Main Text & Formats. Submitted to: Joint Electricity Regulatory Commission for Manipur and Mizoram. By:

Transcription

1 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Petition for Limited Provisional True up of , MYT Petition for Second Control Period to & Tariff Petition for of MSPDCL for Distribution and Retail Supply Business Main Text & Formats Submitted to: Joint Electricity Regulatory Commission for Manipur and Mizoram By: MANIPUR STATE POWER DISTRIBUTION COMPANY LIMITED (Imphal) January 2018

2 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for BEFORE THE HONOURABLE JOINT ELECTRICITY REGULATORY COMMISSION FOR MANIPUR AND MIZORAM FILING NO CASE NO IN THE MATTER OF: Petition for Approval of Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for of Manipur State Power Distribution Company Limited under Sections 61, 62 and 64 of The Electricity Act AND IN THE MATTER OF: THE PETITIONER Manipur State Power Distribution Company Limited Imphal...PETITIONER PETITIONER, UNDER SECTIONS 61, 62 AND 64 OF THE ELECTRICITY ACT 2003 FILES FOR INITIATIONS OF PROCEEDINGS BY THE HONORABLE COMMISSION FOR DECIDING ON THE MATTERS CONCERNING THE APPROVAL OF LIMITED PROVISIONAL TRUE UP OF , MYT PETITION FOR SECOND CONTROL PERIOD TO AND TARIFF DETERMINATION FOR OF MANIPUR STATE POWER DISTRIBUTION COMPANY LIMITED(HEREIN AFTER REFERRED TO AS MSPDCL ) THE MANIPUR STATE POWER DISTRIBUTION COMPANY LIMITED RESPECTFULLY SUBMITS: 1. The petitioner, Manipur State Power Distribution Company Limited is the distribution licensee in the state of Manipur which has been formed after the restructuring of the erstwhile Electricity Department of Manipur. With effect from 1 February 2014, the Electricity Department of Manipur has been restructured into two companies, the Manipur State Power Distribution Company Limited (MSPDCL) responsible for distribution and the Manipur State

3 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Power Company Limited (MSPCL) responsible for transmission and generation functions. 2. As per JERC (Multi Year Tariff) Regulations 2014, the ARR and tariff of transmission and distribution are to be determined separately. In tariff order of , JERC has also issued a directive for filing separate petitions for determination of transmission charges and distribution& retail supply business. Last year, the two restructured companies had filed separate ARRs of distribution and transmission, for the first time and JERC had issued separate orders for transmission and distribution. The present petition is for Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Pursuant to the enactment of the Electricity Act, 2003 MSPDCL is required to submit its Annual Revenue Requirement (ARR) and Tariff Petition as per procedures outlined in Sections 61, 62 and 64 of the Electricity Act, 2003 and the governing regulations thereof. 4. MSPDCL has submitted its ARR and Tariff Petition for determination of Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for on the basis of the principles outlined in JERC (Multi Year Tariff) Regulations, 2014, notified by the Joint Electricity Regulatory Commission. 5. MSPDCL prays to the Honourable Commission to admit the enclosed petition for Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Manipur State Power Distribution Company Limited Petitioner Place: Imphal Dated: January,

4 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for TABLE OF CONTENTS 1 CHAPTER 1: INTRODUCTION HISTORICAL BACKGROUND POWER PROFILE OF MSPDCL BACKGROUND OF REGULATORY SETUP CONTENTS OF THIS PETITION CHAPTER 2: OVERALL APPROACH FOR PRESENT FILING APPROACH FOR FILING CHAPTER 3: LIMITED PROVISIONAL TRUE UP OF ENERGY SALES T&D LOSS ENERGY REQUIREMENT POWER PURCHASE COST OPERATION AND MAINTENANCE DEPRECIATION INTEREST AND FINANCE CHARGES PROVISION FOR BAD DEBT NON-TARIFF INCOME INTEREST ON WORKING CAPITAL RETURN ON EQUITY AGGREGATE REVENUE REQUIREMENT REVENUE GAP CHAPTER 4: DETERMINATION OF MULTI-YEAR ARR PROJECTIONS FROM TO PREAMBLE ENERGY SALES CONSUMER PROFILE CONNECTED LOAD T&D LOSS REDUCTION ENERGY REQUIREMENT OF THE SYSTEM POWER PURCHASE QUANTUM AND COST COST OF POWER PURCHASE OPERATION & MAINTENANCE COSTS CAPITAL EXPENDITURE PLAN GROSS FIXED ASSETS (GFA) DEPRECIATION INTEREST & FINANCE COSTS INTEREST ON WORKING CAPITAL BORROWINGS RETURN ON EQUITY PROVISION FOR BAD & DOUBTFUL DEBTS NON-TARIFF & OTHER INCOME AGGREGATE REVENUE REQUIREMENT REVENUE AT EXISTING TARIFF CHAPTER 5: TARIFF DETERMINATION OF AGGREGATE REVENUE REQUIREMENT FOR REVENUE FOR

5 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for COVERAGE OF REVENUE GAP FOR AVERAGE COST OF SUPPLY TARIFF PROPOSAL FOR CHAPTER 6: COMPLIANCE ON DIRECTIVES CHAPTER 7: TARIFF SCHEDULE CHAPTER 8: PRAYER ANNEXURES

6 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for LIST OF TABLES TABLE 1 : CATEGORY-WISE NUMBER OF CONSUMERS FOR TABLE 2 : CATEGORY-WISE ENERGY SALES (MU) FOR TABLE 3 : DISTRIBUTION AND T&D LOSSES FOR TABLE 4 : CALCULATION OF ACTUAL DISTRIBUTION AND T&D LOSSES FOR TABLE 5: ACTUAL DISTRIBUTION LOSS % OF LAST THREE YEARS TABLE 6: ENERGY REQUIREMENT FOR TABLE 7 : ENERGY DRAWL (MU) FOR TABLE 8 : ENERGY BALANCE APPROVED FOR TABLE 9 : ACTUAL ENERGY BALANCE FOR TABLE 10 : POWER PURCHASE COST FOR TABLE 11: A&G COST FOR TABLE 12 : O&M COST FOR TABLE 13 : INTEREST ON WORKING CAPITAL (RS CR) FOR TABLE 14 : AGGREGATE REVENUE REQUIREMENT (RS CR) FOR TABLE 15 : REVENUE GAP FOR TABLE 16: CATEGORY-WISE ACTUAL SALES OF AND PROJECTION OF ENERGY SALES FOR TO (MU) TABLE 17: CATEGORY-WISE CAGR (%) OF UNITS BILLED TABLE 18: GROWTH RATE (%) ASSUMED FOR PROJECTION OF ENERGY SALES FOR TO TABLE 19: ACTUAL NUMBER OF CONSUMERS AS OF 31ST MARCH 2017 AND PROJECTED NUMBER OF CONSUMERS FOR TO TABLE 20: CATEGORY-WISE CONSUMER CAGR (%) TABLE 21: GROWTH RATE (%) ASSUMED FOR MYT SECOND CONTROL PERIOD TABLE 22: GROWTH RATE (%) ASSUMED FOR THE PROJECTION OF CONNECTED LOAD TABLE 23: CONNECTED LOAD (KW) PROJECTION FOR MYT SECOND CONTROL PERIOD TABLE 24: CAGR FOR DOMESTIC CATEGORY TABLE 25: CAGR FOR COMMERCIAL CATEGORY TABLE 26: T&D LOSSES FOR MYT SECOND CONTROL PERIOD TABLE 27: ENERGY REQUIREMENT OF THE SYSTEM TABLE 28: POWER PURCHASE QUANTUM (MU) TABLE 29: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 30: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 31: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 32: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 33: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 34: PROJECTED POWER PURCHASE RATE & QUANTUM FROM TABLE 35: RPO TRAJECTORY (IN %) TABLE 36: RPO TRAJECTORY (IN MU) TABLE 37: INTERSTATE TRANSMISSION CHARGES FOR MYT SECOND CONTROL PERIOD TABLE 38: INTRA STATE TRANSMISSION CHARGES FOR MYT SECOND PERIOD TABLE 39: TRANSMISSION CHARGES TABLE 40: EMPLOYEE COST (IN RS CR) TABLE 41: REPAIRS & MAINTENANCE EXPENSE TABLE 42: ADMINISTRATIVE & GENERAL EXPENSES TABLE 43: PROPOSED CAPITAL EXPENDITURE (RS CR) FOR AND TABLE 44: PROPOSED CAPITAL EXPENDITURE (RS CR) FOR AND TABLE 45: PROPOSED CAPITAL EXPENDITURE (RS CR) FOR AND TABLE 46: CAPITAL EXPENDITURE & PROPOSED CAPITALIZATION (RS CR) TABLE 47: DEPRECIATION (RS CR) TABLE 48: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING

7 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for TABLE 49: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 50: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 51: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 52: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 53: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 54: TOTAL INTEREST ON LONG-TERM LOANS (RS CR) DURING TABLE 55: INTEREST ON WORKING CAPITAL (RS CR) TABLE 56: ROE (RS CR) FOR AND MYT SECOND CONTROL PERIOD TABLE 57: PROVISION FOR BAD & DOUBTFUL DEBT(RS CR) TABLE 58: NON-TARIFF INCOME (RS CR) TABLE 59: AGGREGATE REVENUE REQUIREMENT (RS CR) OF TABLE 60: REVENUE FROM SALE OF POWER (RS CR) AT EXISTING TARIFF OF TABLE 61: AGGREGATE REVENUE REQUIREMENT (RS CR) TABLE 62: REVENUE (RS CR) FOR TABLE 63: REVENUE GAP & PROPOSED REVENUE (RS CR) TABLE 64: AVERAGE COST OF SUPPLY & REVENUE REALIZATION TABLE 65: EXISTING TARIFF STRUCTURE TABLE 66: PROPOSED TARIFF STRUCTURE FOR TABLE 67: COMPLIANCE ON DIRECTIVES

8 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Notes: In this Petition: Previous Year (PY) is defined as Financial Year (Referred to as ) Current Year (CY) is defined as Financial Year (Referred to as ) Ensuing Year is defined as Financial Year (Referred to as ) Multi Year or MYT or MYT period or MYT Second Control period is defined as Financial Year to Financial Year (Referred to as to ) All currency figures and energy units used in this Petition, unless specifically stated otherwise, are in Rs. Crore (Crs) and Million Units (MU) This petition contains the Main Text of the Petition and Format (Volume I) and Annexure (Volume II).

9 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Chapter 1: Introduction 1.1 Historical Background The commissioning of the two micro hydel sets having capacities of 100 KW and 56 KW at Leimakhong in 1930 by the then Manipur State HE Board marked the beginning of the use of electricity in Manipur. The Royal palace and main areas of Imphal Town enjoyed Electricity generated from this captive hydel station. During the World War-II, two more DG sets of 62 KW and 46 KW capacities were installed at the old Imphal Power House by the Armed Forces for electrification of Imphal town and its suburbs. The above installed capacity remained the same till the end of the first Five Year plan ( ) of the postindependence period. The second Five Year Plan ( ) however saw a significant change in the demand of power in the state. The demand has been growing rapidly envisaging more social acceptance and the gradual promotion of awareness of the people towards the use of electricity for different purposes. This had necessitated further addition in the generation capacity and it was accomplished with the installation of a few more DG sets of various capacities in and around Imphal. To evacuate the power generated from the captive micro hydel power station ( ) KW at Leimakhong to specific load centers of Palace Compound and main bazar area of Imphal, the 20 Km. long, 11 KV line between Imphal & Leimakhong was constructed for the first time in Manipur in The state was then having 26 Kms. of 11 KV lines and 45 Kms. of domestic lines to serve very few consumers in 7 villages/leikais. Both the line and generating stations were owned by the then Manipur State HE Board, constituted under the ex-officio Chairmanship of the Political Agent. Subsequently Electricity was kept under the administrative control of the Public Works Department, Government of Manipur. It was separated from state PWD and started functioning as an independent Department since February The peak load demand of Manipur in 1971 was 3.6 MW only. The demand was met from the State s own generating stations and power purchased from the neighboring states/electricity Board at the low voltage. The per capita consumption of energy was 4.84 kwh. The demand was kept suppressed due to lack of generation till the year The scenario was abruptly changed after the purchase of bulk power from Assam with the commissioning of 132 KV inter-state transmission line from Imphal to Dimapur and 6.3 MVA, 132/33 KV sub-station at Yurembam in December The situation was further 9

10 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for alleviated with the commissioning of Loktak Hydro Electric Project having a capacity of 3x35 MW on 4 th of August During the years from 1984 to 1996, a number of Central Sector Power Projects, mostly hydel projects in the North Eastern Region were commissioned. Every project has a share of about 7-8% for Manipur. Because of the availability from such projects, the peak demand of the state has increased gradually and in the previous financial year, it has increased to more than 200 MW. After the enactment of Electricity Act 2003, various reforms have been initiated in the power sector including restructuring of integrated state electricity boards into separate companies. The Electricity Department of Manipur had also initiated the process of reforms and restructuring and had engaged M/s SBI Caps to advise the Department on process of corporatization and restructuring of the Electricity Department. In the previous year, with effect from 1st Feb'2014, Electricity Department of Manipur (EDM) has been restructured and separated into two different entities 1) Manipur State Power Distribution Company Limited (MSPDCL) and 2) Manipur State Power Company Limited (MSPCL). Accordingly, the tariff filing for Wheeling and Retail Supply Business will be done by MSPDCL and that of Transmission will be done by MSPCL and submitted to JERC. 1.2 Power Profile of MSPDCL Manipur, like other States of the North-Eastern Region has been gifted with a fairly high hydro power potential. However, the major portion is still remaining untapped due to financial and environmental bottlenecks. Currently, the State is having one furnace oil based generating station at Leimakhong (6x6 MW) in standby mode, a few diesel generating stations. Therefore, the State is dependent upon outside sources for meeting majority of its energy requirement. It is currently getting power from NHPC, NEEPCO, ONGC Tripura Power Corporation (OTPC) Unit I and Unit II and Baramura gas turbine power project. The scheduled allocated firm share from the Central sector generating stations of NEEPCO and NHPC, OTPC-I and II, Baramura gas turbine power project of Tripura State Electric Corporation Limited and NTPC Bongaigaon Unit I is currently around MW.MSPDCL is currently receiving power from both Units of OTPC Palatana of share MW. MSPDCL is already getting power from NTPC Bongaigaon Unit I from the beginning of the first quarter of The total allocation from NTPC Bongaigaon Unit I is MW. MSPDCL is also expecting power from NTPC Bongaigaon Unit II and III in the last quarter of and respectively with a share of MW each.

11 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for For the purpose of evacuating power from the Inter State Generating Stations and other sources in the North-Eastern Region, the transmission network is owned and maintained by PGCIL as well as the Manipur State Power Corporation Limited. The existing intra-state transformation capacity of 132 kv Substations in Manipur is 417 MVA and the length of the 132 kv lines single circuit is Km and double circuit is 87.9 Km. 1.3 Background of Regulatory Setup The State Governments of Manipur and Mizoram, in an aspiration to create an independent Electricity Regulatory Commission to regulate the affairs of power sector, authorized Government of India to constitute a Joint Commission as per Memorandum of Agreement dated 23rd July, 2004 among the Government of India and the States of Manipur and Mizoram. Accordingly, under provisions of Section 83(5) of the Electricity Act, 2003, a quasi-judicial independent body as the Joint Electricity Regulatory Commission for the States of Manipur & Mizoram (JERC) was constituted by the Central Government vide Govt. of India F. No. 23/3/2002-R&R dated 18 January, 2005 notified in the Gazette of India, Extraordinary dated 18 January, The functioning of the Commission started on January The Joint Electricity Regulatory Commission issued its first Tariff Order for for the state of Manipur on 15 March, The second tariff order was issued by JERC for on 14th August'2012. EDM had filed the tariff petition for to JERC in April'2013 but the same was not admitted by the Commission because of the delay in filing of the petition and since the order had to be issued before the start of the year. The petition for was kept by JERC for reference and record purpose. The Petition for was filed by EDM before November 2013 and the order has been issued for the same in February'2014. The first Petition for approval for ARR and tariff for was filed by MSPDCL before November 2014 and the order has been issued for the same on 27 February, The next petition for Multi Year ARR approval for to and Tariff petition for was filed by MSPDCL before November 2015 and the order has been issued for the same in 29 February, 2016 As such, MSPDCL is filing the present petition for Limited Provisional True up of , ARR and Tariff determination for and MYT Second Control Period by 15 January, 2017 to enable the issue of the tariff order before the start of MSPDCL being an integrated utility undertaking distribution and retail supply functions is discharging its duties in the matters of; 11

12 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Supplying electricity, as soon as practicable to any person requiring such supply, within its competency to do so under the said Act; Preparing and carrying out schemes for distribution Joint Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2014 requires the licensees to submit the details of expected Aggregate Revenue Requirement for the ensuing financial year before 30th November every year. To fulfill this statutory requirement, the MSPDCL is submitting this petition for Limited Provisional True up of , ARR and Tariff determination for and MYT Second Control Period. MSPDCL being a utility undertaking distribution and retail supply function, the cost and expenses of distribution and retail supply functions are being compiled together and it has been decided to file tariff petition for the same. In view of above MSPDCL hereby submits its petition for Limited Provisional True up of , ARR and Tariff determination for and MYT Second Control Period. 1.4 Contents of this Petition This Petition covers the provisional figures for True up of , assumptions and projections of individual elements constituting the determination of ARR and Tariff for along with MYT Second Control Period.

13 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Chapter 2: Overall Approach for Present Filing MSPDCL is filing the petition for the Limited Provisional True up of , MYT Petition for Second Control Period to and Tariff determination of MSPDCL has studied the previous trends and taken cognizance of other internal and external developments to estimate the likely performance for and Approach for Filing The present filing for the Limited Provisional True up of , MYT Petition for Second Control Period to and Tariff Determination for is based on the principles enumerated by the Joint Electricity Regulatory Commission s (JERC) (Multi Year Tariff) Regulations, 2014 notified on 9 June, 2014 as well as the present CERC regulations for the control period , wherever applicable. The subsequent sections provide projection for various expenses, the proposed investment plan for multiyear and the expected revenue projections with existing tariff for , based on the tariff notifications in force in the area of supply of MSPDCL. MSPDCL would like to submit that due to unbundling of EDM in 2014, various structural, organizational, commercial, financial and administrative aspects had to segment in separate books for the unbundled utilities. These processes were time consuming, which caused delay in preparation of the balance sheet of MSPDCL for This delay has also caused to postpone the finalization of the accounts for and and getting it audited by a statutory auditor. Under the regime of the current JERC, MYT Regulation, MSPDCL is supposed to submit final true up petition for as well, but due to aforesaid reasons, the annual accounts could not be finalized as yet for which MSPDCL is unable to submit the true up petition for However, the annual accounts for are on an advanced stage of completion. As and when the accounts are audited, MSPDCL shall file its final true up petition. However, it is important to consider the actual data for past years because it forms the base for future projections. Hence, MSPDCL is submitting the actual sales and power purchase data for , which forms the base for projections for the ensuing year Therefore, a limited provisional true up of has been prepared based on the actual sales and power purchase data. For data other than sales and power purchase, MSPDCL has considered the approved values in such as for O&M, depreciation, interest and 13

14 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for finance charges, interest on working capital and approved values for non-tariff income. For A&G expenses, which forms a part of O&M, MSPDCL has relied on actual figures as shared by accounts department. Therefore, the A&G projection has been based on realistic figures of and Projections of various cost components required for determination of Aggregate Revenue Requirement for along with the rationale for estimation of such cost and the philosophy have been covered in this section. For the purpose of projecting the financial & technical parameters for , MSPDCL has considered its actual performance during as base and has projected the figures for to with supporting rationales.

15 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Chapter 3: Limited Provisional true up of MSPDCL is supposed to submit petition for true-up for in this petition, but since the audited financial accounts of are not ready at the time of filing this petition, MSPDCL is unable to submit the final true up petition. While the financial accounts of are still under progress, MSPDCL would like to submit a limited provisional trueup of instead of actual true-up based on the actual billing details and power purchase accounts available for It is to be noted that in this petition MSPDCL is submitting actual sales and power purchase data to arrive at the gross aggregate revenue requirement. It is also important to note that no aggregate loss or gain on account of controllable and uncontrollable factors have been considered in this limited provisional true-up of and hence requests the commission to consider the same. The main objective of this limited provisional true-up is to update the commission regarding the revenue gap and treatment of Government Subsidy to mitigate the impact of revenue gap. 3.1 Energy Sales The category-wise actual number of consumers as compared to the earlier estimates for as mentioned in the tariff order for dated 28 February 2017 are as given below. Table 1 : Category-wise number of Consumers for S. No. Category Approved for Actual Kutir Jyoti Domestic Commercial Public Lighting LT Public Water-works Agri & Irrigation Cottage & Small Industries Bulk Medium Industries Large Industries TOTAL:

16 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for It can be observed that there has been a large increase in Kutir Jyoti and Domestic Categories consumers as compared to the estimated figures which may be attributed to the increase in new connections due to rural electrification schemes, RGGVY etc. The actual category-wise energy sales as compared with the energy sales as approved by the Hon ble Commission for are given below. Table 2 : Category-wise energy sales (MU) for S. No. Category Approved Actuals Kutir Jyoti Domestic LT Commercial HT Commercial 4 5 Public Lighting LT Public Water-works HT Public Water-works LT Agri&Irrigation HT Agri&Irrigation Cottage & Small Industries Bulk Medium Industries Large Industries Temporary 0.13 TOTAL: MSPDCL in made a total energy sale of MU. It can be observed here that the actual energy sales while truing up was found to be MU which is lesser than the approved figures. While the growth rate taken into consideration for the approved figures were positive and very high, the actual sales rate growth historically has mostly remained consistent since However, due to continuous effort of Government of India and MSPDCL to electrify all rural households under schemes like DDUGJY and SAUBHAGYA, there have been significant addition in Kutir Jyoti and domestic consumers.

17 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for T&D Loss The aggregate T&D losses as approved by the Hon ble Commission as compared to actual T&D Losses are as given below: Table 3 : Distribution and T&D Losses for Particulars Approved Actual Distribution Loss 19.4% 30.42% It can be observed that distribution losses are higher as compared to approved figures which can be attributed to the fact that majority of the new connections through various schemes are in LT category, which inherently incurs higher distribution losses. The computation of Distribution losses which is 30.42% for is shown below. Table 4 : Calculation of Actual Distribution and T&D Losses for Actual S.No Particulars Unit A Own generation MU 0.68 B Power purchase from CGS in NER MU C Pool losses % 3.22% D Pool losses MU E Add: UI purchases MU 28 Less: UI sales MU F Energy available MU G Less: intra state transmission loss till 11 kv at 10% MU H Net energy available for sale MU I Energy sales within the state MU J Distribution Loss MU K Distribution Loss % % 30.42% MSPDCL has submitted that in and a large number of rural consumers has been added in the distribution utility. As compared with , around 50,000 new Kutir Jyoti and domes consumers has been in alone. Moreover, the approximate number of 1.70 Lakh consumers are envisaged to be added under 24x7 plan, DDUGJY and SAUBHAGYA. Due to addition in the number of consumers it is expected the 17

18 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for distribution losses cannot reduce drastically till The present trajectory of Distribution Losses was aimed at 19.40% losses in which is far below the actual losses of the utility. MSPDCL has signed a tripartite Memorandum of Understanding (MoU) of Ujwal Discom Assurance Yojna with the Ministry of Power, Government of India on 26 th July, In UDAY scheme the Discoms have targeted to reduce the AT&C losses and bring it to the level of 15% by It is to be noted that MSPDCL network periphery includes only 11KV system and below whereas 33 KV and above transmission network falls under the MSPCL network. For the purpose of segregating the MSPDCL distribution losses and MSPCL network losses, a network loss of 10% for MSPCL is considered, which is inclusive of loss of 132 KV till 33/11 KV injection point. Moreover MSPDCL would like to humbly submit to the Commission that it has made some sincere efforts in reducing distribution loss, which can be observed in the trend of distribution losses from till Table 5: Actual distribution loss % of last three years % 33.67% 30.42% Hence, MSPDCL requests the Hon ble Commission to consider the actual distribution loss of 30.42% as mentioned above. 3.3 Energy Requirement The actual energy balance for as compared to approved figures are as shown below: Table 6: Energy Requirement for S.No Particulars Unit Approved for Actual A Energy Requirement MU 1 Energy Sales MU Distribution loss % 19.40% 30.42%

19 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Distribution Loss MU Energy Requirement MU MSPDCL would like to submit that the actual energy requirement stood at MU, lesser than MU as approved by the Hon ble Commission. This may be mainly attributed to lower sales as compared to previous approved estimates along with higher distribution losses Sources of Power The actual power procurement as compared to approved figures for are as given below: Purchase of Power from Central Generating Stations The MSPDCL has been allocated power from various central generating stations in North Eastern Region (viz. NEEPCO, NHPC, Tripura-Baramura and OTPC- Pallatana) and NTPC Bongaigaon for power purchase under long term PPA basis. The actual power purchase against approved figures for are as detailed in Table below: Table 7 : Energy Drawl (MU) for Source Approved Actual Own Generation Leimakhong - Micro Hydel NA NA Various Diesel Generating plants NA NA CGS - NEEPCO Kopili -I HE Kopili-II HE Khandong HE Ranganadi HE Project Doyang HE Project Assam GBPP Agartala GTPP I & II CGS - NHPC Loktak HE Loktak Free Power Other 19

20 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Source Approved Actual Baramura GBPP Unit IV and V OTPC Pallatana Unit I & II New Plants NTPC Bongaigaon Unit I NTPC Bongaigaon Unit II NA NTPC Bongaigaon Unit III NA Monarchak Gas Based Power Project Neepco NA Kameng HEP Stage I NA Kameng HEP Stage II NA Pare HEP NA Tuirial HEP 6.24 NA Renewable-Solar 1.02 Renewable-Non Solar 8.03 Sub Total Interstate Transmission loss Power Purchase under UI Gross Power Purchased As it can be seen from the above table, the actual gross power purchase stands at MU as compared to MU as approved by the Hon ble commission for The reason for this deviation may be attributed to higher purchase of power from KOPLI-II to meet RPO and also due to shortfall of power availability due to delay in commissioning of the upcoming power plants NTPC Bongaigaon unit II and III. Hence, MSPDCL requests the Hon ble commission to approve the gross power purchase of MU for truing up Energy Balance The actual energy balance for against approved figures is as detailed in the table below:

21 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Table 8 : Energy Balance Approved for S.no. Particulars Unit Approved A Energy requirement Energy sales MU 707 Distribution loss % 19.40% Distribution loss MU Energy requirement MU B Energy availability MU Own generation (Net) MU 1.01 Power purchase MU Less: External losses % 3.25% Less: External losses MU Net energy available at State Periphery MU Transmission (Intra-State) Loss 3.6% MU Energy available for distribution MU Surplus Surplus grossed up by 3.6% for sale outside the state Table 9 : Actual Energy Balance for S.No. Particulars Unit A Energy Requirement Actual Energy Sales MU Distribution loss % 30.42% 3 Distribution loss quantum MU Energy Requirement at Distribution Periphery MU Transmission Network Loss % 10.00% 6 Transmission and Transformation loss quantum MU Energy Requirement at State Periphery MU

22 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for S.No. Particulars Unit B Energy Availability MU Actual Own Generation (Net) MU Power Purchase MU Less: External Losses (3.60%) % 3.60% 11 Less: External Losses MU Net energy available at state periphery(8+9-11) MU Surplus (12-7) MU As it may be seen above that there is a surplus in energy of MU in actual energy balance for MU and the same constituted for outside State sales. The difference in approved and actual figures is due to lesser energy sales during Hence, MSPDCL requests the Hon ble Commission to consider the same for truing up for Power Purchase Cost The actual power purchase cost as against power purchase cost approved tariff order for dated 28 February, 2017 is as given in the table below: Table 10 : Power Purchase Cost for Station Approved Average Total Cost rate (Rs. Cr) (Rs./Kwh) Actual Average rate Total Cost (Rs./Kwh) (Rs. Cr) Own Generation Leimakhong - Micro Hydel Various Diesel Generating plants CGS - NEEPCO Kopili -I HE Kopili-II HE Khandong HE Ranganadi HE Project Doyang HE Project

23 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Approved Actual Station Average Total Cost Average rate Total Cost rate (Rs. Cr) (Rs./Kwh) (Rs. Cr) (Rs./Kwh) Assam GBPP Agartala GTPP I & II CGS - NHPC Loktak HE Loktak Free Power Other Baramura GBPP Unit IV and V OTPC Pallatana Unit I & II NTPC Bongaigaon Unit I NTPC Bongaigaon Unit II NTPC Bongaigaon Unit III Monarchak Gas Based Power Project Neepco Kameng HEP Stage I Kameng HEP Stage II Pare HEP Tuirial HEP Lower Subansiri Stage I Lower Subansiri Stage II Renewable-Solar 1.02 Renewable-Non Solar 8.30 Total UI Purchase 7.39 NERLDC Charges 0.84 Arrears/Supplementary Bills Total Power Purchase Cost (excluding Transmission Charges) The total power purchase cost including UI Purchase, NERLDC charges, arrears/supplementary bills at Rs crores as compared to the approved figure at Rs 23

24 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for crores for MSPDCL requests the Hon ble Commission to approve the same for MSPDCL has also incurred supplementary bill expenses of Rs crore for This cost has been loaded in s ARR. The details of the supplementary cost is given below. S.No. Particular Amount ( Rs Cr) 1 Neepco NHPC OTPC PGCIL 6.40 Total Operation and Maintenance Since the audited annual accounts are under the process of finalization, the employee expenses, repair and maintenance cost are taken as per figures approved by the Hon ble Commission in its order dated 28 February, However, MSPDCL has incurred Cr on administrative and general expenses in the The actual O&M expense may vary once the actual audited figures are available. MSPDCL requests the Hon ble Commission to approve as O&M expense for Table 11: A&G Cost for A&G Cost (Rs Cr) A&G expenses Thus the total O&M expense for is tabulated below: Table 12 : O&M Cost for Expense/ Cost (Rs Cr) Approved for Provisional for Employee R&M A&G Total

25 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Depreciation The depreciation for is taken as Rs 0.23 crore as approved by the Hon ble Commission in the last tariff order. The actual figures shall be made available when the audited financial statements for are ready. 3.7 Interest and Finance Charges MSPDCL had claimed Rs Cr as interest and finance charges for in the last tariff order. The actual figures shall be made available when the audited financial statements for are ready. 3.8 Provision for Bad Debt Provision for bad debt is considered as Rs 3 Cr for as approved by the Hon ble Commission in its tariff order dated 28 February, The actual figures shall be made available when the audited financial statements for are ready. 3.9 Non-Tariff Income Non-tariff income of Rs 0.34 Cr has been considered for as approved by the Hon ble Commission in its tariff order dated 28 February, The actual figures shall be made available when the audited financial statements for are ready Interest on Working Capital The interest on working capital has been computed as shown in the table below. Table 13 : Interest on Working Capital (Rs Cr) for S. No. Particulars A) Receivables Approved Provisional A) i) Annual Revenue for Wheeling and Retail supply Charges A) ii) Receivables equivalent to 1 months average billing B) i) GFA B) ii) 1% of GFA C) i) O&M Expenses

26 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for C) ii) O&M Expenses one month D) Total Working capital A) ii) - B) ii) - C)ii) E) Less : Total Security Deposit F) Net working Capital requirement Interest Rate 14.75% 14.75% Interest on working capital The interest on working capital has been worked out to be Rs 6.13 crores as against approved figure at Rs 6.02 crores. The actual figures shall be made available when the audited financial statements for are ready Return on Equity Return on Equity has been worked out to be Rs 1.56 crores including MAT at 20.01% same as approved by the Hon ble Commission in its tariff order dated 28 February, The actual figures will be furnished by MSPDCL upon availability of financial statements for Aggregate Revenue Requirement Based on the above analysis and approvals, the Aggregate Revenue Requirement computed for by MSPDCL against the figures approved by the Commission in its order dated 28 February, 2017 is furnished in the table below. Table 14 : Aggregate Revenue Requirement (Rs Cr) for Sl. No Particulars Approved Actual 1 Power purchase cost Inter-State Transmission charges Intra-State Transmission charges Employee costs Repair & Maintenance expense Adm & Gen. Expenses Depreciation Interest & Finance Charges Interest on Working capital Provision for bad debts Total Cost Add: Return on Equity / ROE Add: Income Tax Less: Non-Tariff income Net Aggregate Revenue Requirement

27 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for The Net ARR stood at Rs crores as against crores as approved by the Hon ble Commission for in its tariff order dated 28 February, MSPDCL submits the same for approval from the Hon ble Commission. The actual ARR figure shall vary once the audited balance sheet is available for Sharing of gains and losses for each ARR component shall be done once the actual audited figures are available Revenue Gap The revenue gap computed for as against the approved figures is shown below: Table 15 : Revenue Gap for Particulars Unit Approved Actual Revenue requirement Rs crore Revenue from existing tariff Rs crore Outside state sales Rs crore Total revenue from sale of energy Rs crore Revenue gap Rs crore As it can be seen from the above table, the revenue gap is Rs crores as against Rs crores approved by the Hon ble Commission. 27

28 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for Chapter 4: Determination of Multi-year ARR Projections from to Preamble The Hon ble Commission in June 2016 came up with its Joint Electricity Regulatory Commission for Manipur and Mizoram (Multi Year Tariff) Regulations, 2014 applicable from 1st April This section outlines the MYT petition of MSPDCL as per the JERC (Manipur and Mizoram) MYT Regulations, 2014 for the Second Control Period from to covering the following projections: Sales, No. of Consumers and Connected load Energy requirement and Energy balance Power purchase cost Multi-Year Aggregate Revenue Requirement from to MSPDCL is submitting its ARR and Tariff Petition for determination of Tariff and ARR for broadly on the basis of the principles outlined in MYT Tariff Regulations notified by JERC. MSPDCL has considered the past trends and taken cognizance of other internal and external developments to estimate the likely performance for to The following sections explain in detail the basis and forecasts of the following elements for : 1. Category wise Energy Sales & Revenues at existing tariffs 2. T&D Losses and Energy Requirement 3. Determination of Aggregate Revenue Requirement by forecasting the following costs, other income & returns: i. Power Purchase Cost ii. Employee Cost iii. Repairs & Maintenance Cost iv. Admin & General Cost v. Capital Investment Plan

29 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for vi. Interest Cost vii. Depreciation viii. Provision for bad & doubtful debts ix. Return on Equity x. Non-Tariff Income b. Determination of Gap between Revenue & Costs and the arrangements to cover the revenue gap for the First year of the Second Control Period i.e to c. Additional Revenue through the proposed Tariff Revision and the arrangements to cover the revenue gap for Energy Sales As per section 88.1 of MYT regulations 2014; The Distribution Licensee shall submit a forecast of the expected sales of electricity to each tariff category/sub-category and to each tariff slab within such tariff category/sub-category to the Commission for approval along with the Business Plan, as specified in these Regulations. Also, as per section 88.3 of MYT regulations 2014; The sales forecast shall be consistent with the load forecast prepared as part of the long-term power procurement plan submitted as a part of Business Plan and shall be based on past data and reasonable assumptions regarding the future Approach for Sales: It has been observed from past experience that the historical trend method has proved to be a reasonably accurate and well accepted method for estimating the load, number of consumers and energy consumption. In light of the above, MSPDCL has estimated the above for various customer categories primarily based on the CAGR trends during past years. Wherever the trend has seemed unreasonable or unsustainable, the growth factors have been corrected by the company, to arrive at more realistic projections Summary of Growth & Projections The growth rates observed in the energy sold to each consumer category has been analysed for the purpose of sales projections for the Second Control Period to The analysis of the growth rate helps us understand the behaviour of each category and hence forms the basis of forecasting the sales for each category Category-wise Units Sold The Break-up of the sales and the CAGR growth rates for different periods (4 year, 3 year, 2 year and year on year) thereof are as follows. CAGR has been computed for each consumer category for the past 4-year period to , the 3-year period

30 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for to , and the 2-year period to , along with the y-o-y growth rate of over , as summarised in the table below. For the purpose of projection of category wise energy sales from to , the category wise actual energy sales for are considered. Table 16: Category-wise Actual Sales of and Projection of Energy Sales for to (MU) Energy Sales (MU) Actual CY Projected Kutir Jyoti Domestic LT Commercial HT Commercial Public Lighting LT Public Water-works HT Public Water-works LT Agriculture & Irrigation HT Agriculture & Irrigation Cottage & Small Industries Bulk Temporary Medium Industries Large Industries Total Energy Sales

31 MSPDCL Limited Provisional True up of 16-17, MYT Petition for Second Control Period to and Tariff Determination for As can be seen, MSPDCL overall energy sales are significantly dependent on the domestic consumers to the extent of around 50%. MSPDCL is of the view that there are various factors contributing to the growth in the energy sales and beyond the control of the utility including factors such as Rural Electrification, Government Policy, economic climate, weather conditions and force majeure events like natural disasters, etc. MSPDCL therefore, for projecting the category-wise consumption for the to has considered the past growth trends of last 4 years in each of the consumer category sales and the availability of supply. It is also submitted that the sales in Domestic category are going to increase due to launch of Saubhagya Scheme. The category wise CAGR has been applied on sales volume of This is because of the fact that, in , we have got actual total energy sales data for On this sales data of , the historical growth trend percentage is applied to project sales for Table 17: Category-wise CAGR (%) of Units Billed Energy Sales (MU) 4 Yr. CAGR 3 Yr. CAGR 2 Yr. CAGR Y-o-Y CAGR Kutir Jyoti 20.57% 10.32% 15.00% 7.78% Domestic 11.75% 14.76% 11.87% 7.78% LT Commercial 8.64% 7.68% 9.47% 7.78% HT Commercial Public Lighting -1.78% -6.77% 0.55% 7.78% LT Public Water-works % % % % HT Public Water-works LT Agriculture & Irrigation HT Agriculture & Irrigation -7.37% % % % Cottage & Small Industries 0.32% 5.52% -1.86% 7.78% Bulk 4.71% -0.30% -0.07% 7.78% Temporary % 12.48% % 6.33% Medium Industries 9.42% 12.59% 10.11% 7.78% Large Industries % % % 7.78% 31