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3.0
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CESCO’S PROPOSAL The Central Electricity
Supply Company of Orissa Ltd. (CESCO) is carrying out the business of distribution and
retail supply of electricity in the eight coastal Districts and a part of one district of
state of Orissa namely Puri, Khurda, Nayagarh, Cuttack, Denkanal, Jagatsinghpur, Angul,
Kendrapara and a part of Jajpur. The company receives bulk supply from GRIDCO at several
interconnected points at HT and EHT. |
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3.1
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The profile of the company as on 31st March 2001
gives a pen picture about the current activities.
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Total Consumer
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-
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689220
|
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Total Input in MU
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-
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4023.37
|
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Total Billing in MU
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-
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2218.53
|
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Total Billing in Rupees Lakhs
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-
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58736.74
|
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33 KV Lines
|
-
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2174 CKT Km.
|
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11KV Lines
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-
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13008 CKT Km.
|
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LT Lines
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-
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17938 CKT Km.
|
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33/11KV Transformers
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-
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263 nos.(976 MVA)
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11/0.4 KV Transformers
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-
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1254 nos.(1078.77 MVA)
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3.2
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CESCO in its RST application of FY 01-02 in para 2.1 and in
para 1.1.of the RR application of FY 02-03 has furnished the category-wise consumption
details at various voltage levels for the past period as well as projected for the year
ending 02-03. An extract of the same is given below. Table-1 :
Energy Sale
|
Segment
|
FY 99 Billing MU
|
FY 00 Billing MU
|
FY 01 Billing MU
|
FY 02 Billing MU
|
FY 03 Expected Billing MU
|
|
LT Category
|
1173
|
1332
|
1379
|
1552
|
1735
|
|
HT Category
|
367
|
338
|
387
|
394
|
402
|
|
EHT Category
|
435
|
320
|
453
|
266
|
322
|
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Total Sales
|
1975
|
1990
|
2219
|
2212
|
2459
|
|
Energy Purchase
|
3821
|
3607
|
4023
|
4204.56
|
4314
|
|
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3.3
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CESCO has stated in its RST application of FY 01-02 and RR
application of FY 02-03 that the sale in EHT and HT is likely to remain static during the
FY 02-03 leading to a shift in their energy sale mix towards LT segments. The licensee has
given a comparative picture of category-wise sale mix at different voltage levels in para
2.2 of the RST application for the FY 02 and para 1.1.2 of the RR application for FY 03
application and stated that the system loss is on the increase due to high percentage of
consumption in LT. The sale mix variation as projected by CESCO is given in the table
below. Table-2 : Sale Mix Variation
|
Segment
|
CESCO FY 99
|
CESCO FY 00
|
CESCO FY 01
|
CESCO FY 02
|
CESCO FY 03
|
|
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% of Total
|
% of Total
|
% of Total
|
% of Total
|
% of Total
|
|
LT Category
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59.1%
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69.3%
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63%
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71%
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71%
|
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HT Category
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18.7%
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17.6%
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17%
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18%
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16%
|
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EHT Category
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22.2%
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13.2%
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20%
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12%
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13%
|
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Total
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100.0%
|
100.0%
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100%
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100%
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100%
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3.3.1
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The change in sale mix impacts the loss levels perceptibly and
hence the revenue requirement e. g. a shift in demand of 10% from EHT to LT increases the
total losses by 3.1% by itself.
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3.3.2
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CESCO estimates the LT, HT and EHT sales in FY 02 to go up by
12%, 2% and minus 44% respectively as compared to FY-01 giving rise to a negative overall
load growth of the order of 0.7%.
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3.3.3
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During FY 03, CESCO projects higher energy sale in EHT
category and static energy sales in HT category leading to shift in the energy sale mix
towards LT segment.
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3.3.4
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CESCO estimates the LT, HT and EHT sales to go up by 11.79%,
2.03% and 21.05% respectively giving rise to overall positve load growth of the order of
11.17% during FY 03.
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3.4
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REVENUE REQUIREMENT The licensee is required
to meet the cost of power purchase from GRIDCO, the cost of distribution covering expenses
on account of employees, administration and general expenses, repair and maintenance
expenses, depreciation, interest on loan, appropriation to contingency reserve and
provision for bad and doubtful debts. In addition to this, the licensee is expected to
earn a reasonable return on its capital base based on the methodology prescribed in the
Sixth Schedule to the Supply Act, 1948. The cost of power purchase covers not only the
cost of power required to meet the need of the end users but also it covers the cost of
energy lost on account of technical and commercial losses of the distribution system. The
licensee also is required to meet the cost of capital of new investments needed to improve
system reliability and quality of power supply. |
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3.5
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The licensee earns its only source of revenue through retail
supply tariff from the consumers of electricity within its area of license. A summary of
proposals of its revenue requirement and the expected revenue at the present tariff for
the year 2001-02 and 2002-03 as taken from the filings before the Commission is given in
the table below. Table-3
Rs. in Crore
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Sl. No.
|
Financial year
|
Revenue Requirement including reasonable return
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Expected Revenue at the present tariff
|
Surplus/ (Deficit)
|
|
1.
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2000-01 (Actual)
|
963.26
|
552.26
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(635.36)
|
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2.
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2001-02
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1223.79
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608.73
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(615.06)
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3.
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2002-03
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1619.37
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688.27
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(917.34)
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The details of the components of the revenue requirement
and the expected revenue at the present tariff for the year 2001-02 are furnished below :
Table-4
Rs. in Crore
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Power Purchase Cost
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535.12
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Distribution Cost
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702.72
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Contribution to Contingency Reserve
|
0.0
|
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Total Revenue Requirement
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1237.85
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(-) Misc. Receipts
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20.30
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Reasonable Return
|
6.24
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Net Revenue Requirement
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1223.79
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Net Revenue Receipt from Sale of Power to DISTCOs
|
608.73
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Deficit
|
615.06
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|
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3.6
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CESCO in its application of 2001-02 has submitted that the gap
between revenue from sale of power and the actual expenditure is increasing with every
passing day making it difficult to fulfil its obligation as a licensee. The continued
financial constraints threaten to jeopardize the very existence of the organization.
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3.7
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The ground realities are vastly different from the benchmarks
that are considered in the tariff setting process which are seriously affecting the extent
of cost coverage. In addition to this, delay in tariff filing due to factors beyond its
control such as the delayed finalization of FY 99 GRIDCO accounts has put an extra burden
on the licensee. Therefore, the licensee requests the Commission to relax its benchmark to
revise the existing tariff rates as early as possible keeping in view the financial stress
under which the company is operating.
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3.8
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The licensee prays that to avoid a rate shock the deficit in
revenue may be treated as regulatory asset and be allowed to recover over the next three
years i.e. FY 02-03, 03-04 and 04-05. The interest cost on account of regulatory asset may
please be allowed to recover as pass through. The rate of interest for carrying its asset
may be set as applicable after each year.
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3.9
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The licensee has stated that apart from the first tariff order
of the Commission which came into effect from 1.4.97 and was applicable for full year, all
subsequent tariff revisions have been enforced in the last few months of the financial
years depriving the licensee for revenue recovery for ten months in each year. This has
adversely affected the finances of the licensee.
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3.10
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The financial losses suffered in FY 00 and 01 were enormous
and CESCO presently stands on the brink of liquidation with its networth of Rs.727.2 crore
eroded several times. CESCO has further stated that it is one of the few utilities in the
world that have borne the brunt of nature’s furry in quick succession like the
devastating super-cyclone and floods.
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3.11
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CESCO has stated that the initial adoption of 35% as the
maximum T&D loss allowed in tariff order 1997 and the subsequent lowering to 34% vide
tariff order 2001 does not bode well for the licensee. The ground realities are total
different and the licensee humbly requests the Commission to adopt a benchmark i.e. within
the achievable limits.
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3.12
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TARIFF PROPOSAL
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3.12.1
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Main Features of CESCO’s Proposal CESCO has proposed a tariff to reduce the gap between revenue requirement
and expected revenue from existing tariff and charges for the FY 2001-02. Based on the
concept of rationalisation of tariff structure of the previous years, CESCO proposes a
tariff that is just and reasonable and the same principle is also adopted for proposing
the fixed charges also. The fixed charges proposed is only 24% of the total revenue
generation proposed and therefore is less than 33% of fixed costs that should be recovered
as fixed charges. Main features of tariff proposal of CESCO are as follows:
Demand charges are proposed at Rs.200 per KVA except for the
following categories:
All Domestic, Commercial, Small Industry, Medium Industry,
Irrigation, Street Lighting, Public Institution, PWW <100 KW.
MFC for Street Lighting and Small Industry were proposed at Rs.100
per KVA for the first KW and Rs 80 for the rest.
Demand charge for HT Irrigation is proposed at the existing level of
Rs.30 per KVA. The MFC for LT Irrigation is proposed at Rs.50 for the first KW and Rs.30
for the rest.
In respect of Public Water Works<100 KW, Public Institution and
Medium Industry, MFC is proposed at Rs.150 per KVA for the first KW and Rs 120 for the
rest.
Customer Service Charge is proposed at Rs 200 for LT consumers like
PWW>100KW, General Purpose and Large Industry. The same is proposed at Rs 500 and Rs
700 in respect of HT and EHT consumers respectively.
Energy charges in respect of EHT consumers with various load factors
(LF) except Power Intensive Industry, Colony Consumption and Emergency Supply to CPPs is
proposed as follows:
|
LF
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Rate (P/U)
|
|
Upto 50%
|
350
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50 to 60%
|
300
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Above 60%
|
250
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Energy charge in respect of colony consumption is proposed at 350 p/u
at HT and 340 p/u at EHT.
Energy charge for emergency supply to CPPs is proposed at 4.50
paise/KWH.
Tariff for all HT categories except Irrigation, Bulk Supply Domestic
is proposed at 450 p/u.
Irrigation tariff at HT is proposed at 250 p/u.
Bulk supply domestic tariff is proposed at 350 paise/unit
Tariff for all LT categories except for Domestic, Irrigation,
Commercial and Street Light is proposed at uniform 480 p/u.
Irrigation tariff at LT is proposed at 275 p/u.
Commercial tariff is proposed as follows:
|
Units
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Tariff(p/u)
|
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<=100
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475
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Above 100
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500 for all units.
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Units
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Tariff(p/u)
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<=100
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275
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100-200
|
360
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Above 200
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425
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CESCO proposes that rebate may be allowed on current bill only when
the entire bill including the arrears and current charges are paid in full.
Delayed payment of bills should attract DPS @2% in case of all
consumers.
Power Intensive Industries with various load factors(LF) should pay
the following tariff :
|
LF
|
Rate (P/U)
|
|
Upto 40%
|
205
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Above 40%
|
180
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Connection Type
|
Charges(Rs)
|
|
Single Phase Domestic
|
60
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Single Phase Other Consumer
|
100
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3 Phase Line
|
200
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HT & EHT Line
|
1000
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CESCO requests to reintroduce PF penalty in case of Medium Industries
and Bulk GP consumers.
The existing and proposed tariff schedule of the licensee is given as
an annexure. |
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3.13
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Institution of Purchased Power Price Adjustment
Clause (PPPAC) CESCO has stated that its power purchase
costs were directly affected by GRIDCO’s proposed bulk supply tariff as approved by
OERC. Since these costs were beyond the control of CESCO, the proposal was to insulate
CESCO from such risk through institution of a Purchased Power Price Adjustment Clause
(PPPAC). The proposed formula does not provide an automatic pass through of cost. The
change in retail tariff would need the Commission’s approval. Therefore a simple
interest at the rate of 16% per annum would be made applicable to the delay between the
new BST coming into effect and the adjustment coming into force. CESCO proposes that to
insulate the retail licensee from the risk involved in variation in the bulk supply tariff
, the Commission may permit to institute PPPAC to cover all changes in costs. |
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3.14
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Prayer for 2001-02 CESCO has
made the following prayers to the Commission:
Approve the Retail Supply Tariff and Charges as proposed.
Approve the revenue requirements as proposed.
Confirm revenue requirements, calculation of capital base and
calculation of clear profits for the year 2001-02.
Approve previous year’s deficit of Rs.51.04 Crs to be recovered
through special appropriation in 2001-02.
Allow a voltage-wise loss stipulation for computing revenue
requirement.
Institute PPPAC to cover all changes in the cost of power purchase.
Approve the proposed tariff to be effective from 1st January, 2001.
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3.15
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Prayer for 2002-03
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