KERC Tariff Order 2017-18 for GESCOM

KARNATAKA ELECTRICITY REGULATORY COMMISSION
TARIFF ORDER 2017

OF
GESCOM
ANNUAL PERFORMANCE REVIEW FOR FY16
&
REVISION OF ANNUAL REVENUE REQUIREMENT

FOR FY18
&
REVISION OF RETAIL SUPPLY

TARIFF FOR FY18
11th April 2017
6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001
Phone: 080-25320213 / 25320214
Fax : 080-25320338
Website: www.karnataka.gov.in/kerc - E-mail: kerc-ka@nic.in
CONTENTS
CHAPTER Page No.

1 Introduction 3
1.0 Gulbarga Electricity Supply Company Ltd., 3
1.1 GESCOM at a Glance 5
1.2 Numbers of Consumers, Sales in MU and revenue 5
details of GESCOM
2 Summary of Filing & Tariff Determination Process 7
2.0 Background for Current Filing 7
2.1 Preliminary Observations of the Commission 7
2.2 Public Hearing Process 8
2.3 9
Consultation with the Advisory Committee of the
Commission
3.0 Public Consultation 10
3.1 Suggestions / Objections and replies 10
3.2 List of Persons who filed written objections 11
3.3 List of the persons, who made oral submissions 13
during the public hearing
4 Annual Performance Review for FY16 14
4.0 GESCOM’s Application for APR for FY16 14
4.1 GESCOM’s Submission 14
4.2 GESCOM’s Financial Performance as per 16
Audited Accounts for FY16
4.2.1 Sales for FY16 17
4.2.2 Distribution Losses for FY16 24
4.2.3 Power Purchase for FY16 25
4.2.4 RPO Compliance by GESCOM for FY16 28
4.2.5 Operation and Maintenance Expenses 31
4.2.6 Depreciation 34
4.2.7 Capital Expenditure for FY16 35
4.2.8 Interest and Finance Charges 48
4.2.9 Other Debits 52
4.2.10 Net Prior Period Charges 52
4.2.11 Return on Equity 53
4.2.12 Income Tax 55
4.2.13 Other Income 55
4.2.14 Funds towards Consumer Relations /Consumer 55
Education
4.2.15 Carrying Cost on regulatory Asset 56
4.2.16 Revenue for FY16 57
4.2.17 Subsidy for FY16 57
4.3 Abstract of Approved ARR for FY16 57
4.3.1 Gap in Revenue for FY16 58
5.0 Annual Revenue Requirement for FY18 60
GESCOM’s Filing
5.1 Annual Performance Review for FY16 60
5.2 Revised Annual Revenue Requirement for FY18 61
5.2.1 Capital Investments for FY18 61
ii
5.2.2 Sales Forecast for FY18 65
5.2.3 Distribution Losses for FY18 75
5.2.4 Power Purchase for FY18 76
5.2.5 RPO Target for FY18 80
5.2.6 O & M Expenses for FY18 82
5.2.7 Depreciation 85
5.2.8 Interest on Capital Loans 87
5.2.9 Interest on Working Capital 88
5.2.10 Interest on Consumer Security Deposit 89
5.2.11 Interest and other expenses Capitalized 90
5.2.12 Other Debits and Prior period charges: 91
5.2.13 Return on Equity 91
5.2.14 Other Income 93
5.2.15 Fund towards Consumer Relations / Consumer 93
Education
5.2.16 Contribution towards Pension and Gratuity Trust 94
5.3 Abstract of Revised ARR for FY18 95
5.4 Segregation of ARR into ARR for Distribution 97
Business and ARR for Retail Supply Business
5.5 Gap in Revenue for FY18 98
6 Determination of Tariff for FY18 100
6.0 GESCOM’s Proposal and Commission’s Analysis 100
for FY18
6.1 Tariff Application 100
6.2 Statutory Provisions Guiding Determination of 100
Tariff
6.3 Consideration for Tariff setting 101
6.4 New Tariff Proposals by GESCOM 102
6.5 Revenue of existing tariff and deficit for FY18 108
6.6 Wheeling and Banking Charges 137
6.6.1 Wheeling within GESCOM area 138
6.6.2 Wheeling of Energy using Transmission network or 139
network of more than one licensee
6.6.3 Charges for Wheeling of energy by RE sources 140
(non REC route) to consumers in the State
6.6.4 Charges for Wheeling Energy by RE sources 141
wheeling energy from the state to a
consumer/others outside the State and for those
opting for renewable energy certificate
6.6.5 Banking Charges and Additional Surcharge 141
6.7 Cross Subsidy Charges(CSS) 142
6.8 Other Issues 145
6.8.1 Tariff for Green Power 145
6.9 Other tariff related issues 145
6.10 Cross Subsidy Levels for FY18 147
6.11 Effect of Revised Tariff 148
6.12 Summary of the Tariff Order 149
6.13 Commission’s Order 150
APPENDIX 152
APPENDIX – I 192
iii
LIST OF TABLES
Table Content Page
No. No.
4.1 ARR for FY15 – GESCOM’s Submission 15
4.2 Financial Performance of GESCOM for FY16 16
4.3 GESCOM’s Accumulated Profit / Losses 17
4.4 Approved & Actuals Sales for FY16 18
4.5 Format for IP set Consumption as per feeder-wise 21
data
4.6 Approved Sales for FY16 24
4.7 Penalty for exceeding targeted loss levels in FY16 25
4.8 Power Purchase for FY16-Approved and Actuals 26
4.9 Shortfall in Supply of Power from KPC/RE Sources 27
4.10 RPO Compliance by GESCOM for FY16 28
4.11 Non-solar RPO Compliance by GESCOM 29
4.12 Solar RPO Compliance by GESCOM 30
4.13 O & M Expenses – GESCOMS’s Submission 31
4.14 Approved O & M Expenses as per Tariff Ordered 31
dated 02.03.2015
4.15 Computation of Allowable inflation Rate 32
4.16 Normative O & M Expenses 33
4.17 Allowable O & M Expenses for FY16 33
4.18 Allowable Depreciation for FY16 35
4.19 Capital expenditure of GESCOM FY16 36
4.20 Summary of categories of works 39
4.21 Summary of sampling process for conducting 40
prudence check
4.22 Category wise details of the works in the selected 40
sample
4.23 Gist of Prudence check findings for FY16 42
4.24 Details of non-prudent project 42
4.25 Summary of works having cost overrun 43
4.26 Summary of cost over-run of projects in the category 44
of works
4.27 Summary of Works having time overrun 44
4.28 Summary of time over-run of projects in the category 44
of works
4.29 Details of Amounts disallowed in APR FY16 45
4.30 Inventory levels and utilization 47
4.31 Allowable Interest on Loan – FY16 49
4.32 Allowable Interest on Working Capital for FY16 50
4.33 Allowable Interest and Finance Charges 52
4.34 Allowable Other Debits 52
4.35 Status of Debt Equity Ratio for FY16 53
4.36 Allowable Return of Equity 54
4.37 Return on equity for the additional equity received 54
during FY16
iv
4.38 Approved revised ARR for FY16 as per APR 57
5.1 Revised ARR for FY18 –GESCOM’s submission 60
5.2 Details of capex proposal of GESCOM for FY18 62
5.3 Approved Energy of IP sets installations 71
5.4 Format for furnishing IP set consumption 73
5.5 GESCOMs Approved Energy for FY18 74
5.6 Approved & Actual Distribution Losses –FY11 to FY16 75
5.7 Approved Distribution Losses for FY18 76
5.8 Power purchase cost filed by GESCOM for FY18 77
5.9 Approved Power Purchase Quantum & Cost for the 79
State
5.10 Approved Power Purchase Cost of GESCOM for FY18 80
5.11 Anticipated RE capacity in FY17 &FY18 81
5.12 Revised O&M Expenses for FY18 –GESCOM’s Proposal 83
5.13 Approved O&M Expenses for FY18 as per Tariff Order 83
5.14 Approved O&M expenses for FY18 85
5.15 Depreciation FY18 –GESCOM Submission 85
5.16 Approved Depreciation for FY18 86
5.17 Interest on capital Loan –GESCOM’s submission 87
5.18 Approved interest on Loans for FY 18 88
5.19 Approved interest on working Capital for FY18 89
5.20 Approved interest on consumer security deposits for 90
FY18
5.21 Approved interest and finance charges for FY18 90
5.22 Return on Equity –GESCOM’s Submission 91
5.23 Status of Debit Equity Ratio for FY18 92
5.24 Approved Return on Equity for FY18 93
5.25 Approved Revised ARR for FY18 96
5.26 Approved Segregation of ARR-FY18 97
5.27 Approved Revised ARR for Distribution Business-FY18 97
5.28 Approved ARR for Retail Supply Business-FY18 98
5.29 Revenue gap for FY18 99
6.1 Revenue Deficit for FY18 108
6.2 Wheeling Charges 138
v
LIST OF ANNEXURES
SL.NO. DETAILS OF ANNEXURES Page

No.
I Total Approved Power Purchase Quantum and Cost 204
of all ESCOMs for FY18
II Approved Power Purchase quantum and cost of 207
GESCOM for FY18
III Proposed and approved Revenue for FY18 210
IV Electricity Tariff – 2018 211
vi
ABBREVIATIONS
AAD Advance Against Depreciation

AEH All Electric Home
ABT Availability Based Tariff
A&G Administrative & General Expenses
ARR Annual Revenue Requirement
ATE Appellate Tribunal for Electricity
BST Bulk Supply Tariff
CAPEX Capital Expenditure
CCS Consumer Care Society
CERC Central Electricity Regulatory Commission
CEA Central Electricity Authority
CPI Consumer Price Index
CWIP Capital Work in Progress
DA Dearness Allowance
DCB Demand Collection & Balance
DPR Detailed Project Report
EA Electricity Act
EC Energy Charges
ERC Expected Revenue From Charges
ESAAR Electricity Supply Annual Accounting Rules
ESCOMs Electricity Supply Companies
FA Financial Adviser
FKCCI Federation of Karnataka Chamber of Commerce & Industry
FR Feasibility Report
FoR Forum of Regulators
FY Financial Year
GESCOM Gulbarga Electricity Supply Company
GFA Gross Fixed Assets
GoI Government Of India
GoK Government Of Karnataka
GRIDCO Grid Corporation
HP Horse Power
HRIS Human Resource Information System
ICAI Institute of Chartered Accountants of India
IFC Interest and Finance Charges
IW Industrial Worker
IP SETS Irrigation Pump Sets
KASSIA Karnataka Small Scale Industries Association
KEB Karnataka Electricity Board
KER Act Karnataka Electricity Reform Act
KERC Karnataka Electricity Regulatory Commission
KM/Km Kilometre
KPCL Karnataka Power Corporation Limited
vii
KPTCL Karnataka Power Transmission Corporation Limited
KV Kilo Volts
KVA Kilo Volt Ampere
KW Kilo Watt
KWH Kilo Watt Hour
LDC Load Despatch Centre
MAT Minimum Alternate Tax
MD Managing Director
MFA Miscellaneous First Appeal
MIS Management Information System
MoP Ministry of Power
MU Million Units
MVA Mega Volt Ampere
MW Mega Watt
MYT Multi Year Tariff
NFA Net Fixed Assets
NLC Neyveli Lignite Corporation
NCP Non Coincident Peak
NTP National Tariff Policy
O&M Operation & Maintenance
P&L Profit & Loss Account
PLR Prime Lending Rate
PPA Power Purchase Agreement
PRDC Power Research & Development Consultants
REL Reliance Energy Limited
R&M Repairs and Maintenance
ROE Return on Equity
ROR Rate of Return
ROW Right of Way
RPO Renewable Purchase Obligation
SBI State Bank of India
SCADA Supervisory Control and Data Acquisition System
SERCs State Electricity Regulatory Commissions
SLDC State Load Despatch Centre
SRLDC Southern Regional Load Dispatch Centre
STU State Transmission Utility
TAC Technical Advisory Committee
TCC Total Contracted Capacity
T&D Transmission & Distribution
TCs Transformer Centres
TPC Tanirbavi Power Company
TR Transmission Rate
VVNL Visvesvaraya Vidyuth Nigama Limited
WPI Wholesale Price Index
WC Working Capital
viii
KARNATAKA ELECTRICITY REGULATORY COMMISSION,
BENGALURU - 560 001
Dated 11th April, 2017
In the matter of:
Application of GESCOM in respect of the Annual Performance Review for

FY16, Revision of Annual Revenue Requirement for FY18 and Revision of Retail
Supply Tariff for FY18, under Multi Year Tariff framework.
Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member
Shri D.B.Manival Raju Member
O R D E R
The Gulbarga Electricity Supply Company Ltd., (hereinafter

referred to as GESCOM) is a Distribution Licensee under the
provisions of the Electricity Act, 2003, and has, on 30.11.2016, filed
the following applications for consideration and orders:
a) Review of Annual Performance for the financial year 2015-16

(FY16 ) and approval of revised ARR thereon.
b) Approval of Revised ARR for the financial year 2017-18 (FY18).
c) Approval for revision of Retail Supply Tariff, for the financial

year 2017-18 (FY18).
ix
In exercise of the powers conferred under Sections 62, 64 and other
provisions of the Electricity Act, 2003, read with the KERC (Terms and
Conditions for Determination of Tariff for Distribution and Retail Sale of
Electricity) Regulations 2006, as amended and other enabling
Regulations, the Commission has considered the applications and the
views and objections submitted by the consumers and other
stakeholders. The Commission’s decisions are brought out in the
subsequent Chapters of this Order.
x
CHAPTER – 1
INTRODUCTION
1.0 Gulbarga Electricity Supply Company Ltd.:
The Gulbarga Electricity Supply Company Ltd., (GESCOM) is a

Distribution Licensee under Section 14 of the Electricity Act, 2003
(hereinafter referred to as the Act). The GESCOM is responsible for
purchase of power, distribution and retail supply of electricity to its
consumers and also providing infrastructure for Open Access,
Wheeling and Banking in its area of operation which includes six
Districts of the State as indicated below:
1. Bellary
2. Bidar
3.
Kalaburagi
4. Koppala
5. Raichur
6. Yadgir
The GESCOM is a company registered under the Companies Act, 1956,

incorporated on 30th April, 2002 and commenced its operations on
1stJune, 2002.
At present GESCOM’s area of operations is structured as follows:
xi
O&M Zones O&M Circles O&M Divisions
Gulbarga CSC Division
Gulbarga Rural-I Division

Gulbarga Circle
Gulbarga Rural-II Division
Gulbarga zone Sedam Division
Bidar Division
Bidar Circle Humnabad Division
Yadagir Division
Bellary CSC Division
Bellary Rural Division
Bellary Circle
Hospet Division
Rural Division
Bellary Zone Raichur CSC Division
Raichur Rural Division
Sindanoor Division
Raichur Circle
Gangavathi Division
Koppal Division
The O & M divisions of GESCOM are further divided into sub-divisions.

Each sub-division is having two to three O& M section offices.
The section offices are the base level offices looking into operation
and maintenance of the distribution system in order to provide reliable
and quality power supply to GESCOM’s consumers.
xii
1.1 GESCOM at a glance:
The profile of GESCOM is as indicated below:
Sl.
Particulars (As on 30-09-2016) Statistics
No.
1. Area Sq. km. 43861
2. Districts Nos. 6
3. Taluks Nos. 31
4. Population lakhs 121.10
5. Consumers lakhs 27,95,607
Energy Consumption for MU
6. 2,991.55
FY16
7. Zone Nos. 2
8. DTCs Nos. 81,457
Assets Rs. in
9. 2994.73
Crores
10. HT lines Ckt. kms 53268.48
11. LT lines Ckt. kms 83395.79
Total employees
12.
strength:
A Sanctioned Nos. 10330
B Working Nos. 6104
Revenue Demand Rs. in
13. 1756.22
Crores
Revenue Collection Rs. in
14. 1693.77
Crores
1.2 Number of Consumers, Sales in MU and Revenue details of GESCOM in

FY16 is as follows:
GESCOM for 2015-16

No. of Sales in Revenue
CATEGORY Installation MU in Rs.Crs.
Domestic 2080554 1151.25 609.95
Commercial 229654 345.21 283.26
Industrial 57362 1169.87 780.07
Agriculture 331139 3300.74 1481.15
Others 55667 540.72 332.62
Total 2754376 6507.79 3487.05
xiii
GESCOM has filed its application for approval of Annual Performance Review
for FY16, Revision of Annual Revenue Requirement (ARR) for FY18 and
revision of Retail Supply Tariff for FY18.
GESCOM’s application, the objections / views of stakeholders thereon and the

Commission’s decisions on the approval of Annual Performance Review for
FY16, Revision of ARR for FY18 and Revision of Retail Supply Tariff for FY18
are discussed in detail in the subsequent Chapters of this Order.
xiv
CHAPTER – 2
SUMMARY OF FILING & TARIFF DETERMINATION PROCESS
2.0 Background for Current Filing:
The Commission in its Tariff Order dated 30th March, 2016 had
approved the ARR for FY17 to FY19 and Revised Retail Supply Tariff of
GESCOM for FY17 under the MYT principles for the control period of
FY17 to FY19. GESCOM in its present application filed on 30th
November, 2016, has sought approval for the Annual Performance
Review (APR) for FY16 based on the audited accounts, Revision of ARR
for the second year of the fourth control period i.e. FY18 and revision of
Retail Supply Tariff for FY18.
2.1 Preliminary Observations of the Commission:
After a preliminary scrutiny of applications the Commission had

communicated its observations to GESCOM on 21st December, 2016,
which were mainly on the following points:
 Capital Expenditure
 Sales Forecast
 Projected IP set consumption for FY 18
 RPO Compliance
 Wheeling and Banking
 Cross subsidy surcharge
 Power Purchase
 Issues pertaining to items of revenue and expenditure
 Energy flow diagram
 Compliance to Directives
xv
In response, GESCOM had furnished its replies on 30th December, 2016. The
Commission had issued Rejoinders to the replies vide Commission letter
dated 10th January, 2017, the replies to the Rejoinder were received vide
letter dated 16th January 2017. The replies furnished by GESCOM are
considered in the respective Chapters of this Order.
2.2 Public Hearing Process:
As per the Karnataka Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of
Electricity) Regulations 2006, read with the KERC Tariff Regulations,
2000, and KERC (General and Conduct of Proceedings) Regulations,
2000, the Commission in its letter dated 04th January, 2017 treated the
application of GESCOM as a petition and directed GESCOM to publish
the summary of ARR and Tariff proposals in the newspapers calling for
objections, if any, from the interested persons.
Accordingly, the GESCOM has published the same in the following

newspapers:
Name of the News Paper Language Date of Publication
The Hindu English
08-1-2017
Times of India
&
Samyukta Karnataka Kannada
09-1-2017
Prajavani
The GESCOM’s application on APR of FY16, Revision of ARR for FY18 and
revision of retail supply tariff for FY18 was also hosted on the web-sites of the
GESCOM and the Commission for the ready reference and information of the
general public.
In response to the application of GESCOM, the Commission has received

eight statements / letters of objections. GESCOM has furnished its replies to
all these objections. The Commission has held a Public Hearing on 6th
March, 2017, at Gulbarga. The details of the written / oral submissions made
by various stakeholders and the responses from GESCOM thereon
have been discussed in Chapter – 3 / Appendix to this Order.
2.3 Consultation with the Advisory Committee of the Commission:
xvi
The Commission has also discussed the proposals of KPTCL and all
ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.
During the meeting the following important issues were also discussed:
 Performance of KPTCL / ESCOMs during FY16
 Major items of expenditure of KPTCL / ESCOMs for FY18
Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while
passing the Order.
xvii
CHAPTER – 3
PUBLIC CONSULTATION
SUGGESTIONS / OBJECTIONS & REPLIES
3.1 As per the provisions of Section 64 of the Electricity Act, 2003, the
Commission undertook the process of public consultation, in order to
obtain suggestions/views/objections from the interested stake-
holders, on the application filed by GESCOM for Annual Performance
Review for FY16 and approval of Revised Annual Revenue
Requirement for FY18 revised retail supply tariff for FY18 under the MYT
Principles. In the written submissions as well as during the public
hearing, the stake-holders and the general public have raised several
objections/ made suggestions, on the Tariff Application.
The names of the persons who have filed written objections and
made oral submissions are given below:
List of persons who filed written objections
Sl. Application
Name & Address of Objectors
No No.
1 AE-01 Sri. Prem Chand, Chief Electrical Traction Engineer,
South Western Railway.
2 AE-02 Smt. Shroti Bhatia, VP (Regulatory Affairs &
Communication), Indian Energy Exchange.
3 GB-01 Hyderabad Karnataka Chamber of Commerce &
Industry.
4 GB-02 Sri. Ramu B. Pawar, Rajapur, Kalaburagi.
5 GA-01 Hyderabad Karnataka Environment Awareness &
Protection Organization.
6 GA-02 Laghu Udyog Bharati - Karnataka
7 GA-03 Sri. Prem Chand, Chief Electrical Traction Engineer,
South Western Railway.
8 GA-04 Sri. B. Praveen, Hon General Secretary, KASSIA.
3.2 List of the persons, who made oral submissions during the Public
Hearing, held on 06-03-2017.
xviii
List of persons who made oral submissions during the
Public Hearing
SL No Names & Addresses of Objectors
1 Sri. Deepak G. Gala, Hyderabad Karnataka Environment Awareness &
Protection Organization, Kalaburagi.
2 Sri. Maruthi P. Manpade, President, Karnataka Regional Farmers Sangha,
Kalaburagi.
3 Sri. Ramu B. Pawar, Hyderabad Karnataka RTI Activist, Kalaburagi.
4 Sri. Nirupadappa Jolada Rashi , Bharatiya Kissan Sangha, Sindhanoor.
5 Sri. Yogesh Rao, Renew Power Ventures Pvt Ltd, Bengaluru
6 Sri. Siddu, Bhaaratiya Kissan Sanghaa, Pattan, Gulbarga Taluk.
7 Sri. Siddaramayya Hiremath, President, RTI Activist Association Kalaburagi.
8 Sri. Deepak Nag Punyashetti, Ex- Zilla Parashid President, Kalaburagi.
9 Smt. Anuradha, BCIC, Bengaluru.
10 Sri. Chennaveerappa Salagar, Kalaburagi.
11 Sri. Gundappa Ankalagi, Kalaburagi.
12 Sri. Suryakanth Guddadagi, Kalaburagi..
13 Sri. Lakshmikanth Ganacharya, Kalaburagi.
14 Sri. Ranga Rao, Gangavathi.
15 Sri. S. Basavaraj, Gangavathi
16 Sri. K.Sesha Rao, Gangavathi.
17 Sri B. Umapathi, Sedam.
The gist of the submissions made during the Public Hearing, held on
06.03.2017.
1. Though the distribution loss of GESCOM is stated as 18%, it is as high as

42% in some areas and 11kV feeders have loss in the range of 20 to 39%.
2. The Power purchase from Jurala Hydro station and Sharavathi

generating station at high cost needs to be checked by the
Commission.
3. GESCOM has not levied interest on the receivables of Rs.1148 Crores,

whereas, for the loans availed interest is paid and passed on to the
consumers.
4. IP Set arrears prior to 2008 have to be collected with interest.
5. The excess Capital expenditure increased without the approval of the

Commission should not be allowed.
6. Even though the DTC metering is stated to be carried out, the energy
audit is carried out for only 7% of DTCs.
7. GESCOM has not quantified the results of NJY.
xix
8. GESCOM should install consumer help line service and educate
consumers about the procedures for availing power supply, metering,
etc.
9. The proposal of GESCOM to reduce the Banking to three months is not to

be considered, as it discourages renewable energy.
10. Power supply to the IP sets to should be provided during the day time to
help farmers and avoid accidents.
11. The transformer failure rate is very high and the repairs and replacement
is not happening within time.
12. The GESCOM has not complied with the Directives issued by the
Commission. The rules and regulations are not implemented properly.
13. The GESCOM has not taken any action against the corrupt officers in
spite of complaints quoting specific instances.
14. The subsidy to the IP Sets should be given directly to the farmers.
15. The GESCOM should note that, the HT consumption has reduced by 4%
due to highest energy charges, as compared to other States in South
India.
16. The women appointed for carrying out the works as linemen, are
assigned some other duties other than linemen.
17. The GESCOM is not conducting consumer meetings as per the

requirement in the directives. The Commission should penalize the
companies which are not conducting such meetings.
18. In case of BJ connections, some people are using air conditioners also,
such installations should be billed appropriately.
19. Action should be taken to link the high employee cost to performance
and productivity.
20. The concessional electricity extended to the employees of GESCOM

should be stopped.
xx
21. The GESCOM has not supplied safety equipment to linemen, resulting in
increased accidents.
22. The farmers of Gangavathi who have invested 25% of the cost of HT Lines
for their IP Sets are being billed under LT4(c) instead of billing under LT4
(a). The Commission should verify and change the tariff.
23. The GESCOM should explore the possibility of providing group meters to
the BJ/KJ installations.
The Managing Director, GESCOM has replied to some of the points raised as
follows:
i. The High cost of power supply was due to fire accident in Sharavathy
station and purchase of power under section 11 of Electricity Act.
ii. If the transformers are not replaced by the concerned officers, they will
be penalized as per SoP.
iii. Toll free No.1912 is in operation which can be utilized for complaints as
well as help.
iv. The theft cases are being registered by the Vigilance officers.
v. A number of DTC meters have become defective and action is being
taken to replace them.
vi. The substandard works will be checked by the TA & QC wing.
vii. Administrative action will be taken against the concerned in cases of
corruption.
viii. The consumer meetings are being held once in three months.
ix. The issue of IP Set installation of farmers of Gangavathi, the
Government has to take a decision.
x. The Group metering for BJ/KJ installations as suggested will be
analyzed. The GESCOM shall furnish replies as other points directly to
the concerned issues relating to tariff and dealt appropriately by the
Commission in the relevant chapters of this Tariff Order.
3.3 The gist of the written objections, Replies by GESCOM and the
Commission’s Views is appended to this order as Appendix-1.
xxi
CHAPTER – 4
ANNUAL PERFORMANCE REVIEW FOR FY16
4.0 GESCOM’s Application for APR for FY16:
GESCOM has filed its application for Annual Performance Review (APR)
for FY16 and revision of Annual Revenue Requirement (ARR) along with
revision of retail supply tariff for FY18 on 30th November, 2016. The
GESCOM has sought the Annual Performance Review (APR) for FY16
based on the Audited Accounts and approval of a revised ARR
thereon.
The Commission in its letter dated 20th December, 2016 had

communicated its preliminary observations on the application of the
GESCOM. In its letter dated 30th December, 2016, the GESCOM has
furnished its replies to the preliminary observations of the Commission.
Further, the Commission had sought additional information /details,
through a rejoinder, vide its letter dated 10th January, 2017. The
GESCOM has furnished its replies in its letters dated 16th and 31st
January, 2017.
The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013
had approved the GESCOM’s Annual Revenue Requirement (ARR) for
FY14 – FY16. Further, in its Tariff Order dated 2nd March, 2015, the
Commission had approved the APR for FY14 and had revised the ARR
along with Retail Supply Tariff for FY16.
As per the application filed by the GESCOM, the Annual Performance

Review to revise the Annual Revenue Requirement of the GESCOM for
FY16, based on the audited accounts, is discussed in this Chapter.
4.1 GESCOM’s Submission:
The GESCOM has submitted its proposals for revision of ARR as per APR
for FY16 based on the Audited Accounts as follows:
xxii
TABLE – 4.1
ARR for FY16 – GESCOM’s Submission
Amount in Rs. Crores
Sl.
Particulars As Filed
No
1 Energy at Gen Bus in MU 8260.75
2 Energy at Interface in MU 7946.02
3 Distribution Losses in % 18.10
Sales in MU
4 Sales to other than IP & BJ/KJ 3159.39
5 Sales to BJ/KJ 123.85
6 Sales to IP 3224.55
Total Sales 6507.79
Revenue
Revenue from other than IP & BJ/KJ and
7 Misc. Charges 2514.03
8 Tariff Subsidy to BJ/KJ 63.54
9 Tariff Subsidy to IP 1492.13
Total Revenue 4069.70
Expenditure
10 Power Purchase Cost 2971.91
11 Transmission charges of KPTCL 331.53
12 SLDC Charges 2.65
Power Purchase Cost including cost of
transmission 3306.09
13 Employee Cost 312.40
14 Repairs & Maintenance 37.68
15 Admin. & General Expenses 70.99
Total O&M Expenses 421.07
16 Depreciation 97.62
Interest & Finance charges
17 Interest on Loans 89.98
18 Interest on Working capital 99.83
19 Interest on belated payment of PP Cost 126.60
20 Interest on consumer deposits 36.66
21 Other Interest & Finance charges 2.82
22 Less: interest & other expenses capitalised 0.00
Total Interest & Finance charges 355.89
23 Other Debits 28.09
24 Net Prior period Debit/Credit 33.69
25 Return on Equity 0.00
26 Provision for taxation 0.00
Funds towards Consumer
27 Relations/Consumer Education 0.00
28 Other Income 39.31
Net ARR 4203.14
xxiii
Considering the revenue of Rs.4069.70 Crores against the net ARR of
Rs.4203.14 Crores, the GESCOM has reported a gap in revenue of
Rs.133.44 Crores for FY16.
4.2 GESCOM’s Financial Performance as per the Audited Accounts for

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

per its Audited Accounts is given below:
TABLE – 4.2
Financial Performance of GESCOM for FY16
Sl. No. Particulars FY16
Receipts
1 Revenue from Tariff and misc. charges 1975.80
2 Tariff Subsidy 1524.97
Income on account of Regulatory Asset/Truing
up Subsidy 577.39
Total Revenue 4078.16
Expenditure
5 SLDC Charges 2.65
Power Purchase Cost including cost of
transmission 3306.62
6 O&M Expenses 422.65
8 Interest on Loans 89.96
9 Interest on Working capital 0.82
Interest on belated payment of power purchase 225.62
10 Interest on consumer deposits 36.66
12 Less: Interest and other expenses capitalized 0.00
14 Net Prior Period Debit/Credit 33.28
15 Other income 39.31
16 Income tax 0.00
Total Expenditure 4209.41
As per the Audited Accounts, the GESCOM has incurred loss of

Rs.131.25 Crores for FY16. The yearly profits / losses reported by the
GESCOM in its audited accounts in the previous years are as follows:
xxiv
TABLE – 4.3
GESCOM’s Accumulated Profit / Losses
Amount in
Particulars
Rs. Crs
Accumulated losses as at the end of (216.60)

FY10
Profit earned in FY11 61.30
Losses incurred in FY12 (4.62)
Profits earned in FY14 37.52
Losses incurred in FY 16 (131.25)
Accumulated losses as at the end of (552.10)

FY16
As seen from the above table, the GESCOM has accumulated losses of
Rs. 552.10 Crores, as at the end of FY16.
Commission’s analysis and decisions:
The Annual Performance Review for FY16 has been taken up duly
considering the actual revenue and expenditure as per the Audited
Accounts, vis-à-vis the revenue and expenditure approved by the
Commission in its Tariff Order dated 2nd March, 2015. The item-wise
review of expenditure and the decisions of the Commission thereon
are as discussed in the following paragraphs:
4.2.1 Sales for FY16:
I. Sales other than IP sets:
The Commission in its Tariff Order 2015 dated 02.03.2015 had approved
total sales to various consumer categories at 6435.91 MU as against the
GESCOM’s proposal of 6542.05 MU. The actual sales of the GESCOM as
xxv
per the current APR filing [D-2 Format] is 6507.78 MU indicating an
increase in sales to the extent of 71.87 MU as against the approved
sales. There is an increase in sales to LT-categories by 158.61 MU and
there is a reduction in sales to HT-categories by 86.74 MU. As against
the approved sales of 3172.41 MU to categories other than BJ/KJ and
IP sets, the GESCOM has achieved actual sales of 3174.99 MU, resulting
in marginal increase of sales to these categories by 2.58 MU. Further,
the GESCOM is stated to have sold 3332.79 MU to BJ/KJ and IP set
categories against approved sales of 3263.50 MU resulting in increased
sales to these categories by 69.29 MU.
The category-wise sales approved by Commission in its Tariff Order

dated 02.03.2015 and the actuals for FY 16 are indicated in the table
below:
TABLE-4.4
Approved and Actual Sales for FY16

Million Units
Approved
as per
Category Actuals Difference
2015 Tariff
Order
LT-2a* 1000.68 1043.01 42.33
LT-2b 9.04 9.64 0.60
LT-3 264.41 274.89 10.48
LT-4b 24.67 2.98 -21.69
LT-4c 0.78 1.28 0.50
LT-5 158.39 166.37 7.98
LT-6 172.10 183.23 11.13
LT-6 174.39 210.84 36.45
LT-7 15.91 17.45 1.54
HT-1 78.72 84.14 5.42
HT-2a 1047.88 1003.50 -44.38
HT-2b 66.10 70.32 4.22
HT-2c 21.74 13.27 -8.47
HT-3a & b 118.70 76.19 -42.51
HT-4 12.07 12.87 0.80
HT-5 6.83 5.01 -1.82
Sub total 3172.41 3174.99 2.58
BJ/KJ** 124.13 108.24 -15.89
IP 3139.37 3224.55 85.18
Sub total 3263.50 3332.79 69.29
Grand total 6435.91 6507.78 71.87
*Including BJ/KJ installations consuming more than 18 units/month
**BJ/KJ break-up as per replies furnished to observations.
xxvi
The major categories contributing to the reduction in sales with respect
to the estimates are HT industries (44.38 MU), HT-3(42.51 MU) and LT -
4(b) (21.69 MU). Further, it is observed that there is increase in sales to
LT-6(Street Lights) (36.45 MU), LT-2a (42.33 MU) and IP sets (85.18 MU).
The observations of the Commission on sales for FY16 and the replies
furnished by the GESCOM are discussed below:
i. The GESCOM was directed to analyze the reasons for reduction in
sales to HT industries (44.38 MU), HT-3(42.51 MU) and LT-4(b) (21.69
MU) and increase in sales to LT-6 SL (36.45 MU), LT-2a (42.33 MU)
and IP sets (85.18 MU).
The GESCOM in its replies has stated that sale to HT-2a has
decreased due to consumers opting for open access and in the
case of HT-3 and LT-4b, the sales depend on water availability and
usage and that HT-5 sales depend on usage.
The Commission notes that the above statements made by the

GESCOM are not substantiated by any data analysis.
ii. In order to analyze reduction in HT sales, the GESCOM was

requested to furnish the data of sales to HT2(a) and HT2(b)
categories along with the consumption from open access /
wheeling for the period 2011-12 to 2014-16 in the specified format.
The GESCOM in its replies to the preliminary observations has

furnished the details. But it has not furnished the breakup of
wheeled energy between HT-2a and HT-2b. In the absence of
break up, the Commission has attributed the wheeled energy to
HT-2a category.
iii. The GESCOM was asked to furnish the number of installations

shifted from HT2a, HT2b and HT-4 categories to HT-2c category and
the corresponding sales figures for FY14, FY15 and FY16, in order to
estimate the impact of shifting of these installations.
xxvii
The GESCOM has furnished the above information in its replies to
the rejoinder and the Commission has considered the same for the
purpose of analysis.
iv. The GESCOM was requested to furnish, the breakup of installations

for FY16 to FY18, consuming less than or equal to 18 units and
above 18 units to assess the sales in BJ/KJ category in the specified
format and the same was furnished by the GESCOM.
II. Sales to IP-sets :
i) The Commission in its Tariff Order dated 2nd March, 2015, had
approved the specific consumption of IP-sets at 9,503

units/installation/annum for FY16, whereas as per the data of IP-
sets’ consumption submitted by the GESCOM in its Tariff filing for
APR of FY16, the specific consumption works out to 10,131 units /
installation / annum, which corresponds to an increase in the
specific consumption by 628 units/installation / annum. The total IP-
set consumption reported for FY16 as per the Format D-2 is 3,224.55
MU, whereas the IP-set consumption approved by the Commission
is 3,139.37 MU. The difference in consumption between the
approved and reported for FY16 is 85.18 MU. Thus, the quantum of
sales to the IP-sets has exceeded the approved quantum by 2.7
per cent and the specific consumption has also increased by 6.6
per cent for FY16.
ii) Further, the Commission had approved 3,38,881 as the number of
IP-set installations for the FY16, but, the actual number of

installations existing, as reported by the GESCOM, is 3,30,873. The
difference in the number of installations is 8,008 and this
corresponds to decrease in the number of installations by about 2.4
per cent as against the approved number of installations for the
FY16.
xxviii
iii) The Commission in its Tariff Order dated 2nd March, 2015, had
directed the GESCOM to furnish to the Commission, the month-wise
IP-set consumption based on the specific consumption arrived at
as per the data from 11 kV feeders’ energy meter, in respect of
exclusive agricultural feeders segregated under NJY scheme, for
the reason that the energy consumed by the IP-sets can be
accurately measured at the 11 kV level at the substations after
allowing the losses prevailing in the distribution system, as per the
following format prescribed by the Commission.
TABLE-4.5
Format for IP set Consumption as per feeder-wise data

to other consumers if any,
to the agricultural feeders

Distribution loss(11kV line,
deducting the Distribution

the substations pertaining
Feeders in the subdivision
Total sales of IP sets in MU

MU as recorded in all the
Average consumption of
No. of IP sets connected
agricultural feeders only
subdivision (as per DCB)

Monthly Consumption in
DTCs,& LT line) Plus sales

Segregated Agricultural
agricultural feeders at
Total no of IP sets in the

in MU ( losses in all the
Net consumption duly
loss (11kV & LT) & any
(specific cons in units

to be considered)
other loads if any
in the subdivision
to the division
Sub-division
/IP/month)
IP / month
Name of
Month
No.
1 2 3 4 5 6=(4-5) 7 8 9 10=8*9
April to Subdivision-1
March Subdivision-2
Subdivision….
iv) The Commission has been following this methodology since 2015
(Tariff Order dated 12th May, 2014, for FY15), considering the fact
that ESCOMs have bifurcated the 11 KV feeders into separate rural
and agricultural feeders. Earlier to the year 2015, in the absence of
universal metering of IP-set installations, the Commission had
allowed the ESCOMs to assess the IP-set consumption, based on
the specific consumption arrived at from the readings of the
sample meters fixed to the distribution transformer Centers (DTCs)
feeding predominantly IP-set loads. The sample was selected in
such a way that, per O&M section, two to three DTCs feeding
predominantly IP-set loads, were covered so that in each
subdivision about ten such DTCs were covered. As per the
methodology, the overall IP- set consumption for the Company
was being assessed on the basis of specific consumption arrived at
xxix
from the meter reading data of such sample meters provided to
the DTCs.
v) As per the IP-set data for FY13 submitted to the Commission by the
GESCOM, total 388 DTCs covering 3,872 IP-sets of the total 2,77,707
IP-sets in its jurisdiction was considered for assessing the overall IP-
set consumption for the Company. The Commission notes that the
sample IP-sets considered to arrive at the specific consumption
and in-turn to assess the total IP-consumption for FY13, based on
the sample DTCs meter readings, constituted only 1.4 per cent. This
means a smaller number of IP-sets were considered while
computing the total list consumption as compared to a large
sample (47.34% of the feeders in March 2016) being considered
now after segregating the feeders under NJY. Therefore, there is a
better representation of samples in terms of metered consumption
for arriving at the specific consumption and the overall IP-set
consumption, as compared to the methodology followed earlier.
vi) Accordingly, the GESCOM was directed to furnish month-wise, 11
kV feeder-wise IP-set consumption based on the energy meter

reading data in respect of agriculture feeders segregated under
NJY scheme, duly deducting the prevailing distribution loss in 11 kV
lines distribution transformers and LT system, to the Commission.
However, the GESCOM has not submitted the month-wise IP-set

consumption based on the feeder-wise meter reading data of 11
kV lines from the segregated agricultural feeders regularly, to the
Commission. Also, the GESCOM did not submit, in its Tariff filing,
the data indicating as to the amount of loss in 11 kV lines,
distribution transformers & LT system, has been deducted from the
gross consumption to arrive at the net IP sets consumption and the
methodology adopted to arrive at the loss figures for FY 16.
vii) The Commission, in its preliminary observations, had raised the issue
of increase in both sales and the specific consumption of IP-set

category and had also directed the GESCOM to furnish necessary
month-wise feeder-wise consumption data as per the energy
xxx
recorded in the segregated agricultural feeders, in support of its
claims of IP-set consumption for the FY16.
viii) The GESCOM, in its reply to the preliminary observations, has
submitted the consolidated month-wise IP-set consumption data

in respect of the exclusive agricultural feeders segregated under
NJY but it has not indicated the basis for arriving at the energy
losses in feeders while computing the IP-set consumption. Further,
in its data furnished by the GESCOM, many inconsistencies have
been observed in the subdivision-wise computation and the
company’s overall IP-set consumption.
ix) Accordingly, the Commission’s observations were communicated

to the GESCOM through rejoinders vide Commission’s letter dated
10th January,2017, directing it to rectify the discrepancies pointed
out duly computing the overall IP-set consumption on the basis of
specific consumption arrived at from the meter readings of
segregated agricultural feeders by deducting the allowable
losses in its distribution system.
x) In response, the GESCOM has submitted the consolidated month-

wise IP-set consumption data in respect of the exclusive
agricultural feeders segregated under NJY. On a verification of
the said data, it is observed that the percentage of distribution
loss in the feeders’/LT lines reckoned to compute the net IP-set
consumption, is not based on actual calculation considering the
distribution network sketches. Further, there were inconsistencies
in the IP-set consumption data of agricultural feeders.
xi) Subsequently, the GESCOM vide its communication No. GESCOM

/ CEE(CP)/SEE(MIS)/EE(RA)/AEE-1/16-17/54000-04, dated 31st
January 2017, has submitted the revised IP-set consumption for
FY16 as 3,167.91 MU, based on segregated agricultural feeders
duly revising the energy losses instead of 3,224.55 MU claimed in
the Format D-2 of its Tariff application. On a verification of the
month-wise IP-set consumption based on the segregated
xxxi
agricultural feeders’ meter readings, submitted by the GESCOM,
it is found that the overall IP-consumption is 3,167.91 MU. This
results in a difference in consumption to an extent of 56.64 MU for
which the GESCOM did not submit any justification in support of it.
Hence, the Commission decides to disallow the consumption of
56.64 MU out of 3,224.55 MU claimed by the GESCOM in its Tariff
filing for APR of FY16.
xii) In view of the above, the Commission decides to approve
3,167.91 MU towards sales to IP-sets on the basis of the revised

meter readings data of the segregated agricultural feeders,
reported for the FY16, as against 3,224.55 MU claimed by the
GESCOM, in its Tariff filing dated 30th November, 2016, after
disallowing sales to an extent of 56.64 MU,
In the light of the above discussion, the Commission approves

total sales of 6451.15 MU for FY16 against the category wise sales
as indicated in the following:
TABLE-4.6
Approved Sales for FY16
Million Units
Approved as Approved-as per
Category
per T.O.2015 APR for FY16
LT-2a* 1000.68 1043.01
LT-2b 9.04 9.64
LT-3 264.41 274.89
LT-4b 24.67 2.98
LT-4c 0.78 1.28
LT-5 158.39 166.37
LT-6 172.10 183.23
LT-6 174.39 210.84
LT-7 15.91 17.45
HT-1 78.72 84.14
HT-2a 1047.88 1003.50
HT-2b 66.10 70.32
HT-2c 21.74 13.27
HT-3a & b 118.7 76.19
xxxii
HT-4 12.07 12.87
HT-5 6.83 5.01
Sub total 3172.41 3174.99
BJ/KJ** 124.13 108.24
IP 3139.37 3167.91
Sub total 3263.50 3276.15
Grand total 6435.91 6451.15
4.2.2 Distribution Losses for FY16:
GESCOM’s Submission:
The Commission in its Tariff Order dated 2nd March,2015 had

approved distribution losses for FY16 as follows:
Range FY16
Upper limit 17.00%
Average 16.50%
Lower Limit 16.00%
GESCOM, in its annual accounts, has reported the distribution

losses at 18.10% for FY16 as under:
1 Energy at Interface Points in MU 7936.21
2 Total sales in MU including wheeled energy 6507.80
Distribution losses as a percentage of input
3 18.00%
energy at IF points

The distribution loss of 18.00% reported by GESCOM is above the
targeted losses fixed by the Commission for FY16 by 1.50%. percentage
points. Further, as per the revised consumption of IP sets as discussed in
the preceding paragraphs of this Chapter, the distribution loss works
out to 18.71%.
In the above context, the Commission notes that the overall actual
distribution losses of 18.71% exceeds the approved upper limit of losses
for FY16. Hence, in terms of the MYT Regulations, the penalty for
exceeding the targeted loss levels is computed below:
TABLE-4.7
Penalty for exceeding targeted loss levels in FY16
Particulars FY14
Actual input at IP points as per audited accounts in MU 7936.21
xxxiii
Retail sales as per audited accounts in MU 6451.15
Percentage distribution losses 18.71%
Target upper limit of distribution loss 17.00%
Increase in percentage points loss 1.71%
Input at target loss for actual sales in MU 7772.47
Increase in input due to increase in distribution losses in
163.74
MU
Average cost of power purchase at IF points in Rs./unit 4.00
Penalty for Increase in power purchase cost due to
65.67
increased losses
Thus, the Commission decides to levy penalty of Rs.65.67 Crores for
exceeding the distribution loss levels targeted for FY16. This has been
factored in the APR for FY16.
4.2.3 Power Purchase for FY16:
GESCOM Submission:
The Commission in its Tariff order dated 30th March,2016, had approved
source-wise quantum and cost of power purchase for FY16. GESCOM,
in its application has submitted the details of actual power purchase
for FY16 for the purpose of Annual Performance Review. The details of
power purchase is detailed hereunder:
TABLE – 4.8
Power Purchase for FY16- Approved and Actuals
xxxiv
% increase
Difference-between Actuals (+)/decrease (-)
Actuals for FY16 Approved for FY16
and Approved-for FY16 over an approved
Source of
figures
Generation
Rate in Rate in Rate in
Energy Cost in Energy in Cost in Energy in Cost in
Rs per Rs per Rs per Energy Cost
in MUs Rs Cr. MUs Rs Cr. MUs Rs Cr.
Unit Unit Unit
KPCL Hydel
Stations
1247.89 122.27 0.98 1995.04 144.9 0.73 -747.15 -22.63 0.25 -37.45 -15.62
KPCL-
Thermal 2932.32 1196.35 4.08 3147.2 1220.36 3.88 -214.88 -24.01 0.20 -6.83 -1.97
Stations
CGS 2258.97 693.05 3.07 1995.75 594.62 2.98 263.22 98.43 0.09 13.19 16.55
Major IPPs 83.92 35.09 4.18 82.09 33.92 4.13 1.83 1.17 0.05 2.23 3.45
IPPs -Minor
(NCE 350.67 138.64 3.95 587.31 221.19 3.77 -236.64 -82.55 0.19 -40.29 -37.32
Projects)
Other
States 0.95 4.85 51.05 21.96 3.95 1.80 -21.01 0.90 49.25 -95.67 22.78
Projects
Short
/Medium 560.17 283.74 5.07 182.79 95.96 5.25 377.38 187.78 -0.18 206.46 195.69
term
Section 11 475.31 241.46 5.08 475.31 241.46 5.08
UI Charges 80.66 24.37 3.02 80.66 24.37 3.02
Transmissio
n Charges
459.00 409.55 49.45
(KPTCL &
PGCIL)
SLDC
Charges
2.65 4.23 -1.58
(POSOOC
& SLDC)
Energy
225.47 96.05 4.26
Balancing
Others
28.04 9.10
Charges
TOTAL 8244.38 3306.62 4.01 8012.14 2728.71 3.41 232.24 577.38 0.60 2.90 21.16
* Source : D1 format
Commission’s analysis and decisions;
1. The actual power purchase for FY16 as filed by GESCOM for approval
of Annual Performance Review is 8244.38 MU amounting to Rs.3306.62
Crores, as against the approved quantum of 8012.14MU amounting
to Rs.2728.71 Crores. This represents a reduction in the quantum of
power purchase to an extent of 232.24 MU and an increase in the
cost by Rs.577.38 Crores.
2. As against the approved quantum of 8012.13 MU, the actual power

purchased by GESCOM is 8244.38 MU for FY16, which is about 2.90 %
more than the approved quantum.
xxxv
3. On an analysis of the source-wise approved and actual power
purchases, the following deviations in the quantum of energy and its
cost of purchase are observed:
i. There is shortfall in supply from sources of power like KPCL Hydel,

KPCL Thermal and RE/NCE to an extent of:
TABLE-4.9
Shortfall in Supply of Power from KPCL/ RE Sources
Energy Cost Difference
Difference between actual
Source of Generation (shortfall) and approved in
between actual Rs Cr.
and approved in
MU
KPCL Hydel
-747.15 -22.63
KPCL Thermal
-214.88 -24.01
RE/NCE
-236.64 -82.55
To make good the shortfall from the conventional /RE sources, the
GESCOM has sourced power form un-requisitioned surplus power
from CGS and major IPPs apart from purchases through short-
term / medium-term procurement besides procurement under
Section 11 of the EA,2003 to a tune of 560.17 MU and 475.31 MU
respectively, at a cost of Rs.283.74 Crores and Rs.241.46 Crores
respectively. GESCOM has incurred an additional cost Rs.577.38
Crores towards meeting the overall deficit in the availability of
power, resulting in an increase in per unit cost by 60 Paise.
ii. The change in the source-wise mix of supply, reconciliation of
energy and its cost among the ESCOMs have resulted in higher
average power purchase cost of the GESCOM at the rate of
Rs.4.01 per KWh as against the approved rate of Rs.3.41 per KWh.
4. To ensure proper accounting of energy and its cost, the GESCOM is

directed to reconcile the inter-ESCOM energy exchanges and its
costs every month. It shall collect/pay the amounts due to from other
ESCOMs out of the tariff subsidy received from the Government of
xxxvi
Karnataka, with a view to avoid accumulation of large balances
under Inter-ESCOMs Receivable/ Payable accounts.
5. The Commission notes that, the SLDC has not implemented the intra-
state ABT. As per the directions issued by the Government of
Karnataka vide its letter dated 28th January, 2016, intra-state ABT has
to be implemented
6. The Commission therefore directs the SLDC, the KPCL and the
GESCOM to take appropriate action immediately to implement intra-
state ABT and to host the details thereof, on their respective websites.
The Commission decides to approve the power purchases of 8244.38

MU at a cost of Rs.3306.62 Crores, for the purpose of Annual
Performance Review for FY16.
4.2.4 Renewable Purchase Obligation (RPO) compliance by GESCOM for
FY16:
GESCOM submission:
The GESCOM in its replies to the rejoinder has filed the details of RPO
compliance for solar and non-solar RPO for 2015-16 as indicated
below:
TABLE-4.10
RPO Compliance by GESCOM for FY16
Energy Purchased-MU 8244.385
Non-Solar energy required to be procured at 5% 412.22

target-MU
Non-Solar energy actually procured -MU 560.95
Non-Solar compliance as percentage of energy 6.80%

purchased
Solar energy required to be procured at 0.25% 20.61

target-MU
Solar energy actually procured -MU 45.28
Solar compliance as percentage of energy 0.55%

purchased
xxxvii
The Commission in its preliminary observations had noted that the
quantum of energy purchased is indicated as 8244.385 MU in page 110
of the filing, whereas the same is indicated as 8260.75 MU in the A-1
Format. Therefore, the GESCOM was directed to reconcile the figures.
Further for validating the RPO compliance, the Commission had
directed the GESCOM to furnish the data as per prescribed format,
duly reconciling the data with the audited accounts.
The GESCOM, duly reconciling the data with energy balance account,
in list replies have furnished the following data:
TABLE-4.11
Non-solar RPO Compliance by GESCOM:

No. Particulars Quantum in MU Cost- Rs. Crs.
1 Total Power Purchase quantum from all 8244.385 3291.27
sources
2 Non–solar Renewable energy purchased 289.736* 110.24
under PPA route at Generic tariff including
Non-solar RE purchased from KPCL
3 Non –solar Short-Term purchase from RE 107.124 56.04
sources, excluding sec-11 purchase
4 Non –solar Short-Term purchase from RE 164.086 86.46
sources under sec-11
5 Non-solar RE purchased at APPC 8.920 2.76
6 Non-solar RE pertaining to green energy sold 0 0
to consumers under green tariff
7 Non-solar RE purchased from other ESCOMs 0 0
8 Non-solar RE sold to other ESCOMs 0 0
9 Non-solar RE purchased from any other 0 0
source like banked energy purchased at
85% of Generic tariff
10 Total Non-Solar RE Energy Purchased 569.866 255.50
[No 2+ No.3+No.4+No.5 +No.7+No.9]
11 Non-Solar RE accounted for the purpose of 560.946 252.74
RPO
[ No.10- No.5-No.6-No.8]
12 Non-solar RPO complied in % 6.804
[No11/No1]*100
* As per D-1 Format, the total non-solar RE purchased is 310.94 MU. After deducting 8.92 MU of purchases
under APPC, the Commission has reckoned 302.02 MU for the purpose of Non-solar RPO.
xxxviii
TABLE-4.12
Solar RPO Compliance by GESCOM
No. Particulars Quantum in Cost- Rs. Crs.
MU
1 Total Power Purchase quantum from all 8244.385 3291.270
sources
2 Solar energy purchased under PPA route 28.998 22.53
at Generic tariff including solar energy
purchased from KPCL
3 Solar energy purchased under Short- 0 0
Term, excluding Sec-11 purchase
4 Solar Short-Term purchase from RE under 0 0
Sec-11
5 Solar energy purchased under APPC 0 0
6 Solar energy pertaining to green energy 0 0
sold to consumers under green tariff
7 Solar energy purchased from other 0 0
ESCOMs
8 Solar energy sold to other ESCOMs 0 0
9 Solar energy purchased from NTPC (or 16.282 17.270
others) as bundled power
10 Solar energy purchased from any other 0 0
source like banked energy purchased at
85% of Generic tariff
11 Total Solar Energy Purchased 45.280 39.80
[No2+
No.3+No.4+No.5+No.7+No.9+No.10]
12 Solar energy accounted for the purpose 45.280 39.80
of RPO
[ No.11- No.5-No.6-No.8]
13 Solar RPO complied in % 0.549
[No12/No.1]*100
The Commission has considered the data and the explanation

submitted by the GESCOM. The Commission has approved total input
energy of 8244.38 MU for FY16 in its APR. Thus, the GESCOM was
required to purchase 412.22 MU of Non-solar energy and 20.61 MU of
solar energy to meet its RPO targets. Based on the information furnished
as per the revised D-1 Format, the Commission notes that GESCOM has
purchased 573.23 MU of Non-Solar energy (302.02 MU of Non-Solar
energy under PPA after deducting 8.92 MU purchased under
APPC,164.09 MU under Sec-11 and 107.12 MU under Short-term
purchase, including purchase from Tata Power Trading Company). Thus
the GESCOM has achieved 6.95% of non-solar RPO.
xxxix
Further, as per the revised D-1 Format, the Solar energy purchased by
GESCOM is 45.28 MU resulting in achievement of 0.55% of solar RPO for
FY16. Thus, GESCOM has over-achieved its non-solar and solar RPO
targets by 1.95 percentage points and 0.30 percentage points
respectively.
4.2.5 Operation and Maintenance Expenses:
In its application, GESCOM, as per its provisional accounts has

sought approval of O&M expenditure of Rs.421.07 Crores for
FY16. The break-up of O&M expenses are as follows:
TABLE – 4.13
O & M Expenses – GESCOM’s submission
Particulars FY16
Employee cost 312.40
Administrative & General Expenses 70.99
Repairs and Maintenance 37.68
Total O & M Expenses 421.07

The Commission in its Tariff Order dated 2nd March, 2015 had approved
O&M expenses for FY16 as detailed below:
TABLE – 4.14
Approved O&M Expenses as per Tariff Order dated 02.03.2015
Particulars FY16
No. of installations as per actuals as per Audited Accts 2812302
Weighted Inflation Index 6.69%
CGI based on 3 Year CAGR 4.86%
Actual O&M expenses for FY13 - in Rs. Crs. 364.39
Total approved O&M Expenses for FY16 – in Rs .Crs. 416.86
The Commission in its preliminary and subsequent observations, on the
application of GESCOM, had sought the details of certain expenses
booked under A & G expenses during FY16 and has noted the replies
furnished. As per the audited accounts of GESCOM has incurred actual
O&M expenses of Rs.422.65 Crores for FY16.
xl
The Commission notes that the actual O&M expenses reported by
GESCOM are more than the approved O&M expenses by Rs.1.58
Crores. The Commission, in accordance with the methodology
adopted while approving the ARR for FY14-16 and subsequent APRs,
proceeds with the determination of normative O&M expenses based
on the 12 Year data of WPI and CPI besides considering 3 year
compounded annual growth rate (CAGR) of consumers. Considering
the Wholesale Price Index (WPI) as per the data available from the
Ministry of Commerce & Industry, Government of India and Consumer
Price Index (CPI) as per the data available from the Labour Bureau,
Government of India and adopting the methodology followed by the
CERC with CPI and WPI in a ratio of 80: 20, the allowable rate of
inflation for FY16 is computed as follows:
TABLE-4.15
Computation of Allowable Inflation Rate
Compo Product
Yt/Y1=
Year WPI CPI site Ln Rt Year (t-1) [(t-1)*
Rt
Series (LnRt)]
2004 98.72 111.1 108.624
2005 103.37 115.8 113.314 1.04 0.04 1 0.04
2006 109.59 122.9 120.238 1.11 0.10 2 0.20
2007 114.94 130.8 127.628 1.17 0.16 3 0.48
2008 124.92 141.7 138.344 1.27 0.24 4 0.97
2009 127.86 157.1 151.252 1.39 0.33 5 1.66
2010 140.08 175.9 168.736 1.55 0.44 6 2.64
2011 153.35 191.5 183.87 1.69 0.53 7 3.68
2012 164.93 209.3 200.426 1.85 0.61 8 4.90
2013 175.35 232.2 220.83 2.03 0.71 9 6.39
2014 182.00 246.90 233.92 2.15 0.77 10 7.67
2015 177.03 261.42 244.542 2.25 0.81 11 8.93
A= Sum of the product column 37.56
B= 6 Times of A 225.37
C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00
D=B/C 0.07
g(Exponential factor)= Exponential (D)-1 0.0771
e=Annual Escalation Rate (%)=g*100 7.71
For the purpose of determining the normative O & M expenses for FY16,
the Commission has considered the following:
a) The actual O & M expenses allowed for FY13 excluding contribution

to Pension and Gratuity Trust.
xli
b) The three year compounded annual growth rate (CAGR) at 4.13%
of the number of installations considering the actual number of
installations as per the audited accounts upto FY16.
c) The weighted inflation index (WII) at 7.71% as computed above.
d) Efficiency factor at 2% as considered in the earlier two control

periods.
Thus, the normative O & M expenses for FY16 are computed as
follows:
TABLE-4.16
Normative O & M Expenses
Particulars FY16
No. of Installations As per actuals as per
Audited Accts 2754376
Weighted Inflation Index 7.71%
Consumer Growth Index (CGI) based on 3 4.13%
Year CAGR
Base year O & M expenses for FY13
excluding P&G contribution - Rs. Crores 272.62
O&M Index= 0&M (t-1) *(1+WII+CGI-X)- Rs.
Crores. 350.74
The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust for FY 16.
The Commission has treated the employee costs on account of

contribution to P&G Trust as uncontrollable O&M expenses. This
component has been allowed beyond the normative O&M expenses
to enable the ESCOMs to meet their actual employee costs.
The GESCOM has incurred an amount of Rs.60.38 Crores towards

contribution to the Pension and Gratuity Trust for FY16. Considering the
request of the GESCOM to treat the pension and gratuity contribution
as uncontrollable O & M expenses and as per the provisions of the MYT
Regulations, the computation of the allowable O & M expenses for
FY16, is as under:
TABLE – 4.17
Allowable O & M Expenses for FY16
Sl. Particulars FY16
xlii
No.
1 Normative O & M expenses 350.74
2 Additional employee cost (uncontrollable O 60.38
& M expenses)
Allowable O & M expenses for FY16 411.12
Thus, the Commission decides to allow an amount of Rs.411.12 Crores

as O&M expenses for FY16.
4.2.6 Depreciation:
The GESCOM in its application, as per the provisional accounts for

FY16, has claimed an amount of Rs.97.62 Crores as the net
depreciation, after deducting an amount of Rs.30.14 Crores towards
the depreciation on account of assets created out of consumers’
contributions / grants as per Accounting Standards (AS) – 12.
The Commission notes that, as per the audited accounts of GESCOM

for FY16, the amount of depreciation factored is Rs.132.36 Crores and
depreciation withdrawn on assets created out of consumer
contribution and grants is Rs.30.14 Crores.
In accordance with the provisions of the KERC (Terms and Conditions

for Determination of Tariff) Regulations, 2006 and amendments
thereon, the Commission has determined the depreciation for FY16.
Based on the opening and closing balances of gross blocks of fixed
assets for FY16 and the depreciation as per the audited accounts, the
weighted average rate of depreciation works out to 4.68%.
Further, the Commission as per the Accounting Standards (AS) – 12,

has recognized an amount, of Rs.30.14 Crores of depreciation on
assets created out of consumer contribution / grants.
The computation of asset-wise depreciation is as follows:
xliii
TABLE – 4.18
Allowable Depreciation for FY16
Opening Closing
Balance of Balance of Depreciation
Particulars
Asset as on Asset as on for FY16
01.04.2015 31.03.2016
Buildings 31.55 48.77 1.46

Civil 5.89 6.69 0.07
Plant & M/c 471.63 526.67 23.95
Line, Cable Network 2082.46 2448.34 106.27
Vehicles 5.38 5.38 0.19
Furniture 4.28 4.81 0.20
Office Equipment 2.91 6.01 0.22
Sub Total 2604.10 3046.67 132.36
Less: Depreciation on account of Assets created 30.14
out of grants/Consumer contribution
Net Depreciation 102.22
Based on the above, the Commission decides to allow a net

depreciation of Rs.102.22 Crores for FY16.
4.2.7 Capital Expenditure for FY16:
a) Capital Investments-GESCOM Submission
As per the tariff application filed by the GESCOM, it has incurred a

capex of Rs. 299.70 Crores, as against the approved capex of Rs.376
Crores, for FY16. The details of category-wise capital expenditure
submitted by GESCOM for FY16 is shown below:
xliv
Table –4.19
Capital expenditure of GESCOM for FY16:
Approved Actual
Sl.No. Details of Works capex for Expenditure
FY16 for FY16
33 kV Sub-Stations, 33 kV Line works &
1 25 5.92
Augmentation of 33 kV Sub-Station.
2 RGGVY Works 75 0
3 RAPDRP Works 0 13.6
4 Non-RAPDRP Works 0 36.55
5 Reconductoring works 18 3.2
6 DTC Metering works 2 4.22
7 Water Supply Works. 5 19.84
8 Additional DTC's Works. 9 16.31
Replacement failed 11 kV Transformers &
9 5 4.99
33 kV Power Transformers.
10 Replacement of MNR Meters. 5 7.26
11 Providing ETV Meters. 1 0
Providing HT Metering Cubicles for Ring
12 0.5 0
Fencing.
13 Service Connection Works. 17 4.38
System Improvement (SI) Works (33kV Link
14 Line / Express Feeders) & (11kV Link Line / 22 10.54
Express Feeders).
15 Nirantara Jyothi Works. 0 33.6
a) Major Replacement in Sub-Stations &
16 Lines, R&M to 33kV Stations & Lines, 11kV 10.5 0
DTC's & Lines.
17 Civil Engineering works. 8 2.92
18 IT Initiatives 5 0.27
19 HVDS works. 75 0
20 Providing ABC, UG Cables & RMUs. 1 0
21 SCADA Works 1 0
22 SCP & TSP Works. 3.5 1.81
23 Ganga Kalyan Scheme works. 25 41.41
24 T&P Articles. 0.5 1.07
Replacing of Electro Magnetic Meters by
25 1 5.03
Static Meters
26 Metering of IP / Street Lights/ BJ & KJ Sets. 1 1.30
Providing Infrastructure to Regularization of
27 30 15.64
Unauthorized IP Sets.
28 R.E. General Works. 20 0
29 Prevention of Electrical Accident & Safety. 5 60.96
30 Electrification of Rehabilitation Villages. 5 0
LT Line Conversion, Fixing of SMC Box to
31 0 7.76
DTC and Replacement of Broken Poles.
Energization of IP Sets General
32 0 1.12
Electrification of HB/JC's and KJ's
33 Providing Times Switches to Street Lights. 0 0
34 Shifting of Meters to Outside Premises. 0 0
35 Taluka Wise Segregation. 0 0
xlv
Total 376 299.70
Commission’s analysis and decision:
It is seen from the above data that the overall capital expenditure of
the GESCOM for FY16 is within the approved capex of Rs.376 Crores.
But, in respect of a few major categories of works, the GESCOM has
exceeded its approved capex as indicated below:
i. In respect of “DTC Metering, water supply works and additional DTCs

works”, the GESCOM has achieved capex exceeding the approved
figures. The GESCOM has not explained the reasons for such excess
capex. The GESCOM is yet to conduct energy audit in all the
feeders covering all the areas in its jurisdiction. The Commission has
been directing GESCOM to complete DTC metering and conduct
DTC-wise energy audit and reduce the distribution losses. The
GESCOM in its replies to the preliminary observations has stated that,
the energy audit of 11 kV feeders has been conducted and DTC-
wise energy audit is also being conducted and the information in
Format A and B is being submitted to the Commission.
ii. In respect of “Nirantara Jyothi Works”, the GESCOM has achieved a

capex of Rs.33.60 Crores. The GESCOM in its replies to the
preliminary observations has stated that, there is a saving in the
energy sent out in the segregated feeders as compared to the
original mixed feeder, the failure rate of distribution transformers has
come down, interruptions have been reduced, there is reduction in
the distribution loss level and the voltage at the tail end has
improved.
iii. In respect of “System Improvement (SI) Works (33kV Link Line / Express
Feeders) & (11kV Link Line / Express Feeders)”, the GESCOM has
achieved a capex of Rs.10.54 Crores as against the approved
capex of Rs.22 Crores. The GESCOM should note that, the system
improvement works are to be completed on priority as they help in
network strengthening and expansion as well as loss reduction and
improvement of system reliability. The GESCOM in its replies to the
preliminary observations has stated that, the works which were
xlvi
expected to be completed during FY16, have spilled over to FY17,
due to which the capex could not be achieved as expected.
iv. In respect of “Ganga Kalyan Scheme works”, the GESCOM has

incurred a capex of Rs.41.41 Crores as against the approved capex
of Rs.25 crores. The GESCOM in its replies to the preliminary
observations has stated that, the excess capex achievement is
attributed to the target of completion given by the Government of
Karnataka.
v. In respect of “Providing Infrastructure to Regularization of Unauthorized

IP Sets”, the GESCOM has achieved capex of only Rs.15.64 Crores
against the approved capex of Rs.30 Crores. Creation of
infrastructure to regularize the Un-authorized IP Sets should have
been taken up on priority by the GESCOM to provide reliable and
quality power supply to the IP Set consumers and reduce the losses.
But, GESCOM has not achieved its own target of capex. The
GESCOM in its replies to the preliminary observations, has stated
that, around 4342 Nos of IP set applicants have not paid the
charges, but, the GESCOM is taking action to complete all the
infrastructure works, in order to reduce the losses and improve the
reliability.
vi. In the case of capex on “Prevention of Electrical Accident & Safety”,

the GESCOM has achieved a capex of Rs.60.96 Crores as against
the approved capex of Rs.5 Crores. The GESCOM in its replies to the
preliminary observations, has stated that, the budget re-
appropriation has been approved by the GESCOM Board with a
provision of Rs.103.06 Crores for prevention of accidents, based on
which the capex has been achieved.
In light of the above discussions, the Commission accepts the

reasons furnished by the GESCOM for excess capex achieved in
respect of the above categories of works. Further, recognizing the
fact that the GESCOM’s capex is well within the approved limit of
Rs.376 Crore for FY16, the Commission decides to consider the
xlvii
capital expenditure of Rs.299.7 Crores as indicated by the GESCOM
for APR of FY16, subject to disallowance if any, as per the prudence
check conducted for FY16, indicated in the following paragraphs.
b) The prudence check of capital expenditure and material
procurement of GESCOM for FY16:
The Commission has got the Prudence check of capital expenditure

for FY16, done through third party verification of the capital works
categorized and also the material procurement of GESCOM during
FY16. This was taken up in two parts:
i. Prudence check of execution of the capital works of FY16:

ii. Prudence check of material Procurement process of FY16:
i. Prudence check of execution of the capital works of FY16:
The Commission has taken up prudence check of the capital

expenditure incurred by GESCOM for the period FY16, by engaging the
services of M/s. Deloitte Touche Tohmatsu India Private Limited (M/s.
Deloitte) as consultant, being the lowest bidder for the said job,
through a transparent process of e-tendering to evaluate the
prudence of the capital expenditure incurred by the GESCOM for
FY16, in respect of categorized works.
M/s Deloitte, after necessary validations on the data made available

by GESCOM, has found 3542 numbers of capital works amounting to a
total cost of Rs.20864 Lakh for the prudence check of capital
expenditure for FY16. The break-up of the works is shown below:
TABLE -4.20
Summary of categories of works
Number of Cost of works
Type of work
works Rs.Lakh
Ganga
1,102 1,981
Kalyan
E&I 753 4,263
NJY 151 7,238
RAPDRP 77 2,000
Civil 290 1,500
Meter 106 2,127
UNIP 151 245
Emergency 47 67
Others 865 1,443
Total 3,542 20,864
xlviii
M/s Deloitte has selected the samples as per the guidelines and the
requirements specified in the bid documents. The summary of sampling
process is stated as follows:
TABLE -4.21
Summary of sampling process for conducting prudence check
Master List Sample List
Number Cost of works Number Cost of
Category
of works Rs.Lakh of works works
Rs. Lakh
Work costing
above Rs.6 305 15,602 127 12,744
Lakh
Work costing
between Rs.3 279 1,115 58 302
– 6 Lakh
Work costing
below Rs.3 2,958 4,147 24 57
Lakh
Total 3,542 20,864 209 13,102
Also, the comparison of the samples considered with respect to the

category of works in the master list is as below:
TABLE -4.22
Category wise details of the works in the selected sample
Master List of Works Sample List of Works
Type of Cost of Cost of
Number of Number of
work works works
works works
[Rs. Lakh] [Rs. Lakh]
Ganga
1,102 1,981 15 86
Kalyan
E&I 753 4,263 40 2,337
NJY 151 7,238 64 6,821
RAPDRP 77 2,000 26 1,528
Civil 290 1,500 12 515
Meter 106 2,127 28 1,251
UNIP 151 245 6 25
Emergency 47 67 2 4
Others 865 1,443 16 535
Total 3,542 20,864 209 13,102
M/s Deloitte has stated that, based on the prudence check guidelines and
the scope of the work as per the bid document, a methodology consisting of
xlix
five stages was adopted for conducting prudence check of capital
expenditure of GESCOM as mentioned below:
Stage I: Collection of master list of projects from GESCOM through KERC:
In the initial stage, the collection of the full list of categorized works for
FY16 from GESCOM with the assistance of KERC carried out. The list
provides various details such as category of capital work, actual date,
cost of completion etc.
Stage II: Preparation of representative sample of projects as per KERC

guidelines:
In the second stage, with the master list as base, projects were
arranged in the descending order of cost and the samples were
prepared as per KERC guidelines and the terms mentioned in the letter
of award.
Stage III: Collection of data for selected projects as per KERC format from
GESCOM:
In the third stage, the project specific details were collected in the
detailed format which was already prepared by KERC. Wherever
required, copies of various supporting documents were also collected
such as approved estimates, detailed work award, C register entries
etc.
Stage IV: Physical inspection of projects:
The fourth stage, comprised of the field visit and verification exercise
which was conducted to analyse the achievement of objectives after
the execution of the capital works are actually met or not.
Stage V: Analysis of data and preparation of report:
In the final stage, the projects were assigned a score based on various
parameters such as planning, implementation, achievement of
primary objectives and achievement of secondary objectives. Based
on the score obtained by each project, the project’s status of meeting
l
with the norms of prudence was calculated by following guidelines
issued by KERC.
As per the report submitted by the consultant, the following are the salient
features of prudence check:
TABLE –4.23
Gist of Prudence check findings for FY16

Amount
Particulars Numbers
in Rs. Lakhs
Works costing Rs.6 Lakhs and above considered
127 12,744
as samples for validation
Works costing between than Rs.6 Lakhs and Rs.3
58 302
Lakhs considered as samples
Works costing below Rs.3 Lakhs considered as
24 57
samples
Works not meeting Rs.6 Lakhs and above 01 153.14
the norms of Rs.6 Lakhs and Rs.3 Lakhs Nil -
prudence below Rs.3 Lakhs Nil -
Total works not meeting the norms of prudence 01 153.14
The following project was found to be not meeting the norms of prudence:
TABLE -4.24
Details of non-prudent project
Actual
Actual Categorizatio
No. Division Work Category Cost
Completion n
Rs. Lakh
Establishment
Raichur
1 of Mamadoddi E&I 153.14 - 31-03-16
Rural
substation
Further, M/s Deloitte has stated that, there are 30 numbers of projects, which
include establishment of 33/11kV substation, Water works and DTC metering
treated as conditionally prudent due to reasons stated below:
1. Establishment of Idapnur substation in Raichur Rural division at a cost

of Rs.526.79 Lakh;
The substation was commissioned on 17th November, 2016. However, in
spite of the substation not being commissioned in FY16, the amount
li
corresponding to expenditure passed in FY16 was categorized by the
division. This categorisation is to be reversed and posted to the
relevant year.
2. Establishment of Thappanadagagi substation in Shorapur subdivision of

Yadgir division at a cost of Rs.317.79 Lakh (DWA No 42365-74 Dt
19.01.2012);
It was noticed that, out of the two 5 MVA transformers present in the
substation, only one was utilized, while the second one was on idle
charge. The station currently has only two outgoing feeders with the
station peak load of only 2 MW. GESCOM should utilise the 2nd
transformer, by drawing 11kV lines to the nearest load centres to reap
the benefit.
3. A-42890/09.10.15: Water Works in Bidar division at a cost of Rs.2.91

Lakh;
The infrastructure (extension of HT line and installation of transformer)
was created to supply power to the water service connection is
currently idle. The bore well has now been connected from a newly
extended LT line emanating from another nearby feeder. GESCOM
should monitor such cases and should make use of the infrastructure to
avoid wasteful expenditure.
4. 27 Number of DTC Metering works at 5 divisions at a total cost of

Rs.851.96 Lakh;
In FY14, GESCOM had started wide-spread implementation of DTC
metering with AMR using thread-through meters. During the field
inspections, it was observed that though the DTC Meters with modems
are working satisfactorily and energy audit reports are being compiled,
the reports are not being utilized to their full potential. GESCOM needs
to take necessary action to make use of the energy audit reports.
Some of the other findings of the prudence check are summarized

below:
TABLE -4.25
Summary of Works having cost overrun
lii
Particulars Within 10% 10-25% Above 25%
Rs.6 Lakhs and above 1 0 5
Rs.6 Lakhs and Rs.3 Lakhs 7 0 1
below Rs.3 Lakhs 8 2 6
liii
TABLE -4.26
Summary of cost over-run of projects in the category of works
Cost Cost Cost
No cost Cost overrun
Type of Work overrun overrun of overrun of
overrun beyond 50%
up to 10% 10-25% 25-50%
Ganga Kalyan 9 5 - - -
E&I 23 1 - - 1
NJY 4 - - - 5
RAPDRP 3 - - - -
Civil 6 - - - -
Meter 12 - - - -
UNIP 3 - 1 - -
Emergency 2 - - - -
Others 7 2 1 - -
Total 69 8 2 - 6
TABLE –4.27
Summary of Works having Time overrun
Time overrun up Time overrun of Time overrun
Particulars
to 3 months 3-6 months beyond 6 months
Rs.6 Lakhs and above 1 0 5

Rs.6 Lakhs and Rs.3 Lakhs 8 2 3
below Rs.3 Lakhs 4 0 1
TABLE – 4.28
Summary of time over-run of projects in the category of works
Time overrun Time overrun
No Time overrun
Type of work up to 3 beyond 6
time overrun of 3-6 months
months months
Ganga Kalyan 7 4 2 2
E&I 20 2 - 1
NJY 26 - - 5
RAPDRP 10 - - 1
Civil 6 - - -
Meter 25 1 - -
UNIP 5 1 - -
Emergency 2 - - -
Others 5 5 - -
Total 106 13 2 9
The Commission has forwarded the copy of the Report on the
Prudence check to the GESCOM for its views/comments and
justification if any on the non-prudent works as meeting to norms of
prudence on or before 20th March, 2017. But, GESCOM has not
furnished the replies as sought by the Commission.
liv
The Commission after verifying the project termed as not meeting the
prudence norms by the consultant, has decided to disallow the capex
and the weighted average interest and weighted average
depreciation is disallowed as stated below:
TABLE -4.29
Details of Amounts disallowed in APR FY16

Sl Amount
No Particulars in Rs.
Crores
1 Total cost of categorized works eligible for prudence check 208.64
2 Total cost of the sample works 131.02
Cost of sample works not meeting prudence norms (01 work
3 1.5314
with cost of Rs.48.59 Lakh) in E& I category
Cost of sample works not meeting prudence norms (01 work
with cost of Rs.153.14Lakh against a sample basket of 40
4 2.793
works with Rs.2337 Lakhs in the category of E&I works of 753
Nos. of works and total cost of Rs.4263 Lakhs)
Amount to be disallowed towards works not meeting

8 prudence norms calculated on the basis of weighted 0.343
average interest & weighted average depreciation on the
capex to be disallowed.
Thus, the Commission decides to deduct an amount of Rs.0.343 Crores

towards disallowance of interest and depreciation on the imprudent
capital works for FY16 in the revised approved ARR for FY18 as
discussed in the subsequent chapter of this Order.
ii. Prudence check of material Procurement process of FY16:
The GESCOM has been executing capital works both on turnkey as

well as partial turnkey contracts. In the process, the GESCOM procures
major materials like, distribution transformers, poles and conductor etc.
and issues them to the partial turnkey contractor for carrying out the
labour contract work as per award. The contractor would also invest
on some of the smaller materials associated with the works viz., cross
arm, bolt & nuts, earthing materials etc., if necessary.
lv
In view of the fact that, a large quantity of major materials is being
procured by the ESCOMs, the Commission decided to review material
procurement process of major materials as a part of prudence check
carried out, to ensure that, the procurement is carried out in a cost
effective manner without compromising with the operational needs.
Hence, the consultant was directed to look into the procurement
process of the GESCOM, and analyze the process.
The Commission suggests that, the GESCOM has to take steps to utilize
the materials in a systematic way and reduce inventory by planning
the delivery schedule of the material to synchronize with the work
execution. The inventory level should be around 25% of the
consumption, at any given time, to avoid idle stock.
M/s Deloitte has stated that, the analysis of procurements in FY16

revealed that a considerably higher level of inventory with respect to
actual requirement seems to be maintained in the case of
 BEE 3 star rated Distribution Transformers

 Insulators
 Cross Arms
 Transformer Oil
In some of the divisions, it was revealed that there was an increase in

inventory due to non-completion / abandonment of NJY works by
some contractors. For example, in Humnabad, there were a
significantly large number of new distribution transformers in the store.
Some of materials with huge stock are shown below:
lvi
TABLE –4.30
Inventory levels and utilization
Material Unit Averag Utilization Inventory as
e % of
Inventor utilization
y
RCC Pole 9 Mtrs.long Nos. 4,383 9,815 45%
RCC Pole 9.5 Mtr long Nos. 58 108 54%
Pin Insulator Shell 11 KV Nos. 76,254 2,292 3327%
45 KN Disc Insulator Nos. 65,821 1,642 4009%
Guy Strain Insulator No. 08 Nos. 3,687 2,612 141%
Weasel ACSR Conductor Kms 3,029 8,753 35%
Rabbit ACSR Conductor Kms 2,535 7,400 34%
DTC 25 KVA 3 Star Nos. 3,172 875 362%
DTC 63 KVA 3 Star Nos. 1,947 313 622%
DTC 100 KVA 3 Star Nos. 583 92 634%
Cross Arm - 2 Pin Nos. 8,198 1,676 489%
Cross Arm - 4 Pin Nos. 20,612 28,298 73%
Transformer oil KL 929 608 153%
It may be noted that, the critical items may have been overstocked if
their order lead time is higher, so as to avoid affecting the continuity of
supply. Therefore, mere existence of higher stock of some of the items
may not by itself be treated as a proof of inefficiency.
Prudence of procurement costs:
The study of purchase costs in FY16 reveals that on an overall basis, the
purchases were at an average of 0.29% below the Schedule of Rates.
However, it has to be noted that the ESCOMs are still using the
Schedule of Rates prepared in December, 2014 as the reference,
which has not been updated further in the last two years.
GESCOM has gone for open tendering under e-procurement mode for
all the purchases, except in case of the orders placed with Govt.
owned firms, for which exemption is made under KTPP. Though
purchase under KTPP exemption for Govt. owned firms may be Govt.
policy, the purchase rates in such cases are mutually negotiated and
lvii
seem to be at higher side. Probably, some savings can be realised if
competitive procurement of transformers is conducted.
The Commission based on the above discussions on the prudence

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

projects to see that, there will not be any slippage in terms of time
overrun, cost overrun and also, the works are completed and
categorized to reap the objectives set out by the company. Also,
there should not be any instance, by which, the works will have to
be treated as not meeting the prudence norms.
b) Directs, GESCOM to analyze and bring 30 numbers of projects to
meet prudence norms, which have been treated as conditionally
prudent as mentioned above.
c) Directs, GESCOM to monitor the material procurement,
deployment to the field and track the stock position to see that,
no idle stock of materials is kept for a longer period.
4.2.8 Interest and Finance Charges:
a) Interest on Capital loan:
The GESCOM in its application has claimed an amount of

Rs.89.98 Crores towards interest on capital loans drawn from
Banks/Financial Institutions for FY16.
The status of opening and closing balances of capital loans as per the
audited accounts for FY16 and Format D-9 as filed by the GESCOM, is
shown below:
lviii
TABLE – 4.31
Allowable Interest on Loans – FY16
Particulars FY16
Opening balance of capital loans 695.28
Add: New Loans 133.18
Less: Repayments 63.65
Total loan at the end of the year 764.81
Average Loan 730.05
Allowable Interest on Capital Loans 89.96
As per the audited accounts of the GESCOM for FY16, the actual
interest on both capital and short term loans is Rs.90.79 Crores. The
interest on capital loan is Rs.89.96 Crores and interest on short term loan
is Rs.0.83 Crores. Considering the average loan of Rs.730.05 Crores and
an amount of Rs.89.96 Crores incurred towards interest on capital
loans, the weighted average of interest works out to 12.32%.
towards interest on capital loans for FY16.
b) Interest on Working Capital:
The GESCOM in its application has claimed an amount of

Rs.99.83 Crores as interest on short term loans and overdrafts for
FY16.
As per the audited accounts and replies to the preliminary

observations of the Commission, the GESCOM has incurred an interest
of Rs.0.83 Crores on short term loans for FY16. The Commission notes
that the GESCOM has claimed the interest on working capital on
normative basis.
lix
As decided in the Tariff Order dated 2nd March, 2015 while approving
the revised ARR for FY16, the Commission decides to allow working
capital loans at a normative interest rate of 11.75% for FY16.
As per the KERC (Terms and Conditions for Determination of Tariff for
Distribution and Retail sale of electricity) Regulations, 2006 and
amendments thereon, the Commission has computed the allowable
interest on working capital for FY16 as follows:
TABLE – 4.32
Allowable Interest on Working Capital for FY16
Particulars FY16
One-twelfth of the amount of O&M Expenses 34.26
Opening GFA 2610.55
Stores, materials and supplies 1% of Opening balance of GFA 26.11
One-sixth of the Revenue 579.17
Total Working Capital 639.54
Rate of Interest (% p.a.) 11.75
Normative Interest on Working Capital 75.15
Actual interest on WC as per audited accounts for FY16 0.83
Allowable Interest on Working Capital 37.98
The Commission, therefore, decides to allow an amount of Rs.37.98

Crores towards interest on working capital for FY16.
c) Interest on Consumers’ Security Deposits:
The GESCOM in its application as per provisional accounts has

claimed an amount of Rs.36.66 Crores towards payment of
interest on consumers’ security deposits for FY16.
The Commission notes that, based on the average amount of

consumer security deposits, the interest on consumer security deposits
amounting to Rs.36.66 Crores claimed by the GESCOM as per its
audited accounts works out to a weighted average rate of interest of
lx
8.80%. As per the KERC (Interest on Security Deposit) Regulations, 2005,
the interest on consumers’ security deposits is to be allowed as per the
bank rate prevailing on the 1st of April of the relevant year. The bank
rate as on 1st April, 2015 was 8.50%. The weighted average rate of
interest claimed by the GESCOM as per the audited accounts is above
the applicable bank rate. Hence, the allowable interest on consumers’
security deposits is limited to 8.50% of the average amount of deposits
held by the GESCOM for FY16.

towards interest on consumers’ security deposits for FY16.
d) Other Interest and Finance charges:
The GESCOM has claimed an amount of Rs.2.82 Crores towards other

interest and finance charges for FY16, paid to banks / financial
institutions. The Commission decides to allow the same for FY16.
Interest on belated payment of Power Purchase Cost:
The GESCOM in its application has claimed an amount of Rs.126.60

Crores towards Interest on belated payment of Power Purchase Cost
for FY16. As per the audited accounts, an amount of Rs.225.62 Crores is
indicated as interest on power purchase dues. The Commission has
been consistently allowing the interest on working capital as per the
norms under MYT Regulations to meet the day to day expenses of the
ESCOMs. Therefore, there is no justification for claiming interest on
power purchase dues separately. The Commission notes that, inspite of
providing adequate working capital to meet its power purchase
commitments, GESCOM has been incurring substantial amount of
interest on belated payment of power purchase bills in the present and
previous years. The Commission directs GESCOM to initiate action to
settle power purchase bills in time by availing the working capital and
avoid any interest burden thereon. Hence, the Commission decides
not to allow any interest on power purchase dues in the APR for FY16.
lxi
The total allowable interest and finance charges for FY16 are as
follows:
TABLE – 4.33
Allowable Interest and Finance Charges
Sl.
Particulars FY16
No.
1. Interest on Loan capital 89.96
2. Interest on working capital 37.98
3. Interest on consumers’ security deposits 35.43
4. Interest on Power Purchase dues 0.00
5. Other interest and finance charges 2.82
Total interest and finance charges 166.19
4.2.9 Other Debits:
The GESCOM, in its application has claimed an amount of

Rs.28.09 Crores towards other debits for FY16.
As per the audited accounts, the allowable other debits excluding the
provision for bad and doubtful debts for FY16 are as detailed below:
TABLE – 4.34
Allowable Other Debits
Sl No Particulars FY16
Compensation for death, injuries and
1
damages 2.17
3 Assets decommissioning cost (1.21)
4 Miscellaneous losses and write offs 0.20
Total 1.16
Thus, the Commission decides to consider an amount of Rs.1.16 Crores

as other debits for FY16.
4.2.10 Net Prior Period Charges:
lxii
GESCOM in its application has claimed Prior Period credit of Rs.33.69

Crores for FY16.

As per the Audited Accounts for FY16, the prior period expenses (debit)
are shown as Rs.42.75 Crores on account of employee costs, under-
provision of depreciation, A&G expenses, interest and finance charges
and expenses in the previous years. Further the prior period income
(credit) of Rs.9.47 Crores is on account of income relating to prior
period.
The Commission therefore decides to allow a net prior period credit of

4.2.11 Return on Equity:
The GESCOM in its application has not claimed any Return on

Equity for FY16.
The closing balances of gross fixed assets along with break-up of equity
and loan component and the details of GFA, debt and equity (net-
worth) for FY16 as per the actual data as per the audited accounts are
indicated as follows:
TABLE – 4.35
Status of Debt Equity Ratio for FY16
Amount in Rs.
Crores
Equity (Net- Normative %age of

GFA Debt Normative
worth) Debt @ actual %age of actual
(Closing (Closing Equity @
(Closing 70% of debt on equity on GFA
Balance) Balance) 30% of GFA
Balance) GFA GFA
3053.29 764.81 202.67 2137.30 915.99 25.05 6.64
From the above table it is evident that the amounts of debt equity are
within the normative debt equity amounts in of 70:30 ratio on the
closing balances of GFA for FY16.
lxiii
As per the KERC (Terms and Conditions for Determination of Tariff for
Distribution and Retail sale of electricity) Regulations, 2006 and
amendments thereto, the Commission has computed the allowable
Return on Equity at 15.5% on equity plus reserves and surplus as at the
beginning of the year and also factoring the recapitalization of
consumers’ security deposit of Rs.22.00 Crores in compliance with the
Orders of the Hon’ble ATE in appeal No.46/2014. The allowable RoE for
FY16 is determined as follows:
TABLE – 4.36
Allowable Return on Equity
Particulars FY16
Paid Up Share Capital 305.14
Share deposit 372.02
Accumulated losses as on 01.04.2015 (420.84)
Recapitalization of Consumers’ security
deposit (22.00)
Total Equity 234.32
Allowable RoE @ 15.50% 36.32
Further, as reported by the GESCOM an additional equity of Rs.92.05 Crores

has been received during the year from Government of Karnataka.
Considering the actual date of receipt of this additional equity as reported and
as per the documents furnished by the GESCOM, the Commission as per
provisions of the MYT Regulations has determined the allowable return on
additional equity as detailed below:
TABLE-4.37
Return on equity for the additional equity received during FY16
No. of
Amount
Additional Equity received Date of Months RoE allowed
in Rs.
during FY16 Receipt Equity put Rs. Crores
Crores
to use
EN 11 PSR 2015 dated 20.00 9.9.2015 6 1.55
25.08.2015
EN 16 PSR 2015 P1 0.58
dated3.12.2015 15.00 15.12.2015 3
EN 13 PSR 2015 0.85
dated10.12.2015 22.05 29.12.2015 3
EN 11 PSR 2015 dated 0.26
30.12.2015 10.00 8.1.2016 2
lxiv
EN 11 PSR 2015 P1 0.00
dated18.02.2016 10.00 5.3.2016 0
EN 11 PSR 2015 dated 0.00
29.02.2017 15.00 10.03.2016 0
TOTAL 92.05 3.24
Return on Equity allowed on Additional Equity Infusion in FY16 3.24
Thus, the Commission decides to allow Return on Equity of Rs.39.56

Crores for FY16.
4.2.12 Income Tax:
GESCOM, in its application has not factored any Income Tax liability for
FY16. Hence, the Commission has also not considered any income tax
liability in the APR for FY16.
4.2.13 Other Income:
The GESCOM in its application has claimed an amount of Rs.39.31

Crores as Other Income for FY16.
As per the audited accounts, the other income is Rs.39.31 Crores for
FY16. This amount includes income from sale of scrap, income from
rent, rebate for collection of electricity duty, income relating to prior
period, and miscellaneous recoveries. Also an amount of Rs.17.00
Crores pertaining to incentive received for early payment of power
purchase bills is considered as other income. Further, as decided in the
earlier Tariff Orders, to encourage and bring in financial discipline by
ensuring timely payment of monthly power purchase bills, the
Commission continues to allow10% of the total incentive amounting to
Rs.1.70 Crores towards early payment of power purchase bills, to be
retained by GESCOM for FY16.
Thus, the Commission decides to allow an amount of Rs.37.61 Crores as

other income for FY16.
lxv
4.2.14 Fund towards Consumer Relations / Consumer Education:
The Commission has been allowing an amount of Rs.0.50 Crore per year
towards consumer relations / consumer education. The GESCOM in its filing
has not claimed any expenditure for FY16. Hence, the Commission has not
considered any expenditure towards Consumer Relations / Consumer
Education for FY16.
4.2.15 Carrying Cost on Regulatory Asset:
GESCOM in its application has not claimed any amount towards carrying cost
on the Regulatory Assets kept by the Commission in its earlier Tariff Orders.
The Commission in its Tariff Order dated 12.05.2014 had kept an unmet gap
in revenue of Rs.151.73 Crores as Regulatory asset to be recovered in FY16
and FY17 and also decided to allow carrying cost at 12% per annum on the
Regulatory Asset to be assessed at the time of APRs of FY16 and FY17.
Accordingly, the Commission had factored Rs.75.87 Crores being the 50% of
Regulatory Asset in the ARR of FY16 and allowed it to be recovered in the
revised retail supply tariff.
The Commission in allowing the Carrying cost of Rs.9.10 Crores at 12% per
annum on the Regulatory Asset of Rs. 75.87 Crores kept for FY16, and
carried forward the gap in revenue to the ARR of FY18 and recover in the
retail supply tariff for FY18.
4.2.16 Revenue for FY16:
The GESCOM, in its application has considered Rs.4069.70 Crores as

revenue from sale of power from consumers and miscellaneous charges and
Regulatory income. As per the audited accounts for FY16, the revenue from
sale of power is Rs. 4078.16 Crores. However, as discussed earlier, the sale
to IP sets is reckoned as 3167.91 MU instead of 3224.55 MU, a reduction of
56.64 MU. Based on the approved CDT of Rs.4.55 per unit, an amount of
Rs.25.77 Crs is deducted from the earlier approved revenue from sale to IP
Sets. Also, the Commission has not considered the notional regulatory
income of Rs.577.39 Crores factored by the GESCOM in its audited accounts
for FY16 as the same is not actually realized by GESCOM during FY16.
lxvi
Accordingly, the Commission decides to consider Rs.3475.00 Crores as
revenue from sale of power to consumers in the approval of revised ARR as
per APR of GESCOM for FY16.
4.2.17 Subsidy for FY16:

The Commission in its tariff order dated 2nd March, 2016 has approved
tariff subsidy of Rs. 1494.70 Crores towards sale of power to BJ/KJ and IP
sets for FY16 in accordance with the prevailing Government Order. The
Commission in computation of APR for FY16 has approved the revised
tariff subsidy of Rs.1499.20 Crores towards sale of power to BJ/KJ and IP
sets for FY16.
4.3 Abstract of Approved ARR for FY16:
As per the above item-wise decisions of the Commission, the

consolidated Statement of revised ARR for FY16 is as follows:
TABLE – 4.38
Approved revised ARR for FY16 as per APR
Amount in Rs.
Crores
FY16
Sl.
Particulars
No As Appd. As filed
As per APR
02.03.2015 30.11.2016
1 Energy at Gen Bus in MU 8012.14 8260.75 8244.38
2 Transmission Losses in % 3.80% 3.81% 3.93%
3 Energy at Interface in MU 7707.66 7946.02 7936.21
4 Distribution Losses in % 16.50% 18.10% 18.71%
5 Sales in MU
6 Sales to other than IP & BJ/KJ 3172.40 3159.39 3175.00
7 Sales to BJ/KJ 124.13 123.85 108.24
8 Sales to IP 3139.37 3224.55 3167.91
11 Total Sales 6435.90 6507.79 6451.15
Revenue at existing tariff in Rs Crs
Revenue from tariff and Misc.
12 Charges 1941.17 2514.03 1975.80
13 Tariff Subsidy for BJ/KJ 66.29 63.54 57.80
14 Tariff Subsidy for IP 1428.41 1492.13 1441.40
15 Total Existing Revenue 3435.87 4069.70 3475.00
Expenditure in Rs Crs
16 Power Purchase Cost 2393.33 2971.91 2972.44
17 Transmission charges of KPTCL 331.53 331.53 331.53
18 SLDC Charges 3.85 2.65 2.65
lxvii
Power Purchase Cost including
cost of transmission 2728.71 3306.09 3306.62
21 Admin & General Expenses 70.99
Total O&M Expenses 416.86 421.07 411.12
22 Depreciation 105.04 97.62 102.22
23 Interest on Loans 100.20 89.98 89.96
24 Interest on Working capital 72.19 99.83 37.98
Interest on belated payment on
25 PP Cost 0.00 126.60 0.00
26 Interest on consumer deposits 38.45 36.66 35.43
27 Other Interest & Finance charges 0 2.82 2.82
28 Less : interest capitalised 8.00 0.00 0.00
Total Interest & Finance charges 202.84 355.89 166.19
29 Other Debits 0.00 28.09 1.16
18 Net Prior Period Debit/Credit 0.00 33.69 33.28
30 Return on Equity 61.49 0.00 39.56
31 Provision for taxation 0.00 0.00 0.00
Funds towards Consumer
32 Relations/Consumer Education 0.50 0.00 0.00
33 Less : Other Income 50.00 39.31 37.61
ARR 3465.44 4203.14 4022.54
34 Surplus/Deficit -133.44 -547.54
35 Surplus for FY14 carried forward 43.37 0.00 0.00
Carrying Cost on Regulatory asset
of FY13 to be recovered in FY16 &
36 FY17 151.74 0.00 9.10
Net of Disallowance on account
of prudence check of capex and
incentives for loss reduction in
37 FY14 14.99 0.00
Regulatory asset carried forward
38 to FY17 152.94 0.00
Less : Penalty for excess losses
39 beyond target loss levels 65.67
40 Net ARR 3435.87 4203.14 3965.97
4.3.1 Gap in Revenue for FY16:
As against an approved ARR of Rs.3435.87 Crores, the Commission,

after the Annual Performance Review of GESCOM, decides to allow a
revised ARR of Rs.3965.97 Crores for FY16. Considering the revenue of
Rs.3475.00 Crores, the deficit in revenue of Rs.490.97 Crores is
determined for the year FY16.
lxviii
The Commission decides to carry forward the deficit of Rs.490.97 Crores
of FY16 to the proposed ARR for FY18 as discussed in the subsequent
Chapter of this Order.
lxix
CHAPTER – 5
REVISED ANNUAL REVENUE REQUIREMENT FOR FY18

5.0 Revised Annual Revenue Requirement (ARR) for FY18:
GESCOM’s Application:
The GESCOM in its application dated 30th November, 2016, has sought
approval of the Commission for the revised ARR for FY18. The summary
of the proposed revised ARR for FY18 is as follows:
TABLE – 5.1
Revised ARR for FY18-GESCOM’s Submission
Sl.No. Particulars FY18
1 Energy at Gen Bus in MU 9059.54

2 Transmission Losses in % 3.37%
3 Energy at Interface in MU 8754.23
4 Distribution Losses in % 17.00%
Sales in MU
5 Sales to other than IP & BJ/KJ 3668.98
6 Sales to BJ/KJ 145.15
7 Sales to IP sets 3451.88
Total Sales 7266.01
Revenue at existing tariff in Rs Crs
8 Revenue from tariff and Misc. Charges 2450.45
9 Tariff Subsidy from BJ/KJ 83.75
10 Tariff Subsidy from IP sets 1736.30
Total Existing Revenue 4270.50
13 SLDC Charges 3.16
Power Purchase Cost including cost of 3470.34
transmission
Total O&M Expenses 649.30
18 Interest on Capital Loans 152.10
19 Interest on Working capital loans 108.14
20 Interest on belated payment on PP Cost 216.86
21 Interest on consumer security deposits 37.75
23 Less interest & other expenses capitalised 4.49
lxx
25 Net Prior Period Debit/ Credit 20.00
26 Return on Equity 146.29
27 Funds towards Consumer 0.00
Relations/Consumer Education
28 Provision for contribution to P&G Trust (GoK 262.49
Liability)
ARR 5212.39
30 Surplus/ Deficit for FY16 carried forward (133.44)
Net ARR 5345.83
The GESCOM has requested the Commission to approve the revised

Annual Revenue Requirement of Rs.5345.83 Crores for FY18.
Considering the estimated revenue of Rs. 4270.50 Crores based on the
existing retail supply tariff, GESCOM has projected a revenue gap of Rs.
1075.33 Crores for FY18 inclusive of the carried forward gap of revenue
of Rs. 133.44 Crores of FY16. In order to bridge this gap in revenue,
GESCOM, in its application has proposed anincrease in retail supply
tariff by 148 paise per unit in respect of all the categories of consumers
including BJ/KJ and IP set consumers for FY18.
5.1 Annual Performance Review for FY16:
As discussed in the preceding chapter of this Order, the Commission

has carried out the Annual Performance Review for FY16 based on the
audited accounts furnished by GESCOM. Accordingly, a deficit of
Rs.490.97 Crores of FY16 is carried forward in to the ARR of FY18.
5.2 Revised Annual Revenue Requirement for FY18:

The item-wise expenditure proposed by the GESCOM and approved
by the Commission for FY18 is discussed in this Chapter as follows:
5.2.1 Capital Investments for FY18:
The GESCOM has indicated a capex of Rs.698 Crores for FY18 as
against the approved capex of Rs.834 Crores for FY18 as per the MYT
Order. The category -wise details of the capex submitted by GESCOM
for FY18 is as shown below:
Table -5.2
lxxi
Details of capex proposal of GESCOM for FY18 are as below
lxxii
Approved
Capex as Revised
Sl. NO. Categories of works
per MYT Capes
for FY18 for of
FY18
33kV Sub-station, 33kV line works &
1 10 10
Augmentation of 33kV S/S's
C
o 2 RGGVY works REC 40 40
m RAPDRP works
Part-A 3 3
m
3 Part-B 20 20
i
s IPDS 100 100
s
Reconductoring works:
i
a) 33kV lines 2 2
o 4
n b) 11kV lines 4 4
’ c) L.T Lines 4
s
5 DTC metering works (RAPDRP area) 20 2
6 Water supply works 3 3

a
n Additional DTC's works:
a 7 a) New DTC's 4 4
l
b) Enhancement of DTC's 2 2
y
Replacement failed 11 KV
s 8 10 10
transformers
i
9 Replacement of Power transformers 1 1
s
10 Replacement of MNR meters 3 3
a 11 Providing ETV meters 0.5 0.5
n Providing HT metering Cubicles for

12 0.5 0.5
ring fencing
d
Service Connection works
13 a) General works 10 10
d
b) IP set works 1 1
e
c SI works (33KV link line /Express
1 1
feeders)
i 14
SI works (11KV Link line /Express
10 10
feeders,)
s
a) Nirantara Jyoti works 80 80
i
15
b) Deen Dayal Upadhay Gram Jyothi
o 138 138
Yojane
a) Major Replacements in S/S's & lines 0.5 0.5
16
b) Replacement oflxxiii
Age old
4 4
Equipment in existing S/S & lines
17 Civil Engineering works 6 6
n:
The GESCOM, in its MYT application had proposed a capex of Rs.834
Crores. It was stated that though the GESCOM had planned a capex
of Rs.1618 Crores for FY18, it was likely to achieve Rs.834. Taking into
consideration the past capex performance of GESCOM and its own
statement on capex achievements envisaged for FY18 at Rs.834
Crores, the Commission, at the time of passing the MYT order, had
recognized the capex of Rs.834 Crores for FY18. Now, the GESCOM
has proposed a capex of Rs.698 Crores (actual total of the categories
though indicated in the table by GESCOM in its application for capex
of FY18 as Rs.694 Crores works out to Rs.698 Crores) which is less than
Rs.834 Crores, already approved in the MYT order. The Commission had
sought to know the reason for reducing the capex further down from
the approved figures. The GESCOM in its replies to the preliminary
observations has stated that, it has reduced the capex in respect of
DTC metering works and providing ABC, UG cables and RMUs works for
FY18, due to which the overall capex is reduced to Rs.698 Crores.
In respect of the scheme for providing ABC, UG Cables & RMUs, the
GESCOM has proposed a capex of Rs.100 Crores. But, the GESCOM
has not furnished the present status such as planning of the works,
preparation of DPRs, tendering process etc., to implement the scheme
during FY18. The GESCOM should note that, while proposing any
capital expenditure it should subject such proposal to rigorous
planning to ensure that the likely benefits the project is going to accrue
are evaluated properly before taking up any scheme and ensure its
execution in a time bound and phased manner.
In respect of Prevention of electrical accident & safety, the GESCOM
has proposed a capex of Rs.3 Crores only for FY18, whereas the it has
incurred a huge expenditure of Rs.60.96 is FY16, indicating that the
approved limits are not kept in mind while incurring the actual
expenditure. The GESCOM should judiciously spread its capex year on
year, on the schemes it proposes to take up and wherever the
amounts to be incurred exceed the approved amounts, it should
obtain prior approval of the Commission.
lxxiv
Though the GESCOM has proposed a revised capex for FY18, it has not
indicated as to whether it has followed the “Capital Expenditure
Guidelines for ESCOMs” issued by the Commission. If so, the GESCOM
needs to project its capex commensurate with:
a) The network strengthening and expansion requirement,
b) Improvement of power supply reliability.
c) The target date for each of the project.
d) Loss reduction trajectory.
Further, the GESCOM should mandatorily follow the “Capital

Expenditure Guidelines for ESCOMs” in which the capital investment
planning process, prioritization and post-commissioning analysis to be
adopted by the ESCOMs are elaborated. Further, the Commission has
been directing the ESCOMs to conduct energy audit by listing out high
loss making 11kV feeders and take up strengthening works to reduce
losses. Prioritizing of such projects to be taken up for execution are to
be based on payback period and benefit to cost ratio the GESCOM
should also move in this direction and list the high loss making feeders
based on the input energy to each of the feeders and sale of energy
in that feeder. The GESCOM should mandatorily adhere to the
guidelines and plan its capex carefully to reap the benefits.
With the above observations, the Commission decides to consider the
proposed capex of Rs.698 Crores for FY18, subject to prudence check
and directs that, the GESCOM should meet any additional capex
required during FY18, only through re-appropriation of approved
amounts within the overall capex and should not to seek the approval
of the Commission in the middle of the year for additional/higher
capex.
5.2.2 Sales Forecast for FY18:
I. Sales other than IP sets/BJ KJ:
GESCOM, in its filing has stated that the energy sales for the FY18 has
been estimated on the basis of actual consumption available for
FY15 to FY16 for metered categories and for LT4(a) on the basis of
lxxv
sample studies and for BJ/KJ installations based on 17 units per
installation per month.
1. The observations of the Commission on sales forecast for FY18
and the replies of GESCOM are discussed below:
i. The Commission had observed that, the GESCOM had

considered only one-year data for estimating the sales, which
does not capture the trend in the category-wise sales. The
Commission further observed that, while forecasting for the
future period, a minimum period of three to five years past
data need to be considered. The GESCOM had also not
indicated the category-wise working details of estimates made
for the number of installations and the sales along with their
growth rates. Therefore, GESCOM was directed to furnish the
same. Further, the Commission had also furnished data
pertaining to the CAGR for the period 2010-11 to 2015-16 and
2012-13 to 2015-16 towards number of installations and sales, for
reference of the GESCOM.
The GESCOM in its replies has furnished the category-wise

growth rates considered for estimating the number of
installations and sales. Further in its replies to the Rejoinder, the
GESCOM has stated that the growth rates considered by them
are more or less similar to the CAGR furnished by the
Commission.
The Commission notes that the GESCOM has not furnished a

satisfactory reply in the matter, as GESCOM did not furnish
justifiable reasons for considering only one-year growth rate.
ii. The Commission had observed that growth rate considered for
the number of installations for LT-6, HT-1, HT-3 and HT-4
categories is higher as compared to the normal growth rates
and that the GESCOM may reconsider revising its estimates for
these categories. The GESCOM has stated that growth rates
considered by it are more or less similar to CAGR furnished by
lxxvi
the Commission. The Commission notes that GESCOM has not
furnished justifiable reasons.
iii. The Commission had observed that while the sales growth rate
considered for LT-5, HT-2a, HT-3 and HT-4 categories is higher, it
is lower for LT2a, LT2b and LT-3 categories compared to the
normal growth rates indicated above. That GESCOM may
reconsider revising its estimates for these categories.
The GESCOM has stated that growth rates considered by it are

more or less similar to CAGR furnished by the Commission. The
Commission notes that the GESCOM has not furnished
justifiable reasons.
iv. To validate the sales, the Commission had requested the

GESCOM to furnish category-wise information in the prescribed
format both for number of installations and energy sales. The
GESCOM has furnished the required details.
2. Commission’s approach for estimating the number of

installations and sales for FY18:
The methodology adopted by the Commission to estimate the

number of installations and sales to categories other than BJ/KJ
and IP sets is discussed below:
i) No. of Installations:
While estimating the number of installations (Excluding BJ/KJ

and IP), the following approach is adopted:
a. The base year number of installations for FY17 is modified

duly validating the revised estimate furnished by the
GESCOM in the current filing and the data available as on
30.11.2016. The Commission has validated both the number
of installations and sales to various categories considering
the actuals as on 30.11.2016 and has estimated the number
of installations and sales for the remaining period
lxxvii
reasonably, keeping in view the number of installations and
also sales as on 31.03.2016. Accordingly, the base year
estimation has been revised which has an impact on the
estimates on the number of installations and sales for the
year FY18.
b. Wherever the number of installations estimated by the

GESCOM for the FY18 is within the range of the estimates
based on the CAGR for the period FY11 – FY16 and for the
period FY13 - FY16, the estimates of the GESCOM are
retained.
c. Wherever the number of installations estimated by the

GESCOM for the FY18 is lower than the estimates based on
the CAGRs for the period FY11 – FY16 and for the period
FY13 - FY16, the estimates based on the lower of the CAGRs
are considered.
d. Wherever the number of installations estimated by the

GESCOM for FY18 is higher than the estimates based on the
CAGRs for the period FY11 – FY16 and for the period FY13 -
FY16, the estimates based on the higher of the CAGRs are
considered.
e. For LT 4(b), 4(c), LT-6 WS, LT-7, HT-2(c), and HT-5 categories,
the estimates of GESCOM are retained, as the growth rate
for these categories is not consistent.
Based on the above approach, the total number of installations

(excluding BJ/KJ and IP) estimated by the Commission for FY 18
is 2011919 as against 2015492 proposed by GESCOM.
ii) Energy Sales:
For categories other than BJ/KJ and IP sets, generally the sales
are estimated considering the following approach:
lxxviii
a. The base year sales for FY17 as estimated by GESCOM are
validated duly considering the actual sales upto
November, 2016 and modified suitably as stated earlier.
b. Wherever the sales estimated by GESCOM for the FY18 is
within the range of the estimates based on the CAGR for
the period FY11 – FY16 and for the period FY13 - FY16, the
estimates of GESCOM are retained.
c. Wherever the sales estimated by GESCOM for the FY18 is
lower than the estimates based on the CAGRs for the
period FY11 – FY16 and for the period FY13- FY16, the
estimates based on the lower of the CAGRs are
considered.
d. Wherever sales estimated by GESCOM for the FY18 is
higher than the estimates based on the CAGRs for the
period FY11 – FY16 and for the period FY13 - FY16, the
estimates based on the higher of the CAGRs are
considered.
e. For LT4(b), LT 4(c), LT-7, HT-2(c) and HT-5 categories, the
estimates of GESCOM are retained, as the growth rate for
these categories is not consistent.
f. For HT2(a) category, the sales estimate based on the
methodology specified at paras b, c and d above is not
reasonable and therefore, the sales estimate based on the
analysis of open access impact is considered for FY18.
Based on the above approach, the sales (excluding BJ/KJ

and IP) estimated by the Commission for FY 18 is 3608.26
MU, as against 3668.99 MU proposed by GESCOM.
3. Sales to BJ/KJ and IP sets:
The electricity consumption to this category upto 18 units per

installation per month hitherto was being subsidized by the
Government of Karnataka and any installation under this
category consuming more than 18 units per month was billed
under relevant LT 2(a) category. However, the Government of
lxxix
Karnataka in its Budget for 2017-18 has announced that it would
extend the subsidy to BJ/KJ installations consuming upto 40 units
per installation per month. Therefore, the Commission has
reckoned the above and has worked out the subsidy
accordingly.
Considering the specific consumption and the number of

installations, for FY16, for installations consuming upto 18 units
and above 18 units as per the actual data furnished by
GESCOM, the total sales estimated for this category for FY18
works out to 128.44 MU. Considering the total number of BJ/KJ
installations of 618687 for FY18 as proposed by GESCOM, the
specific consumption works out to 17.30 units per installation per
month which is less than 40 units per installation per month
announced by the Government for the purpose of subsidy.
Thus, the entire consumption of 128.44 MU is considered for the
purpose of estimating the subsidy for this category. However,
the GESCOM while claiming the subsidy shall consider only such
installations which consume upto 40 units per installation per
month and any installation under this category consuming more
than 40 units shall be billed under the relevant LT 2(a) category.
II. IP set sales projections:
The Commission, in its Tariff Order dated 30th March, 2016, had
approved a specific consumption of IP-sets as 9,503
units/installation/annum for the control period FY17 to FY19. The
IP-set sales reported as per the format D2 of its Tariff filing by the
GESCOM was 3,224.55 MU, as against the approved sales
quantity of 3,139.37 MU, for FY16. However, the GESCOM in its
subsequent communication dated 30th January, 2017, to the
Commission, has submitted the revised sales of IP-sets, based on
the meter readings of segregated agricultural feeders as
3,167.91 MU for FY16 instead of 3,224.55 MU as claimed in the
format D2 of its Tariff filing. However, on verification of the
month-wise IP-set consumption based on the segregated
lxxx
agricultural feeders’ meter readings reported by the GESCOM, it
is found that the overall IP-set consumption is 3,167.01 MU and
not 3,167.91 MU as reported subsequently. The Commission
observes that this indicates a decrease in sales to an extent of
57.54 MU between the IP-set consumption reported in its Tariff
filing and its subsequent reporting to the Commission. Also, it is
noted that the GESCOM has already segregated significant
number of feeders under NJY as exclusive agricultural feeders
and rural feeders, which means that regulated power supply to
IP-sets should have contributed to substantial reduction in the
agricultural consumption during the FY16. However, in reality
there is not much reduction in the IP-set consumption mentioned
above.
Further, it is noted that during FY15, the GESCOM’s specific

consumption of IP sets was 9,503 units/installation/annum and
the specific consumption worked out on the basis of the revised
consumption of 3,167.01 MU for FY16 as reported by the
GESCOM is 9,951 units/installation/annum. However, the specific
consumption of 9,951 units / installation /annum based on the
revised consumption of 3,167.01 MU for FY16, is rather high
perhaps due to presence of number of dried-up/defunct/not-in-
use installations, that are yet to be identified in the field and
deleted from its account by the GESCOM. Therefore, till the GPS
survey is completed to identify such installations, it is proper to
consider the specific consumption of 9,743
units/installation/annum for projections of FY18 as proposed by
the GESCOM. In view of this, the Commission decides to
approve the specific consumption of 9,743 units / installation /
annum for the ARR of FY18.
Further, it is noted that the GESCOM has estimated the number
of IP-set installations as 3,62,821 for the FY18 in the current Tariff
filing. In view of this, the Commission has considered the number
of IP-sets as reported by the GESCOM for the ARR of FY18
without any modifications. Hence, based on the estimated
lxxxi
number of installations for the FY17 and the FY18 as reported by
the GESCOM, the mid-year number of installations is determined
and the sales to IP-set consumers are indicated as below:
TABLE-5.3
Approved Energy of IP sets Installations
As filed by the As approved by

Particulars GESCOM the Commission
FY17 FY18 FY18
No of installations 3,45,792 3,62,821 3,62,821
Mid-Year no. of
3,54,307 3,54,307
installations
Specific consumption in
9,743 9,743
units/installation/annum
Sales in MU 3,451.88 3,451.88
Accordingly, the Commission approves 3,451.88 MU as energy
sales to IP-sets as proposed by the GESCOM for the FY18. The
number of installations approved for FY18 is 3,62,821. This
approved IP-set consumption for FY18 is with the assumption that
the Government of Karnataka would release subsidy to fully
cover the approved quantum of IP-sales. However, if there is any
reduction in the subsidy allocation by the GoK, the quantum of
sales to IP-sets of 10 HP and below shall be proportionately
regulated.
During the course of Public hearing held by the Commission, the
representatives of certain Farmers’ Association have suggested
that the Government may consider paying the subsidy directly
to the farmers against their IP Set consumption. They have also
expressed that meters could be installed to their IP Sets, by the
ESCOMs to whom energy charges would be paid by the
farmers.
The Commission is of the view that implementing the suggestion

of direct remittance of subsidy to the farmers would encourage
metering of the IP Sets enabling proper accounting of energy
and also facilitate accurate computation of losses in the
distribution system. The Commission notes that the Government
of Karnataka would have to formulate suitable policy in the
matter.
lxxxii
Further, as discussed above, the GESCOM was directed to take
up GPS survey of IP-sets in order to identify the defunct/dried
up/not-in-use installations in the field and to take further
necessary action to arrive at correct number of IP-sets by
deducting such IP-sets from its account, on the basis of GPS
survey report. The GESCOM has reported that it has completed
GPS survey of one feeder covering 405 IP-sets in its Bidar division
and has identified seven as not-in-use installations and two as
unauthorized installations. It has sought time upto May 2017 to
complete the survey of remaining IP-set installations, to enable it
to arrive at correct number of dried up/defunct/not-in-use wells,
and to take further action to deduct such IP-set installations
from its accounts.
The GESCOM is directed to complete the GPS survey of IP-sets

within the targeted time as agreed by it and compliance
thereon shall be submitted to the Commission. In view of the
pendency of GPS survey of IP-sets, the number of installations
estimated for FY17 as well as for FY18 are subject to change
based on the GPS survey. Hence, on completion of the GPS
survey, the GESCOM shall arrive at correct number of IP-sets in
the field duly deducting from its account the number of dried
up/defunct/not-in-use wells based on the GPS survey results.
Therefore, Accordingly, any variation in sales due to change in
number of installations would be trued up during the Annual
Performance Review, for the FY18.
Further, it is noted that the GESCOM has already segregated 223

agriculture feeders from rural loads under NJY Phase1 & 2 and
implementation of balance feeders’ works is in progress.
Therefore, energy consumed by the IP-sets could be more
accurately measured at the 11 KV feeder level at the sub-
stations after allowing for distribution system losses in 11 KV lines,
distribution transformers and LT lines.
Hence, the Commission reiterates that the GESCOM shall report
the total IP-set consumption on the basis of specific
lxxxiii
consumption arrived at from the data of energy meters in
respect of agriculture feeders segregated under NJY only, to the
Commission, every month regularly, as per the following format:
TABLE-5.4
Format for furnishing IP set Consumption
(11kV line, DTCs &LT line) & any

feeders only to be considered)
up) connected
other consumers if any, in MU (
consumption of
Total sales of IP
the subdivision
deducting the Distribution loss
IP sets/ month
(specific cons
feeders in the
(total dried
substations pertaining to the
dried up) in
Total no of IP
(as per DCB)

No. of IP sets
agricultural feeders at the
losses in all the agricultural

DTCs,& LT line) Plus sales to
agricultural
sets(total-
subdivision
/IP/month)
Distribution loss(11kV line,
Feeders in the subdivision
MU as recorded in all the
sets in MU
Monthly Consumption in
Segregated Agricultural
Average
Net consumption duly
in units
to the
other loads if any
-
Sub-division
sub-division
Name of
Month
No. of
Begi
Beginni nnin Servic
Service
ng of Mid- g of ed Mid-
d during
the Month the during Month
Month
Month Mon Month
th
7c 9c 10=
9
1 2 3 4 5 6=(4-5) 7a 7b = 8=6/7c 9b = 8*9
(7a+7 a (9a+9
b)/2 b)/2 c
April to Subdivisi
March on-1
Subdivisi
on-2
Subdivisi
on….
Note:
(1) If the agricultural feeders are not yet segregated under NJY in any sub-division, then the
specific consumption of the division / circle / zone / company (where NJY is taken up)
shall be considered to compute the IP consumption of such sub-division.
(2) No. of dried up IP-set installations shall be deducted from the accounts, while arriving at
the month-wise and subdivision-wise specific consumption and total sales.
Based on the above discussions, the category- wise approved number

of installations and sales for the year FY 18 vis-à-vis the estimates made
by GESCOM are indicated as follows:
TABLE-5.5
GESCOM’s Approved Energy for FY18
Approved by the
GESCOM’s estimate
Commission
Category Installations Sales Installations Sales
No. MU No. MU
LT-2a 1622293 1191.35 1618948 1205.26
LT-2b 4510 11.15 4512 11.54
LT-3 255312 321.25 255348 321.72
LT-4 (b) 3304 3.61 3304 3.61

LT-4 (c) 548 1.51 548 1.51
LT-5 62099 170.38 62376 168.67
LT-6-WS 17181 221.47 17181 227.63
LT-6-PL 14476 245.39 13938 245.39
LT-7 33155 21.12 33155 21.12
lxxxiv
HT-1 160 93.37 148 93.86
HT-2 (a) 1502 1183.31 1502 1106.17
HT-2 (b) 392 83.21 392 83.31
HT2C 138 16.06 138 16.06
HT-3(a)& (b) 356 87.11 366 83.82
HT-4 34 13.27 32 13.16
HT-5 32 5.43 32 5.43
Sub-total other than BJ/KJ
2015492 3668.98 2011919 3608.26
and IP sets
BJ/KJ 618687 145.15 618687 128.44
IP Sets 362821 3451.88 362821 3451.88
Sub-total BJ/KJ and IP sets 981508 3597.03 981508 3580.32
Total 2997000 7266.02 2993427 7188.58
Thus, the Commission approves 7188.58 MU as sales for FY18.
lxxxv
5.2.3 Distribution Losses for FY18:
As per the audited accounts for FY16, the GESCOM has reported
distribution losses of 18.10% as against an approved loss level of 16.50%.
However, as discussed in the previous chapter of this Order, based on
the revised consumption of IP Sets, furnished by the GESCOM in its
replies to the preliminary observations of the Commission on the filing,
the distribution losses for FY16 is 18.71%. The Commission in its Tariff
Order dated 30th March, 2016 had fixed the target level of distribution
losses for FY18 at 16.00%. GESCOM in its application has proposed to
achieve the loss levels of 17.00% for FY18.
Commission’s Analysis and Decisions:
The performance of GESCOM in achieving the loss targets set by the

Commission in the past six years is as follows:
TABLE – 5.6
Approved & Actual Distribution Losses-FY11 to FY16
Figures in % Losses
Particulars FY11 FY12 FY13 FY14 FY15 FY16
Approved 23.00 21.00 19.50 20.00 18.50 16.50

Distribution losses
Actual 22.03 21.71 18.97 17.77 18.93 18.10

distribution losses
*Actual losses for FY16 are reported as 18.10%. As per APR the losses for FY16 is 18.71% after validation of sales.
The Commission has allowed the capex as proposed by GESCOM and

substantial capital expenditure is consistently being incurred by the
GESCOM. Investments in improvements of the existing distribution
system should enable the GESCOM to reduce the distribution losses
besides increasing the reliability and quality of power supply to end
consumers.
lxxxvi
The Commission, in its preliminary observations had stressed on the
need of further reduction in the distribution loss levels proposed by the
GESCOM, for FY18, duly considering the past and the present capex.
However, the GESCOM has not proposed any changes to its proposed
loss levels.
Based on the achievement made by the GESCOM in reduction of

losses in the previous years besides considering the capex incurred so
far along with the proposed capex for FY18, the Commission decides
to retain the distribution loss targets levels as approved in the Tariff
Order dated 30th March, 2016 for FY18.
TABLE – 5.7
Approved Distribution Losses for FY18
Figures in % Losses
Particulars FY18
Upper limit 16.50
Average 16.00
Lower limit 15.50
5.2.4 Power Purchase for FY18
The GESCOM has submitted the power purchase requirement along
with its cost including the transmission charges and SLDC charges, in D-
1 Format. The GESCOM has sought approval of the Commission for
purchase of power to an extent of 9059.54 MU at Cost of Rs 3470.34
Crores for the FY18, which includes transmission charges and SLDC
charges
The cost of power purchase has been considered by the GESCOM as
per the norms defined in the contracts (PPAs)/Regulations and based
on the Tariff indicated by the KPCL, for its Stations. In respect of Central
Generating Stations, DVC Stations and UPCL Stations, the cost is
considered as per the tariff determined by the CERC.
lxxxvii
Table-5.8
Power Purchase Cost as filed by GESCOM for FY18
Power Purchase Cost as filed by GESCOM
Source of Power Cost Per
Energy in MU Cost in Rs. Crs Unit in
Rupees
KPCL Hydel Energy 2487.87 174 0.69
KPCL Thermal 1669.90 732.37 4.38

Energy
CGS Energy 2779.87 988.26 4.20
IPP 1021.12 432.98 4.24

NCE 913.98 479.62 5.24
Other State Hydel 4.22 7.34 17.38
Short Term/Medium 182.58 82.16

term
KPTCL Transmission 391.74
charges
PGCIL Charges 181.39
POSOCO Charges 0.48
Total 9059.54 3470.34 3.83
Commission’s Analysis and Decisions:

The energy requirement of the ESCOMs, including GESCOM is being
met by The Karnataka Power Corporation Limited (KPCL) Generating
Stations, Central Generating Stations(CGS), Major Independent Power
Producers(IPPs) and Minor Independent Power Producers (RE sources)
through long term Power Purchase Agreements.
The Commission has considered the availability of energy as furnished
by KPCL for its generation and by SRPC/CEA in respect of Central
Generating Stations (CGS). The availability of CGS stations is based on
the share of Karnataka, as notified by MoP from time to time. However,
the availability of energy from CGS thermal Generating units has been
considered duly limiting the quantum of energy as per the requirement
of ESCOMs, to meet the sales target on the basis of merit Order
dispatch.
The energy availability for FY18 from the upcoming thermal projects of
750MW unit#3 of BTPS, 2X800 MW units of YTPS and 1X800MW of
Kudagiplant of NTPC, has not been considered by the GESCOM, since
these units are under trial Operation and are yet to stabilize.
lxxxviii
The Commission has decided to consider the energy availability from
these units in line with the LGBR furnished by the NTPC for the 1X800
MW unit of Kudagi Power Plant for the FY18. However, the energy has
been considered from these units by limiting the quantum of energy as
per the requirement of ESCOMs, to meet the sales target on the basis
of merit order despatch. It is expected that any surplus energy
available from tied up sources of energy would be traded by the
ESCOMs through PCKL on commercial principles. Similarly, any
requirement over and above the quantum approved in this Tariff Order
shall be procured from the tied up sources only.
While approving the cost of power purchase, the Commission has
determined the quantum of power from various sources in
accordance with the principles of merit order schedule and despatch
based on the ranking of all approved sources of supply, according to
the merit order of the variable cost.
After a detailed Analysis of the rates claimed by the GESCOM, the
Commission has arrived at the power purchase cost to be allowed in
the ARR for the FY18.
The fixed charges and the variable charges for the Central Generating
Stations, UPCL Stations and the DVC Stations are reckoned based on
the Tariff determined by the CERC and the CERC norms. The
transmission charges payable to PGCIL are arrived at with 5% annual
escalation on the base figure of FY16.
The fixed charges and the variable charges for the State owned
Thermal and Hydel Power Stations are based on the tariff approved by
the Commission and the norms in the PPAs wherever the tariff is
regulated as per the PPAs. In respect of upcoming new stations only
variable charge has been considered.
The variable costs of State thermal stations and UPCL are considered
based on the recent power purchase bills passed by the BESCOM duly
keeping in view the substantial increase in the fuel costs. This is subject
to adjustment in the FAC exercise/Annual Performance Review of FY18.
lxxxix
The ESCOM-wise share of the quantum of power from different sources
of generation is as per the allocation given by the Government of
Karnataka.
The Source-wise approved power purchase quantum for the State (all
ESCOMs) and its cost is as under:
TABLE-5.9
Approved Power Purchase Quantum & Cost- For the State
Power Purchase
Source of Power Energy Amount in Cost/Unit
(MU) Rs. Crores in Rs.
KPCL Thermal Energy 16071.68 6963.89 4.33
CGS Energy
20542.91 7283.67 3.55
IPP 6712.00 3288.88 4.90
KPCL Hydel Energy 11668.46 926.33 0.79
OTHER HYDRO 119.37 49.54 4.15
NCE 7165.41 2980.86 4.16
NTPC Bundled power 582.21 258.46 4.44
Power purchase from Co gen 1300.00 451.10 3.47
Short term Power Purchase 1120.00 467.04 4.17
Short term Purchase from MSEDCL 294.00 106.43 3.62
TRANSMISSION CHARGES
PGCIL CHARGES 1066.00
KPTCL CHARGES 2753.70
SLDC 24.77
POSOCO CHARGES 3.48
TOTAL INCLUDING TRANSMISSION
& SLDC CHARGES 65576.04 26624.15 4.06
The Source-wise approved Power Purchase quantum and cost of
GESCOM is as follows:
xc
TABLE-5.10
Approved Power Purchase Cost of GESCOM for FY18
Power Purchase Cost as
Power Purchase Cost as filed
approved by the
by GESCOM
Commission
Source of Power Per Per
Energy in Cost in Unit Energy in Cost in Unit
MU Rs Cr Cost in MU Rs Cr Cost
RS in RS
KPCL Hydel Energy 2487.87 174 0.69 2852.9 175.86 0.62
KPCL Thermal Energy 1669.90 732.37 4.38 1522.1 658.43 4.33
CGS Energy 2779.87 988.26 4.20 2774.94 983.88 3.55
UPCL 1021.12 432.98 4.24 606.05 296.96 4.9
Renewable Energy 913.98 479.62 5.24 726.07 354.64 4.88
Other State Hydel 4.22 7.34 17.38 16.12 6.69 4.15
Short Term/Medium 182.58 82.16 358.11 134.67
term
PGCIL Charges 391.74 153.42
KPTCL Charges 181.39 352.75
SLDC & POSOCO 0.48 3.45
Charges
Total 9059.54 3470.34 3.83 8856.29 3120.75 3.524
The details of station wise / Source wise power purchased quantum & cost for
the State and GESCOM are shown in Annexure-I & Annexure-II respectively.
5.2.5 GESCOM RPO target for FY18:
1. The Commission had directed GESCOM to submit the estimates for

complying with solar and non-solar RPO for 2017-18, including cost
implication for purchasing RECs, if any.
In its replies to the Rejoinders, the GESCOM has stated that it has
estimated purchase of 354.19 MU from non-solar projects and that
it would achieve 3.91% of non-solar RPO against the target of 6%
for FY18. Further, it is stated that the short fall in non-solar RPO
would be met with excess of solar energy. Regarding solar RPO, the
GESCOM has estimated purchase of 516.93 MU from solar projects
and stated that it would achieve 5.71% solar RPO against the
target of 1.25% for FY18.
2. Further, the Commission had directed the GESCOM to furnish

certain details, with respect to the renewable energy purchase
xci
estimates for the FY18. GESCOM in its replies has furnished the
following details:
TABLE-5.11
Anticipated RE Capacity in FY17 & FY18
Anticipated
Anticipated MW
Capacity MW
capacity addition
under PPA in capacity
Source under PPA during
MW as on addition
the remaining
30.11.2016 under PPA
period of FY17
during FY18
Wind 95.15 60 0
Mini-hydel 75.04 0 0
Co-generation 57 0 0
Biomass 27.50 0 0
Waste to Energy 0 0 0
Solar 29 109 183
3. The Commission had directed GESCOM to furnish certain additional

data on solar power projects. GESCOM has not furnished the
details.
Commission’s observations on GESCOM ’s RPO Submissions:

As regards Non-Solar RPO, the Commission notes that:
a. As per D-1 Format, the non-solar renewable energy is estimated as
356.19 MU.
b. The GESCOM has considered addition of wind projects to the extent

of 60MW by 2017-18, which should generate around 142 MU at 27%
CUF, whereas the GESCOM has considered only 38.26 MU in its D-1
format.
c. With the estimated total energy purchase of 9059.54 MU for FY18

and considering excess solar energy of 416.99 MU, the GESCOM as
per its filing would meet 8.53% of Non-solar RPO against target of 6%
for FY18.
As far as solar RPO is concerned, the Commission notes that:
xcii
a. As per D-1 format, the solar renewable energy is estimated
as 530.24 MU including 16.28 MU solar power out of NTPC
bundled power of 33.10 MU.
b. With its estimated total energy power of 9059.54 MU, the
GESCOM would meet 5.85% of solar RPO against target of
1.25% for FY18.
Commission’s Analysis:
The Commission has approved power purchase quantum of 8856.29
MU for FY18. The Non-solar RPO target at 6% would be 531.38 MU. The
Commission has approved purchase of 507.77 MU from non-solar RE
sources. Thus, the GESCOM would be able to procure 507.77 MU as
against an estimated RPO of 531.38 MU, resulting in shortfall of 23.61
MU, which could be met by the anticipated surplus of solar energy of
268.57 MU, as discussed in this Chapter. Therefore, the need for
purchasing RECs may not arise. Thus, in case there is a shortfall based
on the actuals, the GESCOM may purchase RECs at the market rates,
which would be considered by the Commission in the APR of FY18.
The Commission has approved power purchase quantum of 8856.29

MU for FY18. The Solar RPO target at 1.25 % would be 110.70 MU. The
Commission has approved purchase of 379.27 MU of Solar energy.
Thus, GESCOM would exceed the solar RPO by 268.57 MU, which shall
be utilized to meet the shortfall in non-solar RPO. In case, there is any
need to buy Solar RECs to fully meet the solar RPO, the cost thereon
would be factored in the APR of FY18.
5.2.6 O & M Expenses for FY18:
GESCOM’s Proposal:
The GESCOM, in its application, has claimed the O&M expenses of

Rs.649.30 Crores for FY18 which includes contribution to the P&G Trust,
additional employee cost of Rs.32.76 Crores on account of recruitment
of employees and increase in employee cost due to pay scale
revision. GESCOM has projected the O&M expenses based on the
actual expenses incurred in the past three years, by increasing with
xciii
2.5% in basic pay, 15% increase on account of pay revision, 2.4%
increase in terminal benefit and other allowances by 15% for FY18.
Based on the above, the GESCOM has sought the O & M expenses for
FY18 as detailed below:
TABLE – 5.12
Revised O&M Expenses for FY18- GESCOM’s Proposal
Amount in Rs.Crores
Sl.
Particulars FY18
No.
1 Employee cost 499.47
2 Administrative and General expenses 102.35
3 Repairs and Maintenance expenses 47.48
Total O & M Expenses 649.30
Commission’s analysis &decision:
The Commission in its MYT Order dated 30th March, 2016, while
deciding the ARR for each year of the control period FY17-19, had
approved O&M expenses of Rs. 484.22 Crores for FY18 based on the
base year O&M expenses which was determined on the basis of
actual O&M expenses inclusive of contribution to P&G trust as per the
audited accounts of FY15. , three years compounded annual growth
rate (CAGR) of consumers of 4.69% and weighted inflation index of
7.24%. The approved O&M expenses for FY18 were as follows:
TABLE-5.13
Approved O&M Expenses for FY18 as per Tariff Order dated 30th March,
2016
Particulars FY16 FY17 FY18

No. of Installations 2858887 2976522
CGI based on 3 Year CAGR 4.61% 4.69%
7.24% 7.24%
Weighted Inflation index
Base Year O&M expenses (as per
actuals of FY15 )-Rs.Crs 400.99
Total O&M Expenses-Rs.Crs 440.47 484.22
xciv
As per the norms specified under the MYT Regulations, the O & M
expenses are controllable expenses and the distribution licensee is
required to incur these expenses within the approved limits.
The Commission notes that, the GESCOM has claimed additional O&M
expenses of Rs.32.76 Crores for the proposed recruitment of employees
during FY18.
The Commission is of the view that additional employee cost due to

recruitment and the revision of pay scale for FY18 could be factored
only after being incurred by the distribution licensee.
In view of the above discussion, the Commission has computed the O

& M expenses for FY18 duly considering the actual O & M expenses of
FY16 as per the audited accounts (being the latest data available as
per the audited accounts) to arrive at the O & M expenses for the
base year i.e. FY16. The actual O& M expense for FY16 is Rs.422.65
Crores inclusive of contribution to P&G Trust. Considering the
Wholesale Price Index (WPI) as per the data available from the Ministry
of Commerce & Industry, Government of India and Consumer Price
Index (CPI) as per the data available from the Labour Bureau,
Government of India and adopting the methodology followed by the
CERC with CPI and WPI in a ratio of 80 : 20, the allowable annual
escalation rate for FY18 is 7.71%.
For the purpose of determining the normative O & M expenses for FY18,
the Commission has considered the following:
e) The actual O & M expenses incurred as per the audited accounts

inclusive of contribution to the Pension and Gratuity Trust to
determine the O & M expenses for the base year FY16.
f) The three year compounded annual growth rate (CAGR) of 4.89%

of the number of installations considering the actual number of
installations as per the audited accounts upto FY16 and as
projected by the Commission for FY17 and FY18.
g) The weighted inflation index (WII) at 7.71%.
h) Efficiency factor at 2% as considered in the MYT Order.
xcv
The above said parameters are computed duly considering the same
methodology as being followed in the earlier Tariff Orders of the
Commission and the relevant Orders issued by the Commission on
Review Petitions. Accordingly, the normative O & M expenses for
FY18 are as follows:
TABLE – 5.14
Approved O & M expenses for FY18
Particulars FY16 FY17 FY18

No. of Installations 2868856 2993427
CGI based on 3 Year CAGR 4.73% 4.89%
Weighted Inflation index 7.71% 7.71%
Base Year O&M expenses (as per
actuals of FY16 )-Rs. Crs 422.65
Total allowable O&M Expenses-Rs. Crs 516.20
Since, the base year data includes the O & M expenses inclusive of
contribution to the P & G Trust, the Commission has not considered
allowing contribution to the P & G Trust separately.
Thus, the Commission decides to approve O&M expenses of Rs.516.20

Crores for FY18.
5.2.7 Depreciation:
The GESCOM, in its application has claimed the net depreciation of

Rs.164.94 Crores for FY18 after deducting the depreciation of Rs. 26.45
Crores on assets created out of consumer contribution and grants as
detailed below:
TABLE – 5.15
Depreciation-FY18- GESCOM’s Submission
Particulars FY18
Buildings 2.22
Civil 0.00
Other Civil 0.00
Plant & M/c 32.21
Line, Cable Network 155.51
Vehicles 0.64
xcvi
Furniture 0.38
Office Equipments 0.44
Less: Deprecation on assets created out
26.45
of grants and consumer contribution
Total 164.94
The Commission, in accordance with the provisions of the MYT

Regulations and amendments issued thereon, has determined the
depreciation for FY18 considering the following:
a) The actual rate of depreciation of category-wise assets has been

determined considering the depreciation and gross block of
opening and closing balance of fixed assets, as per the audited
accounts for FY16.
b) The actual rate of depreciation, so arrived at, is considered to allow

the depreciation on the gross block of opening and closing
balances of fixed assets projected by GESCOM, duly factoring the
retirement of assets value in its application for FY18.
c) The depreciation on account of assets created out of consumers

contribution / grants are deducted based on the opening and
closing balance of such assets duly considering the addition of
assets as proposed by the GESCOM, at the weighted average rate
of depreciation as per actuals in FY16.
Accordingly, the depreciation for FY18 is arrived at as follows:

TABLE – 5.16
Approved Depreciation for FY18
Particulars FY18
Buildings 2.22
Civil 0.00
Other Civil 0.07
Plant & M/c 28.62
Line, Cable Network 141.81
Vehicles 0.25
Furniture 0.27
Office Equipments 0.35
xcvii
Less: Deprecation on assets
created out of grants and 26.15
consumer contribution
Total 147.43
Thus, the Commission decides to approve an amount of Rs.147.43

Crores towards depreciation for FY18.
5.2.8 Interest on Capital Loans:
GESCOM’s proposal:
The GESCOM in its application has proposed revised capex of

Rs.694.00 Crores for FY18 as against Rs.834.00 Crores proposed earlier in
its MYT filing and the capital loan requirement is projected at Rs.439.90
Crores. Considering the existing loans, new loans and projected
repayments, the GESCOM has claimed interest on capital loan of
Rs.152.10 Crores at weighted average rate of interest of 13.32% for
FY18.
The GESCOM has requested to approve interest on capital loan for

FY18 as follows:
TABLE – 5.17
Interest on Capital Loan– GESCOM’s Submission
Particulars FY18
Opening Balance of Capital Loans 992.58
Add New Loans 439.90
Less Repayments 140.77
Total Loan at the end of the year 1291.71
Average Loan for the year 1142.15
Rate of Interest 13.32%
Total Interest on Capital Loans 152.10
The Commission in its Order dated 30th March, 2016 had reckoned
capex of Rs.500.00 Crores as against the proposed capex of Rs.834.00
Crores made by GESCOM for FY18. The Commission notes that the
GESCOM has revised capex proposal of Rs.694.00 Crores for FY18 and
has factored the same for computation of interest on capital loan and
depreciation for FY18.
xcviii
As per the audited accounts and as per the APR of FY16, the GESCOM
had incurred interest on capital loan at a weighted average rate of
interest of 12.32% p.a. This rate of interest is considered for the existing
loan balances for which interest has to be factored during FY17.
Further, for the year FY18, the weighted average rate of interest of the
preceding year has been considered on the existing loan balances.
The Commission has considered new loan, the special debt equity
ratio of 70:30 as in the MYT Regulations.
The present interest rates by commercial banks and financial

institutions are charged mainly on the basis of Marginal Cost of fund
based Lending Rates (MCLR). These rates are comparatively lower
than the base rates considered earlier. Further, in view of the changing
economic situation, it is observed that there is a considerable
reduction in the MCLR and also downward trend is evident in the
interest rates. Hence, in such a situation, the Commission is of the view
that, the ESCOMs can avail Capital loans at competitive interest rates.
The Commission notes that, the present SBI MCLR rate for capital loans
with tenure of 3 years is 8.15%. Considering the present rate of interest
on the new loan availed during FY17 MCLR, the Commission decides to
allow an interest rate of 12.00% for FY18 for new Capital loans. It shall
be noted that, the rate of interest now considered by the Commission
on the new capital loans is subject to review during APR. Accordingly,
the approved interest on loans for FY18 is as follows:
TABLE – 5.18
Approved Interest on Loans for FY18
Particulars FY18
Opening Balance long term loans 984.78
Add new Loans 350.00
Less: Repayments 140.77
Total loan at the end of the year 1194.01
Average Loan 1089.40
Weighted average rate of interest in % 12.22%
Interest on long term loans 133.09
xcix
Thus, the Commission decides to approve an interest of Rs.133.09
Crores on Capital loans for FY18.
5.2.9 Interest on Working Capital:
GESCOM has claimed interest on working capital of Rs.108.14 Crores
for FY18.
The Commission in its MYT Order dated 30th March, 2016 while deciding
the ARR for each year of the control period FY17-19, had approved
Interest on working capital of Rs. 86.67 Crores for FY18.
The Commission has been computing the interest on working capital as

per the norms specified under the MYT Regulations and amendments
thereon, which consists of one month’s O & M expenses, 1% of opening
GFA and two months’ revenue. As discussed earlier, the interest regime
is based on MCLR. The present MCLR for loans with tenure of one year
is 8.00%. Therefore, the Commission decides to considered interest on
working capital at 11% p.a. for FY18. Accordingly, the approved
interest on working capital for FY18 is as follows:
TABLE – 5.19
Approved Interest on Working Capital for FY18
Amount in Rs. Crs
Particulars FY 18
One-twelfth of the amount of O&M Expenses 43.02
Opening Gross Fixed Assets (GFA) 3503.03
Stores, materials and supplies 1% of Opening
35.03
balance of GFA
One-sixth of the Revenue 696.33
Total Working Capital 774.38
Rate of Interest (% p.a.) 11.00%
Interest on Working Capital 85.18
Thus, the Commission hereby approves interest on working capital of

5.2.10 Interest on Consumer Security Deposit:
c
The GESCOM in its application has claimed interest on consumer
security deposit of Rs.37.75 Crores on the opening balance of
consumer security deposit for FY18 based on Bank rate of 8.00 %.

In accordance with the KERC (Interest on Security Deposit) Regulations
2005, the interest rate on consumer security deposit to be allowed is
the bank rate prevailing on the 1st of April of the financial year for
which interest is due. As per the Reserve Bank of India Notification
dated 4th October, 2016, the applicable bank rate is 6.75%. The
Commission has considered the same, for computation of interest on
consumer security deposits for FY18.
The Commission has considered the consumer security deposits as per

the audited accounts of FY16 for onward projection for FY18. Also, the
Commission is considering the average of the opening and closing
balances of consumers’ deposits of the relevant year. Accordingly,
the interest on consumer deposits for FY18 is as follows:
TABLE – 5.20
Approved Interest on Consumer Security Deposits for FY18
Particulars FY18
Opening balance of consumer security deposits 453.65
Addition of deposits during FY18 27.00
Closing balance of consumer security deposits 480.65
Average Consumer Security Deposits for FY18 467.15
Bank rate to be allowed as per Regulations 6.75%
Interest on Consumer Security Deposit 31.53
Thus, the Commission decides to approve interest on the consumer

security deposits of Rs.31.53 for FY18.
5.2.11 Interest and other expenses Capitalized:
The GESCOM has claimed an amount of Rs.4.49 Crores towards

capitalization of interest and other expenses during FY18. Considering,
the capital expenditure incurred and capitalized in the previous years,
the Commission decides to allow capitalization of interest and other
ci
expenses of Rs.4.49 Crores as proposed by the GESCOM for FY18. The
abstract of approved interest and finance charges for FY18 are as
follows:
TABLE – 5.21
Approved Interest and finance charges for FY18
Particulars FY18
Interest on Loan Capital 133.09
Interest on Working Capital 85.18
Interest on Consumers Security Deposit 31.53
Less Interest & other expenses capitalized (4.49)
Total Interest & Finance Charges 245.31
5.2.12 Other Debits and Prior period charges:
GESCOM, in its application has claimed an amount of Rs.37.66 Crores
towards other debits and Rs.20 Crores towards net prior period debit /
credit for FY18.
The Commission notes that, GESCOM has claimed expenditure of
Rs.37.66 Crores towards Other Debits and Rs.20.00 Crores towards Prior
period debit/credit for FY18. It is to be noted that, these items of
expenditures/income cannot be estimated upfront and included in
the proposed ARR for FY18. However, as per the provisions of the MYT
Regulations, the Commission would consider the same based on the
actuals as per the audited accounts while approving APR for FY18.
5.2.13 Return on Equity:
GESCOM in its application has claimed RoE of Rs. 146.29 Crores for FY18
based on the Share Capital, Share Deposit, accumulated balance of
surplus/deficit under Reserves and surplus account as detailed below:
TABLE-5.22
Return on Equity- GESCOM Submission
Particulars FY18
Opening balance of share capital 896.77
Reserves and Surplus (141.81)
cii
Total Equity 754.96
Return on Equity @ 19.377% 146.29

The Commission has considered the actual amount of share capital,
share deposits and accumulated surplus / deficit under reserves &
surplus account as per the audited accounts for FY16 for arriving at the
allowable equity base for the control period FY18.
The Commission, in accordance with the provisions of the MYT

Regulations and amendments there on, has considered 15.5% of
Return on Equity duly grossed up with the applicable Minimum
Alternate Tax (MAT) of 21.342%. This works out to 19.706% per annum.
Further, as per the decision of the Commission in the Review Petition
No.6/2013 and Review Petition 5/2014 and the provisions of amended
MYT Regulations, the Return on Equity is to be computed based on the
opening balances of share capital, share deposits and accumulated
surplus / deficit under reserve and surplus account. Further, an
amount of Rs.22.00 Crores of recapitalized consumer security deposit
as net-worth is considered as per the orders of the Hon’ble Appellate
Tribunal for Electricity in Appeal No.46/2014.
Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing
balances of gross fixed assets along with break-up of equity and loan
component in the Tariff Order henceforth, the details of GFA, debt and
equity (net-worth) for FY18 are indicated as follows:
TABLE – 5.23
Status of Debt Equity Ratio for FY18
%age
Normative Normative %age of
Equity of
Debt @ Equity @ actual
Year Particulars GFA Debt (Net- actual
70% of 30% of debt on
worth) equity
GFA GFA GFA
on GFA
FY18 Opening 3503.03 984.78 234.08
ciii
Balance
Closing 3928.91 1194.01 270.36 2750.24 1178.67 30.39% 6.88%
Balance
From the above table it is seen that the amounts of debt and equity
are within the normative levels with reference to the closing balances
of GFA for FY18. Further, the Commission would review the same during
the Annual Performance Review, for FY18, based on the actual data,
as per the audited accounts. Accordingly, the Return on Equity that
could be approved for FY18, works out as follows:
TABLE – 5.24
Approved Return on Equity for FY18
Particulars FY18
Opening Balance of Paid Up Share Capital 305.14
Share Deposit 471.63
Reserves and Surplus (520.69)
Less Recapitalised Security Deposit (22.00)
Total Equity 234.08
Approved Return on Equity with MAT 46.13
Thus, the Commission decides to approve a Return on Equity of Rs.46.13

Crores, for FY18.
5.2.14 Other Income:
GESCOM has claimed an amount of Rs.48.99 Crores as other income

for the FY18.

The Commission notes that, the other income received by the
GESCOM mainly includes rebate from collection of electricity duty,
income from miscellaneous recoveries, interest on bank deposits, rent
from staff quarters and sale of scrap, profit on sale of stores besides
incentives for timely payment of power purchase bills. The actual
‘other income’ as per the audited accounts for FY16 is Rs.39.31 Crores.
civ
Considering the other income earned by the GESCOM in the past
three years, the Commission decides to approve other income of
5.2.15 Fund towards Consumer Relations / Consumer Education:
The Commission has been allowing an amount of Rs.0.50 Crore per

year towards consumer relations / consumer education. This amount
is earmarked to conduct consumer awareness and grievance
redressal meetings periodically and institutionalize a mechanism for
addressing common problems of the consumers. The Commission has
already issued guidelines for consumer education and grievance
redressal activities.
The Commission decides to continue providing an amount of Rs.0.50

Crore for FY18, towards meeting the expenditure on consumer relations
/ consumer education.
The Commission directs GESCOM to furnish a detailed plan of action

for utilization of this amount and also maintain a separate account of
these funds and furnish the same at the time of APR.
5.2.16 Contribution towards Pension and Gratuity Trust :
GESCOM in its application has claimed under O&M expenses an

amount of Rs.262.49 Crores being the arrears of contribution to P&G
Trust not released by the Government of Karnataka.
The Commission in its preliminary observations had requested the

GESCOM to furnish reasons /justifications for inclusion of this amount in
the proposed ARR for FY18 to be recovered from the consumers as
part of the retail supply tariff during FY18 in contravention to the
Commission’s decision in Tariff Order 2016.
In its replies to the Commission’s preliminary observations, the GESCOM

has stated that it has included an amount of Rs. 262.49 Crores towards
cv
GESCOM portion of arrears of contribution to P&G Trust not released by
the Government of Karnataka, in accordance to the instructions issued
by the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3
dated 16.09.2016.
It is to be noted that, the Commission in its Order dated 30th March,

2016 has already dealt with this issue and has observed that,
“a) As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution
and Retail Supply Companies) Rules, 2002, notified by the
Government on 31.05.2002, the State Government is liable for
funding the pension and gratuity liability of existing pensioners as
on the effective date of Second Transfer Scheme.
b) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity
requirements of existing pensioners on the effective date of
second transfer Scheme. With this arrangement, the GoK is liable
to meet the pension and gratuity requirement of existing
pensioners.”
In the above context, as per the provisions of the prevailing Rules and
Government Orders issued thereon, the Commission had earlier
decided that this liability cannot be passed on to the consumers,
through tariff.
In spite of this Order of the Commission, GESCOM has gone ahead to

claim this liability (in the proposed ARR for FY18) that should have been
borne by the Government of Karnataka.
The Commission reiterates its earlier decision that, as per Rule 4(13) of
the Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL
and its Personnel to Electricity Distribution and Retail Supply
Companies) Rules, 2002, notified by the Government on 31.05.2002
and Government Order No. DE 15 PSR 2002 Dated 19.12.2002, the
amount in question is liable to be borne by the Government of
cvi
Karnataka only and cannot be passed on to the consumers, through
tariff.
In view of the above, the Commission is unable to accept the claims
of GESCOM to allow an amount of Rs.262.49 Crores being the GoK
liability towards arrears of contribution to P&G Trust in the ARR for FY18.
5.3 Abstract of revised ARR for FY18:
In the light of the above analysis and decisions of the Commission, the
following is the approved revised ARR for the control period FY18:
cvii
TABLE – 5.25
Approved Revised ARR for FY18
Amount in Rs.
Crores
FY18
As Appd. in As per As
Sl.
Particulars Tariff Order revised Revised
No.
dated filing on and
30.03.2016 30.11.2016 Approved
Revenue at existing Tariff in Rs Crs
Revenue from Tariff and Misc.
1 2450.45 2376.94
Charges
2 Tariff Subsidy from BJ/KJ 83.75 64.77
3 Tariff Subsidy from IP Sets 1736.30 1736.30
4 Total Existing Revenue 4270.50 4178.00
5 Power Purchase Cost 3190.79 3078.60 2765.03
6 Transmission charges of KPTCL 388.58 388.58 352.75
7 SLDC Charges 3.16 3.16 2.97
8 Power Purchase Cost including
cost of transmission 3582.53 3470.34 3120.75
12 Total O&M Expenses 484.22 649.30 516.20
13 Depreciation 143.35 164.94 147.43
14 Interest on Capital Loans 143.91 152.10 133.09
15 Interest on Working Capital Loans 86.67 108.14 85.18
16 Interest on belated payment on
PP Cost 0.00 216.86 0.00
16 Interest on consumer security
deposits 38.08 37.75 31.53
17 Other Interest & Finance charges 0.00 0.00 0.00
18 Less interest & other expenses
capitalised 4.49 4.49 4.49
19 Total Interest & Finance charges 264.17 510.36 245.31
20 Other Debits 0.00 37.66 0.00
21 Net Prior Period Debit/Credit 0.00 20.00 0.00
22 Return on Equity 61.60 146.29 46.13
23 Funds towards Consumer
Relations/Consumer Education 0.50 0.00 0.50
24 Other Income 48.00 48.99 43.66
25 P&G Trust (GoK Liability) 262.49 0.00
Disallowance of Interest and
Depreciation on imprudent
investments in FY16 0.34
26 ARR 4488.36 5212.39 4032.32
27 Surplus/Deficit for FY16 carried
forward -133.44 -490.97
28 Net ARR 4488.36 5345.83 4523.29
cviii
5.4 Segregation of ARR into ARR for Distribution Business and ARR for Retail
Supply Business:
GESCOM in its application has proposed the segregation of ARR into

ARR for Distribution Business and ARR for Retail Supply Business as
approved by the Commission in its Tariff Order dated 30th March, 2016.
The Commission decides to continue with the same ratio of
segregation of ARR as detailed below:
TABLE – 5.26
Approved Segregation of ARR – FY18
Distribution Retail Supply
Particulars
Business Business
O&M 70% 30%
Depreciation 84% 16%
Interest on Loans 100% 0%
Interest on Consumer Deposits 0% 100%
RoE 84% 16%
GFA 84% 16%
Non-Tariff Income 0% 100%
Accordingly, the following is the approved ARR for Distribution Business
and Retail supply business:
TABLE – 5.27
APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18
Sl.
Particulars FY18
No
1 R&M Expenses 361.34
2 Employee Expenses
3 A&G Expenses
5 Interest & Finance Charges
8 Less interest & other expenses 4.49
capitalised
9 Total 634.03
10 ROE 38.75
cix
11 NET ARR 672.78
TABLE – 5.28
APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18
Sl.
Particulars FY18
No
1 Power Purchase 2765.03
2 Transmission Charges 355.72
3 R&M Expenses 154.86
4 Employee Expenses
5 A&G Expenses
Interest & Finance Charges
9 Interest on consumer security deposits 31.53
Total 3395.32
11 ROE 7.38
13 Fund towards Consumer Relations / 0.50
Consumer Education
14 NET ARR 3359.54
5.5 Gap in Revenue for FY18:
As discussed above, the Commission decides to approve the revised

Annual Revenue Requirement (ARR) of GESCOM for its operations in
FY18 at Rs.4523.29 Crores as against GESCOM’s application proposing
the revised ARR of Rs.5345.83 Crores which included a revenue deficit
of Rs.133.44 Crores for FY16. This approved revised ARR includes an
amount of Rs.490.97 Crores which is determined as the deficit in FY16
as discussed in Chapter-4. Based on the existing retail supply tariff, the
total realization of revenue will be Rs.4178.00 Crores which is Rs.345.29
Crores less than the projected revenue requirement for FY18.
The net ARR and the gap in revenue for FY18 are shown in the following
table:
cx
TABLE – 5.29
Revenue gap for FY18
Particulars FY18
Net ARR including carry forward gap of FY16 (in Rs. 4523.29
Crores)
Approved sales (in MU) 7188.58
Average cost of supply (in Rs./unit) 6.29
Revenue at existing tariff (in Rs. Crores) 4178.00
Gap in revenue (in Rs. Crores) (345.29)
The determination of revised retail supply tariff on the basis of the

above approved ARR is detailed in the following Chapter.
cxi
CHAPTER – 6
DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18
6.0 Revision of Retail Supply Tariff for FY18-GESCOM’s Proposals and

Commission’s Decisions:
6.1 Tariff Application
As per the Tariff application filed by the GESCOM, it has projected an

unmet gap in revenue of Rs.1075.33 Crores for FY18, which also
includes the gap in revenue of Rs.133.44 Crores for FY16. In order to
bridge this gap in revenue, GESCOM has proposed a uniform tariff
increase of 148 paise per unit, in respect of all the categories of
consumers.
In the previous chapters of this order, the Annual Performance

Review(APR) for FY16 and the revision of ARR for FY18 has been
discussed. The various aspects of determination of tariff for FY18 are
discussed in this Chapter.
6.2 Statutory Provisions guiding determination of Tariff
As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the
following factors, while, determining the tariff so that,
 the distribution and supply of electricity are conducted on

commercial basis;
 competition, efficiency, economical use of resources, good
performance, and optimum investment are encouraged;
 the tariff progressively reflects the cost of supply of electricity, and
also reduces and eliminates cross subsidies within the period to be
specified by the Commission;
 efficiency in performance is to be rewarded: and
 a multi-year tariff framework is adopted.
cxii
Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the
Karnataka Electricity Reform Act 1999, empowers the Commission to
specify, from time to time, the methodologies and the procedure to be
observed by the licensees in calculating the Expected Revenue from
Charges (ERC). The Commission determines the Tariff in accordance
with the Regulations and the Orders issued by the Commission from time
to time.
6.3 Factors Considered for Tariff setting:
The Commission has considered the following relevant factors for

determination of retail supply tariff:
a) Tariff Philosophy:
As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply in respect of consumers
whose ability to pay is considered inadequate and also fix tariff at
or above the average cost of supply for categories of consumers
whose ability to pay is considered to be higher. Thus, the system of
cross subsidy continues. However, the Commission has taken due
care to progressively bring down the cross subsidy levels as
envisaged in the Tariff Policy 2016, issued by the Government of
India.
b) Average Cost of Supply:
The Commission has been determining the retail supply tariff on the
basis of the average cost of supply. The KERC (Tariff) Regulations,
2000, as amended from time to time, require the licensees to
provide details of embedded cost of electricity voltage / consumer
category-wise. The distribution network of Karnataka is such that, it
is difficult to segregate the common cost between voltage levels.
Therefore, the Commission has decided to continue the average
cost of supply approach for recovery of the ARR. With regard to
the indication of voltage- wise cross subsidy with reference to the
cxiii
voltage-wise cost of supply, the same is indicated in the Annexure
to this Order.
c) Differential Tariff:
The Commission has been determining differential retail supply tariff

for consumers in urban and rural areas, beginning with its Tariff
Order dated 25th November, 2009. The Commission decides to
continue the same in the present order also.
6.4 New Tariff Proposals by GESCOM’s:
i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-

stations:
ESCOMs, in their tariff application dated 30th November, 2016,

besides seeking revision of retail supply tariff for all the
categories of consumers, has prayed for determination tariff for
the Auxiliary Consumption of KPTCL Stations. CESC has also filed
separate Petitions before this Commission seeking tariff
determination for auxiliary consumption of KPTCL’s substations.
GESCOM Submission:
ESCOMs have requested fixation of tariff for KPTCL’s Auxiliary

consumption on the following grounds:
1. The power utilized by KPTCL Substations for auxiliary
consumption purpose is supplied by ESCOMs through a
separate feeder or local feeder. The power so supplied by
ESCOMs is from the pooled purchase of power from different
sources at different rates. The cost incurred in procurement
of power by the ESCOMs, need to be paid by the KPTCL.
2. The auxiliary consumption of PGCIL stations, being the

transmission utility, is being billed under commercial tariff.
cxiv
3. The auxiliary consumption of KPTCL Substations is being billed
at average power purchase cost of the ESCOMs where the
substations are geographically located, from June, 2005 to
October 2016 as per the KPTCL’s letter dated 15.12.2005.

The treatment of the electricity consumption of KPTCL’s substations
has been a matter of contention between KPTCL and ESCOMs.
While the KPTCL has been urging the Commission to treat the
consumption of its substations as transmission loss, the ESCOMs
have been requesting the Commission to fix a commercial tariff.
The BESCOM in its letter dated 29.05.2015, had requested the
Commission to approve the Commercial tariff to the auxiliary
consumptions in respect of KPTCL Sub-stations. After examining the
issue in detail, the Commission had clarified that as per the
provisions of Regulation 3.3 of the KERC (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2006, the charges
for the auxiliary consumptions of KPTCL substations used for the
purpose of air-conditioning, lighting etc. are part of the normative
operation and maintenance expenses of KPTCL and hence the
charges for the same have to be borne by KPTCL. Further, the
Commission also notes that, the KPTCL while computing the
transmission losses, is not considering the electricity consumption of
its sub-stations as part of the transmission loss. Accordingly, the
Commission vide its letter No. B/07/05/451 dated 23.06.2015, had
clarified that since there is no specific category in the present tariff
schedule for billing the auxiliary consumption of KPTCL Substations,
the ESCOMs should seek determination of tariff in respect of sale of
power to KPTCL substations under the provisions of clause 3.05 of
the Conditions of Supply of Electricity by Distribution Licensees in
the State of Karnataka. Accordingly, the ESCOMs have filed the
petitions.
From the submissions made by ESCOMs, it is clear that, the power
utilized by KPTCL Sub-stations for the consumption purpose is being
supplied by the ESCOMs through a separate / local feeder. Since,
cxv
KPTCL is responsible for accounting the energy purchased by the
ESCOMs upto the interface point of the ESCOM’s and the energy
utilized by KPTCL Substations for auxiliary consumption purpose has
not been recognized in computation of transmission losses, the
energy supplied from the distribution network of the ESCOMs for
the consumption of the KPTCL Sub stations has to be accounted
and charged in accordance with the provisions of the KERC (Terms
and Conditions for Determination of Transmission Tariff)
Regulations, 2006.
Now, keeping in view the request of the ESCOMs, the issue before
the Commission is whether to fix a commercial tariff or a tariff
equal to the State’s average power purchase cost, to bill the
auxiliary consumption of KTPCL Sub-stations. The Commission notes
that any tariff charged to bill the KPTCL’s substations consumption,
shall have to be ultimately recovered through transmission tariff,
which in turn, is passed on to the end consumers in the form of
retail supply tariff. In order to minimise the burden on the retail
supply consumers, the Commission decides as follows:
In accordance with the provisions of Regulation 3.3 of the KERC

(Terms and Conditions for Determination of Transmission Tariff),
Regulations, 2006 and amendment thereon and Clause 3.05 of the
Conditions of Supply of Electricity by Distribution Licensees in the
State of Karnataka, the power supplied by the ESCOMs to the
KPTCL’s Substations for auxiliary consumption purposes, the
Commission decides to fix a single part tariff rate at the State
Average Power Purchase Cost, as approved by the Commission, in
the Tariff Orders issued from time to time.
Further, for the energy consumption by KPTCL’s Sub-stations for

auxiliary purposes, during the previous periods, the ESCOMs shall
bill it at the average power purchase cost of the State, as
determined by the Commission in the Tariff Order issued from time
to time.
cxvi
ii) Petition seeking increase in Demand Charges and reduction in energy
charges to HT consumers.
Some of the ESCOMs in their application and also in the petitions has
proposed increase in Demand Charges (Fixed Cost) and reduction in
energy charges to HT-1, HT-2(a)(b) (c) and HT4 consumers for the
following reasons:
i) The ratio of fixed and variable cost of power purchase cost

payable to the private generators is 33: 67
ii) All the ESCOMs in the state are recovering the fixed cost of their
distribution network only 9% of the ARR, the balance 24%. of the
fixed cost through energy charge (variable charge)
iii) ESCOM, it is not able to recover the variable costs which include
the fixed cost by Rs.10/- (Rupees Ten only) Per KVA/HP/KW from
the HT consumer opting for open access.
iv) The contribution of Fixed cost is only 9% of the ARR and the
remaining fixed cost is camouflaged in the energy charges,
which are higher.
With the above justification, the ESCOMs have proposed to increase

the Demand charges upto Rs.250 per KVA of the billing demand from
the existing Demand Charge of Rs.180 -200 per KVA. GESCOM has also
proposed reduction in energy charges ranging between 20 Paise to 85
paise per unit to the various categories of HT consumers.
Consumers’ Response:
The representatives of small-scale industries have opposed the

proposal for increasing the Demand Charges. They have contended
that ESCOM has not furnished the working details of fixed charges and
its percentage to the total fixed charges being incurred. It is submitted
that as per the provisions of the Electricity Act, 2003, the ESCOMs
should realise the cost of supply from all the categories of consumers
and should not confine recovery of fixed cost only to a specific
category of consumers.
cxvii
ESCOM’s, in their petitions have considered the recovery of Fixed Cost
(FC) of generation sources and the distribution network. It has not
considered the FC involved in transmission of power and the SLDC
charges which one of the major components of the ARR. Further,
seeking increase in demand charges and reduction in the energy
charges to HT consumers only does not appear to a proper approach.
Any proposal to encourage sale or to improve the ESCOM’s finances
should be made by keeping the interest of all the consumers in mind
and the treatment to various class of consumers across the ESCOM
should be just and equitable. Hence, the Commission is unable to
accept the proposal of ESCOM’s to increase the Demand Charges of
its HT consumers in total.
The Commission in its Tariff Order dated 30th March, 2016 had
considered increase in demand charges to the consumers of all
consumer in the State. While doing so it had observed that:
“As per the new Tariff Policy issued by the Ministry of Power,
Government of India, dated 28th January, 2016, two-part Tariff
featuring separate fixed and variable charges shall be
introduced for all consumers. In order to ensure their financial
viability, it is imperative that the fixed expenditure incurred by
the ESCOMs are recovered in the form of fixed charges. On a
study of the existing rate of fixed charges levied on the
consumers and the amount collected thereon, it is observed
that fixed charges needs to be increased gradually to meet the
above objective”.
In pursuance of the above, the Commission has again reviewed the

status of recovery of fixed charges while revising the tariff for FY18. The
fixed costs to be incurred by GESCOM to supply power to its consumers
for FY18, consists of the following components:
Total Fixed Cost to be

Activity
incurred -Rs. Crs.
Generation 571.11
Transmission including SLDC charges 509.62
Distribution network cost 673.12
Total Fixed cost of GESCOM 1753.85
cxviii
The approved Net ARR of GESCOM is Rs.4523.29 Crores out of which,
RS.1753.85 Crores is towards fixed cost. As per the existing Revenue
rates, GESCOM recovers an amount of Rs.249.95 Crores towards the
fixed cost, which accounts for recovery of 14.25% of the fixed cost,
incurred by the GESCOM.
Since the Commission has decided to increase the FC year on year

gradually, an increase ranging between Rs.10 to Rs.20 has been
considered while approving the tariff to various categories of
consumers. The details of the actual increase is indicated in the tariff
schedule of each of the consumer categories.
iv) Introduction of morning peak from 6 AM to 10 AM under ToD billing:
In respect of HT consumers, the GESCOM in its petition No.58 /2017

dated 31st March,2017 has proposed to introduce ToD billing for
morning peak between 6 AM to 10AM in addition to the prevailing ToD
billing for usage of energy during evening peak (6 p.m. to 10 p.m.) and
to remove the existing incentive of Rs.1.25 per unit for off peak period
usage from 22.00 Hours to 6.00 Hours (during night hours).
GESCOM has submitted that the ToD billing is to encourage the HT

consumers to shift their load from peak hours to non-peak hours by
incentivising them and also to levy a penalty to discourage usage of
energy during peak hours. They have also cited the examples of Delhi,
Mumbai and Gujarat where ToD billing is prevailing for both morning
and evening peak usage as compared to the State’s single ToD billing
for evening peak usage. The off peak incentive helps in shifting the
load curve to night hours which is helpful for optimum power
generation during night hours.
Consumers across the State have opposed this proposal and have
requested the Commission to make the ToD billing optional instead of
making it mandatory.
The Commission has examined the issue in detail. It is found that during
most part of the year, the morning peak usage is higher than the
cxix
evening peak usage. In the absence of penal charges during the
morning peak, the tendency to use the power in the morning peak is
more as compared to the evening peak. The system of ToD billing for
morning peak is also prevalent in the States referred to above. Hence,
the Commission decides to introduce ToD billing in respect of HT
consumers for morning peak between 6 AM to 10AM in addition to the
prevailing ToD billing for usage of energy during evening peak (6 p.m.
to 10 p.m.) and also to reduce the incentive for off-peak usage (during
night hours) to Rs.1/ per unit as against the existing rate of Rs.1.25 per
unit. The necessary changes in the ToD billing are indicated in the
respective Tariff schedule of the HT Consumers, in this Tariff Order.
6.5 Revenue at existing tariff and deficit for FY18:
The Commission in its preceding Chapters has decided to carry

forward the gap in revenue of Rs.490.97 Crores of FY16 to the ARR of
FY18. The gap in revenue for FY18 is proposed to be filled up by revision
of Retail Supply Tariff, as discussed in the following paragraphs of this
Chapter.
Considering the approved ARR for FY18 and the revenue as per the
existing tariff, the gap in revenue for FY18 is as follows:
TABLE – 6.1
Revenue Deficit for FY18
Amount Rs. in Crores
Particulars Amount
Approved Net ARR for FY18 including gap of FY16 4523.29
Revenue at existing tariff 4178.00
Surplus / (- )Deficit (345.30)
Additional Revenue to be realised by Revision of 345.30
Tariff
Accordingly, in this Chapter, the Commission has proceeded to

determine the Revised Retail Supply Tariff for FY18. The category-wise
tariff as existing, as proposed by GESCOM and as approved by the
Commission are as follows:
cxx
1. LT-1 Bhagya Jyothi:
The existing tariff and the tariff proposed by GESCOM are given below:
Sl. Details Existing as per 2016 Proposed by GESCOM

No Tariff Order
1 Energy charges 577 Paise / Unit Subject 725 Paise / Unit Subject
(including recovery to a monthly minimum to a monthly minimum
towards service main of Rs.30 per installation of Rs.30 per installation
charges) per month. per month.
Commission’s Views/ Decision
The Government of Karnataka has continued its policy of providing

free power to all BJ/KJ consumers with a single outlet, whose
consumption is not more than 40 units per month, vide Government
Order No. EN12 PSR 2017 dated 20th March, 2017 (instead of the earlier
limit of 18 units per month). Based on the present average cost of
supply, the tariff payable by these BJ/KJ consumers is revised to Rs.6.29
per unit.
Further, the ESCOMs have to claim subsidy for only those consumers
who consume 40 units or less per month per installation. If the
consumption exceeds 40 units per month or if any BJ/KJ installation is
found to have more than one outlet, it shall be billed as per the Tariff
Schedule LT 2(a).
The Commission determines the tariff (CDT) in respect of BJ / KJ of

GESCOM installations as follows:
LT – 1 Approved Tariff for BJ / KJ installations

Commission determined Tariff Retail Supply Tariff determined
by the Commission
629 paise per unit, -Nil-*
Subject to a monthly minimum of Fully subsidized by GoK
Rs.30 per installation per month.
*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff
payable by these Consumers is shown as nil. However, if the
GOK does not release the subsidy in advance, a Tariff of Rs.6.29
per unit subject to a monthly minimum of Rs.30 per installation
cxxi
per month, shall be demanded and collected from these
consumers.
2. LT2 - Domestic Consumers:
The details of the existing and proposed tariff under this category are
given in the Table below:
Proposed Tariff for LT-2 (a)
LT-2 a (i) Domestic Consumers Category
Applicable to areas coming under City Municipal Corporations and all
Urban Local Bodies
Details Existing as per 2016 Proposed by GESCOM

Tariff Order
Fixed Charges per For the first KW Rs.30 For the first KW Rs.30
Month For every additional KW For every additional
Rs.40 KW Rs.40
Energy Charges
0-30 units 0 to 30 units: 300 0 to 30 units: 448
(life line paise/unit paise/unit
Consumption )
31 to 100 units: 440 31 to 100 units: 588
paise/unit paise / unit
Energy Charges
exceeding 30 units 101 to 200 units: 590 101 to 200 units:738
per month paise/ unit paise/ unit
Above 200 units: 690 Above 200 units: 838
paise/ unit paise / unit
LT-2(a)(ii) Domestic Consumers Category
Applicable to Areas under Village Panchayats
Tariff Order
Fixed charges For the first KW Rs.20 For the first KW Rs.20
per Month For every additional For every additional
KW Rs.30 KW Rs.30
Energy Charges Upto 30 units: 290 paise 0 to 30 units: 438
0-30 units (life line/ unit paise/unit
Consumption )
Energy Charges 31 to 100 units: 410 31 to 100 units: 558
exceeding 30 paise/ unit paise/ unit
Units per month 101 to 200 units: 560 101 to 200 units: 708
paise/ unit paise
/unit
Above 200 units: 640 Above 200 units: 788
paise/ unit paise/ unit
Commission’s decision
cxxii
The decides to continue with the two tier tariff structure in respect of
the domestic consumers as shown below:
(i) Areas coming under City Municipal Corporations and all Urban
Local Bodies.
(ii) Areas under Village Panchayats.
The Commission approves the tariff for this category as follows:
Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:

Applicable to Areas coming under City Municipal Corporations and all
Urban Local Bodies
Details Tariff approved by the

Commission
Fixed charges per Month For the first KW: Rs.40/-
For every additional KW Rs.50/-
Energy Charges up to 30 units per Upto 30 units: 325 paise/unit
month (0-30 units)-life line consumption.
31 to 100 units: 470 paise/unit
Energy Charges in case the
consumption exceeds 30 units per 101 to 200 units: 625 paise/unit
month Above 200 units: 730 paise/unit
Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats
Details Tariff approved by the

Commission
Fixed Charges per Month For the first KW: Rs.25/-
For every additional KW Rs.40/-
Energy Charges up to 30 units per Up to 30 units: 315 paise/unit
month (0-30 Units)-Lifeline
Consumption
Energy Charges in case the 31 to 100 units: 440 paise/unit
consumption exceeds 30 units 101 to 200 units: 595 paise/unit
per month Above 200 units: 680 paise/unit
LT2 (b) Private and Professional Educational Institutions& Private

Hospitals and Nursing Homes:
cxxiii
The details of the existing and the proposed tariff by GESCOM under
this category are given in the Table below:
LT 2 (b) (i)Applicable to areas under City Municipal Corporations Areas

and all urban Local Bodies
Details Existing as per 2016 Tariff Proposed by GESCOM

Order
Fixed Charges Rs.45 Per KW subject to a Rs.45 Per KW subject to a
per Month minimum of Rs.75 per month minimum of Rs.75 per month
Energy Charges For the first 200 units: 625 For the first 200 units: 773 paise
paise per unit per unit
Above 200 units : 745 paise For the balance units: 893
per unit paise per unit
LT 2 (b)(ii) Applicable to Areas under Village Panchayats

Order
Fixed Charges Rs.35 per KW subject to a Rs.35 per KW subject to a
per Month minimum of Rs.60 per Month minimum of Rs.60 per Month
Energy For the first 200 units: 570 For the first 200 units: 718 paise
Charges paise per unit per unit
Above 200 units: 690 paise For the balance units: 838
per unit paise per unit
As in the previous Tariff Order the Commission decides to continue the
two tier tariff structure as follows:
(i) Areas coming under City Municipal Corporation and all urban local
bodies.
Approved Tariff for LT 2 (b) (i)

Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable to areas under City Municipal Corporations and all other
urban Local Bodies.
Details Tariff approved by the Commission
Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85
per Month
Energy Charges 0-200 units: 650 paise/unit
Above 200 units: 775 paise/unit
Approved Tariff for LT 2 (b) (ii)
cxxiv
Private Professional and other private Educational Institutions, Private
Hospitals and Nursing Homes
Applicable in Areas under Village Panchayats
Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per
Month
Energy Charges 0-200 units: 595 paise/unit
Above 200 units: 720 paise/unit
3. LT3- Commercial Lighting, Heating& Motive Power:

The existing and proposed tariff are as follows:

LT- 3 (i) Commercial Lighting, Heating& Motive Power
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cxxvi
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Order
Fixed charges per Rs.50 per KW Rs.50 per KW
Month
Energy Charges For the first 50 units: 715 For the first 50 units: 863 paise
For the balance units: 815 For the balance units: 963
paise per unit paise per unit
cxxvii
Demand based tariff (optional) where sanctioned load is above 5 KW but
below 50 KW.
Details Existing as per 2016 Tariff Order Proposed by GESCOM
Fixed Rs.65 per KW Rs.65 per KW
charges
Energy For the first 50 units:715paise For the first 50 units: 863paise
Charges per unit per unit
For the balance units: 815 For the balance units: 963
LT-3 (ii) Commercial Lighting, Heating & Motive
Applicable to areas under Village Panchayats
Order
Fixed Charges per Rs.40 per KW Rs.40 per KW
Month
Energy Charges For the first 50 units: 665 For the first 50 units: 813
For the balance units: For the balance units: 913
765paise per unit paise per unit
Demand based tariff (optional) where sanctioned load is above 5 KW

but below 50 KW
Tariff Order
Fixed Charges Rs.55 per KW Rs.55 per KW
per Month
Energy Charges For the first 50 units: 665 For the first 50 units: 813
For the balance units: For the balance units:
765 paise per unit 913 paise per unit
Commission’s Views/ Decision
As in the previous Tariff Order, the Commission decides to continue

with the two tier tariff structure as below:
(i) Areas coming under City Municipal Corporations and other

urban local bodies.
cxxviii
Approved Tariff for LT- 3 (i)Commercial Lighting, Heating& Motive
A
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Details Approved by the Commission

Fixed Charges per Month Rs.60 per KW
Energy Charges For the first 50 units: 750 paise/ unit
For the balance units: 850 paise/unit
Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW
cxxx
Energy Charges For the first 50 units: 750 paise /unit
For the balance units: 850 paise/unit
Approved Tariff forLT-3 (ii) Commercial Lighting, Heating and Motive
Applicable to areas under Village Panchayats

Fixed charges per Month Rs.50 per KW
Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
Approved Tariff for Demand based tariff (Optional)where sanctioned

load is above 5 kW but below 50 kW

Energy Charges For the first 50 units: 700 paise per unit
For the balance units: 800 paise per unit
4. LT4-Irrigation Pump Sets:
The existing and proposed tariff for LT4 (a) are as follows:
cxxxi
LT-4 (a) Irrigation Pump Sets
Applicable to IP sets upto and inclusive of 10 HP
Order
Fixed charges per Nil Nil
Month
Energy charges CDT 503 paise per unit Free (In case GoK does not
release the subsidy in
advance, CDT of 651 paise
per unit will be demanded
and collected from
consumers)
Commission’s Decision
The Government of Karnataka has extended free supply of power to
farmers as per Government Order No. EN 55 PSR 2008 dated
04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets
up to and inclusive of 10 HP is being borne by the GoK through tariff
subsidy. In view of this, all the consumers under the existing LT-4(a) tariff
are covered under free supply of power.
Considering the cross subsidy contribution from categories other than

IP Sets and BJ/KJ Categories, the Commission determines the tariff for
IP Sets under LT4(a) category as follows:
Approved CDT for IP Sets for FY18
Particulars GESCOM
Approved ARR in Rs. Crore 4523.29

Revenue from other than IP & BJ/KJ
2540.51
installations in Rs. Crore
Amount to be recovered from IP & BJ/KJ
1982.78
installations in Rs. Crore
Approved Sales to BJ/KJ installations in MU 128.44
Revenue from BJ/KJ installations at
80.79
Average Cost of supply in Rs. crore
Amount to be recovered from IP Sets
1901.99
category in Rs. crore
Approved Sale to IP Sets in MU 3451.88
Commission Determined Tariff (CDT) for IP
5.51
set Category for FY18 in Rs/Unit
Accordingly, the Commission decides to approve tariff of Rs.5.51 per

unit as CDT for FY18 for IP Set category under LT4 (a). In case the GoK
cxxxii
does not release the subsidy in advance, a tariff of Rs.5.51 per unit shall
be demanded and collected from these consumers.
Approved by the Commission

LT-4 (a) Irrigation Pump Sets
Applicable to IP sets up to and inclusive of 10 HP
Fixed charges per Month Nil*
Energy charges
CDT (Commission Determined Tariff):
551 paise per unit
* In case the GoK does not release the subsidy in advance, a tariff of
Rs.5.51 per unit shall be demanded and collected from these
consumers.
The Commission has been issuing directives to ESCOMs for conducting
Energy Audit at the Distribution Transformer Centre (DTC)/feeder level
for properly assessment of distribution losses and to enable detection
and prevention of commercial loss. In view of substantial progress in
implementation of feeder segregation under NJY scheme, the ESCOMs
were also directed to submit IP set consumption on the basis of the
meter readings of the 11 kV feeders at the substation level duly
deducting the energy losses in 11kV lines, distribution transformers & LT
lines, in order to compute the consumption of power by IP sets
accurately. Further, in the Tariff Order 2016, the ESCOMs were also
directed to take up enumeration of IP sets, 11 KV feeder-wise by
capturing the GPS co-ordinates of each live IP set in their
jurisdiction. In this regard, the Commission has noted that the ESCOMs
have complied partly with these directions and they have initiated
measures to achieve full compliance. The ESCOMs need to ensure full
compliance as this has direct impact on their revenues and tariff
payable by other categories of consumers.
For the forgoing reasons, the Commission directs the ESCOMs as

follows:
cxxxiii
The ESCOMs shall manage supply of power to the IP sets for the FY18,
so as to ensure that it is within the quantum of subsidy committed by
the GoK. They shall procure power which is proportional to such supply.
In case the ESCOMs opt to supply power to the IP sets in excess of the
quantum corresponding to the amount of subsidy the GoK has assured
to be released for FY18, the difference in the amount of subsidy relating
to such supply shall be claimed from the GoK. If the difference in
subsidy is not paid by the GoK, the same has to be collected from the
IP set consumers.
LT4 (b) Irrigation Pump Sets above 10 HP:
GESCOM’s Proposal
The Existing and proposed tariff for LT-4(b) are as follows:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Order
Fixed charges per Rs.40 per HP Rs.40 per HP
Month
Energy charges for 280 paise per unit 428 paise per unit
the entire
consumption
The existing and proposed tariff for LT4(c) are as follows:

LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea
& Rubber plantations up to & inclusive of 10 HP

Order
Month
Energy charges for 280 paise per unit 428 paise per unit
the entire
consumption
LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &
Rubber plantations above 10 HP
Order
Month
Energy charges for the 280paise per unit 428 paise per unit
entire consumption
cxxxiv
Approved Tariff:
The Commission decides to revise the tariff in respect of these
categories as shown below:
LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Fixed charges per Month Rs.50 per HP
Energy charges for the entire 300 paise/unit
consumption
LT4(c) (i) - Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber plantations up to & inclusive of 10 HP
Energy charges 300 paise / unit
LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea&

Rubber plantations above 10 HP
Energy charges 300 paise/unit
5. LT5 Installations-LT Industries:
The existing and proposed tariffs are given below:
LT-5 (a) LT Industries:
Applicable to areas under City Municipal Corporation

i) Fixed charges
Fixed i) Rs. 30 per HP for 5 HP & i) Rs. 30 per HP for 5 HP & below
charges below ii) Rs. 35 per HP for above 5 HP &
per Month ii) Rs. 35 per HP for above 5 HP below 40 HP
& below 40 HP iii) Rs. 40 per HP for 40 HP &
iii) Rs. 40 per HP for 40 HP & above but below 67 HP
above but below 67 HP iv)Rs. 100 per HP for 67 HP &
iv)Rs. 100 per HP for 67 HP & above
above
cxxxv
Demand based Tariff (Optional)
Details Description Existing Tariff as per Proposed by

2016 Tariff Order GESCOM
Fixed Above 5 HP and less Rs.50 per KW of billing Rs.50 per KW of
Charg than 40 HP demand billing demand
es per 40 HP and above but Rs.65 per KW of billing Rs.65 per KW of
Month less than 67 HP demand billing demand
67 HP and above Rs.150 per KW of Rs.150 per KW of
billing demand billing demand
ii) Energy Charges

Tariff Order
For the first 500 units 495 paise per unit 643 paise/ unit
For next 500 units 585 paise per unit 733 paise /unit
For the balance unit 615 paise per unit 763 paise /unit
cxxxvi
LT-5 (b) LT Industries:
Applicable to all areas other than those covered under LT-5(a)
i) Fixed charges

Fixed i) Rs.30 per HP for 5 HP & i) Rs.30 per HP for 5 HP &
Charges per below below
Month ii) Rs.35 per HP for above 5 HP ii) Rs.35 per HP for above 5
& below 40 HP HP & below 40 HP
iii) Rs.40 per HP for 40 HP & iii) Rs.40 per HP for 40 HP &
above but below 67 HP above but below 67 HP
iv)Rs.100 per HP for 67 HP & iv)Rs.100 per HP for 67 HP &
above above
Demand based Tariff (optional)

Details Description Existing Tariff as per Proposed by
2016 Tariff Order GESCOM
Fixed Above 5 HP and Rs.50 per KW of Rs.50 per KW of
Charges less than 40 HP billing demand billing demand
per Month 40 HP and above Rs.65 per KW of Rs.65 per KW of
but less than 67 HP billing demand billing demand
67 HP and above Rs.150 per KW of Rs.150 per KW of
billing demand billing demand
ii) Energy Charges

Tariff Order
For the first 500 units 485 paise per unit 633 paise/ unit
For the next 500 570 paise per unit 718 paise/ unit
units
For the balance 600 paise per unit 748 paise/ unit
units
Existing ToD Tariff for LT5 (a) & (b): At the option of the
consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
cxxxvii
22.00 Hrs to 06.00 Hrs (-) 125 paise per unit
06.00 Hrs to 18.00 hrs 0
18.00 Hrs to 22.00 Hrs (+) 100 paise per unit
Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers
ToD Tariff
Time of day Increase (+) / reduction (-) in the energy

06.00 Hrs to 10.00 Hrs (+) 100 Paise per unit
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
Commission’s Decision:
Time of the Day Tariff:
The decision of the Commission in its earlier Tariff Orders, providing for
mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers
with a contract demand of 500 KVA and above is continued. The
optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)
consumers with contract demand of less than 500 KVA. Further, for LT5
and HT1 consumers, the optional ToD is continued as existing.
The Commission has decided to continue with two tier tariff structure
introduced in the previous Tariff Orders, which are as follows:
i) LT5 (a): For areas falling under City Municipal Corporations

ii) LT5 (b): For areas other than those covered under LT5 (a) above.
Approved Tariff:
The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given
below:
Approved Tariff for LT 5 (a):
Applicable to areas under City Municipal Corporations
i) Fixed charges

Fixed i) Rs.40 per HP for 5 HP & below
Charges per ii) Rs.45 per HP for above 5 HP & below 40 HP
Month iii) Rs.60 per HP for 40 HP & above but below 67 HP
iv) Rs.120 per HP for 67 HP & above
cxxxviii
Fixed Above 5 HP and less than 40 Rs.60 per KW of billing
Charges per HP demand
Month 40 HP and above but less Rs.85 per KW of billing
than 67 HP demand
67 HP and above Rs.170 per KW of billing
demand
ii) Energy Charges

For the first 500 units 510 paise/unit
For the next 500 units 605 paise/ unit
For the balance units 635 paise/ unit
Approved Tariff for LT 5 (b):

i) Fixed charges
Details Approved Tariff
Charges ii) Rs.40 per HP for above 5 HP & below 40 HP
per Month iii) Rs.55 per HP for 40 HP & above but below 67 HP
ii) Demand based Tariff (optional)

Details Description Approved Tariff
Fixed Charges per Month Above 5 HP and Rs.55 per KW of billing
less than 40 HP demand
but less than 67 HP demand
demand
cxxxix
iii) Energy Charges
Details Approved tariff

For the first 500 units 500 paise/ unit
For the balance units 620 paise/unit
As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a)
& (b): At the option of the consumers
ToD Tariff
Time of Day Increase (+ )/ reduction (-) in energy

06.00 Hrs to 10.00 Hrs (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 hrs (+) 100 paise per unit
22.00 Hrs to 06.00 Hrs (-) 100 paise per unit
6. LT-6 Water Supply Installations and Street Lights:
The existing and the proposed tariffs are given below:
LT-6(a) : Water Supply

Order
Fixed charges per Month Rs.45/HP/month Rs.45/HP/month
Energy charges 390 paise/unit 538 paise/unit
LT-6 (b) : Public Lighting

Fixed charges Rs.60/KW/month Rs.60/KW/month
per Month
without LED bulbs
for LED/Induction
cxl
The Commission approves the tariff for these categories are as follows:
Tariff Approved by the Commission for LT-6 (a): Water supply

Fixed Charges per Month Rs.55/HP/month
Tariff Approved by the Commission for LT-6 (b): Public Lighting

Fixed charges per Month Rs.70 /KW/month
Energy charges for LED / 485 paise/unit
Induction Lighting
7. LT 7- Temporary Supply & Permanent supply to Advertising Hoardings:
The existing rate and the proposed rate are given below:
Tariff Schedule LT-7(a)

Applicable to Temporary Power Supply for all purposes.

Tariff Order
a) Less than 67 Energy charge at 950 Energy charge at 1098 paise

HP: paise per unit subject per unit subject to a weekly
to a weekly minimum minimum of Rs.170 per KW of
of Rs.170 per KW of the sanctioned load.
the sanctioned load.
TARIFF SCHEDULE LT-7(b)
Applicable to power supply to Hoardings & Advertisement boards
on Permanent connection basis.

Tariff Order
a) Less than 67 Fixed Charge Rs.50 per Fixed Charge Rs.50 per KW/
HP: KW/ month of the month of the sanctioned load.
sanctioned load.
Energy charge at 950 Energy charge at 1098 paise
cxli
As decided in the previous Tariff Order, the tariff specified for
installations with sanctioned load / contract demand above 67 HP
shall be covered under the HT temporary tariff category under HT5.
With this, the Commission decides to approve the tariff for LT-7
category as follows:
TARIFF SCHEDULE LT-7(a)
LT 7(a) Details Approved Tariff

Temporary Power Less than 67 HP: Energy charges at 1000 paise / unit
Supply for all subject to a weekly minimum of Rs.190
purposes. per KW of the sanctioned load.
Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the
interest of public such as Police Canopy Direction boards, and other
sign boards sponsored by Private Advertising Agencies / firms on
permanent connection basis.
[
LT 7(b) Details Approved Tariff

Power supply on Less than 67 HP: Fixed Charges at Rs.60 per KW / month
permanent
connection basis Energy charges at 1000 paise / unit
H.T. Categories:
Time of Day Tariff (ToD)
The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a), HT-2(b) and HT2(c) consumers with a contract demand
of 500 KVA and above. Further, the optional ToD will continue as
existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract
demand of less than 500 KVA. The details of ToD tariff are indicated
under the respective tariff category.
8. HT1- Water Supply & Sewerage

The existing and proposed tariff are as given below:
The Existing and the proposed tariff – HT-1 Water Supply and Sewerage
Installations
cxlii
Details Existing tariff as per 2016 Proposed Tariffs by
Tariff Order GESCOM
Demand Rs.190 / kVA of billing Rs.190 / kVA for billing
charges demand / month demand / month
Energy 450 paise per unit 598 paise per unit
charges
Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage
installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff to HT-1 category:

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
Commission’s decision:
As discussed earlier in this Chapter, the Commission
approves the tariff for HT 1 Water Supply & Sewerage
category as below:
Details Approved Tariff for HT 1

Demand Rs.200 / kVA of billing demand / month
charges
Energy charges 485 paise/ unit
As discussed earlier in this Chapter, the approved ToD tariff to HT-1 tariff to
Water Supply & Sewerage installations at the option of the consumer is as
follows
06.00 Hrs. to 10.00 hours (+) 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
18.00 Hrs to 22.00 Hrs (+)100 paise per unit
22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit
9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial

cxliii
HT – 2 (a) HT Industries
Applicable to all areas of GESCOM
Details Existing tariff as per Proposed Tariff by

Tariff Order 2016 GESCOM
Demand charges Rs. 180 / kVA of billing Rs. 180 / kVA of billing
demand / month demand / month
Energy charges
(i) For the first one 620 paise per unit 768 paise per unit
lakh units
(ii) For the balance 660 paise per unit 808 paise per unit
units
Railway traction and Effluent Plants under HT2 (a).
Details Existing tariff as per Tariff Proposed by GESCOM

Tariff order 2016
Demand charges Rs. 190 / kVA at billing Rs. 190 / kVA of billing
Energy charges 590paise per unit for all 738 paise per unit for all the
the units units
Existing ToD Tariff for HT-2(a)

22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit
06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2(a)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
Approved Tariff for HT – 2 (a):

As discussed earlier in this chapter, the Commission approves
the tariff for HT 2(a) category as below:
i) Approved Tariff for HT2(a)
Applicable to all areas under GESCOM
Demand charges Rs.200 / kVA of billing demand / month
cxliv
Energy charges
For the first one lakh units 660 paise/ unit
For the balance units 680 paise/ unit
As discussed earlier in this Chapter, the approved ToD tariff to HT2(a)(i) &
(ii) tariff.
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs (-)100 paise per unit
ii) Railway Traction & Effluent Treatment Plants under both HT2(a)

Demand charges Rs. 210 / kVA of billing demand / month
Energy charges 620 paise / unit for all the units
10. HT-2 (b) HT Commercial
Existing and proposed tariff HT – 2 (b) HT Commercial

Details Existing tariff as per Tariff Proposed by GESCOM

Tariff Order 2016
Demand charges Rs.200 / kVA of billing Rs.200 / kVA of billing
Energy charges
(i) For the first two 785paise per unit 933paise per unit
lakh units
(ii)For the balance 815paise per unit 963paise per unit
units
Existing ToD Tariff for HT-2(b)

06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2(b)
cxlv
10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
cxlvi
The Commission notes the issue raised by the consumer of Diagnostic

centres and their request to classify under HT-2(c)(ii) category. The
Commission has examined the issue in detail and decided to classify
the HT power supply to Diagnostic centres running on commercial lines
under HT-2(b) category.
As discussed earlier in this chapter, the Commission approves the

following tariff for HT 2 (b) consumers:
Approved tariff for HT – 2 (b) - HT Commercial

Energy charges
(i) For the first two lakh units 825 paise per unit
(ii) For the balance units 835 paise per unit
Note: The above tariff under HT2 (b) is not applicable for construction of new industries. Such
power
1supply shall be availed only under the temporary category HT5.
Approved ToD Tariff for HT-2(b)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:
The existing and proposed tariff are given below:
Existing and proposed tariff for HT – 2 (c) (i)
Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI
Hospitals
and
Universities, Educational Institutions belonging to Government, Local Bodies and
Aided Institutions and Hostels of all Educational Institutions
Details Existing tariff as per Tariff Proposed by

Tariff Order 2016 GESCOM
Demand charges Rs.180 / kVA of billing Rs.180 / kVA of billing
cxlvii
Energy charges
(i) For the first one 600 paise per unit 748 paise per unit
lakh units
(ii) For the balance 650 paise per unit 798 paise per unit
units
Existing and proposed tariff for HT – 2 (c) (ii) –

Applicable to Hospitals and Educational Institutions other than those covered under
HT2(c) (i)
Details Existing tariff as per Tariff Proposed by

Tariff Order 2016 GESCOM dated
30.11.2016
Demand charges Rs. 180 / kVA of Rs. 180 / kVA of billing
billing demand / demand / month
month
Energy charges
(i) For the first one 700 paise per unit 848paise per unit
lakh units
(ii) For the balance 750 paise per unit 898paise per unit
units
Existing ToD Tariff for HT-2(c)(i) & (ii)

06.00 Hrs to 18.00 Hrs 0
Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs 0
cxlviii
The Commission approves the following tariff for HT2(c) consumers.
Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI
Hospitals,
Universities and Educational Institutions belonging to Government& Local Bodies,
Aided Educational Institutions and Hostels of all Educational Institutions

Demand charges Rs.200/ kVA of billing demand / month
Energy charges
(i) For the first one lakh units 640 paise per unit
Approved tariff for HT – 2 (c) (ii)
Applicable to Hospitals/Educational Institutions other than those covered under
HT2(c) (i)

Energy charges
(i) For the first one lakh units 740 paise per unit
As discussed earlier in this Chapter approved ToD for Tariff to HT-2(c)
(i) & (ii)

10.00 Hrs to 18.00 Hrs 0
22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit
12. HT-3(a) Lift Irrigation Schemes under Government Departments /
Government owned Corporations/ Lift Irrigation Schemes under Pvt
./Societies:
The existing and proposed tariff are given below:
cxlix
Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes
HT 3(a) (i) Applicable to LI Schemes under Government Departments /
Government owned Corporations
Details Existing charges as per Tariff Proposed charges by

Order 2016 GESCOM
Energy 200 paise / unit 348 paise / unit
charges/ Subject to an annual minimum Subject to an annual
Minimum of Rs.1120 per HP / annum minimum of Rs. 1120
charges per HP / annum
HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

Fed through Express / Urban feeders
Details Existing Tariff as per Tariff Proposed by GESCOM

Order 2016
Fixed charges Rs. 40 / HP / Month of Rs. 40 / HP / Month of
sanctioned load sanctioned load
Energy charges 200paise / unit 348 paise / unit
HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

other than those covered under HT-3 (a)(ii)
Details Existing Tariff as per Tariff Proposed by GESCOM

Order 2016
Fixed charges Rs.20 / HP / Month of Rs.20 / HP / Month of
Energy charges 200paise / unit 348paise / unit
The Commission approves the following tariff for HT3(a) consumers:
Approved tariff for HT 3 (a) (i)
Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations
Energy charges / 225 paise/ unit subject to an annual

Minimum charges minimum of Rs. 1240 per HP / annum
cl
Approved tariff for HT 3 (a) (ii)
Applicable to Private LI Schemes and Lift Irrigation Societies fed through
express / urban feeders
Fixed charges Rs.50 / HP / Month of sanctioned load
Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies
other than those covered under HT 3 (a) (ii)
Fixed charges Rs.30 / HP / Month of sanctioned load
13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
The existing and the proposed tariff are given below:
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
Details Existing Tariff Order 2016 Proposed tariff by GESCOM

Energy charges / 400 paise / unit subject to 548 paise / unit subject to
minimum an annual minimum of an annual minimum of
charges Rs.1120 per HP of Rs.1120 per HP of
The Commission approves the tariff for this category as indicated

below:
Approved Tariff
HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut
Plantations:

Energy charges / 425 paise / unit subject to an
minimum charges annual minimum of Rs.1240 per
HP of sanctioned load
cli
14. HT4- Residential Apartments/ Colonies:
The existing and the proposed tariff for this category are given below:
Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies
HT – 4 Applicable to all areas.
Details Existing Tariff Order 2016

Tariff Proposed by
GESCOM
Demand Rs.110 / kVA of billing Rs.110 / kVA of
charges demand billing demand
Energy charges 585 paise per unit 733 paise/ unit
As discussed earlier in this chapter, the Commission approves the tariff

for this category as indicated below:
Approved tariff
HT – 4 Residential Apartments/ Colonies Applicable to all areas
Demand charges Rs.120 / kVA of billing demand

Energy charges 620 paise/ unit
15. TARIFF SCHEDULE HT-5
The existing and the proposed tariffs are given below:

HT – 5 – Temporary supply
67 HP and above: Existing Proposed

Fixed charges / Rs.220/HP/month for the Rs.220/HP/month for the
Demand Charges entire sanction load / entire sanction load /
contract demand contract demand
Energy Charge 950 paise / unit (weekly 1098 paise / unit (weekly
minimum of Rs.170/- per minimum of Rs.170/- per
KW is not applicable) KW is not applicable)
Commission’s Views/Decisions:
TARIFF SCHEDULE HT-5
(i) As approved in the Commission’s Tariff Order dated 6th May,

2013, this Tariff is applicable to 67 HP and above hoardings and
advertisement boards and construction power for industries
clii
excluding those category of consumers covered under HT2(b)
Tariff schedule availing power supply for construction power for
irrigation and power projects and also applicable to power
supply availed on temporary basis with the contract demand of
67 HP and above of all categories.
Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff
Fixed Charges / Rs.240 /HP/month for the entire
Demand Charges sanction load / contract demand
Energy Charges 1000 paise / unit
The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this

Order.
6.6 Wheeling and Banking Charges:

GESCOM in their filing have proposed the following Wheeling charges:
Paise/unit
Injection Point HT LT
Drawal Point
HT 84.28 283.00
LT 283.00 205.57
HT-loss 4.36%
LT-loss 6.32%.
Further, GESCOM in its tariff filing has requested the Commission to

maintain parity in wheeling charges and not to allow banking
during summer months.
The Commission in its preliminary observations had noted that

GESCOM while computing wheeling charges at page 146 of the
filing has indicated distribution network cost as Rs. 4978.90 Crores,
whereas the same is indicated as Rs.1198.05 Crores. for FY18. It is
noted that the distribution ARR indicated at Page -147 does not
tally with the figures indicated at page-120. GESCOM was directed
to reconcile the figures.
Subsequently in their replies to preliminary observations, GESCOM

reconciling the data has proposed the following Wheeling charges:
Paise/unit
Injection Point HT LT
cliii
Drawal Point
HT 49.97(4.36%) 115.41(10.68%)
LT 115.41(10.68%) 49.47(4.36%)
Note: Figures in brackets are losses
The approach of the Commission regarding wheeling &

banking charges is discussed in the following paragraphs:
The Commission has considered the approved ARR pertaining

to distribution wires business and has proceeded determining
the wheeling charges as detailed below:
6.6.1 Wheeling within GESCOM Area:
The allocation of the distribution network costs to HT and LT networks
for determining wheeling charges is done in the ratio of 30:70, as
was being done earlier. Based on the approved ARR for distribution
business, the wheeling charges to each voltage level is worked out
as under:
TABLE – 6.2
Wheeling Charges
Distribution ARR-Rs. Crs 672.78

Sales-MU 7188.58
Wheeling charges- paise/unit 93.59
Paise/unit
HT-network 28.08
LT-network 65.51
In addition to the above, the following technical losses are

applicable to all open access/wheeling transactions:
Loss allocation % loss
HT 4.54
LT 6.03
Note: Total loss is allocated to HT, LT & Commercial
loss based on energy flow diagram furnished by GESCOM.
The actual wheeling charges payable (after rounding off) will

depend upon the point of injection & point of drawal as under:
Paise/unit
cliv
Injection point HT LT
Drawal point
HT 28(4.54%) 94(10.57%)
LT 94(10.57%) 66(6.03%)
Note: Figures in brackets are applicable loss
The wheeling charges as determined above are applicable to
all the open access or wheeling transactions for using the
GESCOM network, except for energy transmitted or wheeled
from Renewable sources to the consumers within the State.
6.6.2 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK

OF MORE THAN ONE LICENSEE
In case the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or
network of more than one licensee, the charges shall be as
indicated below:
i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the
Transmission Licensee.
ii. If the Transmission network and the ESCOMs’ network is used,

Transmission Charges shall be payable to the Transmission
Licensee. Wheeling Charges payable to the ESCOM where
the power is drawn shall be shared equally among the
ESCOMs whose networks are used.
Illustration:
If a transaction involves transmission network & GESCOM’s
network and 100 units is injected, then at the drawal point the
consumer is entitled for 86.42 units, after accounting for
Transmission loss of 3.37% &GESCOM technical loss of 10.57%.
The Transmission charge in cash as determined in the

Transmission Tariff Order shall be payable to KPTCL & Wheeling
charge of 94 paise per unit shall be payable to GESCOM. In
case more than one ESCOM is involved the above 94 paise shall
be shared by all the ESCOMs involved.
clv
iii. If ESCOMs’ network only is used, the Wheeling Charges is
payable to the ESCOM where the power is drawn and shall
be shared equally among the ESCOMs whose networks are
used.
Illustration:
If a transaction involves injection to BESCOM’s network & drawal
at GESCOM’s network, and 100 units is injected, then at the
drawal point, the consumer is entitled for 89.43 units, after
accounting GESCOM’s technical loss of 10.57%.
The Wheeling charge of 94 paise per unit payable to GESCOM

shall be equally shared between GESCOM& BESCOM.
6.6.3 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-

REC ROUTE) TO CONSUMERS IN THE STATE
The separate Orders issued by the Commission from time to time in

the matter of wheeling and banking charges for RE sources (non-
rec route) wheeling energy to consumers in the State shall be
applicable.
6.6.4 CHARGES FOR WHEELING ENERGY BY RE SOURCS WHEELING

ENERGY FROM THE STATE TO A CONSUMER/OTHERS OUTSIDE THE
STATE AND FOR THOSE OPTING FOR RENEWABLE ENERGY
CERTIFICATE[REC]
In case the renewable energy is wheeled from the State to a

consumer or others outside the State, the normal wheeling charges
as determined in para 6.6.1 and 6.6.2 of this Order shall be
applicable. For Captive RE generators including solar power
projects opting for RECs, the wheeling and banking charges as
specified in the Orders issued by the Commission from time to time
shall be applicable.
6.6.5 BANKING CHARGES AND ADDITIONAL SURCHARGE
GESCOM has prayed for the following on Open Access

Transactions:
clvi
a. To allow banking facility for a period of 3-months from the
date of generation
b. Not to allow withdrawal of banked power during peak and
ToD hours
c. If banked energy is not utilized within the period of three
months from the date of power banked, it shall automatically
lapse and no charges shall be paid in view of that power.
d. To levy additional surcharge on OA consumers who draw
power from utility even after opting for OA.
The Commission in its preliminary observations had directed

GESCOM to justify the above requests in terms of detailed financial
impact analysis.
GESCOM in its replies to the preliminary observations had replied

that the financial impact analysis regarding banking and
additional surcharges could be submitted within a week. However,
GESCOM did not furnish any financial impact analysis.
The Commission notes that all the ESCOMs except CESC, have filed
separate petitions seeking modifications to the existing banking
facility. Further, all the ESCOMs have filed petitions separately to
introduce additional surcharge. The above issues pertaining to
banking facility and additional surcharge are being dealt
separately by the Commission in those petitions. Till such time the
Orders are passed in those petitions, the existing banking facility
shall be continued and no additional surcharge is payable.
6.7 CROSS SUBSIDY SURCHARGE[CSS]:

GESCOM in its tariff petition has worked out the Cross Subsidy
surcharge as per the MYT Regulations (the methodology as per
Tariff Policy-2006). However, in its replies to preliminary observations
GESCOM has stated that it has worked out the CSS as per Tariff
Policy-2016, which is not correct. GESCOM has proposed the CSS
as indicated below:
Paise/unit
Voltage Level HT-1 HT-2a HT-2b HT-2C HT-4 HT-5
clvii
66kV & above 150.95 355.32 463.58 301.74 153.85 1222.27
HT level- 23.27 227.64 335.90 174.06 26.17 1094.59
33kV/11kV
The Commission notes that as per the calculations submitted to
preliminary observations the CSS considering 80% criteria would be as
indicated below:
Paise/unit
66kV & above 49.52 194.36 310.09 -73.18 109.40 850.15
HT level- 47.53 192.13 308.10 -83.74 107.39 875.67
33kV/11kV
Subsequently, in its replies to rejoinder, GESCOM has submitted
revised CSS considering 75% of the CSS worked out as per the
formula as indicated below:
Paise/unit
66kV & above 44.56 180.35 288.84 -78.50 100.68 795.15
HT level- 46.42 182.21 290.71 -68.61 102.55 797.02
33kV/11kV
The Commission notes that in the above proposal, the GESCOM
has interchanged the CSS applicable for 66 kV& above and for HT-
categories.
The determination of cross subsidy surcharge by the Commission is
discussed in the following paragraphs: -
The Commission in its MYT Regulations has specified the
methodology for calculating the CSS as per Tariff Policy 2006.
Meanwhile, the Central Government has issued the new Tariff
Policy 2016, wherein a revised methodology has been specified for
determining CSS. So far, the Commission, for determining the CSS
had adopted the methodology specified in the earlier Tariff Policy
of 2006. However, considering that such Tariff Policy has been
replaced now by the Tariff Policy-2016 and that a few ESCOMs
have sought determination of CSS under such new Tariff Policy, the
Commission decides to adopt the methodology specified in the
latest Tariff Policy 2016 for determination of CSS in this Tariff Order
for FY18. Action shall be taken to amend the relevant Regulations
for adoption of the revised methodology for determination of CSS.
Based on this methodology, the category-wise cross subsidy will be
as indicated below:
clviii
Paise/unit
Cross subsidy Cross subsidy
Average Cost Average 20% of tariff
surcharge surcharge
Category of supply @ Cost of payable by
Particulars paise/unit @ 66 kV & paise/unit @
Tariff 66 kV and supply at relevant
above level as per HT level as per
above level* HT level** category
formula formula
1 2 3 4 8 9 10
HT-1
536.76 410.53 445.45 126.23 91.32 107.35
Water Supply
HT-2a
762.23 410.53 445.45 351.70 316.79 152.45
Industries
HT-2b
962.09 410.53 445.45 551.56 516.64 192.42
Commercial
HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17
HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94
HT3 (a)(i)
225.48 410.53 445.45 -185.05 -219.97 45.10
Lift Irrigation
HT3 (a)(ii)
318.06 410.53 445.45 -92.47 -127.38 63.61
Lift Irrigation
HT3 (a)(iii)
262.67 410.53 445.45 -147.86 -182.77 52.53
Lift Irrigation
HT3 (b)
Irrigation & 426.55 410.53 445.45 16.02 -18.90 85.31
Agricultural Farms
HT-4
Residential 662.71 410.53 445.45 252.18 217.27 132.54
Apartments
HT5
1642.58 410.53 445.45 1232.05 1197.14 328.52
Temporary
*Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09/unit and transmission losses of 3.37%.
** Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of
51.09Ps/unit and transmission losses of 3.37%, HT distribution network / wheeling charges of
20.81Ps/unit and HT distribution losses of 3.77%.
Note: The carrying cost of regulatory asset for the current year is zero.
As per the Tariff Policy 2016, while limiting the CSS so as not to exceed
20% of the tariff applicable to relevant category, the CSS (after
rounding off to nearest paise) is determined as under:
Cross Subsidy Surcharge for FY18
Paise/unit
66 kV
HT level-11
Particulars &
kV/33kV
above
HT-1 Water Supply 107 91
HT-2a Industries 152 152
HT-2b Commercial 192 192
HT-2 (C)(i) 147 147
HT-2 (C)(ii) 164 164
HT3 (a)(i) Lift Irrigation 0 0
HT3 (a)(ii) Lift Irrigation 0 0
HT3 (a)(iii) Lift Irrigation 0 0
clix
HT3 (b) Irrigation &
16 0
Agricultural Farms
HT-4 Residential Apartments 133 133
HT5 Temporary 329 329
Note: wherever CSS is negative, it is made zero
The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area
coming under GESCOM. However, the above CSS shall not be
applicable to captive generating plant for carrying electricity to
the destination of its own use and for those renewable energy
generators who have been exempted from CSS by the specific
Orders of the Commission.
The Commission directs the Licensees to account the transactions
under open access separately.
6.8 Other Issues:
6.8.1 Tariff for Green Power:
In order to encourage generation and use of green power in the

State, the Commission decides to continue the existing Green Tariff
of 50 paise per unit as the additional tariff over and above the
normal tariff to be paid by HT-consumers, who opt for supply of
green power from out of the renewable energy procured by
distribution utilities over and above their Renewable Purchase
Obligation (RPO).
6.9 Other tariff related issues:

i) Rebate for use of Solar Water Heater:
While some of the ESCOMs have requested to discontinue the

Solar rebate to consumers, the consumers have requested to
increase the Solar Rebate. Since the use of Solar Water Heaters is
advantageous to both the ESCOMs and the consumers, the
Commission has decided to retain the existing rebate of 50 paise
per unit subject to a maximum of Rs.50 per installation per month
for use of solar water heaters.
ii) Prompt payment incentive:
clx
The Commission had approved a prompt payment incentive at
the rate of 0.25% of the bills amount (i) in all cases of payment
through ECS; and (ii) in the case of monthly bill exceeding
Rs.1,00,000/- (Rs.one lakh), where payment is made 10 days in
advance of due date and (iii) advance payment of exceeding
Rs.1000 made by the consumers towards monthly bills. The
Commission decides to continue the same.
clxi
iii) Relief to Sick Industries:
The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial
Policy 2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001.
Further, the Government of Karnataka has issued G.O No.CI2 BIF
2010, dated 21.10.2010. The Commission, in its Tariff Order 2002,
had accorded approval for implementation of reliefs to the sick
industries as per the Government policy and the same was
continued in the subsequent Tariff Orders. However, in view of issue
of the G.O No.CI2 BIF 2010, dated 21.10.2010, the Commission has
accorded approval to the ESCOMs for implementation of the
reliefs extended to sick industrial units for their revival /
rehabilitation on the basis of the orders issued by the Commissioner
for Industrial Development and Director of Industries & Commerce,
Government of Karnataka.
iv) Power Factor:
The Commission in its previous order had retained the PF threshold

limit and surcharge, both for LT and HT installations at the levels
existing as in the Tariff Order 2005. The Commission has decided to
continue the same in the present order as indicated below:
LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive
power is involved): 0.85
HT Category: 0.90
v) Rounding off of KW / HP:

In its Tariff Order 2005, the Commission had approved rounding off
of fractions of KW / HP to the nearest quarter KW / HP for the
purpose of billing and the minimum billing being for 1 KW / 1HP in
respect of all the categories of LT installations including IP sets. This
shall continue to be followed. In the case of street light installations,
fractions of KW shall be rounded off to the nearest quarter KW for
clxii
the purpose of billing and the minimum billing shall be for a quarter
KW.
vi) Interest on delayed payment of bills by consumers:
The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission
decides to continue the same in this Order also.
vii) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued the K.E.R.C. (Security Deposit)
Regulations, 2007 on 01.10.2007and the same has been notified in
the Official Gazette on 11.10.2007. The payment of security deposit
shall be regulated accordingly, pending orders of the Hon’ble High
Court in WP No.18215/2007.
viii) Mode of Payment by consumers:
The Commission, in its previous Order had approved bill payment

in cash/cheque/DD of amounts up to and inclusive of Rs.10,000/-
and payment of amounts above Rs.10,000 to be made only
through cheque. The consumers can also make payment of power
bills through Electronic Clearing System(ECS)/ Credit card/ online
E-payment up to the limit prescribed by the RBI, RTGS / NEFT / on
line E-Payment / Digital mode of payments as per the guidelines
issued by the RBI wherever such facility is provided by the Licensee
in respect of bill payments up to the limit prescribed by the RBI.
ESCOM in their application had proposed to consider the

collection of power supply bills above One lakh rupees, through
RTGS/NEFT. The Commission has examined the request and
decides to approve the payment of power supply bills above One
lakh rupees, through RTGS/NEFT, at the option of the consumer.
6.10 Cross Subsidy Levels for FY18:
The Hon’ble Appellate Tribunal for Electricity (ATE), in its order

dated 8th October, 2014, in Appeal No.42 of 2014, has directed the
clxiii
Commission to clearly indicate the variation of anticipated
category-wise average revenue realization with respect to overall
average cost of supply in order to implement the requirement of
the Tariff Policy that tariffs are within ±20% of the average cost of
supply, in the tariff orders being passed in the future. It has further
directed the Commission to also indicate category-wise cross
subsidy with reference to voltage-wise cost of supply so as to show
the cross subsidies transparently.
In the light of the above directions, the variations of the

anticipated category-wise average realization with respect to the
overall average cost of supply and also with respect to the
voltage-wise cost of supply of GESCOM and the cross subsidy
thereon, is Indicated in ANNEXURE- III of this Order. It is the
Commission’s endeavour to reduce the cross subsidies gradually as
per the Tariff policy.
6.11 Effect of Revised Tariff:
As per the KERC (Tariff) Regulations 2000, read with the MYT
Regulations 2006, the ESCOMs have to file their applications for
ERC/Tariff before 120 days of the close of each financial year in the
control period. The Commission observes that the ESCOMs have
filed their applications for revision of tariff on 30th November, 2016.
As the tariff revision is effective from 1st April, 2017 onwards, the
ESCOMs would be recovering revenue as per the revised tariff for
eleven months of the Financial Year (Except in case where the
billing cycle is lesser than a month).
A statement indicating the proposed revenue and approved

revenue is enclosed vide Annexure-III and detailed tariff schedule
is enclosed vide Annexure IV.
clxiv
6.12 Summary of the Tariff Order:
 The Commission has approved an ARR of Rs.4523.29 Crores for
FY18, which includes the deficit for FY16 of Rs.490.97 Crores with
a net gap in revenue of Rs.345.30 Crores as against GESCOM’s
proposed ARR of Rs.5345.83 Crores.
 The Commission has allowed recovery of entire gap in revenue

with additional revenue of Rs.345.30 Crores on Tariff Revision as
against the additional revenue of Rs.1075.33 Crores proposed
by GESCOM for FY18.
 GESCOM in its filing dated 30.11.2016 had proposed an increase

of 148 paise per unit for all categories of consumers resulting in
average increase in retail supply tariff by 25.18%. The
Commission has approved an average increase of 48 paise per
unit. The average increase in retail supply tariff of all the
consumers for FY18 is 8%.
 The Commission has allowed for recovery of additional

revenue partly by increase in fixed charges ranging from
Rs.5 per KW/HP/KVA to Rs.20 per KW/HP/KVA.
 The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the
range of 15 paise per unit to 50 paise per unit.
 The increase in the energy charges for domestic category

upto 30 and from 30 to 100 units is 25 to 30 paise per unit.
 The increase in the LT industries category is in the range of

15 paise per unit to 20 paise per unit and for other
categories, the increase is in the range of 20 paise per
unit to 50 paise per unit.
 In order to increase the sales under HT industry and HT

commercial category, the increase made in energy
charges in 2nd slab is 20 paise per unit as against the 40
clxv
paise per unit increase under 1st slab for consumption
upto 1 lakh / 2 lakh units per month.
 Time of the day tariff which was made mandatory in the previous
Tariff Orders for installations under HT2 (a), HT2 (b) and HT2(c)
with contract demand of 500KVA and above is continued in this
Order.
 The Commission has introduced Time of Day billing for

morning peak period from 06.00 hours to 10.00 hours in
respect of LT/ HT consumers in addition to the prevailing
ToD billing.
 A rebate of 50 paise per unit is allowed for Effluent

Treatment Plant installed within the industrial premises
under HT-2(a) tariff schedule.
 Green tariff of additional 50 paise per unit over and above

the normal tariff which was introduced a few year ago
for HT industries and HT commercial consumers at their
option, to promote purchase of renewable energy from
ESCOMs, is continued in this Order.
 As in the previous Orders, the Commission has continued

to provide a separate fund for facilitating better
Consumer Relations /Consumer Education Programmes.
 The Commission has decided to impose penalty upto

Rs.one lakh per sub division of GESCOM who fail to
conduct Consumer Interaction Meetings at least once in
three months and such penalty would be payable by the
concerned officers of the GESCOM.
6.13 Commission’s Order
clxvi
1. In exercise of the powers conferred on the Commission under
Sections 62, 64 and other provisions of the Electricity Act, 2003,
the Commission hereby determines and notifies the retail
supply tariff of GESCOM for FY18 as stated in Chapter-6 of this
Order.
2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling
on or after 1st April, 2017.
3. Consequent to issue of this Tariff Order, the petition filed by

GESCOM vide OP.No.58 of 2017 stand disposed of.
4. This Order is signed dated and issued by the Karnataka

Electricity Regulatory Commission at Bengaluru this day, the
11th April, 2017.
Sd/- Sd/- Sd/-

(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)
Chairman Member Member
clxvii
APPENDIX
NEW DIRECTIVES
AND
REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED
BY THE COMMISSION
1. The following new directives are issued by the Commission:
i. Directive on conducting Consumers’ Interaction Meetings in the O

& M sub-divisions for redressal of consumer complaints:
During the Public Hearings held by the Commission to hear the
views, comments & suggestions of the consumers and other
stakeholders on the ESCOMs’ Tariff applications, it was brought to
the notice of the Commission by the consumers that the Consumer
Interaction Meetings chaired by the Superintending Engineers, in
the O&M sub-divisions of ESCOMs are not being conducted
regularly, thus denying them of the opportunity to attend such
meetings to air their complaints/ grievances pertaining to supply of
electricity and any others issues. The consumers have urged the
Commission to ensure that ECOMS take necessary action to make
the sub-divisions conduct Consumer Interaction meetings regularly
to hear and address the consumer grievances.
The Commission strongly opines that if the ESCOMs conduct

consumer interaction meetings regularly, not only most of the
grievances of the consumers could be redressed in such meetings,
the ESCOMS could also redesign/realign their operations and
investments on capital and other works to optimally deliver better
and satisfactory service to the consumers. Such development
could also increase the efficiency and revenues of the ESCOMs.
Hence, the Commission hereby directs the GESCOM to ensure that

Consumer Interaction Meetings chaired by the Superintending
clxviii
Engineers, are conducted in each O&M sub-division according to
a pre-published schedule, at least once in every three months.
Further, the consumers shall be invited to such meetings in
advance through emails, letters, notices on GESCOM’s website,
local newspapers etc., to facilitate participation of maximum
number of consumers in such meetings. The GESCOM should
ensure that the proceedings of such meetings are recorded and
uploaded on its website, for the information of consumers.
Compliance in this regard shall be reported once in three months
to the Commission, indicating the date, the number of consumers
attending such meetings and the status of redressal of their
complaints.
If the GESCOM fails to ensure conduct of the Consumer Interaction

Meetings as directed, the Commission would consider imposing a
penalty of up to Rs one lakh per O&M sub-division per quarter for
each instance of non-compliance, and also direct that such
penalty shall be recovered from the concerned Superintending
Engineer who fails to conduct such meetings.
ii. Directive on preparation of energy bills on monthly basis by

considering 15 minute’s time block period in respect of EHT/HT
consumers importing power through power exchange under Open
Access
The Commission has noticed that, year on year, there has been a
substantial increase in the number of EHT and HT consumers of the
distribution licensees opting for open access resulting in substantial
volume of energy being procured through Power Exchanges,
which imposes a burden on the SLDC, in grid management.
Further, in accordance with the stipulations in Clause 6.3 (f) of the
Karnataka Electricity Grid Code (KEGC),2015, under the chapter
on Operation Planning, in order to facilitate demand estimation
for operational purpose, the distribution licensee (ESCOM) is
required to provide to the SLDC, on a day ahead basis, at 09.00
clxix
hours each day, its estimated demand for each 15-minute block,
for the ensuing day. The distribution licensee is also required to
provide to the SLDC, the estimates of loads that may be shed,
when required, in discrete blocks, with the details of arrangements
of such load shedding. Consequent to such stipulation the ESCOMs
are required to prepare monthly energy bills in respect of EHT/HT
consumers importing power through power exchange under Open
Access, by considering 15 minute’s time block. However, it is
observed that except in rare cases, this billing requirement is not
being complied with the ESCOMs.
In view of this, the Commission directs the GESCOM to ensure

preparation of energy bills on monthly basis by considering the 15
minute’s time block period in respect of EHT/HT consumers
importing power through power exchange under Open Access.
The GESCOM shall implement the directive forthwith and the
compliance regarding the same shall be submitted monthly from
May, 2017 onwards, to the Commission, regularly.
2. Review of Compliance of Existing Directives:
The Commission had in its earlier Tariff Orders and other

communications issued several directives for compliance by the
GESCOM. While reproducing such directives, the compliance of
the directives as reported by the GESCOM is analyzed in this
Section.
i. Directive on Energy Conservation:
The Commission had directed the ESCOMs to service all the new
installations only after ensuring that the BEE ***** (Bureau of Energy
Efficiency five-star rating) rated Air Conditioners, Fans,
Refrigerators, etc., are being installed in the applicant consumers’
premises.
Similarly, ESCOMs were directed to ensure that all new

streetlight/high mast installations including extensions made to the
clxx
existing streetlight circuits shall be serviced only with LED
lamps/energy efficient lamps like induction lamps.
Further, the Commission had directed the ESCOMs to take up

programmes to educate all the existing domestic, commercial and
industrial consumers, through media and distribution of pamphlets
along with monthly bills, regarding the benefits of using five-star
rated equipment certified by the Bureau of Energy Efficiency in
reduction of their monthly electricity bills and conservation of
precious energy.
Compliance by the GESCOM:
The Commission has issued the directive on energy conservation

and the GESCOM has taken action to service all the new
installation only after ensuing that the BEE ***** rated Air conditions,
Fans, Refrigerators, etc., are being installed in the applicant
consumers’ premises. Further, new streetlight/high mast installations
including extensions made to existing streetlight circuits are being
serviced with LED lamps/energy efficient lamps.
Further, the GESCOM has conducted awareness programme to all

the existing domestic commercial and industrial consumer
regarding the benefits of using five star rated equipment certified
by the Bureau of Energy Efficiency in reduction of their monthly
electricity bills and conserving precious energy during consumer
interaction meetings at sub-divisions. Also, continuous awareness is
being carried out by distributing the pamphlets, through print &
digital media and in the monthly electricity bills also.
Commission’s Views:
The Commission observes that the GESCOM has not submitted the
compliance regularly on implementation of the directive. It is also
observed from the GESCOM’s report that it has merely issued a
circular to all its officers to use BEE five-star rated Energy Efficient
clxxi
Appliances, and has not taken any further effective steps in the
field to ensue service to all new installations only with BEE five-star
rated Air Conditioners, Fans, Refrigerators, etc., in the applicant
consumers’ premises. The GESCOM should focus on effective
implementation of this directive by reviewing periodically the
progress/status of implementation of its circular instructions by its
field officers and take corrective action wherever necessary.
Further, it is also important that the GESCOM draws up a

continuous awareness programme to educate the consumers
about the benefits of using the energy efficient appliances in their
premises and ensure increase in use of energy efficient appliances.
The Commission reiterates that the GESCOM shall service all the
new installations only after ensuring that the BEE ***** (Bureau of
Energy Efficiency five-star rating) rated Air Conditioners, Fans,
Refrigerators, etc., are being installed in the applicant consumers’
premises and the compliance thereon shall be reported to the
Commission once in a quarter regularly.
ii. Directive on implementation of Standards of Performance (SoP):
The Directive issued was as follows:
“The GESCOM is directed to strictly implement the specified

Standards of Performance while rendering services related to
supply of power as per the KERC (Licensee’s Standards of
Performance) Regulations, 2004. Further, the GESCOM is directed
to display prominently both in Kannada and English the details of
various critical services such as replacing the failed transformers,
attending to fuse off call / line breakdown complaints, arranging
new services, change of faulty energy meters, reconnection of
power supply, etc., rendered by it as per Schedule-1 of the KERC
(Licensee’s Standards of Performance) Regulations, 2004 and
Annexure-1 of the KERC (Consumer Complaints Handling
clxxii
Procedure) Regulations, 2004, on the notice boards in all the O & M
sections and O & M sub-divisions in its jurisdiction for the information
of consumers as per the following format:
Standards of
Primary
performance Amount
responsibility Next
Nature of (indicative payable to
centers where higher
Service minimum time limit affected
to lodge Authority
for rendering consumer
complaint
services)
The GESCOM shall implement the above directives within one

month from the date of this order and report compliance to the
Commission regarding the implementation of the directives.”
The GESCOM has implemented the specified Standards of

Performance while renderings services related to supply of power
as per the KERC (Licensee’s Standards of Performance)
Regulations, 2004 and has displayed the details of specified
standards of performance on the notice boards in all its O&M
section and sub-division offices for the information of the
consumers.
Further, the GESCOM has conducted interaction meetings for

educating the consumers about standards of performance. The
compliance on the above is being submitted to the Commission
regularly.
The status of implementation of the above directive in the

GESCOM is as follows:
O&M sub-divisions O&M sections

No. of sub- No. of
divisions sections
Total Likely date Likely date
where SoP Total where SoP
sub- Balance of Balance of
parameters sections parameters
divisions completion Completion
have been have been
displayed displayed
53 53 0 - 245 245 0 -
clxxiii
Monitoring of Overall Performance Standards Relating to Distribution and
Supply of Power for the month from April to September 2016 is given below:
Balance at the end of
Reasons for the delay

(Maximum time limit
received during the
within the Time limit

Cases attended to
Cases attended to
limit prescribed in
beyond the Time
prescribed in the
beginning of the
Number of Cases
Number of Cases
Nature of Service
in attending the
pending at the
the Regulation
for rendering
Performance
Standards Of
Regulation
the month
service)
month
month
cases
Sl.No.
Total
1 2 3 4 5 6=4+5 7 8 9 10
Normal Fuse Off
1 Cities & Towns Within 6 Hrs 16 89773 89789 88497 1243 49
Rural Areas Within 24 Hrs 15 89926 89941 85273 4635 33
Line Break downs 0
Within 6
Hrs(10 hrs if
Cities & Towns poles are 14 1874 1888 1767 107 14
2 Major line
broken
fault.
down)
Within 24 Hrs
Rural Areas 14 6967 6981 5300 1639 42
(in all cases)
Distribution
Transformer failure
3
Cities & Towns Within 24 Hrs 3 756 759 723 16 20
Rural Areas Within 72 Hrs 156 5607 5763 5113 523 127
Period of
Scheduled 0
Outages
4 Maximum duration Not to
in single stretch exceed 12
0 147 147 142 5 0
Restoration of hrs By 6 PM
supply on any day
Voltages
variations
Where no
expansion or
Within 7 days 7 1018 1025 977 44 4
enhancement of
network is involved
5 Where up
gradation or Within 120
0 304 304 258 41 5
distribution system days
is required
Opening of Within 6 Hrs.in
0 258 258 238 20 0
neutral and cities
neutral voltage Within 24 hrs. 1 352 353 318 35 0
exceeding 2% of in Rural areas
Meter Complaints
supply voltage
Inspect and
check Within 7 days 0 4115 4115 3898 207 10
correctness
Replace slow
Within 10
creeping or stuck 16 1435 1451 1385 44 22
days
6 meters
Replace burnt Within 7 days
meters if cause of receipt of 302 1270 1572 1115 76 381
not attributable complaint
to consumer Within 24 hrs.
Replace burnt
of payment
meter in all other 73 1098 1171 1012 132 27
of charges by
cases
consumer
clxxiv
Application for
new connection 0
/additional load
Release of supply
Due to
where service is Within one 843
7125 39029 46154 36481 1239 network
feasible from month 4
problem
existing network
As specified
Release of supply
by KERC
where network
(Duty of the Deposit
expansion/
Licensee to not paid
enhancement 367 703 1070 997 9 64
supply by
required for
electricity on applicant.
7 providing
request)Regul
connection
ations 2004
Within 30
days after
attaining Deposit
seniority (The not paid/
number of work is
123
IP Sets new 123 3446 3569 2177 157 being
5
connections carried
shall be out as per
limited to the the
target fixed in seniority.
the year)
WUP at
Erection of Sub- Nittur
8 NA 1 32 33 32 0 1
station 33/11 KV
(Bidar Div)
Transfer of
Within 7 days
ownership &
9 of receipt of 6 866 872 863 6 3
conversion of
application
service
Conversion of LT
Within 30
single phase to LT
days from the
three phase
10 date of 3 169 172 163 5 4 _
Conversion from
payment of
LT to HT and vice-
charges
versa
Resolution of
complaints on 0
consumer's Bills
If no additional Within 24 Hrs Due to
information is of receipt of 26 31420 31446 22356 9066 24 insufficient
11
required complaint /wrong
data
If additional Within 7 days
furnished
information is of receipt of 6 15696 15702 9551 6143 8
by the
required complaint
applicant
Reconnection of
supply following 0
disconnection
On the same 299
Towns and cities day of 2387 256743 21286 235457 20682
1 Due to
12 receipt ofhrs
Within 24 non-
request
of receipt of payment
205 of arrears
Rural Areas payment 514 164356 21286 143211 19604
5 by
from
consumer consumer.
clxxv
Payment of
solarium in cases
0
of electric
accidents
Within 7 days
Cases where it is without Documen
established waiting for ts not
13 beyond doubt report from submitted
6 1 7 0 4 3
that the accident Chief by owner
is not due to the Electrical of the
fault of the victim Inspector to animal
Govt.(CEIG)
Within 30
In other cases days after 2 0 2 0 0 2 work
receipt of under
report from process
Refund of Within
CEIG 60
14 4 0 4 1 0 3
Deposits days receipt
of request
On the same
Issue of day of
15 0 2036 2036 1785 103 148
certificates receipt of
request
As seen above, the reason for pendency is due to delay in

payment of deposits/ other charges by the applicants/consumers.
Further, there is also delay in replacement of failed transformers
and the GESCOM will take steps to repair the transformers in the
transformer repair centers and make it available to the needy sub-
divisions.
The Commission while noting the compliance furnished, reiterates

that the GESCOM shall continue to comply with its earlier directive
by displaying the details of SoP in all its O&M section and sub-
division offices for the information of the consumers, and also to
adhere to the specified standards of performance in rendering
various services to consumers in a time bound manner.
The Commission notes that, during the Public Hearings held on the
ESCOMs’ Tariff petitions, the consumers participating in the hearing
have stated that, the ESCOMs, contrary to their submission before
the Commission on compliance of the directive issued by the
Commission, have not displayed the SoP parameters on the notice
boards in the O&M offices and also not adhered to the timelines
stipulated in the SoP. They have sought the intervention of the
clxxvi
Commission to ensure that the ESCOMs comply with the directive
on SoP.
The Commission notes that the situation indicates that there is lack
of effective supervision over the functioning of field offices by the
ESCOMs especially in rendering services relating to supply of
power to the consumers.
Therefore, the Commission once again reiterates its directive to the

GESCOM to continue to strictly implement the specified SoP while
rendering services related to supply of power as per the KERC
(Licensee’s Standards of Performance) Regulations, 2004 and
directs the GESCOM to monitor effective implementation of the
directive on SoP in all its O&M offices. The Commission shall initiate
appropriate action on any instance of breach of its directive.
iii Directive on use of safety gear by linemen:
The directive issued was as follows:
The Commission directs the GESCOM to ensure that all the linemen
in its jurisdiction are provided with proper and adequate safety gear
and also ensure that the linemen use such safety gear provided
while working on the network. The GESCOM should sensitise the
linemen about the need for adoption of safety aspects in their work
through suitably designed training and awareness programmes. The
GESCOM is also directed to device suitable reporting system on the
use of safety gear and mandate supervisory/higher officers to
regularly cross check the compliance by the linemen and take
disciplinary action on the concerned if violations are noticed. The
GESCOM shall implement this directive within one month from the
date of this order and submit compliance report to the Commission.
clxxvii
Compliance of the GESCOM:
The GESCOM has provided safety gadgets to 2,000 linemen and

further action is being taken to provide the safety gadgets to
newly recruited 1,491 linemen by January 2017.
The GESCOM is monitoring the use of safety gear by linemen and

also the supervisory / higher officers are regularly cross checking
the use of safety gadgets by its staff. Further, the GESCOM is
frequently imparting training to all the linemen and other field staff
regularly under various mandatory technical training program on
safety aspects. The compliance on the directive is being
submitted to the Commission once in a quarter regularly.
The Commission notes that the GESCOM has already issued

required safety gear to its existing linemen and also taken
necessary action to provide the safety gear to its newly recruited
linemen. It is important that the GESCOM should continue to focus
on safety aspects to reduce the electrical accidents occurring
due to negligence and non-adherence of safety procedures by
the field staff, while working on the distribution network. Further,
the linemen should be given training on adherence to safety
aspects, so that it becomes part of their routine.
The Commission reiterates its directive that the GESCOM shall

ensure that, all the linemen in its jurisdiction are provided with
proper and adequate safety gear and that they use such safety
gear provided to them while working on the network. The
compliance in this regard shall be submitted once in a quarter to
the Commission regularly.
iv Directive on providing Timer Switches to Streetlights by the ESCOMs
The directive issued was as follows:
The Commission directs the GESCOM to install timer switches using

own funds to all the streetlight installations in its jurisdiction
clxxviii
wherever the local bodies have not provided the same and later
recover the cost from them. The GESCOM shall also take up
periodical inspection of timer switches installed and ensure that
they are in working conditions. They shall undertake necessary
repairs / replacement work, if required and later recover the cost
from the local bodies. The compliance regarding the progress of
installation of timer switches to streetlight installations shall be
reported to the Commission within three months of the issue of the
order.
The GESCOM has conducted a meeting with the urban local

bodies on 22.10.2016 regarding providing timer switches to all
streetlight control points. The local bodies have agreed to take up
the work under DCW/self-execution basis. All the field officers of
GESCOM have been instructed to prepare the necessary
estimates for providing timer switches and submit it to division
offices. The divisional officers will sanction such estimates and
inform the concerned local bodies to take up the works in their
jurisdiction. Further, the concerned divisional officers have been
directed to complete the work before March 2017.
The Commission observes that, the GESCOM, so far has not taken
any concrete steps to provide timer switches to the streetlight
installations in its jurisdiction. The GESCOM has also not initiated any
action except conducting one meeting that too as late as
October 2016, with the concerned local authorities, for installation
of timer switches. This inaction by the GESCOM has resulted in
wastage of electricity by indiscriminate use of streetlights in its
jurisdiction, during day time.
Further, wherever feasible, the GESCOM should install the timer
switches at its cost and later recover the cost from the concerned
local bodies. The GESCOM is also directed to persuade the local
bodies to install timer switches at their cost availing funds / grants
clxxix
received from Government and other agencies for such
programmes.
ensure that, all the new streetlight installations and any
extension/modification to be carried out to the existing streetlight
installations, shall be serviced only with timer switches.
v. Directive on Load Shedding:
The Commission had directed that:

(1) Load shedding required for planned maintenance of
transmission /
distribution networks should be notified in daily newspapers at
least 24 hours in advance for the information of consumers.
(2) The ESCOMs shall on a daily basis estimate the hourly
requirement of
power for each sub-station in their jurisdiction based on the
seasonal
conditions and other factors affecting demand.
(3) Any likelihood of shortfall in the availability during the course
of the
day should be anticipated and the quantum of load
shedding should be estimated in advance. Specific sub-
stations and feeders should be identified for load shedding for
the minimum required period with due intimation to the
concerned sub-divisions and sub-stations.
(4) The likelihood of interruption in power supply with time and
duration of such interruption may be intimated to consumers
through SMS and other means.
(5) Where load shedding has to be resorted due to unforeseen
reduction in the availability of power, or for other reasons,
consumers may be informed of the likely time of restoration of
supply through SMS and other means.
clxxx
(6) Load shedding should be carried out in different sub-stations /
feeders to avoid frequent load shedding affecting the same
sub-stations feeders.
(7) The ESCOMs should review the availability of power with
respect to the projected demand for every month in the last
week of the previous month and forecast any unavoidable
load shedding after consulting other ESCOMs in the State
about the possibility of inter-ESCOM load adjustment during
the month.
(8) The ESCOMs shall submit to the KERC their projections of
availability and demand for power and any unavoidable
load shedding for every succeeding month in the last week of
the preceding month for approval.
(9) The ESCOMs shall also propose specific measures for
minimizing load
shedding by spot purchase of power in the power exchanges
or
bridging the gap by other means.
(10) The ESCOMs shall submit to the Commission sub-station wise
and feeder wise data on interruptions in power supply every
month before the 5th day of the succeeding month.
The Commission had directed that the ESCOMs shall make every
effort to minimize inconvenience to consumers strictly complying
with the above directions. The Commission will review the
compliance of the directions on a monthly basis for appropriate
orders.
During the planned outages, the GESCOM will intimate the

affected consumers well in advance regarding load shedding to
be carried out through newspapers.
The GESCOM is submitting 15 minute’s block-wise week ahead

requirement of power and energy for one week in advance to
clxxxi
SLDC, KPTCL. Also, the block-wise day ahead requirement of
power based on seasonal condition and other factor affecting
the demand is being submitted daily to the SLDC through e-mail.
In turn, everyday SLDC will issue availability of power and energy
one day in advance for GESCOM. Accordingly re-scheduling of
power and energy will be done at 220 KV Receiving Stations.
Whenever there is loss of generation, SLDC will intimate the

GESCOM for restricting the load. Accordingly, the GESCOM will
restrict the load based on the real time schedule given by the
SLDC. The load will be restricted based on the 220KV Receiving
station-wise percentage of allocation chart and by
communicating all the sub-stations and the concerned nodal
officers for proper monitoring of power supply timings in batches
with intimation to the concerned sub-division officers.
Whenever advance intimation received from the SLDC regarding

loss of generation, in that case, information will be given to the
high yielding consumers such as HT and EHT.
The load shedding is being carried out in all the sub-

stations/feeders by maintaining load shedding chart in batches
with category-wise feeders by strict monitoring by the concerned
nodal officers to avoid frequent load shedding of the same sub-
stations/feeders.
The GESCOM is reviewing the availability of power with respect to

the projected demand for every month in the last week of the
previous month and forecasting any unavoidable load shedding.
The GESCOM has submitted the projection of demand of power

and energy, month-wise for the year 2016-17, 2017-18 and 2018-
19. The revised power supply/load shedding timings is being
intimated to the Commission regularly.
clxxxii
Further, for informing consumers through SMS regarding likely time
of restoration, incase of unforeseen reductions in supply, the
implementation of SMS gateway is in progress.
The GESCOM is submitting feeder-wise interruption details such as,

number of interruptions and duration of scheduled and
unscheduled interruptions to KERC every month (PQM-1 {a}, {b}
and {c}). The GESCOM is taking all possible measures, based on
the real time schedule allocation by SLDC to minimize the
inconvenience to the consumers.
The Commission notes that the GESCOM, so far has not taken any
definite action to put in place a system for providing information to
the consumers through SMS regarding the schedule of load
shedding. There is no progress in this regard as the status is the
same as compared to the previous year. The Commission notes
that the GESCOM has not effectively and satisfactorily complied
with the directive on load shedding. The GESCOM shall expedite
development of necessary software and other process required to
inform consumers through SMS regarding both scheduled and un-
scheduled load shedding due to reasons such as system
constraints, breakdowns of lines/equipment, maintenance etc., This
would significantly address the “consumers’ dissatisfaction” on this
issue and prevent inconvenience/disruption caused to industrial
consumers.
Further, the Commission observes that the GESCOM is not

submitting its projections of availability and demand for power and
any unavoidable load shedding for every succeeding month in the
last week of the preceding month to the Commission regularly. The
GESCOM shall henceforth submit the same regularly to the
Commission without fail.
clxxxiii
The Commission reiterates that the GESCOM shall comply with the
directive on load shedding and submit monthly compliance
reports thereon to the Commission regularly.
vi. Directive on Establishing a 24X7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:
The directive was as below:
“The GESCOM is directed to put in place a 24x7 fully equipped

centralized Consumer Service Center at its Headquarters with state
of the art facility/ system for receiving consumer complaints and
monitoring their redressal so that electricity consumers in its area of
supply are able to seek and obtain timely and efficient services /
redressal in the matter of their grievances. Such a Service Center
shall have adequate number of desk operators in each shift so that
consumers across the jurisdiction of the GESCOM are able to lodge
their complaints directly with this Centre.
Every complaint shall be received on a helpline telephone number

by the
desk operator and registered with a docket number which shall be
intimated to the Consumer. Thereafter, the complaints shall be
transferred
online / communicated to the concerned field staff for resolving
the
same. The concerned O&M / local service station staff shall visit the
complainant’s premises / fault location at the earliest to attend to
the complaints and then inform the Centralized Service Centre
that the
complaint is attended. In turn, the call centre shall call the
complainant
and confirm with him whether the complaint has been attended
to. The
complaints shall be closed only after receiving consumer’s /
complainant’s confirmation. Such a system should also generate
clxxxiv
daily
reports indicating the number / nature of complaints received,
complaints attended, complaints pending and reasons for not
attending to the complaints.
The GESCOM shall publish the details of the complaint handling

procedure Mechanism with contact numbers in the local media
periodically for the information of the consumers. The compliance
of the action taken in the matter shall be submitted to the
Commission within two months from the date of this Order.
Further, the Commission directs the GESCOM to

establish/strengthen 24x7 service stations, equipping them with
separate vehicles & adequate line crew, safety kits and
maintenance materials at all its sub-divisions including rural areas
for effective redressal of consumer complaints”.
Compliance of the GESCOM :
A 24X7 Customer Care Centre(CCC) was established on 18-01-

2012 with a Toll Free number 1800-42558585 in the Corporate Office
premises, with all the necessary infrastructures for registering the
complaints on fuse off calls, billing problems, transformer failure,
power supply failure etc. by the consumers.
On registering a complaint, the consumer will be given complaint

number and the same will be informed to the concerned service
station of the sub-division for attending to the complaint at the
earliest. The complaints, which are attended by the service
stations, will be confirmed by the consumers over phone.
Further, short code ‘1912’ was implemented at CCC w.e.f 01-02-

2015 for complaints on electricity, with ‘Calling Party Pays Mode
Basis’. The short code ‘1912’ has been made Toll-Free successfully
w.e.f. 01-09-2016.
clxxxv
The statement showing the details of calls received and answered
/ complaints registered and attended at the centralized Customer
Care Centre from August to October 2016 and consumer
interaction meetings conducted from April to September16 are as
under:
No. of calls No. of No. of No. of

SI.
Month received & complaints complaints complaints
No.
answered registered attended pending
1 Aug’16 24,160 2,821 2,821 Nil
2 Sept’16 30,168 3,489 3,489 Nil
3 Oct’16 26,876 2,134 2,134 Nil
Total 81,204 8,444 8,444 Nil
The details of interaction meetings held with consumers are as below:
No. of consumers No. of

interaction meetings consumers
Sl. Name of the Name of the
held in O&M sub- participated
No O&M division sub-division
division from April to in every
Sept’16 meeting
Gulbarga CSD-I&II 2 33+35 (65)

1
Urban CSD-III&IV 2 40+36 (76)
RSD 2 27+27 (54)
Gulbarga
2
Rural-1 Aland 2 17+22 (39)
Jewargi 2 16+17 (33)
Gulbarga
3 Yadrami 2 26+22 (48)
Rural-2
Kalgi 1 11
Sedam 1 13
4 Sedam
Chincholi 1 26
Yadgir 1 39
5 Yadgir
Gurmitkal 1 29
Bidar 1 50
6 Bidar
Kamthana 1 40
7 Ballari Urban CSD-I 2 18+20 (38)
Hosapete
8 CSD-I 2 16+18 (34)
Urban
clxxxvi
CSD-II 2 11+15 (26)
RSD, 26+20+22+26
4
Hosapete (92)
9 Hosapete Rural Hadagali 1 25

H.B.Halli 1 80
Kudligi 3 52+32+15
(99)
10 Raichur Rural Devadurga 2 16+31 (47)
11 Sindhanur Maski 1 30
Yelburga 1 29
12 Koppal
Koppal 1 24
13 Gangavathi Karatagi 3 5+22+5 (32)
Gangavathi 2 12+8 (20)
Total 44 1067
The Commission notes that the GESCOM has established a 24x7
Customer Care Centre and has taken various measures for
redressal of consumer complaints. The GESCOM should continue its
efforts in improving delivery of consumer services to reduce the
consumer complaint downtime so as to ensure delivery of prompt
services to them. The GESCOM effective should develop necessary
capacity and infrastructure for prompt and effective response to
consumer complaints on breakdown of lines/equipment, failure of
transformers etc., resulting in interruptions in power supply. In
addition to this, GESCOM should take up steps to continuously
sensitize its field staff that they need to discharge their work
efficiently.
The Commission reiterates its directive to the GESCOM to publish

the complaint handling procedures / contact number of the
centralized Consumer Service Centre in the local media and other
modes periodically for the information of the public and ensure
that all the complaints of consumers are registered only through
the centralized Consumer Service Centre for proper monitoring of
disposal of complaints registered. The compliance in this regard
shall be furnished regularly once in a quarter, to the Commission.
clxxxvii
vii. Directive on Energy Audit:
The Commission had directed all the GESCOM to prepare a

metering plan for energy audit to measure the energy received in
each of the interface points and to account for the energy sales.
The Commission had also directed the GESCOM to conduct
energy audit and chalk out an Action Plan to reduce distribution
losses to a maximum of 15 per cent, wherever it was above this
level, in towns/ cities having a population of over 50,000.
The Commission had earlier directed the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this
regard, the ESCOMs were required to furnish to the Commission the
following information on a monthly basis:
a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.
c) Number of DTCs yet to be metered.
d) Time bound monthly programme for completion of work.
Compliance by GESCOM:
The GESCOM has initiated various measures for metering of DTC and
energy audit at DTC level and the results are as follows:
The details of DTC meters and energy audit carried out are as
under:
Sl. Progress as on
Particulars
No 30.09.2016
Number of DTCs existing in the
1 81,457
Company.
2 Number of DTCs already metered. 60,123
3 Number of DTCs yet to be metered. 21,334
Time bound monthly programme for

4 March, 2017
completion.
The details of average 33kV line losses in GESCOM:
clxxxviii
Sending end Receiving
%
Sl. Name of 33 kV feeder Conducto Length energy at 110 end Loss in
age
No. (name of 110 kV MUSS) r used of line kV MUSS in energy in KWH
loss
KWH KWH
33KV Emmiganur(110KV
1 Coyote 15.23 2298000 2264600 33400 1.5
Kurugodu)
33KV Gududur(110KV
2 Coyote 14.3 1340000 1312100 27900 2.1
Shridaragada)
33KV Hospete(110KV
3 Rabbit 9 3772600 3690520 82080 2.2
Munirabad)
33KV Kampli(110KV
4 Coyote 3.1 1283600 1255100 28500 2.2
Kampli
5 Byalahalli Coyote 9 2034120 2030800 3320 0.2
6 Yelburga-Bandi Coyote 15 1092500 1066900 25600 2.3
7 Kanakgiri-Muslapur Coyote 10 1746900 1723900 23000 1.3
33Kv Azadpur (North

8 Coyote 13 2570000 2530000 40000 1.6
110Kv MUSS)
33Kv Jambaga (North
9 Coyote 14 700000 690000 10000 1.4
MUSS)
33Kv Udchan
10 Coyote 8 700000 690000 10000 1.4
(Karajagi 110Kv MUSS)
33Kv V.K.Salgar
11 (Mahagaon 110Kv Coyote 22 760000 740000 20000 2.6
MUSS)
33Kv Khajuri
12 Coyote 16 720000 690000 30000 4.2
(Aland 110Kv MUSS)
33Kv Nimbarga
13 Coyote 11 480000 470000 10000 2.1
(Madiyal 110Kv MUSS)
33Kv Sarsamba
14 Coyote 25 670000 660000 10000 1.5
(Aland 110 Kv MUSS)
GESCOM Avg. 20167720 19813920 353800 1.75
The Details of average 33kV Power Transformer losses:
Energy
Energy
Name of 33 kV recorde Loss %
Transformer recorded
Sl.No feeder (name of d at HV in age
capacity at LV side
110 kV MUSS) side (33 KWH Loss
(11 kV)
kV)
33KV Erragudi 5MVA 1930

1 974600 955300 2.0
(110KV S/S Moka) Power Tr-1 0
33KV Rudrapada
5MVA 2200
2 (110KV S/S 2393200 2371195 0.9
Power Tr-1 5
Thekkalkote)
33Kv Azadpur 4000

3 2x5 MVA 2570000 2530000 1.6
(North 110Kv MUSS) 0
clxxxix
33Kv HadgilHaruthi 2052
4 2x5 MVA 936300 915780 2.2
(West 110Kv MUSS) 0
33Kv
1000
5 MadanHipparga 2x5 MVA 630000 620000 1.6
0
(Aland 110Kv
33Kv Khajuri
MUSS) 1080
6 (Aland 110Kv 2x5 MVA 819000 808200 1.3
0
MUSS)
33Kv Jidaga
7 (Aland 110 Kv 1x5 MVA 522000 517950 4050 0.8
MUSS)
1266
GESCOM Avg. 8845100 8718425 1.43
75
The GESCOM has initiated various measures to reduce the losses on 11

kV feeders of the 21 towns.
cxc
The details of 11 kV energy audit are as under:
Average percentage distribution
Sl. losses recorded
Name of city/town
No. FY17 (up to
FY16
Sept’ 16)
1 Kalaburagi 18.90 10.30
2 Aland 16.71 16.69
3 Shahabad 25.47 16.28
4 Wadi 26.52 16.57
5 Yadgir 19.92 17.77
6 Shahapur 20.47 17.93
7 Shorapur 19.05 17.09
8 Sedam 14.48 11.16
9 Bidar 13.53 9.76
10 Bhalaki 22.43 15.29
11 Basavakalyana 12.97 17.05
12 Humnabad 15.99 10.96
13 Raichur 19.87 21.46
14 Manavi 16.30 21.35
15 Sindhanoor 17.92 19.37
16 Koppal 16.56 15.56
17 Gangavathi 16.47 14.88
18 Hospet 16.12 13.19
19 Kampli 17.35 17.90
20 Ballari CSC 19.95 18.49
21 Siruguppa 29.37 17.67
GESCOM 18.87 16.03
cxci
Towns / cities with percentage distribution losses
SI.
Year
No. <10% <15% 15-20% 20-25% >25%
1 FY16 0 3 14 2 2
FY17 ( up to
2 1 4 14 2 0
Sept’16)
Abstract
1 33 kV line losses 1.75

2 33 kV transformer losses 1.43
3 11 kV line losses 4.36
4 11/0.433 kV DTC losses (assumed) 1.62
5 LT line losses 6.32
6 Commercial 7.39
Total 22.87
The energy audit conducted as per the approved formats

(Annexure A & B) has been furnished up to June, 2016 to the
Commission. Presently energy audit is being carried out for 12,677
DTCs. The tagging of installations with DTCs is in progress, and
instructions have been issued to the Executive Engineers to
complete the tagging before March 2017.
It is observed that the monthly energy audit reports of cities/towns

with detailed analysis are not being submitted by the GESCOM
regularly to the Commission. As seen from the consolidated energy
audit statement for the FY16, 18 of the 21 towns have AT&C losses
more than the mandated 15 percent. Similarly, the energy audit
for the FY17 (upto Sept’16) reveals that 16 towns have AT&C losses
more than 15 percentage with the Raichur town topping the list
with the highest losses at 21.46 per cent. The GESCOM is directed
to initiate urgent remedial measures to bring down the losses
below the targeted levels.
The Commission directs the GESCOM to conduct energy audit of

identified cities/towns and initiate necessary measures on the basis
cxcii
of energy audit results to reduce the technical losses and
improving collection efficiency to achieve the mandated A T & C
loss of less than 15 per cent. The GESCOM is directed to submit
compliance thereon regularly to the Commission.
The Commission further notes that the GESCOM despite
completing metering of 60,123 (74%) DTCs, it has taken up energy
audit of only 12,677 DTCs and even it has not submitted the details
of energy conducted in respect of such DTCs also. The GESCOM
has failed to take up DTC-wise energy audit, citing non-completion
of tagging of consumer installations with the concerned
feeders/DTCs. The stand repeatedly taken by the GESCOM for the
last three years that tagging of consumer details with the
concerned feeders/DTCs is not completed, does not augur well for
the Company which wants to run its business on commercial
principles. This shows that the GESCOM is not serious about
conducting energy audit and taking remedial measures to reduce
losses in order to run its business efficiently. The Commission views
with displeasure, the delay on the part of the GESCOM to
complete the tagging of consumer installations and take up the
DTC-wise energy audit.
The Commission directs the GESCOM to take up energy audit of
60,123 DTCs for which meters have already been provided and to
initiate remedial measures for reducing energy losses in the
distribution system based on the results of energy audit. The
compliance in respect of DTC-wise energy audit conducted with
detailed analysis and the remedial measures initiated to reduce
loss levels shall be submitted every month regularly to the
Commission.
Further, the GESCOM is directed to submit to the Commission, the
consolidated energy audit report for the FY17, as per the formats
prescribed by the Commission, vide its letter No: KERC/D/137/14/91
dated 20.04.2015, before 15th May, 2017.
viii Directive on Implementation of HVDS:
cxciii
In view of the obvious benefits in the introduction of HVDS in
reducing distribution losses, the Commission had directed the
GESCOM to implement High Voltage Distribution System in at least
one O&M division in a rural area in its jurisdiction by utilizing the
capex provision allowed in the ARR for the year.
The Commission has directed the GESCOM to submit the DPR of

HVDS project in respect of Turuvihal Hobli in Sindhanur taluk for
approval of the commission. The cost of implementation of HVDS
project is Rs 11.89 crore. However, the Agavani Committee has
recommended that the HVDS scheme is not viable for the
GESCOM. Therefore, the scheme is under study and a decision will
be taken after completing the study.
. Commission’s Views:
The Commission has been directing the ESCOMs to identify one

sub-division in each ESCOM with high LT / HT ratio and high
distribution loss levels, so that substantial loss reduction could be
achieved by implementing the HVDS in such sub-divisions.
Further, the Commission, with a view to bring down the cost of
implementation of HVDS, had issued revised guidelines to all the
ESCOMs directing them to implement the HVDS in their sub-
divisions/feeders having the highest distribution losses.
The Commission notes that the GESCOM has not taken up

implementation of HVDS in its jurisdiction contending that the
Agavani Committee has recommended that the HVDS scheme is
not viable for the GESCOM.
The Commission is of the view that implementation of the HVDS for

the agricultural feeders segregated under NJY scheme, wherever
high losses are prevailing, is necessary to reduce the distribution
losses significantly. The Commission directs the GESCOM to take a
final call whether to implement HVDS or not in its sub-divisions. In
cxciv
the event of GESCOM decides to take up HVDS in any of its sub-
divisions/feeders, the DPR of the same shall be submitted to the
Commission for its approval before taking up implementation and
the compliance in this regard shall be submitted to the Commission
at the earliest.
ix. Directive on Niranthara Jyothi – Feeder Separation:
The ESCOMs were directed to furnish to the Commission the

programme of implementing 11 KV taluk wise feeders’ segregation
with the following details:
a) Number of 11 KV feeders considered for segregation.

b) Month wise time schedule for completion of envisaged work.
c) Improvement achieved in supply after segregation of
feeders.
Progress of Niranthara Jyothi Work

11 kV
Probabl
No. NJY DPR Short Work
feeders feeders Work e date
Phas of Villages feeder cost closed to be
commis complete under of
e Taluk covered s in Rs. feeder take
-sioned d progress comple
s propos Cr. s n up
tion
ed
286.8
Ph-I 20 2,765 235 207 13 15 0 0
9
Ph-II 10 1,087 109 153.8 87 6 2 14 0 Mar’17
440.6
Total 30 3,852 344 294 19 17 14 0
9
cxcv
Benefits accrued to the system after implementation of NJY
Before
implementation After implementation of NJY
Parameters of NJY
Mixed load Residual IP
NJY feeder Total
feeder set feeder
Input energy into the system in MU 229.25 58.58 134.96 193.53
Average failure of transformers per

6 0 1 1
feeder
Average No. of (un-scheduled)

68 13 20 33
interruptions per feeder
Average peak load during peak

189 41 106 148
hours in Amps
Percentage dist. loss per feeder 45 22 11 33.00
Improvement in Tail end voltage 340 410 395 403
The Commission notes that the GESCOM has commissioned totally

291 feeders under both NJY phase 1 & 2. But, it has not expedited
the said works for commissioning as can be seen from its
compliance that work in respect of 19 feeders is completed but
despite this, GESCOM has failed to commission them. Further, the
works in respect of 17 feeders are still in progress. The delay on the
part of GESCOM to implement the NJY works across its jurisdiction
has only resulted in non-realization of envisaged benefits set out in
the DPR when the project was initiated.
The GESCOM is hereby directed to complete and commission the
remaining 36 feeders expediously and after that to carry out the
analysis of those feeders so as to ensure that the objectives set out
as per the DPR are accomplished. Further, the GESCOM shall
continue to ensure that NJY feeders are not tapped illegally for
running IP-sets which would defeat the very purpose of feeder
segregation scheme undertaken at huge cost. The consumers who
are found to be tapping the NJY feeders need to be dealt with
seriously for theft of energy. The field officers/officials who fail to
note and curb illegal tapping shall be personally held responsible
for these irregularities.
cxcvi
Further, the Commission notes that the GESCOM has carried out
the analysis of feeders commissioned under NJY indicating the
benefits accrued to the system in terms of reduction in failures of
distribution transformers, improvement in tail-end voltage and
improvement in supply/reduction in interruptions and reduction in
peak load. The analysis reveals that there is overall improvement in
supply condition after implementation of NJY. However, there is no
mention of obtaining consumer feedback post implementation of
NJY. Therefore, it is important to know as to whether such analysis
reveals that, the consumers are satisfied in the wake of increased
number of hours of availability of quality power, post
implementation of NJY. The GESCOM is directed to conduct
analysis of NJY feeders covering the consumers in the project area
to obtain their feedback.
Further, it is noted that the GESCOM has already segregated 294

feeders under NJY phase1 & 2 works and consequent to this,
agricultural feeders are exclusive from rural loads and the energy
consumed by the IP-sets could be more accurately measured at
the 11 KV feeders at the sub-stations after duly allowing for
distribution losses in 11 KV lines, distribution transformers and LT lines.
The GESCOM is directed to report every month, specific
consumption and the overall IP-set consumption only on the basis
of reading data obtained from agricultural feeders’ energy meters
as per the formats prescribed by the Commission.
The Commission reiterates its directive to the GESCOM to continue
to furnish feeder-wise IP-set consumption based on meter reading
data of the meters installed to the 11 KV feeders, to the Commission
every month, in respect of agriculture feeders segregated under
NJY.
x. Directive on Demand Side Management in Agriculture:
In view of the urgent need for conserving energy for the benefit of
the consumers in the State, the Commission had directed the
GESCOM to take up replacement of inefficient pumps with energy
cxcvii
efficient pumps approved by the Bureau of Energy Efficiency, at
least in one sub-division in its jurisdiction and report compliance
thereon to the Commission.
The GESCOM has selected two feeders exclusively feeding to the

IP-sets in Aland taluka of Kalaburagi district for implementation of
DSM and has requested M/s EESSL to prepare the DPR in this
regard. In this regard, the EESL team is expected to visit GESCOM in
January 17.
The Commission notes that there is no progress in implementation

of DSM in agriculture by the GESCOM. In fact, the status is same as
that of the last three years only. Further, the Commission observes
that, the GESCOM has not taken any concrete action in the field
to take forward the implementation of DSM measures in its
jurisdiction, seriously. The GESCOM needs to expedite DSM
measures otherwise its action taken so far on this can be termed as
merely rhetoric without any action on the ground. The Commission
is of the view that there is a huge potential for energy saving in the
agricultural sector which needs to be tapped by implementing the
scheme as early as possible and to derive the optimum benefits on
completion of the same. In this regard, strong emphasis should be
given for implementation of DSM measures to conserve energy
and also precious water for the benefit of farmers.
Further, the Commission while emphasizing the need for

implementation of DSM in agriculture during its review meetings
held with the ESCOMs, has been directing them to initiate DSM
measures in any one sub-division/taluk in order to assess the results
of such measures before the same is scaled up in whole of its
jurisdiction.
cxcviii
The Commission directs the GESCOM to expedite the
implementation of DSM measures in its jurisdiction and complete
the same at the earliest and compliance thereon shall be submitted
to the Commission within three months from the date of this Order.
xi. Directive on Lifeline Supply to Un-Electrified households:
The Commission has directed the ESCOMs to prepare a detailed

and time bound action plan to provide electricity to all the un-
electrified villages, Hamlets and Habitations in every taluk and to
every household therein. The action plan was required to spell out
the details of additional requirement of power, infrastructure and
manpower along with the shortest possible time frame (not
exceeding three years) for achieving the target in every taluk and
district. The Commission has directed that the data of un-electrified
households could be obtained from the concerned gram
panchayaths and the action plan be prepared based on the data
of un-electrified households.
The RGGVY scheme was envisaged for providing access to all rural
households by the end of 12th Five-Year-Plan. Accordingly, RGGVY
scheme under 10th and 11th Plans were formulated to provide
access to rural households including BPL households and 12th
RGGVY scheme covered balance left over rural houses including
BPL. Following are the details:
No. of BPL Rural households

No. of rural Total BPL covered
Name of the households covered under
Sl. No households under the XII plan
district already the XII plan
already electrified scheme
electrified scheme
1 Bidar 22,948 31,466 5,965 34,810
2 Raichur 28,335 34,514 2,5387 34,583
3 Koppal 26,946 32,506 7,995 32,027
4 Bellary 43,300 40,857 7,152 29,106
5 Kalaburagi 35,135 48,752 26,518 45,665
6 Yadgir 23,838 32,501 15,780 39,564
Total 1,80,502 2,20,597 88,797 2,15,755
After completion of 12th Plan scheme, all the rural households

including BPL households would be electrified in GESCOM.
cxcix
Total
Total un- covered for
Sl. Name of Total rural Total
electrified electrification Progress
No the district households electrified
households under XII
plan RGGVY
1 Bidar 2,37,789 2,02,865 34,924 34,810 0
2 Raichur 2,58,604 2,23,793 34,811 34,583 0
3 Koppal 2,13,549 1,81,490 32,059 32,027 0
4 Ballary 2,94,445 2,65,304 29,141 29,106 0
5 Kalaburagi 3,14,905 2,69,135 45,770 45,665 0
6 Yadgir 1,62,755 1,23,137 39,618 39,564 0
Total 14,82,047 12,65,724 2,16,323 2,15,755 0
Further, 88,797 BPL households and 2,15,755 rural households were

included in XII Plan RGGVY scheme covering six districts of the
GESCOM. In GESCOM, the scheme was sanctioned for Kalaburagi
district only. The works of Kalaburagi district has been awarded
and the same are in progress. The Chief Executive Officer, Zilla
Panchayat of Kalaburagi district was requested to furnish a list of
BPL beneficiaries for electrification. The list is yet to be received.
The RGGVY scheme was subsumed in DDUGJY for balance five
districts, tenders for the same are under evaluation.
The Commission expresses its displeasure over the GESCOM’s tardy

progress and apparent lack of seriousness in electrification of
un-electrified households in its jurisdiction. Even after so many
years, there are a large number of households remain without
electricity, which is of serious concern.
Further, the Commission concerned with the slow pace of progress

in this programme, in its previous Tariff Orders had directed the
GESCOM to cover electrification of 5 per cent of the total
identified un-electrified households every month beginning from
April, 2015 so as to complete this programme in about twenty
months. However, the progress achieved in electrification of
households so far by the GESCOM remains much to be desired.
cc
The Commission directs the GESCOM to expedite action to provide
electricity to the un-electrified households and cover all the
remaining households at the earliest and report compliance
thereon to the Commission regarding the monthly progress
achieved from May, 2017 onwards. The Commission as already
indicated in the earlier Tariff Orders would be constrained to initiate
penalty proceedings under section 142 of the Electricity Act, 2003,
against GESCOM in the event of non-compliance in the matter.
xii. Directive on Implementation of Financial Management Framework:
The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented towards maintenance of power
supply without a corresponding emphasis on realization of
revenue. This has resulted in a serious mismatch between the
power supplied, expenditure incurred and the revenue realized in
many cases. The continued inability of ESCOMs to effectively
account the input energy and its sale in different sub-divisions of
the ESCOM in line with the revenue realization rate fixed by the
Commission, urgently calls for a change of approach by the
ESCOMs, so that the field level functionaries are made
accountable for ensuring realization of revenues vis-à-vis the input
energy supplied to the jurisdiction of sub-division/ division.
The Commission has directed the GESCOM to introduce the system

of Cost-Revenue Centre Oriented sub-divisions at least in two
divisions in its operational area and report results of the experiment
to the Commission.
Strategic Business Units in eleven sub-divisions have been already

introduced. However, the data furnished by the field staff is not in
proper format. The staff will be educated to prepare proper
cci
information of SBUs. Further, SBUs will be introduced in balance sub-
divisions before March 2017.
Further, as directed by the Commission, the GESCOM has
implemented the model suggested by the consultant i.e., M/s PWC
in GESCOM’s jurisdiction covering divisions and sub-divisions to
bring accountability on the performance of the divisions and sub-
divisions in relation to the quantum of energy received, sold and its
cost in order to conduct the business on commercial principles.
To implement the directive on Financial Management Framework
at subdivision-wise needs asset categorization, which is presently
not available with the sub-divisions, hence, it requires some time for
implementation. This process is in progress and will be completed
by March 2017.
The Commission has forwarded a report prepared by the

consultants, M/s PWC regarding implementation on Financial
Management Framework to bring in accountability on the
performance of the divisions / sub-divisions by analyzing the
quantum of energy received, sold and recovery of costs through
revenue, so that the ESCOMs conduct their business on
commercial principles.
However, it is observed from the GESCOM’s compliance on the

directive that, it has not taken any action for implementing this
directive. The GESCOM, without actually taking any measurable
action, has only repeated whatever it has submitted to the
Commission last year on the directive of formation of SBUs. The
Commission directs GESCOM to review the performance of the
divisions & sub-divisions in respect of energy received, sold,
average revenue realization and average cost of supply using the
financial framework Model without giving lengthy explanation.
Further, the GESCOM is directed to analyze the following
parameters each month to monitor the performance of the
divisions/sub-divisions at corporate level.
ccii
a) Target losses fixed and the achievement at each stage.
b) Target revenue to be billed and achievement at each
category.
c) Target revenue to be collected and achievement at all
categories.
d) Targeted distribution loss reduction when compared to
previous years’ losses.
e) Comparison of high performance divisions in sales with low
performance divisions.
Therefore, based on the above analysis, the GESCOM needs to

take corrective measures to ensure 100 per cent meter reading,
billing, and collection; analysis of sub-normal consumption;
replacement of non-recording meters; etc.

implement the financial management framework model in its
jurisdiction at the earliest to bring in accountability on the
performance of the divisions / sub-divisions in the matter of the
quantum of energy received, sold and its cost so as to conduct its
business on commercial principles. Compliance in this regard
shall be submitted to the Commission on a quarterly basis,
regularly.
xiii Directive on Prevention of Electrical Accidents:
The directive was as follows:
“The Commission has reviewed the electrical accidents that have

taken place in the State during the year 2015-16 and with regret
noted that as many as 430 people and 520 animals have died due
to these accidents.
From the analysis, it is seen that the major causes of these accidents
are due to snapping of LT/HT lines, accidental contact with live
LT/HT/EHT lines, hanging live wires around the electric poles
/transformers etc., in the Streets posing great danger to human lives.
cciii
Having considered the above matter, the Commission hereby directs
to prepare an action plan to effect improvements in the Transmission
and Distribution Networks and implement safety measures to prevent
electrical accidents. Detailed division-wise action plans shall be
submitted by the GESCOM to the Commission.”
To reduce electrical accidents GESCOM has taken following measures:
i. To carry out periodical and preventive maintenance works on

distribution system.
ii. Providing intermediate poles on LT/ HT lines.
iii. Replacement of deteriorated conductors / broken poles in
LT/HT lines and setting right the slanted poles by providing
foot concreting.
iv. Re-stringing of loose spans in HT/LT lines.
v. Rectification of hazardous installations identified in lines and
equipment.
vi. Providing clearance to the LT/HT Lines which are passing close
to the buildings.
vii. Procurement of safety materials for field staff
viii. Educating the field staff and public about the use of safety
electric equipment and measures to be taken to prevent
accidents.
No. of accidents
No. of accidents
during
Particular during FY 2015-
FY 2016-17
16
( up to Sept’ 16)
Fatal 59 66
Departmental 1 2
Non-Departmental 58 64
Animal 158 177
Non-Fatal 50 54
Departmental 14 19
Non-Departmental 36 35
cciv
The details of number of hazardous installations identified and
rectified in the distribution system for FY16 and FY17 and the action
plan is furnished in Annexure-XII.
As per the direction by the Commission vide letter No.
KERC/D/47/2016-17/ 1884, dated 28.10.2016, all the field
engineers/staff are instructed vide No. GESCOM/CEE(CP)/SEE(MIS)/
EE(RA)/2016-17/ 40890-931, dated 24.11.2016 to implement the
safety measures as indicated in the safety manual and this manual
will be used as a guide in the field in maintaining the power
distribution system in an efficient manner.
Further, the GESCOM is conducting consumer interaction meetings
at O&M sub-divisions for creating awareness on safety among
public.
Further, instructions have been issued to the TA&QC, GESCOM
wing vide letter No. GESCOM/CEE(CP)/SEE(MIS)/ EE(RA)/2016-
17/42566-600, dated 03.12.2016, to inspect one feeder in each sub-
division as per the manual for conducting safety/technical audit of
distribution system.
The Commission notes that the GESCOM has taken certain

remedial measures including rectification of hazardous installations
in its jurisdiction. However, these measures are totally inadequate
considering the increased number of fatal electrical accidents
involving both human and livestock which is a serious concern. The
Commission would like to impress upon the GESCOM that the
identification and rectification of hazardous installations is a
continuous process, which should be regularly carried out without
any let up. Therefore, the GESCOM should make more concerted
efforts for continuous identification and rectification of all the
hazardous installations including streetlight installations / other
electrical works under the control of local bodies to prevent
electrical accidents. In addition, it is also important that the
ccv
GESCOM takes up awareness campaigns through visual/print
media continuously to spread about safety aspects among public.
During the ESCOMs’ Review meetings held, the Commission has

been emphasizing that the ESCOMs should take up periodical
preventive maintenance works, install LT protection to distribution
transformers, conduct regular awareness programme for public on
electrical safety aspects in use of electricity and also ensure use of
safety tools & tackles by the field staff besides imparting necessary
training to the field staff at regular intervals.
Further, the Commission is of the view that the hazardous

installations in the distribution network is the result of shabby works
carried out without adhering to the best construction practices as
per the standards, while taking up construction/expansion of the
distribution network. Therefore, the GESCOM shall take adequate
and effective steps to ensure that distribution network is hazardous
free. In addition to this, the GESCOM also needs to conduct regular
safety audit of its distribution system and to carryout preventive
maintenance works as per schedule in order to keep the network
equipment in healthy condition.
The Commission has already forwarded the Safety Technical

Manual to the ESCOMs, the said manual enumerates detailed
account of the steps to be taken on each element of the
distribution system which would help the engineers in the field to
identify and attend to the defects. In this context, it is necessary
that the ESCOMs are required to continuously monitor the
implementation of the suggestions / recommendations contained
in the Safety Technical Manual to ensure that distribution network is
maintained properly.
The Commission, therefore, reiterates its directive that the GESCOM

shall continue to take adequate measures to identify & rectify all
ccvi
the hazardous locations/installations existing in its distribution
system under an action plan to prevent and reduce the number of
electrical accidents occurring in its distribution system. The
compliance thereon shall be submitted to the Commission every
month, regularly.
ccvii
APPENDIX - 1
Gist of the Objections of the Stakeholders/Public, GESCOM’s response and
the Commission’s Views
Objections on Tariff Issues:

Objections Replies by GESCOM
1) As per Regulation 2.7.1 of MYT GESCOM has filed Tariff Application
Regulations 2006, the application for FY18 in time i.e. on 30.11.2016.
for determination of Tariff, for any
financial year shall be made not
less than 120 days before the
commencement of such financial
year. GESCOM should have filed on
or before 30th Nov 2016 which has
not been done (petition filed on 08-
01-2017) and hence, the
Application is not maintainable.
Commission's Views: The GESCOM has filed the application on 30.11.2017 and
hence the petition is maintainable.
2) The GESCOM has failed to arrest the Vigilance activities have been
pilferage of power due to its increased to arrest the pilferage of
inefficient management of power power. The distribution loss has been
situation and it is trying to pass on reduced from 18.93% during FY-15 to
the loss on account of this, to the 18.10% during FY16 and action will be
consumers and have applied for taken to reduce the loss to 17.60 % in
revision of tariff to cover up FY-17 and projected to reduce the
inefficiency and miss-management. loss to 17.00 % in FY-18.
The distribution loss of GESCOM is
increasing over the years.
Commission's Views: The issue of distribution loss is dealt in the relevant
chapter of this Tariff Order.
3) GESCOM has procured short term The GESCOM has stated that, the
power at rates higher than the PCKL has purchased short term
Commission fixed rate of Rs.4.50 source energy on behalf of the
per unit. The amount in excess of GESCOM to an extent of 467.42 MU
the approved limit should to be during FY16 and payment of
disallowed. Rs.235.81 Crores is made at an
average cost of power purchase
that works out to Rs.5.04 per unit.
However, KERC has approved the
contingent power purchase cost
(Short Term/Medium term) for Rs.5.50
per unit.
Commission's Views: The reply of GESCOM is noted and the power purchase
isuue has been dealt in the relevant chapter of this Tariff Order.
4) The P&G trust contribution is to be The amount pertains to the prior
borne by GoK and hence, the period (i.e. before formation of
Commission has to reject the claim GESCOM), hence same has been
of P&G trust contributions.
claimed in FY18 as it was already
ccviii
claimed in previous tariff
application and rejected by the
Commission. GESCOM once again
prays the Commission to consider
Rs.262.49 Crores for Pension &
Gratuity Trust to reduce the
financial burden for GESCOM.
Commission's Views: The Commission has dealt with the matter appropriately
in the relevant chapter of this Tariff Order.
5) GESCOM collects interest on all its GESCOM has stated that, 12 %
dues from the consumers. But, it interest is levied and same yard stick
has not collected interest for the is applied to all installations except
outstanding dues of subsidy to an
IP Set installations.
amount of Rs.1110.48 Crores which
is due from 2008-2016 and the
interest works out to Rs.916.52
Crores at simple interest of 12%.
The tariff hike would not be
required, if this interest is collected
by GESCOM.
Commission's Views: The reply of GESCOM is noted and the Commission
would examine the issue and take appropriate action in the matter.
6) GESCOM has stopped levying GESCOM has stated that, in view of
interest for the outstanding arrears the observations by the audit and
of IP Set consumers prior to 2008 instructions from the GoK not to levy
which is Rs.774.12 Crores (principal interest on belated payments vide
+ Interest) from 1st April, 2013. This G.O. dated 12.05.2011 on IP Set
clearly shows that, GESCOM is dues/subsidy releases, change in the
passing the burden to the accounting policy in the Financial
consumers through tariff. year 2013 was proposed and
approved by GESCOM Board.
Subsequent to this, the levy of interest
on arrear of the IP sets consumers
having load up to and inclusive of 10
HP was discontinued and stopped
from 01.04.2013.
Commission's Views: Commission's Views: The reply of GESCOM is noted and
the Commission would examine the issue and take appropriate action in the
matter.
7) GESCOM has invested Rs.508.68 The details of benefits and
Crores on NJY programme, but, improvement in power supply such as
the distribution loss reduction has reduction in failure of Distribution
not been achieved to the level Transformers, number of (Un-
required. There is hooking of NJY scheduled) Interruptions, reduction in
feeders for running the IP sets in the peak load during peak hours in
GESCOM area. Amps, reduction of T&D loss and
improvement in tail end voltage, has
already been furnished in the Tariff
petition dated 30.11.2016 vide page
ccix
No. 79.
Commission's Views: This issue has been dealt in the relevant chapter of the
Tariff Order.
8) GESCOM has not indicated the Out of 5,96,571 Nos. of BJ/KJ

number of BJ/KJ installations which installations, 4,24,379 Nos. are
are metered and which are not metered and balance 1,72,192 Nos.
metered. are unmetered. The % of metering of
Most of the consumers are BJ/KJ installations is 71.14%. The BJ/KJ
consuming more than 18 units, but installation power supply up to an
GESCOM is not able to bill them as extent of 18 units is subsidized. In
case of BJ/KJ installations are
they do not have the meters fixed.
consuming more than 18 units,
A third party should be made to GESCOM is taking action to bill them
quantify the exact sale to BJ/KJ. under LT-2(a) tariff.
Commission's Views: The reply furnished by the GESCOM is noted. The

Commission directs GESCOM to complete the metering of all BJ/KJ
installations at the earliest.
9) The Commission has been It is conducting interaction meeting
allowing Rs.1.00 Crore to each at sub-division level and would
ESCOM for consumer education accept the suggestion made.
programs in successful tariff
orders. There is no proper
consumer education/ awareness
created. The Commission should
issue suitable direction to
GESCOM for effective and
meaningful education
programme. Laghu Udyog Bharati
- Karnataka is willing to organize
these kind of awareness programs
in the state.
GESCOM shall enhance its consumer education programs so that consumer
education is effectively implemented. If required GESCOM may seek the
assistance of Laghu Udyog Bharati – Karnataka.
10) As per the Tariff Order of 2016, GESCOM has stated that, the
level of cross subsidy by HT2a preparation of Cost of supply has to
consumers stood at 35.04% and be done, the fixation of Tariff has
HT2a(ii) at 29.92% and HT been arrived depending upon the
commercial consumers are expenditure and Revenue of
paying 65% over and above the GESCOM. The Gap in the expenditure
tariff. As per the Tariff Policy, the and income for the Year-2017-18 is
cross subsidy should be brought working out at Rs.1075.34 Crores.
within +/-20% of the cost of supply. Accordingly, the hike of Rs.1.48 /Unit
Hence, the tariff determination in the Tariff is proposed for existing
should be based on the cost of tariff to cover up the gap of
supply. Rs.1075.34 Crores.
The IP Sets are subsidized by the
other category of consumers,
ccx
mainly Industrial sector. Hence,
cross subsidy payable by industrial
consumers should be reduced.
At least the cost to serve of HT2(a)

category should be worked out
and the cost per unit is to be
reduced.

Commission is indicating the cross subsidy levels based on cost to serve as
well as average cost of supply in its Tariff Order. The Commission’s endeavor is
to reduce cross subsidies gradually.
11) The Fixed charges are to be GESCOM has stated that, the fixed
based on the assets created for charges are being claimed on
each type of consumers, but, investment made for infrastructure
GESCOM has not furnished the created for the consumers.
details except seeking increase in
Fixed charges just to increase its
revenue. This should not be
allowed.
Commission's Views: The Commission has dealt with this issue appropriately in
the relevant chapters of this Tariff Order.
12) GESCOM has spent Rs.60.96 GESCOM has taken following
Crores capex for safety measures measures:
to prevent accidents, but, the
accidents have not come down, a) To carry out periodical and
which shows that, the planning for preventive maintenance works
taking safety measures is not on distribution system.
proper. The Commission should to b) Providing intermediate poles on
conduct safety audit by an LT/ HT lines.
independent agency and take c) Replacement of deteriorated
suitable action. conductors/broken poles in LT/HT
lines and setting right the slanted
poles by foot concreting.
d) Re-stringing of loose spans in HT/LT
lines.
e) Providing clearance to the LT/HT
Lines which are passing close to
the buildings.
f) Procurement of safety materials
for field staff
g) Educating the field staff and
public about the use of safety
equipment and measures to be
taken.
h) Rectification of hazardous
installations identified in lines and
equipment.
GESCOM is continuously taking
ccxi
remedial measures towards
prevention and minimization of
electrical accidents such as
providing protective gears to the
maintenance staff, identifying
hazardous locations and
rectifications, educating the staff
and the general public regarding
safety precautions to be taken in
handling electrical installations.

Commission directs GESCOM to take all precautionary and safety
measures and also take up periodical maintenance to reduce the
accidents.
13) Introducing the morning peak Most of the consumers including

tariff would hamper the industries industries are seeking supply in
and hence should not to be morning hours and GESCOM is unable
allowed. to sustain the required peak. Hence it
has proposed charges to curtail
usage of supply in the morning and
evening peak hours.
Commission's Views: The Commission has dealt with the matter appropriately
in the relevant chapter of the Tariff Order.
14) A gap of Rs.133.44 Crores for FY16 The expenditure such as Power
should not be considered for tariff purchase, repair & maintenance,
determination as it will burden the employs cost, A&G Expenses,
consumers. Any expenditure over depreciation and Interest and
and above the approved limit has finance charges have increased. The
to be absorbed by the fixation of tariff depends on the
Government and not to be expenditure and Revenue of
passed on to the consumers. GESCOM. The gap in the expenditure
and income for the Year-2017-18 is
worked out at Rs.1075.34 Crores.
Accordingly, the hike of Rs.1.48 /Unit
in the tariff is proposed from the
existing tariff to cover the gap for
Rs.1075.34 Crores.
Commission has dealt with the matter appropriately in the relevant chapters
of the Tariff Orders.
15) Though the average cost of The average cost of electricity for
supply is Rs.5.69 per unit, IP Set is FY17 works out Rs.6.93 per unit and
charged at Rs.2.38 per unit and GESCOM is claiming at Rs.5.03 per
the difference of Rs.3.22 per unit is unit only for IP sets. So the difference
charged to the other consumers works out Rs.1.90 per unit only and not
through cross subsidy. Rs.3.22 per unit.
Commission's Views: The reply furnished by the GESCOM is noted. The cross
subsidy levels have to be gradually reduced as stated earlier.
ccxii
16) GESCOM has procured 71.89 MU The power purchases were made
excess of the approved quantum according to the actual demand
of 6435.9 MU, hence, the cost required by the consumers.
incurred for additional energy
should not be allowed.
Commission's Views: The reply furnished by the GESCOM is noted and the
quantum of power purchased is discussed in the relevant chapter of this Tariff
Order.
17) The cross subsidy surcharge GESCOM has applied the Cross
proposed by the ESCOMs is higher Subsidy Surcharge Formula as
than the previous year and is notified in the Tariff Policy dated 28-
against the principles set out by
01-2016 for FY-18.
the Commission.
Commission's Views: The Commission has dealt with this matter suitably in the
relevant chapter of this Tariff Order.
18) The Open Access Consumers are As per the formula the component ‘T’
already paying demand charges is the tariff applicable to the relevant
(fixed charges) as per their category of consumers and since the
contract demand. As demand average cost per unit for a particular
charges are already inbuilt while category also includes the demand
calculating T as revenue charges GESCOM has considered the
realization from the particular same.
category of consumer, the
demand charges ought to be
deducted from T while calculating
CSS to avoid double charging of
demand charges.
Commission's Views: : GESCOM’s reply is noted. The Commission has already
issued Orders in the matter in RP4/2016 and the decision is binding.
19) The Wheeling Charges proposed It is following the tariff orders of the
by the DISCOMs have been Commission for proposing the
increased to the tune of 39% wheeling charges.
(BESCOM), 95% (CESC), 94%
(GESCOM), 106% (HESCOM) and
54% (MESCOM) for FY18
compared to FY17 which is
consequent to increase of
Distribution ARR to the tune of
Rs.2500 Crores.
The Commission should do
prudence check of these
allocations which are not in line
with the principle set out by the
Commission in its earlier tariff
orders. Calculation of Wheeling
charges proposed by ESCOMs
seems erroneous as the quantum
of energy considered for
calculation is only the quantum of
ccxiii
sales by BESCOM to the
consumers excluding quantum of
Open Access. For calculation of
wheeling charges, total energy to
be wheeled in the BESCOM
system (ESCOM sale+ Open
Access Sale) should be
considered.
Commission's Views: The reply of GESCOM is noted and computation of

wheeling charges is discussed in the relevant chapter of this Tariff Order.
20) The DISCOMs must buy power
from Exchange/Short term
markets when prices are lower
than energy charge of generators
tied up in long term PPA. At such
low prices there is huge potential
to replace costlier power. The
DISCOMs may continue to pay
fixed charges irrespective of their
schedule from generator and
replace costlier power with
exchange power to ensure most
efficient merit order dispatch.
Commission's Views: The purchase from exchange may not arise due to
commissioning of new power projects in the near future. However, GESCOM
may consider the suggestion made by the objector, if it is financially viable.
Objections on the Quality of Service:
21) With 18.10% loss the GESCOM has In order to reduce the distribution
exceeded the Distribution loss limit losses, system improvement works
of 16.50% approved by the are being taken up and vigilance
Commission the impact of losses
activities are conducted to curb
beyond the approved figure
should not be passed on to the the pilferage. The distribution loss
consumers. GESCOM has has been reduced from 18.93%
indicated 675 11kV feeders out of during FY15 to 18.10% during FY-16
1595 feeders having loss between and initiation will be taken to further
20%-39.7%., this shows that, around reduce the losses to 17.60 % in FY17.
42% of the feeders have high The projected loss reduction for
distribution losses. The distribution
FY18 is at 17.00 %.
losses should be brought below
15% as per the directives of the
Commission.
Commission's Views: This matter has been dealt suitably in the relevant
chapters in this Tariff Order.
22) Apart from detection of Power For detection of connected load,
theft cases GESCOM should new metering arrangements are
identify the cases of being made which will record the
disproportionate load against the connected load of the installation
sanctioned loads leading to i.e. maximum demand. Routine
ccxiv
nonpayment of fixed charges. inspection of installation is also being
GESCOM should address this, by carried out and action is being taken
identifying the consumers who are to penalize the consumers who have
paying only for the electricity connected more than the
charges, but not for the loads sanctioned load. The information
connected. The fixed charges are about usage of more than
also to be levied on such sanctioned load attracts penalty
consumers by properly identifying and the same is being brought to the
them. notice of the consumers in the
monthly electricity bills or through
notices.
Commission's Views: The Reply furnished by GESCOM is acceptable.
23) GESCOM has not implemented GESCOM has stated that, to
the model of Financial implement the directive on Financial
Management Frame works to Management Framework (FMFW) at
bring in accountability on subdivision wise, GESCOM needs
performance of the divisions. asset categorization which is presently
not available with sub-division, hence
it requires some time for
implementation and this process is
under progress.
Commission directs GESCOM to educate its staff about the guidelines and
adopt the Financial frame work guidelines to create awareness among the
O&M Divisions and downstream work units, keeping in view the commercial
principles in the electricity distribution business.
24) GESCOM should have indicated GESCOM has taken various steps for
steps taken for the improvement improving the efficiency by carrying
of efficiency and indicate the the various improvement measures in
efficiency gains. its jurisdiction and as a result of the
efforts put forth by GESCOM,
distribution losses for the past years
have come down from 26% in FY08 to
18.93 % at end FY15. Further it is
planned to reduce the distribution loss
to 17.6 % at end of FY17 and in FY18
17.00 %.
Commission's Views: The reply furnished by GESCOM is noted. The issue of
losses is discussed in the relevant chapter of this Tariff Order.
25) GESCOM is not conducting GESCOM has stated that, the Energy
energy audit and segregating the Audit for FY16 and FY17 (Up to
technical and commercial losses. September, 2016) of 21 Towns has
The distribution losses declared been furnished in the Tariff Filing
without proper energy audit is Application (Page No. 76) along with
doubtful. The GESCOM has not the Voltage-wise and Commercial
given the number of IP set based losses. The feeder/DTC-wise
on the enumeration. enumeration of IP sets using GI survey
method in GESCOM area has been
awarded to M/s. Steslite. The work has
commenced in the month of
December 2016 and the period of
ccxv
completion is for 24 months.
Commission's Views: The reply furnished by the GESCOM is noted. However,
the Commission emphasizes that, conducting energy audit is the only way for
plugging leakage and to make the GESCOM viable both technically and
financially.
26) The vigilance officers are booking As per clause 42.02 of Condition of
cases by treating some of the supply issued under section 126 of the
Industrial establishments as Electricity Act, 2003, the demand
commercial entities, though they notice in respect of unauthorized use
are not competent to book cases of electricity is being issued by the
under section 126 of the Electricity local authority i.e. Assistant Executive
Act 2003. The competent officer Engineer, O&M subdivision of
as per the Act is assessing officer GESCOM. The vigilance staff detect
(AEE Ele of the subdivision). This the case, prepare the assessment
needs to be stopped. and inform the respective Asst.
Executive Engineer, along with details
of case and relevant document for
billing and serving notice to the
consumer.
Commission's Views: : The GESCOM is directed to strictly adhere to the
provisions of the Electricity Act, 2003 and the relevant Regulations thereon. .
27) GESCOM is carrying out load Unscheduled shedding is resorted to,
shedding without publishing it in only in case of sudden generation
advance through newspaper. loss, emergency repair works and
unforeseen situations.
Commission's Views: The reply furnished by the GESCOM is noted.
28) GESCOM is not complying to the GESCOM is implementing the
directives like, energy directives issued by the Commission.
conservation, ToD meters, Timer GESCOM is submitting the
switches, NJY, HVDS, DSM in compliance to the Commission
Agriculture, metering of DTCs and promptly which are being reviewed
Energy audit and has not tried to regularly. Further, providing timer
improve the efficiency of switches to street lights is being taken
operation and hence the tariff by EESL through Union Ministry of
petition is not maintainable. Power, The estimates have been
prepared for Gulbarga City Municipal
Area.
ccxvi
Commission's Views: The reply furnished by the GESCOM is noted and the
issues pertaining to compliance of directives is dealt in the relevant chapter
of this Tariff Order.
29) GESCOM has not furnished the The annual abstract of reliability index
details of reliability indices. The of the feeders for the year FY16 has
consumers will not be able to been submitted to KERC vide e-mail
know the quality of power supply dated 24.09.2016
given by GESCOM.
Commission's Views: The reply furnished by the GESCOM is acceptable.
30) In the case of Un-authorized IP To arrive at an accurate number of IP
sets, GESCOM do not know the Set consumer GESCOM has
connected load in HP and the bifurcated 11 kV feeders and is
consumption of each IP set. arriving at the specific consumption
GESCOM has not taken any of IP Sets. GESCOM is taking action
action to regularize the IP sets. for regularizing balance 4342 nos. of
Unauthorized IP Sets.
Specific Requests:
31) HKCCI, requests that, GESCOM The tariff is determined by the
should Commission based on the type of
a) Levy uniform tariff across all the consumers.
consumers on par with telephone
tariff, price of fuel such as petrol, The slab-wise tariff has been
diesel price of milk and so on. designed to reduce the burden on
b) The slab rates should not be the poor people and loaded with
levied and the classification of higher tariff for sustainable
categories to stop cross categories of consumers, Hence slab
subsidization by various and category wise system cannot
categories of consumers. be removed due to social
c) Average cost of power supply obligation.
per unit should be the power tariff
per unit irrespective number of Instead of subsidies, the slab rates
units consumed by the consumer. are designed such that, consumers
d) The subsidies in the power tariff to get the benefit of the subsidy in the
eligible categories of consumers slab rate tariff itself.
can be extended on the lines of
DBT followed by Oil Companies in
the matter of cooking gas other
benefits by the Central Govt.
Commission's Views: The reply furnished by the GESCOM is noted. The tariff for
various categories is discussed in the relevant chapter of this order. Further,
the Commission notes that cross subsidies cannot be eliminated. However,
the Commission’s endeavor is to reduce cross subsidies gradually. Therefore,
uniform tariff across all consumers is not a possibility.
32) The Commission should direct the GESCOM will initiate action for
GESCOM to display all power displaying all PPA of power
purchase Agreements (PPAs) and purchases on GESCOM website.
monthly bills of power purchase on
their website.
ccxvii
33) There is a huge requirement to Paper notifications are already
improve the awareness among the published about CGRF Members
consumers on the CGRF and Chairman of the CGRF for
mechanism and redress the applying and get their problems and
complaints within the time frame the grievances redressed. GESCOM,
stipulated. while conducting interaction
meeting at Sub-division level, has
created awareness on the
importance of CGRF and its function
in solving the grievances.
34) Laghu Udyog Bharati, requests Training for the Officers and Work
that, the officers at the field level men is being conducted regularly
are to be trained on the post examination are also being
Regulations issued by the
suitable subject under taken.
Commission to carry out the day to
day activities.
Commission's Views: The reply furnished by the GESCOM is noted. GESCOM is
directed to improve the effectiveness of training.
35) Independent feeders are to be Out of 1637 No. of 11 kV feeders
provided to the industries to get existing in GESCOM 399 independent
quality and uninterrupted power feeders are feeding Urban and
supply. industrial areas. Wherever
independent industrial feeder are
required, GESCOM is ready to
construct separate industrial feeders.
36) Railways, serving utility and an The tariff applicable to the railway
essential part of the transport traction is less as compared to HT-
system, and should have a single 2(a) and HT-2(b). The tariff proposed
part tariff instead of two part tariff
for the railways is Rs.7.38 per unit for
and a lower tariff than the
prevailing tariff and should be the usage of all units, whereas the
exempted from tariff hike. tariff proposed for HT-2(a) is Rs.7.68
per unit for usage up to 1 Lakhs units
and Rs.8.08 per Unit for the balance.
In respect of HT-2(b) the tariff is
Rs.9.33 per Unit for usage up to 1
Lakhs units and Rs.9.63 per Unit for
the balance units. Hence, the tariff
of Railways is comparatively lower
than other HT tariffs.
Commission's Views: The tariff policy envisages two-part tariff so that fixed
costs and variable costs are recovered separately. The category-wise tariff is
discussed in the relevant chapter of this Tariff Order.
37) Major part of the Energy GESCOM has stated that, the
purchased by Railways is under expenditure such as Power
HT2(b) and is consumed for purchase, Repair & Maintenance,
providing passenger amenities like Employs cost, A&G Expenses,
ccxviii
Platform lighting, waiting halls, Depreciation and related DTS and
Approach area, Water coolers, Interest and finance charges have
Water pumping, Concourse etc., to increased. The revision of Tariff is
bring perceptible improvements in based on the expenditure and
the quality of services by giving Revenue of GESCOM. The gap in
different inputs with substantial revenue for the Year-2017-18 is
financial burden despite hardly any worked out at Rs.1075.34 Crores.
increase in the passenger fares. Accordingly, the hike of Rs.1.48 per
Hence, Railways should be unit in the Tariff is proposed to cover
exempted from proposed tariff up the gap for Rs.1075.34 Crores.
hike.
Commission's Views: The activities in the station are considered as
commercial and non-domestic. Hence there cannot be any discrimination
between the consumers who are similarly placed.
38) Railways should be given The penalty has been proposed for
incentives for maintaining the the consumers who are maintaining
power factor (P.F) above, 0.9. less than 0.9 PF. If the consumers
maintain PF more than 0.9 there will
be gain to the consumer i.e., utilizing
less units for the same output which is
resulting as incentive. Hence it is a
duty of consumer to use electricity in
economical way by maintaining PF
above 0.9 and nearer to 1.0.
Commission's Views: The maintenance of proper PF is in the interest of
consumer only. PF above the threshold levels would improve the voltage of
the supply to the consumers and also enables optimizing the power
consumption.
39) There should be substantial The electricity consumed by the
reduction in tariff for the Foundries, small scale industries will be less
Forging Shops, Heat treatment compared to large scale industries.
shops, Blow Moulding units and GESCOM has proposed reduced
Steel mills in Karnataka. slab benefits in the Tariff for the users
who are consuming less than One
Lakh units. Hence tariff proposed is
reasonable.
Commission's Views: Commission's Views The Commission has considered the
Foundries, Forging Shops, Heat treatment shops, Blow Moulding units and
Steel mills as industries and is categorized under HT-2a or LT-5, as the case
may be.
40) Open access facility should be This is not acceptable to GESCOM.
extended for the consumers having
load below 1MW also.
Commission's Views: The Commission, for the present, has extended ‘Open
Access’ only to consumers with contract demand of 1MW and above in line
with the provisions of the Electricity Act, 2003.
ccxix
ESCOM's Total Approved Power Purchase For FY18
ENERGY PER UNIT
ENERGY CAPACITY CHARGES ENERGY
TOTAL COST RATE
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES
(Rs Cr) (RS/Kwh
(MU) (Rs Cr) RATE (Rs Cr)
)
(RS/Kwh)
KPCL THERMAL STATIONS

RAICHUR THERMAL POWER
7850.68 792.92 3.34 2622.13 3415.05 4.35
STATION_RTPS 1-7 (7x210)
RAICHUR THERMAL POWER
1269.00 227.15 2.88 365.47 592.62 4.67
STATION_RTPS 8 (1x250)
BELLARY THERMAL POWER
2516.00 274.36 3.52 885.63 1159.99 4.61
STATIONS_BTPS-1 (1x500)
2516.00 470.49 3.06 769.90 1240.39 4.93
960.00 0.00 2.87 275.52 275.52 2.87
YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92
TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33

CGS SOURCES
N.T.P.C-RSTP-I&II
3214.00 198.82 2.29 735.65 934.48 2.91
(3X200MW+3X500MW)
N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36
NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47
Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43
NTPC Tamilnadu Energy
Company Ltd (NTECL)_Vallur TPS 702.21 125.25 2.64 185.34 310.60 4.42
Stage I &2 &3 (3X500MW)
Neyveli Lignite Corporation_NLC
710.08 82.73 2.82 200.24 282.97 3.99
TPS-II STAGE I (3X210MW)
1126.00 135.83 2.82 317.53 453.36 4.03
TPS-II STAGE 2 (4X210MW)
698.00 98.92 2.61 182.07 281.00 4.03
TPS I EXP (2X210MW)
520.98 111.33 2.55 132.67 244.00 4.68
TPS2 EXP (2X250MW)
NLC TAMINADU POWER LIMITED
1153.11 216.03 2.50 288.28 504.30 4.37
(NTPL) (TUTICORIN) (2X500MW)
MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15
Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19
Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19
NPCIL-KudanKulam Atomic
Power Generating Station 1511.00 0.00 623.16 623.16 4.12
(KKNPP U1 (1X1000MW)
NPCIL-KudanKulam Atomic
Power Generating Station 345.77 0.00 142.60 142.60 4.12
(KKNPP) U2(1X1000MW)
ENERGY
ENERGY CAPACITY ENERGY PER UNIT
CHARGES TOTAL COST
NAME OF THE GENERATING STATION ALLOWED CHARGES CHARGES RATE
PER UNIT Rs Cr
MU Rs Cr Rs Cr RS/Kwh
RATE
ccxx
RS/Kwh
DVC-Unit-1 &2 Meja TPS

1402.48 208.22 2.38 333.59 541.82 3.86
(2x500MW)
DVC-Unit-7 & 8-KODERMA TPS
1753.58 321.82 2.19 383.48 705.30 4.02
(2x500MW)
Kudgi 750.04 0.00 3.02 226.51 226.51 3.02
TOTAL CGS Energy @ KPTCL
20542.92 1963.88 5319.80 7283.68 3.55
periphery
TOTAL MAJOR IPPS
UDUPI POWER CORPORATION
6712.00 1141.04 3.20 2147.84 3288.88 4.90
LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS
SHARAVATHI VALLEY
4914.10 21.27 0.35 173.40 194.67 0.40
PROJECT_SVP (10x103.5+2x27.5)
MAHATMA GANDHI HYDRO
ELECTRIC POWER HOUSE_MGHE 279.58 2.32 0.45 12.60 14.92 0.53
(4x21.6+4x13.2)
GERUSOPPA_GPH (SHARAVATHI
521.59 24.43 1.11 57.94 82.37 1.58
TAIL RACE_STR) (4x60)
KALI VALLEY PROJECT_KVP
3172.76 21.36 0.55 174.31 195.67 0.62
(2x50+6x150)
VARAHI VALLEY PROJECT_VVP
1068.73 40.64 1.18 125.65 166.29 1.56
(4x115+2x4.5)
ALMATTI DAM POWER
481.63 31.50 0.97 46.73 78.23 1.62
HOUSE_ADPH (1x15+5x55)
BHADRA HYDRO ELECTRIC
POWER HOUSE_BHEP 60.65 1.50 3.36 20.39 21.89 3.61
((1x2+2x12)+(1x7.2+1x6))
KADRA POWER HOUSE_KPH
362.80 19.38 1.46 53.13 72.51 2.00
(3x50)
KODASALLI DAM POWER
340.17 12.01 1.14 38.86 50.87 1.50
HOUSE_KDPH (3x40)
GHATAPRABHA DAM POWER
82.75 2.18 1.68 13.92 16.10 1.95
HOUSE_GDPH (2x16)
SHIVASAMUDRAM (4x4+6x3) &
SHIMSHAPURA (2x8.6) HYDRO 292.24 3.54 0.80 23.52 27.06 0.93
STATIONS.
MUNIRABAD POWER HOUSE
91.46 0.43 0.58 5.32 5.75 0.63
(2x9+1x10)
TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79
OTHER HYDRO
PRIYADARSHINI JURALA HYDRO
110.00 4.35 47.82 47.82 4.35
ESLECTRIC STATION (6x39)
TUNGABHADRA DAM POWER
9.37 1.83 1.72 1.72 1.83
HOUSE_TBPH (4x9+4x9)
TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15
RENEWABLE ENERGY SOURCES
WIND-IPPS 3704.87 1343.76 1343.76 3.63
KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71
MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29
CO-GEN 160.01 74.30 74.30 4.64
ENERGY
PER UNIT
ENERGY CAPACITY CHARGES ENERGY
TOTAL COST RATE
NAME OF THE GENERATING STATION ALLOWED CHARGES PER UNIT CHARGES
(Rs Cr) (RS/Kwh
(MU) (Rs Cr) RATE (Rs Cr)
)
(RS/Kwh)
CAPPTIVE 13.17 3.74 3.74 2.84
BIOMASS 119.71 59.23 59.23 4.95
ccxxi
SOLAR-existing (anticipated as
932.00 618.10 618.10 6.63
on 31.03.2017)
Solar-New Park 535.96 187.59 187.59 3.50
Solar-KREDL 672.16 353.29 353.29 5.26

SOLAR-KPCL
(YELESANDRA,ITNAL,YAPALDINNI, 10.61 6.37 6.37 6.00
SHIMSHA) (3x1+3x1+1x3x1x5)
TOTAL RE 7165.41 2980.86 2980.86 4.16
NTPC Bundled power 582.21 258.46 258.46 4.44
Power purchase from Co gen 1300.00 451.10 451.10 3.47
Short term power purchase 1120.00 467.04 467.04 4.17

Short term Purchase from
294.00 106.43 106.43 3.62
MSEDCL
TRANSMISSION CHARGES 0.00
PGCIL CHARGES 1066.00 1066.00
KPTCL CHARGES 2753.70 2753.70
SLDC 24.77 24.77
POSOCO CHARGES 3.48 3.48

TOTAL INCLUDING
65576.04 8898.35 17725.80 26624.15 4.06
TRANSMISSION & SLDC CHARGES
ccxxii
GESCOM’s Approved Power Purchase For FY18
ENERGY
% SHARE OF ENERGY CAPACITY ENERGY TOTAL
NAME OF THE CHARGES PER PER UNIT RATE
ENERGY ALLOWED CHARGES CHARGES COST
GENERATING STATION UNIT RATE (RS/Kwh)
ALLOWED (MU) (Rs Cr) (Rs Cr) (Rs Cr)
(RS/Kwh)
KPCL THERMAL
STATIONS
RAICHUR THERMAL
POWER STATION_RTPS 5.243 411.61 41.57 3.34 137.48 179.01 4.35
1-7 (7x210)
RAICHUR THERMAL
POWER STATION_RTPS 8 13.508 171.42 30.68 2.88 49.37 80.05 4.67
(1x250)
BELLARY THERMAL
POWER STATIONS_BTPS- 13.508 339.86 37.05 3.52 119.63 156.73 4.61
1 (1x500)
BELLARY THERMAL
2 (1x500)
BELLARY THERMAL
3 (1x700)
YTPS (1x 800) 13.508 129.68 0.00 2.92 37.87 37.87 2.92
TOTAL KPCL THERMAL 1522.10 172.86 3.19 485.56 658.43 4.33

CGS SOURCES
N.T.P.C-RSTP-I&II
13.508 434.15 26.86 2.29 99.37 126.23 2.91
(3X200MW+3X500MW)
N.T.P.C-RSTP-III
13.508 106.98 10.26 2.40 25.68 35.93 3.36
(1X500MW)
NTPC-Talcher
13.508 384.30 30.51 1.68 64.59 95.09 2.47
(4X500MW)
Simhadri Unit -1 &2
13.508 133.42 22.03 2.77 37.01 59.05 4.43
(2X500MW)
NTPC Tamilnadu
Energy Company Ltd
(NTECL)_Vallur TPS 13.508 94.85 16.92 2.64 25.04 41.96 4.42
Stage I &2 &3
(3X500MW)
Neyveli Lignite
Corporation_NLC TPS-II 13.508 95.92 11.18 2.82 27.05 38.22 3.99
STAGE I (3X210MW)
Neyveli Lignite
Corporation_NLC TPS-II 13.508 152.10 18.35 2.82 42.89 61.24 4.03
STAGE 2 (4X210MW)
Neyveli Lignite
Corporation_NLC TPS I 13.508 94.29 13.36 2.61 24.59 37.96 4.03
EXP (2X210MW)
Neyveli Lignite
Corporation_NLC TPS2 13.508 70.37 15.04 2.55 17.92 32.96 4.68
EXP (2X250MW)
NLC TAMINADU
POWER LIMITED (NTPL)
13.508 155.76 29.18 2.50 38.94 68.12 4.37
(TUTICORIN)
(2X500MW)
MAPS (2X220MW) 13.508 26.88 2.15 5.78 5.78 2.15
Kaiga Unit 1&2 13.508 124.27 3.19 39.59 39.59 3.19
ccxxiii
(2X220MW)
Kaiga Unit 3 &4
13.508 123.19 3.19 39.25 39.25 3.19
(2X220MW)
NPCIL-KudanKulam
Atomic Power
13.508 204.11 4.12 84.18 84.18 4.12
Generating Station
(KKNPP U1 (1X1000MW)
NPCIL-KudanKulam
Atomic Power
Generating Station 13.508 46.71 4.12 19.26 19.26 4.12
(KKNPP)
U2(1X1000MW)
ENERGY
(RS/Kwh)
DVC-Unit-1 &2 Meja
13.508 189.45 28.13 2.38 45.06 73.19 3.86
TPS (2x500MW)
DVC-Unit-7 & 8-
KODERMA TPS 13.508 236.87 43.47 2.19 51.80 95.27 4.02
(2x500MW)
Kudgi 13.508 101.32 0.00 3.02 30.60 30.60 3.02
TOTAL CGS Energy @
2774.94 265.28 2.59 718.60 983.88 3.55
KPTCl periphery
TOTAL MAJOR IPPS
UDUPI POWER
CORPORATION 9.029 606.05 103.03 3.20 193.94 296.96 4.90
LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS
SHARAVATHI VALLEY
PROJECT_SVP 39.343 1933.37 8.37 0.35 68.22 76.59 0.40
(10x103.5+2x27.5)
MAHATMA GANDHI
HYDRO ELECTRIC
13.508 37.77 0.31 0.45 1.70 2.02 0.53
POWER HOUSE_MGHE
(4x21.6+4x13.2)
GERUSOPPA_GPH
(SHARAVATHI TAIL 13.508 70.46 3.30 1.11 7.83 11.13 1.58
RACE_STR) (4x60)
KALI VALLEY
PROJECT_KVP 13.733 435.73 2.93 0.55 23.94 26.87 0.62
(2x50+6x150)
VARAHI VALLEY
PROJECT_VVP 13.508 144.36 5.49 1.18 16.97 22.46 1.56
(4x115+2x4.5)
ALMATTI DAM POWER
HOUSE_ADPH 13.508 65.06 4.26 0.97 6.31 10.57 1.62
(1x15+5x55)
BHADRA HYDRO
ELECTRIC POWER
HOUSE_BHEP 13.508 8.19 0.20 3.36 2.75 2.96 3.61
((1x2+2x12)+(1x7.2+1x6
))
KADRA POWER
13.508 49.01 2.62 1.46 7.18 9.79 2.00
HOUSE_KPH (3x50)
KODASALLI DAM
POWER HOUSE_KDPH 13.508 45.95 1.62 1.14 5.25 6.87 1.50
(3x40)
GHATAPRABHA DAM
POWER HOUSE_GDPH 13.508 11.18 0.29 1.68 1.88 2.17 1.95
(2x16)
ccxxiv
SHIVASAMUDRAM
(4x4+6x3) &
13.508 39.48 0.48 0.80 3.18 3.66 0.93
SHIMSHAPURA (2x8.6)
HYDRO STATIONS.
MUNIRABAD POWER
13.508 12.35 0.06 0.58 0.72 0.78 0.63
HOUSE (2x9+1x10)
TOTAL KPCL HYDRO 2852.90 29.93 0.51 145.93 175.86 0.62
OTHER HYDRO
PRIYADARSHINI JURALA
HYDRO ESLECTRIC 13.508 14.86 4.35 6.46 6.46 4.35
STATION (6x39)
TUNGABHADRA DAM
POWER HOUSE_TBPH 13.508 1.27 1.83 0.23 0.23 1.83
(4x9+4x9)
TOTAL OTHER HYDRO 13.508 16.12 4.15 6.69 6.69 4.15
RENEWABLE ENERGY
SOURCES
WIND-IPPS 203.57 73.83 73.83 3.63
ENERGY
(RS/Kwh)
KPCL-WIND
0.00 0.00 0.00 3.71
(9x0.225+10x0.230)
MINI HYDEL-IPPS 33.15 10.89 10.89 3.29
CO-GEN 6.52 3.03 3.03 4.64
CAPPTIVE 10.73 3.05 3.05 2.84
BIOMASS 75.92 37.57 37.57 4.95
SOLAR-existing
(anticipated as on 242.95 161.12 161.12 6.63
31.03.2017)
Solar-New Park 13.686 73.35 25.67 25.67 3.50
Solar-KREDL 43.98 23.12 23.12 5.26
SOLAR-KPCL
(YELESANDRA,ITNAL,YA
2.71 1.63 1.63 6.00
PALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL RE 692.88 339.91 339.91
NTPC Bundled power 5.701 33.19 14.73 14.73 4.44
Power purchase from
13.683 177.88 61.72 61.72 3.47
Co gen
Short term power
12.500 140.00 58.38 58.38 4.17
purchase
Short term Purchase
13.683 40.227 14.56 14.56 3.62
from MSEDCL
TRANSMISSION
CHARGES
PGCIL CHARGES 153.42 153.42
KPTCL CHARGES 352.75 352.75
SLDC 2.97 2.97
POSOCO CHARGES 0.48 0.48
TOTAL INCLUDING
TRANSMISSION & SLDC 8856.29 1080.73 2040.02 3120.75 3.52
CHARGES
ccxxv
Annexure-III
PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF GESCOM
With ref. to With ref. to voltage w ise
ACS COS*
Proposed by GESCOM Approved as per RST Level of Level of
Average Le v e l o f
Sales-MU Sales-MU Cross Cross
Sl No Category Description Revenue Revenue Realisation in C ro s s S ubs idy
in % Subsidy in % Subsidy in
Rs. crores Rs. crores Rs. Per Kw h
(LT&HT) % (EHT)
LT-1[fully Bhagya Jyothi/Kutir Jyothi
subsidised by
1 GoK]* 145.15 105.24 128.44 80.79 6.29 0.00 -1.87
LT-2(a)(i) Dom. / AEH - Applicable to City
Municipal Corporations areas and all
2 area under Urban Local Bodies. 873.73 668.37 883.94 499.62 5.65 -10.14 -11.82
LT-2(a)(ii) Dom. / AEH - Applicable to areas
4 under Village Panchayats 317.61 200.29 321.32 165.70 5.16 -18.02 -19.55
LT-2(b)(i) Pvt. Educational Institutions
Applicable to all areas of Local
5 Bodies including City Corporations 9.40 6.79 9.74 7.55 7.75 23.28 20.97
LT-2(b)(ii) Pvt. Educational Institutions
Applicable to areas under Village
6 Panchayats 1.74 1.57 1.80 1.35 7.50 18.56 16.34
LT-3(i) Commercial - Applicable in areas
under all ULBs including City
7 Corporations. 237.44 237.96 237.78 209.65 8.82 40.17 37.55
LT-3(ii) Commercial - Applicable to areas
8 under Village Panchayats 83.82 83.84 83.94 67.78 8.07 28.38 25.98
9 LT-4(a)* IP<=10HP 3451.88 2247.18 3451.88 1901.99 5.51 -12.40 -14.04
10 LT-4(b) IP>10HP 3.61 1.54 3.61 2.76 7.65 21.47 19.19
LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea
Plantations of sanctioned load of 10
11 HP & below 0.54 0.33 1.26 0.48 3.81 -38.85 -39.99
LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea
Plantations of sanctioned load of
12 above 10 HP 0.97 0.42 0.25 0.13 0.00 -15.42 -17.00
13 LT-5(a) LT Industrial 114.69 81.71 113.53 90.74 7.99 27.07 24.69
LT-5 (b) 55.70 50 55.14 41.38 7.50 19.32 17.09
14 LT-6 Water supply 221.47 125.92 227.63 104.87 4.61 -26.75 -28.13
15 LT-6 Public lighting 245.39 173.83 245.39 152.68 6.22 -1.08 -2.94
16 LT-7(a) Temporary supply 21.12 23.19 21.12 21.12 10.00 58.98 56.01
LT-7(b) Permanent Supply to Adversiting &
17 Holding 0.00 0.00 0.00 0.00 #DIV/0! 0.00 0.00
LT - TOTAL 5784.26 4008.19 5786.77 3348.59 5.79 -8.00 -9.73
1 HT-1 Water supply & sew erage 93.37 64.33 93.86 53.23 5.67 -9.84 -4.69 0.37
2 HT-2(a) Industrial - 1183.31 1034.73 1106.17 841.83 7.61 20.99 27.90 34.70
3 HT-2(b) Commercial 83.21 84.43 83.31 77.87 9.35 48.60 57.10 65.44
HT-2 ( c) (i) Govt./ Aided Hospitals & Educational
4 Institutions 16.06 7.10 9.78 8.93 9.13 45.16 53.45 61.60
HT-2 ( c) (ii) Hospitals and Educational Institutions
other than covered under HT-2( c)
5 (i) 0.00 0.00 6.28 5.12 8.15 0.00 0.00 0.00
HT-3(a)(i) Lift Irrigation - Applicable to lift
irrigation schemes under Govt Dept,
6 / Govt. ow ned Corporations 77.38 26.93 74.46 16.75 2.25 -64.23 -62.18 -60.18
HT-3(a)(ii) Lift Irrigation - Applicable to Private
lift irrigation schemes Lift Irrigaton
7 societies on urban/express feeders 9.73 5.22 9.36 7.77 8.30 31.93 39.46 46.87
HT-3(a)(iii) LI schemes other than those
8 covered under HT 3(a)(ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
HT - 3b Irrigation & Agriculture Farms,Govt.
Horticultural Farms, Pvt.Horticulture
Nurseries, Coffee, Tea,Cocanut &
9 Arecanut Plantations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
10 HT-4 Residential Apartments -Colonies 13.27 10.14 13.16 8.58 6.52 3.66 9.59 15.41
11 HT-5 Temporary supply 5.43 9.18 5.43 6.58 12.12 92.71 103.72 114.54
HT - TOTAL 1481.76 1242.06 1401.81 1026.66 7.32 16.44 23.09 29.63
TOTAL 7266.01 5250.25 7188.58 4375.25 6.09
Misc. Revenue 95.60 148.04
Grand Total 7266.01 5345.85 7188.58 4,523.29 6.29 0.00
0.00
* These categories are subsidised by GoK. In case subsidy is not released by the Gok in adv ance, GESCOM
shall raise demand & collect CDT of Rs.6.29/unit by BJ/KJ &Rs.5.51/unit from IP set Consumers.
* Voltage w ise cost of supply per unit to: LT Rs: 6.41, HT Rs.5.95 & EHT- Rs.5.65 Page - 210
ccxxvi
ANNEX - IV
ELECTRICITY TARIFF - 2018
K.E.R.C. ORDER DATED: 11th April, 2017
Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2017
Gulbarga
Electricity Supply Company Ltd.,
ccxxvii
ELECTRICITY TARIFF-2018
GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)
1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed
deposits and compliance of terms and conditions as stipulated
in the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka and Regulations issued
under the Electricity Act, 2003 at the time of supply and
continuation of power supply is subject to compliance of the
said Conditions of Supply / Regulations as amended from time
to time.
2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.
3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The
minimum charge is the power supply charges in accordance
with the tariff in force from time to time. This shall be payable by
the Consumer until power supply agreement is terminated,
irrespective of the installation being in service or under
disconnection.
4. The tariffs in the schedule are applicable to power supply within

the area of operation of the licensee.
5. The tariffs are subject to levy of Tax and Surcharges thereon as

may be decided by the State Government from time to time.
6. For the purpose of these tariffs, the following conversion table would
be used:
ccxxviii
1 HP=0.746 KW. 1HP=0.878 KVA.
7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill
amount of 50 Paise and above will be rounded off to the next higher
Rupee and the amount less than 50 Paise will be ignored.
8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales
promotions etc., is limited to sanctioned load at the applicable
permanent power supply tariff rates. Temporary tariff rates will be
applicable in case the load exceeds sanctioned load as per the
Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka.
9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations
serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for
supply of Electricity) Regulations, 2004 and its amendments from time
to time. The applicant is however at liberty to avail HT supply for lesser
loads. The minimum contract demand for HT supply shall be 25 KVA or
as amended from time to time by the Licensee with the approval of
KERC.
10. The Consumer shall not resell electricity purchased from the Licensee
to a third party except -
(a) Where the Consumer holds a sanction or a tariff provision for
distribution and sale of energy,
(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.
11. Non-receipt of the bill by the Consumer is not a valid reason for non-
payment. The Consumer shall notify the office of issue of the bill, if the
same is not received within 7 days from the meter reading date.
Otherwise, it will be deemed that the bills have reached the Consumer
in due time.
12. The Licensee will levy the following charges for non-realization of each
Cheque
ccxxix
1 Cheque amount upto 5% of the amount subject to a
Rs. 10,000/- minimum of Rs100/-
2 Cheque amount of 3% of the amount subject to a
Rs. 10,001/- and upto minimum of Rs500/-
Rs. 1,00,000/-
3 Cheque amount above 2% of the amount subject to a
Rs. 1 Lakh: minimum of Rs3000/-
13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the
Consumer has to collect the same.
14. In case of any belated payment, simple interest at the rate of 1 % per
month will be levied on the actual No. of days of delay subject to a
minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No
interest is however levied for arrears of Rs.10/- and less.
15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall

provide current limiter/Circuit Breakers of capacity prescribed by the
Licensee depending upon the sanctioned load.
16. All payments made by the Consumer will be adjusted in the following
order of priority: -
(a) Interest on arrears of Electricity Tax
(b) Arrears of Electricity Tax
(c) Arrears of Interest on Electricity charges
(d) Arrears of Electricity charges
(e) Current month’s dues
17. For the purpose of billing,

(i) the higher of the rated load or sanctioned load in respect of LT
installations which are not provided with Electronic Tri-Vector
meter.
(ii) sanctioned load or MD recorded, whichever is higher, in respect
of installations provided with static meters or Electronic Tri-Vector
meter will be considered.
Penalty and other clauses shall apply if sanctioned load is

exceeded.
ccxxx
18. The bill amount shall be paid within 15 days from the date of presentation
of the bill failing which the interest becomes payable.
19. For individual installations, more than one meter shall not be provided
under the same tariff. Wherever two or more meters are existing for
individual installation, the sum of the consumption recorded by the meters
shall be taken for billing, till they are merged.
20. In case of multiple connections in a building, all the meters shall be
provided at one easily accessible place in the ground floor.
21. Reconnection charges: The following reconnection charges shall be
levied in case of disconnection and included in the monthly bill.
For reconnection of:
a Single Phase Domestic installations Rs.20/- per installation
under Tariff schedule LT 1 & LT2 (a)
b Three Phase Domestic installations
under Tariff schedule LT2 (a) and Rs.50/- per installation
Single Phase Commercial & Power
installations.
c All LT installations with 3 Phase supply Rs.100/- per
other than LT2 (a) installation
d All HT& EHT installations Rs.500/-per
Installation.
22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by
cash or cheque or D.D and payments above Rs.10, 000/- shall be made
by cheque or D.D only. Payments under other heads of account shall be
made by cash or D.D up to and inclusive of Rs.10, 000/- and
payment above Rs.10, 000/-shall be by D.D only.
Note: The Consumers can avail the facility of payment of monthly power
supply bill through Electronic clearing system (ECS)/ Credit cards /
RTGS/ NEFT/ on-line E-Payment / Digital mode of payments in line
with the guidelines issued by the RBI wherever such facility is
provided by the Licensee in respect of revenue payments up to the
limit prescribed by the RBI.
23. For the types of installations not covered under any Tariff schedules, the
Licensee is permitted to classify such installations under appropriate Tariff
schedule under intimation to the K.E.R.C.
24. Seasonal Industries

Applicable to all Seasonal Industries
ccxxxi
i) The industries that intend to avail this benefit shall have Electronic Tri-
Vector Meter fitted to their installations.
ii) ‘Working season’ months and ‘off-season’ months shall be
determined by an order issued by the Executive Engineer of the
concerned O&M Division of the Licensee as per the request of the
Consumer and will continue from year to year unless otherwise
altered. The Consumer shall give a clear one month’s notice in
case he intends to change his ‘ working season’.
iii) The consumption during any month of the declared off-season shall
not be more than 25% of the average consumption of the previous
working season.
iv) The ‘Working season’ months and ‘off-season’ months shall be full–
calendar months. If the power availed during a month exceeds
the allotment for the ‘off-season’ month, it shall be taken for
calculating the billing demand as if the month is the ‘working
season’ month.
v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During
the ‘off-season period, the Consumer may use power for
administrative offices etc., and for overhauling and repairing plant
and machinery.
25 Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the
production of certificate Form-12 A from the Income Tax
department.
26 Time of the Tariff (ToD)

The Commission as decides in the earlier tariff order, decide to
continue compulsory Time of Day Tariff for HT2 (a,) and HT2 (b) and
HT2(c) consumers with a contract demand of 500 KVA and above.
Further, the optional ToD would continue as existing earlier for HT2(a),
HT2(b) and HT2(c) consumers with contract demand of less than 500
KVA. Also the ToD for HT1 consumers on optional basis would continue
ccxxxii
as existing earlier. Details of ToD tariff are indicated under the
respective tariff category.
27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for
revival/rehabilitation of sick industries under the New Industrial Policy
2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the
Government of Karnataka has issued G.O No.CI2 BIF 2010, dated
21.10.2010. The Commission, in its Tariff Order 2002, has accorded
approval for implementation of reliefs to the sick industries as per the
Government policy and the same was continued in the subsequent
Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated
21.10.2010, the Commission has accorded approval to ESCOMs for
implementation of the reliefs extended to sick industrial units for their
revival / rehabilitation on the basis ofthe orders issued by the
Commissioner for Industrial Development and Director of Industries &
Commerce, Government of Karnataka.
28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by way
of adjustment in the subsequent month’s bill:
(i) In all cases of payment through ECS.
(ii) And in the case of monthly bills exceeding Rs.1, 00,000/-
(Rs. one lakh), if the payment is made 10 days in
advance of the due date.
(iii) Advance Payment exceeding Rs.1000/- made by the
Consumers towards monthly bills
29. Conditions of Supply of Electricity of the Distribution Licensees in the State
of Karnataka and amendments issued thereon from time to time and
Regulations issued under the Electricity Act, 2003 will prevail over the
extract given in this tariff book in the event of any discrepancy.
30. Self-Reading of Meters:
The Commission has approved Self-Reading of Meters by Consumers
and issue of bills by the Licensee based on such readings and the
Licensee shall take the reading at least once in six months and
ccxxxiii
reconcile the difference, if any and raise the bills accordingly. This
procedure may be implemented by the Licensee as stipulated under
Section 26.01 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka.
---0---
ELECTRICITY TARIFF - 2018
PART-1
HIGH TENSION SUPPLY
Applicable to Bulk Power Supply of Voltages

at 11KV (including 2.3/4.6 KV) and above at
Standard High Voltage or Extra High Voltages
when the Contract Demand is 50 KW / 67 HP
and above.
ccxxxiv
CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:
1. Billing Demand
A) The billing demand during unrestricted period shall be the

maximum demand recorded during the month or 75% of the
CD, whichever is higher.
B) When the Licensee has imposed demand cut of 25% or less, the
conditions stipulated in (A) shall apply.
C) When the demand cut is in excess of 25%, the billing demand

shall be the maximum demand recorded or 75% of the
restricted demand, whichever is higher.
D) If at any time the maximum demand recorded exceeds the CD

or the demand entitlement, or opted demand entitlement
during the period of restrictions, if any, the Consumer shall pay
for the quantum of excess demand at two times the normal rate
per KVA per month as deterrent charges as per Section 126(6)
of the Electricity Act, 2003. For over-drawal during the billing
period, the penalty shall be two times the normal rate.
E) During the periods of disconnection, the billing demand shall be

75% of CD, or 75% of the demand entitlement that would have
been applicable, had the installation been in service, whichever
is less. This provision is applicable only, if the installation is under
disconnection for the entire billing month.
F) During the period of energy cut, the Consumer may get his
demand entitlement lowered, but not below the percentage of
energy entitlement, (For example, In case the energy
entitlement is 40% and the demand entitlement is 80%, the re-
fixation of demand entitlement cannot be lower than 40% of the
CD). The benefit of lower demand entitlement will be given
effect to from the meter reading date of the same month, if the
option is exercised on or before 15th of the month. If the option is
ccxxxv
exercised on or after 16th of the month, the benefit will be given
effect to from the next meter reading date. The Consumer shall
register such option by paying a processing fee of Rs.100/- at
the Jurisdictional sub-division office.
(i) The billing demand in such cases, shall be the “Revised

(Opted) Demand Entitlement” or, the recorded demand,
whichever is higher. Such option for reduction of demand
entitlement, is allowed only once during the entire span
of that particular “Energy Cut Period”. The Consumer,
can however opt for a higher demand entitlement upto
the level permissible under the demand cut notification,
and the benefit will be given effect to from the next
meter reading date. Once the Consumer opts for
enhancement of demand, which has been reduced
under Clause (F), no further revision is permitted during
that particular energy cut period.
(ii) The opted reduced demand entitlement will

automatically cease to be effective, when the energy
cut is revised. The facility for reduction and enhancement
can however be exercised afresh by the Consumer as
indicated in the previous paras.
G) For the purpose of billing, the billing demand of 0.5 KVA and
above will be rounded off to the next higher KVA, and billing
demand of less than 0.5 KVA shall be ignored.
2. Power factor (PF)
It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF
of not less than 0.90.
(i) The specified P.F. is 0.90. If the power factor goes below 0.90
Lag, a surcharge of 3 Paise per unit consumed will be levied
for every reduction of P.F. by 0.01 below 0.90 Lag.
(ii) T
he power factor when computed as the ratio of KWh /
ccxxxvi
KVAh will be determined upto 3 decimals (ignoring figures in
the other decimal places), and then rounded off to the
nearest second decimal as illustrated below:
(a) 0.8949 to be rounded off to 0.89
(b) 0.8951 to be rounded off to 0.90
In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the
same is not available, the ratio of KWh to KVAh consumed in the
billing month shall be considered.
3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will
be entitled to a rebate as indicated below:
Supply Voltage: Rebate
A) 33/66 KV 2 Paise/unit of energy consumed
B) 110 KV 3 Paise/unit of energy consumed
C) 220 KV 5 Paise/unit of energy consumed
The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also
for installations converted from 13.2 KV and below to 33 KV and above
and also for installations converted from 33/66 KV to 110/220 KV, from
the next meter reading date after conversion / service / date of
notification of this Tariff order, as the case may be. The above rebate is
applicable only on the normal energy consumed by the Consumer,
including the consumption under TOD Tariff, and is not applicable on
any other energy allotted and consumed, if any, viz.,
i) Wheeled Energy.
ii) Any energy, including the special energy allotted over and above
normal entitlement.
iii) Energy drawal under special incentive scheme, if any.
The above rebate is not applicable for Railway Traction.
4. In respect of Residential Quarters/ Colonies availing Bulk power supply
by tapping the main HT supply, the energy consumed by such Colony
loads, metered at single point, shall be billed under HT-4 tariff schedule.
ccxxxvii
No reduction in demand recorded in the main HT meter will be
allowed.
5. Energy supplied may be utilized for all purposes associated with the
working of the installations, such as, Office, Stores, Canteens, Yard
Lighting, Water Supply and Advertisements within the premises.
6. Energy can also be used for construction, modification and expansion

purposes within the premises.
7. Power supply under HT-4 tariff schedule may be used for Commercial
and other purposes inside the colony, for installations such as Canteen,
Club, Shop, Auditorium etc., provided, this load is less than 10% of the
CD.
8. In respect of Residential Apartments availing HT Power supply under HT-

4 tariff schedule, the supply availed for Commercial and other
purposes like Shops, Hotels, etc., will be billed under appropriate tariff
schedule, (Only Energy charges) duly deducting such consumption in
the main HT supply bill. No reduction in the recorded demand of the
main HT meter is allowed. Common areas shall be billed at Tariff
applicable to that of the predominant Consumer category.
[
9. Seasonal Industries
a. The industries, which intend to utilize seasonal industry benefit,
shall conform to the conditionalities under Para no. 24 of the
General terms and conditions of tariff (applicable to both HT &
LT).
b. The industries that intend to avail this benefit, shall have
Electronic Tri-Vector Meter fitted to the installation.
c. Monthly charges during the working season shall be the
demand charges on 75% of the contract demand or the
recorded maximum demand during the month, whichever is
higher, plus the energy charges
d. Monthly charges during the off season, shall be demand
charges on the maximum demand recorded during the month,
or 50% of the CD whichever is higher plus the energy charges.
TARIFF SCHEDULE HT 1
ccxxxviii
Applicable to Water Supply, Drainage / Sewerage water treatment plant and
Sewerage Pumping installations, belonging to Karnataka Urban Water Supply
and Sewerage Board, other local bodies, State and Central Government.
RATE SCHEDULE
Demand charges Rs.200/-KVA of billing demand/month
TOD Tariff at the option of the Consumer
Time of Day Increase + / reduction (-) in energy
06.00 Hrs to 10.00 Hrs + 100 paise per unit
10.00 Hrs to 18.00 Hrs 0
Note: Energy supplied to residential quarters availing bulk supply by the
above category of Consumer, shall be metered separately at a
single point, and the energy consumed shall be billed at HT-4
Tariff. No reduction in the demand recorded in the main HT meter
will be allowed.
TARIFF SCHEDULE HT-2(a)
Applicable to Industries, Factories, Workshops, Research &
Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova
Mills, Roller Flour Mills, News Papers, Printing Press, Railway
Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,
Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water
Supply Installations of KIADB and other industries, all Defence
Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green
House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone
Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore
Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,
Developing and Recording Theaters, Tissue Culture, Aqua Culture,
Prawn Culture, Information Technology Industries engaged in
development of Hardware & Software, Information Technology (IT)
enabled Services / Start-ups (As defined in GOI notification dated
17.04.2015)/ Animation / Gaming / Computer Graphics as certified by
the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.
Units, Tyre retreading units, Nuclear Power Projects, Stadiums
maintained by Government and local bodies, also Railway Traction,
Effluent treatment plants and Drainage water treatment plants owned
other than by the local bodies, LPG bottling plants, petroleum pipeline
projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw
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Mills, Toy/wood industries, Satellite communication centres, and
Mineral water processing plants / drinking water bottling plants.
RATE SCHEDULE
HT-2(a): Applicable to all areas of GESCOM.
Demand charges Rs.200/kVA of billing demand/month
Energy charges
For the first one lakh units 660 paise per unit
For the balance units 680 paise per unit
Railway Traction and Effluent Treatment Plants
Energy Charges 620 paise per unit for all the units
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TARIFF SCHEDULE HT-2(b)
Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,
Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V. Station, All
India Radio, Railway Stations, Air Port, KSRTC bus stations, All offices, Banks,
Commercial Multi-storied buildings.
APMC Yards, Stadiums other than those maintained by Government and Local
Bodies, Construction power for irrigation, Power Projects and Konkan Railway
Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription
centers, telecom, call centers, BPO/KPO, Diagnostic centres, concrete mixture
(Ready Mix Concrete) units.
RATE SCHEDULE
HT-2 (b): Applicable to all areas of GESCOM
Demand charges Rs.220 /kVA of billing demand/month
Energy charges
For the first two lakh units 825 paise per unit
TARIFF SCHEDULE HT-2(c)
RATE SCHEDULE
HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable
Institutions, ESI hospitals, Universities and Educational Institutions belonging to
Government and Local bodies, Aided Educational Institutions andHostels of
all Educational Institutions.
Energy charges
RATE SCHEDULE
HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than
those covered under HT-2 (c)(i).
Energy charges
Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.
1. Energy supplied may be utilized for all purposes associated
with the working of the installation such as offices, stores,
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canteens, yard lighting, water pumping and
advertisement within the premises.
2. Energy can be used for construction, modification and
expansion purposes within the premises.
3. In respect of industries availing HT power supply under HT2

(a) tariff schedule, the supply availed for Effluent Treatment
Plant situated within the premises by fixing the separate
sub-meter, a rebate of 50 paise per unit of electricity
consumed by such Effluent Treatment Plant shall be given
to the applicable tariff schedule. No reduction in the
recorded demand of the main HT supply is allowed.
TOD Tariff applicable to HT-2(a), HT-2(b) and HT-2(c) category.

10.00 Hrs to 18.00 Hrs 0
TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,
RATE SCHEDULE
HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.
owned Corporations
Energy charges/ Minimum Charges 225 paise per unit subject to an
annual minimum of Rs.1240 per
HP/Annum
HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:

Connected to Urban/Express feeders
Fixed Charges Rs.50 /HP/ per month of sanctioned
load
HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

other than those covered under HT-3 (a)(ii)
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Fixed Charges Rs.30 /HP/ per month of sanctioned
load
TARIFF SCHEDULE HT-3 (b)

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government
Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,
Rubber, Coconut &Arecanut Plantations.
RATE SCHEDULE
Energy charges / Minimum Charges 425 paise per unit subject to an
annual minimum of Rs.1240/- per HP
of sanctioned load.
Note: These installations are to be billed on quarter yearly basis.

Applicable to Residential apartments and colonies (whether situated outside
or inside the premises of the main HT Installation) availing power supply
independently or by tapping the main H.T. line. Power supply can be used for
residences, theatres, shopping facility, club, hospital, guest house, yard/street
lighting, canteen located within the colony.
RATE SCHEDULE
Applicable to all areas
Demand charges Rs.120/- per KVA of billing demand/
month
NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads
metered at a single point, is to be billed at the above energy
rate. No reduction in the recorded demand of the main H.T.
supply is allowed.
(2) Energy under this tariff may be used for commercial and other
purposes inside the colonies for installations such as, Canteens,
Clubs, Shops, Auditorium etc., provided, this commercial load is
less than 10% of the Contract demand.
[
(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and
other purposes like Shops, Hotels, etc., will be billed under
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appropriate tariff schedule (Only Energy charges), duly deducting
such consumption in the main HT supply bill. No reduction in the
recorded demand of the main HT meter is allowed. Common
areas shall be billed at Tariff applicable to the predominant
Consumer category.
Tariff applicable to sanctioned load of 67 HP and above for
hoardings and advertisement boards and construction power for
industries excluding those category of consumers covered under
HT2(b) Tariff schedule availing power supply for construction
power for irrigation, power projects and Konkan Railway Projects
and also applicable to power supply availed on temporary basis
with the contract demand of 67 HP and above of all categories.
HT – 5 – Temporary supply
RATE SCHEDULE
67 HP and above:
Fixed charges / Rs240/HP/month for the entire sanction load /
Demand Charges contract demand
Energy Charges 1000 paise / unit
Note:
1. Temporary power supply with or without extension of distribution main shall
be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka.
2. This Tariff is also applicable to touring cinemas having license for a duration
of less than one year.
3. All the conditions regarding temporary power supply as stipulated in Clause
12 the Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka shall be complied with before service.
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ELECTRICITY TARIFF-2018
PART-II
LOW TENSION SUPPLY

(400 Volts Three Phase and
230Volts Single Phase Supply)
GESCOM
CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:
1. In the case of LT Industrial / Commercial Consumers, Demand based Tariff

at the option of the Consumer, can be adopted. The Consumer is
permitted to have more connected load than the sanctioned load. The
billing demand will be the sanctioned load, or Maximum Demand recorded
in the Tri-Vector Meter during the month, whichever is higher. If the
Maximum Demand recorded is more than the sanctioned load, penal
charges at two times the normal rate shall apply.
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2. Use of power within the Consumer premises for bonafide temporary
purpose is permitted subject to the conditions that, total load of the
installation on the system does not exceed the sanctioned load.
3. Where it is intended to use power supply temporarily, for floor polishing and
such other portable equipments, in a premises having permanent power
supply, such equipments shall be provided with earth leakage circuit
breakers of adequate capacity.
4. The laboratory installations in educational institutions are allowed to install
connected machineries up to 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
5.Besides combined lighting and heating, electricity supply under tariff
schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,
Refrigerators and other household appliances, including domestic water
pumps and air conditioners, provided, they are under single meter
connection. If a separate meter is provided for Air-conditioner load, the
Consumer shall be served with a notice to merge this load and to have a
single meter for the entire load. Till such time, the air conditioner load will be
billed under Commercial Tariff.
6. Bulk LT supply:
If power supply for lighting / combined lighting & heating {LT 2(a)}, is availed
through a bulk Meter for group of houses belonging to one Consumer, (ie,
Where bulk LT supply is availed), the billing for energy shall be done at the
slab rate for energy charges matching the consumption obtained by
dividing the bulk consumption by number of houses. In addition, fixed
charges for the entire sanctioned load shall be charged as per Tariff
schedule.
7. A rebate of 25 paise per unit will be given for the House/ School/Hostels
meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation
Centres under Tariff schedule LT 2(a).
8. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed subject
to a maximum of Rs. 50/- per installation per month will be allowed to Tariff
schedule LT 2(a), if solar water heaters are installed and used. Where Bulk
Solar Water Heater System is installed, Solar Water Heater rebate shall be
allowed to each of the individual installations, provided that, the capacity
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of Solar Water Heater in such apartment / group housing shall be a
minimum capacity of 100 Ltr. per household.
9. A rebate of 20% on fixed charges and energy charges will be allowed in
the monthly bill in respect of public Telephone booths having STD/ISD/ FAX
facility run by handicapped persons, under Tariff schedule LT 3.
10. A rebate of 2 paise per unit will be allowed if capacitors are installed as
per Clause 23 of Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka in respect of all metered IP Set
Installations.
11. Power Factor (PF):
Capacitors of appropriate capacity shall be installed in accordance with
Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees
in the State of Karnataka, in the case of installations covered under Tariff
category LT 3, LT4, LT 5, & LT 6, where motive power is involved.
(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a
surcharge of 2 paise per unit consumed will be levied for every
reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,
however, this is subject to a maximum surcharge of 30 paise per unit.
(ii) The power factor when computed as the ratio of KWh/KVAh will be
determined up to 3 decimals (ignoring figures in the other decimal
places) and then rounded off to the nearest second decimal as
illustrated below:
(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85
(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.
(iv) During inspection, if the capacity of capacitors provided is found to be
less than what is stipulated in Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka, a surcharge of 30
Paise/unit will be levied in the case of installations covered under Tariff
categories LT 3, LT 5, & LT 6 where motive power is involved.
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(v) In the case of installations without electronic Tri-vector meters even
after providing capacitors as recommended in Clause 23.01 and 23.03
of Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka, if during any periodical or other testing / rating of
the installation by the Licensee, the PF of the installation is found to be
lesser than 0.85, a surcharge determined as above shall be levied from
the billing month following the expiry of Three months’ notice given by
the Licensee, till such time, the additional capacitors are installed and
informed to the Licensee in writing by the Consumer. This is also
applicable for LT installations provided with electronic Tri-vector meters.
12. All new IP set applicants shall fix capacitors of adequate capacity in
accordance with Clause 23 of Conditions of Supply of Electricity of the
Distribution Licensees in the State of Karnataka before taking service.
[
13. All the existing IP set Consumers shall also fix capacitors of adequate
capacity in accordance with Clause 23 of Conditions of Supply of
Electricity of the Distribution Licensees in the State of Karnataka, failing
which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If the
capacitors are found to be removed / not installed, a penalty at the same
rate as above (Rs. 60/-per HP / Year) shall be levied.
14.The Semi-permanent cinemas having Semi-permanent structure, with
permanent wiring and licence of not less than one year, will be billed
under commercial tariff schedule i.e., LT 3.
15.Touring cinemas having an outfit comprising cinema apparatus and
accessories, taken from place to place for exhibition of cinematography
films, and also outdoor shooting units, will be billed under Temporary Tariff
schedule i.e., LT 7.
16.The Consumers under IP set tariff schedule, shall use the energy only for
pumping water to irrigate their own land as stated in the IP set application / water
right certificate and for bonafide agriculture use. Otherwise, such installations
shall be billed under appropriate Industrial / Commercial tariff, based on the
recorded consumption if available, or on the consumption computed as per the
Table given under Clause 42.06 of the Conditions of Supply of Electricity of the
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17. The water pumped for agricultural purposes may also be used by the
Consumer for his bonafide drinking purposes and for supplying water to
animals, birds, Poultry farms, Dairy farms and fish farms maintained by the
Consumer in addition to agriculture.
18. The motor of IP set installations can be used with an alternative drive for
other agricultural operations like sugar cane crusher, coffee pulping,
arecanut cutting etc., with the approval of the Licensee. The energy used
for such operation, shall be metered separately by providing alternate
switch and charged at LT Industrial Tariff (Only Energy charges) during the
period of alternative use. However, if the energy used both for IP Set and
alternative operation is measured together by one energy meter, the
energy used for alternate drive shall be estimated by deducting the
average IP Set consumption for that month as per the IP sample meter
readings for the sub-division, as certified by the sub-divisional Officer.
19. The IP Consumer is permitted to use energy for lighting the pump house
and well limited to two lighting points of 40 Watts each.
20. Billing shall be made at least once in a quarter year for all IP sets.
21. In the case of welding transformers, the connected load shall be taken
as:
a) Half the maximum capacity in KVA as per the nameplate specified
under IS: 1851
OR
b) Half the maximum capacity in KVA as recorded during the rating by
the Licensee, whichever is higher.
22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating and
Air-conditioning, Yard-Lighting, water supply in the respective premises of
Commercial / Industrial Units.
23. Fluorescent fittings shall be provided by the Licensee for the Streetlights in
the case of villages covered under the Licensee’s electrification
programme for initial installation.
In all other cases, the entire cost of fittings including Brackets, Clamps,
etc., and labour for replacement, additions and modifications shall be met
by the organizations making such a request. Labour charges shall be paid
at the standard rates fixed by the Licensee for each type of fitting.
ccxlix
24. Lamps, fittings and replacements for defective components of fittings shall
be supplied by the concerned Village Panchayaths, Town Panchayaths or
Municipalities for replacement.
25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP for
purpose of billing and the minimum billing being for 1 KW / 1HP in respect
of all categories of LT installations including I.P. sets. In the case of street
lighting installations, fraction of KW shall be rounded off to nearest quarter
KW for the purpose of billing and the minimum billing shall be quarter KW.
26. Seasonal Industries.
a) The industries which intend to utilize seasonal industry benefit, shall

comply with the conditionalities specified under Para no. 24 of the
General terms and conditions of tariff (applicable to both HT & LT).
b) The industries that intend to avail this benefit, shall have Electronic
Tri-Vector Meter fitted to their installation.
c) Monthly charges during the seasonal months shall be fixed charges
and energy charges. The monthly charges during the off seasonal
months, shall be the energy charges plus 50% of the fixed charges.
TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira
Jyothi (BJ/KJ) schemes.
RATE SCHEDULE
Energy charges Nil*
(including recovery towards Fully subsidized by the GOK
service main charges)
Commission Determined Tariff for the above category i.e., LT-1 is Rs.6.29 per unit.
*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by
these Consumers is shown as Nil. However, if the GOK does not release the
subsidy in advance, a Tariff of Rs.6.29 per unit subject to monthly minimum of Rs.
30/- per Installation per month shall be demanded and collected from these
Consumers.
Note: If the consumption exceeds 40 units per month or any BJ/KJ installation
is found to have more than one out let, it shall be billed as per Tariff
Schedule LT 2(a).
ccl
Applicable to lighting/combined lighting, heating and motive Power
installations of residential houses and also to such houses where a portion is
used by the occupant for (a) Handloom weaving (b) Silk rearing and reeling
and artisans using motors up to 200 watts (c) Consultancy in, (i) Engineering
(ii) Architecture (iii) Medicine (iv) Astrology (v) Legal matters (vi) Income Tax
(vii)Chartered Accountants (d) Job typing (e) Tailoring (f) Post Office (g)
Gold smithy (h) Chawki rearing (i) Paying guests/Home stay guests (j) personal
Computers (k) Dhobis (l) Hand operated printing press (m) Beauty Parlours (n)
Water Supply installations, Lift which is independently serviced for bonafide
use of residential complexes/residence, (o) Farm Houses and yard lighting
limiting to 120 Watts,(p) Fodder Choppers & Milking Machines with a
connected load upto 1 HP.
Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centres run by State/Central Govt. and local bodies; (ii) Houses, schools and
Hostels meant for handicapped, aged, destitute and orphans; (iii)
Rehabilitation Centres run by charitable institutions, AIDS and drug addicts
Rehabilitation Centres; (iv) Railway staff Quarters with single meter (v) fire
service stations.
It is also applicable to the installations of (a) Temples, Mosques, Churches,
Gurudwaras, Ashrams, Mutts and religious/Charitable institutions; (b) Hospitals,
Dispensaries and Health Centres run by Charitable institutions including X-ray
units; (c) Jails and Prisons (d) Schools, Colleges, Educational institutions run by
State/Central Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the
Government, Educational Institutions, Cultural, Scientific and Charitable
Institutions (g) Guest Houses/Travelers Bungalows run in Government buildings
or by State/Central Govt./Religious/Charitable institutions; (h) Public libraries;
(i) Silk rearing; (j) Museums; (k) Installations of Historical Monuments of
Archeology Departments; (l) Public Telephone Booths without STD/ISD/FAX
facility run by handicapped people; (m) Sulabh/ Nirmal Souchalayas; (n)
Viswa Sheds having Lighting Loads only.
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RATE SCHEDULE
LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations
and all other urban local bodies
Fixed charges per month For the first KW Rs.40/- per KW
For every additional KW Rs.50/- per KW
Energy charges For 0 - 30 units (Lifeline 325 paise/unit
consumption)
31 to 100 units 470 paise/unit
Above 200 units 730 paise/unit
LT-2(a)(ii): Applicable to Areas under Village Panchayats
Fixed charges per month For the first KW Rs.25/- per KW
For every additional KW Rs.40/- per KW
Energy charges For 0 - 30 units (Lifeline 315 paise/unit
consumption)
31 to 100 units 440paise/unit
Above 200 units 680paise/unit

Applicable to the installations of Private Professional and other Private
Educational Institutions including aided, unaided institutions, Nursing
Homes and Private Hospitals having only lighting or combined lighting
& heating, and motive power.
[[[[[
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RATE SCHEDULE
LT 2 (b) (i): Applicable to City Municipal Corporations and all other urban
local bodies
Fixed charges Rs.55 Per KW subject to a minimum of Rs.85 per
month
Energy charges 0 to 200 units 650 paise/unit
LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.45 per KW subject to a minimum of Rs.70 per
month
0 to 200 units
Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.
1 A rebate of 25 paise. Per unit shall be given for installation of a house/
School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,
Rehabilitation Centres run by Charitable Institutions.
2 (a) Use of power within the consumer’s premises for temporary purposes
for bonafide use is permitted subject to the condition that, the total
load of the installation on the system does not exceed the
sanctioned load.
(b) Where it is intended to use floor polishing and such other portable
equipment temporarily, in the premises having permanent supply,
such equipment shall be provided with an earth leakage circuit
breaker of adequate capacity.
3 The laboratory installations in educational institutions are allowed to
install connected machinery upto 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
4. Besides lighting and heating, electricity supply under this schedule can be
used for fans, Televisions, Radios, Refrigerators and other house-hold
appliances including domestic water pump and air conditioners,
provided, they are under single meter connection. If a separate meter is
provided for Air conditioner Load, the consumption shall be under
commercial tariff till it is merged with the main meter.
5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a
maximum of Rs.50/- per installation per month will be allowed to Tariff
schedule LT 2(a), if solar water heaters are installed and used. Where Bulk
ccliii
Solar Water Heater System is installed, Solar Water Heater rebate shall be
allowed to each of the individual installations, provided that, the
capacity of Solar Water Heater in such apartment / group housing shall
be a minimum capacity of 100 Ltr, per household.

Applicable to Commercial Lighting, Heating and Motive Power installations of
Clinics, Diagnostic Centres, X Ray units, Shops, Stores,
Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest Houses,
Mess, Clubs, KalyanMantaps / Choultry, permanent Cinemas/ Semi
Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage
Plants, Service Stations/ Garages, Banks, Telephone Exchanges. T.V.Stations,
Microwave Stations, All India Radio, Dish Antenna, Public Telephone Booths/
STD, ISD, FAX Communication Centers, Stud Farms, Race Course, Ice Cream
Parlours, Computer Centres, Photo Studio / colour Laboratory, Photo Copiers,
Railway Installation excepting Railway workshop, KSRTC Bus Stations
excepting Workshop, All offices, Police Stations, Commercial Complexes, Lifts
of Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres,
Post Offices, Bakery shops, Beauty Parlours, Stadiums other than those
maintained by Govt. and Local Bodies. It is also applicable to water supply
pumps and street lights not covered under LT 6, Cyber cafés, Internet surfing
cafés, Call centres, BPO/KPO, telecom I.T. based medical transcription
centres, Private Hostels not covered under LT -2 (a), Paying guests
accommodation provided in an independent / exclusive premises, concrete
mixtures (Ready Mix Concrete) units .
RATE SCHEDULE
LT-3 (i): Applicable to City Municipal Corporations and all other urban local
bodies.
Fixed charges Rs.60 per KW per month
Energy charges For 0 - 50 units 750 paise/unit
Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW
Fixed charges Rs.75 per KW
Energy charges As above
RATE SCHEDULE
LT-3 (ii): Applicable in Areas under Village Panchayats
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Energy charges For 0 - 50 units 700 paise/unit
Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW
Energy charges As above
Note: 1. Besides Lighting, Heating and Motive power, Electricity supply under
this Tariff can also be used for Yard lighting/ air
Conditioning/water supply in the premises.
2. The semi-permanent Cinemas should have semi-Permanent
Structure with permanent wiring and licence for a duration of not
less than one year.
3. Touring Cinemas having an outfit comprising Cinema apparatus
and accessories taken from place to place for exhibition of
cinematography film and also outdoor shooting units shall be
billed under LT- 7 Tariff.
4. A rebate of 20% on fixed charges and energy charges shall be
allowed in the monthly bill in respect of telephone Booths having
STD / ISD/FAX facility run by handicapped persons.
5. Demand based Tariff at the option of the Consumer can be
adopted as per Para 1 of the conditions applicable to LT
installations.
TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets
used in, (i) Nurseries of forest and Horticultural Departments; (ii) Grass
Farms and Gardens; (iii) Plantations other than Coffee, Tea, Rubber and
Private Horticulture Nurseries
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TARIFF SCHEDULE LT-4 (a)
Applicable to I.P. Sets up to and inclusive of 10 HP
RATE SCHEDULE
Fixed charges
Free
Energy charges
Commission Determined Tariff (CDT) for LT4 (a) category is 551 paise per
unit. In case the GOK does not release the subsidy in advance in the
manner specified by the Commission in K.E.R.C. (Manner of Payment of
subsidy) Regulations, 2008, CDT of 551 paise per unit shall be demanded
and collected from these Consumers.
Note: This Tariff is applicable for Coconut and Areca nut plantations
also.
TARIFF SCHEDULE LT-4 (b):
Applicable to IP sets above 10 HP
RATE SCHEDULE
Fixed charges Rs.50 per HP per month.
Energy charges 300 paise per unit
TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber
plantations of sanctioned load upto and inclusive of 10 HP.
RATE SCHEDULE
TARIFF SCHEDULE LT-4 (c)(ii):

Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber
plantations of sanctioned load above 10 HP.
RATE SCHEDULE
Note:
1) The energy supplied under this tariff shall be used by the consumers only for
pumping water to irrigate their own land as stated in the I.P. Set application /
water right certificate and for bonafide agriculture use. Otherwise, such
installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the
recorded consumption if available, or on the consumption computed as per the
Table given under Clause 42.06 of the Conditions of Supply of Electricity of the
2) The motor of IP set installations can be used with an alternative drive for other
agricultural operations like sugar cane crusher, coffee pulping, arecanut
cutting etc., with the approval of the Licensee. The energy used for such
operation shall be metered separately by providing alternate switch and charged
at LT Industrial Tariff (Only Energy charges) during the period of alternative use.
cclvi
If the energy used both for IP Set and alternative operation, is however measured
together by one energy meter, the energy used for alternate drive shall be
estimated by deducting the average IP Set consumption for that month as per the
IP sample meter readings for the sub-division as certified by the sub-divisional
Officer.
3) The Consumer is permitted to use the energy for lighting the pump house and
well limited to 2 lighting points of 40 W each.
4) The water pumped for agricultural purposes may also be used by the Consumer
for his bonafide drinking purposes and for supplying water to animals, birds,
Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition
to agriculture.
5) Billing shall be made at least once in a quarter year for all IP sets.
6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per
Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in
the State of Karnataka in respect of all metered IP Set Installations.
7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be
collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and
LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or
not.

Applicable to Heating & Motive power (including lighting) installations of
industrial Units, Workshops, Poultry Farms, Sugarcane Crushers, Coffee Pulping,
Cardamom drying, Mushroom raising installations, Flour, Huller & Rice Mills,
Wet Grinders, Milk dairies, Ironing, Dry Cleaners and Laundries having
washing, Drying, Ironing etc., ExclusiveTailoring shop , Bulk Ice Cream and Ice
manufacturing Units, Coffee Roasting and Grinding Works, Cold Storage
Plants, Bakery Product Mfg. Units, KSRTC workshops/Depots, Railway
workshops, Drug manufacturing units and Testing laboratories, Printing Presses,
Garment manufacturing units, Bulk Milk vending Booths, Swimming Pools of
local Bodies, Tyre retreading units, Stone crushers, Stone cutting, Chilly
Grinders, Phova Mills, pulverizing Mills, Decorticators, Iron & Red-Oxide
crushing units, crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood
industries, Viswa Sheds with mixed load sanctioned under Viswa Scheme,
Cinematic activities such as Processing, Printing, Developing, Recording
theatres, Dubbing Theatres and film studios, Agarbathi manufacturing unit.,
Water supply installations of KIADB & industrial units, Gem & Diamond cutting
Units, Floriculture, Green House, Biotech Labs., Hybrid seed processing units.
cclvii
Information Technology industries engaged in development of hardware &
Software, Information Technology (IT) enabled Services / Start-ups(As defined
in GOI notification dated 17.04.2015)/ Animation / Gaming / Computer
Graphics as certified by the IT & BT Department of GOK/GOI, Silk filature units,
Aqua Culture, Prawn Culture, Brick manufacturing units, Silk / Cotton colour
dying, Stadiums maintained by Govt. and local bodies, Fire service stations,
Gold / Silver ornament manufacturing units, Effluent treatment plants,
Drainage water treatment plants, LPG bottling plants and petroleum pipeline
projects, Piggery farms, Analytical Lab. for analysis of ore metals, Satellite
communication centres, Mineral water processing plants / drinking water
bottling plants and soda fountain units.
Tariff for LT 5 :
Tariff for LT 5 (a):
Applicable to areas under Municipal Corporations
i) Fixed charges

Charges per ii) Rs.45 per HP for above 5 HP & below 40 HP
Month iii) Rs.60 per HP for 40 HP & above but below 67 HP

Fixed Above 5 HP and less than 40 Rs.60 per KW of billing
Charges per HP demand
Month 40 HP and above but less Rs.85 per KW of billing
than 67 HP demand
demand
ii) Energy Charges

For the first 500 units 510 paise/unit
For the balance units 635 paise/unit
Tariff for LT 5 (b):

i. Fixed charges
cclviii
Fixed Charges i) Rs.35 per HP for 5 HP & below
per Month ii) Rs.40 per HP for above 5 HP & below 40 HP
iii) Rs.55 per HP for 40 HP & above but below 67 HP
iv)Rs.110 per HP for 67 HP & above
ii. Demand based Tariff (optional)

Fixed Above 5 HP and less than 40 HP Rs.55 per KW of billing demand
Charges 40 HP and above but less than Rs.80 per KW of billing demand
per Month 67 HP
67 HP and above Rs.160 per KW of billing demand
iii. Energy Charges

TOD Tariff applicable to LT-5:At the option of the Consumer

10.00 Hrs to 18.00 Hrs 0
NOTE:
1. DEMAND BASED TARIFF
In the case of LT Industrial Consumers, Demand based Tariff at the option of
the Consumer can be adopted. The Consumer is permitted to have more
connected load than the sanctioned load. The billing demand will be the
sanctioned load or Maximum Demand recorded in the Tri-Vector Meter
during the month whichever is higher. If the Maximum Demand recorded is
more than the sanctioned load, penal charges at two times the normal rate
shall apply.
2. Seasonal Industries: The industries which intend to utilize seasonal industry
benefit shall comply with the conditionalities under para no. 24 of general
terms and conditions applicable to LT.
3. Electricity can also be used for lighting, heating, and air-conditioning in the
premises.
4. In the case of welding transformers, the connected load shall be taken as,
(a) Half the maximum capacity in KVA as per the name plate specified
under-IS1851, or (b) Half the maximum capacity in KVA as recorded
during rating by the Licensee, whichever is higher.
Applicable to water supply and sewerage pumping installations and also
applicable to water purifying plants maintained by Government and Urban
Local Bodies/ Grama Panchayats for supplying pure drinking water to
residential areas, Public Street lights/Park lights of village Panchayat, Town
Panchayat, Town Municipalities, City Municipalities / Corporations / State and
Central Govt. / APMC, Traffic signals, Surveillance Cameras at traffic locations
cclix
belonging to Government Department, subways, water fountains of local
bodies. Also applicable to Streetlights of residential Campus of universities,
other educational institutions, housing colonies approved by local
bodies/development authority, religious institutions, organizations run on
charitable basis, industrial area / estate and notified areas, also Applicable to
water supply installations in residential Layouts, Street lights along with signal
lights and associated load of the gateman hut provided at the Railway level
crossing High Mast street lights, Lifts/ Escalators installed in pedestrian road
crossing maintained by Government and Urban local bodies/ Grama
Panchayats independently serviced.
RATE SCHEDULE
Water Supply- LT-6 (a)
Fixed charges Rs.55/HP/month
Public lighting- LT-6 (b)
Fixed charges Rs.70/KW/month
Energy Charges for LED/ Induction 485 paise/unit
Lighting

Temporary Supply and Permanent Supply to Advertising Hoardings

LT 7(a) Details Approved Tariff
Temporary Power Less than 67 HP: Energy charges at 1000 paise / unit
Supply for all subject to a weekly minimum of Rs.190
purposes. per KW of the sanctioned load.
cclx
Applicable to Hoardings & Advertisement boards, Bus Shelters with
Advertising Boards, Private Advertising Posts / Sign boards in the
interest of public such as Police Canopy Direction boards, and other
sign boards sponsored by Private Advertising Agencies / firms on
permanent connection basis.
LT 7(b) Details Approved Tariff
Power supply on Less than 67 HP: Fixed Charges at Rs.60 per KW/month
permanent & Energy charges at 1000 paise / unit
connection basis
Note:
1. Temporary power supply with or without extension of distribution main
shall be arranged through a pre–paid energy meter duly observing the
provisions of Clause 12 of the Conditions of Supply of Electricity of the
2. This Tariff is also applicable to touring cinemas having licence for
duration less than one year.
3. All the conditions regarding temporary power supply as stipulated in
Clause 12 of the Conditions of Supply of Electricity of the Distribution
Licensees in the State of Karnataka shall be complied with before
service.
-O-
cclxi

KERC Tariff Order 2017-18 for GESCOM

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KERC Tariff Order 2017-18 for GESCOM

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KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2017

REVISION OF ANNUAL REVENUE REQUIREMENT

REVISION OF RETAIL SUPPLY

11th April 2017

6th and 7th Floor, Mahalaxmi Chambers

CHAPTER Page No.

SL.NO. DETAILS OF ANNEXURES Page

AAD Advance Against Depreciation

Dated 11th April, 2017

In the matter of:

Application of GESCOM in respect of the Annual Performance Review for

Present: Shri M.K.Shankaralinge Gowda Chairman

The Gulbarga Electricity Supply Company Ltd., (hereinafter

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

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

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

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

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

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

Gulbarga CSC Division

Gulbarga Rural-I Division

Gulbarga zone Sedam Division

Bidar Circle Humnabad Division

Bellary CSC Division

Bellary Rural Division

Bellary Zone Raichur CSC Division

Raichur Rural Division

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

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

GESCOM for 2015-16

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

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

2.1 Preliminary Observations of the Commission:

After a preliminary scrutiny of applications the Commission had

 Projected IP set consumption for FY 18

 Wheeling and Banking

 Cross subsidy surcharge

 Issues pertaining to items of revenue and expenditure

 Energy flow diagram

2.2 Public Hearing Process:

As per the Karnataka Electricity Regulatory Commission (Terms and

Accordingly, the GESCOM has published the same in the following

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

2.3 Consultation with the Advisory Committee of the Commission:

 Performance of KPTCL / ESCOMs during FY16

 Major items of expenditure of KPTCL / ESCOMs for FY18

Members of the Committee have offered valuable suggestions on the

SUGGESTIONS / OBJECTIONS & REPLIES

List of persons who filed written objections

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

2. The Power purchase from Jurala Hydro station and Sharavathi

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

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

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

7. GESCOM has not quantified the results of NJY.

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

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

20. The concessional electricity extended to the employees of GESCOM

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

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

4.1 GESCOM’s Submission: