013.

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CHAPTER-4

ENERGY SALE FORECAST


4.1 Review of the energy consumption of different categories of consumers

4.1.1 The details of the category wise energy sale forecast for the year 2013-14 and the revised estimate for the year 2012-13 is explained in this chapter. The energy sale forecast has been made based on the past data, existing consumer strength, new service connections proposed during the ensuing year, increase in the consumption per consumer, regional characteristics of consumers, seasonal variations and change in consumer habits etc. The category wise details of actual energy consumption during the period from 2005-06 to 2011-12 are given below.
Table 4-1 Details of category wise energy consumption in MU 2005-06 2006-07 2007-082008-09 2009-10 5213.15 1245.80 933.93 220.24 228.74 7841.86 1436.35 5602.85 1378.33 984.18 230.55 248.56 8444.47 1460.61 5931.27 1501.60 1015.40 225.22 294.32 8967.81 1326.26 6559.00 1793.00 1064.00 257.00 303.00 9976.00 1450.00

Category LT Category Domestic 4668.35 Commercial 1092.66 Industrial 873.90 Agricultural 189.57 Street Lights 207.78 Sub total LT 7032.27 HT category HT I Industrial 1362.24 HT II Non Industrial Non Commercial 130.11 HT IIB 0.02 HTIII -Agriculture 9.54 HT IV- Commercial 377.87 EHT 66/110 KV 1003.74 Railway Traction 57.94 Bulk Supply 296.06 Sub total HT 3237.51 Total 10269.77

2010-11 6877.83 1951.74 1053.45 231.56 265.68 10380.26 1516.01

2011-12 7705.86 2141.22 1097.04 286.18 294.26 11524.56 1595.68 115.76 0.10 8.11 866.62 1243.12 154.49 472.09 4455.97 15980.53

134.72 138.28 107.42 117.00 101.71 0.09 0.10 0.09 0.09 0.09 9.36 9.23 8.76 8.00 8.00 431.10 506.79 578.77 693.00 756.21 1070.01 1024.49 965.67 1149.00 1181.12 72.16 109.26 142.07 165.00 156.39 335.35 356.62 317.47 413.00 448.11 3489.14 3605.38 3446.51 3995.09 4167.64 11331.00 12049.85 12414.32 13971.09 14547.90

4.1.2 The growth of energy consumption of different categories of consumers during the period from 2005-06 to 2011-12 is detailed below.

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Table 4.2 Average growth rate of consumption of different categories of consumers


Category LT Category Domestic Commercial Industrial Agricultural Street Lights Sub total LT HT & EHT category HT I Industrial HT II Non Industrial Non Commercial HTIII -Agriculture HT IV- Commercial EHT 66/110 KV Railway Traction Bulk Supply Sub total HT Total 2005-06 2006-07 2007-082008-09 2009-10 2010-11 Compound Annual Growth 2011-12 rate (2005-06 to 2011-12) 8.71% 11.87% 3.86%

9.50% 15.30% 11.60% -0.60% 13.70% 10.50% 10.00% -7.70% 1.50% 11.60% -3.10% 32.90% 40.00% 7.30% 9.40%

11.70% 14.00% 6.90% 16.20% 10.10% 11.50% 5.40% 3.50% -1.90% 14.10% 6.60% 24.50% 13.30% 7.80% 10.30%

7.50% 10.60% 5.40% 4.70% 8.70% 7.70% 1.70% 2.60% -1.40% 17.60% -4.30% 51.40% 6.30% 3.30% 6.30%

5.90% 8.90% 3.20% -2.30% 18.40% 6.20% -9.20% -22.30% -5.10% 14.20% -5.70% 30.00% -11.00% -4.40% 3.00%

10.58% 19.41% 4.79% 14.11% 2.95% 11.24% 9.33% 8.92% -8.68% 19.74% 15.95% 16.14% 30.09% 15.92% 12.54%

4.86% 8.85% -0.99% -9.90% -12.32% 4.05%

12.04% 9.71% 4.14% 23.59% 10.76% 11.02% 0.00% 4.55% 5.26%

7.11% 5.97%
8.61% 2.67% -1.93% -2.67% 14.84% 3.63% 17.76% 8.09% 5.47% 7.65%

-13.07% 13.81% 0.00% 1.37% 9.12% 14.60% 2.79% 5.25% -5.22% -1.21% 8.50% 5.35% 4.32% 6.92% 4.13% 9.85%

4.1.3 The category wise number of consumers for the period from 2005-06 to 2011-12 is detailed below.
Table 4.3 Category wise details of consumer strength as on 31 st March 2005-06 2006-07 2007-08 2008-09 2009-10 6545692 1202468 119021 423571 2325 8293077 941 206 2 50 755 34 5 11 2004 8295081 6880500 1270932 122308 435673 2325 8711738 946 218 2 47 867 35 6 11 2132 8713870 7137739 1327978 122449 440958 2325 9031449 979 157 2 47 1069 35 7 11 2307 9033756 7481601 1324934 119871 431745 2729 9360880 1052 175 2 48 1248 37 8 11 2581 9363461

Category LT Category Domestic Commercial Industrial Agricultural Street Lights Sub total LT HT category HT I Industrial HT II Non Industrial Non Commercial HT IIB HTIII -Agriculture HT IV- Commercial EHT 66/110 KV Railway Traction Bulk Supply Sub total HT Total

2010-11

2011-12

7790132 8092072 8324961 1387345 1455790 1538786 122325 127354 132051 437877 446460 455078 2927 3038 3160 9740606 10124714 10454036 1128 1230 1321

179 212 237 2 2 2 48 50 55 1455 1678 1925 38 40 40 8 8 8 12 12 12 2870 3232 3601 9743476 10127946 10457637

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4.1.4 Year wise details of connected load/ contract demand of different category of consumers during the period from 2005-06 to 2011-12 are detailed below.
Category LT Category Domestic Commercial Industrial Agricultural Street Lights Sub total LT HT category HT I Industrial HT II Non Industrial Non Commercial HT IIB HTIII -Agriculture HT IV- Commercial EHT 66/110 KV Railway Traction Bulk Supply Sub total HT Total Table 4.4 Category wise details of connected load/ contract demand 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Unit MW 6646.74 7014.07 7420.54 9521.74 9918.76 10497.71 11096.17 MW 1292.76 1397.55 1695.93 2299.48 2371.20 2480.90 2587.24 MW 1239.35 1284.95 1290.82 1425.26 1472.69 1516.56 1560.32 MW 738.58 740.49 876.00 887.90 899.38 913.55 926.68 MW 84.98 88.81 118.54 82.66 93.80 91.09 93.12 MW 10002.41 10525.87 11401.83 14217.04 14755.83 15499.81 16263.53 MVA MVA MVA MVA MVA MVA MVA MVA MVA 424.13 50.30 426.03 54.25 424.79 45.78 448.81 49.36 472.85 49.83 511.20 51.38 465.38 48.34

0.27 0.27 0.27 0.27 0.27 0.27 0.23 12.15 12.02 11.98 12.53 12.53 12.87 10.64 140.69 161.52 197.29 226.01 261.64 298.95 292.75 295.29 296.99 303.02 312.99 291.50 295.50 288.61 29.00 39.00 44.00 57.50 65.50 66.60 65.27 63.04 64.19 68.19 71.61 98.01 98.48 83.67 1014.86 1054.27 1095.31 1179.08 1252.12 1335.25 1254.89 11017.27 11580.14 12497.14 15396.12 16007.95 16835.06 17518.42

4.1.5 Average monthly consumption of different category of consumers during the period from 2005-06 to 2011-12 is given below.
Table 4-5 Consumption per consumer (Units per month) Domestic Commercial Industrial Year (Units) (Units) (Units) 2005-06 59.43 75.72 611.86 2006-07 63.14 81.69 636.32 2007-08 65.41 86.49 669.79 2008-09 66.07 94.44 705.90 2009-10 70.16 107.70 724.85 2010-11 70.83 111.72 689.32 2011-12 77.14 115.96 692.31

4.2

Review of energy consumption for the year 2011-12

4.2.1 The category wise consumer strength and the quantum of energy consumed during the year 2011-12 are shown in the table below.

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Table 4.6 Consumer profile as on 31-03-2012 Consumer Strength(nos) Consumption (MU Revenue (Rs.Cr.) Number of Category Total for Total for consumers as % of total % of total % of total the year the year on 31.3.2012 Domestic 8324961 79.61 7705.86 48.22 1531.84 28.03 LT Commercial 1538786 14.71 2141.22 13.40 1592.83 29.15 LT Industrial 132051 1.26 1097.04 6.86 461.39 8.44 LT Others 458238 4.38 580.44 3.63 94.63 1.73 HT&EHT& Bulk licensees 3600 0.03 4455.97 27.88 1784.02 32.65 Total 10457636 100.00 15980.53 100.00 5464.71 100.00

4.2.2 The comparison of energy consumption of different categories of consumers during the last year 2011-12 over the year 2010-11 is given below.
Table 4.7 Growth of consumption during 2011-12 % increase over 2010-11 2011-12 previous year Category (MU) % Domestic 6877.83 7705.86 12.04 Commercial 1951.74 2141.22 9.71 Industrial 1053.45 1097.04 4.14 Irrigation & Dewatering 231.56 286.18 23.59 Public Lighting 265.68 294.26 10.76 LT Total 10380.26 11524.56 11.02 HT I Industrial 1516.01 1595.68 5.26 HT II Non Industrial Non 101.71 115.76 13.81 Commercial HT II B 0.09 0.1 11.11 HTIII -Agriculture 8.00 8.11 1.37 HT IV- Commercial 756.21 866.62 14.60 EHT 66/110 KV 1181.12 1243.12 5.25 Railway Traction 156.39 154.49 -1.21 Bulk supply 448.10 472.09 5.35 HT &EHT total 4167.63 4455.97 6.92 Grand Total 14547.89 15980.53 9.85

4.2.3 It is observed that, as against the sale growth of 4.13% for the year 2010-11, the same during the year 2011-12 was 9.85%. The increase in energy consumption was mainly due to the following factors. (i) There was no restriction on energy usage for the year 2011-12. (ii) The consumption per consumer has increased due to consumer preferences through the use of latest electronic gadgets and household electrical appliances. 4.3 Revised estimate of energy sale for the year 2012-13. 4.3.1 In the ARR for the year 2012-13, KSEB has anticipated an increase in energy consumption by 7.48% over the previous year 2011-12. Accordingly KSEB has estimated the energy sale for the year 2012-13 as 17139.62 MU without any regulation in power supply.

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4.3.2 However, while approving the ARR, Honble Commission had approved the energy sale for the year 2012-13 as 16386 MU. 4.3.3 But, the energy demand in the State has shown an excessive increase during the year 2012-13. A comparison of the month-wise energy consumption of the LT categories and HT& EHT categories is detailed below.
Table 4.8 Month wise energy consumption of LT categories 2010-11 2011-12 2012-13 (MU) (MU) % of increase (MU) % of increase 870.06 975.39 12.11 1079.86 10.71 836.36 945.52 13.05 1018.58 7.73 795.77 920.50 15.67 992.91 7.87 840.48 879.99 4.70 966.71 9.85 841.91 924.33 9.79 1012.34 9.52 839.13 935.30 11.46 994.54 6.33 5023.71 5581.03 11.09 6064.94 8.67

Month Apr May June July August Sep Total

Table 4.9 Month wise energy consumption of HT&EHT categories 2010-11 2011-12 2012-13 Month MU MU % of increase MU % of increase Apr 332.01 354.77 6.86 355.73 0.27 May 336.05 374.58 11.47 385.6 2.94 June 327.36 356.38 8.86 395.11 10.87 July 336.1 370.07 10.11 404.5 9.30 August 338.12 365.16 8.00 401.8 10.03 September 346.61 355.55 2.58 383.87 7.97 Total 2016.25 2176.51 7.95 2326.61 6.90

4.3.4 It may be noted that, as ordered by the Honble Commission, KSEB had imposed restriction on energy usage during the months of April and May-2012 on all Industrial, commercial consumers at 90% of the previous one year average consumption and the energy usage of domestic consumers at 300 units per month. The excess usage was charged at Rs 10.00 per unit. 4.3.5 After analyzing the actual energy consumption during the period from April to September-2012, past data, existing consumer strength, new service connections proposed during the ensuing year, increase in the consumption per consumer, regional characteristics of consumers, seasonal variations and change in consumer habits, the revised energy demand for the year 2012-13 without any load shedding was estimated and detailed in the table 4.10 below. 4.3.6 Further, Honble Commission based on the request of the Board has ordered to impose interalia the following major restrictions on energy usages in the State. (i) All the HT&EHT consumers shall limit the energy usage at 75% of the previous one year average consumption. The excess

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usage above the restricted quota shall be levied with a penalty equal to the per unit energy charge. (ii) All the LT-II, LT-IV, LT-VI(A), LT-VI(B), LT-VI(C), LT-VII(A), LTVII(B) and LT-VII(C) consumers shall limit the energy usages at 80% of the previous one year average consumption. The excess usage above the restricted quota shall be levied with a penalty equal to the per unit energy charge. The monthly usage of domestic consumers shall be limited to 300 units and the excess usage may be levied with a penalty at the per unit energy charges applicable to the respective slabs.

(iii)

4.3.7 Though KSEB does not expect any substantial reduction in energy usage through the restrictions, the liability incurred for procuring the high cost power would be partly offset through the penalty imposed by the Honble Commission. 4.3.8 The revised estimate of the energy consumption for the year 2012-13 is detailed below. Table 4.10
Revised estimate of energy consumption for the year 2012-13
2011-12 Category Actual (in MU) 7690.12 2141.22 1097.04 286.18 294.26 15.74 11524.56 1595.68 115.76 8.11 866.62 360.49 882.64 154.49 472.1 0.1 4455.99 15980.55 2012-13 Revised estimate Revised Approved by As per ARR without load estimate with KSERC petition (in MU) shedding load shedding (in MU) (in MU) (in MU) 8224 2364 1194 247 299 19 12347 1680 130 8.5 980 405 930 160 499 0.12 4792.62 17139.62 8098.42 2187 1104 247 299 17.58 11953 1554 119.88 8 907 375 860 148 461 0.12 4433 16386 8486.49 2371.06 1152.71 298.37 307.77 16 12632.40 1704.84 128.83 8.16 941.85 423.28 930.17 163.23 525.36 0.01 4825.73 17458.13 8339.20 2330.80 1132.69 293.37 302.67 15.81 12414.54 1675.34 126.63 8.02 923.73 423.28 930.17 163.23 516.26 0.01 4766.67 17181.21

Domestic Commercial Industrial Agricultural Street Lights LT II Total HT I HT II HTIII HT IV EHT I+EHT III EHT II Railway Traction Bulk HTII B HT&EHT Total Total

4.4 Energy sale forecast for the year 2013-14 4.4.1 The energy sale of each category was estimated based on the past data such as the number of consumers, consumption and also considering the actual growth rates on number of consumers and consumption up to first half of the current year. The load forecast
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also takes into account the economic growth, regional characteristics of consumers, seasonal variations, change in consumer habits, cumulative average growth rate during the previous years etc. 4.4.2 The unrestricted consumption for 2012-13 is taken into account for estimating the energy consumption for the year 2013-14. The unrestricted consumption for the year 2012-13 is estimated as 17458.13 MU. 4.4.3 During the ensuing year, KSEB proposes to provide service connections to 3.5 lakhs of new consumers. With the proposed new service connections, the past growth of energy consumption and also considering the efforts on the energy conservation measures proposed to be initiated, the energy sale is forecast for the year 2013-14. 4.4.4 In addition to the sale to its own consumers, KSEB has been providing power supply to other licensees at the BST approved by the Honble Commission. The estimated energy consumption of the Bulk Consumers for the year 2013-14 is detailed below.
Table 4-11 Anticipated energy consumption of Bulk consumers for the year 2013-14 Name of licensee Energy consumption in MU Cochin Port Trust 28.39 Cochin Special Economic Zone 55.45 Kanan Devan Hills Plantation Company (P) limited 46.81 Kinesco Power Utilities Private Limited 63.7 Military Engineering Services 55.94 Electricity Department, Pondicheri 43.99 Electricity Department, Karnataka 0.66 Rubber Park India Pvt. Ltd 27.63 Techno park 70.74 Thrissur Corporation 155.48 Total 548.79

4.4.5 Honble Commission vide the tariff order dated 25-11-2012 has introduced separate tariff for EHT-III (220 kV) consumers. M/s Cochin Refineries limited is the only consumer now availing electricity at EHT 220 kV voltage. The consumption pattern of this consumer for the year 2012-13 is detailed below.
Table 4-12 Energy consumption of EHT-220 kV tariff Month Consumption (MU) Jul-12 5.44 Aug-12 5.58 Sep-12 6.15 Oct-12 4.74

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For estimating the energy consumption of EHT 220 kV category, the energy consumption for the year 2013-14 is estimated at 68.00 MU. 4.4.6 With the approval of the Honble Commission, KSEB has introduced hour cyclic load shedding during morning and evening peak hours since 27th September-2012 and this is likely to be continued till 31 st May-2013. Further, Honble Commission has also introduced restriction on energy usage during the period from 15-12-2012 to 3105-2013. As submitted earlier, KSEB has estimated the reduction in energy usage due to load shedding at 1.80 MU/day. As submitted earlier, KSEB does not expect considerable reduction in energy usage due to the restriction, however the penalty imposed for excess usage would partially offset the additional liability incurred for additional power purchase. The energy sale forecast for the months of April2013 and May-2013 has been estimated after considering the reduction in energy usage due to load shedding. The summary of energy sale forecast for the year 2013-14 is detailed below.
Table 4-13 Energy sale forecast for the year 2013-14
Sl No I 1 2 3 4 5 12 II 1 2 3 4 5 6 III 1 2 3 4 5 6 7 8 9 10 Category LT category Domestic LT-II LT-IV Industrial LT-V Agriculture LT VI Commercial Public Lighting Sub total LT HT &EHT HT-I Industrial HT-II HT-III HT-IV EHT-I+EHT-III EHT-II Railway Traction Bulk supply Cochin Port Trust Cochin Special Economic Zone Tata Tea Ltd KINESCO MES Electricity Dept, Pondicherry Electricity Department, Karnataka Rubber Park India Pvt. Ltd Techno park Thrissur Corporation Bulk supply Total HT &EHT &Bulk supply Total NPG Grand Total With out load shedding (MU) 9128.99 2559.79 1177.89 298.69 308.78 19.00 13493.14 1756.63 130.29 8.75 986.48 440.13 984.59 166.44 28.59 55.78 47.06 64.03 56.25 44.2 0.664 27.78 71.12 156.33 551.80 5025.11 3 18521.25 With load shedding during the months of April & May-2013 (MU) 9078.66 2545.68 1171.39 297.04 307.08 18.9 13418.75 1747.44 129.57 8.71 981.04 440.13 984.59 166.44 28.39 55.45 46.81 63.7 55.94 43.99 0.66 27.63 70.74 155.48 548.79 5006.71 3 18428.46

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CHAPTER-5

REDUCTION OF AGGREGATE TECHNICAL AND COMMERCIAL LOSSES


5.1 Introduction 5.1.1 KSEB has consistently been reducing the Transmission and Distribution losses in the Kerala power system. Since the year 200102, KSEB has been able to reduce the T&D loss from 30.76% to 15.11%. The details are given below.
Table 5.1 Extent of reduction of T&D Losses T&D Loss within Extent of reduction (%) Year KSEB system (%) Yearly Cumulative 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 30.76 29.08 27.44 24.95 22.96 21.47 20.02 18.83 17.71 16.09 15.65 1.68 1.64 2.49 1.99 1.49 1.45 1.19 1.12 1.62 0.44 1.68 3.32 5.81 7.8 9.29 10.74 11.93 13.05 14.67 15.11

5.1.2 The total T&D losses of KSEB include the transmission losses in the transmission system from 400KV to 33 kV and also the distribution losses from 11 kV upto LT system. While approving the order on ARR&ERC for the year 2012-13, Honble Commission has directed KSEB to study and report the transmission and distribution losses. The details of the loss study conducted by the field office are discussed in the subsequent paragraphs. 5.1.3 By way of consistently reducing the T&D losses, KSEB was able to make substantial savings on the cost of generation and power purchase since the year 2001-02. The details are given below.

Table 5.2

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Reduction in cost of Generation and Power Purchase due to T&D loss reduction
T&D Loss within KSEB system Extent of reduction Savings in Savings in Total Energy (%) Generation & Power sales within Power purchase the State Purchase cost)* Yearly Cumulative (%) 1.68 1.64 2.49 1.99 1.49 1.45 1.19 1.12 1.62 0.44 (%) 1.68 3.32 5.81 7.8 9.29 10.74 11.93 13.05 14.67 15.11 (MU) 8667.32 8873.3 8910.84 9384.4 10269.8 11331 12049.85 12414.32 13971.09 14547.9 15980.53 (MU) (Rs.Cr) 106.3 206.1 367.2 525.6 677.6 817.9 922.3 1120.0 1285.6 1447.0

Year

(%) 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 30.76 29.08 27.44 24.95 22.96 21.47 20.02 18.83 17.71 16.09 15.65

303.58 588.85 1049.24 1501.70 1935.94 2336.94 2635.18 3199.90 3673.33 4134.41

@ average cost of power purchase @ Rs 3.50 per unit.

5.1.4 The total savings in cost of generation and power purchase by way of T&D loss reduction alone for the year 2011-12 was Rs 1447.00 crore. KSEB is one of the few distribution utility in the country having effected 100% metering and also to reduce the total T&D loss level to 15.65%. KSEB has been taking continuous efforts to reduce the T&D losses further. 5.2 Estimation of Transmission and Distribution losses

5.2.1 Honble Commission vide the order dated 28 th April-2012 has issued direction to KSEB to study and report the voltage level losses as well as technical and commercial separation of T&D losses. Board has issued specific directions to the field offices and also to the Chief Engineer (Corporate Planning) to study and report the Transmission and Distribution losses. A brief report on the loss studies conducted by the Board is submitted herewith. 5.2.2 Transmission losses (i) The transmission loss studies were done by the System Study group under the Chief Engineer (Corporate Planning), using the MiPower software. The entire transmission system of KSEB from 440 kV to 33kV was modeled into the system. The studies were conducted after considering the seasonal load flow variations during the year 2011-12. For this, the year was divided into three blocks viz. July-September 2011, October 2011-December 2011 and January-March 2012. The Peak demand profile for various months from July 2011 to
Page

(ii)

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March 2012 was considered for the studies. The morning and evening maximum demand for each month in the respective blocks were taken and maximum of the same was used for analysis purpose. Since the morning peak demand from JulySeptember 2011 appeared to be similar with respect to the other morning demands, it was not considered for the studies. (iii) The transmission losses were estimated for the following five typical load scenarios. (a) Evening peak demand of 3337 MW on 19-03-2012 (b) Evening peak demand of 3145 MW on 21-12-2011 (c) Evening peak demand of 2925 MW on 26-09-2011 (d) Morning peak demand of 2635 MW on 21-03-2012 (e) Morning peak demand of 2472 MW as on 14-12-2011 (iv) Case-1 The transmission losses at different voltage levels of the above five different load simulation studies are detailed below. Evening peak demand of 3337 MW on 19-03-2012
Total load flow out of Weighted average the peak demand losses up to the through the Observed losses Losses respective voltage respective voltage level system (MW) (MW) (%) (%) 405 1940 3064 1074 522 2.63 61.49 57.60 24.60 8.30 0.65 3.17 1.88 2.29 1.59 0.65 3.25 3.80 5.94 5.97

Transmission system

400kV 220kV 110kV 66kV 33kV

Case-2

Evening peak demand of 3145 MW on 21-12-2011


Total load flow out of the peak demand through the respective voltage system (MW) 478 2397 2676 984 455 Observed losses (MW) Weighted average losses up to the Losses respective voltage level (%) 0.58 2.39 1.91 2.16 1.53 0.58 2.48 3.82 5.70 5.74

Transmission system

400kV 220kV 110kV 66kV 33kV

(%) 2.77 57.30 51.12 21.26 6.96

Case-3

Evening peak demand of 2925 MW on 26-09-2011

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Total load flow out of the peak demand Observed Transmission system through the losses respective voltage system (MW)
400kV 220kV 110kV 66kV 33kV

Losses

Weighted average losses up to the respective voltage level 0.46 4.66 4.03 5.81 6.03

(MW) 348 1357 2676 972 421

(%) 1.60 62.57 49.23 18.75 6.36

(%) 0.46 4.61 1.84 1.93 1.51

Case-4

Morning peak demand of 2635 MW on 21-03-2012


Losses Weighted average losses up to the respective voltage level 0.70 3.32 3.52 5.43 5.36

Total load flow out of the peak demand Observed Transmission system through the respective losses voltage system (MW)
400kV 220kV 110kV 66kV 33kV

(MW) (%) 439 3.07 1678 53.69 2418 33.12 842 17.01 406 5.28

(%) 0.70 3.20 1.37 2.02 1.30

Case-5 Morning peak demand of 2472 MW as on 14-12-2011


Weighted Total load flow out of average losses the peak demand up to the through the respective Observed respective Transmission *system voltage system losses Losses voltage level (MW) (MW) (%) (%) 400kV 476 3.00 0.63 0.63 220kV 2012 50.91 2.53 2.65 110kV 2082 30.40 1.46 3.64 66kV 740 14.06 1.90 5.31 33kV 355 4.55 1.28 5.26

(v)

It is seen from the above table that, the average transmission losses upto 110 kV is more than 3.80% and 66 kV is more than 5.70% during evening peak hours.

5.2.3 Distribution losses (i) HT Losses KSEB has issued directions to all the Deputy Chief Engineers to conduct the HT level loss studies on one urban feeder and one rural feeder under each circle. It is noticed that, there is wide variations on the HT losses reported from the field. However, the losses in each feeder
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depend on the type of loading, length of the line etc. The median value of the HT losses is in the range of 6.90% to 7.60%. (ii) LT losses All the Distribution Deputy Chief Engineers were directed to identify three LT feeders under each circle one lightly loaded feeder, one medium loaded feeder and one heavily loaded feeder. It is seen that, the LT losses of the KSEB system is about 11.50%. The details of loss study had already been reported to the Commission vide letter dated 27.12.2012. The segregation of the total LT losses among technical and commercial losses is yet to be finalized. 5.3 Efforts for T&D loss reduction for the year 2012-13 and 2013-14 5.3.1 As part of curtailing technical losses and system improvement, KSEB propose to add more substation and lines in the transmission system. The details are given below. (a) Transmission 5.3.2 As on 31-03-2012, 2 numbers of 400 kV s/s, 17 numbers of 220 kV s/s, 13 nos of 110 kV s/s, 80 nos of 66 kV s/s and 120 nos of 33 kV s/s are existing in the KSEB system. 5.3.3 The summary of the transmission substation and lines commissioned since the year 2003-04 for system improvement and loss reduction is given below.
Table 5.3 Details of substations and lines commissioned during the period from 2003-04 to 201-12 Particulars 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Substations Numbers 220 kV 1 1 1 1 2 110 kV 6 8 4 2 4 2 9 5 3 66 kV 3 2 4 3 1 1 33 kV 7 15 10 10 13 16 18 7 7 Sub total 17 26 19 15 19 18 29 13 10 Lines Ckt.km 220 kV 4.3 15 56 1.01 18.3 11.38 110 kV 154.6 30 55 30 56.38 17.5 48.3 65.2 0.89 66 kV 8.4 5 13 15 11.13 0.1 33 kV 95.4 157 131 95 105.44 169.3 199.2 70.8 75.65 Sub total 262.7 207 255 140 173.96 186.8 265.8 136.1 87.92

5.3.4 Further during the year 2011-12, the capacity of the existing substations has been enhanced as follows. (i) 220 kV s/s- capacity has enhanced by 25 MVA (ii) 110 kV s/s - capacity enhanced by 99 MVA (iii) 66 kV s/s - capacity enhanced by 78.7 MVA (iv) 33kV s/s - capacity enhanced by 5 MVA

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5.3.5 Substations and lines proposed for the year 2013-14 and the revised target for the current year are given below.
Table 5.4 Details of substations and lines proposed for the year 2012-13 and 2013-14 Particulars Substations 220 kV 110 kV 66 kV 33 kV Sub total Lines 220 kV 110 kV 66 kV 33 kV Sub total Revised target Target for the for 2012-13 year 2013-14 (Numbers) 1 1 5 10 3 3 7 5 16 19 (Kilometers) 113.17 26 97.17 129.74 2.53 68.6 281.47 0.30 72.95 228.99

(b)

Distribution

5.3.6 Details of the distribution works done for system improvement and loss reduction carried out since the year 2003-04 are as detailed below.
Table 5.5 Achievement of Distribution works
Particulars 11 kV lines (km) LT Line (km) Distribution Transformers (nos) 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 1269 955 1062 1820 1807 3018 3398 3645 2572 4429 1063 6074 1882 7441 1751 8229 2124 8128 2553 7636 4109 7837 5790 6929 5800 4089 4375

5.3.7 The summary of the distribution works proposed for system improvement works and loss reduction are detailed below.
Table 5.6 Details of Distribution works proposed for the year 2012-13 and 2013-14
Work 11 kV Line extension (km) Transformer installation (Nos.) LT Line extension (km) 1-ph to 3-ph Conversion (km) Target 3500 4500 5000 6000 2012-13 Achievement till Sep-2012 992 1545 1793 2519 Revised Target 3325 3843 5000 4405 Target for 2013-14 3250 3750 5000 4500

(c)

Efforts taken for commercial loss reduction

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5.3.8 Over the years, KSEB has been giving due thrust for commercial loss reduction, through following efforts. (i) Replacement of faulty and sluggish electromechanical meters with good electronic meters. (ii) Intensive power theft detection by the anti power-theft squad. (iii) Computerisation of billing and revenue collection. (iv) Enlarging energy audit. 5.3.9 The number of faulty meters replaced during the last few years is given below:
Table 5.7 Faulty meters replaced (Lakhs) Year Numbers (in Lakhs) 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 4.21 8.67 4.35 6.38 2.69 5.8 6.44 10.21 7.09 6.16

5.3.10 Revised target for meter replacement for the current year is 10.30 lakhs and the target for the year 2013-14 is 7.50 lakhs. During the year 2012-13 up to 30-09-2012, KSEB had replaced 5.01 lakhs of meters. 5.3.11 The performance of the Anti Power Theft Squad (APTS) for theft detection is detailed below.
Table 5.8 Performance of APTS Amount Amount No of theft No of Assessed Realised cases Inspections Registered (Rs.Cr) (Rs. Cr) 6215 52 5.69 3.45 7888 93 17.48 3.82 14354 275 12.27 5.24 10287 365 40.46 8.11 15611 981 21.69 9.82 16221 1895 12.73 11.04 16.93 18606 1144 10.50 15792 504 29.58 18.97 17936 369 30.63 20.47 23479 2980 15.56 11.85 24090 336 17.39 11.35 14388 241 18.46 10.46

Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (up to Nov)

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(d) Loss reduction targets for the year 2012-13 and 2013-14 5.3.12 As detailed under Table-5.1 above, KSEB has achieved an overall T&D loss reduction of 15.65% as on 31-03-2012. This is inclusive of the losses in the transmission system which is about 5.7% of the total loss. Excluding the transmission loss, the loss in the distribution system is about 11.78%. 5.3.13 It is submitted before the Honble Commission that, the T&D loss in the system is heavily dependent on the power flow in the system; especially the abnormal increase in the peak demand and the resultant over loading in the system may lead to increase the T&D loss further. Hence, the prime target of the Board is to maintain the loss reduction already achieved. 5.3.14 However, with the ongoing and continuous efforts on loss reduction, KSEB target to reduce the T&D loss during the year 2012-13 by 0.43% over the same achieved during the year 2011-12 and further 0.32% during the year 2013-14. Thus, the targeted T&D loss as on 31-032013 would be 15.23% and the same as on 31-03-2014 would be 14.91%. 5.3.15 It is submitted that, due to the ongoing restriction on all categories of consumers, especially the reduction in consumption by HT&EHT consumers, the actual loss may be less than the revised target. 5.3.16 Honble Commission may kindly note that, KSEB has already achieved the T&D loss at 15.65% during the year 2011-12. Further loss reduction can be achieved mainly through improving HT-LT ratio of the Kerala power system. However, there is public resistance against drawing HT lines, procuring land for installing substations and transformer points etc. Hence, KSEB has being facing difficulties in improving the HT-LT ratio further. Further, most of the Hydel projects of the State are located at hilly and remote areas, far away from load centres. This has necessitated for lengthy transmission system to evacuate power from the generation plants to the load centres. Moreover, KSEB has reduced the commercial losses to a considerable extent by replacing the faulty and sluggish meters with electronic meters and also through intensified APTS activities. Though KSEB has been continuing its efforts on commercial loss reduction, the loss reduction expected is marginal only. Considering these facts, KSEB may submit before the Honble Commission to approve the realistic loss reduction targets as proposed by KSEB. (e) Collection efficiency 5.3.17 For the year 2011-12, the annual collection efficiency of HT & EHT consumers is 97.16% and that of LT consumers is 98.11% and the over all collection efficiency is 97.83%. The majority of the arrears are from Government departments. However, KSEB is accounting all the revenue on accrual basis.

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5.3.18 With the collection efficiency of 98%, the overall AT&C loss target for the year 2012-13 is 16.93% and the target for the year 2013-14 as 16.61%. 5.3.19 The T&D loss achieved since the year 2003-04 to 2011-12 and the target proposed for the year 2012-13 and 2013-14 is detailed below.
Table 5.10 Technical & Commercial Loss reduction
Sl No. Items KSEB own Generation Energy generated (MU) 1.(a) (gross incl. Hydro, Wind, KSEB thermal)) 1.(b) Aux . Consumption 1.( c) Net energy generation 2 Power Purchase 8015.41 6390.74 6700.27 8149.84 8074.62 9628.98 10199.96 10512.29 11270.71 15049.78 15204.84 Total Power purchase 2.(a) (MU) at Generator Bus (including Ext. loss) Addl power purchase 2(b) to meet the shortage 1 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

4488.06 48.10 4439.96

6377.06 48.08 6328.98

7600.78 46.42 7554.36

7745.78 50.66 7695.12

8703.55 55.86 8647.69

6494.50 54.06 6440.44

7240.38 50.87 7189.51

7412.59 55.13 7357.46

8350.74 60.85 8289.89

5630.98 37.98 5593.00

6913.47 41.91 6871.56

0.00 0.00 External PGCIL Line 174.50 214.93 287.64 370.10 310.40 Loss 312.57 357.53 401.73 413.21 375.45 Net Power purchase at 2.( d) KSEB bus 2(a) + 2 (b)7840.91 6175.81 6412.63 7779.74 7764.22 9316.41 9842.43 10110.56 10857.50 14674.33 2(c ) Total energy generated and power 3 12455.37 12719.72 14254.63 15844.96 16722.31 16069.42 17389.47 17869.75 19560.60 20642.78 purchased by KSEB 1( c) + 2(a) Energy sales through 4 NVVN & PTC 635.90 1046.89 1346.76 463.33 53.90 130.24 201.10 0.00 (displacement mode) Total Energy to be generated & purchased 5 for KSEB for sale 12455.37 12719.72 13618.73 14798.07 15375.57 15606.09 17335.57 17739.51 19359.50 20642.78 within the state (3)(4) Energy sales with in 6 8910.84 9384.40 10269.80 11331.00 12049.85 the state 12414.32 13971.09 14547.90 15980.53 17181.21 Total energy loss 7 including PGCIL line 3544.53 3335.32 3348.93 3467.07 3325.72 3191.77 3364.48 3191.61 3378.97 3461.57 loss(MU) = (5)- (6) 2.(c) 8 9 Total energy Loss (incl. PGCIL Line losses) in percentage - (7)/(5) 28.46% 26.22% 24.59% 23.43% 21.63% 20.45% 19.41% 17.99% 17.45% 16.77%

419.68 14785.16

22076.40

0.00

22076.40

18428.46 3647.94

16.52%

10

11 12 13

Extent of Reduction (%) 1.95% 2.24% 1.63% 1.16% 1.80% 1.18% 1.04% 1.42% 0.54% 0.68% 0.24% Energy generated and Power purchase to the KSEB system (excl. 12280.87 12504.79 13331.09 14427.97 15065.15 15293.51 16978.03 17337.78 18946.29 20267.33 21656.72 external loss) 1( c)+ 2(d ) Energy loss in the KSEB system (internal) (MU) = 3370.03 3120.39 3061.29 3096.97 3015.30 2879.19 3006.94 2789.88 2965.76 3086.12 3228.26 (10)-(6) Internal energy loss (with in KSEB system) 27.44% 24.95% 22.96% 21.47% 20.02% 18.83% 17.71% 16.09% 15.65% 15.23% 14.91% (%) = (11)/(10) Extent of Reduction of T&D loss with in KSEB 1.64% 2.49% 1.99% 1.50% 1.45% 1.19% 1.12% 1.62% 0.44% 0.43% 0.32% system (%)

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CHAPTER-6

REVIEW OF GENERATION AND POWER PURCHASE FOR THE YEAR 2012-13


6.1 Introduction 6.1.1 The Honble Commission, vide the order dated 28 th April-2012 on ARR & ERC, has approved the cost of generation and power purchase for the year 2012-13 as Rs 5201.64 crores as against Rs 5659.19 crores projected by the Board. The summary of the generation and power purchase proposed by the Board and approved in the ARR is given below.
Table-6.1 Generation and Power Purchase proposed and approved for the year 2012-13
Quantum of energy Amount (Rs in Crore) KSERC KSERC Differenc KSEB Differen KSEB ARR Approv Approv e ARR ce al al (Rs. (MU) (MU) (MU) (Rs. Cr) (Rs. Cr) Cr) 6992.9 6 34.96 6958.0 0 88.00 117.00 205.00 9.00 196.00 9650.0 0 622.00 0.00 20.00 74.00 119.00 835.00 1599.0 0 19238. 00 154.02 -665.28 181.34 0.00 27.58 -0.46 -0.32 208.14 414.26 111.14 378.10 3143.85 1054.08 71.50 56.99 23.09 25.63 1231.29 905.97 5659.21 193.15 3291.0 8 850.24 71.50 27.28 23.09 25.62 997.73 719.69 5201.6 5 184.95 -147.23 203.84 0.00 29.71 0.00 0.01 233.56 186.28 457.56

Sl No.

Particulars

Hydro (a) Gross Gen (b) Less Aux consumption (c) Net Hydro Gen 6992.96 34.96 6958.00 122.00 237.00 359.00 8.98 350.02 8984.72 803.34 0.00 47.58 73.54 118.68 1043.14 2013.26 19349.14 0.00 0.00 0.00 34.00 120.00 154.00 130.91 247.19 378.10 80.19 112.96 193.15 50.72 134.23 184.95

KSEB thermal (a) BDPP (b) KDPP (c) Subtotal (d) Less Aux consumption (e) Net BDPP+KDPP

3 4

CGS at KSEB periphery IPPs (a) RGCCPP-Kylm (b) BSES (c) KPCL (d) Wind (e) Ullumkal, MP Steel and Others (f) Sub total

5 6

Purchase through traders Net Energy Gen&PP

6.1.2 The cost of generation and power purchase approved by the Honble Commission was less by Rs 457.56 crores over the same projected by the Board. 6.1.3 The power situation in the State has become most critical due to the combined impact on the following factors.

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(i)

Failure of the south-west monsoon and consequent reduction in inflow and hydel generation. (ii) Excessive increase in energy demand over the same approved by the Commission. (iii) Reduction in power allocation from Central Generating Stations (CGS) (iv) Delay in commissioning of Kudamkulam Nuclear Power Project (v) Excessive increase in the prices of energy exchange and day ahead market. (vi) Limitations on importing power from outside the State. (vii) Transmission constraints in the southern region and difficulty in getting open access. (viii) High price of energy available from liquid fuel stations. (ix) 6.2 Reduction in generation from CGS due to coal shortages.

Failure of the south-west monsoon and consequent reduction in inflow and hydel generation.

6.2.1 Though the monsoon started in the State during 1 st week of June2012, so far the monsoon received is far below the normal. This had a dual impact on the power situation of the State as follows. (i) (ii) Availability of hydel power has been considerably reduced. The electricity demand in the State has been continuing as that in the summer months.

6.2.2 A comparison of the inflow received during the period from 1st June2012 up to 16th December -2012 is detailed below. Table-6.2. Reduction on the inflow received
Month Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-2012 (up to 16th) Total Inflow Inflow Percentage of Reduction expected received reduction (MU) 755.86 1513.72 1320.06 892.58 822.36 573.46 132.63 6010.67 (MU) 340.07 726.85 893.79 744.06 435.67 245.73 59.31 3445.49 (MU) 415.79 786.87 426.27 148.52 386.69 327.73 73.32 2565.18 55.01 51.98 32.29 16.64 47.02 57.15 55.28 42.68

As detailed above, the reduction on hydel availability due to the failure of monsoon is to the extent of 2565.18 MU, i.e., the reduction is as high as 42.68% of the average inflow anticipated.
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6.2.3 Even though KSEB has been limiting the hydel generation at less than 10 Million Units per day, the present reservoir storage position as of now is the worst compared to the previous years. The details are given below.
Table 6.3 Reservoir storage position as on 16th December
Year 2012 2011 2010 2009 2008 Storage (MU) Percentage of total Comparison of the present storage storage capacity with that of previous years (%) (MU) 44.68 78.491.76 times the present 87.721.96 times the present 76.821.72 times the present 1.45 times the present storage. 64.75Draught year- power restrictions imposed

1849.80 3249.50 3631.60 3180.20 2680.66

6.2.4 Anticipating average inflow for the remaining months of the water year up to 31st May-2013, possible daily generation is detailed below.
Table 6.4 Possible hydro generation for the remaining periods of the Water Year 2012-13 1762.42 Storage as on 28-12-2012 (MU) Inflow scenario
Inflow expected for the remaining Months (MU) Dec-2012 (29-12-2012 to 31-12-2012) Jan-13 Feb-13 Mar-13 Apr-13 May-13
Sub total Total water available for generation till 31-5-2013 = (1)+(2) (MU) Balance storage to be kept as on 1-6-2012 (to meet the contigency) (MU) Net water available for generation upto 31-052013= (3)- (4) (MU) Average daily hydro generation possible for the remaining days till (MU

Average (10 year avg) 24.90 136.59 90.99 89.28 106.74 172.23

Less by 10% Less by 20% Less by 30% Less by 40% over the avg. over the avg over the avg over the avg 22.41 122.93 81.89 80.35 96.07 155.01 19.92 109.27 72.79 71.43 85.39 137.79 17.43 95.61 63.70 62.50 74.72 120.56 14.94 81.95 54.60 53.57 64.04 103.34

620.74 2383.16 550.00 1833.16 11.90

558.66 2321.08 550.00 1771.08 11.50

496.59 2259.01 550.00 1709.01 11.10

434.52 2196.94 550.00 1646.94 10.69

372.44 2134.86 550.00 1584.86 10.29

3 4 5 6

6.2.5 However, KSEB has to conserve the available water resources in the reservoirs to the maximum possible extent for the use in the extreme

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summer months from February-2013 to April-2013 considering the following. (a) (b) (c) The energy demand is likely to increase up to 64 MU /day during the months of February to March-2013. The energy prices in power exchanges are likely to increase during the summer months in comparison to the present rates. The energy demand of all the Southern States may rise during the summer months and further there may be difficulty in getting open access for sourcing power through traders etc.

6.2.6 The actual hydel generation for the period from April 2012 to November-2012 and the proposed generation from December-2012 to May-2013 are detailed below.
Table-6.5 Hydel generation for the year 2012-13 Hydel generation Hydel generation (actual) Reduction due to (approved by failure of monsoon Remarks For the month MU/day KSERC) (MU) (MU) for the month (MU) 621.20 553.38 18.45 67.82 631.85 666.24 21.49 -34.39 495.35 505.17 16.84 -9.82 519.27 425.45 13.72 93.82 Actual 581.80 427.40 13.79 154.40 598.43 500.35 16.68 98.08 603.77 333.32 10.75 270.45 525.05 252.56 8.42 272.49 554.89 310.00 10.00 244.89 565.99 341.00 11.00 224.99 Anticipated 570.36 377.00 13.46 193.36 725.00 434.00 14.00 291.00 6992.96 5125.87 14.04 1867.09

Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Total

6.3

Excessive increase in energy demand over the same approved by the Commission.

6.3.1 The energy and peak demand in the State shows an excessive growth rate since the year 2011-12 and this has been continuing. While approving the ARR, Honble Commission has approved the energy demand of the State for the year 2012-13 as 19235.00MU as against the unrestricted demand of 20225 MU estimated by the Board. i.e., the energy demand approved by the Commission was less by 990 MU (4.89%) over the same projected by KSEB. The stake holders including the HT&EHT consumers association has been vehemently arguing that the energy demand of the State would be less by 10% over the level projected by KSEB.

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6.3.2 However, even with the restrictions on energy usage imposed during the months of April-2012 and May-2012, the actual energy demand of the State during April and May-2012 has increased by 5.50 % over the demand approved by the Honble Commission. 6.3.3 Aggravating the situation further, due to the failure of monsoon, the energy and peak demand of the State during the monsoon months had remained at high levels as in summer months. A comparison of the month wise energy demand approved by the Commission and the actual demand up to 15th of December-2012 is detailed below.
Table-6.6 Increase in consumption over approval
Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Demand approved (MU/day) 52.93 55.28 48.60 48.55 49.32 50.30 53.11 52.34 54.21 Actual (MU/day) 55.56 57.08 54.08 53.85 52.81 53.97 53.87 53.97 55.00 Increase over approval (%) Remarks

4.96 3.26With restrictions 11.28 10.93 7.08 7.30 1.44 With 1/2 hour load 3.13shedding during morning 1.45and evening peak ours

6.3.4 A comparison of the increase in energy demand over the previous year is detailed below.
Table-6.7 Increase in energy demand over 2011-12 Energy demand (%) of increase (MU/day) Remarks over 2011-12 2011-12 2012-13 51.66 55.56 7.55With 54.38 57.08 4.98restrictions 47.76 54.08 13.23 47.71 53.85 12.87 48.62 52.81 8.63 49.63 53.97 8.74 51.51 53.87 4.58 51.13 53.07 3.93With load 52.59 55.00 4.58shedding

Month Apr May Jun Jul Aug Sep Oct Nov Dec

6.3.5 Further, the restriction on issue of LPG cylinders at subsidized rates may lead to increased usage of induction cookers by domestic consumers. The impact of usage of induction cookers is observed since September 2011 and the trend is increasing, as revealed in the abnormal increase of morning peak.

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6.3.6 Considering the critical power situation of the State, Honble Commission has ordered to impose an hour cyclic load shedding in the morning and in evening peak hours and this has been continuing. The reduction in evening and morning peak demand by imposing load shedding was about 350 MW and 150 MW respectively. Further, the reduction in energy usage through load shedding was about 1.80 MU/day. 6.3.7 With the ongoing load shedding and other regulations on energy usage, the increase in energy demand expected for the remaining months of the year over the actual demand during the previous year 2011-12 was about 5.00%. 6.3.8 The month wise energy demand from January to March during the year 2011-12 and the anticipated demand in the same months of the year 2012-13 is detailed below.
Table 6-8 Anticipated energy demand from January-2013 to March-2013 Energy demand (%) of increase (MU/day) Month over 2011-12 2011-12 2012-13 Jan Feb Mar 52.34 57.02 59.23 54.96 59.87 62.19 5.00 5.00 5.00

6.4

Energy availability from Central Generating Stations

6.4.1 The capacity allocation from CGS as on 01-12-2012 is detailed below. Table 6-9. Allocation from CGS as on 01-12-2012
No. Name of the Station 1 2 3 4 5 6 7 8 9 10 11 12 TALCHER - Stage II NLC- Exp- Stage-1 NLC-II- Stage-1 NLC-II- Stage-2 RSPTS Stage I & II MAPS KAIGA Stg I KAIGA Stg II Simhadri Exp ER ISTS-Jhajjar Vallur JV with Allocated Aux Capacity Target PLF Energy IC (MW) Allocation Consumption to KSEB (%) availability (%) (MW) (MU/day) 2000 21.60% 432.0 6.50% 88.00% 8.53 420 16.38% 68.8 9.50% 80.00% 1.20 630 10.43% 65.7 10.00% 75.00% 1.06 840 11.14% 93.6 10.00% 75.00% 1.52 2600 12.45% 323.6 6.50% 89.00% 6.46 440 5.41% 23.8 10.00% 68.50% 0.35 440 9.33% 41.1 10.00% 75.00% 0.67 440 8.65% 38.1 10.00% 75.00% 0.62 1000 8.76% 87.6 6.50% 85.00% 1.67 1600 2.19% 35.0 6.50% 85.00% 0.67 50.0 10.00% 85.00% 0.92 1500 3.27% 18.0 7.50% 85.00% 0.34 1277.2 24.00

6.4.2 The present energy availability from CGS is about 24.00 MU/day and the average power availability is about 1050 MW. The average energy at KSEB bus after accounting for PGCIL line losses is about 23.00

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MU/day only. This includes the special allocation of 50MW from the Indira Gandhi Super Thermal Power Station at Jhajjar of APCPL. The average cost of electricity from this plant including transmission charges at KSEB periphery is about Rs 5.45 per unit. However, the special allocation of 50 MW from Jhajjar of APCPL is available only up to 31st March-2013. 6.4.3 Further, one unit (500 MW) of the Vallur JV project has already been commissioned by the end of November-2012. KSEB has an allocation of about 17.95 MW from the 1st unit of Vallur JV. One unit (1000MW) of Kudamkulam Nuclear Power plant is scheduled for commissioning during the month of December-2012 and KSEB has an allocation of 133 MW from this plant. With the commissioning of Vallur JV and Kudamkulam Power plant, the energy availability from CGS is likely to be increased to 26.00 MU/day from January-2013 onwards. 6.5 Arrangements already made to procure power through traders & energy exchanges and UI

6.5.1 KSEB has already made arrangements to procure power through traders at competitive rates. The details are given below.
Table-6.10 Short-term arrangement made for power procurement through traders
Month July-2012 to May-2013 October-2012 to May-2013 Trader/ source M/s NVVN MW arranged 300 MW RTC power Rate at KSEB periphery Rs 4.47per unit Rs 4.45 per unit Rs 4.82 per unit

M/s PTC 200 MW RTC power M/s Global Energy Pvt 150 MW- 05:00 to Ltd 23:00 hrs

6.5.2 However, due to transmission constraints, KSEB could get short-term open access in the range of 100 to 150 MW only. The same trend is likely to be continued till May-2013. The average energy availability is about 3.00 MU/day. 6.5.3 Further, KSEB has been procuring up to 250 MW and an average 4 MU/day through energy exchanges at the rates between Rs 6.50 to Rs 7.00 per unit. Further, KSEB expect about 1.00 MU/day as UI. 6.5.4 Thus, KSEB has taken all possible efforts to make available 8.00 MU/day from short-term market including traders and energy exchanges. However, if the commissioning of the Kudamkulam plant gets delayed, it may affect the energy procurement through traders and energy exchange. 6.6 Demand and supply position during the period from December2012 to May -2013

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6.6.1 The energy demand and availability for the remaining months of the water year, after duly considering the reduction in hydel availability due to failure of monsoon, energy availability from CGS, power procurement through traders etc, is estimated in anticipation of the continuance of the prevailing hour load shedding during morning and evening peak hours. 6.6.2 The energy demand, energy availability from hydel, CGS, energy schedule from liquid fuel stations, and the balance to be met from traders and energy exchange is given below.
Table-6-11 Energy demand and availability/ target from other sources for the period from December2012 to May-2013
Hydro Month (MU) (MU) 10.0 10.9 13.4 13.9 11.8 11.7 (MU) 25.0 26.0 26.0 26.0 26.0 26.0 BDPP + KDPP Kayamkulam (MU) (MU) 0.4 0.4 0.3 0.4 0.4 0.5 1.5 1.5 1.5 1.5 1.3 1.3 CGS Small IPPS Liquid Fuel stations Traders & Exchange/ shortages Total (MU) 12.0 9.7 12.2 13.9 13.3 14.9 (%) of power from liquid fuels & traders on the total consumption 55.3 55.0 59.9 62.2 59.8 61.4 36.1 32.1 33.7 35.2 36.1 37.7

Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13

6.5 6.5 6.5 6.5 7.0 7.0

6.6.3 As detailed above, KSEB has to procure about 21 to 23 MU per day from costly sources, including liquid fuel stations and traders, in order to meet the anticipated energy demand of the State. 6.6.4 Due to the excessive increase in cost of liquid fuels, the variable cost of generation from the liquid fuel stations is detailed below.
Table-6-12 Details of liquid fuel stations Total Capacity Energy Sl No Name of the Station capacity available availability (MW) (MW) (MU/day) 1RGCCPP 2BSES 3KPCL 4BDPP 5KDPP Total 360.0 157.0 20.0 106.6 128.0 771.6 330.0 157.0 13.0 40.0 80.0 613.0

Approx. rate (Rs/kWh) 11.36 11.35 10.76 10.39 10.84

7.68 3.49 0.30 0.35 1.20 13.03

6.6.5 The average clearing price of energy exchanges was in the range of Rs 6.50 per unit to Rs 7.50 per unit during the period from July-2012 to November-2012. 6.6.6 Considering the excessive variable cost of liquid fuel stations and increase in the clearing prices at energy exchanges, KSEB is likely to

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incur huge additional liability for procuring power from these sources. 6.7 Anticipated increase in cost of generation and power purchase for the period from December-2012 to March-2013 6.7.1 The summary of the likely increase in generation and power purchase for the period from December-2012 to March-2013 is detailed below.
Table-6-13 Likely increase on Generation &Power Purchase for the period from December-2012 to March-2013 over approval
Particulars KSERC approval (MU) Hydel (net) BDPP + KDPP (net) Central Generating station (at KSEB ) Kayamkulam BSES & KPCL Small IPPs Traders/ exchanges Total 2404.17 87.92 3489.93 279.34 6.64 44.34 402.73 6715.06 Quantity Availability/ proposed (MU) 1456.87 182.87 3109.38 784.08 0.00 44.34 1444.10 7021.63 Amount Excess / short fall (MU) -947.30 94.95 -380.55 504.74 -6.64 0.00 1041.37 306.57 9.66 3.41 12.82 56.73 2.33 4.50 2.78 84.95 1191.34 358.05 37.67 10.31 181.23 1863.55 11.42 3.20 12.10 1.62 6.00 4.35 208.90 994.99 948.68 30.56 7.19 866.45 3056.77 123.95 -196.35 590.63 -7.11 -3.12 685.22 1193.22 Approved Unit rate Amount (Rs/kWh) (Rs. Cr) Anticipated Excess over approval

Unit rate Amount (Rs. (Rs. Cr) (Rs/kWh) Cr)

6.7.2 As detailed above, the cost of generation and power purchase is likely to increase by Rs 1193.22 crore for the remaining months of the year for meeting the energy demand without any regulation on power usage other than the ongoing hour cyclic load shedding. 6.7.3 Above computation is made on the presumption that, the average rate of power purchase from traders and energy exchanges etc at Rs 6.00 per unit. However, if the commissioning of the Kudamkulam plant is delayed and the power shortages in the Southern grid continue as such, it is likely that energy prices in short-term markets including energy exchanges would be shooting up. 6.8 Increase in cost of generation and power purchase incurred over the approved level. 6.8.1 The increase in cost of generation and power purchase over the same approved by the Commission on account of the reduction in hydel availability and the consequent increase in demand and excessive energy prices of short-term markets for the period from April-2012 to November-2012 is detailed below.

Table 6-14

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Additional amount incurred for Generation and Power purchase over the approved level during the period from April-2012 to November-2012 Excess over KSERC approvals Actuals approval Particulars
Quantity (MU) 1 2 KSEB Hydel KSEB Thermal (i) BDPP (ii) KDPP Subtotal CGS (at KSEB periphery) IPPs RGCCPP BSES KPCL Wind Other IPPs Subtotal 5 Traders & UI Total 340.72 0.00 13.28 65.27 82.68 501.95 1187.11 12517.87 492.74 57.2 18.14 20.49 17.91 606.48 534.2 3335.27 13.66 3.14 2.17 12.08 4.50 2.66 14.46 873.62 21.92 17.06 51.69 55.83 1020.12 2632.03 13282.94 1117.14 86.20 5.09 20.39 12.97 1241.78 1377.90 4768.25 2.98 3.94 2.32 12.17 5.24 3.59 12.79 49.98 64.71 114.69 6160.94 45.53 62.43 107.96 2086.63 9.11 9.65 9.41 3.39 37.75 268.22 305.97 5675.51 39.29 292.90 332.19 1816.38 10.41 10.92 10.86 3.20 4553.18 Amount (Rs. Cr) Avg. Rate (Rs/kWh) Quantity (MU) 3649.31 Amount (Rs. Cr) Avg. Rate (Rs/kWh) Quantity (MU) Amount (Rs. Cr)

-903.87 -12.23 203.51 191.28 -485.43 532.90 21.92 3.78 -13.58 -26.85 518.17 1444.92 765.06 -6.24 230.47 224.23 -270.25 624.40 29.00 -13.05 -0.10 -4.94 635.30 843.70 1432.98

3 4

6.9

Likely increase in cost of generation and power purchase for the year 2012-13. 6.9.1 The likely increase in cost of generation and power purchase for the year 2012-13 over the approved level, due to reduction in hydel availability, transmission constraints on importing power from outside the State, increase in cost of liquid fuel stations, is detailed below.
Table 6.15 Likely increase in generation and power purchase for the year 2012-13
Quantity Particulars KSERC approval (MU) Hydel (net) BDPP + KDPP (net) Central Generating station (at KSEB periphery) Kayamkulam BSES & KPCL Small IPPs Traders/ exchanges Total 6957.99 199.73 9650.88 622.62 20.00 192.22 1589.85 19233.29 Availability/ proposed (MU) 5112.05 479.26 8849.12 1642.12 38.08 158.97 3985.73 20265.33 Excess / short fall (MU) -1845.94 279.53 -801.76 1019.50 18.08 -33.25 2395.88 1032.04 192.93 3277.97 850.80 113.08 48.72 715.43 5198.93 Approve d (Rs. Cr) Amount Anticipated (Rs. Cr) Excess over approval (Rs. Cr) 353.78 -379.31 1227.12 15.74 -7.86 1416.72 2626.19

546.71 2898.66 2077.92 128.82 40.86 2132.15


7825.12

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6.9.2 The source wise details of generation and power purchase likely to be incurred during the year 2012-13 are detailed under DATA-FORMF2. 6.10 Regulations imposed in the State for reducing the additional liability on Generation and Power purchase.

6.10.1 Considering the critical power situation of the State and also considering the corridor constraints for procuring power from outside the State and lack of adequate fund for additional generation and power purchase from liquid fuel stations, the Kerala State Electricity Regulatory Commission (KSERC) vide the order dated 12.12.2012 has ordered to impose power restrictions on electricity usage in the State during the period from 15-12-2012 to 31-05-2013 as briefed below. (a) There shall be restrictions on usage of power by all categories of consumers, except Railway Traction, Public lighting, LT VI (D) Nondomestic, and LT (V) Agriculture to the extent specified below. Each unit of consumption beyond the prescribed limits will attract penalty of an amount equal to the per unit rate of energy charges at the applicable tariff. There shall be no restriction on maximum demand but excess above Contract Demand shall be charged at 3 times the applicable demand charges during this period. All HT/EHT Consumers who has been provided exclusive feeders shall limit their energy consumption to 75% of their base average consumption in the previous year. Consumption beyond this shall attract penalty as at (a) above. All HT Consumers who are provided supply through combined feeders and coming under cyclic load shedding shall limit their consumption to 80% of their base average consumption in the previous year. Consumption beyond this shall attract penalty as at (a) above. All LT-II, LT-IV, LT-VI (A), (B) & (C), LT-VII (A), (B) & (C) category consumers shall limit their consumption to 80% of their base average consumption in the previous year. Consumption beyond this limit shall attract penalty as at (a) above. All consumers under LT-1 (LT IA Domestic and LT IB) category shall limit their monthly consumption to 300 units. Consumption beyond this limit shall attract penalty as at (a) above. These restrictions shall be applicable to the consumers of all the Licensees in the State. The restrictions shall be effective from 15/12/2012 to 31/5/2013. The Commission may suo-moto review the power situation and adequacy/continuation of restrictions every month. KSEB shall submit all supporting data for the review by 15th of every month.

(b)

(c)

(d)

(e)

(f)

(g) (h)

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(i)

For estimating the base average consumption, 12 months up to 30 th September 2012 excluding the two months of April and May 2012 (i.e. from August 2011 to September 2012), shall be reckoned. Base average shall be arrived at by estimating the average excluding the months of minimal consumption, and then arriving at the base average by leaving out the months of consumption above or below 30% of that average. Months of minimal consumption means the months where the consumption is below 5% of the average of 3 months highest values during the period of reckoning. However, for LT consumers if such average is below 105 units /kW, the norm of 105 units/kW of connected load shall be applied and quota shall be fixed accordingly. In the case of new consumers who availed power connection from April 2012 onwards, the base average consumption shall be fixed as 250kWh/kVA of contract demand for HT consumers and 400kWh/kVA of contract Demand for EHT consumers. For new LT consumers other than domestic category, who have started operation from April 2012, the base average consumption shall be fixed as 105kWh/kW of connected load. However, for new consumers under TOD system the base average consumption shall be 200kWh/kVA of contract demand. The Board shall constitute empowered Grievance Redressal Committees at the Head Quarters for HT/EHT consumers and at Circle level for LT consumers consisting of senior officers for addressing all genuine complaints regarding base average calculations and permissible limits. The Licensees other than KSEB shall follow the same principles as above in base average calculations for power restrictions. Additional revenue from consumers towards penalty shall be transferred to KSEB promptly on a monthly basis. All licensees including KSEB shall indicate the base average, permissible limit, excess consumption and penalty levied etc., separately in the bills issued to the consumers. Licensees shall take steps to resolve the disputes or doubts of the consumers on this issue in a time bound manner, without causing hardship to the consumers. All the amounts collected as penalty shall be accounted in a separate head and this will be offset against the Fuel surcharge to be collected from July 2013 due to variations in Hydro Thermal mix in accordance with the Sections 12 and 13 of KSERC (Fuel Surcharge) Regulations 2009.

(j)

(k)

(l)

(m)

(n)

(o)

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CHAPTER - 7

GENERATION AND POWER PURCHASE FOR THE YEAR 2013-14


7.1 7.1.1 Introduction As detailed under Chapter-6, the power situation in the State has become most critical due to the combined impact of the following factors. (i) Failure of the south-west monsoon and consequent reduction in inflow and hydel generation. (ii) Excessive increase in energy demand over the same approved by the Commission. (iii) Reduction in power allocation from Central Generating Stations (CGS) (iv) Delay in commissioning of Kudamkulam Nuclear Power Project. (v) Excessive increase in the prices at energy exchange and day ahead market. (vi) Limitations in importing power from outside the State. (vii) Transmission constraints in the southern region and difficulty in getting open access. (viii) High price of energy available from liquid fuel stations. (ix) Reduction in generation from CGS due to coal shortages. However, KSEB expects normal monsoon and also expects that all the ongoing Central Generating Stations will start commercial operation as per the schedule. A detailed appraisal of the energy availability from various sources including hydel, CGS, Wind and Small IPPs, possibility of procuring power through traders and energy exchange, review on the rising trend of energy price of CGS etc are given in detail in the subsequent paragraphs.

7.1.2

7.2 Review of Energy Demand 7.2.1 The energy demand and peak demand in the State has been showing an unprecedented increase during the recent years. The energy demand from June to September-2012 shows an excessive increase of 8 to 13% over the actual demand for the year 2011-12. However, on request of the Board and also as ordered by the State Commission, KSEB has imposed hour cyclic load shedding through 11 kV feeders in the State since 27 th September-2012. Further, considering the critical power situation of the State, Honble Commission has ordered to impose certain restrictions on energy usage in the State from 15th December-2012 to 31st May-2013. Through the load shedding and power restrictions imposed in the State, the increase in energy demand expected for the remaining months up to May-2013 is about 5.00% over the energy demand of the previous year. Further, due to the ongoing cyclic load shedding,
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the peak demand in the State can be maintained as that of last year.
2010-11 Month
Demand (internal) (MU)

Table 7.1 Comparison of Energy demand 2011-12 2012-13


Demand (internal) (MU) % of increase over previous year Demand (internal) (MU) % of increase over previous year Remarks

2013-14
Demand (internal) (MU) % of increase over previous year

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

48.76 49.72 44.69 43.53 44.65 46.65 46.36 48.25 47.46 49.06 49.77 54.81

51.66 54.38 47.76 47.71 48.62 49.63 51.51 51.13 52.59 52.34 57.02 59.23

5.95% 9.35% 6.87% 9.61% 8.89% 6.38% 11.11% 5.96% 10.82% 6.68% 14.58% 8.07%

55.56 57.08 54.08 53.85 52.81 53.97 52.79 53.14 55.22 54.96 59.87 62.19

7.55% 4.98% 13.23% 12.87% 8.63% 8.74% 2.48% 3.93% 5.00% 5.00% 5.00% 5.00%

Actuals

Anticipated

58.33 59.94 56.78 56.55 55.45 56.67 57.54 57.92 60.19 59.90 65.26 67.79

5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%

Table 7.2 Comparison of peak demand


2010-11 Month Actual (MW) 2011-12 % of increase over previous year 2012-13 % of increase over previous year 2013-14 % of increase Actual (MW) over previous year

Actual (MW)

Actual (MW)

Remarks

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2837.03032.38 2930.03031.10 2830.02874.40 2675.02896.14 2730.02898.44 2789.02952.76 2812.03012.10 2832.03107.40 2930.03145.18 2918.03096.70 2960.03221.00 3119.03347.94

6.89% 3.45% 1.57% 8.27% 6.17% 5.87% 7.12% 9.72% 7.34% 6.12% 8.82% 7.34%

3071 3181 3182 3168 3250 3158 3037 2993 3097 3044 3179 3316

1.274 4.945 10.701 9.387 Actuals 12.129 6.951 0.827 -3.682 -1.538 -1.688 Anticipated -1.314 -0.961

3043 3092 3341 3326 3413 3316 3310 3173 3283 3227 3369 3515

-0.9 -2.8 5.0 5.0 5.0 5.0 9.0 6.0 6.0 6.0 6.0 6.0

7.2.2

With the present trend of increase in energy and peak demand, the annual energy requirement for the year 2013-14 is likely to be 21656.70MU and the maximum peak demand would be 3515 MW as detailed below.

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Table 7-3 Anticipated energy and peak demand for the year 2013-14 Energy demand Peak demand Month MU for the month MU/ day (MW) Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Total / Max 1750.0 1858.1 1703.5 1752.9 1719.1 1700.0 1783.8 1737.6 1866.0 1857.0 1827.3 2101.4 21656.7 58.3 59.9 56.8 56.5 55.5 56.7 57.5 57.9 60.2 59.9 65.3 67.8 59.3 3043 3092 3341 3326 3413 3316 3310 3173 3283 3227 3369 3515 3515

7.2.3

The energy and capacity availability and its cost from the different energy sources including hydel, allocation from CGS, liquid fuel stations, power traders and energy exchange for the year 2013-14 are discussed below.

7.3

7.3.1

Estimation of Hydel generation for 2013-14

The month wise details of inflow received during the last 20 years from 1992-93 to 2010-12 is given as Annexure 7(1). The 20 year average annual inflow works out to be 6571.10 MU. Further, the average inflow adopted for estimating the station wise hydel generation of major hydel stations- Idukki, Sabarigiri, Kuttiadi and Idamalayar is enclosed as Annexure 7(2) to Annexure 7(5). With the available storage as on 28th December-2012 and also expecting average monsoon for remaining months of the water year 2012-13, the average hydro generation possible for the remaining months works out to about 11.90 MU per day only. However, with the 40% reduction in inflow as that happened so far, the hydro availability may be limited to 10.29 MU/day only for the remaining months of the current water year upto May-2013. Further, the actual generation from hydel plants depends on the availability of water and the daily generation will have to be regulated based on the energy and peak demand, availability of power from CGS, traders, energy exchange and short-term market etc. The targeted hydro generation for the period from December-2012 to May-2013 is given as Table- 6.11 of the Chaper-6 of this petition. The targeted hydro generation for the months of April-2013 and May-2013 from storage plants is given below.

7.3.2

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Table 7.4. Hydel generation target for April-13 and May-2013 Month April-13 May-13 MU for the month 354.82 363.67 MU/day 11.83 11.73

7.3.3

Considering the fluctuations in the inflow received during the last twenty years, KSEB has adopted twenty year average inflow for estimating the hydel generation. Based on twenty year average inflow, KSEB expects an average generation of 18.40 MU per day from June 2013 onwards. The targeted hydro generation from hydel plants (excluding SHPs) is estimated as 6294.00 MU for the year 2013-14. However, the hydel generation from each plant is worked out separately considering the inflow from the catchment, storage facility, tailrace release from upstream projects etc. The details are given as Annexure 7-(6). Energy availability from SHPs. Almost all the Small Hydro plants do not have significant storage facility and hence the generation from SHPs is possible only during monsoon months. The estimate of the annual energy availability from SHPs for the year 2013-14 is given below.
Table 7.5 Annual targeted energy generation from SHPs without storage facility
Power plant Kallada Peppara Madupetty Chembukadavu I &II Malampuzha Urumi I & II Malankara Lower Meenmutty Kutiadi Tail Race Poozhithode Ranni-Perunadu Total Installed Capacity (MW) Hydro Generation target (MU) 64.00 7.50 4.40 10.90 3.84 13.50 36.40 5.20 5.50 16.82 5.80 173.86

7.3.4

7.3.5

15.00 3.00 2.00 6.45 2.50 6.15 10.50 3.50 3.50 4.80 4.00 61.40

Thus the total energy from hydel plants including SHPs for the year 2013-14 is estimated at 6468.16 MU. 7.3.6 The real time schedule from each hydel plant may vary on daily basis depending on the storage facility, rainfall, variations in monthly and daily demand, strategy on conserving water for use in summer months, availability of machines, availability of power from
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other sources etc. The principles followed for scheduling power from hydel plants is detailed below. 7.3.7 Principles adopted for scheduling power from KSEBs hydel plants (i) During the monsoon months from June to November, the runoff the river plant and small hydel stations are operated continuously to avoid spillage of water. On an average 550 MW to 700 MW is being scheduled from such plants during monsoon months to avoid spillage of water. The schedule from the storage projects such as Idukki, Sabarigiri etc is being limited to peak hours during monsoon months so as to store maximum water for the use in summer months. Further, water in the KSEB reservoirs is also used for irrigation, drinking and industrial purposes, salinity control etc during summer months. Thus the endeavor of the Board is to minimize spillage during monsoon months and to maximize storage in all its reservoirs for managing the power and water requirement in summer months. Every year, all the generating units of the hydel plants are subjected to essential annual maintenance. The annual maintenance works of the run off the river and low storage projects are being scheduled during summer months so that the full capacity shall be available for generation during the monsoon months. In the case of storage plants, the annual maintenance is being carried out during monsoon periods so as to ensure their maximum availability during the summer months. The proposed maintenance schedule for the hydel plants for the year 2013-14 is given as Annexure-7 (7). Further, the actual scheduling from hydel plants depend on other factors such as availability of power from the short-term markets such as UI, energy exchange, power availability at competitive rates through traders, energy demand, vagaries of monsoon etc. Hence, the targets proposed may be considered only as tentative plan in respect of hydel plants. Further, Board shall take all efforts to optimize the hydel generation by minimizing spill. The month wise schedule of hydel generation targeted from different hydel plants is given as Annexure- 7(8). The proposed station wise hydel generation for the year 2013-14 is summarized in the following table.

(ii)

(iii)

(iv)

(v)

Table - 7.6. Targeted Hydel Generation for 2013-14

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Name of the Station Idukki Sabarigiri Idamalayar Kutiadi Sholayar Poringal PLB Pallivasal Panniar Sengulam Neriamangalam+ NES Lower Periyar Kakkad Kallada Peppara Madupetty Chembukadavu Malampuzha Urumi Malankara Lower Meenmutty Kuttiady tail race Poozhithode Ranni perunadu Grand Total

Generation target (MU)

1955.00 1215.50 311.30 645.65 232.00 169.00 107.00 200.25 135.30 150.00 382.00 572.00 219.00 64.00 7.50 4.40 10.90 3.84 13.50 36.40 5.20 5.50 16.82 5.80 6468.16

7.3.8

7.3.9

Auxiliary consumption of hydel stations. Based on the past experience, the auxiliary consumption of hydel stations is taken as 0.5% of the gross generation. Thus, the total auxiliary consumption for the year 2013-14 is estimated at 32.34 MU. The net hydel generation available at the generation end after meeting the auxiliary consumption is 6435.82 MU. The month wise energy availability from hydel plants after the auxiliary consumption is detailed below. The month wise net capacity available during peak hours after considering the maintenance schedule also given below.
Table 7.7Monthwise details of energy and capacity available from hydel
Energy availability (Net) Total for the MU/day month (MU) Apr-13 354.82 May-13 363.67 Jun-13 370.04 Jul-13 513.72 Aug-13 562.95 Sep-13 567.97 Oct-13 595.67 Nov-13 597.70 Dec-13 578.99 Jan-14 579.59 Feb-14 615.00 Mar-14 735.70 Total 6435.82 Month Capacity availability during peak hours (MW) 11.83 11.73 12.33 16.57 18.16 18.93 19.22 19.92 18.68 18.70 21.96 23.73 17.63 1658 1705 1529 1574 1626 1634 1634 1634 1739 1660 1647 1782

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7.4 7.4.1

Energy and Capacity available from Central Generating Stations for the Year 2013-14. Allocation from Central Generating Stations (i) The present allocation and expected daily generation from the existing Central Generating Stations (CGS) w.e.f 01-12-2012 is given as Table- 6.9 of the Chapter-6. (ii) The following ongoing CGS/ Joint venture projects with allocation to KSEB are expected to start commercial operation during the year 2013-14.
Table - 7.8 New CGS expected to be commissioned during 2013-14

Name of the station Kudankulam- 2nd unit NLC- Exp- Stge-II Vallur JV project (TN) Tuticurin JV Total

Total capacity (MW) 1000 500 1500 500 2500

Allocation Allocated to KSEB capacity (%) 13.3 14 3.27 7.25 (MW) 133 70 49 36 288

Expected date of commercial operation Jul-13 1st unit by April-2013 and 2nd by Dec-2013 2nd unit by Aug-2012 by Dec-2013

(iii) 7.4.2

The total capacity available from CGS including new CGS scheduled for commissioning is given in the Table 7-9 below.

Energy availability from CGS for the year 2013-14 (i) CERC has approved the operating norms including target availability for full fixed cost recovery, auxiliary consumption, secondary fuel consumption etc for CGS. Usually, all the State Commissions and power utilities are estimating the energy availability from CGS as per the norms fixed by the Central Commission. Any difference in the availability over the normative levels from CGS may be taken into account during the Truing Up process. However, while approving the ARR during the last two years, The Honble Commission has adopted the higher availability of 88% for Talcher-II and 89% of NTPCs Ramagundam stations instead of the target availability of 85% as per the CERC norms. In view of the labour strike in the collieries due to Telangana problems and consequent scarcity for coal, the estimation of availability of power from Talcher-II and Ramagundam stations adopted by the Honble Commission seems to be on the higher side. In order to avoid the mismatch in KSEB projections and Commissions approval, KSEB has also adopted the availability as 88% and 89% for Talcher-II and Ramagundam stations for the

(ii)

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year 2013-14. However, if the availability of cheaper energy from these stations is lower than anticipated, the Honble Commission may consider the issue separately and may please to allow the additional liability for procuring power from alternate sources such as traders, energy exchange or liquid fuel stations etc. (iii) It may be noted that, as per the Regional Energy Account certified by SRPC, Bangalore, the average transmission losses in the PGCIL lines for evacuating power from CGS was 4.10%. Accordingly, the net energy available at KSEB periphery was less by 4.10% over the energy scheduled at Generator bus. The estimate of the energy availability from CGS at the generator bus and KSEB periphery for the year 2013-14 is detailed below.
Table 7.9 Energy availability from CGS for the year 2013-14 Allocated Aux Energy Net Energy Capacity Target No. Power Plant IC (MW) Allocation Consumption availability for PGCIL availability to KSEB PLF (%) (%) the year 2013- losses at KSEB bus (MW) 14 (MU) (MU) (MU) 1 TALCHER - Stage II 2000 21.60% 432.0 6.50% 88.00% 3113.74 127.66 2986.08 2 NLC- Exp- Stage-1 420 16.38% 68.8 9.50% 80.00% 436.32 17.89 418.43 3 NLC-II- Stage-1 630 10.43% 65.7 10.00% 75.00% 388.54 15.93 372.61 4 NLC-II- Stage-2 840 11.14% 93.6 10.00% 75.00% 553.31 22.69 530.63 5 RSPTS Stage I & II 2600 12.45% 323.6 6.50% 89.00% 2359.28 96.73 2262.55 6 MAPS 440 5.41% 23.8 10.00% 68.50% 128.55 5.27 123.28 7 KAIGA Stg I 440 9.33% 41.1 10.00% 75.00% 242.74 9.95 232.79 8 KAIGA Stg II 440 8.65% 38.1 10.00% 75.00% 225.05 9.23 215.82 9 Simhadri Exp 1000 8.76% 87.6 6.50% 85.00% 609.87 25.00 584.87 10 Farakka STP 1600 1.02% 16.3 6.50% 85.00% 113.48 4.65 108.83 11 Kahalgon 840 1.01% 8.5 6.50% 85.00% 59.18 2.43 56.75 12 Talcher-I 1000 1.02% 10.2 10.50% 82.00% 65.58 2.69 62.89 13 Kudamkulam 2000 13.30% 266.0 10.00% 75.00% 1376.79 56.45 1320.34 13 NLC - II Exp 500 14.00% 70.0 10.00% 80.00% 293.93 12.05 281.88 14 Vallur JV with 1500 3.27% 49.1 7.50% 85.00% 187.58 7.69 179.89 15 Tuticurin JV 500 7.25% 36.3 7.50% 85.00% 82.08 3.37 78.72 1630.5 10236.03 419.68 9816.35

(iv)

(v)

The month wise details of the net energy available from CGS and the average capacity availability after accounting the auxiliary consumption etc for the year 2013-14 is detailed below.

Table 7-10. Month wise details of energy availability from CGS for the year 2013-14

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Month
Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14

Total

Energy availability at KSEB periphery Total for the MU/ per day month in MU 742.14 24.74 766.88 24.74 742.14 24.74 830.93 26.80 840.11 27.10 813.01 27.10 840.11 27.10 813.01 27.10 877.77 28.32 878.42 28.34 795.38 28.41 876.45 28.27 9816.35 26.89

Avg. Capacity availability at KSEB periphery (MW) 1031 1031 1031 1117 1129 1129 1129 1129 1180 1181 1184 1184

7.4.3

Cost of energy from the Central Generating stations (a) Fixed cost Central Electricity Regulatory Commission (CERC) is the authority to determine the tariff of all the CGS. CERC has issued final/ provisional tariff orders for all CGS and PGCIL for the period from April-2009 to March-2014. The fixed cost commitment of KSEB for the year 2013-14 is estimated based on the approved tariff orders for the tariff period 2009-14. But for the new CGS, the fixed cost of the similar CGS/ or the indicative tariff offered at the time of entering into PPA has been adopted. The fixed cost of various CGS for the year 2013-14 is given below.

Table 7-11. Fixed cost commitment of CGS for the year 2013-14 Total Fixed cost for Fixed cost to Installed Allocation the year 2013-14 KSEB Sl No. Power Plant Capacity to KSEB (MW) (Rs. Cr) (Rs. Cr) 1 TALCHER - Stage II 2000 21.60% 1102.37 238.11 2 NLC- Exp- Stage-1 420 16.38% 360.63 59.07 3 NLC-II- Stage-1 630 10.43% 231.24 24.12 4 NLC-II- Stage-2 840 11.14% 314.82 35.07 5 RSPTS Stage I & II 2600 12.45% 1205.39 150.05 6 MAPS 440 5.41% 26.19 7 KAIGA Stg I 440 9.33% 72.95 8 KAIGA Stg II 440 8.65% 67.64 9 Simhadri Exp 1000 8.76% 1188.24 104.09 10 Farakka STP 1600 1.02% 9.65 11 Kahalgon 840 1.01% 5.03 12 Talcher-I 1000 1.02% 5.57 13 Kudamkulam 2000 13.30% 447.46 13 NLC - II Exp 500 14.00% 35.27 14 Vallur JV with 1500 3.27% 28.14 15 Tuticurin JV 500 7.25% 12.31 Total 1320.72

(b) Variable cost

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(i)

The month wise details of variable cost of CGS for the period from April-2012 to September-2012 are given below.
Table-7.12 Variable cost of CGS for the period from April-2012 to Sep-2012

Sl No
1 2 3 4 5

Source
Talcher Stage-II NTPC-RSTPS NLC-Stage-1 NLC-Stage-II NLC Expansion

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Average 1.51 1.61 2.05 2.05 1.87

1.58 1.61 1.99 1.99 1.85

1.79 1.84 2.05 2.05 1.85

1.70 1.70 2.06 2.06 1.87

1.62 1.61 2.07 2.07 1.85

1.24 1.44 2.06 2.06 1.87

1.15 1.47 2.06 2.06 1.90

(ii)

The average variable cost of CGS for the period from April -2012 to September-2012 has been adopted for estimating the variable cost for the year 2013-14. The tariff approved by the Department of Atomic Energy (DAE) for KAIGA APS and MAPS has been adopted for estimating the cost of power from these stations. The average tariff for the energy purchased from MAPS was Rs 2.04 per unit and that from KAIGA was Rs. 3.04 per unit during the period from April-12 to September-2012. For the new projects Valluar JV and Tuticurin JV, the fixed cost is assumed at Rs 1.50 per unit and for NLC-II Exp, the variable cost is assumed as Rs 1.20 per unit. The variable cost of all new projects is presumed as Rs 2.00 per unit. Considering the competitive variable cost of CGS, KSEB has proposed to schedule the full allocation from CGS during the year 2013-14. The source wise details of tentative energy schedule from CGS at Generator Bus, PGCIL line losses, net energy available at KSEB periphery, Fixed cost and Energy Charge as per the prerevised rates is given in the Table below.

(iii)

(iv)

(v)

(vi)

Table 7-13

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Estimated cost of Power Purchase from CGS for the year 2013-14
Net Energy input into Fixed Cost KSEB system Avg.rate (excl. incentive, Total cost transmission charges, other levies) etc. (Rs.Cr) 705.17 137.17 100.27 143.52 518.10 26.19 72.95 67.64 217.53 37.22 19.41 21.51 447.46 94.06 65.65 28.73 2702.58 (Rs/unit) 2.36 3.28 2.69 2.70 2.29 2.12 3.13 3.13 3.72 3.42 3.42 3.42 3.39 3.34 3.65 3.65 2.75

No.

Power Plant

Energy schedule External at generator bus loss

Variable cost

(MU)

(MU) 127.66 17.89 15.93 22.69 96.73 5.27 9.95 9.23 25.00 4.65 2.43 2.69 56.45 12.05 7.69 3.37 419.68

(MU) 2986.08 418.43 372.61 530.63 2262.55 123.28 232.79 215.82 584.87 108.83 56.75 62.89 1320.34 281.88 179.89 78.72 9816.35

(Rs. Cr) 238.11 59.07 24.12 35.07 150.05 26.19 72.95 67.64 104.09 9.65 5.03 5.57 447.46 35.27 28.14 12.31 1320.72

(Rs.Cr) 467.06 78.10 76.15 108.45 368.05 0.00 0.00 0.00 113.44 27.58 14.38 15.93 0.00 58.79 37.52 16.42 1381.86

1 2 3 4 5 6 7 8 9 10 11 12 13 13 14 15

TALCHER - Stage II NLC- Exp- Stage-1 NLC-II- Stage-1 NLC-II- Stage-2 RSPTS Stage I & II MAPS KAIGA Stg I KAIGA Stg II Simhadri Exp Farakka STP Kahalgon Talcher-I Kudamkulam NLC - II Exp Vallur JV with Tuticurin JV Total

3113.74 436.32 388.54 553.31 2359.28 128.55 242.74 225.05 609.87 113.48 59.18 65.58 1376.79 293.93 187.58 82.08 10236.03

(vii)

The cost of power purchase as detailed above is excluding the incentive, water cess, duties and other state levies etc, which are detailed subsequently. Further, KSEB has to bear the transmission charges for evacuating the power from CGS. The details of the transmission charges payable to the PGCIL are detailed below.

7.4.4

Transmission charges payable to PGCIL Evacuation of power from CGS up to the respective State boundary is through the transmission system developed by PGCIL. The transmission tariff of the transmission system is approved by the Central Commission from time to time. Hitherto, the sharing of transmission charges is being done in proportion of the capacity allocation from each CGS to the respective beneficiary states. However, CERC has recently notified a new regulation on sharing of transmission charges and losses and it has been implemented w.e.f 01-07-2011. For the initial two years, 50% of the transmission charges payable to the PGCIL are being shared based on the new methodology and 50% based on the prevailing practices. The transmission charges were estimated based on the methodology adopted and followed till date.

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It may be noted that, the average transmission charges claimed after the implementation of the new methodology was about Rs 0.31 per unit as against the claim of Rs 0.25 per unit claimed till June-2011.
Table - 7.14 Transmission charges to PGCIL 2012-13 As per Revised the estimat Items order e on ARR (Rs. Cr) (Rs. Cr) Southern region Transmission charges Incentives etc Sub total NTPC Kayamkulam Transmission charges Total transmission charges (excluding income tax, incentives etc) 293.22 20.41 313.63 12.2 325.83 266.33 20.41 286.74 8.18 294.92

Sl No

Estimate for the year 201314 (Rs. Cr) 308.96 26.25 335.21 8.18 343.39

1 2 3

7.4.5

Other Charges payable to CGS In addition to fixed charges, variable energy charges and transmission charges, the beneficiary State utilities are liable to pay incentive, income tax, water cess, foreign exchange rate variation etc The amount paid on this account during 2009-10, 2010-11, 2011-12 and the estimates for 2012-13 and 2013-14 are given below.
Table 7-15. Other charges payable to CGS
2009-10 (actual) (Rs.Cr) 2010-11 (actual) (Rs.Cr) 2011-12 (actual) (Rs.Cr) 2012-13 (Est) (Rs.Cr) 2013-14 (est) (Rs.Cr)

Source Generators Thalcher - II NLC-II - Stage-1 NTPC- RSTPS NLC-II - Stage-2 MAPS NLC (Exp) Kayamkulam KPCL Kaiga PGCIL Eastern Region Southern Region Kayamkulam Total

118.37 0.84 25.06 0.3 0.06

12.36 8.25 7.73 12.03 0.07 54.90 32.90 0.33

10.79 8.55 18.38 14.82 0.95 29.19

11.00 5.88 17.06 13.43 0.44 28.05

11.38 7.56 14.39 13.43 0.49 28.05

0.89

2.80

1.34

1.49

2.25 147.77

38.25 166.82

20.25 105.73

20.25 97.44

26.25 103.03

7.4.6

Total cost of Power purchase from CGS

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(i)

The total anticipated cost of Power Purchase from CGS for the year 2013-14 is given below.
Table 7-16 Cost of Power Purchase from CGS

Source

Energy External Produced Loss /Purchased

Net Energy Input to KSEB Fixed Cost T&D system

Incentive, Tax, etc.

Total Total Cost Variable cost

MU (a) Fixed cost, Variable charges, incentives etc

MU

MU

Rs. Cr

Rs. Cr

Rs. Cr

Rs. Cr

TALCHER - Stage II NLC- Exp- Stage-1 NLC-II- Stage-1 NLC-II- Stage-2 RSPTS Stage I & II MAPS KAIGA Stg I KAIGA Stg II Simhadri Exp Farakka STP Kahalgon Talcher-I Kudamkulam NLC - II Exp Vallur JV with Tuticurin JV Sub total (CGS) Transmission charges CGS Kayamkulam Sub total Total

3113.74 436.32 388.54 553.31 2359.28 128.55 242.74 225.05 609.87 113.48 59.18 65.58 1376.79 293.93 187.58 82.08 10236.03

127.66 17.89 15.93 22.69 96.73 5.27 9.95 9.23 25.00 4.65 2.43 2.69 56.45 12.05 7.69 3.37 419.68

2986.08 418.43 372.61 530.63 2262.55 123.28 232.79 215.82 584.87 108.83 56.75 62.89 1320.34 281.88 179.89 78.72 9816.35

238.11 59.07 24.12 35.07 150.05 26.19 72.95 67.64 104.09 9.65 5.03 5.57 447.46 35.27 28.14 12.31 1320.72 308.96 8.18 317.14 1637.86

11.38 28.05 7.56 13.43 14.39 0.49 1.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 76.79 26.25 0.00 26.25 103.04

467.06 78.10 76.15 108.45 368.05 0.00 0.00 0.00 113.44 27.58 14.38 15.93 0.00 58.79 37.52 16.42 1381.86

716.55 165.22 107.83 156.95 532.49 26.68 74.44 67.64 217.53 37.22 19.41 21.51 447.46 94.06 65.65 28.73 2779.37 335.21 8.18 343.39 3122.76

10236.03

419.68

9816.35

1381.86

7.5 Energy availability from Wind and other Small IPPs in the State. 7.5.1 Wind projects As on date, the total installed capacity of the Wind IPPs in the State is about 33.675 MW. With the present trend of generation, KSEB expect to have an annual generation of 73.54MU from wind projects. The month wise details of generation anticipated through wind projects are given under Table 7-17 below. The approved tariff of these wind projects is Rs 3.14 per unit and the total cost for purchase of 73.54MU from wind projects is estimated at Rs 23.09 crores for the year 2013-14. 7.5.2 Ullumkal SHP Ullumkal project is an IPP- SHP with installed capacity of 7 MW and annual generation potential of 34.1 MU. The month wise details of energy from Ullumkal project are given Table 7-17 below. Ullumkal IPP is yet to sign PPA with KSEB. However, in the absence of the PPA, KSEB continue to purchase energy provisionally @Rs 2.00 per unit. The cost estimated for purchasing 34.00 MU from Ullumkal is Rs 6.80
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crores for the year 2013-14. 7.5.3 Cogeneration plant of MP steel KSEB has been procuring energy from co-generation plant of MP steel casting Ltd @ Rs 2.31 per unit approved by the Honble Commission. The annual energy expected from MP Steel is 40.80 MU and its cost is about Rs 9.42 crores. Irruttikkanam SHP of M/s Viyyat Power (Pvt) Ltd The Iruttikkanam SHP (3MW) of M/s Viyyat Power (Pvt) Ltd has started commercial operation during November 2010. The Iruttukkanam Stage-II was started commercial operation during the year 2012-13. The average energy expected from Iruttukkanam StageI is 7.88MU @ Rs 2.70 per unit and 3.60 MU from Stage II @Rs 2.96 per unit.

7.5.4

7.6.5 Co-generation plant- Philips Carbon Black Limited (PCBL) KSEB has been availing the surplus energy from the Captive Cogeneration plant since last two years. The annual energy expected from PCBL for the year 2013-14 is about 36MU. Now the generator has demanded to increase the tariff to Rs 3.50 per unit from the provisional tariff of Rs 2.02 per unit. Since the Honble Commission is yet to approve the tariff of this plant, and also considering the critical power situation of the State, KSEB made a provision of Rs 12.60 crore for the year 2013-14. 7.5.5 The month wise details of energy and capacity available from Wind and Small IPPs are given below.
Table 7-17 Energy and Capacity availability from Wind and Small IPPs
Energy availability from Wind and other Small IPPs Capacityavailability from Wind and other (MU) Small IPPs MW) Month Iruttikkanam MP MP Wind Ullumkal PCBL Total Wind Ullumkal Iruttikkanam PCBL Total steel Stage-I Stage-II steel Apr-13 May-13 1.98 7.38 2.89 2.85 2.44 3.05 3.14 3.70 3.23 2.98 2.69 2.51 1.88 2.63 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 3.40 0.13 0.28 0.83 1.14 0.97 1.36 1.28 1.12 0.50 0.13 0.06 0.09 7.88 0.06 3.00 11.45 0.13 3.00 17.03 0.38 3.00 22.28 0.52 3.00 26.37 0.45 3.00 22.90 0.62 3.00 24.17 0.59 3.00 13.85 0.51 3.00 13.04 0.23 3.00 12.22 0.06 3.00 11.53 0.03 3.00 9.63 0.04 3.00 11.33 3.60 36.00 195.82 3 10 8 10 8 8 3 3 3 3 2 3 3 3 3 5 5 5 5 3 3 3 3 3 5 5 5 5 5 5 5 5 5 5 5 5 3 3 3 4 4 3 3 3 3 3 2 2 5 5 5 5 5 5 5 5 5 5 5 5 19 26 24 29 27 26 21 19 19 19 17 18

Jun-13 12.23 Jul-13 15.27 Aug-13 11.94 Sep-13 12.10 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Total 2.35 2.02 2.40 2.43 1.27 2.17 73.54

34.00 40.80

7.5.6

The summary of the energy availability and its estimated cost from

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the Wind, SHP and Cogeneration plants is given below.


Table.7.18 Proposed generation & Cost for power procurement from Wind and other Small IPPs
Source Wind IPPs Ullumkal SHP MP steel- Co generation plant Iruttikkianam SHP- Stage-1 Iruttikkianam SHP- Stage-2 PCBL Total Capacity (MW) 33.68 7.00 8.00 3.00 1.50 6.00 59.18 Generation target (MU) 73.54 34.00 40.80 7.88 3.60 36.00 195.82 Per unit cost (Rs/ kWh) 3.14 2.00 2.31 2.70 2.96 3.50 Total cost (Rs.Cr) 23.09 6.80 9.42 2.13 1.07 12.60 55.11

7.6

Power purchase proposed through the traders, energy exchanges etc. 7.6.1 Electricity demand in the State cannot be met from the energy available from hydel and CGS. Further, the energy rate from liquid fuel stations within the State was about Rs 11.50 per unit. Hence in order to meet the energy demand and also to avoid the energy schedule from the high cost liquid fuel stations, KSEB has been taking all possible efforts to procure energy through traders and energy exchanges from various generating stations located outside the State at most competitive rates. Accordingly, KSEB propose to procure energy through traders by entering into advance tie-ups and also by booking Medium Term Open Access (MTOA) in advance. 7.6.2 However, due to the transmission constraints and other reasons, there are limitations on the import of energy from Generating sources located outside the State through traders and energy exchanges. The details are given below. (i) (ii) At present, the firm import capability through the interstate feeders of KSEB is 1800MW including the share from CGS. The execution of interstate transmission line from TirunelveliPallikkara in Cochin for evacuating power from Kudamkulam Nuclear power plant is slow due to the local resistance in various localities of the State.

7.6.3

Further, during the months from July to October (monsoon months), the night off-peak demand in the State is about 1800 MW to 1900 MW only. But in order to avoid spillage of water, all the run-off the river plants with a total capacity up to 700 to 800 MW has to be operated continuously during monsoon. Further, as detailed under Table-7.10, about 1031MW to 1184MW is expected from CGS during monsoon months. Hence, considering the off-peak demand and supply position during monsoon months, KSEB may not require power through traders and energy exchanges to the extent of full

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evacuation capacity of the interstate feeders during monsoon months. The details are given below.
Table.7-19 Day and Night off-peak demand and power availability Import Night offHydel Day time expecte Import required through peak (Must demand d from traders/UI/exchanges demand run) CGS Night-off (MW) (MW) (MW) (MW) Day time peak 1800 to 1900 2400 to 2500 1100 700 to 800 up to 100 MW Up to 600 MW

Period

July -2013 to November2013

7.6.4

As detailed above, expecting a normal monsoon, the power procurement through traders and energy exchange is only up to 100 MW during monsoon months. However, for meeting the day time demand and peak demand, KSEB requires about 500 to 600 MW from alternate sources including traders/ exchanges and liquid fuel stations within the State. Considering the present trend of the energy price in the short term market, the anticipated average cost of energy from traders and exchanges at KSEB periphery including transmission charges and PGCIL line losses is taken as Rs 4.50 per unit for computation subject to modification as per actual. KSEB had already issued LoI for procuring 200 MW through M/s PTC Ltd from June-2013 to May-2014 @ Rs 4.27 per unit. Further, MTOA also received for the same. Further, KSEB has also issued LoI for procuring 100 MW RTC power from M/s Shree Cements Ltd (SCL) from June-2013 to May-2014. The approximate rate at Kerala Periphery works out to Rs 4.20 per unit. The trader has already applied for MTOA, however the same is yet to be granted. KSEB shall take all efforts to procure the power by availing short term open access. Further, KSEB has been taking steps to procure about 600 MW through traders from November-2013 to October-2014 by availing MTOA. Since the MTOA has already been granted, there is limited chance for getting MTOA for the same. However, short-term open access may be granted for availing at least a part of the contracted power from November-2013 to October-2014. Further, KSEB shall take all efforts to procure power through energy exchanges and UI as and when the rates are very competitive. However, as indicated earlier, the maximum import capability to the State of Kerala is only up to 1800 MW including CGS, traders, energy exchanges and UI.

7.6.5

7.6.6

7.6.7

7.6.8

7.6.9

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7.6.10 The total energy proposed to procure from short-term market is about 3628.27 MU at an average cost of Rs 5.00 per unit. 7.7 Energy procurement from liquid fuel stations 7.7.1 As submitted earlier, the maximum import capability from outside the State is about 1800 MW only, where as the day time energy demand may likely to be in the range of 2600 to 2700 MW in the ensuing financial year 2013-14. The maximum schedule recommended from hydel even during monsoon months is up to 700 MW only. Thus, KSEB has to schedule electricity up to 200MW internally to meet the day time electricity demand. 7.7.2 Further, the peak demand expected during the ensuing year is about 3500 MW. Even after considering the hydel availability and maximum import capability, about 200 to 250 MW is to be schedule from internal sources other than hydel during the ensuing year. KSEB proposes to schedule the entire power generated from small IPPs including wind, small hydel etc and the details are given under Table 7-17. Other than hydel, small IPPs, the power plants operating with the liquid fuel stations are the other sources available in the State. However, the variable cost of the liquid fuel stations is excessively high. The capacity and energy availability from liquid fuel stations and its variable cost as on 01-12- 2012 is detailed below.
Table-7-20 Energy availability from liquid fuel stations Annual Fixed Total Capacity Energy cost capacity available availability commitment (MW) (MW) (Rs.Cr) (MU per day) 360 157 20 106.6 128 510 320 150 13 60 80 623 233.00 88.02 1.98

7.7.3

7.7.4

Station

Variable cost as on 1st December2012 (Rs/unit) 11.36 11.35 10.76 10.39 10.84

RGCCPP- Kayamkulam BSES KPCL BDPP KDPP Total

323.00

7.45 3.40 0.20 0.50 1.50 13.05

7.7.5

Out of the above, as of now, Ministry of power has allocated 215 MW power, i.e., 180 MW from Talcher-II and 35 MW ER stations together for pooling with the high cost RGCCPP- Kayamkulam power. KSEB has already considered this special allocation of 215 MW while estimating the energy availability from CGS. Hence, in order to get the special allocation continuously, KSEB may give first priority to RGCCPP- Kayamkulam among the liquid fuel stations. Considering the energy demand, limitations on importing

7.7.6

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power from other regions, KSEB may schedule about 150 MW continuously during the ensuing year 2013-14. 7.7.7 Considering the energy demand in the Northern part of the State, KSEB proposes to schedule KDPP partially during every month. Further, BDPP station is proposed to schedule partly for peak load assistance. The energy proposed to schedule from liquid fuel stations during the ensuing year 2013-14 is detailed below.

Table 7-21. Energy proposed to schedule from liquid fuel stations Energy Fixed Cost Variable cost Total Name of the Station schedule (MU) (Rs. Cr) (Rs/kWh) (Rs.Cr) (Rs.Cr) Sl No 1RGCCPP- Kylm 1220.45 233.00 11.36 1358.37 1591.37 2KDPP 251.55 11.08 285.86 285.86 3BDPP 106.76 11.34 124.17 124.17 4BSES 0 88.02 11.35 88.02 5KPCL 0 1.98 10.76 1.98 Total 1578.77 323.00 55.89 1768.40 2091.40

7.8

Summary of the energy demand and supply position for the year 2013-14. 7.8.1 The month wise details of the energy schedule from each source for the year 2013-14 is detailed below.
Table 7-22. Demand and supply position for the year 2013-14 Availability Energy Traders & Hydel CGS (KSEB Demand Small IPPS Exchange RGCCPP BDPP KDPP (net) periphery) and UI (MU) (MU) (MU) (MU) (MU) (MU) (MU) (MU) 1750.01 354.82 742.14 11.45 393.95 209.52 8.78 29.25 1858.11 363.67 766.88 17.03 454.52 216.50 9.07 30.23 1703.45 370.04 742.14 22.28 440.63 104.76 8.78 14.63 1752.93 513.72 830.93 26.37 276.33 81.19 9.07 15.11 1719.06 562.95 840.11 22.90 214.59 54.13 9.07 15.11 1699.98 567.97 813.01 24.17 218.95 52.38 8.78 14.63 1783.82 595.67 840.11 13.85 255.78 54.13 9.07 15.11 1737.61 597.70 813.01 13.04 237.99 52.38 8.78 14.63 1865.99 578.99 877.77 12.22 291.44 81.19 9.07 15.11 1857.04 579.59 878.42 11.53 239.85 108.25 9.07 30.23 1827.35 615.00 795.38 9.63 273.97 97.78 8.19 27.30 2101.38 735.70 876.45 11.33 330.25 108.25 9.07 30.23 21656.72 6435.82 9816.35 195.82 3628.27 1220.45 106.76 251.55

Month

Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Total

The month wise details of the energy schedule is further given as Annexure-7 7.9 Summary of the cost of generation and power purchase for the year 2013-14 The summary of the source wise generation and power purchase for the year 2013-14 and its cost is given below.
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Table-7-23 Source wise details of generation and power purchase and cost for the year 2013-14
Source Energy Net Energy Total Auxiliary External Incentive, Produced Input to KSEB Fixed Cost Variable Consumption Loss Tax, etc. /Purchased T&D system cost MU MU MU MU Rs. Cr Rs. Cr Rs. Cr 6468.16 1.70 109.50 258.00 6837.36 32.34 0.00 2.74 6.45 41.53 6435.82 1.70 106.76 251.55 6795.83 Total Cost Rs. Cr

KSEB Internal Hydel Wind -Kanjikode BDPP KDPP Sub total Power purchase (a) CGS TALCHER - Stage II NLC- Exp- Stage-1 NLC-II- Stage-1 NLC-II- Stage-2 RSPTS Stage I & II MAPS KAIGA Stg I KAIGA Stg II Simhadri Exp Farakka STP Kahalgon Talcher-I Kudamkulam NLC - II Exp Vallur JV with Tuticurin JV Sub total (CGS) Wind and Other IPPs Wind Ullumkal MP steel Irukkikkanam SHP-stage-1 Irukkikkanam SHP-stage-2 PCBL Sub total Traders IPPS RGCCPP BSES KPCL Sub total Total Transmission charges CGS Kayamkulam Sub total Sub total power purchase Total

124.17 285.86 410.04

124.17 285.86 410.04

3113.74 436.32 388.54 553.31 2359.28 128.55 242.74 225.05 609.87 113.48 59.18 65.58 1376.79 293.93 187.58 82.08 10236.03 73.54 34.00 40.80 7.88 3.60 36.00 195.82 3628.27 1220.45 0.00 0.00 1220.45 15280.57

127.66 17.89 15.93 22.69 96.73 5.27 9.95 9.23 25.00 4.65 2.43 2.69 56.45 12.05 7.69 3.37 419.68

2986.08 418.43 372.61 530.63 2262.55 123.28 232.79 215.82 584.87 108.83 56.75 62.89 1320.34 281.88 179.89 78.72 9816.35 73.54 34.00 40.80 7.88 3.60 36.00 195.82 3628.27 1220.45 0.00 0.00 1220.45 14860.89 0.00 0.00

238.11 59.07 24.12 35.07 150.05 26.19 72.95 67.64 104.09 9.65 5.03 5.57 447.46 35.27 28.14 12.31 1320.72

11.38 28.05 7.56 13.43 14.39 0.49 1.49

467.06 78.10 76.15 108.45 368.05 0.00 0.00 0.00 113.44 27.58 14.38 15.93 0.00 58.79 37.52 16.42 76.79 1381.86 23.09 6.80 9.42 2.13 1.07 12.60 55.11 1814.14

716.55 165.22 107.83 156.95 532.49 26.68 74.44 67.64 217.53 37.22 19.41 21.51 447.46 94.06 65.65 28.73 2779.37 23.09 6.80 9.42 2.13 1.07 12.60 55.11 1814.14 1591.37 88.02 1.98 1681.36 6329.98 335.21 8.18 343.39 6673.36 7083.40

419.68

233.00 88.02 1.98 323.00 1643.72 308.96 8.18 317.14 1960.86 1960.86

1358.37 0.00 0.00 1358.37 76.79 4976.31 0.00 0.00 26.25 0.00 103.04 5019.51 103.04 5429.54 26.25

15280.57 22117.93

41.53

419.68 419.68

14860.89 21656.72

CHAPTER-8

AGGREGATE REVENUE REQUIREMENT

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8.1

Cost of Generation and Power Purchase for the Year 2013-14


A detailed appraisal on the Strategy on Generation and Power Purchase for the Year 2013-14 is furnished under Chapter-7 of this petition. The summary of the Generation, power purchase and cost estimated for the year 2013-14 is detailed below.
Table 8.1 Summary of Cost of Generation and Power purchase for the year 2013-14 Energy procured/ purchased (net) (MU) KSEB own generation (a) Hydel Generation (net) (b) Wind (c) BDPP (d) KDPP Sub Total Central Generating stations (KSEB bus) Traders Wind and Small IPPs Liquid fuel stations- IPPs (i) RGCCPP- Kayamkulam (ii) BSES- Kochi (iii) KPCL- Kasargod Sub total Transmission Charges Total 6435.82 1.7 106.76 251.55 6795.83 9816.35 3628.27 195.82 1220.45 0.00 0.00 1220.45 21656.72

Sl No. 1

Source

Total cost (Rs.Cr)

124.17 285.86 410.04 2779.37 1814.14 55.11 1591.37 88.02 1.98 1681.36 343.39 7083.40

2 3 4 5

6 7

8.2
8.2.1

Interest and Finance charges


(a) Introduction Interest and finance charges include interest on outstanding loans and bonds, interest on additional borrowings for meeting capital liabilities, interest payable on consumers security deposit, interest on working capital, Guarantee Commission payable to State Government, rebate allowed to electricity traders for prompt remittance, discount allowed to consumers for prompt payment of electricity charges, interest on General Provident fund, cost of raising finance, interest allowed on electricity duty retained with KSEB etc. While estimating the additional borrowing for meeting the capital liabilities, all the internal accruals including depreciation and expenses not requiring immediate cash outflow, return on equity,

8.2.2

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consumer contributions, duty and other charges payable to Government etc are duly considered and additional fund requirement over and above the internally available resources alone are met through borrowing from financial institutions. Further, excess internal resources, if any, with KSEB had been judiciously earmarked for repayment of existing capital liabilities. 8.2.3 Accordingly KSEB was able to reduce the outstanding capital liabilities from Rs 5094.17 crore from the year 2003-04 to Rs 1356.34 crore as on 31-03-2012. Further, the interest on capital liabilities has been reduced from Rs 622.16 crore in 2003-04 to Rs 128.63 crore during the year 2011-12. However, the State Commission is yet to approve the efforts taken by KSEB for repaying the past capital liabilities etc and taken a stand that, all the money utilized for repaying the past capital liabilities etc are freely available with KSEB, and even adjusted the same against the revenue gap determined for the subsequent years. However, while approving the interest and finance charges in the process of truing up, Honble Commission had considered the reduced capital liabilities as per the audited accounts and corresponding reduced interest and finance charges was approved for the year. Even though the State Commission has not approved the resources utilized for repaying the past capital liabilities, the interest and finance charges had been trued up after duly taken care of the same. In short, in the process of truing up the amount utilized for repaying the capital liabilities or towards meeting the capital investment was not approved by the State Commission. KSEB has already appraised the matter before the State Commission; however a final decision on the same is yet to be taken. (b) Interest & Finance charges of 2011-12 In the ARR for the year 2011-12, the Board had projected total borrowing for the year at Rs 1036 Crore and repayment of bonds and loans at Rs 79.79 Crore. The outstanding loans and bonds as per the ARR at the end of the financial year 2011-12 was Rs.2464.14 Crore. But the actual borrowing and redemption during 2011-12 was Rs 1380.26 crore and Rs 1079.97 crore respectively and the outstanding balance as on 31-03-2012 was Rs 1356.34 crore. The details are given below.

8.2.4

8.2.5

8.2.6

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Table 8.2 Interest and finance charges for the year 2011-12
Opening Balance Sl.No Item I ll lll IV V Existing Bonds Long term loans Short term loans Loans from Financial Institutions(II+III) Total (I+IV) ARR (Rs. Cr) 10.45 477.91 1030.02 1518.38 Accounts (Rs. Cr) 10.45 556.05 500.00 Borrowing ARR (Rs. Cr) 0.00 0.00 Accounts 0.00 80.26 Redemption ARR Accounts (Rs. Cr) 10.45 79.97 Closing Balance ARR (Rs. Cr) 0.00 398.12 2066.02 2464.14 Accounts (Rs. Cr) 0.00 556.34 800.00 1356.34

(Rs. Cr) (Rs. Cr) 10.45 79.79

1036.00 1300.00 578.53 578.53

0.00 1000.00 90.24 1079.97

1056.05 1036.00

1518.38 1066.50 1036.00

90.24 1090.42 2464.14 1356.34

8.2.7

As against the proposed capital investment of Rs 1036 crore, the actual investment during the year 2011-12 was Rs 1019.13 crore (i.e, achievement is about 98.37% of the total capital investment proposed). However, the net additional borrowings for the capital investment were only Rs.289.84 crore. This has achieved mainly through: (i) Utilized the section-4 duty collected from the consumers amounts to Rs 326.36 crore as internal resources though it is payable to the Government with interest.
(ii)

By availing over draft from financial institutions, which has resulted in increasing the interest on working capital from Rs 35.00 crore to Rs 82.25 crore.

8.2.8

The details in respect of interest and finance charges approved and actuals for the year 2011-12 are detailed below.
Table 8.3 Interest and Finance Charges incurred in 2011-12
2010-11 (actual) (Rs. Cr) 2011-12 Approved by the Projected Hon'ble by KSEB Commission (Rs. Cr) (Rs. Cr) 214.21 64.73 30.00 3.25 55.25 0.00 1.00 1.61 15.00 106.11 385.05 109.42 64.73 15.00 3.25 55.25 0.00 1.00 1.61 15.00 91.11 265.26 Actual (Rs. Cr) 128.63 68.01 82.25 0.97 54.80 0.11 0.00 1.28 4.47 143.88 340.52

Sl.No

Particulars

IInterest on existing loans II Interest on Security Deposit IIIOther Interest and Finance Charges a) Interest on borrowings for working capital b) Discount to consumers for timely payment of Charges c) Interest on PF d) Other Interest charges e) Cost of raising finance f) Guarantee Commission g)Bank Charges Total of III Grand Total (I+II+III )

120.85 64.74 35.78 1.57 50.08 1.10 0.00 2.50 4.29 95.32 280.91

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(iii)

Revised Estimate of Interest on outstanding debts for the year 2012-13.

8.2.9

Honble Commission has approved a revenue gap for the year 201213 at Rs 1889.15 crore as against the revenue gap of Rs 3240.25 crore projected by the Board, i.e., made a total disallowances amounts to Rs 1351.10 crores from the amount projected by the Board under following heads. (i) (ii) (iii) (iv) (v) Cost of Generation by Rs 184.95 crores Cost of Power Purchase by Rs 272.60 crores Interest and finance charges by Rs 151.02 crores Employee cost by Rs 567.80 crores Administration and General Expenses(excluding section 3(1) duty) by Rs 32.74 crores (vi) R&M expenses by Rs 130.12 crores (vii) Not admitted Section 3(1) duty by Rs 96.39 crores. (viii) Disallowed Return on Equity by Rs 23.30 crores. (ix) Additional non tariff income Rs.20 crore (x) Additional revenue from tariff Rs.320.63 crore (xi) Depreciation Rs.192.80 crore.

8.2.10 Honble Commission had revised the tariff for all consumers w.e.f 01.07.2012. The additional revenue expected through the tariff revision during the nine months from July-2012 to March-2013 would be about Rs 1257.63 crore as against the approved revenue gap of Rs 1889.15 crore for the year 2012-13, leaving an un bridged revenue gap of Rs 631.527 crore for the FY 2012-13. 8.2.11 The monsoon in the State was far below the expectation as detailed in Chapter-6. As per the estimate, the reduction in hydel availability due to failure of monsoon was about 2000 MU during the year 201213. During the period from April 2012 to November-2012 alone, KSEB had incurred an additional liability of more than Rs 1400.00 crore towards power purchase for meeting the shortfall due to monsoon failure. Even after the recent tariff hike, the monthly revenue shortfall is about Rs 200.00 crore per month. This is being met through availing overdraft and short-term loans from financial institutions. The month wise details of the short-term loans and over draft since April-2010 is detailed in the table below.

Table 8.4

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Month wise details of the short-term loans and overdraft MAXIMUM OD+STL BALANCE DURING THE MONTH 848.77 899.60 939.61 939.71 941.30 985.17 983.52 981.05 1030.00 1111.71 1157.18 1184.86 1141.64 1138.37 1203.17 1251.37 1308.35 1444.62 1492.36 1582.65 1670.46 1876.94 2059.02 2123.87 2210.65 2230.32 2320.34 2514.01 2678.06 2891.70 2950.95 2972.87 Increase/Decrease over previous month 50.83 40.01 0.10 1.59 43.87 -1.65 -2.47 48.95 81.71 45.47 27.68 -43.22 -3.27 64.80 48.20 56.98 136.27 47.74 90.29 87.81 206.48 182.08 64.85 86.78 19.67 90.02 193.67 164.05 213.64 59.25 21.92

DATE 30-Apr-10 31-May-10 30-Jun-10 31-Jul-10 31-Aug-10 30-Sep-10 31-Oct-10 30-Nov-10 31-Dec-10 31-Jan-11 28-Feb-11 31-Mar-11 30-Apr-11 31-May-11 30-Jun-11 31-Jul-11 31-Aug-11 30-Sep-11 31-Oct-11 30-Nov-11 31-Dec-11 31-Jan-12 29-Feb-12 31-Mar-12 30-Apr-12 31-May-12 30-Jun-12 31-Jul-12 31-Aug-12 30-Sep-12 31-Oct-12 30-Nov-12

However, considering the excessive increase of short-term loans and over draft position, the financial institutions are now reluctant to provide short-term loans and overdrafts to KSEB. 8.2.12 The Board has proposed a capital expenditure of Rs.1397.12 crore for the year 2012-13, however while approving the ARR, Honble Commission had approved the same at Rs 980.00 crore. As per the revised estimate, the capital expenditure would be about Rs.1118.75 crore for 2012-13 and the capital outlay for the year 2013-14 at Rs.1521.45 crore as detailed in Chapter-3. 8.2.13 During the last few years, KSEB has been resorting to short term loans and overdrafts instead of long term loans to meet its financing requirements on account of easy availability, lower interest rates, and less conditionality involved. However, due to the reasons cited above, the short term borrowings have gone up substantially and

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hence it is not practically possible to source short term funds for meeting capital expenditure. 8.2.14 Interest rates have also hardened. Interest on Short term loans availed during March 2011 was in the range of @9.45%-9.50% and the rates have gone up to 10.75% in March 2012. The rates have further gone up as high as 12.75% in November- 2012. Similarly interest on clean OD has been around 11% -11.50%. Higher dependence on borrowings coupled with rising interest rates have resulted in increased level of expenses in comparison to previous year. Interest paid on short-term loans for the 8 months of 2012-13 amounted to Rs.65.44 crore as against Rs. 63.24 crore incurred during the whole year 2011-12. 8.2.15 Though the short-term lending rates have increased considerably compared to the previous year, the short-term interest rates are much less than the interest rates for long-term borrowings offered by the financial institutions. The details of the prevailing interest rates for the long-term borrowings by the financial institutions are detailed below. (a) State Bank of India Base rate + 2.50% to 5.00% (SBI Base rate is 10%) Effective rate of interest is in the range of 12.50% to 15.00%. REC 12.75% wef 21.08.2012 PFC 12.75% wef 26.07.2012

(b) (c)

8.2.16 In addition to the short-term borrowings, KSEB has also been availing Overdrafts from financial institutions. Over draft balance as on 30.11.2012 was Rs.1505.57 crore, showing an increase of almost Rs.400 crore over the level as on 31.03.2012. Since the OD has been availed against the fixed deposits created in 2007-08 and 2008-09, the interest on OD could be saved to some extent. The interest on OD till 30.10.2012 has been Rs 98.57 crore against Rs.82.25 crore for the year 2011-12. 8.2.17 KSEB has decided to avail project specific loans and issued instructions to all the functional heads to prepare bankable documents along with capital investment proposal so as to avail project specific loans. 8.2.18 KSEB has proposed to borrow additional loans to the extent of Rs 500.00 crore @ 12.50 % interest rate for meeting the capital liabilities and meeting cost of power purchase for the remaining part of the year from October-2012 to March 2013 in order to meet the resources for capital investments etc.

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8.2.19 The following table summarizes the revised estimate of the borrowings and repayments and also the interest charges on loans for the year 2012-13.
Table 8.5 Interest on loans for the year 2012-13
Balance at the beginning of the year (Rs.Cr) Amount Received during the year (Rs.Cr) Amount Redeemed during the year (Rs.Cr) Balance out standing at the end of the year (Rs.Cr)

Sl. No. I

Particulars Loans from others secured REC LIC Subtotal

Rate of Interest in % 7.00 11.75 9.00

Interest for the year (Rs.Cr)

105.95 14.00 119.95

0.00 0.00 0.00 0.00 2.68 0.00 426.00 0.00 428.68 500.00 928.68

29.83 2.00 31.83 9.19 30.28 2.76 0.00 1.00 43.23 0.00 75.06

76.12 12.00 88.12 13.19 166.34 86.50 1226.00 129.82 1621.85 500.00 2209.97

9.39 1.09 10.48 1.74 17.20 20.45 88.80 19.96 148.15 31.25 189.88

II

Loans from others unsecured LIC REC PFC-R-APDRP-Part A Short Term Loans PFC-R-APDRP-Part B Subtotal Additional borrowing 12-13 (October to March) Total 1356.35 12.50 9.00 7.00 11.75 11.50 11.50 11.50 22.38 193.94 89.26 800.00 130.82 1236.40 0.00

8.2.20 It may be noted that, the outstanding capital liability is likely to be increased from Rs 1356.35 crore to Rs 2209.97 crore, i.e, an increase of Rs 853.62 crore during the current year. In addition, KSEB has been retaining about Rs 400.00 crore collected as section-4 electricity duty. Further, KSEB has been deferring many payments including power purchase cost. 8.2.21 The revised estimate of borrowing and redemption of loans in 201213 against the estimate in the ARR is given below.
Table 8.6 Summary of Borrowings & Repayments for the year 2012-13 (RE) Rs.in Crore
Redemption Opening Balance asBorrowing during during the year Closing Balance as on 01-04-2012 the year 2012-13 2012-13 on 31-03-2013 Item Loans from GOK Existing Bonds Loans from Institutions Total Financial 1669.17 1356.35 1200.00 1669.17 1356.35 1200.00 928.68 71.12 928.68 71.12 75.06 2798.05 2209.97 75.06 2798.05 2209.97 ARR Revised 0.00 0.00 ARR Revised ARR 0.00 0.00 0.00 0.00 Revised ARR 0.00 0.00 Revised 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

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(d) Estimate of Interest on outstanding debts payable in 2013-14. 8.2.22 As detailed above, the anticipated loans and bonds as on 31-03-2013 would be 2209.97 crore. The interest and finance charges on the same for the year 2013-14 is estimated based on the prevailing interest rates. 8.2.23 As summarized under Chaper-3, KSEB proposed for a total capital investment of Rs 1521.45 crore in 2013-14. 8.2.24 Honble Commission may please note that the Government of Kerala vide its order G.O.(MS) No. 42/2011/PD dated 03.11.2011 has accorded in principle approval of Kerala Electricity Second Transfer (Scheme Re vesting) and stipulated the modality of funding terminal liability in the wake of re vesting of assets and liabilities of erstwhile KSEB to the KSEB Ltd. Vide the order, Government has approved the netting off dues between KSEB and the Government as on 31-032008 and approved the net amount dues to the Board at Rs 1600.00 crore. Government has ordered that, a total amount of Rs 3024.00 crore will be released to the KSEB limited by Government towards funding of terminal liability. Out of the above Rs 2500.00 crore will be adjusted by the Government in 10 years @ 250.00 crore per year. The adjustment has to be made against electricity duty payable to Government. However, considering the enhancement in pension liabilities, Government has in principle allowed to retain higher amount of electricity duty with KSEB. The final Government order will be issued along with orders on re-vesting. 8.2.25 Hitherto Board has been utilizing the section-4 duty collected from consumers for funding capital projects. In view of the Government order No. G.O (Ms) No. 42/2011/PD dated 03-11-2011, hereafter, the duty collected is to be transferred to the Master Trust for funding the terminal liability. Since the modalities are not finalized, the duty collection is being retained by the Board. 8.2.26 Out of the capital investment of Rs 1521.45 crore, KSEB proposed to borrow Rs 750.crore from financial institutions and the balance may be available as RGVVY, RAPDRP funds as well as consumers contribution towards capital works. 8.2.27 The estimated interest charges on loans and bonds for the year 2013-14 is given below.

Table 8.7

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Sl. No.

Interest charges on Loans and Bonds for the year 2013-14 (Rs. in Crore) Amount Amount Balance Balance at Received Redeemed out Rate of the during during the standing Particulars Interest beginning the year year at the in % of the end of year the year

Interest for the year

II

Loans from others secured


REC LIC Subtotal
8.00 12.75 9 76.12 12.00 88.12 13.19 166.34 86.50 129.82 1226.00 1621.85 500.00 2209.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 750.00 750.00 25.00 2.00 27.00 7.53 28.98 9.19 0.00 0.00 45.70 0.00 72.70 51.12 10.00 61.12 5.66 137.36 77.31 129.82 1226.00 1576.15 1250.00 2826.15 7.08 0.89 7.97 0.98 15.52 5.26 14.93 153.25 189.94 109.38 307.28

III

Loans from others unsecured


LIC REC PFC-R-APDRP-Part A PFC-R-APDRP-Part B Short term loans Subtotal Additional borrowing 12-13 Total
7.00 -11.75 11.5 11.5 12.5 12.5 9

(e) Interest on borrowings for working capital for the year 2012-13 8.2.28 Due to the failure of monsoon and consequent excessive cost of power purchase, the actual revenue gap during the year 2012-13 would be more than Rs 3000.00 crore even after the tariff revision and penalty for excess usage over the restricted quota. KSEB has been meeting the revenue shortfall by availing overdrafts from financial institutions. The details of month wise overdraft balance during the current year from April-12 to November-2012 are furnished below.
Table 8.8 Details of average OD availed from April-12 to November-2012
Month April-12 May-12 June-12 July-12 August-12 September-12 October-12 November-12 OD availed (Rs.Cr) 1284.79 992.88 1328.96 1479.77 1412.85 1367.56 1564.36 1505.57 Interest (Rs.Cr) 11.49 11.76 11.38 12.76 12.00 12.51 13.23 13.44 Rate of interest (%) 9.50 to 10.75 9.50 to 10.50 9.50 to 10.71 9.50 to 10.71 9.50 to 10.70 9.50 to 10.62 9.50 to 10.71 9.50 to 10.71

Total

98.57

8.2.29 With the present trend, the interest on working capital for the year 2012-13 is estimated at Rs 150.00 crore.

(f)

Interest on working capital for the year 2013-14

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8.2.30 Considering the overdraft position now prevailing and also the huge un bridged revenue gap for the year 2012-13, the overdraft is likely to continue during the year 2013-14 also. However, for the year 2013-14, KSEB expects that the Honble Commission may kindly approve the proposals for bridging the anticipated revenue gap of the ensuing year. But considering the present OD position and the likely additional liability for the remaining months of the FY 201213, KSEB may create a provision of Rs 100.00 towards interest on working capital for the year 2013-14. (g) Interest payable on the security deposit of the consumers 8.2.31 As per sub clause (4) of section 47 of the Electricity Act, 2003, KSEB as a Distribution Licensee is required to pay interest on the security deposit to the consumers at a rate equivalent to the bank rate or more. In accordance with the clause 16(1) of the Supply Code specified by the KSERC and further clarification issued by the Commission thereon, KSEB has been crediting interest on security deposit on the outstanding deposit as on 1 st April since the year 2005-06. Accordingly, the amount of interest payable for 2012-13 is estimated at Rs.74.55 Crore and for 2013-14 is estimated at Rs. 85.48 Crore. Rebate to consumers for advance payment of Charges/Rebate to traders for prompt payment. 8.2.32 Present rate of rebate allowed by the Board on advance payment of electricity charges by the consumers is 4% for advance payment of 12 months charges and 2% for 6 months charges. The actual payment towards rebate to the consumers during 2011-12 was Rs.0.69 Crore. In line with the above, the amount estimated for the year 2012-13 is revised to Rs.0.80 Crore and the amount for 2013-14 is estimated at Rs.1.00 Crore excluding prompt payment rebate to traders. (i) Interest on Provident Fund balance. 8.2.33 As per the Provisional Accounts for 2010-11, the GPF credit as on 3103-2012 is Rs.937.90 Crore in the GPF accounts of the Board employees. Interest at the rate of 8.60% payable for the year 201213 is estimated as Rs.82.00 Crore. Expecting a nominal increase, the interest on PF balance estimated as Rs.85.00 Crore for 2012-13. These are statutory payments and hence may be admitted. (j) Cost of raising finance 8.2.34 An amount of Rs.1.00 Crore is provided in the ARR for 2012-13 towards cost of raising finance. The same level is estimated for the year 2013-14 for raising fresh loans etc. (k) Guarantee Commission 8.2.35 The outstanding balance of Government secured loan as on 31-032012 is Rs. 119.95 Crore and the same at the end of the financial year 2012-13 are estimated at Rs.88.12 Crore. The amount of (h)

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guarantee commission payable in 2012-13 would be Rs.0.90 Crore and it would be Rs. 0.66 Crore in 2013-14. (l) Other charges and bank charges 8.2.36 Other charges include bank charges for remittance between offices, collection of electricity charges from the consumers, service tax and other bank charges like LC charges, bank guarantee charges. After taking into account the increase in the number of new section offices and collection centers opened by the Board, the total bank charges is likely to increase and it is estimated that the charges would be Rs.7.00 Crore in the year 2012-13 and, Rs.8.00 Crore in the year 2013-14. 8.2.37 The summary of the revised estimate of Interest and Finance charges for 2012-13 and the estimate for 2013-14 is given below.
Table - 8-9 Summary of Interest and Finance Charges 2011-12 Particulars I - Interest on outstanding Loans & Bonds II - Interest on Security Deposit III - Other Interest and Finance Charges Interest on borrowings for working capital Rebate to consumers for timely payment Interest on PF Cost of raising finance: Guarantee Commission Bank Charges Total of (III) Grand Total (I+II+III) Accounts
128.63 68.01

Rs.in Crore 2012-13 SERC approval Revised


178.14 74.55 189.88 74.55

2013-14 Estimate
307.28 85.48

82.25 0.97 54.80 0.00 5.86 143.88


340.52

20.00 2.50 83.00 1.00 1.00 10.00 117.50


370.19

150.00 0.80 82.00 1.00 0.90 7.00 241.70


506.13

100.00 1.00 85.00 1.00 0.66 8.00 195.66


588.42

(m)

Apportioning of interest and finance charges Generation, Transmission and Distribution functions.

into

8.2.38 The interest and finance charges are apportioned into Generation, Transmission and Distribution as detailed below. (i) The interest and finance charges on the existing capital liabilities as on 31-03-2012 are allocated in the ratio of capital liabilities assigned to each function. (ii) Capital liabilities are assigned on the basis of Gross fixed assets reduced by Contribution, Grants and Subsidies towards cost of capital assets. (iii) For new capital investments to be made during the year 201314, capital liabilities are apportioned on the basis of capital investments made/proposed. (iv) Other interest and finance charges are apportioned as follows.
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(a) Interest on security deposit- 100% for distribution (b) Interest on working capital in the ratio of 25:75 between transmission and distribution (c) Rebate to consumers- 100% for distribution (d) Interest to PF - in the ratio of employee cost- 7.93% for generation, 29.24% for transmission and 62.83% for distribution (e) Cost of raising finance and Guarantee Commission in the ratio of capital liabilities (f) Bank charges- 100% to the distribution 8.2.39 The capital liabilities as on 31.03.2012 have been assigned to the Generation, Transmission and Distribution in the proportion of GFA less Contribution is as shown below:
Table 8.10 Ratio of capital liabilities for apportioning existing interest and finance charges Particulars GFA as on 31.03.2012 Contribution as on 31.03.2012 GFA less Contribution Ratio Unit Generation Transmission Distribution Total (Rs. Cr) 3806.87 3735.89 4530.85 12073.61 (Rs. Cr) 3618.61 3618.61 (Rs. Cr) 3806.87 3735.89 912.24 8455.00 (%) 45.03 44.19 10.79 100.00

8.2.40 As discussed above, the interest on additional borrowings proposed for the year 2013-14 for meeting the fund requirements for the new investment may be apportioned in the ratio of normative debt requirements of each functional unit. The details are given below.
Table 8-11 Ratio of capital liabilities proposed for the year 2013-14 into the three functional areas.
Sl No 1 2 3 4 5 Particulars Capital investment proposed for the year 2013-14 Others (including IT enabled services Total Debt proposed Ratio of new debts service to each functional units Unit (Rs. Cr) (Rs. Cr) (Rs. Cr) (Rs. Cr) (%) 372.87 372.87 49.72 293.00 293.00 39.07 Generation 372.87 Transmission 293.00 Distribution 851.58 4.00 855.58 84.13 11.22 Total 1517.45 4.00 1521.45 750.00 100.00

8.2.41

The summary of the ratio of apportioning of interest and finance charges into three functional units for the year 2013-14 is given below.

Table 8-12

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Allocation of interest and finance charges for the year 2013-14 among the three functional units (in percentage) Sl No. 1 2 3 4
Generation Transmission Distribution

Particulars Interest on existing loans and bonds as on 31-03-2013 Interest on additional borrowings proposed for the year 2013-14 Interest on security deposit Other interest & finance charges (a)Interest on borrowings for working capital (b)Rebate to consumers for timely payment (c)Interest on PF (d)Cost of raising finance: (e)Guarantee Commission (f)Bank Charges

45.03 37.29

44.19 29.30

10.79 33.41 100.00 58.00 100.00 63.00 10.79 10.79 100.00

18.00 8.00 45.03 45.03

24.00 29.00 44.19 44.19

8.2.42 Based on the allocation as above, the function wise break of interest and finance charges for the year 2013-14 is detailed below.
Table 8-13 Function wise break up of interest and finance charges for the year 2013-14 Sl No. Particulars 1 2 3 4 Interest on existing loans and bonds as on 31-03-2013 Interest on additional borrowings proposed for the year 2013-14 Interest on security deposit Other interest & finance charges (a)Interest on borrowings for working capital (b)Rebate to consumers for timely payment (c)Interest on PF (d)Cost of raising finance: (e)Guarantee Commission (f)Bank Charges Grand Total
Generation Transmission Distribution Total (Rs. Cr) 89.11 54.38 0.00 0.00 0.00 6.80 0.45 0.30 0.00 151.04 (Rs. Cr) 87.45 42.73 0.00 25.00 0.00 24.65 0.44 0.29 0.00 180.56 (Rs. Cr) 21.34 12.27 85.48 75.00 1.00 53.55 0.11 0.07 8.00 256.82 (Rs. Cr) 197.90 109.38 85.48 100.00 1.00 85.00 1.00 0.66 8.00 588.42

Honble Commission may kindly approve the interest and finance charges as detailed above.

8.3
8.3.1

Depreciation
Since the year 2006-07, Honble Commission has been allowing depreciation to KSEB at the rates approved by the Central Electricity Regulatory Commission (CERC). During the tariff period 2004-09, Honble CERC has adopted lower depreciation rates for the generators and transmission utilities with permission to claim additional amount towards Advance Against Depreciation (AAD) up to 70% of the GFA including depreciation, in a

8.3.2

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span of 10 years. Thus, effectively the depreciation including the AAD allowed by the CERC for Central Power Utilities is more than 5.28% during the tariff period. 8.3.3 Though the State Commission has been allowing the depreciation at the CERC rates, the Commission has been denying the AAD to KSEB citing the reason that, KSEB could not avail project specific financing. Considering the provisions in the tariff policy that the AAD may not be allowed to the power utilities as such, the CERC has dispensed with the AAD during the tariff period 2009-14. However, considering the necessity for the power utilities to generate additional cash flow during the initial years of the tariff period, CERC proposed to offer high rate of depreciation during the initial 12 years. Since the year 2006-07, Honble Commission has been approving the depreciation as per the CERC norms and the latest norms are applicable from 2009 onwards. However, FOR is still to adopt the revised norms for distribution. 8.3.4 For regulatory accounts, as ordered by the State Commission, KSEB has been claiming the depreciation for the ARR&ERC petition and truing up petition at the CERC rates. However, while approving the truing up petitions for the year 2009-10 and 2010-11, the State Commission has not allowed the depreciation citing the reason that, KSEB has not provided the vintage of assets. Further, the State Commission has gone to the further extent that, the depreciation was allowed at old rates, that too without AAD. In the process of truing up for the years 2009-10 and 2010-11, KSEB has actually furnished the year wise details of the assets created during the immediate last 12 years. The State Commission has itself cited in the order that, more than 72 % of the financial value of the assets created by KSEB was less than 12 years old. The fact being so, there is no rational for denying the genuine claim of depreciation to KSEB at the rates approved by the CERC for the tariff period 200914. The category wise details of the assets created by KSEB during the immediate 12 years since 2000-2001 are detailed below.

8.3.5

8.3.6

Table 8-14

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Asset wise details of the GFA created during the last 12 years
Asset class GFA Land Other Hydraulic Building civil works works 215.64 55.02 19.24 46.44 36.23 33.35 34.05 26.64 20.47 10.21 39.20 19.24 52.9 392.99 608.63 559.49 38.84 18.90 50.08 36.38 14.10 119.52 19.15 30.48 12.09 75.35 98.87 28.87 Lines, Plant & Cable Furniture Office Vehicles Total Machinery networks & Fixtures Equipments etc 1155.38 160.29 700.76 174.94 519.16 137.37 136.57 154.01 118.06 197.81 313.51 290.84 279.85 3183.17 4338.55 1208.79 208.11 189.17 467.62 331.25 272.13 254.65 262.18 272.96 286.67 451.91 515.15 464.7 3976.50 5185.29 11.19 0.01 0.01 0.05 0.01 0.27 0.29 0.07 0.01 1.14 0.52 0.98 1.5 4.86 16.05 7.28 1.10 0.37 0.96 0.92 1.18 0.35 0.51 0.49 0.75 1.13 1.01 1.06 9.83 17.11 5.31 1.36 0.51 0.30 6.49 1.71 1.71 13.43 1.6 2.78 5.40 7.24 3.74 46.27 3347.16 494.14 947.15 801.37 968.74 501.41 651.65 505.23 467.70 564.56 935.92 1018.73 869.86 8726.46

GFA as on 01.04.2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Total addition during last 12 years GFA as on 01.04.2012

128.31 16.01 6.48 19.50 12.54 10.30 55.96 4.66 2.92 24.12 25.47 19.35 6.36 203.67 331.98

55.77 13.40 11.71 41.48 25.76 31.00 48.55 24.58 20.71 28.99 23.43 66.05 30.88

542.63 366.54 1102.12 422.31

51.58 12073.62

8.3.7

The depreciation for the GFA added during the immediate last 12 years amounting to Rs 8726.46 crore was claimed at the revised rates approved by the CERC during the tariff period 2009-14. Further, the balance depreciation of the old assets amounting Rs 3347.16 crore was claimed considering the residual value of depreciation duly considering the useful life of the assets. Thus the total depreciation for the 2012-13 as per the revised CERC rates after duly considering the vintage of assets is detailed below.
Table 8-15 Depreciation for the year 2012-13 Depreciation for the assets created Depreciation for the old assets during the last 12 years (more than 12 year old) Total Rate rate (CERC depreciation Gross value Gross value (considering tariff norms Amount Amount of the assets of the assets the residual 2009-13) value) (Rs.Cr) (%) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 203.67 0.00 0.00 128.31 0.00 0.00 0.00 392.99 3.34 13.13 215.64 2.17 4.68 17.81 542.63 5.28 28.65 559.49 0.70 3.92 32.57 366.54 3.34 12.24 55.77 2.17 1.21 13.45 3183.17 5.28 168.07 1155.38 2.05 23.68 191.75 3976.50 5.28 209.96 1208.79 2.05 24.77 234.73 4.86 9.50 0.46 11.19 0.00 0.00 0.46 9.83 6.33 0.62 7.28 4.68 0.34 0.96 46.27 6.33 2.93 5.31 4.68 0.25 3.18 8726.46 436.06 3347.16 58.85 494.91

Particulars

Land Building Hydraulic works Other civil works Plant & Machinery Lines, Cable networks etc Vehicles Furniture & Fixtures Office Equipments Total

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8.3.8

KSEB propose to capitalize Rs 978.00 crore during the year 2012-13. However, the assets created during the year 2001-02 amounts to Rs 494.00 crore created would fall under old assets. Considering these aspects, the total depreciation claimed for the year 2013-14, after duly considering the vintage of assets is detailed below.
Table 8-16 Details of Depreciation for the year 2013-14 Depreciation for the assets created Depreciation for the old assets during the last 12 years (more than 12 year old) Rate rate (CERC Gross value Gross value (considering tariff norms Amount of the Amount of the assets the residual 2009-13) assets value) (Rs.Cr) (%) (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 213.95 387.27 593.06 387.35 3374.92 4188.41 6.15 10.12 49.09 9210.32 0.00 3.34 5.28 3.34 5.28 5.28 9.50 6.33 6.33 0.00 12.93 31.31 12.94 178.20 221.15 0.58 0.64 3.11 460.86 144.32 270.66 598.33 69.17 1315.67 1416.90 11.20 8.38 6.67 3841.30 0.00 2.17 0.70 2.17 2.05 2.05 0.00 4.68 4.68

Particulars

Total depreciation

(Rs.Cr) 0.00 18.81 35.51 14.44 205.16 250.18 0.58 1.03 3.42 529.13

Land Building Hydraulic works Other civil works Plant & Machinery Lines, Cable networks etc Vehicles Furniture & Fixtures Office Equipments Total

0.00 5.87 4.19 1.50 26.96 29.04 0.00 0.39 0.31 68.27

8.3.9

Thus the total depreciation claimed for the year 2013-14 after duly considering the vintage of assets etc was Rs 529.13 crore.

8.3.10 Honble Commission vide the order dated 13 th April-2012 in the matter of the suo-motu proceedings on the recovery of depreciation on assets created out of Contributions from the Kerala State Electricity Board had ordered as follows: (a) Depreciation need not be allowed on assets created out of contributions and grants by any licensee in the state as a general rule. In the case of KSEB, this will be made applicable from 2010-11 and proposal for clawing back the depreciation already claimed up to 2009-10 is dispensed with. (b) In future, all licensees shall provide separate statements under capital works programme for assets to be created out of contributions and grants in their ARR & ERC / truing up petitions. The depreciation estimations in these petitions shall also distinctly indicate the value of assets for which depreciation is claimed and that which is created out of contributions and grants. 8.3.11 Further, vide the paragraph-28 of the order, Honble Commission has stated as follows:
Another claim of the Board is that, of the total amount of Rs.2,504.14 crore, Rs.1,535.99 crore was collected under OYEC scheme for providing priority for

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service connections and are not linked to any specific assets directly. Hence, the Board argued for a distinction on amount collected under OYEC scheme prior to the year 2003. However, in order to establish the claim the Board has to properly present the case with sufficient evidence so that the claim can be considered in detail. It is up to the Board to present the case before the Commission with all supporting details separately.

8.4.13 The summary of the amount booked under Contribution is extracted below.
Table 8-17 Summary of the amount booked under Contribution and Grants as on 31-03-2010 Item Consumers Contribution Towards Cost Of Capital Assets Service Connection charges OYEC (Priority) Charges Government Grants (APDRP, RGGVY etc) Contribution from Local bodies, PWD, Government etc Total Account Code 55.101 to 55.102 55.103 to 55.107 55.108 to 55.124 55.201 to 55.311 55.401 to 55.501 Amount (Rs.Cr) 164.89 256.19 1764.79 456.50 311.54 2953.91

8.4.14 The year wise details of the amount collected as OYEC charges from different categories of consumers is given in the Table below.
Table 8-18 Details of the amount booked under OYEC charges
Year Industrial Industrial HT non EHT LT/HT EHT/for Domestic Commercial LT HT Domestic Industrial Distribution any purpose Rapid Service Rapid Service Connection connection Total Charge -CT Noncharge Domestic Domestic

A/c As on 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Total

55.113 6.32 11.92 11.98 13.93 15.09 35.20 38.24 39.81 41.98 55.76 70.56 65.65 61.38 64.76 85.13 95.39 99.04 97.21 92.67 98.07 116.83 152.28 1369.20

55.114 0.77 1.65 1.07 1.42 1.51 4.49 3.00 3.20 3.31 6.58 11.58 11.24 8.79 9.99 9.86 12.06 10.68 9.82 16.30 23.92 41.38 48.61 241.23

55.115 0.12 0.72 -0.23 0.17 0.26 0.62 0.14 0.10 0.23 0.15 0.83 0.29 0.54 0.37 0.62 1.62 0.41 0.76 2.04 -0.27 2.44 1.42 13.35

55.116 0.16 0.02 0.17 0.11 0.21 0.82 2.07 1.20 0.88 0.56 0.43 0.21 0.52 0.38 0.62 0.19 0.27 0.41 0.71 0.09 1.34 0.32 11.69

55.117 0.00 0.55 0.09 0.08 0.03 0.13 0.01 0.30 0.25 -0.40 0.09 0.28 0.37 0.22 0.06 0.04 0.08 0.40 0.11 0.39 0.44 0.91 4.43

55.118 0.01 0.03 0.08 0.06 0.09 0.35 0.24 0.02 0.05 0.00 0.00 0.00 0.00 0.44 0.21 0.53 0.01 0.00 0.57 0.10 0.17 0.19 3.15

55.119 0.49 0.73 0.51 1.60 0.81 2.00 1.47 0.90 0.96 1.18 2.70 1.89 2.52 2.06 2.07 3.78 3.98 10.38 6.71 7.14 18.33 37.45 109.66

55.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.20 -0.20 0.00 0.12 0.00 0.00 0.00 5.11 5.45 10.69

55.123 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.38 0.19 0.00 0.13 0.03 0.03 0.04 0.02 0.00 0.00 0.01 0.04 0.00 0.87

55.124 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.16 0.01 0.02 0.11 0.00 0.02 0.02 0.01 0.00 0.01 0.06 0.01 0.09 7.87 15.62 13.67 17.37 18.00 43.61 45.17 45.53 47.66 64.38 86.39 79.58 74.36 78.45 98.42 113.67 114.62 118.98 119.12 129.51 186.09 246.72

0.52 1764.79

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8.4.15 As detailed above, out of the total amount of Rs 2953.91 crore booked under consumer contribution and grants, an amount of Rs 1764.79 crore is collected towards Priority of Service Connection scheme under OYEC. Honble Commission may kindly note that, this amount was not collected for creation of any specific assets, but for giving only for priority for service connection. These charges were collected at the standardized rates approved by the Board in consultation with the Government from time to time. 8.4.16 Under these circumstances, KSEB humbly request before the Honble Commission that, the amount collected under OYEC charges may be excluded from the purview of consumer contribution for disallowing depreciation. 8.4.17 The amount of depreciation arrived at after excluding consumer contribution as discussed above for the year 2012-13 & 2013-14 is detailed in the table given below.
Table 8-19 Depreciation for the year 2012-13 Function wise Depreciation details of applicable on Function wise Depreciation at the Consumer Consumer split of rate of GFA contribution contribution depreciation duly (Without (less OYEC) considering the considering charges consumer Consumer contribution contribution) 156.05 0.00 0.00 156.05 153.14 0.00 0.00 153.14 185.72 1853.82 75.99 109.73 494.91 1853.82 418.92

Year

Generation Transmission Distribution Total

Table 8-20 Depreciation for the year 2013-14 Function wise Depreciation details of applicable on Function wise Depreciation at the Consumer Consumer split of rate of GFA contribution contribution depreciation duly Year (Without (less OYEC) considering the considering charges consumer Consumer contribution contribution) Generation 166.84 0.00 0.00 166.84 Transmission 163.73 0.00 0.00 163.73 Distribution 198.56 2128.82 93.29 105.27 Total 529.13 2128.82 93.29 435.84

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8.4

8.4.1 Employee cost of KSEB include salary, DA and other benefits to serving employees and pensions, terminal benefits etc to the retired employees. 8.4.2 KSEB was established as a statutory body as per the Section-5 of the Electricity (Supply) Act-1948. At present KSEB has been functioning under the transitional provisions of section-172 and 131 of the Electricity Act-2003. Since KSEB is yet to be re-vested into the new company as per the provisions of the Electricity Act, 2003, there was no change in the policies regarding service conditions of the employees after the enactment of the Electricity Act-2003. The salary, DA and other benefits to its workmen are governed by the wage agreement with the trade unions. 8.4.3 There is a statutory provision in the Electricity Act-2003 on the terms and conditions of employees of State Electricity Boards, which is quoted below.
Section 133. (1) The State Government may, by a transfer scheme, provide for the transfer of the officers and employees to the transferee on the vesting of properties, rights and liabilities in such transferee as provided under section 131. (2) Upon such transfer under the transfer scheme, the personnel shall hold office or service under the transferee on such terms and conditions as may be determined in accordance with the transfer scheme: Provided that such terms and conditions on the transfer shall not in any way be less favorable than those which would have been applicable to them if there had been no such transfer under the transfer scheme: Provided further that the transfer can be provisional for a stipulated period. Explanation: - For the purposes of this section and the transfer scheme, the expression "officers and employees" shall mean all officers and employees who on the date specified in the scheme are the officers and employees of the Board or transferor, as the case may be.

Employee Costs

8.4.4 Hitherto Board has been providing salary and other benefits including earned leave surrender etc as per the wage settlement agreement entered into between the trade unions, the DA is provided as and when the same released by the State Government to its employees, pension and other benefits as approved by the State Government and also as per the statutory rules and directions under court of law. This is the practice followed by the Board from its inception in 1957.

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8.4.5 Honble Commission has been approving the actual employee cost as per the audited accounts till the year 2008-09. However, since the year 2009-10 onwards, Honble Commission has been making significant disallowance on the employee cost, and now such disallowance has exceeded 30% of the employee cost incurred by KSEB. Total employee cost disallowed by the State Commission since 2009-10 to 2012-13 8.4.6 The total employee cost disallowed by the Honble Commission since the year 2009-10 is detailed below.
Table 8-21 Employee cost Disallowed by the State Commission from 2009-10 to 2012-13 Disallowance as a Employee cost Approved by Disallowance percentage of as per KSEB SERC Year total (Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr) 2009-10 1451.53 1352.45 99.08 6.83 2010-11 1712.80 1462.00 250.80 14.64 2011-12 1910.62 1582.11 328.51 17.19 2012-13 2231.46 1663.66 567.80 25.45 Total 7306.41 6060.22 1246.19 17.06

Out of the above, the major disallowance was made under DA, pension, basic pay etc. A description of the disallowances made on each head is detailed below. Disallowance made on DA 8.4.7 The percentage of DA allowed by KSEB to its employees, the percentage of DA approved by the State Commission and the total amount of DA provided by KSEB, the same approved by the State Commission and the total disallowance made etc is detailed below.
Table 8-22 Amount of DA disallowed by the State Commission
Year DA provided by KSEB as (%) of basic pay (%) 67 88 112 140 DA allowed by KSERC as (%) of basic pay (%) 57 61 64 68 Amount of DA provided by KSEB (Rs.Cr) 258.11 357.93 481.61 627.58 1725.23 Amount of DA allowed by KSERC (Rs.Cr) 221.11 246.98 266.83 288.29 1023.21 Amount disallowed (Rs.Cr) 37 110.95 214.78 339.29 702.02 Amount disallowed as (%) of the total amount provided by KSEB (%) 14.33 31.00 44.60 54.06 40.69

2009-10 2010-11 2011-12 2012-13 Total

During the last four years, the State Commission has disallowed a total amount of Rs 702.02 crore alone towards DA and the amount
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disallowed was 40.69% of the amount actually granted by the Board to its employees. 8.4.8 Regarding the release of DA, the following points may kindly be noted. (i) (ii) KSEB has been following the Kerala Service Rules and other service conditions since its inception. As quoted earlier, there is a provision in the Electricity Act2003 that, the service conditions of the existing employees after the enactment of the Electricity Act-2003 shall be in no way inferior to the same as if the Board has been continuing as per the provision of the Electricity (Supply) Act-1948. KSEB has been releasing DA to its employees as and when the same are allowed by the State Government to its employees. The State Government releases DA to its employees in line with the DA declared by the Central Government periodically. DA is being released periodically to compensate the erosion in value of earnings due to inflation. The State Commission vide the letter No. 1235/ARR&ERC 10-11/KSERC /2010 dated 28th July-2010 addressed to KSEB, has communicated as under:
the expenditure on account of DA/DR increases announced by the Government from time to time can be paid to the employees and pensioners without reference to the Commission. Any additional expenditure in this regard over and above the approved expenditure can be considered at the time of truing up as has been done in the previous years

(iii)

(iv)

(v)

(vi)

The State Commission vide the press release dated 28 th July-2010 has further clarified as under:
Existing salary, DA and pension are considered as uncontrollable items in the tariff determination process . In the past also all such increases in salary and DA have been allowed even if it was higher than the approved level while finalizing each years accounts. In one of the previous Orders, the Commission had stated that the increase in DA due to inflation has to be allowed to KSEB employees as and when it becomes due and shall not be permitted to accrue. There is also a provision in the Electricity Act that there shall not be any deterioration in the terms and conditions of employees in the reform process.

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8.4.9 However, disregarding all the above, the State Commission has been disallowing the DA since the year 2009-10. It is ironical to note that, on one hand the State Commission has been clarifying that the DA is uncontrollable and the same can be allowed to Board employees as and when the same is released by the Government to its employees and on other hand the State Commission has been irrationally disallowing the same being disbursed in line with its own clarification. 8.4.10 The methodology adopted by the State Commission for approving the DA is also totally irrational and not adaptable for a distribution utility like KSEB. The methodology now adopted by the State Commission for approving the DA is detailed below. (i) (ii) The total DA provided by KSEB for the year 2008-09 is adopted as the base. For the subsequent years, the increase in DA is allowed at the rate of the weighted average indices of Wholesale Price Index (WPI) and Consumer Price Index (CPI) at the weighatge of 30:70 Accordingly, the DA allowed by the State Commission is only a percentage increase over the DA actually allowed during the year 2008-09 and not on the basic salary of the employees.

(iii)

Disallowance made on Pension and benefits 8.4.11 The other major disallowance on employee cost made by KSEB since the year 2009-10 was on pension and terminal benefits provided by KSEB. 8.4.12 The pension and terminal benefits disallowed by the State Commission since the year 2009-10 is detailed below.
Amount disallowed Pension and terminal benefits provided by KSEB (Rs in Crore) 604.30 739.20 750.67 853.97 2948.14 Table 8-23 by the State Commission as pension Pension and terminal Disallowance benefits allowed by made KSERC (Rs in Crore) (Rs in Crore) 544.44 59.86 599.81 139.39 660.87 89.80 713.94 140.03 2519.06 429.08

Year
2009-10 2010-11 2011-12 2012-13 Total

Amount disallowed as (%) of total 9.91 18.86 11.96 16.40 14.55

8.4.13 As detailed above, the State Commission has made a total disallowance of Rs 429.08 crore towards pension and other benefits during the last four years since 2009-10. 8.4.14 For approving the terminal benefits also, the State Commission has adopted the payment made for the year 2008-09 as the base. For

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the subsequent years, the increase was allowed at the rate of the weighted average indices of WPI and CPI at the weightage of 30:70. 8.4.15 While disallowing the pension as detailed above, Honble Commission failed to consider the following. (i) Pension is a statutory liability and uncontrollable expense and has to be included in the ARR till an alternate arrangement is made on payment of pension. (ii) The payment of pension depends on the number of pensioners as on date and KSEB could not deny or limit the pension to any indices as ordered by the State Commission but to follow rules in this behalf. The State Commission has also recognized that, the pension is an uncontrollable expense of KSEB. KSEB has been disbursing the pension on the principle of pay as you go basis. The forum of regulators also identified that the pension is a statutory liability of the distribution utility.

(iii) (iv) (v)

Disregarding all these facts, the State Commission has been disallowing the actual claim of pension. 8.4.16 Honble Commission may also be aware of the fact that, the pensioners are also approaching the Honble High Court even when there is a delay in releasing pensionary benefits and getting favorable orders. Under any circumstances, KSEB cannot deny pensionary benefits to its retired employees unless there is separate mechanism for payment of the same. Disallowance made on basic salary 8.4.17 The State Commission has been denying the basic salary as claimed by KSEB. Honble Commission has adopted the basic salary for the year 2008-09 is the base and allowed only 3% increase every year. The basic salary claimed by KSEB and the same approved by the Honble Commission during the period from 2009-10 to 2012-13 is detailed below.
Table 8-24 Amount disallowed by the State Commission as basic salary Year
2009-10 2010-11 2011-12 2012-13 Total

Basic salary Basic salary claimed by KSEB approved (Rs. Cr) 387.85 406.59 430.12 448.26 1672.82 (Rs. Cr) 390.06 401.76 413.82 423.23 1628.87

Disallowance (Rs. Cr) -2.21 4.83 16.30 25.03 43.95

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Deficiency in the methodology adopted by the Honble Commission for approving the employee cost during the period from 2009-10 to 2012-13 8.4.18 As submitted under table 8.21, State Commission has made a total disallowance of Rs 1246.19 crore from the employee cost claimed/ projected by KSEB. This amount has actually been incurred/ likely to be incurred by KSEB during the said period. KSEB would not be able to sustain unless the Honble Commission allows the said expenses after prudence check. Otherwise, it may affect the financial sustainability and even the existence of KSEB itself. Further, it may create employee unrest and also could affect the relationship between KSEB and its employees. In turn these would ultimately affect the performance and Boards ability to provide quality power to its consumers. 8.4.19 Honble Commission and some of the stake holders are vehemently arguing that the employee cost of KSEB is the highest compared to other distribution utilities. KSEB humbly submit that, this criticism appraising the employee cost of KSEB in the right sense. 8.4.20 Growth of KSEB system: Honble Commission has been approving the ARR&ERC and truing up petitions since the year 2003-04. Since then, the volume of activities in all the three functional areas has increased manifold. The following table illustrates the growth of KSEB business since the year 2003-04.
Table 8-25 Growth of the Kerala power system since the inception of the Honble Commission
Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Annual Consumer energy strength sale (Lakhs) (MU) 73 78 83 87 90 94 97 101 105 Connected No of load S/s MW Revenue Dist. No of from sale Transformers section of Power offices (Nos) (Km) (Km) (Km) (Nos) (Rs. Cr) 201638.00 34758.00 9910 229 8958.00 33280.00 556 2756.09 EHT lines HT Lines LT lines 250 267 280 298 314 337 340 368 9220.00 9478.00 9652.00 9825.00 10012.00 10279.00 10414.00 10714.00 34235.00 207711.00 34596.00 217899.00 36419.00 226128.00 38235.00 234286.00 41284.00 241849.00 44682.00 249687.00 48232.00 256616.00 53075.00 259479.00 36640.00 37724.00 39848.00 42401.00 46510.00 52300.00 58427.00 63381.00 558 603 619 640 641 641 694 697 2917.36 3367.3 4009.71 4696.95 4893.02 4747.17 5641.26 5984.6

8910.84 9384.40 10269.80 11331.00 12049.85 12414.32 13971.09 14547.90 15980.53

10334 10907 11466 12378 15267 15867 16682 17518

8.4.21 Even during the period from 2008-09 to 2012-13 , the energy sale has increased from 12414.32 MU to 17181.21 MU, i.e., an increase of 4767 MU (38.39%) over the last four years, the consumer strength has increased from 94 lakhs to 108.50 laks, an increase of 15.40% over 2008-09. In all areas of activity of KSEB including the creation of substation, lines, distribution transformers, capacity addition etc has been increasing every year. However, as opined by some of the
101

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stake holders, Honble Commission has also claiming that, KSEB can do its increased business activity with the same level of employees in 2008-09 and that too without adequate increase in salary, DA or pay revision. KSEB could not understand how a DISCOM can do its increased business volume without resorting to required manpower and additional cost. That, too in a highly labour sensitive State like Kerala. 8.4.22 In addition to the business growth, the employee cost is highly susceptible to inflation. The inflation during the regulatory regime from 2003-04 to 2012-13 is detailed below.
Table 8-26 Rate of inflation during the period from 2003-04 to 2012-13 Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Inflation (%) Cumulative inflation (%) 3.87 3.83 4.41 6.69 6.21 9.09 12.32 10.53 9.04 8.39 7.70 12.11 18.80 25.01 34.10 46.42 56.95 65.99 74.38

8.4.23 The year wise details in respect of employee cost per unit of electricity sale during the period from 2003-04 to 2012-13 is detailed below.
Table 8-27 Employee cost during the period from 2003-04 to 2013-14 (%) increase of Employee Annual Employee employee cost cost energy sale cost (actual) over 2003-04 (Rs.Cr) (MU) (Rs/unit) (%) 788.31 789.64 862.52 898.09 904.87 1255.19 1451.53 1712.80 1912.18 2231.46 8910.84 9384.40 10269.80 11331.00 12049.85 12414.32 13971.09 14547.90 15921.53 16386.30 0.88 0.84 0.84 0.79 0.75 1.01 1.04 1.18 1.20 1.36 -4.89 -5.06 -10.41 -15.12 14.29 17.44 33.08 35.76 53.93

Year

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

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8.4.24 As submitted earlier, the employee cost is highly susceptible to inflation. The employee cost admissible on the basis of inflation is detailed below.
Table 8-28 Employee cost admissible based Employee cost Cumulative Inflation admissible inflation (based on inflation) (%) (%) (Rs/unit) 3.87 3.83 4.41 6.69 6.21 9.09 12.32 10.53 9.04 8.39 7.70 12.11 18.80 25.01 34.10 46.42 56.95 65.99 74.38 on the inflation rate Reduction in employee cost Employee cost (compared to the actual same admissible based on inflation) (Rs/unit) (Rs/unit) 0.88 0.84 0.84 0.79 0.75 1.01 1.04 1.18 1.20 1.36 0.00 0.07 0.11 0.23 0.33 0.17 0.29 0.29 0.38 0.37

Year

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

0.88 0.91 0.95 1.02 1.08 1.18 1.32 1.46 1.60 1.73

8.4.25 It can be seen from the above that, the employee cost admissible for the year 2012-13 on the basis of inflation is Rs 1.73 per unit, where as the actual claim including pension was only Rs 1.36 per unit. The inflationary increase is not the fault of KSEB, however, KSEBs projection/ actual expense towards employees in all the financial year under consideration was much less than the cost admissible on the basis of inflation. 8.4.26 Usually, during the deliberation of the ARR&ERC petition, some of the stake holders have been confusing the Honble Commission and the general public that the employee cost of KSEB has increased 400 times compared to the year 2003-04. This is a baseless argument without appraising the increase in business growth of the utility and inflation. Say, the employee cost incurred for the year 2003-04 for distributing 1000 MU of energy was Rs 100.00 crore @ Rs 1.00 per unit. According to the stake holders and recent thinking of the Honble Commission, the same Rs 100.00 crore is sufficient for distributing 10000 MU (10 times that in 2003-04) the same in 201314. Automatically, in tune with the increase in business volume, the employee cost would also increase. However, it is ironical to note that, these facts are not considered by the Honble Commission. 8.4.27 Ultimately, KSEB may humbly pointout that, there is a conceptual error on the part of the Honble Commission in adopting the absolute employee cost of 2008-09 as the base and application of inflation indices alone without considering the business growth of KSEB. Further, WPI is never factored for the computation of DA/DR
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percentages. If the Honble Commission proposes to index the employee cost with respect to a base year, definitely the employee cost per unit alone shall be adopted as the base. Further, Honble Commission may kindly desist from putting KSEB in hardship by disallowing the uncontrollable expenses like DA and pension. 8.4.28 Honble Commission has also taken a different stand that, the additional liability due to pay-revision etc shall be met through employee productivity. The increase in employee cost due to pay revision etc was about 14% on the pre-revised scale. This cannot be met through employee productivity alone. Honble Commission may take note of the fact that as a Government utility, KSEB can not take drastic steps on reduction of employees through retrenchment, out sourcing etc. Computerization is being done on all areas including billing and revenue collection, Supply chain management, HRM activities, accounting etc. Further, the R-APDRP scheme, which is now under implementation, would also give thrust on computerization and related activities. Through all these efforts, additional man power requirement could be reduced in a phased manner. Methodology adopted for estimating the employee cost for the year 2013-14 8.4.29 KSEB has estimated the employee cost and pension for the year 2013-14, based on the prevailing practices in this petition as detailed below. (i) (ii) (iii) (iv) (v) Honble Commission may allow the basic salary as per the wage settlement agreement entered into between the KSEB and its trade unions. The DA may be allowed to KSEB employees as and when the same is allowed by the State Government to its employees. The pension and terminal benefits may be allowed. The provision created for pay revision, which is due from July/August-2013 may be allowed to be provided for. Ultimately, Honble Commission may kindly consider the practices followed by other regulators and FOIR recommendations that the DA and pension are uncontrollable expenses to the Distribution utilities.

Salary and allowances to serving employees 8.4.30 As on 31-03-2012, KSEB had 31,113 employees; their function wise split up along with comparable numbers is detailed below.

Table 8-29 Total number of employees in each functional unit Functional Unit 31.03.2010 31.03.2011

31.03.2012

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Generation Transmission Distribution Corporate Office Total

1616 3021 22368 1038 28043

1737 3026 24123 999 29885

1745 3314 24994 1060 31113

8.4.31 As submitted earlier, the basic salary for the serving employees has been estimated as per the prevailing wage settlement agreement. Regarding the pay revision, KSEB may submit that, the long term settlement with recognized Trade Unions with regard to pay revision is arrived at after a series of negotiations. Memorandum of Settlement so entered into with Trade union is under the section 18 of the Industrial Disputes Act, 1947. Further, the attention of the Honble Commission is invited to the decision of Honble ATE in Appeal no. 250 of 2006 between Bangalore Electricity Supply Company Ltd and others v/s KERC and KPTCL. In the captioned decision, it was held that we do not agree with the decision of the Commission not to allow employee cost as pay revisions take in to account factors such as: cost of living, salary levels in similar sectors etc. and are not necessarily linked to employee productivity alone . Further it was also held that wage revisions invariably require very long and protracted negotiations and, therefore, we do not find any justification in disallowing arrears of pay revision to the appellants. In todays industrial environment the appellants can not postpone the payment of arrears and, therefore, will be exposed to crippling cash flow constraints if the wage related payments are not allowed. In view of the aforesaid discussion we hold that all payment of arrears arising as a result of the pay revision should be allowed with carrying cost in the next truing up exercise. KSEB also like to invite the recommendations of the 9 th pay commission constituted by the State Government, which is extracted below. 1. The employees and pensioners require to be compensated for the rising cost of living particularly the cost of education and health care services. The consumerism is gripping the state and the state government employees, mostly belonging to the middle class, will have to meet the consumption norms of their class in society. The disparities in income of the government employees in one hand and the income of the non resident Malayalees, employees in industries like banking, insurance, information technology and communication, employees benefiting from pay scales of UGC and AICTE, professionals like doctors, engineers etc are widening. This downward movement in the relative income of the government employees has been one of the causes of
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frustration, discourteous behavior towards the public and corruption among them. The increasingly long years of education of the children in the state, huge unemployment problem of the educated and the increasing number of the old people in the households (a drawing death rate population) have increased the number of dependents of a government employee, has to take care of despite the decrease in number of children. 2. Increasing the salary, allowance and pension is important not only for the government employees. The Government is already finding it difficult to attract talents to government service and to retain them. The technically qualified persons, doctors and other professionals do not find Government service attractive enough despite, the more relaxed working conditions, security of tenure and pensions of Government employees. Low quality of employees will affect quality of governance. 3. The case for upward revision in salary and pension rests on the following grounds. Firstly, the income of Government employees vis-a-vis other segments of their middle class has been coming down and this may lead to difficulties in attracting good talents to Government services. Secondly, the higher salaries are required to offset the increasing cost of living particularly the cost of services like education and health care. It is likely that the inflation rates which are hovering around double digit level at present are unlikely to go down in near future. Thirdly, a Government employee has to take care of his/her dependents who may be students who spend longer years in educational institutions than in other parts of the country. In view of the increasing life expectancy, a good number of the dependents are likely to be old parents whose health care and other support needs are increasing and are getting costlier. Fourthly, the Government employees can not insulate themselves totally from the consumerism which has gripped the middle class in the state. 8.4.32 KSEB has to provide the HRA, project allowances etc as per the provisions in the wage agreement with the employees unions. Also, KSEB employees are entitled to claim earned leave encashment for 30 days and Terminal Leave surrender for 300 days. The actual earned leave encashment including Terminal leave surrender for the year 2011-12 was Rs 81.16 crore. KSEB has made a provision of Rs 87.50 crore for the year 2012-13 and Rs 94.00 crore for the year 2013-14. It may be noted that, the actual EL encashment may depend on the number of employees who opt to claim earned leave surrender. Employees also can choose to avail earned leave instead of en cashing the same. Hence, any deviation/ excess on actual
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disbursement over the approval may be admitted at the time of truing up of accounts. 8.4.33 The revised estimate of the salary and benefits to serving employees for the year 2012-13 and the estimate for the year 2013-14 are detailed below.
Sl No. A. B. Table 8-30 Details of salary and benefits of serving employees 2011-12 2012-13 Particulars (Rs. Cr) (Rs. Cr) Basic Pay 685.98 720.28 DA at the beginning of the year * 373.28 403.20 DA released/ provision made during the year 57.02
Other allowances allowances) Bonus Medical reimbursements Compensation Leave salary & Pension Contribution Earned Leave encashment Staff Welfare Provision made for pay revision due from July/Aug-2013 (HRA, Project 38.50 0.25 5.80 4.55 1.01 0.20 81.16 1.56 0.00 40.25 0.27 6.50 4.75 1.00 0.25 87.50 1.80 0.00

2013-14 (Rs. Cr) 756.29 543.11 59.88


43.75 0.30 6.50 5.00 1.00 0.25 94.00 2.05 82.55

Over Time/ holiday wages

D E
F G

Total
Less amount capitalized from employee cost Net Employee cost * DA as on 31.03.2012 -55.978% DA as on 31.03.2013 -71.812% DA as on 31.03.2014 -87.646%

1192.29
120.91 1071.38

1322.82
136.62 1186.20

1594.67
163.22 1431.45

8.4.34

(a) Pension and Terminal benefits to the Retired Employees Pensionary claims are firm commitment and KSEB could not deny this to its past employees. Moreover, as and when DA is released to serving employees, same relief is also granted to the pensioners in line with Government policies. Honble Commission may kindly note that, the pension also being revised as and when the pay revision is made applicable to serving employees.

8.4.35 The revised estimate of the pension and other benefits to the retired employees for the year 2011-12 and the estimate of the same for the year 2012-13 and 2013-14 are given below.

Table 8-31 Estimate of pension and terminal benefits


Particulars 2011-12 2012-13 (provisional) (Revised) 2013-14

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(Rs. Cr) Annual Pension Commutation DCRG Medical, interim relief and festival allowance Provision for pension revision Total 628.78 21.47 25.37 5.01 30.41 711.04

(Rs. Cr) 714.16 27.50 30.80 5.94 52.50 830.90

(Rs. Cr) 832.53 27.50 30.80 6.00 60.00 956.83

8.4.36 The total employee cost including salary and allowances to the serving employees and the pension, terminal benefits for the retired employees are given below.
Table 8-32 Total employee cost
Particulars 2011-12 2012-13 (provisional) (Revised) (Rs. Cr) (Rs. Cr) 2013-14 (Rs. Cr)

Salary and allowance to serving employees Terminal benefits Total

1192.29 711.04 1903.34

1322.82 830.90 2153.72

1594.67 956.83 2551.50

8.4.37 The Government has decided funding pattern of terminal benefits in principle based on the report of M/s PFC on the subject matter. Till date pension liabilities of KSEB remain unfunded and this liability has been accounted over the years on the principle of pay as you go as in Government. Since various modalities are to be finalized, its impact on ARR could not be assessed correctly and hence not included in ARR. How ever the Board shall approach the Honble commission once all aspects of the funding pattern are finalized. Apportioning Employee Cost among different functional units. 8.4.38 As stated under para-7.1 above, the total employee cost is apportioned into Generation, Transmission and Distribution based on the basis of the employee strength and cost as on 31-03-2012 as per the provisional accounts for the year 2011-12. The details are given below.
Table 8-33 Function wise details of employee cost for the year 2013-14 Function wise break Amount for the Functional area up of employee cost year 2013-14 (%) (Rs.Cr) Generation 5.81 148.15 Transmission 11.03 281.35 Distribution 83.17 2122.00 Total 100.00 2551.50

8.5 Repairs and Maintenance Cost (R&M)

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8.5.1

The assets of KSEB include plant and machinery, lines, cable networks, buildings, office equipments etc. In order to provide quality power with minimum interruptions, the assets have to be maintained in good condition throughout its economical life. The R&M cost is the essential cost required to maintain the assets. Most of the assets of KSEB are very old and it is to be repaired & maintained properly for ensuring desired level of performance. Further Honble Commission has imposed stringent performance standards to maintain quality and reliability in power supply. Irrespective of use, the plant and machinery of the electricity utility has to be kept in a state of readiness to achieve the performance standards. As per accounting policies, the expenditure on repairs & maintenance has to be charged to revenue in the same year in which it is incurred. In order to the meet the standards, reasonable expenses under R&M heads based on the prudent utility practices is inevitable to maintain the assets properly. Honble Commissions has treated the R&M expenses as a controllable item and disallowing considerable portion of expenses actually incurred/ projected by the Board. Since 2011-12, Honble Commission has been adopting norms based on WPI and CPI for approving R&M expenses by taking 2008-09 actuals as the base. During the process of Truing up/ orders on ARR since 2009-10, a total sum of Rs. 273.23 crore has been disallowed by adopting the methodology referred above. The details are given below:
Table 8-34 R&M cost disallowed by the KSERC since the year 2009-10 R&M cost as per Approved KSEB SERC (Rs.Cr) (Rs.Cr) 173.16 231.85 243.75 326.07 974.83 152.74 167.91 185.00 195.95 by Disallowance Disallowance as (%) of the total amount claimed by KSEB (%) 20.42 63.94 58.75 130.12 273.23 11.79 27.58 24.10 39.91 28.03

8.5.2

8.5.3

8.5.4

Year

(Rs.Cr)

2009-10 2010-11 2011-12 2012-13 Total

8.5.5

The present methodology adopted by the Honble Commission, i.e., the R&M cost of the year 2008-09 as the base and the increase for the subsequent years limited to weighted average indices of WPI and CPI at the weightage of 30:70 does not take into accounts various factors such as age of asset, business growth etc and in the process genuine expenses of the Board getting disallowed.

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8.5.6

KSEB is engaged in Generation, Transmission and Distribution of Electricity and has gross assets to the tune of Rs 12073.62 crore as on 31.03.2012. Fixed assets of the Board have increased by 30% as on 31-03-2012 over the level as on 31.03.2009 as detailed below.
Table 8-35 Gross fixed assets

Functional area

% of increase As on As on As on As on Overall over 31-0331-03-2009 31-03-2010 31-03-2011 31.03.2012 increase 2009 21.55 23.34 46.72 30.54

(Rs. Cr) (Rs. Cr) (Rs. Cr) (Rs. Cr) (Rs. Cr) (%) 3132.03 3806.87 674.84 Generation 3401.75 3695.14 3029.03 3735.89 706.86 Transmission 3253.94 3441.44 3088.04 4530.86 1442.82 Distribution 3529.34 4067.19 9249.11 10185.03 Total 11203.77 12073.62 2824.52

8.5.7

Out of the above, the R&M cost of the distribution shows a higher increase compared to other functional area. The assets of the Distribution wing comprises predominantly of Lines, Cable networks etc where as Transmission assets are dominated by Plant and machinery and Lines, Cable networks. However, major portion of Generation assets comprises of Hydraulic works and Plant and machinery. Honble Commission has remarked in the truing up order for 2010-11 that 78% of the assets are below 12 years old. It may kindly be noted that repairs are to be done on physical assets and value wise asset addition can not be considered as a yard stick for the determination of age of the asset. The fixed assets are stated at historical cost and the same is highly influenced by inflation. Even though substantial addition in terms of monitory value took place in the last decade or so, it can not be concluded that there has been proportionate increase in addition of physical asset as well. The following table clearly shows that substantial portion of the physical assets of the Board is more than 12 years old.

8.5.8

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Table 8-36 Growth of Kerala power system


Year Installed Capacity in MW Step up transformer capacity MVA Step down transformer capacity MVA HT lines 11 KV (ckt.kms) HT lines Total (ckt.kms) EHT lines 220 KV (ckt.kms) EHT lines 110 KV (ckt.kms) EHT lines 66 KV (ckt.kms) EHT lines Total (ckt.kms) EHT S/s (Nos) LT lines (ckt. Km) Dist Trfrs (Nos) Dist Trfrs (MVA) 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Assets in existence prior to 12 years % of total asset 82 84

2351 2261

2421 2346

2602 2346

2602 2346

2614 2364

2617 2364

2644 2389

2657 2389

2671 2408

2739 2448

2746 2448

2863 2684

9363 28672 28672 2576 3023 1910 8622 178 29551 3909

10306 30035 30128 2646 3407 2148 9460 190 31329 4182

20573 30971 31184 2646 3459 2161 9564 194 32585 4389

11095 32054 32370 2646 3496 2205 9638 198 33455 4437

11827 33280 33702 2650 3671 2216 9992 205 34758 4640

12432 34236 34830 2663 3742 2221 10147 211 36640 4858

13231 34596 35282 2709 3815 2269 10339 218 37724 5033

13339 36419 37220 2709 3842 2299 10393 221 39848 5157

13808 38235 39142 2710 3899 2310 10508 226 42401 5422

14193 41284 42360 2710 3916 2310 10542 226 46510 5937

15288 44682 45958 2728 3964 2310 10656 231 52300 6708

16222 48342 49681 2728 3999 2310 10726 234 58104 7320

58 59 58 94 76 83 80 76 70 51 53

180499 187169 191931 196974 201638 207711 217899 226128 234286 241849 249687 256449

8.5.9

R&M cost is highly dependent on inflation, age of assets and increase in asset volume. The inflation during the last few years is summarized below.
Year Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Average Table 8-37 Inflation during the years from 2006-2007 2006 2007 2008 2009 5.26 6.67 7.81 8.7 6.14 6.61 7.75 8.63 7.89 5.69 7.69 9.29 6.9 6.45 8.33 11.89 5.98 7.26 9.02 11.72 6.84 6.4 9.77 11.64 7.63 5.51 10.45 11.49 6.72 5.51 10.45 13.51 6.72 5.51 9.7 14.97 6.72 5.51 10.45 16.22 7.56 5.47 9.63 14.86 6.72 7.87 8.03 14.86 6.76 6.21 9.09 12.32 to 2012-13 2010 2011 13.33 9.41 13.91 8.72 13.73 8.62 11.25 8.43 9.88 8.99 9.82 10.06 9.70 9.39 8.33 9.34 9.47 6.49 9.30 5.32 8.82 7.57 8.82 8.65 10.53 8.42 2012 10.22 10.16 10.05 9.84 10.31 9.14 9.60

9.90

8.5.10 It can be seen from the table that inflation level is consistently high during the last few years and even though inflation in the first seven months of current year is at 9.90 %. 8.5.11 Analysis of the R&M expenses over the last three years reveals that the growth in expense is mainly confined to repairs of plant and

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machinery and lines, cable network etc. The details are given below.
Table 8-38 Asset wise details of R&M costs 2008-09 2009-10 2010-11 Actuals Actuals Actuals
41.12 3.69 4.99 1.79 81.29 5.18 0.22 0.52 138.8

Sl No. Particulars 1 2 3 4 5 6 7 8

2011-12 Provisional accounts


63.81 5.78 6.67 2.12 168.05 4.12 0.09 1.06 251.7

Plant & Machinery Buildings Other Civil works Hydraulic works Lines, Cable networks Vehicles Furniture & fixtures Office equipment Total Increase over last year Increase (1) &(5)

52.93 4.41 5.34 2.01 101.53 5.5 0.5 0.94 173.16 24.8% 26.2%

61.28 5.06 5.63 1.99 152.09 4.7 0.12 0.98


231.85

33.9% 38.1%

8.6% 8.7%

Regarding the increase in R&M costs, the following points may kindly be noted. (i) The R&M works is highly susceptible to inflation. The inflation during the year was about 8.42 %. The month wise details of inflation for the year 2011-12 are given as Table-8.37. (ii) Increase in the consumer strength- Number of consumer strength has increased from 101.28 lakhs as on 31-03-2011 to 104.58 lakhs as on 31-03-2012. (iii) Increase in the distribution assets from Rs 4067.19 crore as on 31-03-2011 to Rs 4530.86 crore as on 31-03-2012, i.e., an increase of Rs 463.67 crore during the year 2011-12, which was about 11.40 % on the assets at the beginning of the FY 2011-12. 8.5.12 The function wise breakup of R&M expenses incurred under Plant and machinery for the year 2011-12 is detailed below.

Table 8-39 Function wise break up of expenses incurred under Plant and Machinery 2010-11 2011-12 Increase over 2010-11 Functional area (Rs.Cr) (Rs.Cr) (Rs.Cr) (%) Generation 15.87 17.34 1.47 9.26 Transmission 40.48 42.20 1.72 4.25 Distribution 4.93 4.27 -0.66 -13.39 Total 61.28 63.81 2.53 4.13

8.5.13

Over all function wise R&M expenses over last 4 years are summarized below:

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Table-8-40 Function wise break up of R&M costs Particulars Generation Transmission Distribution Overall 2008-09 (Rs. Cr) 14.9 36.7 87.2 138.8 2009-10 (Rs. Cr) 18.14 45.76 109.26 173.16 2010-11 (Rs. Cr) 19.3 52.61 159.94 231.85
2011-12 (Rs. Cr) 21.68 56.19 173.83 251.7

Average increase over 2008-09 13.32% 15.26% 25.85% 21.95%

8.5.14 Considering asset growth, inflation, the R&M cost requirement for the ensuing year is about 15% over the actuals incurred during th previous years, however, KSEB has been trying to limit R&M cost at 10% on the actuals during the previous years. Based on this R&M expenses for 2012-13 is revise estimated at Rs.276.87 crore and Rs.304.56 crore for 2013-14 as detailed below:
Table-8-41 Function wise break up of R&M costs 2010-11 2012-13 2011-12 Particulars Generation Transmission Distribution Overall (Rs. Cr) 19.30 52.61 159.94 231.85 (Rs. Cr) 21.68 56.19 173.83 251.70 (Rs. Cr) 23.85 61.81 191.21 276.87

2013-14 (Rs. Cr) 26.23 67.99 210.33 304.56

8.5.15 Fixed asset wise break up of R&M expenses are given below:
Table 8-42 Repair and Maintenance Cost (Rs. in Cr) 2011-12 2012-13 Sl Estimate for Particulars No. 2013-14 Provisional ARR KSERC Revised Accounts. 1 Plant & Machinery 63.81 84.59approved estimate 70.19 77.21 2 Buildings 5.72 5.77 6.35 6.98 3 Other Civil works 7.32 6.67 7.34 8.07 4 Hydraulic works 2.60 2.12 2.33 2.57 195.95 5 Lines, Cable networks 168.05 217.20 184.85 203.34 6 Vehicles 6.69 4.12 4.53 4.99 7 Furniture & fixtures 0.20 0.10 0.11 0.12 8 Office equipment 1.75 1.06 1.17 1.28 Total 195.95 251.70 326.07 276.87 304.56

8.5.16 The R&M expense as a percentage of Gross Fixed Assets is given below.

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Details of Assets

Buildings Hydraulic Works Other Civil Works Plant and Machinery Lines, Cable Network etc. Vehicles Furniture and Fixtures Office Equipments Total

Table 8-43 R&M as percentage of Gross Fixed Asset 2011-12 2012-13 GFA at the GFA at the R&M R&M beginning beginning of expenses % expenses of the year the year (Rs. Cr) (Rs.Cr) (Rs. Cr) (Rs.Cr) 555.73 5.77 608.63 6.35 1073.24 2.12 1102.10 2.33 391.41 6.67 422.29 7.34 4058.70 63.81 1.57 4338.54 70.19 4720.60 168.05 3.56 5185.31 184.85 14.56 4.12 16.06 4.53 16.05 0.10 17.11 0.11 47.86 1.06 51.60 1.17 10878.15 251.70 2.31 11741.64 276.87

2013-14 GFA at the R&M beginning of expenses % % the year (Rs. Cr) (Rs.Cr) 657.93 6.98 1191.37 2.57 456.50 8.07 1.62 4690.58 77.21 1.65 3.56 5605.33 203.34 3.63 17.36 4.99 18.50 0.12 55.78 1.28 2.36 12693.35 304.56 2.40

8.5.17 Honble Commission may kindly note that a large quantum of expenses under this head is being incurred towards repair and maintenance of vital infrastructure viz plant and machinery and line, cable network etc. Since these are to be maintained through out the year, the expenses projected may kindly be approved in full.

8.6

Administration and General Expenses

8.6.1 Administration & General (A&G) expenses include various items such as rent, rates and taxes, insurance, telephone charges, internet and related charges, legal charges, audit fees, consultancy charges, printing and stationary, advertisement, DSM expenses, SRPC expenses, statutory fee including payments to SERC etc. All these items are inevitable for a utility like KSEB to perform its obliged duties and functions. KSEB has been estimating likely A&G expenses for the ensuing year after taking into consideration factors such as trends of past actuals, business growth, inflation etc. 8.6.2 Honble Commission has considered the A&G expense as a controllable item. But it is highly amenable to inflation. Further, the A&G expenses have a direct bearing on the business growth of the utility. Unlike a generating station or a process industry, the volume of business activity of KSEB cannot be limited to a base year alone. Further, as part of the obligation of power supply to the consumers, KSEB has to supply electricity to all consumers on demand. 8.6.3 It may be noted that, the energy sale has been showing an annual growth of about 8%. The number of consumers served by KSEB has also been increasing by 5 to 6% per annum. 8.6.4 However, without considering the growth of business activity, Honble Commission has adopted A&G expenses for the year 2008-09 as the base and inflated the same to WPI and CPI at the weightage of 30:70. The State Commission is reluctant to allow any additional
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amount towards meeting the increase in business activity. The annual increase allowed is only for accounting the inflation. 8.6.5 It is further submitted that, the fuel price is one of the most deciding factor influencing the A&G expenses. The variation in fuel prices since 2008-09 is given below.
Table 8-44 Variation in fuel prices
Petrol 40.62 47.43 58.37 65.64 68.46 Fuel prices in Delhi Change in price Diesel Petrol Diesel 30.86 35.47 6.81 4.61 37.75 10.94 2.28 40.91 7.27 3.16 46.95 2.82 6.04 Change in % Petrol Diesel 16.77 23.07 12.46 4.30 14.94 6.43 8.37 14.76

31.03.2009 31.03.2010 31.03.2011 31.03.2012 14.09.2012

8.6.6 It is further submitted, many components now incurred by KSEB did not contributed substantially during the year 2008-09, and this includes expenses such as SRPC expenses, amount incurred for DSM activities, license fee and other fees paid to the State Commission etc. Further certain items of expenses such as freight, fuel related expenses etc are uncontrollable and their increase may mot always be in proportion to the inflation indices. Further, growth in business would also influence these costs. 8.6.7 Further, the A&G expenses of a utility are directly linked to the business growth of the utility. The business growth of the utility including number of consumers, consumption and revenue from sale of power etc since the year 2008-09 is detailed below.
Table 8-45 Growth of KSEB system during the period 2008-09 to 2012-13
Year Consumer strength Annual energy sale Connected load Revenue from sale of Power (%) of (%) of (%) of increase (%) of increase (Lakhs) (MU) increase over MW increase (Rs. Cr) over 2008over 2008-09 2008-09 over 2008-09 09 94 97 101 105 108 12414.32 4 13971.09 8 14547.90 12 15921.53 15 16386.00 15267 12.54 15867 17.19 16682 28.25 17518 31.99 18318 3.93 10.27 14.74 19.98 4893.02 4747.17 5641.26 5984.60 6097.24 -2.98 15.29 22.31 24.61

2008-09 2009-10 2010-11 2011-12 2012-13

8.6.8 The average business growth during the last few years is about 7 to 8%. As detailed under Table 8.25, of this petition, the average inflation during the year 2011-12 was 8.42 % and the same in 2012-13 up to October, 2012 is 9.90%. It may be noted that the rates in the second half of the year is likely to be in double digits. Considering the

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business growth of the utility and inflation, a moderate increase of 15% in A&G cost is expected for the years 2012-13 and 2013-14. 8.6.9 A comparison of item wise A&G expenses for the period from 2008-09 to 2011-12 is furnished below:
Table 8-46 Comparison of the A&G expenses incurred during the period from 2008-09 to 2011-12
2008-09 Actual Sl.No Rent, Rates and Taxes Insurance Telephone/telex/internet charges Legal charges Audit fees Consultancy charges & technical fee Other Professional charges Conveyance and vehicle hire charges Sub Total (Total of 1 to 9) OTHER EXPENSES a) Fess and subscriptions b) Printing & Stationary, books periodicals c) Advertisements d) Data processing charges e) Exhibition & publicity f) Contributions/Donations g) Electricity Charges h) Water charges i) Entertainment j)Sports and related activity k)Study tour/Training l)SRPC expenses m)DSM expenses n)APTS expenses o) Miscellaneous expenses Total of OTHER EXPENSES Freight Other purchase related expenses Total (11+13+14+15) Electricity Duty u/s 3(1), KED Act GRAND TOTAL 0.25 7.11 3.30 0.13 0.05 0.33 3.45 0.27 0.13 0.12 0.84 0.31 0.00 0.01 7.25 23.55 6.98 4.12 60.99 74.47 135.46 0.56 8.50 6.40 0.28 0.08 0.54 4.91 0.23 0.22 0.21 1.87 0.74 3.86 0.02 8.74 37.16 14.61 2.89 86.17 80.79 166.96 0.53 7.37 7.50 0.28 0.19 1.09 5.26 0.28 0.27 0.26 1.58 0.84 0.92 0.02 10.67 37.06 11.27 3.31 90.14 84.42 174.56 0.47 9.01 8.09 0.18 0.22 1.16 5.12 0.24 0.29 0.28 0.71 0.72 0.96 0.01 13.77 41.23 9.33 6.60 15.93 93.31 202.72 (Rs. Cr) 3.89 0.50 3.94 1.75 2.25 0.46 0.11 13.44 26.34 2009-10 Actual (Rs. Cr) 4.30 0.40 3.74 2.80 2.30 0.62 0.24 17.11 31.51 2010-11 Actual (Rs. Cr) 4.30 0.38 3.46 3.24 2.30 0.57 0.26 23.99 38.50 2011-12 Provisional (Rs. Cr) 5.56 0.41 3.46 2.00 2.30 0.40 4.04 34.08 52.25

8.6.10 From the above table, it can be seen that the actual figures for the year 2008-09 escalated by inflation indices would not be realistic for the estimation of expenses and hence the Board has considered all relevant factors while making projection. The actual A&G expenses as
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per the provisional accounts for the year 2011-12, the revised estimate for the year 2012-13 and the projected expenditure for the year 2013-14 are detailed below.
Table 8-47 Administration and General Expenses
2011-12 Sl. No. 1 2 3 4 5 6 8 9 10 11 Insurance Telephone/telex/internet charges, etc. Legal charges Audit fees Consultancy charges Other Professional charges Conveyance and vehicle hire charges Sub Total (Total of 1to 9) OTHER EXPENSES a) Fees and subscriptions b) Printing & stationary c) Advertisements, exhibition publicity etc d) Contributions e) Electricity charges f) Water charges g) Entertainment h)Training expenses i) Miscellaneous expenses j. DSM Activities k. SRPC expenses l. Sports and related activities 12 13 14 TOTAL OF OTHER EXPENSES Freight Other purchase related expenses Sub Total Total A&G expenses excluding section 3(1) duty 15 Ele. Duty u/s 3(I), KED Act GRAND TOTAL 0.47 9.18 8.31 1.16 5.12 0.24 0.29 0.71 13.79 0.96 0.72 0.28 41.23 9.33 6.60 15.93 109.41 93.31 202.72 52.10 14.23 4.50 18.73 118.8 5 96.39 215.2 4 0.80 10.50 9.00 1.20 5.50 0.30 0.30 4.50 20.00 0.80 10.50 9.00 1.20 5.50 0.30 0.30 3.00 15.00 1.50 0.80 0.30 48.20 14.23 7.00 21.23 124.36 99.00 223.36 0.85 11.00 9.50 1.25 5.75 0.32 0.35 3.47 11.25 7.50 0.85 0.35 52.44 15.50 7.50 23.00 137.85 106.27 244.12 Particulars Rents, rates and taxes Provisional 5.56 0.41 3.46 2.00 2.30 0.40 4.04 34.08 52.25 2012-13 Revise ARR Estimated 5.00 0.50 4.75 3.75 2.75 0.85 0.33 30.09 48.02 6.00 0.50 4.75 3.75 2.75 0.85 0.33 36.00 54.93 2013-14 Total 6.50 0.55 5.25 4.00 2.75 0.98 0.38 42.00 62.41

8.6.11 The Board is imparting training on a large-scale to the Officers and staff to improve productivity and efficiency, training on safety measures, maintenance and skill development in computer application, modern management and financial techniques etc. has become inevitable. Therefore, the Board plans to depute the staff to the various training centers within the state under the control of the Board and other centers outside the state. 8.6.12 DSM activities: KSEB proposes to earmark Rs 7.50 crores for the year 2013-14. KSEB shall provide detailed proposal for DSM activities for the ensuing year within two months.
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8.6.13 With the efforts of the Board to provide electricity on demand to all, there is sizable increase in procurement of materials and execution of schemes. All these activities are expected to increase the charges of freight, traveling of personnel and purchase related administrative activities. 8.6.14 One of the major expense items booked under A&G expense is the section 3(1) duty payable by KSEB to the Government. The section 3(1) duty is a statutory levy. While approving the ARR&ERC for the years from 2003-04 to 2006-07, Honble Commission has considered this as revenue expenditure as part of the A&G expenses of the Board. Comptroller & Auditor General (C&AG) have also certified this as an essential expenditure under A&G expenses since the inception of the Board. But, while approving the Truing Up of accounts of KSEB since the year 2003-04 and also while approving the orders on ARR since the year 2007-08, Honble Commission has not been admitting section 3(1) duty as a revenue expenditure quoting the provisions in the Kerala Electricity Duty Act- 1963 that (3) The duty under this section on the sales of energy should be borne by the Licensee and shall not be passed on to the consumers. Accordingly, since the year 2003-04, Honble Commission has not admitted duty aggregating to Rs 748.47 crore so far and the details are given below.

Table 8-48 Section 3(1) Duty not admitted. Section 3(1) duty not admitted Year by KSERC 2003-04 51.53 2004-05 54.98 2005-06 63.26 2006-07 71.78 2007-08 77.54 2008-09 74.47 2009-10 80.79 2010-11 84.42 2011-12 93.31 2012-13 96.39 Total 748.47

8.6.15

The projection of section 3(1) duty payable to the State Government is detailed below.

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Table 8-49 Electricity duty payable


2011-12 Sl No. 1 2 3 4 5 6 Particulars Energy available for sale(MU) Consumption by NPG (MU) Bulk supply(MU) including railway traction Subtotal (2+3) Total energy on which duty is payable (MU) (1-4) Ele. Duty @ 6ps /unit (Rs. In Cr) (Actual) 15980.53 2.63 626.58 629.21 15351.32 93.31 2012-13 (Revised Estimate) 17181.21 2.00 679.49 681.49 16499.72 99.00 2013-14 (Estimate) 18428.46 2 715.23 717.23 17711.23 106.27

Apportioning of A&G expenses among Generation, Transmission and Distribution 8.1.1 The total A&G expense is apportioned among Generation, Transmission and Distribution based on the proportion of actual expenditure in the past as per the Statement-6 of the audited accounts. The details are given below.
Table 8-50 Apportioning of A&G expenses into three functional areas
Functional area Generation Transmission Distribution Total Proportion (average of last five years from 2006-07 to 2011-12 (%) 6.68 22.00 71.33 100.00 Amount (Rs.Cr) 16.31 53.71 174.10 244.12

8.7

Other Expenses
In the previous orders on ARR, Honble Commission has taken the stand that, the prior period expenses may be approved during the truing up after prudence check. For other claims under prior period expenses, KSEB may approach the Honble Commission with details during the truing up process. Hence, in this petition, KSEB has not made any claim for prior period expenses.

8.7.1 Prior period Expenses

8.7.2 Other Debits The expenses relating to research and development, bad and doubtful debts, debit balance under material cost variance and miscellaneous losses and write-offs are included in Other Debits. The details of other debits for the year 2011-12 as per the provisional accounts, the

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revised estimate for the year 2012-13 and projection for the year 2013-14 are detailed below.
Table 8-51 Details of other debits for the year 2011-12
2011-12 (Actual) (Rs. Cr) 1 2 3 Research and Development Expenses Provision for Bad and Doubtful debts Miscellaneous Losses and writeoffs Total 0.52 1.92 8.84 11.28 2012-13 2013-14 (Revised) (Estimate) (Rs. Cr) 1.50 12.00 3.00 16.50 (Rs. Cr) 1.50 15.00 3.00 19.50

Sl No

Particulars

8.7.3 Apportioning of Other expenses among Generation, Transmission and Distribution The research and development expenses are generally related to hydel projects and hence the same is accounted under generation. Other items such as provision for bad and doubtful debts, miscellaneous losses and write-offs are on account of distribution business and hence the same is accounted under distribution. The details are given below.
Table 8-52 Apportioning of other expenses into different functional arrears
Particulars Research and Development Expenses Provision for Bad and Doubtful debts Miscellaneous Losses and write-offs Total Function Generation Distribution Distribution Gen 1.50 0.00 0.00 1.50 Trans 0.00 0.00 0.00 0.00 Dist 0.00 15.00 3.00 18.00 Total 1.50 15.00 3.00 19.50

(Rs.Cr) (Rs.Cr) (Rs.Cr) (Rs.Cr)

8.8

Return on Equity

8.8.1 In the truing up petition for the year 2010-11, KSEB has claimed Rs 240.72 crore as RoE @15.50% on the Government Capital of Rs 1553.00 crore with the Board. but Honble Commission has allowed Rs 217.42 crore being RoE @14.00% on the Government capital of Rs 1553.00 crore, without specifying any reason for allowing a lower rate for return than that claimed by the Board and the norms specified by the CERC. 8.8.2 In this matter, the following points may kindly be noted: 8.8.3 As per the regulation 15 of the CERC (Terms and Conditions of Tariff) regulations, 2009 dated 19th January 2009, the base rate of return on Equity is specified as 15.50%. Further, 1 st proviso to paragraph 5.3 (a) of the National Tariff Policy clearly clarifies that, the rate of return

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notified by the transmission may be adopted by the State Electricity Regulatory Commissions (SERCs) for distribution with appropriate modification taking into view of the higher risks involved. Thus as per the provisions in the Tariff policy a higher return than that specified by the CERC can be allowed to the DISCOMs. However, since KSEB has been continuing as a single utility and doing generation, transmission and distribution activities, KSEB has claimed the base rate of return of 15.50% prescribed by CERC. 8.8.4 In this matter, it is further submitted that, as per the section-61 (a) of the Electricity Act-2003, the methodologies specified by the CERC for determination of tariff applicable to generating companies and transmission licensees and further as per the section 61(i) of the Electricity Act-2003, the National Electricity Policy and Tariff Policy are guiding factors for tariff determination by the State Commission . 8.8.5 Though KSEB is a Government Utility and continuing as a single entity, it is truly functioning under the provisions of the Electricity Act-2003, and also as per the rules and regulations enacted by the State Commission as per the statutory powers envisaged under the Electricity Act-2003. Hence, it is detrimental to KSEB having denied the reasonable return which is ensured to all the Private, Public and Government owned power utilities across the country. 8.8.6 In view of the points mentioned above, a reasonable return @ 15.50% on Government equity of Rs.1553 crore is claimed for the years 201213 and 2013-14, which may kindly be approved. 8.8.7 The function wise details of the equity and RoE claimed for the year 2013-14 is detailed below.
Table 8-53 Function wise details of Equity and RoE claimed for the year 2013-14
Sl No Particulars Ratio of Capital liabilities as on 31-03-2012 Equity as on 31-03-2012 (Government 1 equity) 2 Roe claimed Gen (Rs Cr) 43.07 668.88 103.68 Tran (Rs Cr) 37.78 586.72 90.94 Dist (Rs Cr) 19.15 297.40 46.10 Total (Rs Cr) 100.00 1553.00 240.72

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8.9

8.9.1 The summary of the projections of various items of expense components of ARR&ERC as discussed under the preceding sections of this petition is detailed below.
Table 8-54 Summary of the Aggregate Revenue Requirement for 2011-12, 2012-13 & 2013-14
2011-12 Particulars Generation Of Power (fuel cost of BDPP + KDPP) only Purchase of power Interest & Finance Charges Depreciation Employee Cost Repair & Maintenance Administration & General Expenses Other Expenses Gross Expenditure (A) Less : Interest Capitalized Less : Expenses Capitalized Net Expenditure (B) Statutory Surplus/ RoE (C) ARR (D) = (B) + ( C) Actual (Rs.Cr) KSEB ARR (Rs.Cr) 378.10 5281.09 521.21 607.42 2231.46 326.07 215.24 18.50 2012-13 KSERC (Order) (Rs.Cr)

Summary of the Aggregate Revenue Requirement

2012-13
KSEB Revised) (Rs.Cr) KSEB ARR (Rs.Cr)

281.65 4375.30 340.51 465.99 1903.32 251.70 202.72 73.21 7894.40 30.50 126.61
7737.29 240.72 7978.01

9579.09 47.09 134.60 9397.40


240.72 9638.12

193.15 546.71 410.04 5008.49 7369.00 6673.36 370.19 506.13 588.42 414.62 418.92 435.84 1663.66 2153.72 2551.50 195.95 276.87 304.56 86.11 223.36 244.12 18.50 16.50 19.50 7950.67 11511.21 11227.34 47.09 46.46 62.71 134.60 142.84 168.24 7768.98 11321.91 10996.39 217.42 240.72 240.72 7986.40 11562.63 11237.11

8.9.2 The function wise breakup of ARR&ERC for the year 2013-14 is detailed below.
Table 8.55 Summary of the function-wise details of ARR for the year 2013-14
Sl No. Particulars Generation of Power (Fuel cost of BDPP & KDPP) Purchase of power Interest & Finance Charges Depreciation Employee Cost Repair & Maintenance Administration & General Expenses Other Expenses Gross Expenditure (A) Less : Expenses Capitalized Less : Interest Capitalized Net Expenditure (B) Statutory Surplus/ RoE ARR (D) = (B) + ( C) Generation (Rs. Cr) 410.04 151.04 166.84 148.15 26.23 16.30 1.50 920.10 7.38 15.49 897.23 103.68 1000.91 180.56 163.73 281.35 67.99 53.70 747.33 16.34 15.15 715.84 90.94 806.78 6673.36 256.82 105.27 2122.00 210.33 174.12 18.00 9559.90 144.52 32.08 9383.30 46.10 9429.40 Transmission (Rs. Cr) Distribution (Rs. Cr) Total (Rs. Cr) 410.04 6673.36 588.42 435.84 2551.50 304.55 244.12 19.50 11227.33 168.24 62.71 10996.38 240.72 11237.10

1 2 3 4 5 6 7 8 9 10 11 13 14 15

8.9.3 The cost of energy at KSEB periphery, transmission end and at the distribution end for the year 2013-14 is given below.
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Table 8-56 Cost of energy at Generation end, transmission end and distribution end

1
(a) (b) (c) 2 (a) (b) (c) 3 (a) (b) (c )

Cost of Generation
Total ARR of Generation Functional Area Total internal Generation (excl. auxiliary consumption) Perunit cost of generation Cost of Power Purchase Cost of Power Purchase Total power purchase (KSEB periphery) Per unit cost of power purchase Pooled average Cost of Generation and Power Purchase Total cost of Generation and Power Purchase Total Generation and Power purchase at KSEB periphery Pooled average Cost of Generation and Power Purchase (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (MU) (Rs/kWh ) (Rs/kWh ) (Rs/kWh ) (Rs.Cr) (Rs.Cr) (Rs.Cr) (MU) (MU) (MU) (Rs/kWh) (Rs/kWh) (Rs/kWh ) 1000.91 6871.56 1.46 6673.36 14785.16 4.51 7674.27 21656.72 3.54 806.78 21656.72 20573.88 0.39 0.19 4.12 2756.04 333.20 2422.84 20573.88 18428.46 2145.42 1.31 0.48 5.92

4
(a) (b) (c) (d ) (e ) (e )

Transmission Cost
Total ARR of Transmission Functional Area Total energy input into Transmission Total energy sold to Distribution (after accounting 5% transmission loss) Overhead cost of Transmission Cost of transmission loss Per unit cost at transmission end

5
(a) (b) (c) (c) (d) (e) (f) (g) (g )

Distribution
Total ARR of distribution (excl. cost of power purchase) Non tariff income Net ARR of distribution (excl. cost of Power Purchase) Total energy input into distribution Total energy sale Loss in the distribution Over head cost of Distribution function Cost of Dist loss Cost at Distribution end

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CHAPTER- 9

EXPECTED REVENUE FROM CHARGES


9.1 Introduction

9.1.1 The revenue from sale of power is estimated based on the prevailing Schedule of Tariff and terms and conditions of supply. Even though the Honble Commission had approved a revenue gap of Rs 928.62 crores for the year 2011-12, the tariff had not been revised to bridge the revenue gap. For the year 2012-13 Honorable Commission has approved a revenue gap for Rs 1889.15 crores. Further Honorable Commission vide order dated 25.07.2012 has revised the retail tariff for all consumers including Bulk supply to other Licensees from 01.07.2012 to 31.03.2012. The additional revenue expected through the revision was about Rs 1257.30 crore during the nine months from July-2012 to March-2013 of the financial year 2012-13. 9.1.2 The Honble Commission vide the order dated 21-07-2011 had approved the additional liability incurred on Generation and Power Purchase for the period from October-2010 to March 2011 as Rs 181.14 crore and this amount is allowed to be recovered as fuel surcharge @ 25 paise per unit for the consumption from October 2011 onwards for six months. The State Government had exempted domestic consumers with monthly consumption up to 120 units per month from payment of fuel surcharge and released the revenue shortfall amounts to Rs 54.54 crore as subsidy as per the provisions of the Electricity Act-2003. 9.1.3 The Honorable Commission vide order dated 01.02.2012 had approved the additional liability incurred on Generation and Power Purchase for the period from April 2011 to September 2011as Rs 161.10 crores and this amount is allowed to recovered at the rate of 20 paise per unit for six months from April 2012 onwards. The State Government has directed to exempt domestic consumers with monthly consumption up to 120 units per month from payment of fuel surcharge and agreed to allow the revenue shortfall amounts to Rs 50 crores as subsidy as per the provisions of the Electricity Act-2003. 9.1.4 The Honorable Commission vide order dated 28.05.2012 had approved the additional liability incurred on Generation and Power Purchase for the period from October 2011 to December 2011as Rs 77.22 crores and this amount is allowed to recovered at the rate of 20 paise per unit for three months from October 2012 onwards. As instructed by the Government, Board has exempted domestic consumers with monthly consumption up to 120 units per month from payment of fuel surcharge and the revenue shortfall on this account was about Rs 25.00 crore per month.

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9.1.5 The Honorable Commission vide order dated 03.10.2012 had approved the additional liability incurred on Generation and Power Purchase for the period from January 2012 to March 2012 as Rs 51.84 crores and this amount is allowed to recover at the rate of 10 paise per unit for three months from January 2013 onwards. 9.1.6 The details in respect of the revised estimate of the energy sale for the year 2012-13 and anticipated energy consumption of the different categories of consumers for the year 2013-14 are furnished under Chapter-4 of this petition. The estimate of the revenue from sale of power for the year 2012-13 and 2013-14 is detailed in the subsequent paragraphs. 9.2 Revenue from tariff for the year 2011-12 The summary of the revenue from tariff as per the provisional accounts of KSEB for the year 2011-12 is given in the table below:
Table 9.1 Revenue from sale of power for the year 2011-12 Consumer Strength Energy sale Category Domestic NPG Commercial Public Lighting Irrigation & Dewatering Industrial LT HT&EHT Railway Traction Bulk Supply Inter state Sale through power exchange Grand Total (nos) 8298563 26398 1538786 3160 455078 132051 3580 8 13 (%) of total 79.4 0.3 14.7 0.0 4.4 1.3 (MU) 7703.23 2.63 2141.22 294.26 286.18 1097.04 3829.39 154.49 472.09 24.7 35.67 16040.9

Revenue (%) of total 27.39 0.00 28.48 1.14 0.55 8.25 28.62 1.10 3.28 0.51 0.69 100.00

10457637

100

(%) of total (Rs. Cr) 48.02 1531.84 0.02 0 13.35 1592.83 1.83 63.85 1.78 30.77 6.84 461.39 23.87 1600.75 0.96 61.68 2.94 183.27 0.15 28.26 0.22 38.37 100.00 5593.01

As per the KSERC order dated 21.07.2011, fuel surcharge of Rs 182.59 crores has been collected @ 25 paise per unit during the period from 1st October-2011 to 31st March 2012. The revenue from sale of power as detailed above is inclusive of the fuel surcharge of Rs 182.59 crores allowed to collect @ 25paise per unit during the period from 1 st October-2011 to 31st March 2012. 9.3 Estimate of revenue from sale of power for the year 2012-13 9.3.1 As discussed earlier, Honorable Commission vide the order dated 25.07.2012 has revised the retail tariff for all consumers including Bulk supply to other Licensees from 01.07.2012 to 31.03.2012. Honble Commission had also re-categorized some categories of

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consumers. The following are the major changes proposed in the tariff order dated 25-07-2012. (i) (ii) Non-telescopic tariff has been introduced for domestic consumers having consumption above 500 units. The Commission has introduced fixed charge @ Rs 20 per month and Rs 60 per month for single phase consumers and three phase domestic consumers (LT I(a), LT I(b). The Commission has ordered to implement ToD tariff for all domestic consumers having monthly consumption above 500 units w.e.f 01-01-2013. The Commission has included home stay connections under LT I(a) domestic category. The Commission has reduced the fixed charges of LT IV industrial consumers having connected load of 10 HP or below to Rs.60 per consumer per month. The Commission has also ordered to implement TOD tariff to all LT IV industrial consumers with connected load above 20kW with effect from 1.1.2013. The Commission has decided to include the offices of Kerala Water Authority, Kerala State Road Transport Corporation and Kerala Water Transport Corporation under LT VI (B) shifting them from LT VI(C).

(iii)

(iv) (v)

(vi)

(vii)

(viii) Commission has reduced the composite Tariff for public lighting category. While approving the composite tariff for the year 2012, Commission has not considered the operation charges, repair and maintenance charges, fixed charges etc. Honorable Commission has reduced the tariff for CFL lamps and LED lamps used as streetlights considerably to promote energy conservation. Accordingly, Commission fixed the composite tariffs for CFL and LED lamps based on an implied rate of Rs. 1.50 per unit keeping of the view that the concessional tariff for CFL/LED lights would incentivize shifting of public lighting from high energy consuming Sodium Vapour / Mercury Vapour lamps to CFL/LED lamps. (ix) In the case of HT IV Commercial category, separate tariff is introduced tariff for consumers upto 30,000 units and above 30,000 units. The Commission has introduced a separate tariff for EHT 220 KV category. The Commission has revised the bulk supply tariff based on the consumer mix of licensees.

(x) (xi)

9.3.2 The energy sales forecast for the year 2012-13 is detailed in Chapter4 of this petition. The revised energy demand for the year 2012-13
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without any load shedding was estimated as 17458.13 MU. With the approval of the Honble Commission, KSEB has introduced hour load shedding during morning and evening peak hours since 27 th September-2012 and this is likely to continue till 31 st of May-2013. Further, Honble Commission has also introduced interalia the major restriction on energy usage during the period from 15-12-2012 to 31-05-2013. (i) All the HT&EHT consumers shall limit the energy usage at 75% of the previous one year average consumption. The excess usage above the restricted quota shall be levied with a penalty equal to the per unit energy charge. All the LT-II, LT-IV, LT-VI(A), LT-VI(B), LT-VI(C), LT-VII(A), LT-VII(B) and LT-VII(C) consumers shall limit the energy usages at 80% of the previous one year average consumption. The excess usage above the restricted quota shall be levied with a penalty equal to the per unit energy charge. The monthly usage of domestic consumers shall be limited to 300 units and the excess usage may be levied with a penalty at the per unit energy charges applicable to the respective slabs.

(ii)

(iii)

9.3.3

As submitted earlier, KSEB has estimated the reduction in energy usage due to the load shedding as 1.80 MU/day. Though KSEB do not expect any substantial reduction in energy usage through the restrictions, the liability incurred for procuring the high cost power shall be partly offset through the penalty imposed by the Honble Commission. The energy consumption for the year 2012-13 with the reduction in energy consumption due to load shedding was estimated at 17181.21 MU. Out of this, about 524 MU is expected to be consumed with penalty at the rate of energy charges.

9.3.4 The anticipated energy sale for the year 2012-13, the excess energy usage anticipated at penalty is detailed below.

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Table 9-2 Anticipated energy consumption for the year 2012-13 with load shedding and excess usage with penalty Reduced Anticipated excess Energy demand energy Energy usage energy usage with with out load demand with expected penalty from 15-12Category shedding the ongoing without penalty 2012 to 31-03-2013 load shedding (MU) (MU) (MU) (MU) Domestic 8486.49 8339.2 8262.93 76.27 Commercial 2371.06 2330.8 2234.52 96.28 Industrial 1152.71 1132.69 1064.87 67.82 Agricultural 298.37 293.37 293.37 0 Street Lights 307.77 302.67 302.67 0 LT II 16.00 15.8 15.09 0.71 LT Total 12632.40 12414.53 12173.45 241.08 HT I 1704.84 1675.34 1577.61 97.73 HT II 128.83 126.63 120.1 6.53 HTIII 8.16 8.02 8.02 0 HT IV 941.85 923.73 873.85 49.88 EHT I+EHT III 423.28 423.28 392.42 30.86 EHT II 930.17 930.17 862.35 67.82 Railway Traction 163.23 163.23 163.23 0 Bulk 525.36 516.26 486.14 30.12 HTII B 0.01 0.01 0.01 0 HT&EHT Total 4825.73 4766.67 4483.73 282.94 Total 17458.13 17181.2 16657.18 524.02

9.3.5 The revenue from sale of power for the year 2012-13 for the reduced energy demand with load shedding and the excess usage with penalty for the period from 15-12-2012 to 31-03-2013 is estimated as discussed below. (i) The revenue from energy sale for the period from April-2012 to June-2012 was estimated at the pre-revised tariff applicable up to 30-06-2012. The additional revenue realized through the excess consumption due to the power restriction during April2012 and May-2012 was also duly considered. (ii) The revenue from sale of power for the period from 1 st July2012 to 31-03-2013 was estimated at the revised tariff w.e.f 01-07-2012 (iii) The penalty is arrived for the excess usage at the appropriate energy rate applicable to each consumer category for the period from 15th December 2012 to 31st May 2013. The additional amount realized through fuel surcharge during the period from April-2012 to May-2013 is also duly considered.

(iv)

9.3.6 The details in respect of the revised revenue estimate from sale of power, for the year 2012-13, are detailed below.

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Table 9-3. Revenue from Sale of power for the year 2012-13
Particulars I. Revenue from sale of power Domestic LT II Commercial Public Lighting Irrigation & Dewatering Industrial LT NPG HT&EHT Railway Traction Bulk Supply Total revenue through Tariff II. Fuel surcharge Fuel Surcharge III. Energy charge for excess consumption for April & May 2012 Grand Total Sale of energy (MU) 8336.20 15.81 2330.80 302.67 293.37 1132.69 3.00 4087.17 163.23 516.26 17181.20 Revenue from current tariff (Rs.Cr) Revenue expected at penalized rate (15-122012 to 31-05-2013) (Rs.Cr) 52.18 0.46 63.84 Total (Rs. Cr)

2111.53 12.39 1734.87 78.85 44.77 527.93 0.00 2130.22 77.48 258.20 6976.24 290.16 99.68 7366.08

28.82 112.15 13.32 270.77

2163.71 12.85 1798.71 78.85 44.77 556.75 0.00 2242.37 77.48 271.52 7247.01 0.00 290.16

17181.20

99.68 270.77 7636.85

9.4 Estimate of the revenue from sale of power for the year 2013-14 9.4.1 The estimate of the energy sale forecast for the year 2012-13 is discussed in Chapter-4 of this petition. Due to the critical power situation of the State, the ongoing load shedding is likely to be continued till 31st May-2013. Further, as discussed earlier, on the request of the Board, Honble Commission has approved to impose power restriction till May-2013 and permitted to levy penalty for the excess usage at the per unit rate of the energy charge of each consumer category.
Table 9-4. Anticipated energy sale for the year 2013-14 Energy demand for the Energy usage for the Anticipated excess energy year with the ongoing year expected without usage for the year with load shedding for penalty for April & May- penalty for the month of April 4/2013 & 05/2013) 2013 & May-2013 (MU) (MU) (MU) 9081.66 9035.97 45.69 2545.68 2484.23 61.45 1171.39 1136.02 35.37 297.04 297.04 0 307.08 307.08 0 18.9 18.3 0.6 13421.75 13278.64 143.11 1747.44 1706.19 41.25 129.57 125.25 4.32 8.71 8.71 0 981.04 954.22 26.82 440.13 425.85 14.28 984.59 960.77 23.82 166.44 166.44 0 548.79 533.41 15.38 5006.71 4880.84 125.87 18428.46 18159.48 268.98

Partculars Domestic Commercial Industrial Agricultural Street Lights LT II Total HT I HT II HTIII HT IV EHT I+EHT III EHT II Railway Traction Bulk HT&EHT Total Total

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9.4.2 The revenue from sale of power for the year is estimated as detailed below. (i) The revenue from sale of power (with the load shedding for the month of April & May-2013) was estimated at the prevailing tariff approved by the Honble Commission with effect from 01-07-2012. The penalty for the excess usage was arrived at the appropriate energy rate of each consumer category.

(ii)

9.4.3 The revenue from sale of power for the year 2013-14 is detailed below.
Table 9-5 Revenue from sale of power for the year 2013-14 Category I. Revenue from sale of power Domestic LT II Commercial Public Lighting Irrigation & Dewatering Industrial LT NPG HT&EHT Railway Traction Bulk Supply Total revenue through Tariff 9078.66 18.90 2545.68 307.08 297.04 1171.39 3.00 4291.48 166.44 548.79 18428.46
2520.83 14.82 1937.13 84.45 51.37 594.61 0.00 2438.03 84.10 275.36 8000.69

Sale of energy(at normal tariff) (MU)

Revenue from current tariff


(Rs.Cr)

Revenue expected at penalized rate


(Rs.Cr)

Total
(Rs.Cr)

31.14 0.39 41.16

2551.97 15.21 1978.29 84.45 51.37

15.03 50.02 6.81 144.55

609.64 0.00 2488.05 84.10 282.17 8145.24

9.4.4 The detailed computation of the revenue expected from the various tariff categories for 2013-14 are given in the Data form G&Z. 9.5 Non Tariff Income In the ARR for the year 2012-13, Board has estimated a non-tariff income for the year 2011-12 as Rs.366.14 Crore. However, as per the revised estimate, the same for the current year would be Rs 361.39 crore. The projection of the same for the year 2013-14 is Rs.333.20 Crore. The details are given below.

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Sl No 1

Table - 9.6 Non Tariff Income 2011-12 Particulars Meter Rent/Service Line Rental Miscellaneous Charges. Reasonable cost for providing supply, Testing fee, Reconnection fee, Penal charges etc Interest on Staff Loans and Advances Interest on Advances to suppliers/ Contractors Interest from Banks Rebate Received Income from sale of scrap etc. Miscellaneous Reciepts Wheeling charges recoveries Grand Total Provisional (Rs Cr)
158.14

2012-13 ARR (Rs Cr)


165.00

2013-14 Revised (Rs Cr)


165.00

KSERC (Rs Cr)


165.00

Total (Rs Cr)


167.50

2 3 4 5 6 7 8 9

60.31 0.36 2.13 65.95 81.36 27.25 49.00 6.36 450.86

30.00 0.25 2.75 56.14 40.00 32.00 40.00 0.00 366.14

50.00 0.25 2.75 56.14 40.00 32.00 40.00 0.00 386.14

50.00 0.25 3.00 56.14 15.00 32.00 40.00 0.00 361.39

50.00 0.20 3.00 3.50 35.00 32.00 42.00 0.00 333.20

The major items of non-tariff income are the following: Meter Rent The consumer strength of the Board excluding HT, EHT consumers as on 01.04.2012 was 104.54 lakh. Board proposes to provide 3.32 lakhs new service connections during the year 2012-13 and the target for the year 2013-14 is 3.5 lakhs. The revised target for meter rent for the year 2012-13 is Rs 165.00 crore and the target for meter rent for the year 2013-14 is Rs 167.50 crore. Miscellaneous Charges It includes charges such testing fee, theft recovery, meter box charges etc. The revised target of miscellaneous charges for the year 2012-13 and the projection for 2013-14 is Rs 50.00 crore each. Rebate Rebate is the incentive receivable by the Board for arranging timely payment of power purchase and transmission charges to CPSUs. As per the prevailing CERC regulation, a rebate of 2% is allowing for the payment through letter of credit (LC). However, due to financial crunch, KSEB has been availing the maximum credit period of 60 days for making payments to CPSUs and accordingly, the rebate for prompt payment may likely to get reduced. The rebate availed during the current year (2012-13) so far is only Rs 9.00 crore. However, KSEB has provided the rebate of Rs 35.00 crore only for the year 2013-14.

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Interest from Banks Interest from Banks represents interest accrued on fixed deposit during the year. As stated else where, deposits were made for meeting loan repayment as well as corpus of the pension fund. Balance fixed deposit amounts to Rs 505.00 crores as on 31.03.2012, which is earmarked for meeting the Corpus of proposed Pension fund, is due to mature during the period from Dec-2012 to May-2013. The interest accrued on FD outstanding is shown as income for 2012-13. It may kindly be noted that, overdrafts have been availed against FD and hence the maturity proceeds could be obtained only upon repayment of OD with interest. Since, the deposit is due to mature during the period from December-2012 to May-2013; interest from bank is projected till the date of maturity for the year 2013-14. Income from sale of scrap etc. This head comprise of income earned by the Board by way of hire charge from contractors, profit on sale of store, sale of scrap and tender forms. Miscellaneous receipts Receipts under this account include items like rental for staff quarters, rental from contractors and others, excess found on physical verification of cash, stock and fixed assets, security deposit forfeited, receipts from sale of trees, usufructs etc. 9.6 Total Expected Revenue from charges The total revenue from tariff and revenue from non-tariff income for the years 2011-12, 2012-13 and 2013-14 are given in the following table.
Table 9.7 Total Expected Revenue from Charges (Rs.Cr) 2011-12 2012-13 2013-14 Particulars (Provisional) (Revised) (Estimate) Tariff Income 5593.01 7636.84 8145.24 Non- Tariff Income 450.86 361.39 333.20 Total Income 6043.87 7998.23 8478.44

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CHAPTER 10

SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR THE FINANCIAL YEAR 2013-14


10.1 The Aggregate Revenue Requirement and Expected Revenue from Charges (ARR & ERC) projected for the year 2013-14 have been described in details in the previous chapters 7, 8 & 9. The following table summarizes the various items of expenditure and revenue requirement for the year 2013-14 vis--vis the revised estimate for the year 2012-13 and actual of 2011-12.
Table-10.1

Aggregate Revenue Requirement for the year 2013-14


2011-12 Particulars Actual (Rs.Cr) Generation Of Power (fuel cost of BDPP + KDPP) only Purchase of power Interest & Finance Charges Depreciation Employee Cost Repair & Maintenance Administration & General Expenses Other Expenses Gross Expenditure (A) Less : Interest Capitalized Less : Expenses Capitalized Net Expenditure (B) Statutory Surplus/ Roe (C) ARR (D) = (B) + ( C) KSEB ARR (Rs.Cr) 378.10 5281.09 521.21 607.42 2231.46 326.07 215.24 18.50 2012-13 KSERC (Order) (Rs.Cr)

2013-14
KSEB Revised) (Rs.Cr) KSEB ARR (Rs.Cr)

281.65 4375.30 340.51 465.99 1903.32 251.70 202.72 73.21 7894.40 30.50 126.61
7737.29 240.72 7978.01

9579.09 47.09 134.60 9397.40


240.72 9638.12

Less Non-Tariff Income Less : Revenue from Tariff (a) With in the State (b) Fuel surcharge (c ) Revenue from excess consumption/ penalty Total Income Revenue Gap

450.84 5593.01

366.14 5255.79 775.94 6397.87 3240.25

193.15 546.71 410.04 5008.49 7369.00 6673.36 370.19 506.13 588.42 414.62 418.92 435.84 1663.66 2153.72 2551.50 195.95 276.87 304.56 86.11 223.36 244.12 18.50 16.50 19.50 7950.67 11511.21 11227.34 47.09 46.46 62.71 134.60 142.84 168.24 7768.98 11321.91 10996.39 217.42 240.72 240.72 7986.40 11562.63 11237.11 386.14 361.39 333.20 5550.00 161.1 6097.24 1889.16 6976.23 290.16 370.45 7998.23 3564.40 8000.69 144.55 8478.44 2758.67

6043.85 1934.16

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10.2

A brief description on the various items included in the ARR&ERC is given below. (1) (i) Energy & Peak Demand The energy demand and peak demand in the State has been showing an excessive increase of about 8 to 12% during the current year (2012-13) compared to the same during last year. With the current trend of increase on energy and peak demand, the total annual energy requirement of the State for the year 2013-14 is estimated at 21656.72 MU and peak demand as 3614MW. Energy Sales In addition to the excessive growth of energy and peak demand, KSEB targeted to provide 3.32 lakhs service connections during the year 2012-13 and 3.50 lakhs connections during the year 2013-14. Accordingly KSEB expects that the energy sale for the current year 2012-13 may increase by 8.88% over the previous year and the same may increase by about 6.0% during the ensuing year over current year. Thus, without any restrictions, the energy sale for the year 2012-13 would be 17458.13 MU and the same for the year 2013-14 would be 18521.25 MU. However, considering the critical power situation of the State, Board has introduced hour cyclic load shedding during evening and morning peak hours since 27 th September-2012 and also imposed restriction on energy usage since 15th December2012. The present load shedding and restriction may likely be continued till 31-05-2013. With the load shedding and power restrictions, the energy demand for the year 2012-13 is likely to be 17181.21 MU and the same for the year 2013-14 will be 18428.46MU. T&D loss and AT & C loss The actual T& D loss in the KSEB system for the year 2011-12 is 15.65%. With the ongoing capital works in transmission and distribution, the anticipated T&D loss in the KSEB system for the year 2012-13 would be 15.23%, i.e., a reduction of 0.43% over the previous year. KSEB propose a loss reduction target of about 0.32% for the ensuing year 2013-14. KSEB has already achieved a T&D loss reduction of 15.65% for the year 2011-12 including the transmission losses. The incremental capital investment required for further reduction of T&D loss will be much higher. Hence the main thrust is to maintain loss level. Accordingly, Board targets to reduce the T&D loss to 15.23% during the year 2012-13 (a reduction of 0.43%) and 14.91% during the year 2013-14 (a reduction of 0.32% over the previous year 2012-13).
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(iii)

For the year 2011-12, the annual collection efficiency of HT & EHT consumers is 97.16% and that of LT consumers is 98.11% and the over all collection efficiency is 97.83%. The AT & C loss target for the year 2012-13 is 16.61% Hydel Generation Anticipating a normal monsoon during the ensuing year, the hydel generation for the year 2013-14 is estimated at 6468.16 MU and the net hydel generation excluding auxiliary consumption is estimated at 6435.82 MU. The details are given under paragraph 7.3 of the ARR.

(4)

(5) (i)

Cost for Purchase from Central Generating Stations As on 1st December-2012, KSEB has a total allocation of 1277.20 MW. Further, Kuduamkulam NPC, NLC-Exp-Stage-II and 1st and 2nd unit of Vallur JV project (TN) is expected to start commercial operation during the next financial year 2013-14. With the commissioning of all these plants, the allocated capacity from CGS may increase to 1630.50 MW during the year 2013-14. The energy availability from CGS at generator bus is estimated at 10236.03MU for the year 2013-14. After accounting the PGCIL line losses, the net energy available at KSEB periphery will be 9816.35 MU. The total power purchase cost of CGS for the year 2013-14 is estimated at Rs 2702.58 crores excluding incentives etc payable to CGS and transmission charges payable to PGCIL. The transmission charges payable to PGCIL for evacuating the power from CGS is estimated at Rs 317.14 crores. Further, the incentives, water cess, taxes and duties etc payable to the CGS for the year 2013-14 works out to Rs 103.03 crores. The average cost of CGS power at Kerala periphery works out to Rs 3.18 per unit. Power purchase through power exchange & traders The electricity demand of the State cannot be met entirely from the power from hydel and CGS alone. Further, the cost of energy from liquid fuel stations within the State is exorbitantly high to the extent of Rs 11.50 per unit. Hence, KSEB has been procuring energy through traders and energy exchange to the maximum extent at competitive rates. For the year, KSEB proposed to procure 3628.27 MU through traders) and energy exchanges (the maximum quantity possible to import) at an average rate of Rs 5.00 per unit. Thus the cost of power purchase through traders is estimated at Rs 1814.14 crores.

(ii)

(iii)

(iv)

(6) (i)

(ii)

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(7) (i)

Power Purchase from Wind, other small IPPs The energy expected from Wind IPPs at Agali and Ramakkal medu is 73.54MU. With the approved tariff of Rs 3.14 per unit, the power purchase cost is estimated at Rs 23.09 crores. Based on the past trend, 34MU is expected from Ullumkal SHP for the year 2013-14 and the cost is estimated at Rs 6.80 crores for the year 2013-14. KSEB has been procuring power from the co-generation plant of MPS Steel castings Ltd and the energy expected to be available for the year 2013-14 is estimated at 40.80 MU. At the approved tariff of Rs 2.31 per unit, the cost is estimated at Rs 9.42 crores. The anticipated energy availability from Iruttukkanm IPP stage1 & 2 is 11.48MU and the cost of power purchase is estimated at Rs 3.20 crores for the year 2013-14. KSEB expect 36MU from co-generation plant of Philips Carbon Black Limited. At the provisional tariff of Rs 3.50 per unit, Rs 12.60 crores is estimated for procuring power from PCBL. Power purchase from liquid fuel stations RGCCPPKayamkulam, BSES, KPCL, BDPP and KDPP. The variable cost of liquid fuel stations in the State including BDPP, KDPP etc is about Rs 11.50 per unit. In order to meet the energy demand and peak demand of the State including the anticipated excess consumption over regulated quantum by different categories of consumers, KSEB proposes to procure 1220.45 MU from RGCCPP Kayamkualm @Rs 11.13 per unit, 109.50 MU from BDPP @Rs 11.34 per unit and 258MU from KDPP @ Rs 11.08 per unit. Interest and Finance charges Interest and finance charges include interest on outstanding loans , interest on security deposit, interest for borrowings for capital works, interest on working capital loan , interest on PF and other finance charges. The interest and finance charges estimated for the year 201314 is estimated at Rs 588.42 crore, which include Rs 100.00 crores as interest for Over Draft and Rs 85.00 crores towards interest on GPF etc. Depreciation The general approach on depreciation is that the rates of depreciation should be adequate to provide resources for replacement of assets after their useful life. As directed by the

(ii)

(iii)

(iv)

(v)

(8) (i) (ii)

(9) (i)

(ii)

(10) (i)

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Commission in the previous orders on ARR, KSEB has estimated the depreciation as per the CERC norms. (ii) (11) (i) (ii) The depreciation for the year 2013-14 is estimated at Rs 435.84 crore. Employee Cost Employee cost includes salary and benefits to the serving employees and pension including terminal benefits. The salary and benefits to the serving employees (excluding pensionary claims of the retired employees) for the year 201314 is estimated at Rs 1594.67 crores, which includes Rs 82.55 crores as provision for pay revision which is due from July/ August-2013. Pension and Terminal benefits to the retired/ retiring employees for the year 2013-14 is estimated at Rs 956.83 crores. Thus, the total employee cost including pension for the year 2013-14 works out to be Rs 2551.50 crores. The revised estimate of employee cost including pensionary claims for the year 2012-13 works out to be Rs 2153.72 crores. Repair and Maintenance cost R&M cost includes the cost for upkeep and maintenance of plant and machinery, lines cables, buildings, vehicles, office equipments etc. R&M expense for the year 2013-14 is estimated at Rs 304.56 crores. Administration and General Expenses The A&G expenses include the electricity duty payable to Government under section 3(1) of the Electricity Duty Act, rent, rates & taxes etc, Insurance charges, telephone/telex charges, consultancy charges, conveyance, other professional charges, printing and stationary etc. The A&G expenses are estimated at Rs 244.12 crores for the year 2013-14. Out of the above, Rs 106.27 crores is the section 3(1) duty payable by the Board to the Government. However, in all previous orders on ARR, the State Commission has not allowed section- 3(1) duty as revenue expenditure quoting the provisions in the Kerala Electricity Duty act-1963 that, it shall not be passed on to the consumers. KSEB has taken up the matter with the State Government to delete the subsection 3 of section (3) of Electricity Duty Act-1963, Other expenses Other expenses include prior period expenses and other debits. Prior period expenses includes (i) income related to prior period such as income from consumers, interest and other income related to prior periods and (ii) expenses including
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(ii)

(14)

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power purchase expenses related to prior periods on the basis of CERC orders, employee expenses related to prior period on account of DA revision etc. For the ensuing year, KSEB has not made any claim for prior period expenses, but requested before the Commission to approve the actual during Truing Up process. Other debits include expenses relating to research and development, bad and doubtful debts and miscellaneous losses and write-offs. KSEB has made a provision of Rs 19.50 crores as other debits for the year 2013-14. (15) Return on equity As per the CERC (Tariff Regulations), 2009, 15.5% return on the Equity & investment made out of internal resources is allowed to all CPSUs including NTPC, NHPC, NLC, PGCIL etc. Most of the SERCs also allowing same return to the State Power Utilities also. Hence, KSEB also eligible to claim RoE @15.5% on the equity of Rs 1553 crores plus 30% on the capital investment proposed. However, for the ensuing year 2012-13, KSEB had claimed RoE for the Equity of Rs 1553.00 crores only. The Return on Equity claimed for the year 2013-14 is claimed as Rs 240.72 crores. (16) Aggregate Revenue Requirement As detailed under paragraph-1, the Aggregate Revenue Requirement (ARR) estimated including all expenses and statutory surplus for the financial year 2013-14 as Rs 11237.11 crores and the revised estimate for the year 2012-13 as Rs 11562.63 crores. Revenue from Charges The revenue from tariff estimated at Rs 8000.69 crores for the year 2013-14 at the prevailing tariff applicable. Further, KSEB expect an additional revenue amounts to Rs 144.55 crore as penalty for excess usage over restriction for the months of April-2013 and May-2013. The non-tariff income such as meter rent, wheeling charge recoveries, penalties, belated interest, theft recoveries and other miscellaneous charges etc have been computed at the existing trend. The non-tariff income estimated for the year 2013-14 is Rs 333.20 crores. Revenue Gap The revenue gap estimated for the year 2013-14 is Rs 2758.67 crores. The estimate of various expenses, revenue and revenue gap for the year 2013-14 have been made taking into consideration of

(17) (i)

(ii)

(18)

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past trends as well as the actuals in the year 2011-12 and also considering the present trend up to September-2012. It is also expected that a near normal monsoon in the ensuing year and the current trend in the cost of thermal power will also be continued. These factors being dynamic in nature, the projections for 2013-14 may undergo changes depending on the actual situations. 10.3 The summary of the function wise breakup of ARR&ERC for the year 2013-14 is detailed below.
Table 10.2 Summary of the function wise ARR&ERC for the year 2013-14
Sl No. Particulars Generation of Power (Fuel cost of BDPP & KDPP) Purchase of power Interest & Finance Charges Depreciation Employee Cost Repair & Maintenance Administration & General Expenses Other Expenses Gross Expenditure (A) Less : Expenses Capitalized Less : Interest Capitalized Net Expenditure (B) Statutory Surplus/ RoE ARR (D) = (B) + ( C) Generation (Rs. Cr) 410.04 151.04 166.84 148.15 26.23 16.30 1.50 920.10 7.38 15.49 897.23 103.68 1000.91 180.56 163.73 281.35 67.99 53.70 747.33 16.34 15.15 715.84 90.94 806.78 6673.36 256.82 105.27 2122.00 210.33 174.12 18.00 9559.90 144.52 32.08 9383.30 46.10 9429.40 Transmission (Rs. Cr) Distribution (Rs. Cr) Total (Rs. Cr) 410.04 6673.36 588.42 435.84 2551.50 304.55 244.12 19.50 11227.33 168.24 62.71 10996.38 240.72 11237.10

1 2 3 4 5 6 7 8 9 10 11 13 14 15

10.4

The cost of electricity at the KSEB periphery, transmission end and distribution end computed for the year 2013-14 is detailed below.

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Table 10.3 Cost of energy at Generation end, transmission end distribution end for the year 2013-14

1
(a) (b) (c) 2 (a) (b) (c) 3 (a) (b) (c )

Cost of Generation
Total ARR of Generation Functional Area Total internal Generation (excl. auxiliary consumption) Perunit cost of generation Cost of Power Purchase Cost of Power Purchase Total power purchase (KSEB periphery) Per unit cost of power purchase Pooled average Cost of Generation and Power Purchase Total cost of Generation and Power Purchase Total Generation and Power purchase at KSEB periphery Pooled average Cost of Generation and Power Purchase (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (Rs/kWh ) (Rs.Cr) (MU) (MU) (Rs/kWh ) (Rs/kWh ) (Rs/kWh ) (Rs.Cr) (Rs.Cr) (Rs.Cr) (MU) (MU) (MU) (Rs/kWh) (Rs/kWh) (Rs/kWh ) 1000.91 6871.56 1.46 6673.36 14785.16 4.51 7674.27 21656.72 3.54 806.78 21656.72 20573.88 0.39 0.19 4.12 2756.04 333.20 2422.84 20573.88 18428.46 2145.42 1.31 0.48 5.92

4
(a) (b) (c) (d ) (e ) (e )

Transmission Cost
Total ARR of Transmission Functional Area Total energy input into Transmission Total energy sold to Distribution (after accounting 5% transmission loss) Overhead cost of Transmission Cost of transmission loss Per unit cost at transmission end

5
(a) (b) (c) (c) (d) (e) (f) (g) (g )

Distribution
Total ARR of distribution (excl. cost of power purchase) Non tariff income Net ARR of distribution (excl. cost of Power Purchase) Total energy input into distribution Total energy sale Loss in the distribution Over head cost of Distribution function Cost of Dist loss Cost at Distribution end

10.5

Though the estimated revenue gap for the year 2013-14 is Rs 2758.67 crores, in order to avoid tariff shock to the consumers, KSEB is filing the tariff proposal for bridging the revenue gap for Rs 1573.54 crore only. The details of the tariff proposals are furnished in Chapter-11 of this petition. KSEB may humbly pray before the Honble Commission (1) To approve the revised estimated expenses amounts to Rs 11562.63 Crore, income of Rs 7998.23 Crore and the revenue gap of Rs. 3564.40 crore for the year 2012-13.
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10.6

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(2)

To approve the estimated expenses of Rs 11237.10 Crore, income of Rs. 8478.44 Crore and the revenue gap of Rs. 2758.67 Crore for the year 2013-14. To allow the revenue gap as per the revised estimates for 2012-13 projected in this petition. To approve the proposals for bridging the revenue gap as detailed under chapter-11 of this petition. To allow the Board to revise the present estimates in the event of abnormal increase in fuel price or failure of monsoon during 2013-14 or if there are major changes in the assumptions taken in this petition due to any contingency that may occur due to reasons beyond the control of the Board. To allow the Board to submit a proposal for truing up of the cost at the end of financial year 2013-14 and any revenue gap arising out of such truing up be allowed separately. To recognize the concept of Regulatory Asset and treat the unbridged revenue gaps as Regulatory Asset and allow carry out the same. To permit the Board to present the case in person and submit other details / information as may be necessary before the Commission to takes final decision of the matter.

(3) (4) (5)

(6)

(7)

(8)

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CHAPTER-11

PROPOSALS TO BRIDGE THE REVENUE GAP FOR THE YEAR 2013-14


11.1 11.1.1 Introduction. Honble Commission vide the order dated 25-07-2012 had revised the tariff applicable to all categories of consumers w.e.f 01-072012. Honble Commission has also specified that, the revised rate shall be effective from 01-07-2012 to 31-03-2013. As per the KSERC order dated 28th April-2012, the revenue gap approved for the year 2012-13 was Rs 1889.15 crore. However, the additional revenue expected through the tariff revision effected from 1st July-2012 was only Rs 1257.63 crore as against the approved revenue gap of Rs 1889.14 core, leaving the unbridged revenue gap for the year 2012-13 as Rs 631.52 crore as per the approved ARR. However, due to the failure of monsoon and the consequent power crisis faced by the State, KSEB is constrained to incur an additional amount of about Rs 2626.19 crore for purchase of power alone. Further, as per the revised estimate, the revised revenue gap after accounting the additional revenue through tariff revision and penalty for excess usage is about Rs 3500.00 crore for the year 2012-13. As per the order on ARR&ERC for the year 2011-12, the revenue gap was Rs 928.62 crore, however the tariff was not revised to bridge the revenue gap. The actual revenue gap as per the provisional accounts for the year 2011-12 was Rs 1934.13 crore. Further, there was huge revenue gap as per the C&AG audited accounts prior to the year 2011-12. As per the ARR&ERC for the year 2013-14 as detailed in this petition, the total revenue gap estimated for the year 2013-14 is Rs 2758.67 crore. Considering the very critical financial position of the Board and also the huge un bridged revenue gap accumulated over the years, KSEB is not in a position to sustain without mobilizing at least part of the un bridged revenue gap. At present, a part of the revenue gap is being met through availing overdraft and short term loans. The details of the overdraft and short term loans availed by KSEB during the year is detailed below.

11.1.2

11.1.3

11.1.4

11.1.5

11.1.6

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Table 11.1 Overdraft availed during the period from Apri-11 to Nov-12
DATE OD+STL BALANCE Increase/Decrease over previous month MAXIMUM OD+STL BALANCE DURING THE Increase/Decrease over MONTH previous month

30-Apr-11 31-May-11 30-Jun-11 31-Jul-11 31-Aug-11 30-Sep-11 31-Oct-11 30-Nov-11 31-Dec-11 31-Jan-12 29-Feb-12 31-Mar-12 30-Apr-12 31-May-12 30-Jun-12 31-Jul-12 31-Aug-12 30-Sep-12 31-Oct-12 30-Nov-12

944.07 861.51 918.72 1058.43 1201.16 1231.40 1263.75 1332.20 1614.99 1683.93 1835.35 1914.37 2084.82 1889.60 2279.39 2326.43 2671.73 2593.10 2789.29 2881.57

-82.56 57.21 139.71 142.73 30.24 32.35 68.45 282.79 68.94 151.42 79.02 170.45 -195.22 389.79 47.04 345.30 -78.63 196.19 92.28

1141.64 1138.37 1203.17 1251.37 1308.35 1444.62 1492.36 1582.65 1670.46 1876.94 2059.02 2123.87 2210.65 2230.32 2320.34 2514.01 2678.06 2891.70 2950.95 2972.87

-3.27 64.80 48.20 56.98 136.27 47.74 90.29 87.81 206.48 182.08 64.85 86.78 19.67 90.02 193.67 164.05 213.64 59.25 21.92

11.1.7

It is further submitted that, as per the judgment of the Honble Appellate Tribunal for Electricity dated 11-11-2011 on petition OP No. 1 of 2011, the tariff for the ensuing year shall be decided before 1st April-2013. If KSEB fails to file the tariff proposals with on or before 1st of Januray-2013, Honble Commission is empowered to initiate suo-motu proceedings for tariff determination. Honble Commission vide the notification No. 751/CT/KSERC/2011 dated 20th November-2012 has notified the KSERC (Principles for determination of road map for cross-subsidy reduction for Distribution Licensees) Regulations, 2012. As per the clause 3(2) & 3(3) of the said regulation, the average cost of supply shall be used for assessing the cross subsidy levels of different categories of consumers. The ARR, ERC, Revenue gap and average cost of supply for the year 2013-14 as per this petition is detailed below.

11.1.8

11.1.9

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Table-11.2 ARR,ERC and Revenue Gap for the year 2013-14 Sl No. Particulars Unit 2013-14 1 Aggregate Revenue Requirement (Rs.Cr) 11237.11 2 Non-Tariff Income (Rs.Cr) 333.20 3 Net ARR = (1) - (2) (Rs.Cr) 10903.91 4 Revenue from Tariff (Rs.Cr) 8145.24 5 Revenue Gap 2758.67 6 Energy Sales (MU) 18428.44 7 Average Cost of Supply (3)/(6) (Rs/ kWh) 5.92 8 Average realization (4)/(6) (Rs/ kWh) 4.42 9 Revenue Gap per unit (Rs/ kWh) 1.50

11.2 11.2.1

RATIONALISATION OF TARIFF Basic philosophy adopted for Tariff proposals The electricity consumption in the State has been showing an increasing trend during last few years, especially by the domestic consumers and other LT consumers. Unlike other parts of the country where the domestic consumption accounts for 25-30% of the total consumption, in Kerala domestic consumption accounts for 50% of the total consumption. Though KSEB has imposed various demand side management options, the consumption has been increasing over the years. The present telescopic rates adopted are not based on the ability to pay principles and it goes to subsidize even the well to do consumers to some extent. Power being a valuable resource has to be utilized judiciously and group of consumers who consume more should pay a reasonable price for the consumption. Hence, in the present proposal an attempt has been made to rationalize the tariff structure by doing away with telescopic tariffs. Another aspect which has been looked into is the introduction of Pre-paid metering for Agriculture consumers. The introduction of prepaid meter will enable to monitor the electricity usage of various consumers and get proper records. This will also enable the Government and Board to fix particular quota of power allocation for various classes and also act as an incentive to go for more efficient pumps. As part of the present proposals, KSEB has adopted the following principles. (i) Lt- 1 (a) Domestic categories: Instead of the present telescopic tariff system, KSEB proposes non-telescopic tariff with reduced slab rates.

11.2.2

11.2.3

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(ii)

LT-1(b): The existing number of slab may be reduced from seven to three and also proposes non-telescopic tariff for LT-1(b) categories also. Prepaid metering is also recommended for LT-V Agriculture consumers and LT-VII (C) consumers. Among these consumer category, those who opt for pre-paid metering and limit their consumption as that of the year 2010-11 shall be billed at the prevailing rate (existing rate without revision) for the year 2013-14 and it may be continued for further period as decided by the Honble Commission. However, the excess usage if any shall be billed at the revised rate and penalties imposed by the Honble Commission from time to time. KSEB proposes to merge the LT-VI(A) & VI(B) Categories as LT-VI(A) category. Further, KSEB proposes non-telescopic tariff billing for LT-VI(A), VI(B), VI(C) & LT-VII(C) categories.

(iii)

(iv)

11.2.4

Though the estimated revenue gap for the year 2013-14 was Rs 2758.67 crore, through this petition KSEB proposes to mobilize additional revenue of Rs 1573.54 crore only through this proposals. KSEB humbly request before the Honble Commission to treat the balance gap as regulatory assets and allow carrying cost for the same. The details of the tariff proposals for each category are detailed below. LT-1(a) Domestic Category (a) Energy Charge The slab wise details of the consumer strength and consumption of domestic consumers estimated for the year 2013-14 are given below.
Table-11. 3 Slab wise details of domestic consumers Revenue at Average Consumer strength Consumption Slab rate existing tariff tariff Number 2545755 2542281 1713673 776494 624496 353505 104314 25188 8685619 % of total in MU 745 1896 2085 1282 1294 1020 463 291 9077 % of total (Rs/kWh 1.50 2.40 2.90 3.60 4.80 6.00 7.50 6.50 (Rs. Cr) 111.78 345.26 448.37 312.32 366.52 366.12 218.27 189.39 2358.04 (Rs/ kWh) 1.50 1.82 2.15 2.44 2.83 3.59 4.71 6.50 2.60

11.2.5 11.3 11.3.1

Monthly consumption slab 0-40 41-80 81-120 121-150 151-200 201-300 301-500 Above 500 Total

29.3 29.3 19.7 8.9 7.2 4.1 1.2 0.3 100.0

8.2 20.9 23.0 14.1 14.3 11.2 5.1 3.2 100.0

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11.3.2

It may be noted that, the average revenue realization from domestic category at the prevailing tariff is about Rs 2.60 per unit only. Further, the tariff applicable to lower consumption slabs of domestic categories is highly subsidized. It is further submitted that, the present telescopic tariff applicable to domestic consumers do not provide any incentive for reducing the energy usage. Hence as submitted earlier, KSEB proposes non-telescopic tariff system for the domestic categories, however in order to avoid tariff shock, slab rate proposed is much less than the existing slab rate at telescopic tariff system. The energy charges proposed for different consumption slab of domestic category for the year 2013-14 is detailed below.
Table 11.4 Energy charges proposed for domestic category
Existing Slab rate Monthly consumption slab 0-40 units 41-80 units 81-120 units 121-150 units 151-200 units 201-300 units 301-500 units Above 500 units (Rs/kWh Remarks 1.50 2.40 2.90 3.60Telescopic 4.80 6.00 7.50 6.50Non telescopic Monthly consumption Upto 40 units Upto 80 units Up to 120 units Upto 150 units Upto 200 units Up to 300 units Above 300 units Proposed rate (Rs/kWh Remarks 1.65 2.30 2.70 3.40Non 4.00Telescopic 5.00 6.75

11.3.3

Monthly consumption block( Units) 0-40 41-80 81-120 121-150 151-200 201-300 301-500 Above 500

11.3.4

The additional revenue expected through the proposed tariff is detailed below.
Table 11.4 Additional revenue expected through the proposed revision Existing tariff Proposed tariff Additional Monthly Revenue Avg. Tariff Revenue Avg. Tariff revenue consumption block (Rs. Cr) (Rs/kWh) (Rs. Cr) (Rs/kWh) (Rs. Cr) 0-40 111.78 1.50 122.96 1.65 11.18 41-80 345.26 1.82 436.13 2.30 90.86 81-120 448.37 2.15 562.95 2.70 114.59 121-150 312.32 2.44 435.77 3.40 123.45 151-200 366.52 2.83 517.76 4.00 151.24 201-300 366.12 3.59 510.13 5.00 144.01 301-500 218.27 4.71 312.48 6.75 94.21 Above 500 189.39 6.50 196.68 6.75 7.28 Total/ average 2358.04 2.60 3094.87 3.41 736.83

11.3.5

KSEB also proposes to bring all the domestic consumers with monthly consumption above 300 units under mandatory TOD tariff in a phased manner during the year 2013-14. Honble Commission may kindly approve the revised energy charges proposed for domestic category.

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11.3.6

(b) Fixed Charges Honble Commission vide the order dated 25-07-2012 has introduced fixed charges for domestic category as follows. (i) Single phase consumers (excluding domestic consumers with monthly consumption above 40 units) @ Rs/20/month. (ii) Three phase consumers- Rs 60 month. However considering the huge unbridged revenue gap, KSEB proposes to enhance the fixed charges for single phase domestic consumers with monthly consumption above 120 units from the existing rate of Rs 20/month to Rs 25.00 per month and that for three phase consumers from Rs 60/month to Rs 75.00 per month.The additional revenue expected through the proposed revision of fixed charges is detailed below.

11.3.7

Table 11.5 Additional revenue expected through enhancement of fixed charges of domestic consumers
Sl Particulars No I Single phase consumers Monthly consumption less (a) than 40 units Monthly consumption 41 (b) units to 120 units Monthly consumption more (b) than 120 units II Three phase consumers Number of consumers Fixed Charge Existing rate Proposed rate Revenue from Fixed Charge Existing Proposed Addl revenue rate rate (Rs.Cr) 0.00 0.00 9.42 5.65

(Rs/month) (Rs/month) (Rs.Cr) (Rs.Cr) 2546022 4255954 1569617 314025 0 20 20 60 0 20 25 75 0.00 102.14 37.67 22.61

0.00 102.14 47.09 28.26

Total

8685618

162.42

177.49

15.07

11.3.8

The total additional revenue expected through the proposed revision of energy charges and fixed charges would be Rs 751.90 crore as detailed below.
Table 11.6 Total additional revenue expected from domestic categories Particulars Amount (Rs.Cr) (i) Revising the energy charges 736.83 (ii) By introducing fixed charges 15.07 Total 751.90

Honble Commission may kindly approve the proposals for revising the tariff of LT 1(a) domestic category as detailed above.

11.4

LT 1(b) Tariff applicable to offices of political parties etc.

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11.4.1

The slab wise details of consumers, consumption and the present tariff of LT-1(b) category are detailed below.

Table 11.7 Slab wise consumption details of LT-1(b) category Slab rate Revenue Avg. Tariff Monthly consumption Consumer strength Consumption slab Number % of total in MU % of total (Rs/kWh (Rs.Cr) (Rs/kWh) 0-40 323 26.5 0.13 8.8 2.00 0.03 2.00 41-80 400 32.8 0.32 21.4 3.10 0.08 2.45 81-120 236 19.3 0.29 19.2 3.60 0.08 2.78 121-150 144 11.8 0.22 14.5 4.50 0.07 2.99 151-200 72 5.9 0.14 9.6 5.20 0.05 3.41 201-300 37 3.0 0.10 6.9 6.20 0.04 4.09 Above 300 8 0.7 0.30 19.6 7.50 0.21 7.20 Total 1220 100.0 1.51 100.0 0.56 3.69

11.4.2

As submitted earlier, KSEB proposes to reduce the number of tariff slabs from seven to four and also proposes non-telescopic tariff for LT-1(b) category.
Table 11.8 Tariff proposed for LT-1 (b) category
Proposed rate (Rs/kWh Remarks

Existing tariff Monthly consumption Monthly Monthly block (Rs/kWh consumption consumption 0-40 41-80 81-120 121-150 151-200 201-300 Above 300 0-40 units 41-80 units 81-120 units 121-150 units 151-200 units 201-300 units Above 300 units 2.00 3.10 3.60 4.50 5.20 6.20 7.50 Upto 200 units

Up to 120 units

3.50 Non- Telescopic

4.50 6.50

Above 200 units

11.4.3 11.4.4

KSEB expect an additional revenue of Rs 0.10 crore by revising the tariff applicable to LT-1(b) categories. In addition to the above, KSEB proposes to revise the fixed charges for LT-1 (b) category as follows.
Table-11.9 Fixed charge proposed for LT-1 (b) category Existing tariff (Rs /consumer per month) Single phase consumers Three phase consumers Proposed tariff (Rs /consumer per month) 20 30 60 90

Honble Commission may kindly approve the tariff proposed for LT1(b) category as detailed above. 11.5 LT-II Colonies

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11.5.1

The consumer strength and consumption details of LT-II colonies are detailed below.
Table-11.9 Details of LT-II colonies Particulars No of consumers Annual Energy Consumption (MU) Existing tariff Fixed charge (Rs/ connection) Energy Charge (Rs/kWh) 960 18.90 2200 6.50

11.5.2

The tariff proposed for LT-II category is detailed below.


Table-11.10 Tariff proposed for LT-II category Fixed charge Energy Charge (Rs/connection/ month) kWh) Existing 2200

(Rs/

proposed Existing proposed 2400 6.5 7.15

11.5.3

The additional revenue expected through the proposed revision is detailed below.

Table-11.11 Additional revenue expected through the proposed revision Particulars Revenue (Rs.Cr) at Existing rate at Proposed rate Addl revenue Fixed charge 2.53 2.76 0.23 Energy Charge 12.29 13.51 1.23 Total 14.82 16.28 1.46

Honble Commission may kindly approve the rates proposed for LT-II category as detailed above. 11.6 LT-III Temporary connection KSEB proposes to revise the tariff for LT-III temporary connection as detailed below.
Table 11.12 Existing and proposed tariff for Temporary connection Particulars Existing rate Proposed rate Energy charge Rs 13.50 per unit Rs 15.00 per unit OR Daily minimum Rs/kW or part thereof connected load Rs 130/kW Rs 140/kW

11.7

LT-IV Industrial Tariff

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11.7.1

The details of the LT-IV industrial tariff category including number of consumers, contract demand, annual consumption and the prevailing tariff are given below.
Table 11.13 Details of LT-IV industrial category No of consumers (nos) 74079 (a) connected load below 10 HP 65367 (b) connected load above 10 HP 139446 Total Connected Load (MW) 405 (a) connected load below 10 HP 1270 (b) connected load above 10 HP 1675 Total Annual Energy Consumption (MU) 1171.39 Existing Tariff Demand charge 60.00 (a) below 10 HP (Rs/ consumer) 60.00 (b) above 10 HP (Rs/ kW) Energy Charge (Rs/kWh) 4.25

11.7.2

KSEB proposes to revise the tariff applicable to LT IV categories as detailed below.

Table-11.14 Tariff proposed and additional revenue expected from LT-IV industrial category
Particulars Demand charge (a) Connected below 10 HP (Rs/ consumer) (b)Connected load above 10 HP (Rs/kW) Energy Charge (Rs/kWh) Total 60.00 60.00 4.25 75.00 70.00 5.00 5.33 91.44 497.84 594.61 6.67 106.68 585.70 699.04 1.33 15.24 87.85 104.43 Existing rate Proposed rate at Existing rate Revenue (Rs.Cr) at Proposed Addl rate revenue

11.7.3

KSEB proposes to enhance the demand charges applicable to Maximum demand based tariff/ normal demand charges under ToD tariff as Rs 125/kVA/month. Honble Commission may kindly approve the proposed enhancement in LT-IV industrial tariff as detailed above.

11.8 11.8.1

LT-V Agriculture category The anticipated consumption, connected load and the existing tariff of the LT-V Agriculture consumers are detailed below.
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Table-11.15. Consumption details of LT-V agriculture category Number of consumers 468339 Connected Load (MW) 942 Annual Energy Consumption (MU) 297.04 Existing tariff Demand charge (Rs/kW) 6.00 Energy Charge (Rs/kWh) 1.50

11.8.2

The agriculture tariff in the State is highly subsidized. The tariff proposed for the LT-V category and the additional revenue expected is detailed below.

Table-11.16 Proposed tariff and additional revenue expected from LT-V agriculture category Revenue (Rs.Cr) Existing Proposed Particulars at Existing at Proposed Addl rate rate rate rate revenue Demand charge (Rs/kW) 6.00 8.00 6.82 9.09 2.27 Energy Charge (Rs/kWh) 1.50 2.00 44.56 59.41 14.85 Total 51.37 68.50 17.12

11.8.3

As submitted earlier, KSEB proposes to introduce prepaid metering for LT-V Agriculture consumers. Those who opt for prepaid metering and limit their consumption as that of the year 2010-11 shall be allowed to bill at the prevailing rate (existing rate without revision) for the year 2013-14 and it may be continued for further period as decided by the Honble Commission. However, the excess usage if any shall be billed at the revised rate and penalties imposed by the Honble Commission from time to time. KSEB shall procure and install meters at the cost of consumer or KSEB shall levy rent at the rate approved by the Honble Commission. Once Honble Commission approve the pre-paid metering for agricultural consumers in principle, KSEB shall submit detailed proposal for its implementation including the identification of the target group, meter procurement plan, action plan for changing the meters etc shall be submitted separately for the approval of the Honble Commission. Till the pre-paid metering is being implemented, Honble Commission may kindly approve the tariff proposed for LT-V agriculture category as detailed above.

11.8.4

11.9 11.9.1

LT-VI (A) Category & LT- VI (B) category At present LT-VI (A) categories belong to premises of religious worship, Government or aided educational institutions,

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Government and Private Hospitals etc and LT-VI(B) applicable to offices and institutions under State and Central Government, Offices of advocates, chartered accountants etc. KSEB proposes to re-categories all the private hospitals from LT-VI(A) to LT-VII(A) commercial category. Further, considering the similar nature of activities of other consumers of LT-VI(A)& LT-VI(B), KSEB proposes to merge the LT-VI(A) and LT- VI (B) categories together as LT-VI (A) category. 11.9.2 The consumer and consumption details of the LT-VI (A) category are detailed below.
Table-11.17 Details of LT-VI (A) Category Consumer Details Number of consumers Connected Load (MW) Annual Energy Consumption (MU) Up to 500 units Above 500 units Total Existing Tariff Demand charge (Rs/kW) Energy Charge (Rs/kWh) Up to 500 units Above 500 units

145304 219.71 130.37 62.66 193.03 50.00 4.80 5.50

11.9.3

The consumer details including annual energy consumption and connected load for LT-VI (B) category is detailed below.
Table 11.19 Consumer details of LT-VI (B) Category

Consumer Details
Number of consumers Connected Load (MW) Annual Energy Consumption (MU) Up to 500 units Above 500 units Total Existing Tariff Demand charge (Rs/kW) Energy Charge (Rs/kWh) Up to 500 units Above 500 units 93088 346.25 119.72 198.55 318.27 70.00 5.50 6.50

11.9.4

The tariff proposed for LT-VI (A) LT-VI (B) category and additional revenue expected is detailed below.

Tasble-11.18 Proposed tariff and additional revenue expected from LT-VI (A) & VI(B) category

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Particulars LT - VI(A) Category Demand charge (Rs/kW) Energy Charge (Rs/kWh) Upto 500 units Above 500 units Sub total LT-VI(B) Category Demand charge (Rs/kW) Energy Charge (Rs/kWh) Upto 500 units Above 500 units Sub total Grand total

Existing rate

Proposed rate

Revenue (Rs.Cr) at Existing at Proposed Addl rate rate revenue 13.18 62.58 33.13 108.89 29.09 65.85 125.15 220.08 328.96 18.46 78.22 43.86 140.54 29.09 71.83 138.99 239.90 380.44 5.27 15.64 10.74 31.65 0.00 5.99 13.84 19.82 51.48

50.00 4.80 5.50

70.00 6.00 7.00

70.00 5.50 6.50

70.00 6.00 7.00

KSEB request that, Honble Commission may kindly approve the revision proposed for LT-V1 (A) & VI (B) categories as above. 11.10 LT-VI (C ) category

11.10.1 The consumer, consumption and existing tariff of LT-VI(C) category is detailed below.
Table 11.21 Details of LT- VI (C ) category Consumer Details Number of consumers Connected Load (MW) Annual Energy Consumption (MU) Up to 500 units Above 500 units Total Existing Tariff Demand charge (Rs/kW) Energy Charge (Rs/kWh) Up to 500 units Above 500 units

34849 189.14 86.60 97.44 184.04 180.00 7.00 8.50

11.10.2 The tariff proposed for LT-VI(C) category and the additional revenue expected is detailed in the table below.
Table 11.22 Proposed tariff and additional revenue expected from LT-VI (C) category Particulars Revenue (Rs.Cr)

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Demand charge (Rs/kW) Energy Charge (Rs/kWh) Up to 500 units Above 500 units Total

Existing Proposed at Existing at Proposed Addl rate rate rate rate revenue 180.00 200.00 40.85 45.39 4.54 7.00 8.50 7.00 8.50 60.62 80.44 181.92 60.62 82.82 188.84 0.00 2.38 6.92

Honble Commission may kindly approve the tariff as proposed above. 11.11 LT-VI (D) category

11.11.1 The consumption details of the LT-VI(D) category is detailed below.


Table 11.23 Details of LT-VI (D) category Consumer Details Number of consumers Connected Load (MW) Annual Energy Consumption (MU) 1896 3.53Demand charge (Rs/kW) Nil 3.24Energy Charge (Rs/kWh) 1.50 Existing Tariff

11.11.2 LT-VI(D) category is highly subsidized category, however considering the low paying capacity as well as social considerations the present subsidy cannot be dispensed with for this consumer group. 11.11.3 The tariff proposed for the LT- VI(D) category and the additional revenue expected is detailed below.
Table 11.24 Proposed tariff and additional revenue expected from LT-VI(D) category Revenue (Rs.Cr) Existing Proposed Particulars at Existing at Proposed Addl rate rate rate rate revenue Energy Charge 1.50 2.00 0.49 0.65 0.16 (Rs/kWh)

Honble Commission may kindly approve the tariff proposed for LTVI(D) category

11.12

LT-VII (A) Commercial category

11.12.1 The consumer details of then LT-VII (A) category is detailed below.
Table 11.25 Details of LT-VII (A) category Consumer details Existing Tariff

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Number of consumers Connected Load (MW) Single phase Three phase Annual Energy Consumption (MU) Upto 100 units per month Upto 200 units per month Upto 300 units per month Upto 500 units per month Above 500 units per month Total

523130 Demand charge (Rs/kW) 506.01 Single phase 759.01 Three phase Energy Charge 184.96 Upto 100 units per month 136.93 Upto 200 units per month 120.13 Upto 300 units per month 137.78 Upto 500 units per month 619.96 Above 500 units per month 1199.76 60.00 120.00 5.45 6.05 6.75 7.30 8.50

11.12.2 Though the LT-VII (A) category is a subsidizing category, KSEB may propose a meagre enhancement on this category also to avoid tariff shock to other categories. The tariff revision proposed and the additional revenue expected from this category is detailed below.
Table 11.26 Proposed tariff and additional revenue expected from LT-VII (A) category Revenue (Rs.Cr) Existing Proposed at at Particulars Addl rate rate Existing Proposed revenue rate rate Demand charge (Rs/kW) 60.00 75.00 36.43 45.54 9.11 Single phase 120.00 140.00 109.30 127.51 18.22 Three phase Energy Charge 5.45 6.00 100.80 110.98 10.17 Upto 100 units per month 6.05 6.50 82.84 89.00 6.16 Upto 200 units per month 6.75 7.25 81.09 87.09 6.01 Upto 300 units per month 7.30 8.00 100.58 110.22 9.64 Upto 500 units per month 8.50 8.75 526.97 542.47 15.50 Above 500 units per month 1038.01 1112.82 74.81 Total

Honble Commission may kindly approve the tariff proposed for LT-VII (A) category.

11.13

LT- VII(B) Category

11.13.1 The consumer details of the LT-VII (B) category is detailed below.
Table 11.27 Details of LT-VII(B) category

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Consumer details Number of consumers Connected Load (MW) Annual Energy Consumption (MU) Up to 100 units per month Above 100 units per month Total

Existing Tariff 864974 625.44Demand charge (Rs/kW) Energy Charge 262.03 Up to 100 units per month 274.71 Above 100 units per month 536.74

40.00 4.00 6.00

11.13.2 The tariff revision proposed for LT-VII (B) category and the additional revenue expected is detailed below.
Table 11.28 The proposed tariff and additional revenue expected from LT-VII(B) category Revenue (Rs.Cr) Particulars Existing rate 40.00 4.00 6.00 Proposed at rate Existing rate 50.00 4.70 6.60 30.02 104.81 164.83 299.66 at Addl Proposed revenue rate 37.53 123.15 181.31 341.99 7.51 18.34 16.48 42.33

Demand charge (Rs/kW) Energy Charge Up to 100 units per month Above 500 units per month Total

Honble Commission may kindly approve the tariff proposed for LT-VII (B) category. 11.14 LT- VII (C ) category

11.14.1 The consumption details of the LT-VII(C) category are detailed below. Table 11.29 Details of LT-VII(C) category
Consumer details Number of consumers Connected Load (MW) Annual Energy Consumption (MU) Upto 1000 units per month Above 1000 units per month Total Existing Tariff 3807 206.91Demand charge (Rs/kW) Energy Charge 4.76 Upto 1000 units per month 105.82 Above 1000 units per month 110.58

90.00 5.00 6.50

11.14.2 The tariff proposed and the additional revenue expected through LT-VII(C) category is detailed below.
Table 11-30 Proposed tariff and additional revenue expected from LT-VII(C) category Revenue (Rs.Cr) Existing Proposed at at Particulars Addl rate rate Existing Proposed revenue rate rate

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Demand charge (Rs/kW) Energy Charge Upto 100 units per month Above 500 units per month Total

90.00 5.00 6.50

100.00 5.75 7.10

22.35 2.38 68.78 93.51

24.83 2.74 75.13 102.70

2.48 0.36 6.35 9.19

11.14.3 As proposed for LT-V agriculture consumers, KSEB proposes to introduce pre-paid metering for LT- VII (C) categories also. Those who opt for pre-paid metering and limit their consumption as that of the year 2010-11 shall be allowed to bill at the prevailing rate (existing rate without revision) for the year 2013-14 and it may be continued for further period as decided by the Honble Commission. However, the excess usage if any shall be billed at the revised rate and penalties imposed by the Honble Commission from time to time. KSEB shall procure and install meters at the cost of consumer or KSEB shall levy rent at the rate approved by the Honble Commission. Once Honble Commission approve the pre-paid metering for agricultural consumers in principle, KSEB shall submit detailed proposal for its implementation including the identification of the target group, meter procurement plan, action plan for changing the meters etc shall be submitted separately for the approval of the Honble Commission. 11.14.4 Till the finalisation of the implementation of the prepaid metering, Honble Commission may approve the tariff as proposed above. 11.15 LT-VIII Temporary Extension

11.15.1 The tariff proposed for temporary extension is detailed below.


Particulars Existing Proposed

Fixed charges per day Rs 65/ kW Rs 75/kW

11.16 Public lighting 11.16.1 Honble Commission vide the tariff order dated 25-07-2012 has completely revised the composite tariff as well as metered supply tariff applicable to public lighting. However, still the average tariff applicable to the public lighting is highly subsidized. Further, Honble Commission has dispensed with the R&M cost factored in the composite tariff under the presumption that, the maintenance of the street light is being carried out by the local bodies. However, still the maintenance of the street light is being carried out by KSEB. 11.16.2 Further, KSEB may prefer metered supply to public lighting instead of the present composite tariff. Hence, as an incentive to change over to metered supply, KSEB proposes only 15% increase for metered supply where as 25% increase is proposed for composite

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tariff on the existing rates. The proposed composite tariff applicable to street light is given below. Table 11.31 Proposed composite tariff for street lights
Approved Tariff Type of Lamp Ordinary Ordinary Ordinary Fluoroscent tube Fluoroscent tube Flood Light Mercury Vapour Lamp Mercury Vapour Lamp Mercury Vapour Lamp Mercury Vapour Lamp Mercury Vapour Lamp Sodium Vapour Lamp Sodium Vapour Lamp Sodium Vapour Lamp Sodium Vapour Lamp Sodium Vapour Lamp Sodium Vapour Lamp CFL CFL CFL CFL CFL CFL CFL CFL CFL CFL CFL Watts Effective Energy Rs/Lamp/month Proposed tariff Rs/Lamp/month

LED
Mercury vapour lamp Sodium vapour lamp

rate (paise per 4 hours 6 hours 12 hours 4 hours 6 hours 12 hours unit) 40 300 14 22 43 18 28 54 60 300 22 32 65 28 40 81 100 300 36 54 108 45 68 135 40 300 14 22 43 18 28 54 80 300 29 43 86 36 54 108 1000 300 360 540 1080 450 675 1350 80 300 29 43 86 36 54 108 125 300 45 68 135 56 85 169 160 300 58 86 173 73 108 216 250 300 90 135 270 113 169 338 400 300 144 216 432 180 270 540 70 300 25 38 76 31 48 95 80 300 29 43 86 36 54 108 100 300 36 54 108 45 68 135 125 300 45 68 135 56 85 169 150 300 54 81 162 68 101 203 250 300 90 135 270 113 169 338 11 150 2 3 6 3 4 8 22 150 4 6 12 5 8 15 44 150 8 12 24 10 15 30 18 150 3 5 10 4 6 13 36 150 6 10 19 8 13 24 72 150 13 19 39 16 24 49 15 150 3 4 8 4 5 10 30 150 5 8 16 6 10 20 36 150 6 10 19 8 13 24 72 150 13 19 39 16 24 49 144 150 26 39 78 33 49 98 18 150 3 5 10 4 6 13 300 0 0 1620 1200 1296 300 0 0 338 250 270

11.16.3 The proposed tariff for metered street light supply is detailed below.
Table 11.32 Tariff proposed for metered supply Proposed Approved Particulars tariff tariff Fixed charge (Rs/meter/month) 30 40 Energy charge (Rs/unit) 2.75 3.15

11.16.4 The additional revenue expected through the proposed revision of street lights is given below.

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Table 11.33 Additional revenue expected through the proposed tariff revision of street lights Revenue (Rs.Cr) Avg tariff at Avg tariff at the existing composite proposed composite at Existing at Proposed Addl tariff (Rs/ kWh) tariff (Rs/ kWh) rate rate revenue 2.75 3.15 84.45 96.73 12.28

11.17

EHT 66 kV & 110 KV

11.17.1 The contract demand and annual energy consumption estimated for the EHT supply at 66 kV and 110 kV supply for the year 2013-14 are detailed below.
Table 11.34 Consumption details of EHT 66 kV and 110 kV category Consumer details EHT-66 kV EHT-110 kV Billing Demand (MVA) 96.93 239.4 Annual Energy Consumption (MU) 372.13 984.59 Existing tariff Demand Charge (Rs/kVA/month) 300.00 290.00 Energy charge (Rs/unit) 4.00 4.00

11.17.2 Considering the huge unbridged revenue gap, KSEB proposes an increase of Rs 0.75/unit on energy charges and Rs 60/kVA/month on demand charges for the EHT category. The additional revenue expected through the proposed revision is detailed below.
Table 11.35 Additional revenue expected from EHT category Revenue (Rs.Cr) Existing Proposed at Existing at Proposed rate rate Addl revenue rate rate 300.00 4.00 360.00 4.75 34.89 148.85 183.75 83.31 393.84 477.15 660.89 41.87 176.76 218.64 100.55 467.68 568.23 786.86 6.98 27.91 34.89 17.24 73.84 91.08 125.97

Particulars

EHT-1 66 kV Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total EHT II 110 kV Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total EHT 66 kV + 110 kV total

290.00 4.00

350.00 4.75

Honble Commission may kindly approve the tariff proposed for EHT-66 kV and 110 kV category. 11.18 EHT-220 KV 11.18.1 Honble Commission vide the order dated 25-07-2012 has approved the EHT 220 KV tariff. At present the Cochin Refineries Limited is the only consumer who is availing power supply at EHT 220 KV tariff. The estimated BMD and annual energy consumption of CRL for the year 2013-14 is 31.00kVA and 68 MU respectively. The

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existing tariff and the proposed tariff for EHT-220 KV category is detailed below.
Table 11.36 Additional revenue expected from EHT-220 KV category Revenue (Rs.Cr) Existing Proposed Particulars at Existing at Proposed rate rate Addl revenue rate rate Demand charge 275.00 330.00 10.23 12.28 2.05 (Rs/kVA/month) Energy Charge (Rs/kWh) 4.00 4.75 27.20 32.30 5.10 Total 37.43 44.58 7.15

Honble Commission may kindly approve the tariff proposed for EHT 220 kV category. 11.19 EHT tariff for commercial use

11.19.1 The prevailing EHT tariff (66 kV, 110 kV and 220 kV) is generally indented for industrial use only. Recently a few existing HT-IV commercial categories are seeking supply at EHT tariff. However, comparing to the prevailing HT-IV commercial tariff, the EHT industrial tariff was considerably less as detailed in the table below.
Table 11.37 Comparison of the tariff applicable to HT-IV commercial category and EHT 66 kV tariff
Particulars Fixed charge (Rs/ kVA/ month) Energy charge (Rs/unit) Consumption upto 30000 units per month Consumption above 30000 units per month HT-IV commercial 400 5.5 6.5 EHT-66 kV 290 4.0 4.0 % of reduction 27.50 27.27 38.46

11.19.2 As detailed above, there will be a reduction in tariff up to 38.46 % for those who opt for EHT tariff from HT-IV commercial tariff. This may result in considerable revenue loss to KSEB. Since the consumers who migrate from HT-IV commercial category is not changing their purpose of usage, there is no rationale in extending such reduction in tariff for commercial consumers. Hence KSEB may propose the following tariff for those who are availing EHT supply for commercial use.
Table 11.38 Proposed tariff for EHT commercial category Particulars Demand Charge (Rs/kVA/month) 400 Energy Charge (Rs/unit) 6.00

Honble Commission may kindly approve the same 11.20 HT-I Industrial category

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11.20.1 The estimated BMD and annual energy consumption of the HT-I industrial categories for the year 2013-14 is 525MVA and 1747 MU respectively. Further, the prevailing demand charge for the HT-1 category is Rs 300 kVA/month and energy charge is Rs 4.10 per unit. The details are given below.
Table 11.39 Details of HT-1 category Existing tariff 525 Demand charge (Rs/kVA/month) 1747 Energy Charge (Rs/kWh)

Consumer details Billing Demand (MVA) Annual Energy Consumption (MU)

300.00 4.10

11.20.2 The tariff proposed for HT-1 Industrial category and the additional revenue expected is detailed below.
Table 11.40 Proposed tariff for HT-1 industrial category and additional revenue expected Revenue (Rs.Cr) Existing Proposed Particulars at Existing at Proposed rate rate Addl revenue rate rate Demand charge (Rs/kVA/month) 300.00 360.00 189.00 226.80 37.80 Energy Charge (Rs/kWh) 4.10 4.85 716.27 847.30 131.03 Total 905.27 1074.10 168.83

Honble Commission may kindly approve the HT-1 industrial tariff as proposed above. 11.21 HT-II Non Industrial/ Non- Commercial categories 11.21.1 The details of the consumption and the existing tariff of the HT-II categories are given below. Table-11.41 Details of HT-II category
Consumer details Billing Demand (MVA) Annual Energy Consumption (MU) Existing tariff 49.46Demand charge (Rs/kVA/month) 129.57Energy Charge (Rs/kWh) 350.00 4.10

11.21.2 The proposed tariff and the additional revenue expected from HTII category is detailed below.
Table-11.42 Additional revenue expected from HT-II category Revenue (Rs.Cr) Existing Proposed Particulars at Existing at Proposed rate rate Addl revenue rate rate Demand charge (Rs/kVA/month) 350.00 420.00 20.77 24.93 4.15 Energy Charge (Rs/kWh) 4.10 4.85 53.12 62.84 9.72 Total 73.90 87.77 13.87

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KSEB may request before the Honble Commission to kindly approve the tariff revision proposals for HT-II category as above. 11.22 HT-III Agriculture

11.22.1 The details of the HT-III Agriculture category are detailed below.
Table 11.43 Consumer details Billing Demand (MVA) Annual Energy Consumption (MU) Details of HT-III category Existing tariff 11.03 Demand charge (Rs/kVA/month) 8.71 Energy Charge (Rs/kWh)

165.00 1.80

11.22.2 KSEB proposes to increase the demand charge for this category from Rs 165.00/kVA/month to Rs 200/kVA/month and energy charge from Rs 1.80/unit to Rs 2.50 per unit. The additional revenue expected through the proposal is detailed below.
Table-11.44. Additional revenue expected from HT-III Agriculture
Particulars Existing rate Proposed rate Revenue (Rs.Cr) at Existing at Proposed rate rate Addl revenue

Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total

165.00 1.80

200.00 2.50

2.18 1.57 3.75

2.65 2.18 4.82

0.46 0.61 1.07

Honble Commission may kindly approve the proposals as detailed above. 11.23 HT-IV Commercial 11.23.1 The estimate of the energy consumption of HT-IV commercial category is detailed below.
Table- 11.45 Details of HT-IV commercial category Consumer details Existing tariff Billing Demand (MVA) 340.00 Demand charge (Rs/kVA/month) Annual Energy Consumption (MU) Energy Charge (Rs/kWh) (a) Total consumption of consumers consume upto 30000 units per month (b) Total consumption above 30000 units 294.3 686.73 (a) Total consumption of consumers consume upto 30000 units per month (b) Total consumption above 30000 units

400.00

5.50 6.50

11.23.2 The tariff proposed for HT-IV commercial category and the additional revenue expected is detailed in the table-below.
Table 11.46 Additional revenue expected from HT-IV category
Particulars Demand charge (Rs/kVA/month) Existing rate Proposed rate at Existing rate Revenue (Rs.Cr) at Proposed Addl revenue rate

400.00

470.00

163.20

191.76

28.56

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Energy charge (a) Total consumption of consumers consume upto 30000 units per month (b) Total consumption above 30000 units Total

5.50 6.50

6.3 7.5

161.87 446.37 771.44

183.94 515.05 890.75

22.07 68.67 119.31

Honble Commission may kindly approve the proposals as detailed above. 11.24 HT- Temporary connection Many consumers are seeking temporary connection at HT level; however the tariff for the HT temporary connection is yet to be approved. Hence KSEB may propose the tariff for HT temporary connection as follows.
Table 11.47 HT temporary connection Energy Charge ( Rs/ kWh) Or 10.50

Daily minimum Rs 150/kVA or part thereof of contract demand, whichever is higher

11.25 Railway traction 11.25.1 For traction purposes, railway has been availing power supply at 110 kV. Further, considering the nature of usage of traction, ToD tariff was not made applicable to them. The prevailing tariff applicable to traction is detailed below.
Table 11.48 Prevailing tariff for railway traction Demand Charge Energy Charge (Rs/ kVA/ month) (Rs/ kWh) 250 4.00

11.25.2 The traction tariff prevailing in the State is one of the lowest in the country. Considering the cost of power purchase and un bridged revenue gap, KSEB may propose to enhance the demand charge from Rs 250.00/kVA to Rs 310.00/kVA and energy charge from Rs 4.00 per unit to Rs 4.75 per unit. The additional revenue expected through the proposal is detailed below.

Table 11.49 Additional revenue expected through the proposed revision Revenue (Rs.Cr) Existing Propose Particulars at Existing at Proposed rate d rate rate rate Demand charge (58.42 MVA) 250.00 310.00 17.53 21.73 (Rs/kVA/month) Energy Charge (166.44 MU) 4.00 4.75 66.58 79.06 Rs/kWh) Total 84.10 100.79

Addl revenue 4.21 12.48 16.69

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Honble Commission may kindly approve the proposal as detailed above. 11.26 Tariff applicable to Bulk Supply to other licensees 11.26.1 KSEB is also supplying electricity at Bulk Supply Tariff Rates to small licenses for supplying within their area of operation. The details of the Bulk licensees/ consumers who are availing electricity from KSEB and their prevailing BST is detailed below.
Table 11.49 Details of Bulk consumers of KSEB Existing tariff Annual Contract energy Demand Energy Demand Name of the Licensee consumption charge charge (MVA) (MU) (Rs/kVA) (Rs/ kWh) KINESCO 13.00 63.70 300 4.15 Cochin Special Economic 12.00 55.45 300 4.30 Zone Rubber park 5.50 27.63 300 3.70 Technopark 29.00 70.74 300 4.00 Cochin Port Trust 9.52 28.39 350 5.30 Thrissur corporation 33.48 155.48 350 5.20 Kanan Devan 8.50 46.81 300 3.70 MES 13.70 55.94 350 4.10 Ele. Dept. Pudussery (Mahe) 7.50 43.99 350 4.10 Ele. Dept. Karanataka 0.24 0.66 350 4.10 Total 132.44 548.79

Sl No 1 2 3 4 5 6 7 8 9 10

11.26.2 Honble Commission vide the order dated 25-07-2012 has approved Differential Bulk Supply Tariff considering the revenue surplus earned by each licensees, however decided to adopt uniform retail tariff across the state. 11.26.3 As detailed in the preceeding paragraphs, KSEB proposes 15 to 20% increase on all categories consumers. With the same uniform retail tariff across the State, there shall be proportional increase in revenue from Retail Supply to all Licensees. Considering the huge unbridged revenue gap and also considering the revenue surplus likely to be earned by the licensees through the retail supply tariff proposed by KSEB, KSEB proposes a uniform increase of up to 17% on all licensees. The details are given below.

Table 11.50
Sl No. 1 Particulars

Additional revenue expected from Bulk licensees


Existing rate 300.00 4.15 Proposed rate 360.00 4.85 Revenue (Rs.Cr) at Existing at Proposed rate rate 4.68 26.44 31.12 4.32 5.62 30.89 36.51 5.18 Addl revenue 0.94 4.46 5.40 0.86

KINESCO Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Cochin Special Economic Zone Demand charge (Rs/kVA/month)

300.00

360.00

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Energy Charge (Rs/kWh) Total Rubber Park Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Technopark Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Cochin Port Trust Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Thrissur Corporation Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Kanan Devan Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total MES Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Ele. Dept. Pudussery (Mahe) Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total

4.30

5.00

23.84 28.16 1.98 10.22 12.20 10.44 28.30 38.74 4.00 15.05 19.05 14.06 80.85 94.91 3.06 17.32 20.38 5.75 22.94 28.69 3.15 18.04 21.19

27.73 32.91 2.38 12.16 14.53 12.53 33.25 45.78 4.80 17.03 21.83 16.87 91.73 108.61 3.67 20.60 24.27 6.74 26.85 33.59 3.69 21.12 24.81

3.88 4.75 0.40 1.93 2.33 2.09 4.95 7.04 0.80 1.99 2.79 2.81 10.88 13.70 0.61 3.28 3.89 0.99 3.92 4.90 0.54 3.08 3.62

300.00 3.70

360.00 4.40

300.00 4.00

360.00 4.70

350.00 5.30

420.00 6.00

350.00 5.20

420.00 5.90

300.00 3.70

360.00 4.40

350.00 4.10

410.00 4.80

350.00 4.10

410.00 4.80

10

Ele. Dept. Karanataka Demand charge (Rs/kVA/month) Energy Charge (Rs/kWh) Total Grand Total

350.00 4.10

410.00 4.80

0.10 0.27 0.37 294.80

0.12 0.32 0.43 343.27

0.02 0.05 0.06 48.47

Honble Commission may kindly approve the tariff proposed for Bulk licensees, availing power from KSEB.

11.27

Summary of the additional revenue expected through the proposed revision

11.27.1 As detailed in the preceding paragraph, KSEB anticipate additional revenue amounting to Rs 1573.54 crore through the present proposal. The details are given below.
Table 11.51 Summary of the additional revenue expected through the proposed revision Amount Sl No Category (Rs.Cr)

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1LT- 1(a) Domestic 2LT- 1(b) offices of political parties 3LT-II colonies 4LT-IV Industrial Tariff 5LT-V Agriculture catgory 6LT-VI (A) & VI (B) 7LT-VI ( C) 8LT- VI(D) 9LT-VII (A) 10LT-VII (B) 11LT- VII (C ) 12LT- IX - Public Lighting 13EHT_1 Tariff 14EHT-II 15EHT-III 16HT-1 Industry 17HT-II Nondomestic 18HT-III Agriclture 19HT-IV commercial 20Bulk Supply to other Licensees 21Railways 22Total

751.90 0.10 1.46 104.43 17.12 51.48 6.92 0.16 74.81 42.33 9.19 12.28 34.89 91.08 7.15 168.83 13.87 1.07 119.31 48.47 16.69 1573.54

11.27.2 It is submitted that, in order to avoid tariff shock to the consumers, the additional revenue proposed to be mobilized through the proposed revision is only a part of the revenue gap estimated for the year 2013-14. Honble Commission may kindly account the balance gap as regulatory asset and allow it to be recovered through tariff during the subsequent tariff period. 11.27.3 KSEB has been receiving proposals and suggestions from the field offices and other functional units for re-categorization of certain consumer categories further. KSEB may be permitted to file the recategorization of certain categories, as addendum to this petition. Honble Commission may kindly approve the tariff proposals as above.

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