3.0

GRIDCO’s Proposal

3.1

GRIDCO has submitted the Bulk Supply Tariff (BST) application for Financial Year 2000-01 stating that the tariffs currently applicable to GRIDCO is effectively about two years old. With this tariff structure GRIDCO cannot meet its current costs and would end up with a deficit of Rs.596.20 crores for the FY 2000-01.

3.1.1

GRIDCO has stated that it faces an unparalled increase in power purchase cost which constitutes 79% of its total cost over which it has little control. Due to poor hydrology the current year’s hydro generation is expected to be far lower than that of the previous year requiring procurement of power at higher cost from other alternative sources to meet the shortfall.

3.1.2

GRIDCO has emphasised the necessity of an assured revenue stream as it has to manage the critical function of contracting firm generating capacity, constructing evacuation facilities and transmission network. It is also putting up concrete efforts to improve power availability, system reliability and matching demand and supply on an instantaneous basis which involves costs that are fixed in nature. Besides GRIDCO has to make critical and urgently needed investment in transmission network to upgrade the system and enhance its reliability to meet contingent situation.

3.1.3

To meet all these requirements, GRIDCO proposes to procure 11271.29 MU of power from various generating stations within and outside the states at a total cost of Rs.1432.20 crores at an average cost of 127.07 paise/unit (Table-16 Power Procurement Costs Summary, Page 26/42 of main text). This power procurement is meant to meet the energy requirement of the various distribution companies of the State (including sale to EOUs estimated at 10820.44 MU) based on the actual for 5 months and forecast for balance period of seven months made by GRIDCO (Table-2 Energy Requirement Forecast, page 8/42 of main text).

3.1.4

In addition to this GRIDCO will be meeting transmission cost of Rs.505.78 crores comprising of employees expenses, administrative and general expenses, repair and maintenance expenses, approved investment for restoring damages, depreciation, interest on long term liabilities, appropriation to contingency reserve, reasonable return and rebate to DISTCOs computed using the methodology specified in Sixth Schedule to the Supply Act, 1948 (TRF 5 modified).

3.1.5

In addition to this GRIDCO will be meeting transmission cost of Rs.505.78 crores comprising of employees expenses, administrative and general expenses, repair and maintenance expenses, approved investment for restoring damages, depreciation, interest on long term liabilities, appropriation to contingency reserve, reasonable return and rebate to DISTCOs computed using the methodology specified in Sixth Schedule to the Supply Act, 1948 (TRF 5 modified).

3.1.6

GRIDCO has considered the miscellaneous receipt of Rs.37.9 crores on account of wheeling of power from CPPs, charges for wheeling to other states less and sale to the CPPs. The financial implication of GRIDCO’s proposal at a glance is at Table : 1 & Table : 2.

Revenue Requirement for the year 2000-01 
(Ref : OERC TRF 5 Revised)

Rs. in crores

(i) Estimated cost of power purchase 11271.29 MU

1432.20

(ii) Transmission and sale of energy

 

(a) Employees cost

81.20

(b) Repair & Maintenance

23.70

(c) A&G expenses

19.80

(d) Amortisation of approved investments for restoring damages due to cyclone

4.42

(iii) Interest on loan borrowed from organisation

173.40

(iv) Bad debt

0.00

(v) Depreciation

78.00

(a) Total Expenditure on power purchase & transmission of energy [(i) + (ii) + (iii) + (iv) + (v)]

1812.90

(b) Contribution to contingency reserve

6.38

(c) Reasonable return

107.90

(d) Rebate for timely payment

48.70

(e) Miscellaneous receipt

37.90

Revenue requirement (a + b + c + d - e)

1937.90

Table : 2
Expected Revenue at the existing tariff for the year 2000-01
 
(Ref : TRT 24 Revised)

Sl.No.

CATEGORY

UNIT

CESCO

NESCO

WESCO

SOUTHCO

TOTAL

1

Anticipated sale during the ensuing year Total

MU

4,011.97

2,520.82

2,751.66

1,535.98

10,820.43

2

Billing demand

MVA

665.60

413.30

469.60

187.30

1,735.80

3

Demand Charge

Rs./KVA

200.00

200.00

200.00

200.00

-

4

Energy Charge

P/unit

85.50

85.50

85.50

85.50

-

5

Revenue from Demand Charge

Rs. Crs.

159.74

99.19

112.70

44.95

416.59

6

Revenue from Energy Charge

Rs. Crs.

343.02

215.53

235.27

131.33

925.15

7

Net total Revenue

Rs. Crs.

502.80

314.70

348.00

176.30

1,341.70

8

Overall Existing Rate

P/unit

 

 

 

 

124

3.1.7

To summarise, with the existing tariff GRIDCO expects to earn a revenue of Rs.1341.70 crores as against their requirement of Rs.1937.90 crores for the year 2000-01.

3.2

Bulk Supply Tariff Design

3.2.1

GRIDCO proposes to set the BST to recover the full embedded costs of supply including transmission based on a two part tariff structure comprising of demand charge and energy charges. For this purpose GRIDCO estimates total sale of 10820.43 MU of energy and a simultaneous maximum demand of 1735.7 MVA for billing of demand charges.

3.2.2

For recovery of the full embedded cost GRIDCO has considered three alternative options (in modified table 37, page 16/32 of clarification on BST) for demand and energy charges and for BST of 2000-01, GRIDCO proposes to cover full cost of transmission as well as 35% of fixed cost of power purchase by fixing a demand charge @ Rs.322.8/KVA/month. Energy charge is proposed to be recovered @ 117 paise/unit to cover balance 65% of fixed cost of power purchase and the variable cost of generation in full.

3.2.3

Impact on GRIDCO’s Finances

3.2.4

By the enhanced demand and energy charge proposed in its application, GRIDCO expects to earn net total revenue of Rs.1937.90 crores for sale of a total of 10820.43 MU. The details are exhibited in Table : 3.

Table : 3
Proposed Revenue with Anticipated sale at proposed rate (OERC TRT 24 modified)

Sl.No.

CATEGORY

UNIT

CESCO

NESCO

WESCO

SOUTHCO

TOTAL

1

Anticipated sale during the ensuing year Total

MU

4,011.97

2,520.82

2,751.66

1,535.98

10,820.43

2

Billing demand

MVA

665.60

413.30

469.60

187.30

1,735.80

3

Demand Charge

Rs./KVA

322.80

322.80

322.80

322.80

-

4

Energy Charge

P/unit

117.00

117.00

117.00

117.00

-

5

Revenue from Demand Charge

Rs. Crs.

257.86

160.12

181.93

72.56

672.50

6

Revenue from Energy Charge

Rs. Crs.

469.20

294.81

321.81

179.63

1265.40

7

Net total Revenue

Rs. Crs.

727.10

454.90

503.70

252.20

1937.90

8

Overall proposed rate

P/unit

 

 

 

 

179

9

Increase over existing rate

P/unit

 

 

 

 

55.0

10

% age increase over existing rate

%

  

 

 

 

44.35

3.3.2

If the tariff proposed by GRIDCO is made applicable from 01.01.2001 GRIDCO will not be able to collect revenue at the enhanced tariff for a full year leading to a deficit at the end of current financial year. GRIDCO’s projection in this regard are in Table : 4.

Table : 4
Cost coverage

Rs. in crores

 

Revenue

Surplus/Deficit

For FY 01 based on existing tariff structure

1341.70

- 596.20

For FY 01 based on tariff structure proposed in the BST application applied for full year

1937.90
increase of 44.35% over the previous year

107.89

3.4

Delayed Payment Surcharge

3.4.1

GRIDCO has proposed levying delayed payment surcharge @ 2% per month pro-rata from the 31st day of the bill of the amount remaining unpaid excluding arrears on account of delayed payment surcharge.

3.5

Rebate

3.5.1

Corresponding to the delayed payment surcharge, GRIDCO has also proposed a rebate of 2% of the amount of the monthly bill if payment is made within 48 hours of the presentation of the bill, 1.5% rebate if a minimum of 85% out of billed amount is paid within 48 hours, 1% rebate on the balance amount if paid in full within 15 days of the presentation of the bill.

3.6

Charges for over drawal in demand and energy

3.6.1

GRIDCO in continuation to BST application dtd.29.9.2000 submitted a supplementary application on 10.11.2000 on the following points.

3.6.2

GRIDCO stated that the DISTCOs require much more energy than the projected energy schedule of the month which result in drawal of costliest power of NTPC. GRIDCO has requested that any additional drawal beyond schedule to the extent of about one percent can be considered within year end adjustment. GRIDCO has further requested OERC to approve realisation of monthly energy cost of excess drawal beyond one percent of the projected figure of that month through the costliest power of the month plus wheeling charges and transmission loss.

3.6.3

GRIDCO further suggested that in the absence of firm commitment towards contract demand by DISTCOs the monthly projected demand should be considered as the contract demand of the month and overdrawal penalty may be levied @ 1.5 time of the normal demand charge for the demand in excess of the contract demand of the month.

3.7

Transmission Tariff

3.7.1

It is estimated that the full transmission cost including reasonable return is Rs.494.4 crores (modified table 41, Clarification on BST). For the purpose of determination of tariff it is assumed that the same will be recovered from wheeling of power through DISTCOs (10820.4 MU) and from wheeling of power of CPPs (300 MU). The wheeling charge thus payable by the DISTCOs to the GRIDCO is being recovered through the fixed charge being levied and was proposed at 44.5 paise/unit.

3.8

Transmission Loss

3.8.1

In the BST application GRIDCO proposes to adopt the gross method of computing losses and has estimated a transmission loss of 4% for the ensuing year.

3.9

Summary

3.9.1

To summarise GRIDCO had requested OERC to approve the following :-

3.9.2

Transmission and Bulk Supply Tariff as proposed in the application and summarised in Revised DF 20 which consists of the following items.

Bulk Supply Tariff comprising of :-
(a) Demand charges
(b) Energy charges
(c) Charges for over drawal in demand and energy
(d) Delayed Payment Surcharge
(e) Rebate

Transmission tariff covering :-
(a) Wheeling charges
(b) Transmission loss
(c) Delayed Payment Surcharge

3.9.3

In their prayer dt.29.9.2000 they have requested to make proposed Transmission and Bulk Supply Tariff applicable from January 01, 2001.

 


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