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KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2016


OF

HESCOM
ANNUAL PERFORMANCE REVIEW FOR FY15
&
ANNUAL REVENUE REQUIREMENT FOR FY17-19
&
REVISION OF RETAIL SUPPLY
TARIFF FOR FY17
30th March 2016
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
1
1.0
1.1
1.2
2
2.0
2.1
2.2
2.3
3
3.1
3.2
4
4.0
4.1
4.2
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
4.2.6
4.2.7
4.2.8
4.2.9
4.2.10
4.2.11
4.2.12
4.2.13
4.2.14
4.2.15
4.2.16
4.2.17
4.2.18
4.3
4.4
5.0

Introduction
Hubli Electricity Supply Company Ltd.,
HESCOM at a Glance
Number of Consumers, Sales in MU and Revenue
detail of HESCOM
Summary of Filing and Tariff Determination
Process
Background for Current Filing
Preliminary Observations of the Commission
Public Hearing Process
Consultation with the Advisory Committee of the
Commission
Public Consultation Suggestions / Objections
and Replies
List of Persons who filed written objections
List of persons who made oral submission in
public hearing
Annual Performance Review for FY15

HESCOMs Application for APR for FY15


HESCOMs Submission
HESCOMs Financial Performance as per
Audited Accounts for FY15
Sales for FY15
Distribution Losses for FY15
Power Purchase
RPO Compliance by HESCOM for FY15
Operation and Maintenance Expenses
Depreciation
Capital Expenditure for FY15
Prudence Check of FY15
Interest and Finance Charges
Interest on Working Capital
Interest on Consumer Deposits
Other Interest and Finance Charges
Other Debits
Net Prior Period Credits / Charges
Return on Equity
Income Tax
Other Income
Fund Towards Consumer Relations / Consumer
Education
Abstract of Approved Revised ARR for FY15
Gap In Revenue for FY15
Annual Revenue Requirement for FY17-19

Page No.
3
3
5
6
7
7
7
8
9
10
10
11
12
12
12
13
15
20
22
24
25
29
29
33
38
39
40
40
41
42
42
43
43
44
44
45
46

ii

5.1
5.2
5.2.1
5.2.2
5.2.3
5.2.4
5.2.5
5.2.6
5.2.7
5.2.8
5.2.9
5.2.10
5.2.11
5.2.12
5.2.13
5.2.14
5.2.15
5.2.16
5.2.17
5.3
5.4
5.5
5.6
5.7
6
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.6.1
6.6.2
6.6.3
6.6.4
6.6.5
6.6.6

HESCOMs Filing
Annual Performance Review for FY15 & FY16
Annual Revenue Requirement for FY17-19
Capital Investments for FY17-19
Sales Forecast for FY17-19
Distribution Losses for FY17-19
Power Purchase for FY17-19
Sources of Power
HESCOMs
Power
Purchase
Cost
and
Transmission Charges
RPO Target for FY17
O & M Expenses for FY17-19
Depreciation
Interest on Capital Loans
Interest on Working Capital
Interest on Consumer Security Deposit
Interest on belated payment of power purchase
cost
Other Debits
Return on Equity
Other Income
Fund towards Consumer Relations / Consumer
Education
Treatment of Regulatory Asset
Abstract of ARR for FY16
Segregation of ARR into ARR for Distribution
Business and ARR for Retail Supply Business
Gap in Revenue for FY17
Application for Additional Revenue Requirement
for FY17
Determination of Tariff for FY17
HESCOMs Proposal and Commission Analysis for
FY17
Tariff Application
Statutory Provisions Guiding Determination of
Tariff
Consideration for Tariff setting
New Tariff Proposals by HESCOM
Revenue of Existing Tariff and Deficit for FY17
Other Issues
Tariff for Green Power
Determination of Wheeling Charges
Wheeling within HESCOM area
Wheeling of Energy using Transmission Network
or network of more than one licensee
Charges for Wheeling of energy by RE sources
(non REC route) to Consumers in the State
Charges for Wheeling Energy by RE sources
Wheeling energy from the State to a consumer /
other outside the State and for those opting for

47
47
47
53
66
67
69
73
77
78
82
84
87
88
89
90
90
92
93
93
94
95
97
98
100
100
100
100
101
102
104
136
136
136
137
139
140
140

iii

6.7
6.8
6.9
6.10
6.11

renewable energy certificate


Other Tariff Related issues
Cross Subsidy Levels for FY17
Effect of Revised Tariff
Summary of the Tariff Order
Commissions Order
APPENDIX
APPENDIX I

140
145
145
146
147
148
185

iv

LIST OF TABLES
Table
No.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
5.15

Content
Revised ARR for FY15 HESCOMs Submission
Financial Performance of HESCOM for FY15
HESCOMs Accumulated Profit / Losses
Approved and Actual Sales - FY15
Incentive for loss reduction for FY15
HESCOMs Power Purchase for FY15
RPO Compliance as submitted by HESCOM for FY15
O & M Expenses for FY15 HESCOMs Submission
Approved O & M Expenses as per Tariff Order dated
12.05.2014
O & M Expenses of HESCOM as per Annual Audited
Accounts for FY15
Allowable O & M expenses for FY15
Capital Expenditure for FY15
Approved Vs Actual Capital Investment
Gist of Prudence check findings for FY15
Summary of Works having cost overrun
Summary of Works having Time overrun
Details of Amounts disallowed in APR FY15
Allowable Interest on Loans FY15
Allowable Interest on Working Capital for FY15
Allowable Interest on Finance Charges
Allowable Other Debits
Allowable Return on Equity
Approved Revised ARR for FY15 as per APR
Proposed ARR for FY17-19
Proposed Capex for the control period
Category wise Approved number of Installations
Category wise approved energy sales
Projected Distribution Losses FY17-19 HESCOMs
Submission
Approved & Actual Distribution Losses FY10 to FY16
Approved Distribution Losses for FY17-19
Requirement of Electricity as filed by Licensees
Energy Requirement as filed by HESCOM
Power Purchase requirement approved for the
Control Period FY17 to FY19
Consolidated Power Purchases requirement for FY17
Consolidated Power Purchases requirement for FY18
Consolidated Power Purchases requirement for FY19
Abstract of Power Purchase allowed for ESCOMs for
the control period FY17 to FY19
Power Purchase Cost of HESCOM for FY17

Page
No.
12
14
14
20
21
22
24
25
26
26
28
30
33
34
35
35
36
38
40
41
41
43
44
46
49
64
65
66
66
67
68
68
69
70
70
71
73
75

5.16
5.17
5.18
5.19
5.20
5.21
5.22
5.23
5.24
5.25
5.26
5.27
5.28
5.29
5.30
5.31
5.32
5.33
5.34
5.35
5.36
5.37
5.38
6.1
6.2

Power Purchase Cost of HESCOM for FY18


Power Purchase Cost of HESCOM for FY19
O & M Expenses for FY17-19 HESCOMs Proposal
Computation of Inflation Index for FY17
Approved O & M expenses for FY17-19
Depreciation FY17-19 HESCOMs Proposal
Approved Depreciation for FY17-19
Interest on Capital Loans HESCOMs Proposal
Approved Interest on Capital Loans for FY17-19
Interest on Working Capital HESCOMs Submission
Approved Interest on Working Capital Loans for FY1719
Interest on Consumer Security Deposits for FY17-19
HESCOMs Proposal
Approved Interest on Consumer Security Deposit for
FY17-19
Approved Interest and finance charges for FY17-19
Status of Debt Equity Ratio for FY17-19
Approved Return on Equity for FY17-19
Other Income for FY17-19 HESCOMs Proposal
Approved Other Income for FY17-19
Approved ARR for FY17-19
Approved Segregation of ARR FY17-19
Approved Revised ARR for Distribution Business FY1719
Approved ARR for Retail Supply Business FY17-19
Revenue Gap for FY17
Revenue Deficit for FY17
Wheeling Charges

76
76
79
81
82
83
84
85
86
87
88
88
89
90
91
92
92
93
95
96
96
97
97
105
137

vi

LIST OF ANNEXURES
SL.NO.

DETAILS OF ANNEXURES

Total Approved Power Purchase Quantum and Cost


of all ESCOMs for FY17
Approved Power Purchase quantum and cost of
HESCOM for FY17
Proposed and approved Revenue for FY17
Electricity Tariff 2017

II
III
IV

vii

Page
No.
206
212
218
219

ABBREVIATIONS
AAD
AEH
ABT
A&G
ARR
ATE
BBMP
BDA
BESCOM
BMP
BST
BWSSB
CAPEX
CCS
CERC
CEA
CESC
CPI
CWIP
DA
DCB
DPR
EA
EC
ERC
ESAAR
ESCOMs
FA
FKCCI
FR
FoR
FY
GESCOM
GFA
GoI
GoK
GRIDCO
HESCOM
HP
HRIS
ICAI
IFC
IW

Advance Against Depreciation


All Electric Home
Availability Based Tariff
Administrative & General Expenses
Annual Revenue Requirement
Appellate Tribunal for Electricity
Bruhut Bangalore Mahanagara Palike
Bangalore Development Authority
Bangalore Electricity Supply Company
Bangalore Mahanagara Palike
Bulk Supply Tariff
Bangalore Water Supply & Sewerage Board
Capital Expenditure
Consumer Care Society
Central Electricity Regulatory Commission
Central Electricity Authority
Chamundeshwari Electricity Supply Corporation
Consumer Price Index
Capital Work in Progress
Dearness Allowance
Demand Collection & Balance
Detailed Project Report
Electricity Act
Energy Charges
Expected Revenue From Charges
Electricity Supply Annual Accounting Rules
Electricity Supply Companies
Financial Adviser
Federation of Karnataka Chamber of Commerce & Industry
Feasibility Report
Forum of Regulators
Financial Year
Gulbarga Electricity Supply Company
Gross Fixed Assets
Government Of India
Government Of Karnataka
Grid Corporation
Hubli Electricity Supply Company
Horse Power
Human Resource Information System
Institute of Chartered Accountants of India
Interest and Finance Charges
Industrial Worker

viii

IP SETS
KASSIA
KEB
KER Act
KERC
KM/Km
KPCL
KPTCL
KV
KVA
KW
KWH
LDC
MAT
MD
MESCOM
MFA
MIS
MoP
MU
MVA
MW
MYT
NFA
NLC
NCP
NTP
O&M
P&L
PLR
PPA
PRDC
REL
R&M
ROE
ROR
ROW
RPO
SBI
SCADA
SERCs
SLDC
SRLDC
STU
TAC
TCC

Irrigation Pump Sets


Karnataka Small Scale Industries Association
Karnataka Electricity Board
Karnataka Electricity Reform Act
Karnataka Electricity Regulatory Commission
Kilometre
Karnataka Power Corporation Limited
Karnataka Power Transmission Corporation Limited
Kilo Volts
Kilo Volt Ampere
Kilo Watt
Kilo Watt Hour
Load Despatch Centre
Minimum Alternate Tax
Managing Director
Mangalore Electricity Supply Company
Miscellaneous First Appeal
Management Information System
Ministry of Power
Million Units
Mega Volt Ampere
Mega Watt
Multi Year Tariff
Net Fixed Assets
Neyveli Lignite Corporation
Non Coincident Peak
National Tariff Policy
Operation & Maintenance
Profit & Loss Account
Prime Lending Rate
Power Purchase Agreement
Power Research & Development Consultants
Reliance Energy Limited
Repairs and Maintenance
Return on Equity
Rate of Return
Right of Way
Renewable Purchase Obligation
State Bank of India
Supervisory Control and Data Acquisition System
State Electricity Regulatory Commissions
State Load Despatch Centre
Southern Regional Load Dispatch Centre
State Transmission Utility
Technical Advisory Committee
Total Contracted Capacity

ix

T&D
TCs
TR
VVNL
WPI
WC

Transmission & Distribution


Transformer Centres
Transmission Rate
Visvesvaraya Vidyuth Nigama Limited
Wholesale Price Index
Working Capital

KARNATAKA ELECTRICITY REGULATORY COMMISSION,


BENGALURU - 560 001
Dated this 30th day of March, 2016
Order on HESCOMs Annual Performance Review for FY15 & Annual
Revenue
Requirement for FY17-19 & Revision of
Retail Supply Tariff for FY17

In the matter of:

Application of HESCOM in respect of the Annual Performance Review for FY15,


Annual Revenue Requirement for FY17-19 and Revision of Retail Supply Tariff
for FY17, 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 Hubli Electricity Supply Company Ltd., (hereinafter referred to


as HESCOM) is a Distribution Licensee under the provisions of the
Electricity Act 2003, and has, on 05.12.2015, filed the following
applications for consideration and orders:

a) Review of Annual Performance for FY15 and approval of


revised ARR thereon.
b) Approval of ARR for FY17-19

xi

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


year 2016-17 (FY17)

In exercise of the powers conferred under Sections 62, 64 and other


provisions of the Electricity Act, 2003, read with KERC (Terms and
conditions for Determination of Tariff for Distribution and Retail Sale of
Electricity) Regulations 2006, and other enabling Regulations, the
Commission has considered the applications and the views and
objections submitted by the consumers and other stakeholders. The
Commissions decisions are given in this order, Chapter wise.

xii

CHAPTER 1
INTRODUCTION
1.0

Hubli Electricity Supply Company Ltd.,:


Hubli Electricity Supply Company Ltd., (HESCOM) is a Distribution
Licensee under Section 14 of the Electricity Act, 2003 (hereinafter
referred to as the Act). HESCOM 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 seven Districts of the State as
indicated below:

1. Bagalkot
2. Belgaum
3. Bijapur
4. Dharwad
5. Gadag
6. Haveri
7. Uttara Kannada

HESCOM is a registered company under the Companies Act, 1956,


incorporated on 30th April, 2002. HESCOM commenced its operations
on 1st June, 2002.

xiii

O&M Zones

O&M Circles

O&M Divisions
Hubli Urban
Hubli Rural

Hubli Circle

Dharwad Urban
Dharwad Rural

Hubli Zone

Gadag
Haveri
Haveri Circle

Ranebennur
Sirsi

Sirsi Circle

Karwar
Belgaum Urban
Belgaum Rural

Belgaum Circle

Bailahongal
Ghataprabha
Chikkodi

Chikkodi Circle
BelgaumZone

Athani
Raibagh
Bijapur

Bijapur Circle

Indi
Jamakandi
Bagalkot

Bagalkot Circle

Basavana Bagewadi
Mudhol

xiv

The O & M divisions of HESCOM are further divided into seventy eight
sub-divisions. These sub-divisions are further divided into 255 O & M
section offices.

Section offices are the base level offices looking into the operation
and maintenance of the distribution system in order to provide reliable
and quality power supply to HESCOMs consumers.

1.1

HESCOM at a glance:

The profile of the HESCOM is as indicated below:


Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
A
B
13.
14.

Particulars
Area
Districts
Taluks
Population
Consumers
as
on
31.01.2016
Energy Sales for FY15
Zone
DTCs as on 31.01.2016
Assets as on 31.03.2015
HT lines as on 31.01.2016
LT lines as on 31.01.2016
Total employees strength:
Sanctioned
Working
Revenue Demand
Revenue Collection

Statistics
Sq. km.
Nos.
Nos.
Lakhs
Lakhs

54513
7
49
166
42.16

MU
Nos.
Nos.
Rs. in Crores
Ckt. kms
Ckt. kms

9208.39
2
144482
6431.24
65383
114051

Nos.
Nos.
Rs. in Crores
Rs. in Crores

15938
7868
4851.58
4179.27

Source: HESCOM Website/ Tariff Application / Audited Accounts for FY15

xv

1.2

Number of Consumers, Sales in MU and Revenue details of HESCOM in


FY15 is as follows:

CATEGORY
Domestic
Commercial
Industrial
Agriculture
Others

No. of
Installation
2993380
303582
97442
603172
92476

HESCOM
Sales in
MU
1407.28
485.66
1241.88
5422.17
651.4

Revenue in
Rs.Crs.
606.86
391.11
786.26
2567.51
553.51

4090052

9208.39

4905.25

Total

HRECS is one of the distribution licensees purchasing power from HESCOM as


per the bulk supply tariff determined by the Commission. HRECS has filed
separate application for approval of ARR and retail supply tariff for its
distribution and supply area for the control period FY17 - 19.

HESCOM has filed its application for approval of Annual Performance Review
for FY15, Annual Revenue Requirement (ARR) for FY17-19 and revision of
Retail Supply Tariff for FY17.
HESCOMs application, the objections / views of stakeholders thereon and the
Commissions decisions on the approval of Annual Performance Review for
FY15, ARR for FY17-19 and revision of Retail Supply Tariff for FY17 are
discussed in detail in the subsequent Chapters of this Order.

xvi

CHAPTER 2
SUMMARY OF FILING & TARIFF DETERMINATION PROCESS
2.0

Background for Current Filing:


The Commission in its Tariff Order dated 6th May, 2013 had approved
the ERC for FY14 to FY16 and the Retail Supply Tariff of HESCOM for
FY14 under MYT principles for the control period of FY14 to FY16.
HESCOM in its present application filed on 15th December, 2015 has
sought approval for the Annual Performance Review (APR) for FY15
based on the audited accounts, ARR for the fourth control period i.e.
FY17-19 and revision of Retail Supply Tariff for FY17.

2.1

Preliminary Observations of the Commission


After a preliminary scrutiny of applications the Commission had
communicated its observations to HESCOM on 1st January, 2016. The
preliminary observations were mainly on the following points:

Capital Expenditure
Sales Forecast
Assessment of IP set consumption
Power Purchase
Issues pertaining to items of revenue and expenditure
Other new proposals
Compliance to Directives
In response HESCOM has furnished its replies on 11th January, 2016. The
replies furnished by HESCOM are considered in the respective Chapters of
this Order. Further, the Commission also held a validation meeting to discuss
the proposals of HESCOM on 10th February, 2016.

xvii

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 vide its letter dated 1st January, 2016 treated the
application of HESCOM as petition and directed HESCOM to publish
the summary of its ARR and Tariff proposals in the newspapers calling
for objections, if any, from interested persons.
Accordingly,

HESCOM

has

published

the

same

in

the

following

newspapers:

Name of the News Paper


INDIAN EXPRESS
TIMES OF INDIA
PRAJAVANI
VIJAYAVANI

Language
English
Kannada

Date of Publication
17/1/2016
&
18/1/2016

HESCOMs application on APR of FY15, ARR for FY17-19 and revision of


retail supply tariff for FY17 were also hosted on the web sites of HESCOM
and the Commission for the ready reference and information of the general
public.

In response to the application of HESCOM, the Commission has received ten


statements / letters of objections. HESCOM has furnished its replies to all
these objections. The Commission has held a Public Hearing on 3rd March,
2016 at Dharwad. The details of the written / oral submissions made by
various stake holders and the responses from HESCOM thereon and
Commissions views have been discussed in Chapter - 3 / Appendix to this
Order.

2.3

Consultation with the Advisory Committee of the Commission:

xviii

The Commission has also discussed the proposals of KPTCL and all
ESCOMs in the State Advisory Committee meeting held on 10th March, 2016.
During the meeting the following important issues were also discussed:

Performance of KPTCL / ESCOMs during FY15


Major items of expenditure of KPTCL / ESCOMs for FY17-19

Members of the Committee have offered valuable suggestions on the


proposals.

The Commission has taken note of these suggestions while

passing the order.

xix

CHAPTER 3
PUBLIC CONSULTATION
SUGGESTIONS / OBJECTIONS & REPLIES
3.1

In pursuance of 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 stakeholders on the application for APR for FY15 and ERC, ARR and Retail
supply Tariff for FY 17, FY18 and FY19 under the MYT Principles filed by
HESCOM.

In the written submissions as well as during the public

hearing some Stake-holders and public have raised several objections


to the Tariff Applications filed by HESCOM. 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.
No
1

Applicatio
n No.
HB-01

HB-02

HA-01

HA-02

HA-03

HA-04

HA-05

8
9

HA-06
HA-07

10

HA-08

11

AE-01

Name & Address of Objectors


Sri Yagnanarayana M.N, General Secretary, Laghu
Udyog Bharati Karnataka, Bengaluru.
Sri G.G. Hedge, President Balakedarara
Hitharakshaka Sangha, Sirsi.
Sri S.K Hedge, Kumta Taluk Vidhyuth Balakedarara
Hitharakshana Samithi, Kumta
Sri Siddheshwar G Kammar, Hon. Gen. Secretary,
Karnataka Chamber of Commerce & Industry,
Hubballi.
Shri R.K. Rangrej, Ex-President, Chairman, Electricity
Sub- Committee, Gadag District Chamber of
Commerce & Industry, Gadag.
Shri. Shantilal Mostawal, Hon. Secretary, Karnataka
Cotton Association, Hubballi
Sri G.G. Hegde Kadekodi, President, Uttara
Kannada District Chamber of Commerce and
Agriculture, Sirsi.
Sri Aravind K Pai, Kumta.
Sri K.B. Arasappa, Hon. Gen. Secretary, KASSIA,
Bengaluru.
Sri Lokaraj, Secretary, Federation of Karnataka
Chambers of Commerce and Industry, Bengaluru
Sri P.N. Karanth, Kundapura.

xx

12

3.2

AE-02

Sri Praveen Sood, IPS, Additional Director General of


Police, Administration, Bengaluru

List of the persons, who made oral submissions during the Public
Hearing, held on 03.03.2016.
SL.No.
Names & Addresses of Objectors
1
Sri G.G. Hedge Kadekodi for FKCCI, North Kanara District
Chamber Sirsi, Consumer Protection Society, Sirsi & Karnataka
Electricity Governance Network
2
Sri R.G. Joshi, Kumta
3
Sri Prabhakar Nagarmunchi, KASSIA, Bangalore.
4
Sri Aravind K Pai, Kumta
5
Sri S. K. Hedge, Kumta
6
Sri Siddeshwar Kammar & Sri A.S. Kulkarni, Karnataka Chamber
of Commerce, Hubballi.
7
Sri Pramod Shanbhag, Shreyas Papers, Dandeli
8
Sri Basavaraj Ingalagi, Belagavu (Hosur Village).
9
Sri R.K. Rangrej, Gadag District Chamber of Commerce.
10
Sri Chethan Jain, I Ex.
11
Sri A.A. Thargar, Dharwad.

3.3

The gist of the objections, Replies by HESCOM and the Commissions


Views is appended to this order in Appendix-1

xxi

CHAPTER 4
ANNUAL PERFORMANCE REVIEW FOR FY15
4.0

HESCOMs Application for APR for FY15:


The HESCOM, in its application dated 15th December, 2015, has sought
approval of revised ARR in the Annual Performance Review (APR) for
FY15, based on the Audited Accounts.
The Commission in its letter dated 1st January, 2016 had communicated
its

preliminary

observations.

The

HESCOM,

in

its

letter

dated

11thJanuary, 2016 has furnished its repliesto the preliminary observations


of the Commission.
The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013
had approved the HESCOMs Annual Revenue Requirement (ARR) for
FY14 FY16. Further, in its Tariff Order dated 12th May, 2014, the
Commission had approved the APR for FY13 and had revised the ARR
for FY15 along with Retail Supply Tariff for FY15.
The Annual Performance Review for FY15 based on the HESCOMs
Audited Accounts is discussed in this Chapter.
4.1

HESCOMs Submission:
The HESCOM has submitted its proposals for revision of ARR for FY15
based on the Audited Accounts as follows:
TABLE 4.1
Revised ARR for FY15 HESCOMs Submission

Amount in Rs. Crores

Sl.
No
1
2
3
4
5

Particulars

As Filed

Energy @ Gen Bus in MU


Energy @ Interface in MU
Distribution Losses in %
Sales in MU
Sales to other than IP & BJ/KJ
Sales to IP & BJ/KJ
Total Sales in MU
Revenue at existing tariff in Rs Crs

11513.19
11059.81
16.74%

xxii

3849.77
5358.62
9208.39

6
7

8
9
10

11
12
13
14
15
16
17
18
19
20
21
22
23
24

Revenue from tariff and Misc. Charges


RE Subsidy
Total Revenue
Expenditure in Rs Crs
Power Purchase Cost
Transmission charges of KPTCL
SLDC Charges
Power Purchase Cost including cost of
transmission
Employee Cost
Repairs & Maintenance
Admin. & General Expenses
Total O&M Expenses
Depreciation
Interest & Finance charges
Interest on Loans
Interest on Working capital
Interest on consumer deposits
Other Interest & Finance charges
Less interest & other expenses
capitalised
Total Interest & Finance charges
Other Debits
Net Prior Period Debit/Credit
Return on Equity
Provision for taxation
Other Income
Net ARR

2292.12
2559.46
4851.58
3330.10
445.54
9.94
3785.58

580.95
99.05
180.75
18.43
44.64
2.47
0.00
246.29
(0.78)
0.00
0.00
0.00
(8.08)
4719.17

Considering the revenue of Rs.4851.58 Crores against a net ARR of


Rs.4719.17 Crores, the HESCOM has reported surplus in revenue of
Rs.132.41 Crores for FY15.
4.2

HESCOMs Financial Performance as per Audited Accounts for FY15:


An overview of the financial performance of the HESCOM for FY15 as
per their Audited Accounts is given below:

xxiii

TABLE 4.2
Financial Performance of HESCOM for FY15
Amount in Rs.Crores

Sl.
No.
1
2

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

Particulars

FY15

Receipts
Revenue from Tariff and misc.charges
Tariff Subsidy
Total Revenue
Expenditure
Power Purchase Cost
Transmission charges of KPTCL
SLDC Charges
Power Purchase Cost including cost of transmission

2297.20
2554.38
4851.58
3330.10
445.54
9.94
3785.10
580.96
99.05

O&M Expenses
Depreciation
Interest & Finance charges
Interest on Loans
Interest on Working capital
Interest on consumer deposits
Interest on belated payment of power purchase cost
Other Interest & Finance charges

116.26
82.91
44.64
102.15
2.47
348.43
(0.78)
34.66
26.58
4821.32

Total Interest & Finance charges


Other Debits
Net Prior Period Debit/Credit
Other income
Net ARR

As per the Audited Accounts, the HESCOM has earned a profit of


Rs.30.26 Crores for FY15. The profits / losses reported by the HESCOM in
its audited accounts in the previous years are as follows:
TABLE 4.3
HESCOMs Accumulated Profits / Losses
Amount in

Particulars

Rs. Crs
Accumulated losses as at the end of FY10

(659.08)

Losses incurred in FY11

(64.70)

Profit earned in FY12

39.75

Profit earned in FY13

40.69

xxiv

Losses incurred in FY14

(576.25)

Profits earned in FY15

30.26

Accumulated losses as at the end of FY15

(1189.33)

As seen from the above table, the accumulated losses are Rs.1189.33
Crores as at the end of FY15.
Commissions analysis and decisions:
The Annual Performance Review for FY15 has been taken up duly
considering the actual expenditure as per the Audited Accounts
against the expenditure approved by the Commission in its Tariff Order
dated 12th May, 2014. 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 FY15:


a) Sales- other than IP Sets:
The Commission in its Tariff order dated 12.05.2014, had approved total
sales to various consumer categories at 8855.09 MU as against the
HESCOMs proposal of 9115.70 MU. The Actual sale of HESCOM as per
the current APR filing [FORMAT D-2] is 9208.39 MU, indicating an
increase in sale to an extent of 353.30 MU, as compared to the
approved sales (as also to its own projected sale). There is an increase
in sales to LT consumers by 543.47 MU and there is a reduction in sale to
an extent of 190.18 MU in HT-categories.
The Commission notes that, as against approved sales of 4073.43 MU to
categories other than BJ/KJ and IP sets [excluding HRECS sales and
supply to the SEZ MU], the actual sales achieved by HESCOM is 3849.77
MU, resulting in the reduction of sales to these categories by 223.66 MU.
Further, the HESCOM has sold 5358.62 MU to BJ/KJ and IP categories
against approved sales of 4781.67 MU, resulting in increased sales to
these categories by 576.95 MU.

xxv

The actual share of sales to categories other than BJ/KJ and IP sets is
41.81% as against the estimated share of 46.00% resulting in 4.09
percentage point reduction in share to these categories, while the
actual share of sales to BJ/KJ and IP sets has increased by the same
percentage point.
The Commission notes that the major category contributing to the
reduction in sales with respect to the estimates are HT industries (179.53
MU), and LT- 2a (31.14 MU). Further, the sales to IP sets have increased
by 570.24 MU.
In response to the preliminary observations, the HESCOM in its reply has
stated that, HT sales have decreased due to reduction in sales to
categories other than HT-2c as compared to the estimated sales to
these categories. Further, it is stated that the reduction in sale to HT
category is due to HT consumers drawing power under Open Access.
HESCOM has also stated that there is increased sales in LT-1, LT4 (a) &
(c), LT5 and LT6 categories.
The Commission notes that as per the information furnished by the
HESCOM, there is considerable increase in open access sales from
97.37 MU in FY13 to 252.36 MU in FY15.
b) Sales to IP Sets:
In its Tariff Order dated 6th May, 2013, the Commission had approved
specific consumption of IP sets at 8,244 units/installation/annum for the
entire control period of the FY14 to the FY16, whereas, as per the IP sets
consumption reported by the HESCOM in its tariff filing, the specific
consumption works out to 8,996 units /installation/annum for the FY15,
which indicates a huge increase in the specific consumption by 752
units/installation/annum. The total IP sets consumption reported by the
HESCOM for the FY15 was 5,266.70 MU as against 4,696.46 MU sales
quantum approved by the Commission. The difference in IP sets
consumption between the approved and the actual for the FY15 is
570.24 MU.Thus, the specific consumption has increased by 752 units

xxvi

/installation/annum with the corresponding increase in sales also by a


huge quantum of 570.24 MU to that of the approved quantum by the
Commission for the FY15. It is noted that the specific consumption
reported for the FY15 has increased by about 9 per cent which is very
huge compared to the specific consumption achieved by the
HESCOM for the previous years. It is also noted that the specific
consumption should not increase over the years as it remains fairly
constant given that the 11 kV feeders are segregated as rural &
agricultural feeders and power supply to agricultural feeders is
regulated. Further, the consumption of the IP sets can also be
measured accurately on the basis of energy meters data of
agricultural feeders at the substations which was not possible earlier.
Moreover, the Commission had approved 5,72,306 as number of
installations, likely to be serviced in the FY15; whereas the actual
number of installations serviced,

as reported by the HESCOM, was

6,01,939, an increase by 29,633 numbers. This indicates that, the


increase in number is about 5 per cent of installations serviced during
the FY15, as compared to the approved number of installations by the
Commission. It is noted that the increase in sales can be partly
attributed to increase in number of IP set installations serviced under
regularization scheme as compared to the projected number of
installations for the FY15.
The Commission in its Tariff Order dated 12th May, 2014 had directed
the HESCOM to submit to the Commission every month, the IP sets
consumption based on the feeder energy meters data, of agriculture
feeders segregated under NJY, duly deducting the energy losses in the
distribution system. But, the HESCOM has not submitted the metered
consumption data of agricultural feeders every month regularly to the
Commission. The HESCOM in its tariff application has also not submitted
such data of IP sets for the period from April 2014 to March 2015 as
required by the Commission.

xxvii

The Commission in its preliminary observations on the HESCOMs APR


for the FY15, had directed the HESCOM to justify its claims of IP sets
consumption of 5,266.70 MU considered for the FY15, with necessary
data in support of the same and the methodology adopted to arrive
at the energy loss figures in the 11 kV distribution system for the FY15.
The HESCOM was also directed to furnish whether the total IP sets
consumption for the FY15 has been computed by considering the
specific consumption of agricultural feeders segregated under NJY as
directed or on the basis of readings obtained from the meters fixed to
sample DTCs feeding predominantly IP set loads. However, the
HESCOM, in its reply on the preliminary observations made by the
Commission, has stated that it has analyzed 142 numbers of
agricultural feeders segregated under NJY from April, 2015 onwards
only. It is submitted that, as per the analysis, the IP set consumption in
the river bed areas is ranging from 900 units to 1,667 units, whereas in
other areas the consumption is ranging from 378 units to 1,003 units and
the average consumption is only 603 units per installation per month.
Further, it is also submitted that in some of the feeders, bifurcation of IP
set loads is under progress and wherever exclusive agricultural feeders
are not available, the IP set consumption has been assessed on the
basis of the metered data of sample DTCs feeding predominantly IP
set loads. The HESCOM has requested the Commission to consider the
specific consumption at 727 units per installation per month as filed in
its tariff application.
The Commission notes that, the HESCOM has not submitted the IP sets
consumption details on the basis of meter readings obtained from the
agricultural

feeders

segregated

under

NJY,

despite

achieving

significant progress in commissioning of feeders under NJY, instead, it


has

considered

the

metered

data

of

sample

DTCs

feeding

predominantly IP set loads as per the methodology approved by the


Commission up to the FY14. It is noted that the HESCOM has not
submitted these details for the FY15. It is also not clear as to how the
HESCOM has computed the total IP set consumption of 5,266.70 MU for

xxviii

the FY15 without any basis for arriving at the net IP sets consumption.
Further, the HESCOM has also not submitted the necessary data to
justify its claim in respect of IP sets consumption considered for the
FY15. The result of the analysis made by the HESCOM from April, 2015
onwards cannot be a basis for arriving at the total consumption of IP
sets for the previous period, i.e., FY15. It is clear that the HESCOM has
not complied with the Commissions direction to it to submit the
metered data, despite segregating a large numbers of 11 kV feeders
as rural and agricultural feeders under NJY, wherein it was possible to
compute the total IP set consumption accurately on the basis of
feeder energy meter readings.
Further, the Commission, during the validation meeting held on
10.02.2016, had also directed the HESCOM to submit the IP sets
consumption on the basis of energy meter readings of 11 kV
agricultural feeders which have been segregated under NJY. In
response, the HESCOM has submitted the details of IP sets consumption
based on the meter data in respect of DTCs feeding predominantly IP
loads, in support of its claims in respect of total IP sales to an extent of
5,266.70 MU for the FY15. The HESCOM has stated that the bifurcation
of loads on segregated agricultural feeders was not fully effected in
the field and for that reason, the consumption on the basis of
agricultural feeders for the FY15 could not be furnished to the
Commission and has requested the Commission to approve the sales
of 5,266.70 MU made to IP sets.
The Commission notes that, due to field issues in transferring of loads
from agricultural feeders on to the NJY feeders, the HESCOM has
assessed the IP set consumption for the FY15 based on the readings
from the meters provided to DTCs feeding predominantly IP set loads.
The HESCOM should have addressed these field issues while
commissioning of feeders to ensure that loads on the respective
feeders were transferred to enable taking accurate consumption of IP
sets. Further, the Commission notes that the increase in sales to IP sets

xxix

for the FY15 can only be partly attributed to the fact that the HESCOM
has serviced 29,633 number of IP sets more than it has projected. The
increase in sales could be also due to supplying more number of hours
of power to IP sets on agricultural feeders than stipulated by the
Government. Hence, the HESCOM is directed to regulate henceforth
the hours of power supply to exclusive agricultural feeders as stipulated
by the Government.
For the present accepting the HESCOMs explanation on this issue, in
the absence of feeder wise energy meter data in respect of
segregated agricultural feeders, based on the meters provided to
DTCs feeding predominantly IP set loads, the Commission decides to
approve 5,266.70 MU sales to IP sets for the FY15 as filed by the
HESCOM, in its tariff application.

The HESCOM is directed to report the total IP set consumption on the


basis of data from energy meters in respect of agricultural feeders
segregated under NJY duly calculating the distribution system losses in
11 KV lines, distribution transformers and LT line, to the Commission
every month regularly. The HESCOM is also directed to calculate the
actual distribution losses prevailing in 11 kV lines, DTCs and LT lines as
per the methodology approved by the Commission for arriving at the
net IP sets consumption.

c) Total Approved Sales:


The category wise sales approved by Commission and the
actuals for FY15 are indicated in the table below:
TABLE 4.4
Approved & Actual Sales FY15
Figures in MU

Category
LT-2a*
LT-2b
LT-3

Approved
1346.50
12.54
383.71

Actuals
considered
for APR
1315.36
13.68
371.11

xxx

Difference (Actuals
Approved)
-31.14
1.14
-12.60

LT-4b
LT-4c
LT-5
LT-6
LT-6
LT-7
HT-1
HT-2a
HT-2b
HT-2c
HT-3a & b
HT-4
HT-5
Sub total
BJ/KJ
IP
Sub total
Grand total**

28.57
0.77
303.44
199.58
131.37
20.07
200.37
1105.60
121.71
26.00
148.36
18.11
26.73
4073.43
85.21
4696.46
4781.67
8855.09

17.02
1.07
315.81
203.28
133.13
22.61
195.96
926.07
114.55
47.37
137.38
15.70
19.67
3849.77
91.92
5266.70
5358.62
9208.39

-11.55
0.30
12.37
3.70
1.76
2.54
-4.41
-179.53
-7.16
21.37
-10.98
-2.41
-7.06
-223.66
6.71
570.24
576.95
353.29

*Including BJ/KJ installations consuming more than 18 units/month


**Excludes sale to HRECS and SEZ.

Thus, the Commission approves sales of 9208.39 MU for FY-15.


4.2.2

Distribution Losses for FY15:


HESCOMs Submission:

The Commission had approved distribution losses for FY15 as


shown in the table below:
Range
Upper limit
Average
Lower Limit

FY15
19.50%
19.00%
18.50%

HESCOM has reported the distribution loss level of 16.74% in its


annual accounts for FY15.
1
2
3

Energy at Interface Points in MU


11059.46
Total sales in MU
9208.39
Distribution losses as a percentage of
16.74%
input energy at IF points

Commissions analysis and decisions:


The distribution losses of 16.74% reported by the HESCOM is based on
the sales of 9208.39 MU as against the energy of 11059.46 MU at
interface points. Considering the approved range of losses for FY15, the

xxxi

HESCOM has achieved reduction of distribution losses below the lower


limit of allowable losses by 1.76 percentage point. Hence HESCOM is
entitled to incentive for better performance in loss reduction, during
FY15 as follows:
TABLE 4.5
Incentive for loss reduction for FY15
Particulars
Actual input at IF points as per audited
accounts in MU
Retail sales as per audited accounts in
MU
Percentage distribution losses
Lower limit target for distribution loss
Reduction in loss in percentage point
Input at target loss for actual sales in MU
Decrease in input due to reduction in
distribution losses in MU

FY15
11059.46
9208.39
16.74%
18.50%
1.76%
11298.64

Average cost of power purchase at IF


points in Rs./unit

239.18
2.89

Savings in power purchase cost due to


reduction of losses in Rs.Crores
50% of savings to be included in APR 15
(balance 50% being the share of
consumes)

69.18

34.59

Accordingly, the Commission decides to add an amount of Rs.34.59


Crores to the allowable ARR for FY15.
4.2.3

Power Purchase:
The Commission in its Tariff order dated 12th May, 2014 had approved
source wise quantum and cost of power purchase for FY15. The
HESCOM, in its application, has submitted the details of actual power
purchase for FY15 for reviewing its Annual Performance. The details of
power purchase is listed as under:
TABLE 4.6
HESCOMs POWER PURCHASE FOR FY 15

Source

Actuals for FY15

Approved for FY15

xxxii

Difference of Actuals
over the Approved-for
FY15

% increase /decrease over


approved figures

KPCL
Hydel
Stations
KPCLThermal
Stations
Total
CGS

3474.26

193.09

Rate
in Rs
per
Unit
0.56

2794.25

1123.44

4.02

2908.45

1107.63

3.81

-114.20

15.81

0.21

-3.93

1.43

5.57

6268.51
2387.02

1316.53
735.13

2.10
3.08

6477.47
2592.37

1291.9
811.6

1.99
3.13

-208.96
-205.35

24.63
-76.51

0.11
-0.05

-3.23
-7.92

1.91
-9.43

5.30
-1.63

Major IPPs

1057.40

496.12

4.69

1208.4

551.7

4.57

-151.00

-55.58

0.13

-12.50

-10.07

2.77

IPPs -Minor
(NCE
Projects)
Other
States
Projects
Short
/Medium
term
including U
I & Sce-11
Transmissio
n Charges
(KPTCL &
PGCIL)
LDC
Charges
(POSOO &
SLDC)
Energy
Balancing

1017.61

380.64

3.74

1065.3

389.55

3.66

-47.69

-8.91

0.08

-4.48

-2.29

2.29

28.87

9.08

3.15

37.26

11.87

3.19

-8.39

-2.79

-0.04

-22.52

-23.50

-1.27

554.15

277.91

5.02

279.55

145.82

5.22

274.60

132.09

-0.20

98.23

90.58

-3.86

530.20

515.92

0.00

14.28

0.00

2.77

11.19

5.91

0.00

5.28

0.00

89.34

199.6

27.93

1.40

199.60

27.93

1.40

Others
Charges
TOTAL

0.59

0.00

0.59

0.00

11513.19*

3785.31*

3.29

11660.35

3724.31

3.19

-147.19

61.01

0.09

-1.26

1.64

2.94

Energy in
MUs

Cost in
Rs Cr

184.27

Rate
in Rs
per
Unit
0.52

-94.76

Energy in
MUs

Cost in
Rs Cr

3569.02

Energy
in MUs

8.82

Rate
in Rs
per
Unit
0.04

-2.66

4.79

7.64

Cost
in Rs
Cr

Energy

Cost

*Excluding HRECS

Commissions analysis and decisions;


1. The actual power purchase for FY15, as filed by the HESCOM, for
approval of ARR in the Annual Performance Review is 11513.16 MU
amounting to Rs.3785.32 Crores as against the approved quantum
of 11660.35 MU amounting to Rs.3724.31 Crores. Thus, there is a
reduction in quantum of power purchase to an extent of 147.19 MU
with an increase in the cost to an extent of Rs. 61.01 Crores.
2. On an analysis of the source-wise approved and actual power
purchases, the following deviations in quantum of energy and its
cost of purchase are found:
As against the approved quantum of 11660.35 MU, the actual
power purchased by HESCOM is 11513.16 MU for FY15, which is
around 1.26% of the approved quantum. Such decrease during

xxxiii

Rate

FY14 was 2.67%. The reduction in sales reflected in reduced power


purchase.
i. On verification of the source-wise power purchase, it is found that,
there is lesser energy supply from KPCL thermal, CGS, NCE and
other State projects to an extent of 621.39 MU at a cost of
Rs.119.16 Crores. Consequently, the HESCOM has purchased short
term power to a tune of 554.15 MU at a cost of Rs.277.91 Crores.
The HESCOM has incurred an additional cost Rs.132.09 Crores
towards short term/medium term Power Purchase resulting in an
increase in per unit cost by 9 Paise.
ii. All these factors including the change in the source wise mix of
supply and reconciliation of energy and its cost among ESCOMs
have resulted in higher average power purchase cost of the
HESCOM at Rs.3.29 per KWh as against the approved rate of
Rs.3.19 per KWh leading to an increase by Rs.0.09 per unit. During
FY14, the increase was Rs.0.26 per unit. The increase in per unit
cost is 2.94%, in FY15.
3. The Commission notes that, the SLDC is yet to implement the intrastate ABT scheme. The Commission therefore directs SLDC to take
appropriate action immediately to expedite the implementation of
intra-state ABT scheme and to host such details on its website.
4. The Commission in its Tariff order dated 2nd March, 2015 had
directed HESCOM to move the Government to effect necessary
adjustments in the tariff subsidy payable to ESCOMs and ensure
that there are no inter- ESCOM payments outstanding in their
accounts. Further, HESCOM was also directed to reconcile the interESCOM

exchanges

and

its

costs

duly

making

necessary

adjustments to ensure proper accounting of energy and its cost.


5. It is observed that, inter-ESCOMs balanced energy to an extent of
199.6 MU at a cost of Rs.27.93 Crores has resulted in increased
receivables of HESCOM to an extent of Rs.27.93 Crores in FY15.
xxxiv

6. HESCOM is directed to reconcile the inter ESCOM energy


exchanges and its costs every month and the difference amounts
shall be collected/paid out of the tariff subsidy received from the
Government of Karnataka, to ensure proper accounting of energy
and its cost.

In terms of the MYT Regulations, the Commission taking note of the


above facts, decides to consider 11513.19 MU at a cost of Rs. 3785.58
Crores (as per audited accounts) towards power purchases, for
approving the Annual Performance Review of HESCOM for FY15.
4.2.4

Renewable Purchase Obligation (RPO) compliance by the HESCOM for


FY15:
The HESCOM has submitted that its achievement of non-solar RPO and
solar RPO are 10.30% and 0.34%, respectively, as against the targets of
7% and 0.25%, respectively, as indicated below:
TABLE 4.7
RPO compliance as submitted by the HESCOM for the FY15

Name of
Company

HESCOM

Total Input
Energy incl.
HRECS
(MU)
11793.59

Non-Solar RPO
Target
(MU)
(%)
825.55
7

Achieved
(MU)
(%)
809.02
6.86

Solar RPO
Target
(MU)
(%)
29.48 0.25

Achieved
(MU)
(%)
39.61
0.34

The Commission has approved total power purchase quantum of


11806.37 MU (including HRECS) for the FY15 in the APR of HESCOM.
Based on the information furnished, the Commission notes that the
HESCOM has purchased non-solar energy of 809.02 MU (6.86%) and
solar energy of 39.61 MU (0.34%). Considering the surplus solar energy
of 10.09 MU, the net short-fall in non-solar RPO is 0.06 percentage point
for the FY15.
The Commission notes that, when the State as a whole is taken for the
purpose of assessment of achievement of non-solar RPO, in aggregate
all the State owned ESCOMs have achieved the total non-solar RPO

xxxv

target set for the State.

The Commission therefore decides not to

recognize the individual achievement of the HESCOM and to treat the


matter as closed.
4.2.5 Operation and Maintenance Expenses:
HESCOMs Submission:

The HESCOM has sought approval of O&M expenditure of


Rs.580.95 Crores for FY15.

HESCOM has claimed the O&M

expenses as follows:
TABLE 4.8
O & M Expenses for FY15 HESCOMs submission
Amount in Rs.Crores

Particulars

Repairs & Maintenance


Employee Expenses
A&G expenses

FY15
48.86
455.46
76.63
580.95

O&M expenses

Commissions analysis and decisions:


The Commission in its Tariff Order dated 12th May, 2014 had approved
O&M expenses for FY15 as detailed below:

xxxvi

TABLE 4.9
Approved O&M Expenses for FY15
Amount in Rs. Crores.

Particulars
No. of installations as per actuals as per Audited Accts
Weighted Inflation Index

FY15
4289372
6.89%

CGI based on 3 Year CAGR


Actual O&M expenses for FY13

5.17%
467.68

Approved O&M Expenses for FY15

565.55

As per the Annual Audited Accounts of HESCOM for FY15, the actual
O&M expenditure is as follows:
TABLE 4.10

O&M Expenses of HESCOM as per Annual Audited Accounts for FY15


Amount in Rs.Crores

Repairs & Maintenance


Employee Expenses
A&G expenses
O&M expenses

48.86
455.46
76.64
580.96

The Commission in its preliminary observations, had sought the details


of the items of expenditure incurred by HESCOM during FY15 under A &
G expenses.

HESCOM in its replies has stated that it has incurred

expenses of Rs.26.24 Crores towards professional charges, Rs.21.90


Crores towards conveyance, travel and vehicle hire expenses besides
other A&G expenses.

On a detailed review of the expenses, it is

observed that HESCOM is incurring substantial expenses on vehicle hire


charges and professional charges.
Also, the R&M expenses are increasing year on year, without proper
justification. One of the major items incurred under R & M is expenses
are on repairs of distribution transformers. The HESCOM needs to
institutionalize a mechanism for minimizing such expenses.

These

expenses are abnormally increasing as compared to the previous


years. Since the O & M expenses are controllable, HESCOM has to
initiate necessary measures to ensure prudence in incurring these
expenses. The Commission is of the view that HESCOM should control
its O & M expenses as per the approved O & M expenses so that the

xxxvii

actual O & M expenses does not exceed the approved levels.


However, for the present based on the provisions of the MYT
Regulations, the Commission has proceeded with determining the
normative O & M expenses.
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
inflation for FY15 is computed as follows:
Year

WPI

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

92.6
98.72
103.37
109.59
114.94
124.92
127.86
140.08
153.35
164.93
175.35
182

CPI
107
111.1
115.8
122.9
130.8
141.7
157.1
175.9
191.5
209.3
232.2
246.9

Composite
Series
104.12
108.624
113.314
120.238
127.628
138.344
151.252
168.736
183.87
200.426
220.83
233.92

Yt/Y1=Rt

Ln Rt

1.04
1.09
1.15
1.23
1.33
1.45
1.62
1.77
1.92
2.12
2.25

0.04
0.08
0.14
0.20
0.28
0.37
0.48
0.57
0.65
0.75
0.81

Year
(t-1)

Product [(t1)* (LnRt)]

1
2
3
4
5
6
7
8
9
10
11

0.04
0.17
0.43
0.81
1.42
2.24
3.38
4.55
5.89
7.52
8.90

A= Sum of the product column


B= 6 Times of A
C= (n-1)*n*(2n-1) where n= No of years of data=12
D=B/C
g(Exponential factor)= Exponential (D)-1
e=Annual Escalation Rate (%)=g*100

35.36
212.19
3036.00
0.07
0.0724
7.24

For the purpose of determining the normative O & M expenses for FY15,
the Commission has considered the following:
a) The actual O & M expenses allowed for FY13 excluding contribution
to Pension and Gratuity Trust.
b) The three year compounded annual growth rate (CAGR) of the
number

of

installations

considering

the

actual

number

installations as per audited accounts up to FY15.


c) The weighted inflation index (WII) at 7.24% as computed above.
xxxviii

of

d) Efficiency factor at 2% as considered in the earlier two control


periods.
Thus, the normative O & M expenses for FY15 will be as follows:
Particulars
No. of Installations as per actuals as per Audited Accts
Weighted Inflation Index
Consumer Growth Index (CGI) based on 3 Year CAGR

FY15
4090052
7.24%
3.52%

O & M expenses for FY13 excluding P&G contribution - Rs.


Crs.

400.19

Normative O&M Expenses - Rs.Crs.

470.61

The above normative O & M expenses have been computed without


considering the contribution to Pension and Gratuity Trust.
The Commission has treated certain employee costs on account of
contribution to P&G Trust as uncontrollable O&M expenses as these
expenditure are incurred on the basis of actuarial valuation. This
component has been allowed beyond the normative O&M expenses
to enable ESCOMs to meet their actual employee costs.
The HESCOM in its audited accounts for FY15 has indicated an amount
of Rs.83.22 Crores towards contribution to Pension and Gratuity Trust.
Considering the contribution to terminal benefits to the Pension and
Gratuity Trust as uncontrollable O & M expenses, the Commission has
computed the allowable O & M expenses for FY15, as follows:
TABLE 4.11
Allowable O & M Expenses for FY15
Amount in Rs. Crores

Sl.
No.
1
2
3

Particulars
Normative O & M expenses
Additional employee cost (uncontrollable
O & M expenses)
Allowable O & M expenses for FY15

FY15
470.61
83.22
553.83

Thus, the Commission decides to allow an amount of Rs.553.83 Crores


as O&M expenses for FY15.

xxxix

4.2.6 Depreciation:
HESCOMs Submission:
The HESCOM has claimed an amount of Rs.99.05 Crores as
depreciation, worked out after deducting depreciation on assets
created out of consumers contributions / grants as per Accounting
Standards (AS) 12
Commissions analysis and decisions:
As per the Audited accounts of the HESCOM for FY15, it is noted that,
Rs.99.05

Crores

has

been

accounted

as

depreciation.

The

depreciation is determined by the Commission in accordance with the


provisions of the KERC (Terms and Conditions for Determination of
Tariff)

Regulations,

2006

as

amended

on

1st

February,

2012.

Considering the opening and closing amount of gross blocks of fixed


assets for FY15 and the depreciation as per the annual accounts, the
weighted average rate of depreciation works out to 4.30%. The
amount of depreciation claimed by the HESCOM as per its audited
accounts is rightly without considering the cost of assets created out of
consumer contribution / grants.
Based on the above, the Commission decides to allow the net
depreciation of Rs.99.05 Crores for FY15.
4.2.7

Capital Expenditure for FY15


The HESCOM has reported a capital expenditure of Rs.527.21Crores
(Format D17) against the approved capex of Rs.797.5 Crores for FY15.
But, it has furnished the capital expenditure against each category of
works for a total of Rs.458.78 Crores as shown below:

xl

TABLE 4.12
Capital expenditure for FY15
Amount in Rs. Crores

Sl
No
1
a
b
c
d

Particulars

Units

Mandatory works, Social


obligation and other works
Gangakalyan
Special Development Plan for
backward talukas under
Nanjundappa scheme(SDP)
Electrification of Hamlets(Not
covered under RGGVY)
Electrification of HB/DB/JC/AC
(Habitations) including IP Sets
under SCSP
Electrification of
TC(Habitations) including IP
Sets under TSP
Electrification of BPL
Households (Not covered
under RGGVY)

RGGVY

Rehabilitation of flood affected


villages (special Programme).

I
2
a
b
c

e
f

Water works
Expansion of network and
system improvement works.
E & I works.
Energization of IP sets under
general.
Service connections other than
IP/BJ/KJ/Water works.
Construction of new 33 KV
stations
Construction of new 33 KV
lines.
Augmentation of 33 KV
stations.
Construction of 11 KV lines for
33 KV / 110 KV sub-stations.

Nirantar Jyoti Yojana.

R- APDRP.

i
3

xli

Actual
Expenditur
e

50.00

35.85

village
s

1.98

Nos.

1.00

1.32

Nos.

0.50

0.83

Nos.

0.50

0.32

1.00
No of
House
hold
Nos. of
Village
s
Nos.

3.04

10.00

0.53

30.00

50.00

19.52

Nos.

40.00

1.87

Nos.

35.00

21.83

8.00

4.68

Nos.

8.00

0.05

Feeders

40.00

12.43

50.00

72.77

Nos
Kms

No of
feeder
/Kms
PART
A&B

Creating infrastructure to UAIP


Sets
Reduction of T & D and ATC loss

Approve
d Capex

Nos

15.49
45.00

91.80

Providing meters to un-metered


IP sets.
Providing meters to un-metered
BJ/KJ installations.
Replacement of faulty / MNR
energy meters by static meters.
& Replacement of more than
10 year old electromechanical
energy meters by static meters.
DTC's metering ( Other than
APDRP)
Replacement of 33 KV lines
Rabbit conductor by Coyote
conductor.
11 KV Re-conductoring.
LT Re-conductoring.
HVDS
Sub - total
New initiatives works
Installation of energy efficient
motors
Smart grid/sprinklar/drip
irrigation system
Establishing ALDC & SCADA.
Replacement and other
miscellaneous works
Replacement of failed
distribution transformers.
Replacement of Power
Transformers.
Replacement of old and failed
equipment and other works of
existing 33 KV stations and lines.
Preventive measures to reduce
the accidents. (Providing
intermediate poles, Restringing
of sagging lines, providing guy
&struds, providing guarding,
DTC earthing )
T&P materials.

Civil Engineering works.

Others

a
b

d
e
f
g
h
4
a
b
c
5
a
b
c

Nos.

7.50

0.00

Nos.

15.00

7.76

Nos.

25.00

2.94

Nos.

10.00

1.91

Kms

10.00

1.81

Kms
Kms

8.00
20.00
200.00
295.50
10.00

12.18
16.29
42.89

1.00
1
1.02

Nos.

80.00

110.03

Nos.

5.00

5.20

Nos of
works

3.00

2.11

Nos of
works

10.00

6.96

3.00

0.00

20.00

5.20

797.50

1.06
458.78

Nos
No of
works

Total

Commissions Analysis and decision:


From the above table, it is seen that, in some of the categories, the
HESCOM has incurred excess capex over the approved amount. The
Commission had directed KPTCL and ESCOMs to approach the
Commission with proper justification, if the capex in any category is
likely to exceed 10% or Rs.10 Crores, in the financial year, for an inxlii

principle approval, but the HESCOM has not sought any approval of
this kind. Some of the categories in which the capex has been
exceeded above the approved limit are:
i.

In the case of Electrification of Hamlets (Not covered under

RGGVY) & Electrification of HB/DB/JC/AC (Habitations) including IP


Sets under SCSP programs, HESCOM has achieved 32% and 66%
above the approved capex of Rs.1.0 Crore and Rs.0.5 Crore.
ii.

In the case of NJY and creating infrastructure to Un-Authorized IP

Sets, the HESCOM has exceeded its own projections by 46% and
104% over the approved capex of Rs.50 Crores and Rs.45 Crores.
iii.

In the case of 11kV Re-conductoring work, the capex is exceeded

by 52% over the approved capex of Rs.8 Crores.


iv.

In case of Replacement of failed distribution transformers, the


capex incurred is indicated at an alarmingly high value of Rs.110.03
Crores which is 38% above the approved limit of Rs.80 Crores.

v.

With regard to the Replacement of failed distribution transformers,


the Commission had sought the details of failed distribution
transformers, repaired and replacement and also, the procurement
of new transformers for replacement of failed transformers for FY15.
In its reply the HESCOM has stated that, 22064 Transformers had
failed, 662 nos were scrapped as they could not be repaired, 17944
Nos were repaired and 1356 new transformers were procured for
replacement of failed transformers which has cost Rs.9.34 Crores.
The HESCOM should note that, the failed transformers should be
replaced by repaired good transformers only and it should be
charged to revenue expenditure. In case, the failed transformer is
scrapped, only then, it can be replaced by a new transformer, to be
accounted under capex. Hence, the amount spent for procurement
of new transformers for replacement of failed transformers at Rs.9.34
Crores shall have to be considered as capex instead of Rs.110.03
Crores and the total capex indicated at Rs.458.78 Crores will
become Rs.358.09 Crores (after deducting the excess capex of

xliii

Rs.100.69 Crores indicated as capex of

new transformers for

replacement of failed ones).


vi. In many other categories of works, HESCOM has not achieved more
than 20% of the approved capex, which shows that, the planning
and implementation coordination is not properly monitored by while
taking up the capex program.
The year-wise capital expenditure incurred by HESCOM against the
approved Capex during the last four years is shown in the following
Table:
TABLE 4.13
Approved Vs Actual capital investment
Amount in Rs.Crores

Particulars
Capital Investment Proposed &
Approved
Capital
Investment
actually
incurred (Figures as per Annual
Report)
Short fall
% Achievement

FY12

FY13

FY14

FY15

1495.17

1189.22*

1178*

797.5*

224.48

251.27

343.05

358.09

1270.69

937.95

834.95

431.41

15.01%

21.13%

29.12%

44.90%

* Rs.500 Crores was considered for the purpose of computing ARR for FY13, FY14 & FY15

From the above table, it can be noted that, the HESCOM was not able
to achieve more than 44.90% of the approved capex in any of the
year from FY12. Further, looking at the capital expenditure for FY15, it is
noted that, even though it has exceeded the capex in certain
categories of works, it has not exceeded the overall capex approved
by the Commission.
Taking into consideration the above facts, the Commission decides to
allow the actual capital expenditure of Rs.358.09 Crores for FY15, after
deducting the capex not meeting the prudence norms as per the
following para.

4.2.8 Prudence check of FY15:


The prudence check of capex of HESCOM was taken in two parts:
a) Prudence check of execution of the capital works of FY15:
b) Prudence check of material Procurement process of FY15:

xliv

a) Prudence check of execution of the capital works of FY15:


The Commission had taken up prudence check of the capital
expenditure incurred by for the period FY15 by engaging the services
of M/s. Deloitte Touche Tohmatsu India Private Limited, (M/s. Deloitte)
as consultant to evaluate the capital expenditure of FY15 pertaining to
completed and categorized works.
M/s. Deloitte has collected the list of works carried out in HESCOM for
FY15.The works were divided into three categories based on their cost
(a) works costing above Rs.6 Lakh, (b) works costing Rs.3 to 6 Lakh and
(c) works below Rs.3 Lakhs. The works were taken up under various
schemes like RAPDRP, UNIP and Niranthara Jyothi Schemes apart from
General capital works like service connection, Extension &
Improvement works, Civil engineering works, metering, etc. A
representative sample in each category was selected covering the
geographical area of the Company as per the Scope of work and
submitted the report of the prudence check.
The consultant has considered sample works of 120 Nos. with a cost of
Rs.4,463 Lakh in Rs.6 Lakh and above category, 40 No. of works with a
cost of Rs.217 Lakh in Rs.6 Lakh to Rs.3 Lakhs category and 33 Nos. of
works from 11 divisions with a total cost of Rs.91 Lakh in below Rs.3 Lakh
category.
As per the report of the consultant, the following are the salient
features:
TABLE 4.14
Gist of Prudence check findings for FY15
Particulars
Works costing Rs.6 Lakhs and above considered as
samples for validation
Works costing between than Rs.6 Lakhs and Rs.3
Lakhs considered as samples
Works costing below Rs.3 Lakhs considered as
samples
Works not meeting the Rs.6 Lakhs and above
norms of prudence
Rs.6 Lakhs and Rs.3 Lakhs
below Rs.3 Lakhs
Total works not meeting the norms of prudence

Numbers

Amount
in Rs. Lakhs

120

4,463

40

217

33

91

01
Nil
Nil
01

68.68

68.68

Some of the other findings of the prudence check are summarized in


the following Table:

xlv

TABLE 4.15
Summary of Works having cost overrun
Particulars

Within 10%

10-25%

Above 25%

66
20
23

13
03
03

41
17
07

Rs.6 Lakhs and above


Rs.6 Lakhs and Rs.3 Lakhs
below Rs.3 Lakhs

TABLE 4.16
Summary of Works having Time overrun
Between one
Particulars
Within Year
and two Years
Rs.6 Lakhs and above
106
09
Rs.6 Lakhs and Rs.3 Lakhs
40
below Rs.3 Lakhs
33
-

Above 2
Years
05
-

The Commission had forwarded the copy of the Report on the


Prudence check seeking HESCOMs comments thereon. The reply
forwarded by HESCOM is summarized below:
HESCOM has stated that, it has categorised assets of the pertaining to
work of establishment 5 MVA transformers other than the transformer
on 28.01.2015.

Subsequently, it has installed 5 MVA transformer on

12.08.2015 for which pre commissioning test has been carried out after
four months on 01.12.2015 and the load on the transformer has been
taken.

The categorization of works before commissioning of the

project is not proper. The Commission views this matter seriously and
directs the HESCOM to monitor and avoid such things in future. The
Commission noting the above points has taken a view that, one work
amounting to Rs.68.68 Lakhs in the samples selected by the consultant
during FY15, does not qualify for being treated as prudent and
consequently the corresponding depreciation and interest on loans
allowed by the Commission in the tariff have to be disallowed in APR of
FY15 as detailed below:

xlvi

TABLE 4.17
Details of Amounts disallowed in APR FY15
Particulars
Total cost of categorized works eligible for prudence check
Total cost of the sample works
Cost of sample works not meeting prudence norms (01 work
with cost of Rs.68.68 lakh against a sample basket of 61 works
with Rs.954 Lakhs)
Percentage of cost not meeting prudence norms with respect
to the total samples considered in the category (Rs.68.68 lakh
against a sample basket with Rs.954 Lakhs)
Overall cost of capex not meeting prudence norms compared
with the cost of that category of samples (Rs.68.68 lakh forming
7.2% of sample basket escalated to total capex under the
respective category of works of Rs.1964 Lakhs)
Amount to be disallowed towards works not meeting prudence
norms calculated on the basis of weighted average interest &
weighted average depreciation on the capex to be disallowed.

Amount in Rs.
Lakhs
10,313
4,771
68.68

7.20

141.39

17.43

b) Prudence check of Material Procurement process of FY15:


The HESCOM has been executing capital works both on turnkey as well
as partial turnkey contracts. In the process, the HESCOM 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.
In view of the fact that, a large quantity of major materials are being
procured by the ESCOMs, the Commission decided to review material
procurement process of major materials as a part of prudence check
with a view ensure that procurement is carried out in a cost-effective
manner without compromising on the operational needs.
The Analysis of procurements in FY15 revealed that a considerable
level of inventory vis--vis the actual requirement, seems to have been
maintained in the case of,

xlvii

a. Special three pin cross arms,


b. 1.1 KV GI pins,
c. LT wiring Kit for 100KVA TC,
d. D.P Set.
Hence, the HESCOM has to take measures to utilize the procured
materials in a systematic way and reduce the inventory by planning
the delivery schedule of the material in synchronisation with the work
execution and the inventory level should be around 25% only of annual
requirement.
Further, the HESCOM is going 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 given under KTPP Act.
The Commission noting the above points directs HESCOM to maintain
its inventory judiciously.
c) Prudence Check of Capital Investment for the period FY13 to FY14:
The Commission has treated a capex of Rs.13.46 Crores along with
Rs.7.21 Crores for the asset created by KPTCL in the HESCOM area for
which the downstream lines not completed are attributable to the
HESCOM as not meeting the prudence norms. The Commission had
given an opportunity to the HESCOM to justify the project to meet the
norms of prudence by submitting sufficient data.
The HESCOM has submitted its reply with adequate data to claim that
the works meet the norms of prudence and after verifying all the data,
the Commission has decided that, the works could be considered as
meeting the norms of prudence and that no further disallowance, in
respect of these works, is necessary.
d) Prudence Check of Capital Investment for the period FY10 to FY12:

xlviii

The Commission had disallowed a capex of Rs.2.64 Crores incurred for


one work pertaining to the period FY10 - FY12 as not meeting the
prudence norms and disallowed the weighted average interest and
depreciation on the corresponding capex in the Tariff order dated
02.03.2016. HESCOM has submitted the required data to justify the work
as meeting the prudence norms and after verifying the data submitted
by

HESCOM,

the

Commission

decides

not

to

continue

the

disallowance.

4.2.9

Interest and Finance Charges:


a) Interest on loan:
HESCOMs Submission:

The HESCOM, in its application has claimed an amount of


Rs.180.75 Crores towards interest on long term loans drawn from
banks / financial institutions for FY15.
Commissions analysis and decisions:
The Commission has noted the status of opening and closing balances
of long term loans as per the audited accounts for FY15, the details in
Format- D9 of the filings and replies to the preliminary observations as
shown below:
TABLE 4.18
Allowable Interest on Loans FY15
Amount in Rs.Crores

Particulars
Total opening balance of loans
Add new Loans

FY15
1003.47

Less Repayments

153.63
1023.13
1013.30

Total loan at the end of the year


Average Loan
Interest on long term loans as per audited accounts for FY15

xlix

173.29

116.26

Considering the average loan amount of Rs.1013.30 Crores and an


amount of Rs.116.26 Crores incurred towards interest on long term
loans, the weighted average rate of interest works out to 11.47% which
is within the present interest rates charged by the bank/ financial
institutions.
Thus, the Commission decides to allow an amount of Rs.116.26 Crores
towards interest on long term loan for FY15.
4.2.10 Interest on Working Capital:
HESCOMs Submission:

The HESCOM has stated that it has borrowed short term loans
and overdrafts during FY15 to meet its day to day expenditure
(working capital).

As per the audited accounts and the replies

to preliminary observations, the HESCOM has incurred Rs.82.91


Crores towards interest on short term loans and overdraft for
FY15.
Commissions analysis and decisions:
The Commission notes that, as per the audited accounts and the
replies to its preliminary observations, the HESCOM has incurred an
interest of Rs.82.91Crores on short term borrowings/ Overdrafts during
FY15.
The present interest rates by commercial banks and financial
institutions are charged mainly on the basis of base rate of interest
declared by RBI from time to time. The Commission has considered
interest on short term loan at base rate plus certain basis points
depending upon the tenure of the loan.

As per the HESCOMs

application, it is stated that short term loans for FY15 has been availed
at a weighted average rate of interest of 10.98%.

However,

considering the base rate of interest with spread of 250 basis points
and noting the downward trend in the interest rate, the Commission
l

decides to allow short term loans at a normative interest of 11.75% for


FY15.
As per the KERC (Terms and Conditions for Determination of Tariff)
Regulations, 2006 as amended on 1st February, 2012, the Commission
computes the allowable interest on working capital for FY15 as follows:

li

TABLE 4.19
Allowable Interest on Working Capital for FY15
Amount in Rs.Crores

Particulars

FY15

One-twelfth of the amount of O&M Expenses


Opening GFA

46.15
3174.87

Stores, materials and supplies 1% of Opening balance of GFA


One-sixth of the Revenue
Total Working Capital
Rate of Interest (% p.a.)
Normative Interest on Working Capital
Actual interest on WC as per audited accounts for FY15
Allowable Interest on Working Capital

31.75
808.60
886.50
11.75%
104.16
82.91
93.54

The Commission decides to allow an amount of Rs.93.54 Crores


towards interest on working capital for FY15.

4.2.11 Interest on Consumer Deposits:


HESCOMs Submission:

The HESCOM has claimed an amount of Rs.44.64 Crores towards


payment of interest on security deposits for FY15.
Commissions analysis and decisions:
The Commission notes that, as per the audited accounts for FY15, the
interest on consumer security deposits amounting to Rs.44.64 Crores
claimed by the HESCOM works out to a weighted average rate of
interest of 8.35%.

Under the

KERC (Interest on Security Deposit)

Regulations, 2005 the interest on consumer deposits is to be allowed as


per the bank rate prevailing as on the 1st of April of the relevant year.
The bank rate as on 1st April, 2014 was 9.00%.
Thus, the Commission decides to allow an amount of Rs.44.64 Crores
towards interest on consumer deposits for FY15.
4.2.12 Other Interest and Finance charges:

lii

The HESCOM has claimed an amount of Rs.2.47 Crores towards other


interest and finance charges for FY15 which includes charges payable
to banks / financial institutions and guarantee commission payable to
GoK.

The Commission notes that the claims are as per audited

accounts and hence decides to allow the same for FY15.


Thus the allowable interest and finance charges for FY15 are as follows:
TABLE 4.20
Allowable Interest and Finance Charges
Amount in Rs. Crores

Sl.
No.
1.
2.
3.
4.

Particulars
Interest on Loan capital
Interest on working capital
Interest on consumer deposits
Other interest and finance charges
Total interest and finance charges

FY15
116.26
93.54
44.64
2.47
256.91

4.2.13 Other Debits:


HESCOMs Submission:

The HESCOM, has claimed credit balance of Rs.0.78 Crores


towards other debits.
Commissions analysis and decisions:
The Commission notes that as per the audited accounts, the allowable
other debits excluding provisions for bad and doubtful debts for FY15
are as detailed below:
TABLE 4.21

Allowable Other Debits


Amount in Rs. Crores

Sl
No
1
2
3
4

Particulars
Losses relating to fixed assets
Assets decommissioning cost
Gain on sale of assets
Miscellaneous losses and write offs
Total

liii

FY15
0.10
0.14
(0.12)
8.39
8.51

Thus, the Commission decides to consider an amount of Rs.8.51 Crores


as other debits for FY15.
4.2.14 Net Prior Period Credits/ Charges:
HESCOMs Submission:

The HESCOM has not claimed Net Prior Period Charges for FY15.
Commissions analysis and decisions:
The Commission notes that the net prior period credits/ charges are
included in the other income account in the audited accounts for
FY15. As per the Audited Accounts for FY15, the prior period expenses is
Rs.47.24 Crores on account of employee costs, A&G and other
expenses, under provided depreciation and power purchase cost of
earlier years. Further the prior period income of Rs.12.58 Crores is on
account of excess provision for depreciation, other expenses and
other income of prior period.
Thus, the Commission decides to allow a net prior period debit of
Rs.34.66 Crores for FY15.
4.2.15 Return on Equity:
HESCOMs Submission:

The HESCOM has not claimed any Return on Equity for FY15.
Commissions analysis and decisions:
As per the KERC (Terms and Conditions for Determination of Tariff)
Regulations, 2006 as amended on 1st February, 2012, the Commission
computes the allowable Return on Equity at 15.5% on equity plus
reserves and surplus, as at the beginning of the year besides allowing
taxes as per actuals. Considering the status of equity amount as per
audited accountsfor FY15, the allowable RoE is determined as follows:

liv

TABLE 4.22
Allowable Return on Equity
Amount in Rs. Crores

Particulars
Paid Up Share Capital
Share deposit
Reserves and Surplus as on 31.03.2015
Less recapitalized security deposit
Total Equity

FY15
707.53
155.25
(1219.60)
34.00
(390.82)

Considering accumulated losses of Rs.1219.60 Crores and total equity of


Rs.862.78 Crores, as at the beginning of the year and recapitalization of
security deposit of Rs.26.00 Crores, the HESCOM has negative net worth of
Rs.390.82 Crores.
In view of the negative Equity, the Commission decides not to allow any
Return on Equity for FY15.
4.2.16 Income tax :

As per the audited accounts, HESCOM has not incurred any expenditure
towards payment of Income Tax for FY15. The Commission decides not to
allow any income tax for FY15.
4.2.17 Other Income:
HESCOMs Submission:
The HESCOM has claimed a net amount of (-) Rs.0.08 Crores as other
income.
Commissions analysis and decisions:
As per the audited Accounts FY15, an amount of Rs.26.58 Crores is
shown as Other Income for FY15. This amount includes income from
interest on fixed deposits, sale of scrap, profit on sale of stores, rebate
on collection of electricity duty and other recoveries.

lv

The Commission notes that the negative amount of Rs.0.08 Crores


claimed in its application by the HESCOM is as per the audited
accounts for FY15 by considering the net debit balance of Rs.34.66
Crores towards prior period charges / income. Since, the Commission
has considered the prior period charges separately as discussed in the
earlier paragraphs, the same has not been factored while allowing
other income.
Thus, the Commission decides to consider an amount of Rs.26.58
Crores as other income for FY15.
4.2.18 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 HESCOM in its
application had not reported any expenditure towards Consumer Relations /
Consumer Education incurred separately during FY15. However, the
HESCOM in its reply to the Commissions preliminary observations has
informed that an amount of Rs.6.30 Lakhs has been incurred towards
consumer education programmes under a separate head of account. Hence,
considering the expenditure reported by HESCOM, the Commission decides
to factor Rs.0.06 Crores in the APR, as expenses towards consumer relations
/ consumer education for FY15.

4.3

Abstract of Approved Revised ARR for FY15:


As per the above item-wise decisions of the Commission, the
consolidated Statement of ARR for FY15 is as follows:
TABLE 4.23
Approved Revised ARR for FY15 as per APR
Amount in Rs.Crores

Sl.
No.
1
2

Particulars
Revenue at existing tariff in Rs Crs
Revenue from tariff and Misc Charges
Tariff Subsidy for IP & BJ/KJ installation
Total Revenue
Expenditure in Rs Crs
Power Purchase Cost

lvi

As per
APR
2297.20
2554.38
4851.58
3330.10

4
5

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

24

4.4

Transmission charges of KPTCL


SLDC Charges
Power Purchase Cost including cost of
transmission
Employee Cost
Repairs & Maintenance
Admin & General Expenses
Total O&M Expenses
Depreciation
Interest & Finance charges
Interest on Loans
Interest on Working capital
Interest on belated payment on PP Cost
Interest on consumer deposits
Other Interest & Finance charges
Less interest capitalised
Total Interest & Finance charges
Other Debits
Net Prior Period Debit/Credit
Return on Equity
Provision for taxation
Funds towards Consumer
Relations/Consumer Education
Other Income
ARR
Deficit for FY13 carried forward
Regulatory asset to be recovered in FY16
& FY17
Incentives on account of loss reduction
beyond the targeted losses and
disallowance on imprudent capex
Net ARR

445.54
9.94
3785.58

553.83
99.05
116.26
93.54
44.64
2.47
0
256.91
8.51
34.66
0.00
0
0.06
26.58
4712.02

34.42
4746.44

Gap in Revenue for FY15:


As against an approved ARR of Rs.4949.36 Crores, the Commission,
after the Annual Performance Review of the HESCOM, decides to
allow an ARR of Rs.4746.44 Crores for FY15. Considering the revenue of
Rs.4851.18 Crores, a surplus of Rs.105.14 Crores is determined for the
year FY15.
The Commission decides to carry forward the surplus of Rs.105.14
Crores of FY15 to the proposed ARR for FY17 as discussed in the
subsequent Chapter of this Order.

lvii

CHAPTER 5
ANNUAL REVENUE REQUIREMENT FOR FY17-19
5.0

Annual Revenue Requirement (ARR) for FY17-FY19 - HESCOMs Filing:


HESCOM in its application dated 15th December, 2015, has sought
approval of ARR for FY17-19. The summary of the proposed ARR for
FY17-19 is as follows:
TABLE 5.1
Proposed ARR for FY17-19
Amount

in

Rs.Crores

Sl.
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Particulars

FY17

Energy @ Gen Bus (With HRECS & AEQUS) in MU


Transmission Losses in %
Energy @ Interface in MU
Distribution Losses in %
Sales in MU
Sales to other than IP & BJ/KJ
Sales to IP & BJ/KJ
Total Sales
Revenue at existing tariff in Rs Crs
Revenue from tariff and Misc Charges
Tariff Subsidy
Total Existing Revenue
Expenditure in Rs Crs
Power Purchase Cost
Transmission charges of KPTCL
SLDC Charges
Power Purchase Cost including cost of
transmission
Employee Cost
Repairs & Maintenance
Admin & General Expenses
Total O&M Expenses
Depreciation
Interest & Finance charges
Interest on Capital Loans
Interest on Working capital loans
Interest on belated payment on PP Cost
Interest on consumer security deposits
Other Interest & Finance charges
Less interest & other expenses capitalised

lviii

FY18

FY19

13738.00
5.96%
12919.59
16.40%

14505.47
6.03%
13631.44
16.20%

15307.86
5.95%
14397.42
16.00%

4389.95
6410.84
10800.79

4663.85
6759.28
11423.13

4968.34
7125.50
12093.84

2749.15
3260.81
6009.96

2922.01
3437.82
6359.83

3120.48
3623.87
6744.35

4902.22
579.18
6.00

4915.82
648.59
7.00

5252.05
651.85
8.00

5487.40
586.37
57.21
89.73
733.31
112.10

5571.41
641.09
61.91
97.10
800.10
128.48

5911.90
700.40
66.99
105.07
872.46
147.33

315.00
127.62

361.38
135.67

413.06
144.36

140.00
59.38
0.00
0.00

140.00
67.11
0.00
0.00

140.00
75.85
0.00
0.00

26
27
28
29
30
31
32
33
34
35
36
37
38

Total Interest & Finance charges


Other Debits
Net Prior Period Debit/Credit
Return on Equity
Funds towards Consumer Relations/Consumer
Education
Other Income
ARR
Deficit
Surplus for FY15 carried forward
Regulatory asset
Carrying cost on RA
Incentive for loss reduction in FY15
Net ARR

642.00
18.64
0.00
0.00

704.16
19.65
0.00
0.00

773.27
20.66
0.00
0.00

0.50
27.94
6966.01
-956.05
132.41
-197.69
-23.72
-57.31
7112.32

0.50
28.67
7195.63
-835.80
-1102.36

0.50
29.40
7696.72
-952.37
-1938.16

8297.99

9634.88

The HESCOM has requested the Commission to approve the Annual


Revenue Requirement of Rs.7112.32 Crores for FY17, Rs.8297.99 Crores
for FY18 and Rs.9634.88 Crores for FY19. Further, HESCOM has proposed
increase in retail supply tariff by 102 paise per unit in respect of all the
categories of consumers including BJ/KJ and IP set consumers for FY17,
in order to bridge the gap in revenue of Rs.1102.36 Crores.
5.1

Annual Performance Review for FY15 & FY16:


As discussed in the preceding chapter of this Order, the Commission
has carried out the Annual Performance Review for FY15 based on the
audited accounts furnished by HESCOM. Accordingly, a surplus of
Rs.105.14 Crores of FY15, is required to be carried forward in to the ARR
of FY17.
As regards APR for FY16, the current financial year (i.e. FY16) is yet to be
completed. Hence, the Commission decides to take up the APR of
FY16 during the revision of ARR / Retail Tariff for FY18.

5.2

Annual Revenue Requirement for FY17-19:

5.2.1

Capital Investments for FY17-19:


The HESCOM has proposed its capex of Rs.901.05 Cores, Rs.838.55
Crores and Rs.827.55 Crores for FY17, FY18 and FY19 respectively. The

lix

said proposal is stated to be as per the capital expenditure guidelines,


issued by the Commission.
The HESCOM has stated that, the works which are absolutely essential
have been included in the Investment Plan, prioritization of Capital
Works is undertaken so as to strike a balance between achieving the
desired objective of Transmission and Distribution Loss reduction as
well as discharging social responsibility.
Further, the HESCOM has stated that, the annual Investment Plan
includes all the planned and Non-Plan works, budget provision is made
for the ongoing works and works that have been proposed to be taken
up during the relevant period. The long term projects such as DDUGVY,
IPDS, Replacement of overhead lines by UG Cable under DAS, which
are spread over a span of 3 to 5 years, are included as per the target
to be achieved year-wise. DTC metering and Replacement of old
meters by Static meters, which in turn result in reduction of Technical
and Commercial losses have been prioritized. Social obligatory works,
such as Ganga Kalyan works, SDP, TSP, SCSP and UNIP are being taken
up as per GOK guidelines. The projects such as NJY first and second
Phase, RAPDRP Part A & B which are under completion are prioritized
for FY-17. Also NJY Phase III in 4 districts is yet to be started, for which
financial assistance is obtained from NEF.
The Investment is being made on System strengthening works such as
Reconductoring, link lines, preventive measure works are being taken
into consideration in order to improve tail end voltage, reduction of
losses and prevent Accidents. Investment is being made on E & I works
like additional DTCs, feeder bifurcation, line conversion, shifting of
transformer to load centre, enhancement of transformers capacity
etc. are considered for energy saving and improving quality supply
and reduction of load.

lx

Investment is also proposed on New Sub Stations/ Augmentation and


also replacement works in Stations in order to improve Voltage
regulation, reduce distribution losses and to cater load growth. All the
Projects are being monitored by the Project Monitoring Cell at the
Corporate Office. The category wise capex indicated for FY17, FY18
and FY19 by HESCOM is as follows:
TABLE 5.2
Proposed Capex for the Control Period
Sl
No
1
a
b
c
d
e
f
g
h
i
j

Amount in Rs. Crores


Capital Capital Capital
Budget Budget Budget
FY-17
FY-18
FY-19

Scheme
Mandatory works, Social obligation and other works
Gangakalyan IP sets
Special Development Plan for backward talukas under
Nanjundappa scheme(SDP)
Electrification of Hamlets(Not covered under RGGVY)
Electrification of HB/DB/JC/AC (Habitations) under SCP
(Not covered under RGGVY)
Electrification of TC(Habitations) under TSP
(Not covered under RGGVY)
Electrification of BPL Households
(Not covered under RGGVY)
Water works
RGGVY
DDUGJY
DDG (Phase-1 & Phase-2)
Rehabilitation of flood affected villages (special
programme).

20.00

25.00

25.00

20.00

20.00

20.00

1.00

1.00

1.00

1.00

0.50

0.50

0.50

0.50

0.50

1.00

1.00

1.00

5.00
5.00
110.00

5.00
3.00
100.00

5.00
3.00
100.00

Expansion of network and system improvement works.

E & I works.

25.00

25.00

25.00

Energization of IP sets under general.


Energization of IP sets as per GOK

125.00

125.00

125.00

Service connections other than IP/BJ/KJ/Water

30.00

30.00

30.00

Construction of new 33 KV stations and lines.

4.00

4.00

4.00

Augmentation of 33 KV stations.

3.00

3.00

3.00

Construction of 11 KV lines for 33 KV / 110 KV sub-stations.

5.00

5.00

5.00

50.00

40.00

40.00

works.

Nirantar Jyoti Yojana.

R- APDRP.

50.00
20.00

40.00
20.00

30.00
20.00

R-APDRP exclusively for Modem and meters

1.00

1.00

1.00

IPDS

46.00

50.00

50.00

3
a

Reduction of T & D and ATC loss


Providing meters to un-metered IP sets.

0.05

0.05

0.05

Providing meters to un-metered BJ/KJ installations.

2.00

Replacement of faulty / MNR energy meters by static


meters.

lxi

Replacement of more than 10 year old electromechanical


energy meters by static meters.

50

50

50

DTCs metering ( Other than APDRP)

50.00

25.00

25.00

Replacement of 33 KV lines Rabbit conductor by Coyote


conductor

5.00

5.00

5.00

Replacement of 11 KV lines Weasel conductor by Rabbit


conductor.

10.00

10.00

10.00

6.00

6.00

6.00

h
i

Replacement of age old LT conductor by Rabbit


conductor.
HVDS (Pilot project for 1 district/year)

NEF (REC) for replacing 11 KV OH feeders by UG Cables in


Hubli and Belgaum cities.

100

100

100

4
a
b

New initiatives works


IT initiatives, automation and call centre
Installation of energy efficient motors

1.00

1.00

1.00

Smart grid/sprinkler/drip irrigation system

0.5

0.5

0.5

Providing solar roof tops to HESCOM office buildings

Establishing ALDC & SCADA.

1.00

1.00

1.00

Thermal Imaging and GIS Mapping of DTCs

Special pilot project for Strategic Business Centre at


Shiggaon sub-Division

Replacement and other miscellaneous works

a
b

Replacement of failed distribution transformers.


Replacement of Power Transformers.

100.00
2.00

100.00
2.00

100.00
2.00

Replacement of old and failed equipment and other works


of existing 33 KV stations and lines.

3.00

3.00

3.00

5.00

5.00

5.00

1.00
20.00
5.00
901.05

1.00
10.00
5.00
838.55

1.00
10.00
5.00
827.55

d
e
f
g

Preventive measures to reduce the accidents. (Providing


intermediate poles replacement of deteriorated
conductor, DTC earthing etc.)
T&P materials.
Creating infrastructure to UAIP Sets
Civil Engineering works.
Total

Commissions Analysis and decision:


From the above table, the Commission notes that, the HESCOM has
proposed a capex of Rs.110 Crores for FY17 and Rs.100 Crores each for
FY18 and FY19, for Deendayal Upadhyaya Gram Jyoti Yojana
(DDUGJY) program, but has not mentioned anything about the extent
of grant from the GoI.
In case of HVDS (Pilot project for 1 district/year), HESCOM has
indicated a capex of Rs.1 Crore for FY17 to FY19, fully aware that, HVDS

lxii

scheme for a feeder may cost more than Rs.2 to Rs.3 Crores. Further,
HESCOM has stated that, it is not going to continue with the HVDS
program, as it is not an economical solution.
In the case of Smart grid/sprinkler/drip irrigation system, the HESCOM
has shown Rs.0.5 Crore allocation for each year and has stated that, it
has made provisions for only sanctioning the estimates and calling
tenders.
In respect of Replacement of failed distribution transformers, the
HESCOM has indicated Rs.100 Crores each for FY17 to FY19. From the
data submitted for FY15, on the failure and replacement of
transformers, the capex incurred on the new transformer works out to
only 15 to 20 % of the amount indicated as incurred and it is felt that,
the accounting practice in respect of released and replaced
transformers is to be checked/examined. Further, the HESCOM should
note that, the failed transformers should be replaced by repaired good
transformers only and it should be charged to revenue expenditure. In
case, the failed transformer is scrapped, it can be replaced by a new
transformer, which has to be accounted under capital expenditure.
Hence, considering the scrapped transformers in the previous years the
capex for replacement of failed distribution transformers by new ones,
shall to be limited to Rs.5 Crores and the proposed capex for FY17, FY18
and FY19 shall be considered as Rs.806.05 Cores, Rs.743.55 Crores and
Rs732.55 Crores respectively.
For creating infrastructure to UAIP Sets, HESCOM has shown a capex of
Rs.20 Crores for FY17 and Rs.10 Crores for FY18 and FY19. The HESCOM,
in its reply to the preliminary observations, has stated that, due to nonparticipation of the bidders for execution of the work, the program is
delayed. The HESCOM should take necessary action to complete the
regularization of UAIP sets by creating infrastructure.

lxiii

The HESCOM, while projecting the capital expenditure for the control
period, should identify high loss feeders, high loss subdivisions, division
and circles to specifically reduce losses and to improve reliability of
distribution system. The HESCOM should list out high loss feeders of the
year in descending order and chalk out a program to tackle high loss
feeders, on a priority, to reap the benefit of loss reduction.
The HESCOM should also list out the lengthy 11 Kv feeders with huge
loads and bifurcate them to reduce the loads and losses thereby
improving the reliability and quality of supply.
The optimal distribution system loss shall be less than 10%, even to
maintain the voltage regulations, within the permissible limits of 9 % for
11Kv system and 6% for LT distribution system. The HESCOM should plan
towards bringing down the distribution system losses below 10%, by the
end of the control period.
The HESCOM should prepare a detailed perspective plan by
conducting 11Kv feeder wise and DTC-wise load flow studies
considering the present and projected loads on each feeder. This
would lead to least cost, techno economically feasible improvement
methods for reducing the current level of distribution system energy
losses to less than 10% and improve the reliability of the system.
The HESCOM should subject its system strengthening works for the
period from FY-17 to FY-21, to periodical techno-economic analysis, to
ascertain as to whether the investments have resulted in loss reduction
and improvement of reliability.
The HESCOM should take up system improvement works such as:
a) Reactive power compensation to improve the PF to 0.9-0.95 lag.
b) Reconfiguration of distribution lines.
c) Replacement of conductors by higher size, wherever required.

lxiv

d) Drawing express feeders to bifurcate the loads.


e) Establishing new 33Kv substations and proposing for Establishment
of new transmission voltage substations by KPTCL.
f) Installing additional DTCs and shifting DTCs to load centers to
reduce the LT line lengths.
The Commission notes that, the HESCOM has not achieved capex of
more than 50% of the approved capex in any of the previous years.
Also, it may be noted that, while proposing a capex for FY16, HESCOM
had stated that, it would be achieving only Rs.500 Crores even though
it had proposed Rs.1900 Crore of capex. Considering the capex
achievement in the past, the Commission recognizes the capex
proposed by HESCOM at Rs.806.05 Cores, Rs.743.55 Crores and
Rs.732.55 Crores for FY17, FY18 and FY19 respectively after deducting
the amount towards to replacement of failed transformers. However,
the Commission considers a capex of Rs.600 Crores for FY17 and Rs.550
Crores for FY18 and FY19 for tariff computations, subject to prudence
Check. In case, the HESCOM requires any additional capex during the
financial year, the Commission may be approached with proper
justification for in principle approval.
5.2.2

Sales Forecast for FY17-19:

I. Category wise estimation of number of installations and sales


by HESCOM for the control period FY17-19:
88)

The HESCOM, in their tariff application has submitted that, the


energy sales for the control period depends on the population,
policies of the Government, various implementation of various
schemes, hours of supply to consumers etc. Further, the HESCOM
has submitted that the forecast has been prepared considering
the growth during the period FY-12 to FY-16. Further, it is stated that,
the energy sales for the control period are estimated considering
the following hours of supply of the consumers;

lxv

Feeder
Categor
y

Rural

EIP

Urban

NJY/
semi
urban

3ph

1 ph

3ph

open
delta

Industrial/H
T/
EHT/Water
Supply

FY-17

22-24

18-20

3+3

02-04.

3+3

02-04.

24

FY-18*

24

24

4+3

05-06.

4+3

05-06.

24

FY-19*

24

24

4+3

05-06.

4+3

05-06.

24

* Note: By FY-18, the thermal power plants BTPS unit-3 of capacity 1x700 MW and
Yeramarus thermal plant of capacity 2x800 MW is expected to start generation.
Hence, hours of power supply is assumed more for rural and EIP feeders as per
govt. norms.

It is further stated that, for LT-2(a), LT-b, LT-3, LT-5,LT-6, HT-1, HT-2(a)
and HT-2(b) categories, five-year CAGR is considered, for LT-4(b)
category four-year CAGR is considered, for LT-4(c) (ii), LT-7, HT3(a)(iii), HT-3(b), HT-4 and HT-5 categories

present trend is

considered and for HT-3(a) (ii) due to inconsistency, the CAGR of


installations is considered for projections .

2) The preliminary observations of the Commission and the queries


raised during the validation process on sales forecast for the control
period and the replies furnished by HESCOM are discussed below:
i)

LT (1) BJ/KJ category:

The HESCOM has estimated the number of installation consuming


below 18 units and the number of installations consuming above 18
units at a growth rate of 0.04% based on the CAGR for the period FY12
to FY16. However, while computing the energy sales, the HESCOM has
grossed up the BJ/KJ sales of FY-15 by the LT line losses to arrive at the
consumption to this category. The Commission notes that BJ/KJ
installations are metered and read.
The Commission had directed the HESCOM to revise the sales estimate
duly considering the energy consumption as recorded in the
consumers meter and without grossing up sales by LT line losses. It is
informed that sales are grossed up with LT line losses, as there are

35205 installations yet to be metered.

lxvi

The Commission reiterates its stand that, as the sales increase due to
increase in the number of installations, the line loss is taken care of by
the specific consumption and grossing up sales by loss is not correct.
Thus, the Commission has considered the specific consumption as per
actuals for FY15 for estimating the sales to BJ/KJ installations.
ii) Other Categories excluding IP Sets:
a) The Commission had observed that the HESCOM had included FY16 data, which is an estimated figure, for working out the CAGR
and had suggested that only actual data available up to FY15 had
to be considered for estimating the CAGR. In reply it is stated that,
the estimates for FY-16 are made considering the data up to
November, 15 and it has considered FY16 as the base year for
projecting the number of installations and sales.

The Commission

notes that even though FY16 is the base year, including FY16 data
(which itself is an estimated figure) for arriving at actual growth rate
is not correct.
b) The midyear number of installations indicated at page 66 of the
filing do not match with the midyear installations indicated in D-21
Format. Further, it should indicate the year-end figures in D-2 Format
and mid-year figures in D-21 Format. Also, it is noted that the yearend figures for the number of installations indicated in page 65 and
66 are same as the mid-year number of installations indicated at
page 66. Thus the figures shall be reconciled. In the replies it is
stated that the figures agree for FY17.

However, during the validation process, the Commission pointed out


that, the figures does not match, in respect of the following category:
Mid-Year figure as in
Page-66

lxvii

Mid-Year figure as in
D-21

Category
Mid-Year figure as in

116693

146781

Page-66

Further, it was also noted that there are minor differences in the total
number of installations for FY 18 & FY19 as indicated at page 66 and D2 Format. The figures have since been reconciled and confirmed in
HESCOMs replies to the above query.

c) The Commission in its preliminary observations, had noted that, the


estimation of energy not supplied is complicated and depends on
a number of factors like duration of power not supplied, the timing
at which the power was not supplied, consumption pattern, the
type of consumers, Government Policy on hours of supply to urban
and rural areas etc. For example, power cuts in respect of domestic
consumers during the morning hours may not have much impact
on the energy consumed as appliances like water heaters, washing
machines etc. would be used whenever the power supply is
available.

Similarly, industries working in one or two shifts may

schedule their production whenever the power supply is available


and as such it may not result in considerable reduction in energy
consumption.

Thus, it becomes imperative to make individual

category-wise study to arrive at energy not supplied due to missing


hours. In this context, the Commission had requested the HESCOM
to furnish details of studies conducted category wise. In its replies,
the HESCOM has informed that it has not made any individual
category-wise study to estimate the impact of power cuts.
The Commission notes that, in absence of such a study, the impact of
energy not supplied due to missing hours cannot be assessed.

d) As regards the number of installations, the commission had noted


that the growth rate considered for LT6- Street light and LT-7-

lxviii

Teporaray supply, is lower compared than the normal growth rate.


Further, the Commission had observed that even though there is
negative growth in HT-4, HESCOM had proposed addition to this
category during the control period.
It is stated that HESCOM has revised the number of installations for FY16
for LT-6 street lights and LT-7 considering the growth rate of second half
of FY15 and accordingly, it has worked out the CAGR at 2.97% and
13.44% respectively. Regarding HT-4 installations, it is stated that, the
negative growth may be due to shifting of installations to HT-2c and it
has proposed additions to this category keeping in view upcoming
colonies and apartments.
e) The Commission during the process of validation, had requested
the HESCOM to furnish the details of number of installations shifted
to HT-2c from HT-2a, HT-2b and HT-4 categories and the
corresponding sales for FY13, FY14 and FY15. HESCOM has furnished
the details in the matter.

f) Regarding the sales growth rate, the Commission had noted that
the growth rate considered for LT- 2(b), LT-5 and LT-6 SL is lower and
for HT1, HT-3 (a) & (b) and HT-4 categories, it is higher. HESCOM has
stated that it has revised the sales for FY16 for LT- 2(b), LT-5, LT-6 SL,
HT1 and HT-3 (a) & (b) considering the growth rate of second half of
FY15 and accordingly has worked out the CAGR. Regarding HT-4
installations, it is stated that, sales is estimated keeping in view the
upcoming colonies and apartments.
The replies furnished by HESCOM have been noted by the Commission
and the approach of the Commission in estimating the sales is
discussed in the subsequent paragraphs.
II. Commissions approach for estimating the number of installations
and sales for Control Period FY17-19:

lxix

The Commission has issued the KERC (Load Forecast) Regulations, 2009
which specify that the Commission shall normally adopt the forecast as
per EPS and can deviate from the EPS while approving ERCs or PPAs by
passing orders after duly giving opportunity to the stakeholders.
For the present control period FY17 to FY19, the filing done by ESCOMs
indicates that sales forecast is not in tune with the 18th EPS. The tariff
petition filed by the ESCOMs which includes the sales estimates and
power

purchase

quantum

has

been

made

public

and

the

stakeholders have been heard in the matter. After considering the


views expressed by the stakeholders the Commission has decided to
adopt the methodology specified in the following paragraphs which is
different from the CEAs approach for the reasons stated below:
a. The State of Karnataka is under peak and energy shortages situation
and the supply of electricity is determined by the present restricted
generation availability. The last three years data of energy at
generation bus indicated below justify the above stand:

Year

18th EPS
Generation

Actual supplied
MU

MU
2013

58513

57046

2014

63001

57725

2015

67833

59969

From the above Table, it is seen that the actual growth rate is
different from those estimated by in the 18th EPS, by the CEA.
b. The loss levels considered by the Commission are as per the loss
reduction trajectory fixed by the Commission for the respective
control periods. Hence the loss levels as adopted by the CEA are
not relevant for the purpose of the approval of ARR and Tariff.

lxx

In view of the above, the Commission has considered the business as


usual scenario and 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:
1) 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 FY16 is modified duly
validating the revised estimate furnished by HESCOM in the current
filing and data available as on 30.11.2005. Accordingly, the base
year estimation has been revised which has an impact on the
estimates on number of installations and sales for the control
period.
b. Wherever the number of installations estimated by HESCOM for the
control period is within the range of the estimates based on the
CAGR for the period FY10 FY15 and for the period FY12 FY15, the
estimates of HESCOM are retained.
c. Wherever the number of installations estimated by HESCOM for the
control period is lower than the estimates based on the CAGRs for
the period FY10 FY15 and for the period FY12 FY15, the estimates
based on the lower of the CAGRs for the period FY10 FY15 and for
the period FY12 FY15 are considered.
d. Wherever the number of installations estimated by HESCOM for the
control period is higher than the estimates based on the CAGRs for
the period FY10 FY15 and for the period FY12 FY15, the estimates
based on the higher of the CAGRs for the period FY10 FY15 and
for the period FY12 FY15 are considered.

lxxi

e. For LT 4b and 4c, LT-7, HT-2, HT-4 and HT-5 categories, the
estimates of HESCOM are retained as there is no specific growth
pattern in these categories.
Based on the above approach, the total number of installations
(excluding BJ/KJ and IP installations) estimated by the Commission for
the control period is indicated in the table below:
Nos.
FY17

FY18

FY19

Filed

Approved

Filed

Approved

Filed

Approved

3131030

3122019

3274916

3261773

3425074

3407402

2) Energy Sales:
i)

For categories other than BJ/KJ and IP sets, generally the sales are
estimated considering the following approach:
a. The base year sales for FY16 as estimated by HESCOM are
validated duly considering the actual sales up to November,
2015 and modified suitably.
b. Wherever the sales estimated by HESCOM for the control period
is within the range of the estimates based on the CAGR for the
period FY10 FY15 and for the period FY12 FY15, the estimates
of HESCOM are retained.

c. Wherever the sales estimated by HESCOM for the control period


is lower than the estimates based on the CAGRs for the period
FY10 FY15 and for the period FY12- FY15, the estimates based
on the lower of the CAGRs for the period FY10 FY15 and for the
period FY12 FY15 are considered.

d. Wherever sales estimated by HESCOM is higher than the


estimates based on the CAGRs for the period FY10 FY15 and

lxxii

for the period FY12 FY15, the estimates based on the higher of
the CAGRs for the period FY10 FY15 and for the period FY12
FY15 are considered.

e. For LT 4b and 4c, LT-7, HT-2, HT-4 and HT-5 categories, the
estimates of HESCOM are retained as there is no specific growth
pattern in these categories.

f.

For HT-2a based on the information furnished by HESCOM


regarding the energy sold under open access, the Commission
worked out the sales factoring the impact of the above.
However, the above approach has not been adopted as sales
estimation based on CAGR was more reasonable.

Based on the above approach, the sales (excluding BJ/KJ and IP sales)
estimated by the Commission for the control period is indicated in the
table below:
Figures in MU
FY17

FY18

FY19

Filed

Approved

Filed

Approved

Filed

Approved

4389.95

4352.70

4663.85

4628.84

4968.34

4933.19

ii) Sales to BJ/KJ :


The break-up of sales to BJ/KJ installations as filed by HESCOM for FY15, is as indicated below:

Particulars

Installations consuming
less than or equal to18
units

No. of
Installations

Consumption in
MU

Specific consumption per


installation per month
(kWh)

618729

91.92

12.38

lxxiii

Installations consuming
more than 18 units and
billed under LT2(a)

142905

72.12

42.06

Considering the above specific consumption and considering the


number of installations as proposed by HESCOM, the sales approved
for the control period for BJ/KJ is as indicated below:
MU
Particulars

FY17

FY18

FY19

Installations consuming
less than or equal to18
units

90.84

89.19

87.57

Installations consuming
more than 18 units and
billed under LT2(a)

77.02

82.79

88.47

iii) Sales to IP sets for FY17-19


In its Tariff Order dated 6th May, 2013, the Commission had approved a
specific consumption of IP sets as 8,244 units/installation/annum for the
entire control period of the FY14 to the FY16, by considering the
unauthorized IP sets, that existed in the distribution system. The
HESCOM has reported the total sales of 5,266.70 MU against 6,01,939
numbers of IP set installations serviced, which translates into a specific
consumption of 8,996 units / installation / annum for the FY15. It is
observed that the actual specific consumption achieved by the
HESCOM for the FY15 is more than the approved figure of 8,284 units /
installation / annum by 752 units / installation / annum. The approved
sales quantity for the FY15 was 4,696.46 MU. This indicates an increase
in sales to an extent of 570.24 MU to that of approved quantum for the
FY15.
The Commission notes that, the HESCOM has achieved a specific
consumption of 8,996 units/installation/annum which is on the basis of
consumption reported by it for the FY15. As discussed above, the
lxxiv

HESCOM has not considered the meter readings of agricultural feeders


segregated under NJY for arriving at the total IP set consumption for
the FY15. But, the HESCOM in its tariff filing has requested for
considering specific consumption of 8,735 units/installation/annum for
the FY17 to the FY19, instead of 8,996 units/installation/annum
achieved by it for the FY15, citing the presence of 54,669 numbers of
unauthorized IP installations in the distribution system, which are yet be
regularized/taken into account for want of creation of necessary
infrastructure.
It is further noted that, there is a significant decrease in specific
consumption of IP sets for the period from April 2015 onwards, as per
the HESCOMs own analysis of the 142 numbers of agricultural feeders
segregated under NJY. As per the analysis, it is revealed that the
specific

consumption

of

603

units/installation/month

has

been

achieved which translates into 7,236 units/installation/annum. The


Commission notes that this figure cannot also be taken for fixing the
specific consumption for the FY17 to the FY19, as the analysis carried
out is for a few months in the FY16 from April 2015 onwards. Hence, in
the absence of relevant data for a full year, it is proper to consider the
specific consumption of 8,244 units/installation/annum which was
approved for the FY14 to FY16 by the Commission, for the FY17 to the
FY19 also. In view of this, the Commission decides to approve the
specific consumption of 8,244 units / installation / annum for the FY17 to
the FY19.
It is noted that the HESCOM has projected the number of IP set
installations as 6,84,611, 7,22,444 and 7,62,368 for the FY17, FY18 and
FY19 respectively in the present Tariff filing. However, it is also necessary
to factor in the unauthorized IP set installations as the HESCOM, in its
calculations for ARR for the FY17 to FY19, has not considered the
presence of 54,669 numbers of unauthorized IP sets in the field which
are likely to be regularized /taken into account in the next three years.
Accordingly, the unauthorized installations have also been taken into

lxxv

consideration while arriving at number of installations for the FY17 to


the FY19. In view of this, the Commission has considered the number of
IP sets furnished by the HESCOM for the FY17 to the FY19 with
modification duly factoring the unauthorized IP set installations
reported by it. Hence, based on the estimated number of installations
for the FY17 to the FY19, the mid-year number of installations is
determined and the sales to IP set consumers are indicated as below:

No of installations
Mid-Year
no
of
installations
Specific consumption in
units/installation/annum
Sales in MU

FY17
6,84,611
6,66,686

FY18
7,22,444
7,03,528

FY19
7,62,368
7,42,406

As approved by the
Commission
FY17
FY18
FY19
7,14,611 7,34,778 7,74,703
6,81,686 7,24,695 7,54,741

9,476

9,475

9,472

8,244

8,244

8,244

6,317.43

6,665.83

7,032.01

5,619.82

5,974.38

6,222.08

As filed by HESCOM

Particulars
FY16
6,48,760

Accordingly, the Commission approves 5,619.82 MU, 5,974.38 MU and


6,222.08 MU as energy sales to IP sets as against the HESCOMs sales
projections of 6,317.43 MU, 6,665.83 MU and 7,032.01 MU respectively
for FY17, FY18 and FY19. Further, any variation in sales in the FY17 would
be trued up during the Annual Performance Review for the FY17 based
on the energy consumption in respect of agricultural feeders
segregated under NJY.
The above approved IP set consumption is with the assumption that
the Government of Karnataka would release full subsidy to cover the
approved quantum. However, if there is any variation in the subsidy
allocation by the GoK, the quantum of power to be supplied to IP sets
of 10 HP and below shall be proportionately regulated. The payment
of subsidy by the GoK on supply to IP sets is detailed in Chapter 6 of this
Order.
The Commission reiterates that the HESCOM shall report the total IP sets
consumption on the basis of data from energy meters in respect of
agriculture feeders segregated under NJY, to the Commission every
month, regularly duly deducting the actual distribution system losses in

lxxvi

11 KV lines, distribution transformers and LT lines, calculated as per the


methodology approved by the Commission.
Further, the HESCOM is directed to adhere to the duration of power
supply stipulated by the Government in respect of arranging power
supply to exclusive agricultural feeders. The Commission also directs
the HESCOM to take up enumeration of IP sets in its jurisdiction in order
to identify defunct/dried up wells and un-authorized IP sets in the field
and take necessary action to arrive at correct number of IP sets in its
account on the basis of enumeration report.

The compliance

regarding the same shall be submitted to the Commission within six


months from the date of issue of this order.
Based on the above discussions, the category wise approved number
of installations for the control period vis--vis the estimates made by
HESCOM is indicated below:
TABLE 5.3
Category wise Approved number of installations

Category

HESCOMs
estimate

FY-17
Approved**

No.
LT-2a*

No.

HESCOMs
estimate

FY-18
Approved**

No.

No.

FY-19
HESCOMs
Approved**
estimate
No.

No.

2577712

2569914

2688337

2677762

2802815

2789253

6088

6141

6563

6603

7075

7101

334935

335266

350807

350244

367443

365891

LT-4 (b)

1024

1024

1195

1195

1393

1393

LT-4 (c)

383

383

453

453

538

538

LT-5

108301

107495

114622

113960

121312

120815

LT-6

37277

36507

41126

39735

45373

43248

LT-6

20812

20800

21431

21432

22068

22083

LT-7

41662

41622

47262

47262

53614

53614

HT-1

278

268

308

297

341

329

HT-2 (a)

1433

1433

1558

1573

1694

1727

HT-2 (b)

486

487

495

494

504

502

HT2C

307

307

378

378

463

463

HT-3(a)& (b)

235

235

267

270

306

310

HT-4

32

32

33

33

34

34

HT-5

65

65

81

81

101

101

LT-2b
LT-3

lxxvii

Sub-Total
other than
BJ/KJ and
BJ/KJ
IP sets
IP

3131030

3122019

3274916

3261773

3425074

3407402

611431

611431

600325

600325

589421

589421

684611

714611

722444

734778

762368

774703

Sub Total
1296042
1326042
1322769
1335103
BJ/KJ and
IP sets
Other
Total than
4427072
4448061
4597685
4596876
BJ/KJ & IP
*Includes BJ/KJ consuming more than 18 units/installation/month

1351789

1364124

4776863

4771526

** Excludes HRECS

iv. The category wise approved sales for the control period vis--vis the
estimates made by HESCOM is indicated below:
TABLE 5.4
Category wise Approved Energy sales

Category

FY-17
HESCOMs
Approved**
estimate

FY-18
HESCOMs
Approved**
estimate

FY-19
HESCOMs
estimate Approved**

MU

MU

MU

MU

1487.78

1473.94

1578.30

1567.97

1674.36

1667.49

14.43

15.35

15.66

16.58

16.98

17.90

440.50

440.50

473.72

473.52

509.65

509.02

LT-4 (b)

17.47

17.47

18.16

18.16

18.87

18.87

LT-4 (c)

1.48

1.48

1.97

1.97

2.64

2.64

LT-5

312.98

316.72

317.17

324.81

321.43

333.10

LT-6

231.47

231.47

249.13

252.19

268.14

274.76

LT-6

134.86

137.51

139.75

145.29

144.81

153.51

LT-7

14.61

14.61

14.75

14.75

14.90

14.90

HT-1

239.32

229.75

258.61

246.33

279.46

264.11

HT-2 (a)

1013.41

1013.41

1042.09

1042.10

1071.58

1071.60

HT-2 (b)

135.84

132.59

145.50

141.46

155.86

150.91

LT-2a*
LT-2b
LT-3

HT2C

MU

MU

83.14

83.14

114.97

114.97

159.04

159.04

230.82

212.92

261.75

236.42

297.81

262.52

HT-4

14.01

14.01

14.15

14.15

14.29

14.29

HT-5

17.83

17.83

18.17

18.17

18.52

18.52

Sub-Total
other than BJ/KJ and IP
sets
BJ/KJ

4389.95

4352.70

4663.85

4628.84

4968.34

4933.19

93.41

90.84

93.45

89.19

93.49

87.57

IP Sets

6317.43

5619.82

6665.83

5974.38

7032.01

6222.08

Sub Total
BJ/KJ and IP sets
Other than BJ/KJ & IP
Total

6410.84

5710.66

6759.28

6063.57

7125.50

6309.65

10800.79

10063.35

11423.13

10692.41

12093.84

11242.84

HT-3(a)& (b)

*
**

Includes BJ/KJ consuming more than 18 units/installation/month


Excludes HRECS

lxxviii

5.2.3

Distribution Losses for FY17-19:


HESCOMs Submission:
As per the audited accounts for FY15, the HESCOM has reported
distribution losses of 16.74% as against an approved loss level of 19.00%.
The Commission in its Tariff Order dated 2nd March, 2015 had fixed the
target level of losses for FY16 at 17.50%.

HESCOM in its filing has

proposed to achieve the following loss levels during FY17-19:


TABLE 5.5
Projected Distribution Losses-FY17-19 HESCOMs Submission
Figures in % Losses

Particulars
Projected
Distribution losses

FY17

FY18

FY19

16.40

16.20

16.00

Commissions Analysis and Decisions:


The performance of HESCOM in achieving the loss targets set by the
Commission in the past six years is as follows:
TABLE 5.6
Approved & Actual Distribution Losses-FY10 to FY16
Figures in % Losses

Particulars

FY10

FY11

FY12

FY13

FY14

FY15

FY16

Approved Distribution
losses

22.50

20.00

19.35

18.00

19.00

19.00

17.50

Actual
losses

20.86

20.54

19.99

19.88

18.05

16.74

distribution

The Commission notes that the loss reduction achieved by HESCOM in


the control period FY11-13 was 0.98 percentage point.
preceding years of

In the

FY14 & FY15, the loss reduction has been 3.14


lxxix

percentage point (in two years of the control period FY14-16). Overall
in the past five years HESCOM has been able to achieve distribution
loss reduction of 4.12 percentage point.
The distribution loss projections indicated by the HESCOM shows
reduction from existing levels of 16.74% in FY15 to 16.40% in FY17 and
further reduction 0.20 percentage point for each of the year FY18 and
FY19. It is observed that, the Commission has been allowing capital
expenditure as incurred by the HESCOM and it has also allowed the
capex as proposed for the ensuing control period. The majority of the
capex like HVDS, E&I works, NJY, DTC metering, RAPDRP should enable
HESCOM not only to strengthen its infrastructure but also reduce the
distribution losses.
The loss reduction proposed by HESCOM is meager as compared to
present actual loss levels.

Hence, the Commission, during the

validation meeting stressed upon the need of further reduction in the


distribution loss levels proposed by HESCOM for the control period FY1719 duly considering the past and the present capex for which HESCOM
agreed with the suggestions of the Commission.
Considering the present loss levels and the investments made in the
past besides the proposed investments in the ensuing control period,
the Commission decides to fix the following distribution loss targets for
FY17-19:

TABLE 5.7
Approved Distribution Losses for FY17-19
Figures in % Losses

Particulars

FY17

FY18

FY19

Upper limit

16.50

16.00

15.50

Average

16.00

15.50

15.00

Lower limit

15.50

15.00

14.50

lxxx

5.2.4

Power Purchase for FY17-19


The ESCOMs in their filings, have submitted the D-1 statement wherein
the requirement of power purchase for the control period has been
furnished.

The

consolidated

statement

showing

the

energy

requirement, year-wise is shown hereunder:


TABLE 5.8
Requirement of electricity As filed by Licensees
Distribution Utilities

Energy
(MU)

Energy (MU)

Energy (MU)

FY17

FY18

FY19

BESCOM

32907.24

34674.06

36540.95

MESCOM

5589.96

5904.27

6236.49

CESC

7214.18

7725.09

8274.48

HESCOM

13738.00
8559.14

13942.08
8902.63

14849.40
9292.18

322.87

350.14

372.61

AQUEOS

12.98

17.78

22.46

MSEZ

80.49

89.33

113.06

TOTAL

68424.40

72168.78

76161.08

GESCOM
HRECS

HESCOM submission:
The HESCOM has submitted its power purchase requirement for the
control period FY17 to FY19 based on the projected sales as follows:
TABLE 5.9
Energy Requirement as filed by HESCOM
Particulars

As filed by HESCOM
FY 17

FY18

FY19

10800.78

11423.14

12093.84

16.40

16.20

16.00

Energy at IF point (MU)

12919.59

13631.43

14397.43

Transmission Losses (%)

3.47

3.37

3.27

13384.02

14106.83

14884.14

Sales (MU)
Distribution losses (%)

Energy Required to meet


the sales of HESCOM (MU)

lxxxi

Commissions analysis and decisions:


The validation of sales and allowable distribution losses has been
discussed in the previous section of this chapter. Based on the
approved sales and the allowable distribution losses, the requirement
of Power for the HESCOM, for the control period FY17 to FY19 is worked
out as detailed below:
The quantum of energy allowed by the Commission includes the
requirement of HRECS and AEQUS SEZ.
TABLE 5.10
Power Purchase requirement approved for the
Control period FY17 to FY19
Particulars

FY 17

FY18

FY19

Sales (MU)

10063.35

10692.41

11242.84

16.00

15.50

15.00

Energy at IF point (MU)

11980.18

12653.74

13226.87

Transmission Losses (%)

3.47

3.37

3.27

12410.83

13095.04

13674.01

296.98

305.38

314.95

14.39

19.68

25.95

12722.20

13420.11

14014.91

Distribution losses (%)

Energy Required to meet


the sales of HESCOM (MU)
Hukeri RECS
AEQUS
Total

5.2.5

Sources of Power:
HESCOMs submission;
In its filings, the HESCOM has furnished the sources of power to meet
the requirement of power of all ESCOMs for the control period FY17 to
FY19.
The HESCOM has submitted the sources of Power and the availability
of each source on the basis of:

lxxxii

(i) the details furnished by the KPCL in respect of KPCL Generating


Stations.
(ii) ex-Bus generation details furnished by the Central Generating
Stations to CEA for preparation of LGBR of FY6 in respect of CGS
Generating Stations.
(iii) the contracted capacity in the case of Major IPPs (UPCL), Minor
IPPs (NCE sources) and others such as Jurala Power & TB Dam
Power.
The Capacity share of the existing sources and the envisaged
additional sources vis--vis the energy requirement for the entire State,
its fixed charges and variable charges are discussed in the tariff
application of HESCOM. The same are shown in the following Tables.
The requirement indicated in the tables includes the requirement of
HRECS, MESCOM - SEZ and AEQUS - SEZ.
TABLE 5.11
Consolidated power purchases requirement filed for FY 17

SOURCES

Energy in
MU

Fixed Cost
in
Rs Cr

Variable
Cost in
Rs Cr

Gross Cost
in Rs Cr

Per unit
Cost

KPCL Hydel Energy:

11604.37

28.77

739.16

767.93

0.66

KPCL Thermal Energy:

21690.83

3110.50

6493.51

9604.01

4.43

CGS Energy:

18721.72

1983.03

4574.50

6557.54

3.50

UPCL:

7523.00

1231.51

1653.26

2884.77

3.83

Renewable Energy:

6821.92

0.00

2661.08

2661.08

3.90

147.75

63.75

0.00

63.75

4.31

1500.52

0.00

756.53

756.53

5.04

0.00

916.23

0.00

916.23

0.49

0.00

2745.17

0.00

2745.17

0.40

-2.04

0.00

-0.64

-0.64

416.34

0.00

176.80

176.80

Other State Hydel


Short Term
PGCIL & POSOCO
Charges
KPTCL Transmission,
SLDC and PGCIL
POSOCO Charges
DEDUCT/ADD THE
EXCESS/DEFICIT
AVAILABILITY
Requirement of Utilities
other than ESCOMs

lxxxiii

4.25

TOTAL

68424.40

10078.96

17054.21

27133.17

3.97

TABLE 5.12
Consolidated power purchases requirement filed by ESCOMs for FY 18

Energy in
MU

SOURCES

Fixed Cost
in Rs Cr

Variable
Cost in Rs
Cr

Gross Cost
in Rs Cr

Per
unit
Cost

KPCL Hydel Energy

12042.05

0.00

754.14

754.14

0.63

KPCL Thermal Energy

24277.85

5070.00

7060.74

12130.75

5.00

CGS Energy

21274.61

1983.04

5920.22

7903.27

3.71

UPCL

5628.59

1231.51

1261.69

2493.20

4.43

Renewable Energy

8349.07

0.00

3362.68

3362.68

4.03

Other State Hydel

147.75

53.52

0.00

53.52

3.62

0.00

1186.65

0.00

1186.65

0.56

0.00

2918.23

0.00

2918.23

0.40

-8.39

0.00

-3.24

-3.24

3.86

457.25

0.00

204.75

204.75

4.48

72168.78

12442.96

18560.98

31003.94

4.30

PGCIL & POSOCO Charges


KPTCL Transmission and
SLDC & PGCIL POSOCO
Charges
DEDUCT/ADD THE
EXCESS/DEFICIT
AVAILABILITY
HRECS, AEQUS-SEZ AND MSEZ FILINGS
TOTAL

TABLE 5.13
Consolidated power purchases requirement filed by ESCOMs for FY 19

SOURCES

Energy in
MU

Fixed Cost
in Rs Cr

Variable
Cost in Rs
Cr

Gross Cost
in Rs Cr

Per unit
Cost

KPCL Hydel Energy

12042.05

0.00

772.48

772.48

0.64

KPCL Thermal Energy

24277.89

4932.96

7250.85

12183.80

5.02

CGS Energy

23344.44

1983.05

6744.61

8727.67

3.74

5628.59

1231.51

1286.92

2518.43

4.47

10219.82

0.00

4362.05

4362.05

4.27

147.75

53.52

0.00

53.52

3.62

0.00

1365.22

0.00

1365.22

0.58

0.00

2961.86

0.00

2961.86

0.39

UPCL
Renewable Energy
Other State Hydel
PGCIL & POSOCO
Charges
KPTCL Transmission &
SLDC and PGCIL
POSOCO Charges

lxxxiv

DEDUCT/ADD THE
EXCESS/DEFICIT
AVAILABILITY
HRECS, AEQUS-SEZ
AND M-SEZ FILINGS
TOTAL

-8.59

0.00

-37.24

-37.24

43.35

509.13

0.00

245.66

245.66

4.83

76161.08

12528.13

20625.33

33153.46

4.35

Commissions analysis and decisions


The energy requirement of the ESCOMs, including HESCOM, is being
met by Karnataka Power Corporation Limited (KPCL) Generating
stations, Central Generating Stations (CGS), Major Independent Power
producers (IPPs) and Minor Independent Power producers (NCE
sources)

through

long-term

power

purchase

agreement.

The

contingent requirement to meet the deficit is being met through


purchases from Short/Medium term sources by calling for bids and also
purchases from the Power Exchange. Hence, to arrive at the available
quantum of energy and power for the control period FY17 to FY19, the
Commission has considered the availability as furnished by KPCL and
by SRPC/CERC/CEA for CGS, in respect of their respective Generating
Stations. The availability of CGS stations is based on the share of
Karnataka, as notified from time to time.
In the case of Minor IPPs (NCE/RE sources), the actual generation
capacity contracted by the ESCOMs, as indicated in D-1 format has
been considered. The availability from the other sources such as Jurala
Hydel Station and TB dam Power Stations of Telangana State are taken
at 50% and 20 % of their installed capacity respectively as the share of
Karnataka, as per the contracts executed with these generators.
Further, as the Short Term Power/Medium Term Power procurement to
an extent of around 1108.80 MU has already been contracted by
ESCOMs till May 2016, the same has been considered towards
availability for FY17.

lxxxv

The availability as furnished by the KPCL in respect of Yeramarus Unit-1


& Unit-2 and Yelahanka Combined Cycle Power Plant (YCCPP), having
a capacity of 1600 MW and

350 MW respectively, has not been

considered, as the said generating stations are yet to be synchronized


with the grid and the CoD is yet to be declared. Similarly, Kudgi Unit1,
Unit2 and Unit3, having a total capacity of 2400 MW, are not
considered since they are yet to be synchronized with the grid and
CoD is yet to be declared.
The availability of BTPS unit 3 has been considered since it has been
synchronized and supplying power to the grid. As its commissioning
date and Commercial operation date of is yet to be declared by the
KPCL, the quantum of energy is restricted to the requirement of
ESCOMs and allowed fuel expenses in FY17. For FY18 and FY19, the
availability of energy from this unit has been considered, as furnished
by the KPCL, duly limiting the quantum of energy as per the
requirement of ESCOMs, to meet the sales targets.
Based on the above availability criteria, the energy allowed for the
State to achieve the sales target of the respective years, is given in the
following Table.
TABLE 5.14
ABSTRACT OF POWER PURCHASE APPROVED FOR ESCOMS FOR THE CONTROL PERIOD
FY17 TO FY19
FINANCIAL YEAR 2016-17

FINANCIAL YEAR 2017-18

FINANCIAL YEAR 2018-19

Cost in Rs
Crs.

Per unit
Cost

Energy in
MU

Cost in Rs
Crs.

Per unit
Cost

Energy in
MU

Cost in Rs
Crs.

Per
unit
Cost
in Rs.

10704.90

1001.38

0.94

12045.33

1099.16

0.91

12045.33

1139.37

0.95

17646.77

7252.08

4.11

19323.50

8392.29

4.34

20992.89

9198.23

4.38

CGS Energy

21525.17

6980.84

3.24

21525.17

7082.24

3.29

21525.17

7184.17

3.34

UPCL
Renewable
Energy:
Other State
Hydel

7462.68

3093.67

4.15

7462.68

3129.03

4.19

7462.68

3165.10

4.24

6846.71

2790.38

4.08

8394.81

3413.83

4.07

10265.57

4452.20

4.34

144.08

67.73

4.70

144.08

71.64

4.97

144.08

75.78

5.26

Short Term

1108.80

558.84

5.04

0.00

0.00

0.00

0.00

SOURCES

KPCL Hydel
Energy
KPCL Thermal
Energy

Energy
in MU

lxxxvi

PGCIL &
POSOCO
Charges
KPTCL
Transmission,
SLDC and
PGCIL
POSOCO
Charges
TOTAL

949.21

0.44

958.70

0.45

968.29

0.45

3112.76

0.48

3197.08

0.47

3500.45

0.50

25806.89

3.94

27343.97

3.97

29683.58

4.10

65439.11

5.2.6

68895.57

72435.72

HESCOMs Power Purchase cost & Transmission charges:


HESCOMs Submission:
HESCOM has submitted the Power Purchase cost including the
transmission charges and LDC charges, in D-1 Format wherein energy
to an extent of 13738.002 MU, 14505.479 MU and 15307.85 MU at a cost
of Rs.5487.786, Rs.5571.413 and Rs.5911.90, for the control period years
of FY17, FY18 and FY19 respectively.
As regards power purchase cost, the HESCOM has submitted that, the
same is considered as per the agreed contracts/regulations and
based on the tariff furnished by KPCL for KPCL Stations and the tariff
determined by the CERC in respect of Central Generating Stations,
DVC Stations, and UPCL stations. Further, it is submitted that, the
average cost without escalation, paid towards the supply of NCE
during FY15 is considered in arriving the cost of NCE for the control
period FY 17 to FY19.
Commissions analysis and decisions
After a detailed analysis of the tariff rates claimed by the HESCOM, the
Commission has arrived at the power purchase cost to be allowed in
the ARR for the control period.
The basis for computation of power purchase cost for the control
period FY17 to FY19 is as indicated below:

lxxxvii

The fixed charges and variable charges of RTPS Unit 1 to 7, BTPS unit 1
and the Hydel Generating Stations exclusive of Muinirabad, MGHE,
Shiva & Shimsha, are reckoned based on the respective PPAs
approved by the Commission.
The fixed charges and variable charges of Munirabad, MGHE, Shiva &
Shimsha hydel Stations, BTPS Unit 2 and RTPS unit 8, have been
computed based on the tariffs determined by the Commission and the
Commissions norms approved in the PPAs.
The fixed charges and variable charges for the Central Generating
Stations, UPCL Station and the Stations of DVC are reckoned based on
the tariffs determined by the CERC and the CERC norms.
The variable charges of all the thermal stations including CGS stations
are reckoned based on the recent landed cost of fuel and other
variable components.

The variations, if any, in these allowed costs, will be considered during


the FAC exercise / Annual Performance Review of FY17.
Based on the allowed requirement of energy and the power allocation
given by the Government of Karnataka, the Power Purchase quantum
and its costs are approved in the ARR of HESCOM for the control
period FY17 to FY19, as shown in Annexure- 1 & 2.
The consolidated power purchase cost allowed by the Commission visa-vis the power purchase cost as filed by the HESCOM for the control
period FY17 to FY19 is shown the following table:
TABLE 5.15
Approved Power Purchase Cost of HESCOM for FY17
Source of Power

Power Purchase Cost as filed by


HESCOM

lxxxviii

Power Purchase Cost Approved


by the Commission

Energy in
MU

Cost in Rs
Cr

Per Unit
cost in
Rs

Energy in
MU

Cost in Rs
Cr

Per Unit
cost in Rs

KPCL Hydel Energy

2295.36

153.63

0.669

2389.11

209.603

0.877

KPCL Thermal Energy

4590.05

2030.90

4.425

3127.44

1291.364

4.129

CGS Energy

3744.34

1311.51

3.503

4188.28

1358.304

3.243

UPCL

1504.60

576.95

3.835

1452.06

601.954

4.146

Renewable Energy

1321.53

507.00

3.836

1321.53

550.130

4.163

31.79

12.20

3.838

28.04

13.179

4.701

250.33

127.17

5.080

215.746

108.737

5.040

183.24

0.489

184.693

0.441

585.18

0.426

615.500

0.484

5487.786

3.994603

4933.463

3.877838

Others
Short Term
PGCIL & POSOCO Charges
KPTCL Transmission, SLDC &
PGCIL POSOCO Charges

TOTAL

13738.002

lxxxix

12722.200

TABLE 5.16
Approved Power Purchase Cost of HESCOM for FY18
Power Purchase Cost as filed by
HESCOM

Source of Power

Energy in
MU

Cost in
Rs Cr

Power Purchase Cost Approved by


the Commission

Per Unit
cost in Rs

Energy in
MU

Cost in
Rs Cr

Per Unit
cost in Rs

KPCL Hydel Energy

4383.72

229.69

0.524

2339.374

213.472

0.913

KPCL Thermal Energy

3243.03

1753.94

5.408

3752.898

1629.901

4.343

CGS Energy

3829.58

1426.45

3.725

4180.493

1375.472

3.290

788.00

349.05

4.430

1449.358

607.702

4.193

1666.92

716.58

4.299

1670.000

685.879

4.107

594.22

227.43

3.827

27.983

13.913

4.972

212.69

0.555

186.193

0.445

655.59

0.452

594.520

0.443

5571.413

3.841

5307.052

3.955

UPCL
Renewable Energy
Others
PGCIL & POSOCO Charges
KPTCL Transmission and
SLDC & PGCIL POSOCO
Charges

TOTAL

14505.479

13420.106

TABLE 5.17
Approved Power Purchase Cost of HESCOM for FY19
Power Purchase Cost as filed by
HESCOM

Source of Power

Energy
in MU

Cost in
Rs Cr

Per Unit
cost in Rs

Power Purchase Cost Approved by the


Commission
Energy in
MU

Cost in
Rs Cr

Per Unit
cost in Rs

KPCL Hydel Energy

4383.72

235.52

0.537

2288.720

216.490

0.946

KPCL Thermal Energy

3243.07

1752.36

5.403

3988.836

1747.746

4.382

CGS Energy

4204.84

1576.01

3.748

4089.973

1365.057

3.338

788.00

352.58

4.474

1417.975

601.396

4.241

2198.95
489.27

901.05
190.98

4.098
3.903

2202.030
27.377

1085.854
14.398

4.931
5.259

243.54

0.579

183.983

0.450

659.85

0.431

655.290

0.468

5911.90

3.862

5870.214

4.188549

UPCL
Renewable Energy
Others
PGCIL & POSOCO
Charges
KPTCL Transmission
and SLDC & PGCIL
POSOCO Charges

TOTAL

15307.85

xc

14014.912

The HESCOM shall regulate the quantum and cost of power for the
control period, as approved by the Commission. However, since the
power purchase costs are uncontrollable as per the MYT Regulations,
any excess quantum or cost will be trued up in Annual Performance
Review of the respective years.
In respect of energy and costs allowed in respect of new generating
stations/ sources, the same is subject to approval of the Power
Purchase Agreements, by the Commission.
The Commission has fixed a ceiling rate of Rs.4.50 per unit for short-term
procurement and the same is retained for the year FY17.
The Commission notes that, the procurement of power under short term
has come down significantly over the years. With a view to reduce the
cost of power procurement by avoiding purchase of high cost energy,
the Commission reiterates its earlier directive that, any short-term/
contingent power procurement over and above the approved rate
Rs.4.50 per Kwh, shall be made by the ESCOMs only with the prior
approval of the Commission.
The Commission also reiterates its that any short-term or medium-term
power

purchase to be made over and above the approved

quantities, shall be procured only through competitive bidding, duly


complying with the GoI guidelines, issued in the matter from time to
time.
5.2.7

Renewable Purchase Obligation (RPO) target for FY17:


a. Non-Solar RPO:
HESCOM has submitted that it will be able to achieve non-solar RPO of
8.18% as against target of 7.50% specified by the Commission vide its
(Procurement of Energy from Renewable Sources)(Third Amendment)
Regulations, 2015 for FY17.

xci

The Commission has approved power purchase quantum of 12722.20


MU for FY17 (including HRECS and AEQUS SEZ). The Non-solar RPO
target would be 954.17 MU. The Commission has approved purchase
of 1030.38 MU from RE sources other than Solar. Thus, HESCOM would
be able to meet its non-solar RPO obligation.
In case, there is any need to buy RECs to meet the RPO, the cost
thereon would be factored in the APR of FY17.
b. Solar RPO
HESCOM has submitted that it will be able to achieve solar RPO of
2.12% as against target of 0.75% specified by the Commission vide
its(Procurement

of

Amendment)

Energy

from

Renewable

Sources)(Third

Regulations, 2015for FY17 and has submitted that it

will be able to procure 254.50 MU of solar energy under PPA route.


The Commission has approved power purchase quantum 12722.20 MU
for FY17 (including HRECS and AEQUS SEZ). The Solar RPO target would
be 95.42 MU. The Commission has approved purchase of 291.15 MU of
Solar energy. Thus, HESCOM would be able to meet its Solar RPO
obligation also.
In case, there is any need to buy RECs to meet the RPO, the cost
thereon would be factored in the APR of FY17.
5.2.8

O & M Expenses for FY17-19:


HESCOMs Proposal:
The HESCOM in its application has requested the Commission to
consider the projected O&M expenses computed on the basis of
weighted inflation index of 6.69% using the methodology followed by
the CERC. Further, HESCOM has considered three year CAGR on the

xcii

basis of actual data of FY12 to FY15 for computing the consumer


growth index of 3.52%.
Based on the above indices and the projected O & M expenses of
Rs.628.65 Crores for the base year of FY16, the HESCOM has sought the
O & M expenses for FY17-19 as detailed below:
TABLE 5.18
O&M Expenses for FY17-19-HESCOMs Proposal
Amount in Rs.Crores

Particulars
No of installations

FY17

FY18

FY19

4427071

4597681

4776864

6.69%

6.69%

6.69%

3.52%

3.52%

3.52%

Weighted Inflation Index


CGI based on 3 year
CAGR
O & M expenses

680.26

736.11

796.54

Based on the above projected total normative O & M Expenses,


HESCOM has segregated the O & M Expenses as follows:
Amount in Rs.Crores

Particulars
R&M cost

FY17

FY18

FY19

57.21

61.91

66.99

Employee cost

533.32

577.10

624.48

A&G expenses

89.73

97.10

105.07

Total O&M cost

680.26

736.11

796.54

Further, based on the proposed recruitment of additional employees


during the control period, HESCOM has projected the additional
Employee cost also. The total O&M expenses projected by HESCOM
are as follows:
Amount in Rs.Crores

Particulars
Normative O & M Cost

xciii

FY17

FY18

FY19

680.26

736.11

796.54

Additional Employee Cost


Total O & M Cost

53.06

63.99

75.92

733.32

800.10

872.46

Commissions analysis &decision:


As per the norms specified under the MYT Regulations, the O & M
expenses are controllable expenses and the distribution licensee is
required to operate these expenses within the approved values.
The Commission in its preliminary observations made on the increase in
employee cost due to additional recruitment, had sought details of
cadre wise additional employee cost projected for FY17.
HESCOM in its replies has stated that, additional officers / employees
are proposed to be recruited during FY17 and the additional cost
would be Rs.53.06 Crores for FY17, Rs.10.93 Crores for FY18 and Rs.11.92
Crores for FY19.
HESCOM has not informed the status of the recruitment and the
proposed induction of such additional employees. In the absence of
supporting data for claiming such additional employee cost due to
recruitment, the Commission is of the view that such expenses could
be factored only after being incurred by the distribution licensee.
However, the Commission is of the view that any increase in the
employee strength should reflect in improved productivity and
efficiency for the betterment of services rendered by the ESCOMs to its
consumers in the State. Accordingly, the Commission will look into the
issue at the time of approving the APR for relevant years instead of
loading these costs in the present ARR exercise in the absence of
finalization of such additional employees recruitment and its cost.

xciv

The Commission has computed the O & M expenses for FY17-19 duly
considering the actual O & M expenses of FY15 as per the audited
accounts (being the latest data available as per the audited
accounts) to arrive at the O & M expenses for base year i.e. FY16. The
actual O& M expenses for FY15 were Rs.580.96 Crores. 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
CERC with CPI and WPI in a ratio of 80: 20, the allowable annual
escalation inflation rate for FY17 is computed as follows:
TABLE 5.19
Computation of Inflation Index for FY17
Year

WPI

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

92.6
98.72
103.37
109.59
114.94
124.92
127.86
140.08
153.35
164.93
175.35
182

CPI
107
111.1
115.8
122.9
130.8
141.7
157.1
175.9
191.5
209.3
232.2
246.9

Composite
Series
104.12
108.624
113.314
120.238
127.628
138.344
151.252
168.736
183.87
200.426
220.83
233.92

Yt/Y1=Rt

Ln Rt

1.04
1.09
1.15
1.23
1.33
1.45
1.62
1.77
1.92
2.12
2.25

0.04
0.08
0.14
0.20
0.28
0.37
0.48
0.57
0.65
0.75
0.81

Year
(t-1)

Product [(t1)* (LnRt)]

1
2
3
4
5
6
7
8
9
10
11

A= Sum of the product column


B= 6 Times of A
C= (n-1)*n*(2n-1) where n= No of years of data=12
D=B/C
g(Exponential factor)= Exponential (D)-1
e=Annual Escalation Rate (%)=g*100

0.04
0.17
0.43
0.81
1.42
2.24
3.38
4.55
5.89
7.52
8.90
35.36
212.19
3036.00
0.07
0.0724
7.24

For the purpose of determining the normative O & M expenses for


FY17-19, the Commission has considered the following:
e) The actual O & M expenses incurred as per the audited accounts
for FY15 inclusive of contribution to the Pension and Gratuity Trust to
arrive at the base year O&M expenses for FY16.

xcv

f) The three years compounded annual growth rate (CAGR) of the


number

of

installations

considering

the

actual

number

of

installations as per the audited accounts up to FY15 and as


projected by the Commission for FY16-FY19.
g) The weighted inflation index (WII) at 7.24% as computed above.
h) Efficiency factor at 2% as considered in the earlier two control
periods.
The above said parameters are computed duly considering the same
methodology as followed in the earlier tariff orders of the Commission.
Accordingly, the normative O & M expenses for FY17-19 are as follows:
TABLE 5.20
Approved O & M expenses for FY17-19
Amount in Rs.Crores

Particulars

FY16

FY17

FY18

FY19

4448061

4596876

4771526

CGI based on 3 Year CAGR

4.14%

3.97%

3.86%

Inflation index

7.24%

7.24%

7.24%

693.09

756.93

825.79

No. Of Installations

Base Year O&M Cost (as per actuals of FY15)

633.66

Approved O&M Expenses

Since, the base year data includes the O & M expense 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 the O&M expenses of
Rs.693.09 Crores for FY17, Rs.756.93 Crores for FY18 and Rs.825.79 Crores
for FY19.
5.2.9

Depreciation:
HESCOMs Proposal:
The HESCOM, in its application has claimed the depreciation for the
control period based on the following assumptions:

xcvi

1) Depreciation rates as specified by CERC on the Assets for each


year of the control period.
2) Individual group wise assets are calculated on pro-rata basis as per
the actuals in FY15.
3) 3-year CAGR for projecting the assets created out of consumer
contribution/grants

are

is

considered

and

Depreciation

is

withdrawn on the assets created on account of contribution


/grants as per Accounting Standard-12 .
4) 70% of the proposed capex is considered as addition of assets for
each year of the control period
Accordingly, HESCOM has claimed the depreciation for FY17-19 as
detailed below:
TABLE 5.21
Depreciation-FY17-19- HESCOMs Proposal
Amount in Rs.Crores

Particulars

FY17

FY18

FY19

Buildings

2.67

3.10

3.54

Hydraulics Works

0.10

0.12

0.14

Other Civil Works

0.09

0.11

0.12

38.51

44.63

51.04

Plant & Machinery

148.2
Lines Cable Networks

196.4

171.83

Vehicles

0.58

0.68

0.77

Furniture & Fixtures

0.25

0.29

0.33

Other Equipment

0.22

0.26

0.29

190.6

221.0

252.7

12.20

14.84

13.81

66.37

77.69

91.57

Total
Less withdrawals
Less assets (DCW &
Grants)

xcvii

112.1

128.4

147.3

Net Depreciation

Commissions analysis and decision:


In accordance with the provisions of the MYT Regulations and
amendments

thereon,

the

Commission

has

determined

the

depreciation for FY17-19 considering the following:


a) The actual rate of depreciation of category wise assets is
determined considering the depreciation and gross block of
opening and closing balance of fixed assets as per the audited
accounts for FY15.
b) This actual rate of depreciation is considered to on the gross block
of fixed assets projected by the Commission on the amount of
capex recognized for the purpose of factoring depreciation for
FY17-19.
c) The depreciation on account of assets created out of consumers
contribution / grants are considered (deducted) based on the
opening and closing balance of such assets as proposed by the
HESCOM at the weighted average rate of depreciation as per
actuals in FY15.
Accordingly, the computation of depreciation for FY17-19, is shown as
follows:
TABLE 5.22
Approved Depreciation for FY17-19
Amount in Rs. Crores

Particulars

FY17

FY18

FY19

Buildings

2.89

3.07

3.27

Civil

0.17

0.18

0.19

Other Civil

0.12

0.12

0.13

38.93

41.58

44.49

Plant & M/c

xcviii

Line, Cable Network

71.41

76.28

81.63

Vehicles

0.11

0.12

0.13

Furniture

0.14

0.15

0.16

Office Equipments

0.09

0.09

0.10

113.85

121.60

130.11

Approved Depreciation

Thus, the Commission decides to approve an amount of Rs.113.85


Crores, Rs.121.60 Crores and Rs.130.11 Crores towards depreciation for
FY17, FY18 and FY19 respectively.

5.2.10 Interest on Capital Loans:


HESCOMs proposal:
HESCOM has requested to approve interest on capital loans for FY1719 as follows:

xcix

TABLE 5.23
Interest on Capital Loans HESCOMs Proposal
Amount in Rs. Crores

Particulars

FY17

FY18

FY19

Opening balance

2446.21

2803.83

3219.13

Add new loans

901.05

838.55

827.55

Less repayment

543.43

423.25

381.52

Closing balance loans

2803.83

3219.13

3665.16

Average loans

2625.02

3011.48

3442.15

12%

12%

12%

315.00

361.38

413.06

Rate of interest in %
Interest on capital Loans

Commissions analysis and decision:


The Commission notes the capex and capital loans proposed by
HESCOM for FY17-19. As discussed in the preceding paragraphs of this
Chapter, considering the capex recognized by the Commission for
approval of ARR for the control period, the requirement of capital loan
is Rs.420.00 Crores, Rs.385.00 Crores and Rs.385.00 Crores for FY17, FY18
and FY19 respectively.

Further, the Commission has considered the

repayment of long term loan as proposed by HESCOM at Rs.144.53


Crores, Rs.170.32 Crores and Rs.191.79 Crores for FY17, FY18 and FY19
respectively.
As per the audited accounts of FY15, the HESCOM had incurred
weighted average rate of interest of 11.47% on capital loans. This rate
of interest is considered for the existing loan balances for which interest
has to be factored during FY17. For further period, the weighted
average rate of interest of the preceding year is considered for existing
loans. As discussed in the preceding paragraphs, the Commission has
considered capex amount of Rs.600.00 Crores for FY17, Rs.550.00 Crores
for FY18 and Rs.550.00 Crores for FY19 for the purpose of factoring
interest on loan. The Commission has considered new loans which is in
compliance with the debt equity ratio of 70 : 30.

The present interest rates by commercial banks and financial


institutions are charged mainly on the basis of base rate of interest
notified by the RBI from time to time plus spread of certain basis points
depending upon the tenure of the loan.

Hence, the Commission

would consider the same approach in factoring the interest on new


capital loans. As per the tariff application of HESCOM, the new loans
are proposed at interest rate of 12%.

The Commission notes that the

interest rates availed by HESCOM are on a higher side as compared to


other ESCOMs and the present base rate. HESCOM needs to initiate
financial prudence measures so as to avail loans at comparatively
lesser interest rates and to reduce the interest burden on the
consumers. However, at present considering the base rate of interest
with spread of 200 basis points and considering the interest rates at
which new loans are availed in FY16, the Commission decides to allow
capital loans at a rate of 12% for FY17-19. It shall be noted that, the
rate of interest now considered by the Commission on the new capital
loans for the control period is subject to review during APR and revision
of ARR of the relevant years of the control period.
Accordingly, the approved interests on capital loans for FY17-19 are as
follows:
TABLE 5.24
Approved Interest on Capital Loans for FY17-19
Amount in Rs. Crores

Particulars
Opening balance of capital Loans
Add new capital Loans

FY17
1235.27

FY18
1510.74

FY19
1725.42

Less Repayments
Total capital loan at the end of the
year
Average capital Loan

420.00
144.53

385.00
170.32

385.00
191.79

1510.74

1725.42

1918.63

1373.01

1618.08

1822.02

Approved Interest on capital Loan

158.64

187.81

212.24

Thus, the Commission decides to approve interest on capital loans of


Rs.158.64, Rs.187.81 Crores and Rs.212.24 Crores for FY17, FY18 and
FY19 respectively.

ci

5.2.11 Interest on Working Capital:


HESCOMs proposal:
HESCOM has claimed interest on working capital based on the norms
prescribed in the MYT Regulations as follows:
TABLE 5.25
Interest on Working Capital HESCOMs Submission
Amount in Rs. Crores

Particulars

FY17

FY18

FY19

56.69

61.34

66.38

3647.52

3994.43

4317.28

Stores, materials and supplies - 1% of


opening balance of GFA

36.48

39.94

43.17

One-Sixth of the Revenue

992.98

1053.36

1119.06

Total Working Capital

1086.15

1154.64

1228.61

Rate of Interest

11.75%

11.75%

11.75%

127.62

135.67

144.36

One -twelfth of the amount of O & M


Expenses
Opening GFA

Interest on Working Capital

Commissions analysis and decision:


As per the norms specified under the MYT Regulations, the Commission
has computed the interest on working capital which consists of one
months O & M expenses, 1% of opening GFA and two months
revenue.
The present interest rates by commercial banks and financial
institutions are charged mainly on the basis of base rate of interest
declared by RBI from time to time.

Hence, the Commission would

consider base rate plus certain basis points depending upon the
tenure of the loan. As per the HESCOMs application, it is stated that
working capital loans for FY15 and FY16 has been availed at the rate of
interest ranging from 12.50% to 13%. The Commission notes that, the
cii

present working capital loans availed by HESCOM is comparatively at


a higher rate of interest. HESCOM needs to initiate financial prudence
measures in availing short term loans so that the interest burdens on its
consumers are reduced.

However, considering the base rate of

interest with spread of 250 basis points and noting the present interest
rate on working capital loan availed by HESCOM, the Commission
decides to allow short term loans at a normative interest of 12% for
FY17-19.
Accordingly, the approved interest on working capital loans for FY1719 are as follows:
TABLE 5.26
Approved Interest on Working Capital loans for FY17-19
Amount in Rs.

Crores

Particulars

FY 17

One-twelfth of the amount of O&M Expenses.

FY 18

FY 19

57.76

63.08

68.82

3641.95

3879.40

4154.80

36.42

38.79

41.55

One-sixth of Revenue

922.68

980.36

1030.83

Total Working Capital

1016.86

1082.23

1141.19

Rate of Interest (% p.a.)

12.00%

12.00%

12.00%

Interest on Working Capital loans

122.02

129.87

136.94

Opening Gross Fixed Assets


Stores, materials and supplies at 1% of Opening balance
of GFA

Thus, the Commission decides to approves interest on working capital


loans of Rs.122.02 Crores, Rs.129.87 Crores and Rs.136.94 Crores for
FY17, FY18 and FY19 respectively.
5.2.12 Interest on Consumer Security Deposit:
HESCOMs proposal:
HESCOM has claimed interest on consumer security deposit on the
closing balance of deposits projected for each year of the control
period as follows:
TABLE 5.27

ciii

Interest on Consumer Security Deposits for FY17-19- HESCOMs Proposal


Amount in Rs. Crores

Particulars
Projected Consumer security deposits
Rate of interest at bank rate
Proposed interest on consumer security deposits

FY17
678.65
8.75%
59.38

FY18
767.01
8.75%
67.11

FY19
866.88
8.75%
75.85

Commissions analysis and decision:


In accordance with the KERC (Interest on Security Deposit) Regulations
2005, the interest rate to be allowed is the bank rate prevailing on the
1st of April of the financial year for which the interest is due. As per
Reserve Bank of India notification dated 29th September, 2015, the
bank rate is 7.75%. This being the latest notified bank rate, the
Commission has considered the same for computation of interest on
consumer deposits for FY17-19.
The Commission has considered the deposits as per audited accounts
of FY15 and half yearly accounts of FY16 for onward projection for
FY17-19. The interests on consumer security deposits for FY17-19 are as
follows:
TABLE 5.28
Approved Interest on Consumer Security Deposits for FY17-19
Amount in Rs. Crores

Particulars
Opening balance of consumer security deposits
Rate of Interest at bank rate to be allowed as per
Regulations
Approved Interest on Consumer Security Deposits

FY17
641.55

FY18
709.55

FY19
782.55

7.75%
52.36

7.75%
57.82

7.75%
63.67

Thus, the Commission decides to approve interest on consumer


security deposits of Rs.52.36, Rs.57.82 Crores and Rs.63.67 Crores for
FY17, FY18 and FY19 respectively.
5.2.13 Interest on belated payment of power purchase cost:

civ

HESCOM in its application has requested to allow an amount of


Rs.140.00 Crores towards interest on belated payment of power
purchase cost for each year of the control period. Since, interest on
working capital is being allowed separately as per the norms for
managing the day to day expenditure of the company without any
delays, the Commission decides not to allow interest on belayed
payment of power purchase cost separately.
The abstract of approved interest and finance charges for FY17-19 are
as follows:
TABLE 5.29
Approved Interest and finance charges for FY17-19
Amount in Rs. Crores

Particulars

FY17

FY18

FY19

Interest on Loan Capital

158.64

187.81

212.24

Interest on Working Capital


Interest on belated payment of power
purchase cost

122.02

129.87

136.94

0.00

0.00

0.00

Interest on Consumers Deposit

52.36

57.82

63.67

333.02

375.50

412.85

Approved Interest & Finance Charges

5.2.14 Other Debits:


HESCOM in its application has claimed an amount of Rs.18.64 Crores,
Rs.19.65 Crores and Rs.20.66 Crores towards other debits for FY17, FY18
& FY19 respectively. The Commission has not been considering the
projections for other debits for the reason that, the same cannot be
estimated beforehand. The Commission therefore has not allowed the
same in the ARR for the control period. However, such expenses would
be considered as per the audited accounts for the relevant years at
the time of APR.
5.2.15 Return on Equity:
HESCOMs proposal:
HESCOM in its application has not claimed the Return on Equity for
having estimated the negative networth for the control period FY17-19.
cv

Commissions analysis and decision:


The Commission has considered the actual amount of share capital,
share deposits and the accumulated profits/losses under reserves &
surplus as per the audited accounts for FY15 and the additional share
deposit reported in the half yearly accounts for FY16 for arriving at the
allowable equity base for the control period FY17-19.
The Commission, in accordance with the provisions of the MYT
Regulations 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, an amount of Rs.34.00 Crores


of recapitalized consumer security deposit as networth is considered as
per the orders of the Honble Appellate Tribunal for Electricity in
Appeal No.46/2014.
Further, in compliance with the Orders of the Honble 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 (networth) for FY17-19 are as follows:
TABLE 5.30
Status of Debt Equity Ratio for FY17-19
Amount in Rs. Crores

Year

Particulars

FY17

Opening
Balance
Closing
Balance
Opening
Balance
Closing
Balance
Opening
Balance
Closing
Balance

FY18

FY19

Equity
(Networth)

GFA

Debt

3641.96

1235.27

(288.87)

3879.40

1510.74

(288.87)

3879.40

1510.74

(288.87)

4154.80

1725.42

(288.87)

4154.80

1725.42

(288.87)

4441.74

1918.63

(288.87)

cvi

Normative
Debt @
70% of
GFA

Normative
Equity @
30% of
GFA

%age
of
actual
debt
on
GFA

%age of
actual
equity
on GFA

2715.58

1163.82

38.94

Negative

2908.36

1246.44

41.53

Negative

3109.22

1332.52

43.20

Negative

From the above table it is evident that the debt equity lies within the
normative debt equity ratio of 70 : 30 on the closing balances of GFA
for each year of the control period. Further, the Commission will review
the same during the Annual Performance Review for each year based
on the actual data as per the audited accounts.
Accordingly, the Return on Equity that could be approved for FY17-19
works out as follows:
TABLE 5.31
Approved Return on Equity for FY17-19
Amount in Rs. Crores

Particulars
Paid Up Share Capital

FY17

FY18

FY19

934.49

934.49

934.49

(1189.36)

(1189.36)

(1189.36)

34.00

34.00

34.00

(288.87)

(288.87)

(288.87)

0.00

0.00

0.00

Share Deposit
Reserves and Surplus
Less Recapitalised Security Deposit
Total Equity
Approved Return on Equity

Since the networth of HESCOM is negative for all the three years of the
control period FY17-19, the Commission decides not to factor any
amount of return on equity for the control period.
5.2.16 Other Income:
HESCOMs proposal:
HESCOM has claimed other income for the control period as detailed
below:
TABLE 5.32
Other Income for FY17-19 HESCOMs Proposal
Amount in Rs.Crores

Particulars

FY17
27.94

Other Income

Commissions analysis and decision:

cvii

FY18
28.67

FY19
29.40

The other income received by HESCOM mainly includes income from


incentives, rebate for collection of electricity duty, interest on bank
deposits, rent from staff quarters, profits from sale of stores and sale of
scrap besides incentives for timely payment of power purchase bills.
The Commission notes that HESCOM also receives income from sale of
power to HRECS and AEQUS SEZ which needs to be factored under
other income.
Based on the other income earned by HESCOM in the previous years,
the normal other income amount works out to Rs.30.00 Crores per year.
Further, considering expected revenue from sale of power to HRECS
and AEQUS SEZ

and normative increase, the Commission decides to

approve the other income for the control periods are as follows:
TABLE 5.33
Approved Other Income for FY17-19
Amount in Rs.Crores

Particulars
Other Income

FY17
148.49

FY18
155.70

FY19
163.70

5.2.17 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 each year of the control period FY17-19 towards meeting the
expenditure on consumer relations / consumer education.

cviii

The Commission directs HESCOM 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.

5.3

Treatment of Regulatory Asset:


HESCOM in its application has claimed an amount of Rs.197.69 Crores
as Regulatory asset to be recovered in the ARR for FY17. Further an
amount of Rs.23.72 Crores has also been claimed as carrying cost on
the Regulatory asset.

The Commission notes that as per the Tariff Order dated 12 th May, 2014
the deficit of Rs.415.33 Crores for FY13 was determined duly factoring
the additional subsidy of Rs.186.51 Crores payable by the Government
of Karnataka. This deficit was included in the ARR for FY15. Further,
while approving the ARR for FY15, an amount of Rs.214.58 Crores was
set aside as regulatory asset to be recovered in the tariff over the next
two years (FY16 & FY17). The Commission decided to allow carrying
cost at 12% p.a on the regulatory asset to be assessed at the time of
Annual Performance Review for FY15 and FY16. However, in the present
APR for FY15, as discussed in the previous chapter of this Order, the
revenue earned was more than sufficient to meet the expenses during
FY15. The APR of FY15 indicates a surplus of Rs. 105.14 Crores.
Further, the Commission in its Tariff Order dated 2nd March, 2015 had
decided to carry forward a Regulatory asset of Rs.197.69 Crores being
determined as detailed below:

Regulatory asset as per Commissions Order dated 12th May, 2014.

Amount
in
Rs Crs
214.58

Gap in revenue on APR of FY14

597.00

Surplus in revenue as per ARR for FY16.

442.02

Total Gap for FY16

369.56

Additional revenue allowed by revision of tariff in FY16

166.45

Sl.
No

Particulars

cix

Balance unfilled gap in revenue

203.11

Amount disallowed on imprudent capex

(5.42)

Regulatory asset to be recovered in FY17

197.69

Hence the Commission decides to include this amount of Rs.197.69


Crores in the ARR for FY17.
5.4

Abstract of ARR for FY16:


In the light of the above analysis and decisions of the Commission, the
following is the approved ARR for the control period FY17-19:

cx

TABLE 5.34
Approved ARR for FY17-19
Amount in Rs.Crores

Sl.
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

5.5

Particulars

FY17

Revenue at existing tariff


Revenue from tariff and Misc. Charges
Tariff Subsidy
Total Existing Revenue
Expenditure in Rs Crs
Power Purchase Cost
Transmission charges of KPTCL
SLDC Charges
Power Purchase Cost including cost of
transmission
O&M Expenses
Depreciation
Interest & Finance charges
Interest on Capital Loans
Interest on Working capital loans
Interest on belated payment on PP Cost
Interest on consumer security deposits
Other Interest & Finance charges
Less: interest & other expenses capitalised
Total Interest & Finance charges
Other Debits
Net Prior Period Debit/Credit
Return on Equity
Funds towards Consumer Relations/Consumer
Education
Other Income
ARR
Surplus for FY15 carried forward
Regulatory asset
Net ARR

FY18

FY19

2631.09
2905.01
5536.10

0.00

0.00

4317.97
611.37
4.13

4712.54
589.72
4.80

5214.91
650.08
5.21

4933.46
693.09
113.85

5307.06
756.93
121.60

5870.20
825.79
130.11

158.64
122.02

187.81
129.87

212.24
136.94

0.00
52.36
0.00
0.00
333.01
0.00
0.00
0.00

0.00
57.82
0.00
0.00
375.50
0.00
0.00
0.00

0.00
63.67
0.00
0.00
412.85
0.00
0.00
0.00

0.50
148.49
5925.43
105.14
-197.69
6017.97

0.50
155.70
6405.89

0.50
163.72
7075.73

6405.89

7075.73

Segregation of ARR into ARR for Distribution Business and ARR for Retail
Supply Business:
HESCOM in its application has not proposed any new ratio for
segregation of consolidated ARR into ARR for Distribution Business and
ARR for Retail Supply Business.

cxi

Commissions Analysis and Decisions:


Since no new proposal has been furnished by HESCOM, the
Commission decides to continue with the existing ratio of segregation
of ARR as detailed below:
TABLE 5.35
Approved Segregation of ARR FY17 - 19

Distribution
Business
63%
84%
100%
0%
82%
84%
0%

Particulars
O&M
Depreciation
Interest on Loans
Interest on Consumer Deposits
RoE
GFA
Non-Tariff Income

Retail Supply
Business
37%
16%
0%
100%
18%
16%
100%

Accordingly, the following is the approved ARR for Distribution Business


and Retail supply business:
TABLE 5.36
APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS FY17 - 19
Amount in Rs. Crores

Sl.
No
1
2
3
4
5
6

Particulars
O&M Expenses
Depreciation
Interest & Finance Charges
Interest on Capital Loans
Interest on Working capital loans
Interest on consumer security deposits
NET ARR

cxii

FY17
436.65
95.63

FY18
476.86
102.15

FY19
520.25
109.29

158.64
28.76
0.00
719.68

187.81
30.69
0.00
797.51

212.24
32.51
0.00
874.29

TABLE 5.37
APPROVED ARR FOR RETAIL SUPPLY BUSINESS FY17 - 19
Amount

in

Rs.Crores

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

Particulars
Power Purchase Cost
Transmission Charges
O&M Expenses
Depreciation
Interest & Finance Charges
Interest on Capital Loans
Interest on Working capital loans
Interest on consumer security deposits
Less Other income
Funds towards Consumer Relations/Consumer
Education
Total

5.6

FY17
4317.97
615.49
256.44
18.22

FY18
4712.54
594.52
280.06
19.46

FY19
5214.91
655.29
305.54
20.82

0
93.26
52.36
148.49

0
99.18
57.82
155.70

0
104.43
63.67
163.72

0.50
5205.75

0.50
5608.38

0.50
6201.44

Gap in Revenue for FY17:

As discussed above, the Commission decides to approve the Annual


Revenue Requirement (ARR) of HESCOM for its operations in FY17 at
Rs.6017.97 Crores as against HESCOMs proposal of Rs.7112.32 Crores.
The ARR approved by the Commission also includes an amount of
Rs.105.14 Crores of surplus revenue earned in FY15 as discussed in
Chapter-4 of this Order. Based on the existing retail supply tariff, the
total realization of revenue will be Rs.5536.10 Crores which is less by
Rs.481.87 Crores than the projected revenue requirement for the year.
The net ARR and the gap in revenue for FY17 are shown in the following
table:
TABLE 5.38
Revenue gap for FY17
Particulars
Net ARR including carry forward surplus of FY15 ( Rs. Crores)
Approved sales ( MU)
Average cost of supply for FY17 ( Rs./unit)
Revenue at existing tariff ( Rs. Crores)
Gap in revenue for FY17 ( Rs. Crores)

cxiii

FY17
6017.97
10063.35
5.98
5536.10
(481.87)

The determination of revised retail supply tariff on the basis of the


above approved ARR is detailed in the following Chapter.
5.7

Application for Additional Revenue Requirement for FY17:


The HESCOM, in its application dated 17th March, 2016, filed on 18th
March, 2016, seeking additional ARR for FY17, has submitted that:
1. The Second Transfer Scheme Rules dated 31.05.2002 were issued by
the GoK, for transfer of assets and liabilities and personnel of KPTCL
to the ESCOMs. According to Rule 4(13) of these Rules, the State
Government is responsible for funding the pension and other
liabilities of the personnel as on the date of Second Transfer i.e.
31.05.2002 and sub-rule 13(2)(b) provides for establishment of a
Pension Trust for managing the fund.
2. The GoK, vide its order dated 19.12.2002, has ordered constitution
of the Pension and Gratuity Trust and also decided to adopt Pay
as you go approach, in funding the pension and gratuity
requirement.
3. The GoK vide its letter dated 25.02.2016, has informed that against
the proposed pension and gratuity contribution of Rs.996.39 Crores
for FY17 and the arrears of pension contribution of Rs.2047.84 Crores
payable to KPTCL and ESCOMs, the Finance Department (FD) has
agreed to provide Rs.550 Crore for meeting the pension liability. As
there is difference between the proposed requirement and the
availability as indicated by the FD for FY17, the Pension Trust is
directed to work out the amount of contribution to be recovered
through tariff considering the indicative amount of contribution
available from the Government.
4. It is submitted by HESCOM that, as worked out by the Pension Trust,
an amount of Rs.448.28 Crores (Arrears of Rs.367.84 Crores and
Rs.80.44 Crores for FY17) has to be recovered through tariff.

cxiv

Accordingly, HESCOM has filed an application claiming an additional


ARR of Rs.448.28 Crores, to be recovered through tariff.
Commissions views and decision
The Commission proceeds to dispose of the application filed by
HESCOM, as follows:
a) The application for additional ARR has been filed on 16th March,
2016, that is much after completion of the process of calling for
objections on the original tariff application and furnishing replies
thereon. The Commission has also completed the process of public
consultation by holding a public hearing, in respect of HESCOM, on
3rd March, 2016.
b) 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.
c) 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 as

noted above.

Hence, this liability cannot be passed on to the

consumers, through tariff.


In view of the above, the Commission is unable to accept the
application for approval of additional ARR towards pension and
gratuity of the said pensioners.
stands disposed of.

cxv

Accordingly, the said application

CHAPTER 6
DETERMINATION OF TARIFF FOR FY17
6.0

HESCOMS Proposal and Commissions Analysis for FY17:

6.1

Tariff Application
As discussed in the preceding Chapters, HESCOM has projected an
unmet gap in revenue of Rs.1102.36 Crores for FY17. In order to bridge
this gap in revenue, HESCOM, in its Tariff Application, has proposed a
tariff increase of 1002 paise per unit in respect of all the categories of
consumers.

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
Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the
KER 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.

cxvi

6.3

Consideration 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 for consumers whose
ability to pay is considered inadequate and fix tariff at or above the
average cost of supply for categories of consumers whose ability to
pay is considered to be greater. As a result 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 of 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 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 voltage wise cost of supply, the
decision of the Commission is noted in the subsequent para of this
Chapter.

cxvii

c) Differential Tariff:
Beginning with its tariff order dated 25th November, 2009 the
Commission has been determining differential retail supply tariff for
consumers in urban and rural areas. The Commission decides to
continue the same in the present order also.

6.4

New Tariff Proposals by HESCOM


HESCOM, in its tariff application has made the following new proposals:
1. Increase in Fixed Charges:
HESCOM has proposed to increase the fixed cost by Rs.10/- Per HP/KW
for all LT and HT-3(a) & (b) category of consumers. The demand
charges in respect of HT-1, HT-2(a) and HT-2(b), HT-2(c) has proposed
for increased to Rs.200 per KVA and Rs.40 per KVA in respect of HT-4
and HT-5 category of consumers
Commissions Analysis and decisions:
On an analysis of the revenue at existing tariff of HESCOM, the
Commission notes that the total amount of fixed charges likely to be
recovered on the projected consumers, works out to Rs.269.34 Crores
for FY17. Whereas as per the approved ARR of HESCOM for FY17, the
fixed cost to be incurred in each of the activity in generation,
transmission and distribution is as follows:
Activity
Generation
Transmission including
SLDC charges
Distribution network cost
Total Fixed cost

Total FC to be
incurred
967.08
615.50
991.97
2574.55

From the above analysis, the Commission notes that as against total
fixed expenditure of Rs.2574.55 Crores, HESCOM is able to collect the
expenditure only to an extent of Rs.269.34 Crores, in the form of fixed
charges, at the existing rates. This accounts for recovery of only 10.46%

cxviii

of the fixed charges. The remaining 89.54% is being recovered in the


form of energy charges, it is not an efficient method of recovery of
fixed expenditure.
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 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. Hence the Commission hereby decides to
provide for collection of additional fixed charge of Rs.5/- per KW/HP
per month from the Domestic and LT Industrial consumers and RS.10/per KW /HP/ KVA per month from all the other categories of
consumers. This would enable the HESCOM to recover an additional
fixed charges from the projected consumers only to the extent of Rs.
41.81 Crores and the projected total recovery of fixed charges would
be Rs.311.15 Crores for FY17 which accounts for 12.09% of the total
fixed charges incurred.
2. Billing on KVAH basis to EHT/HT consumers
HESCOM has proposed to introduce KVAH billing in place of the
present system of billing on KWH basis in respect of EHT and HT
consumers with a view to reduce the distribution losses, encourage
efficient consumption of electricity by consumers lower electricity bill of
the consumers and reduce HESCOMs energy requirement.

In order to estimate the category-wise KvAh consumption and its


impact on revenue/ consumer tariff/ cross subsidy the Commission has
directed HESCOM to furnish the KvAh consumption data of all its HT
consumers for FY13 to FY15 and FY16 up to November, 2015 and to
rework the financial implication for FY17 on the proposed billing on

cxix

KvAh basis for all the HT consumers. But, the required information has
not been submitted by HESCOM. In the absence of any scientific study
and failure on the part of HESCOM to furnish the require data along
with the financial implications, the Commission is unable to take any
decision in the matter and hence decides to continue the existing Kwh
billing system for all the HT consumers.
3. Other proposals:
HESCOM has made the following proposals:
a) Charge higher tariff to Kalyana Mantapas, where lavish wedding
are taking place.
b) Extend concessional tariff to RO drinking water supply units.
c) Concessional rate to Private irrigation installations under HT supply.
The Commission has examined the above proposals and notes that the
new proposals are not properly justified with financial implications and
hence, decides not to accept the proposals made.

6.5

Revenue at Existing Tariff and Deficit for FY17:


The Commission in its preceding Chapters has decided to carry
forward the surplus in revenue of Rs.105.14 Crores of FY15 to the ARR of
FY17.The gap in revenue for FY17 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 FY17 and the revenue as per the
existing tariff, the gap in revenue for FY17 is as follows:

cxx

TABLE 6.1
Revenue Deficit for FY17
Amount in Rs.Crores

Particulars
Approved Net ARR for FY17 including surplus of
FY15
Revenue at existing tariff
Deficit
Additional Revenue to be realised by Revision of
Tariff

Amount
6017.97
5536.10
(481.87)
481.87

Accordingly, in this Chapter, the Commission has proceeded to


determine the retail supply tariff for FY17. The category-wise tariff as
existing, as proposed by HESCOM and as approved by the Commission
is as follows:
1.

LT-1 BhagyaJyothi
The existing tariff and the tariff proposed are given below:
Sl.
No
1

Details

Existing (as per 2015


Tariff Order)

Proposed by HESCOM

Energy Charges
(including recovery
towards service main
Charges)

552 paise / unit subject


to a monthly minimum
of Rs. 30 per installation
per month.

654 paise / unit subject


to a monthly minimum
of Rs. 30 per installation
per month.

Commissions Views/ Decision


The GoK, as a policy, has extended free power to all BJ/KJ consumers,
whose consumption is not more than 18 units per month. The tariff
payable by these consumers is revised to Rs.5.98 per unit.
Further, the ESCOMs have to claim subsidy for only those consumers
who consume 18 units or less per month per installation.

If the

consumption exceeds 18 units per month or any BJ/KJ installation is


found to have more than one out- let, it shall be billed as per the Tariff
Schedule LT 2(a).
The Commission determines the tariff (CDT) in respect of BJ / KJ
installations as follows:
LT 1 Approved Tariff for BJ / KJ installations

cxxi

Commission determined Tariff

598 paise per unit,


Subject to a monthly minimum of
Rs. 30 per installation per month.

Retail Supply Tariff


determined by the
Commission
-NilFully subsidized by GoK

*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.5.98 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 18 units per month or any BJ/KJ


installation is found to have more than one light point being
used, it shall be billed as per Tariff Schedule LT 2(a).
2. LT2 Domestic Consumers:
HESCOMs Proposal:
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
areas under Urban Local Bodies.
Det
ails

Existing as per 2015 Tariff


Order

Fixed
For the first KW Rs.25
Charges
For every additional KW
per Month
Rs.35
Energy
Charges
0-30 units
0 to 30 units:270 paise/unit
( life line
Consumpti
on )
Energy
31 to 100 units:400paise/unit
Charges
exceeding 101 to 200 units: 540 paise
30 Units
/unit
per month
Above 200 units:640 paise
/unit

cxxii

Proposed by HESCOM
For the first KW Rs.25
For every additional KW Rs.35

0 to 30 units: 372 paise


/unit
31 to 100 units: 502 paise
/ unit
101 to 200 units: 642 paise
/unit
Above 200 units: 742 paise
/unit

LT-2(a)(ii) Domestic Consumers Category


Applicable to Areas under Village Panchayats
Details
Fixed Charges per
Month
Energy Charges
0-30 units ( life line
Consumption )
Energy Charges
exceeding 30 Units
per month

Proposed by HESCOM

Existing as per 2015 Tariff


Order
For the first KW Rs.15

For the first KW Rs.15

For every additional KW


Rs.25
0 to 30 units: 260 paise
/unit

For every additional


KW Rs.25
0 to 30 units:362 paise
/unit

31 to 100 units: 370 paise


/ unit
101 to 200 units:510 paise
/unit
Above 200 units: 590 paise
/unit

31 to 100 units:472 paise


/ unit
101 to 200 units: 612 paise
/unit
Above 200 units: 692 paise
/unit

Commissions Decision
The Commission has decided to continue the two tier tariff 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
other Urban Local Bodies
Details

Tariff approved by the


Commission
Fixed Charges per Month
For the first KW Rs.30
For every additional KW Rs.40
Energy Charges up to 30 Units per Upto 30 units: 300 paise/unit
month (0-30 Units)-life line consumption.
Energy
Charges
in
case
the 31 to 100 units: 440 paise/unit
Consumption exceeds 30 Units per 101 to 200 units: 590 paise/unit
month
Above 200 units: 690 paise/unit
LT-2(a)(ii) Domestic Consumers Category:
Applicable to Areas under Village Panchayats

cxxiii

Details

Tariff approved by the Commission

Fixed Charges per Month

For the first KW Rs.20/For every additional KW Rs.30/-

Energy Charges up to 30
Units per Month (0-30 Units)Lifeline Consumption
Energy Charges in case the
Consumption exceeds 30
units per month

Upto 30 units: 290 paise/unit

31 to 100 units: 410 paise/unit

101 to 200 units: 560 paise/unit

Energy Charges

Above 200 units: 640 paise/unit

LT2

(b)

Private

Professional

and

other

Private

Educational

Institutions, Private Hospitals and Nursing Homes.


HESCOMs Proposal:
The details of the existing and the proposed tariff under this
category are given in the Table below:
LT 2 (b) (i) Private Professional Educational Institutions & Private
Hospitals and Nursing Homes.
Applicable to areas coming under Municipal Corporations & all Urban
Local Bodies
Details
Fixed
Charges per
Month
Energy
Charges

Existing tariff as per 2015 Tariff


Order
Rs.35 per KW subject to a
minimum of Rs.65 per month
For the first 200 units 600
paise per unit
For the balance units 720
paise per unit

Proposed by HESCOM
Rs.35 per KW subject to a
minimum of Rs.65 per
month
For the first 200 units 702
paise per unit
For the balance units 822
paise per unit

LT 2 (b) (ii) Private Professional Educational Institutions &Private


Hospitals and Nursing Homes.
Applicable to Areas under Village Panchayats
Details
Fixed
Charges per
Month

Existing as per 2015 Tariff Order


Rs.25 per KW subject to a
minimum of Rs.50 per Month

cxxiv

Proposed by HESCOM
Rs.25 per KW subject to a
minimum of Rs.50 per
Month

Energy
Charges

For the first 200 units: 550


paise per unit
For the balance units: 670
paise per unit

For the first 200 units:652


paise per unit
For the balance units:772
paise per unit

Commissions decision
As in the previous Tariff Order, the Commission decides to continue the
two tier tariff structure as below:
(i) Areas coming under Municipal Corporations and all urban local
bodies.
(ii) Areas under Village Panchayats.
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 urban
Local Bodies
Details

Tariff approved by the Commission

Fixed Charges per Month

Rs.45per KW subject to a minimum of Rs.75 per


Month.

Energy Charges

0-200 units: 625 paise/unit


Above 200 units: 745 paise/unit

Approved Tariff for LT 2 (b) (ii) Private Professional and other Private
Educational Institutions, Private Hospitals and Nursing Homes
Applicable in Areas under Village Panchayats
Details

Tariff approved by the Commission

Fixed Charges per Month

Rs.35 per KW subject to a minimum of Rs.60per


Month
0-200 units: 570 paise/unit
Above 200 units: 690 paise/unit

Energy Charges

3. LT3- Commercial Lighting, Heating and Motive Power


HESCOMs Proposal:
The existing and proposed tariff are as follows:
LT- 3 (i) Commercial Lighting, Heating& Motive Power

Applicable in areas under all Urban Local Bodies including City Municipal
Corporations
Details

Existing as per 2015 Tariff

cxxv

Proposed by HESCOM

Fixed Charges per


Month

Order
Rs.40 per KW

Rs. 40 per KW

For the first 50 units:695


paise per unit
For the balance units: 795
paise per unit

For the first 50 units:797


paise per unit
For the balance units:897
paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW


but below 50 KW.
Details
Fixed
Charges
Energy
Charges

Existing as per 2015 Tariff


Order
Rs. 55 per KW

Proposed by HESCOM
Rs. 55 per KW

For the first 50 units:695 paise


per unit
For the balance units:795
paise per unit

For the first 50 units: 797 paise


per unit
For the balance units:897
paise per unit

LT-3 (ii) Commercial Lighting, Heating& Motive Power


Applicable in areas under village Panchayats
Details
Fixed Charges
per Month
Energy Charges

Existing as per 2015


Tariff Order
Rs. 30 per KW

Proposed by HESCOM
Rs.30 per KW

For the first 50 units:645


paise per unit
For the balance units:
745 paise per unit

For the first 50 units:747


paise per unit
For the balance units:
847 paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW


but below 50 KW
Details
Fixed Charges
per Month
Energy Charges

Existing as per 2015


Tariff Order
Rs. 45 per KW

Proposed by HESCOM
Rs. 45 per KW

For the first 50 units: 645


paise per unit
For the balance
units:745 paise per unit

For the first 50 units:747


paise per unit
For the balance units:
847paise per unit

Commissions decision
As in the previous Tariff Order, the Commission decides to continue the
two tier tariff structure as below:

cxxvi

(i)

Areas coming under Municipal Corporations and other urban


local bodies.

(ii)

Areas under Village Panchayats.


LT- 3 (i) Commercial Lighting, Heating& Motive Power

Applicable to areas under all Urban Local Bodies including Municipal


Corporations
Details

Approved by the Commission

Fixed Charges per Month Rs 50 per KW


Energy Charges
For the first 50 units: 715 paise/ unit
For the balance units: 815 paise/unit
Demand based tariff (Optional)where sanctioned load is above 5 kW
but below 50 kW
Details

Approved by the Commission

Fixed Charges per


Month
Energy Charges

Rs 65 per KW
For the first 50 units: 715paise /unit
For the balance units: 815 paise/unit

LT-3 (ii) Commercial Lighting Heating& Motive Power


Applicable to areas under Village Panchayats
Details
Fixed Charges per
Month
Energy Charges

Approved by the Commission


Rs. 40 per KW
For the first 50 units: 665 paise per unit
For the balance units: 765 paise per unit

Demand based tariff (Optional)where sanctioned load is above 5 kW


but below 50 kW
Details
Fixed Charges per
Month
Energy Charges

Approved by the Commission


Rs.55 per KW
For the first 50 units: 665 paise per unit
For the balance units: 765 paise per unit

4. LT4-Irrigation Pump Sets:


HESCOM Proposal:
The existing and proposed tariff for LT4 (a) are as follows:

cxxvii

LT-4 (a) Irrigation Pump Sets


Applicable to IP Sets up to and inclusive of 10 HP
Details
Fixed Charges per
Month
Energy Charges

Existing as per 2015 Tariff


Order
Nil
CDT 508 paise per unit

Proposed by HESCOM
Free (In case GoK does
not release the subsidy
in advance, CDT of 610
paise per unit will be
demanded
and
collected
from
consumers)

Commissions Views/ 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 categories under the existing LT-4a tariff
are covered under free supply of power.
Considering the cross subsidy contribution from categories other than
IP Sets & BJ/KJ Categories, the Commission determines the tariff for IP
Set under LT4(a) category as follows:
Approved CDT for IP Sets for FY17
Particulars

HESCOM

Approved ARR in Rs. Crores

6017.97

Revenue from other than IP & BJ/KJ installations in Rs. Crores


Amount to be recovered from IP & BJ/KJ installations in Rs.
Crores

2839.03

Approved Sales to BJ/KJs installations in MU


Revenue from BJ/KJ installations at Average Cost of supply in
Rs. Crores

90.84

3178.94

54.32

Amount to be recovered from IP Sets category in Rs. Crores

3124.62

Approved Sale to IP Sets in MU

5619.82

Commission Determined Tariff (CDT) for IP Set Category for


FY17 in Rs/unit

5.56

Accordingly, the Commission decides to approve tariff of Rs.5.56 per


unit as CDT for FY17 for IP Set category under LT4(a). In case the GoK

cxxviii

does not release the subsidy in advance, a tariff of Rs.5.56 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

Details
Approved by the Commission
Free*
Fixed charges per Month
Energy charges
CDT (Commission Determined Tariff):
556 paise per unit
* In case the GoK does not release the subsidy in advance, a tariff of
Rs.5.56 per unit shall be demanded and collected from these
consumers.

PAYMENT OF SUBSIDY BY GOVERNMENT OF KARNATAKA FOR FY17:


Several consumers and stakeholders who participated in the Public
Hearing held by the Commission have expressed that the ESCOMs may
be showing part of their technical losses against IP set consumption by
inflating the number of live pump sets, in order to report technical
losses lower than the actual losses prevailing in the distribution system.
Further, they have also expressed that there are many defunct, nonworking/idle IP sets provided to both open wells and bore wells which
have dried up and the same have not been identified / deleted from
the ledger accounts by the ESCOMs and that the ESCOMs, however,
are treating these IP sets as live IP set installations and claiming subsidy
from the Government, which needs to be stopped immediately. They
have requested the Commission to direct the ESCOMs to take up
enumeration of IP sets in their jurisdiction to identify defunct/dried up
wells and un-authorized IP sets in the field and take necessary action to
arrive at the correct number of IP sets in their account on the basis of
the enumeration report. The Commission is also of the view that IP sets
of defunct /dried up wells should be deleted in the accounts of the
ESCOMs in order to reflect exact numbers of live IP sets and its usage
for claiming subsidy from the Government and more importantly to
assess the performance of the ESCOMs.
cxxix

The Commission has approved in respect of all the ESCOMs, a total


ARR of Rs.31,917.59 Crores for the FY17, which includes estimated
revenue of Rs.8,571.08 Crores against supply of 19,505.96 MU of power
to 25,64,999 number of IP sets (excluding HRECS). The Commission is of
the view that the actual number of IP set installations would be far less
than 25,64,999 approved for the FY17, if proper enumeration is carried
out to ascertain the correct number of IP sets by the ESCOMs.
Therefore, the ESCOMs need to immediately take up enumeration of IP
sets to arrive at the exact number of IP sets in use. The ESCOMs should
note that the quantum of sales to IP sets approved in ARR for FY17 is
subject to APR and the Commission will not accept such sales without
being substantiated in the manner specified by it.

The Commission has been issuing directives to ESCOMs for conducting


Energy Audit at the Distribution Transformer Centre (DTC)/feeder level
to enable detection and prevention of commercial losses. 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. 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:
1) The ESCOMs shall manage supply of power to the IP sets for the
FY17, so as to ensure that it is within the quantum of subsidy

cxxx

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 FY17, 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.
2) The ESCOMs shall, immediately take up enumeration of IP sets,
11kV feeder wise by capturing the GPS co-ordinates namely
longitude, latitude and altitude of each live IP set in their jurisdiction
and complete this process within six months from the date of this
Order and submit the list of 11 kV feeder-wise IP sets census with
GPS co-ordinates to the Commission, on or before 15th October,
2016. The Commission would accordingly revise the number of IP
sets and its consumption for the FY17.
3) The ESCOMs shall compute the specific consumption and total sale
of energy to IP sets considering the month-wise energy input to 11
kV segregated agricultural feeders at the substation duly deducting
the energy losses prevailing in 11 kV lines, DTCs & LT Lines and
submit to the Commission, the monthly DTC wise/ feeder-wise
energy audit reports regularly in the formats prescribed by the
Commission, before 15th of succeeding month.
Pending compliance of the directives contained in (2) and (3) above,
the Commission hereby advises the Government to release only 90% of
the subsidy allocated for FY17. The Commission will advise the
Government, in the last quarter of the financial year to release the
balance 10% of subsidy for the year, on satisfactory compliance of the
above directives.

LT4 (b) Irrigation Pump Sets above 10 HP:


HESCOMs Proposal

cxxxi

The existing and proposed tariff for LT-4(b) is as follows:


LT-4 (b) Irrigation Pump Sets:
Applicable to IP Sets above 10 HP
Details
Fixed Charges per
Month
Energy Charges

Existing as per 2015 Tariff


Order
Rs. 30 per HP

Proposed by HESCOM
Rs. 30 per HP

240 paise per unit

342 paise per unit

The existing and proposed tariff for LT4(c) is as follows:


LT-4 (c) (i) Irrigation Pump Sets:
Applicable to Private Horticultural Nurseries, Coffee and Tea
plantations up to & inclusive of 10 HP
Details
Fixed Charges per
Month
Energy Charges

Existing as per 2015 Tariff


Order
Rs. 20 per HP

Proposed by HESCOM
Rs. 20 per HP

240 paise per unit

342 paise per unit

LT-4 (c) (ii) Irrigation Pump Sets:


Applicable to Private Horticultural Nurseries, Coffee and Tea
plantations above 10 HP.
Details
Fixed Charges per
Month
Energy Charges

Existing as per 2015 Tariff


Order
Rs. 30 per HP

Proposed by HESCOM
Rs. 30 per HP

240 paise per unit

342 paise per unit

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


Energy Charges for the entire
consumption

Rs.40 per HP
280 paise/unit

LT4(c) (i) Irrigation Pump Sets:


Applicable to Horticultural Nurseries,
Coffee, Tea & Rubber plantations up to & inclusive of 10 HP
cxxxii

Fixed Charges per Month


Energy Charges

Rs.30 per HP
280 paise / unit

LT4 (c)(ii) Irrigation Pump Sets:


Applicable to Horticultural Nurseries, Coffee, Tea& Rubber
plantations above 10 HP
Fixed Charges per Month
Energy Charges
5.

Rs.40 per HP
280 paise/unit

LT5 Installations-LT Industries:


HESCOMs Proposal:
The existing and proposed tariffs are given below:

cxxxiii

LT-5(a)- LT Industries:
Applicable to all areas under HESCOM
i) Fixed charges

Details

Existing as per 2015 Tariff Order

Fixed
Charges per
Month

Proposed by HESCOM

i)Rs. 25 per HP for 5 HP &


below.
ii) Rs. 30 per HP for above 5
HP & below 40 HP
iii) Rs. 35 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above

i) Rs. 25 per HP for 5 HP &


below
ii) Rs. 30 per HP for above 5
HP & below 40 HP
iii) Rs. 35 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above

ii) Demand based Tariff (optional)


Details
Fixed
Charges
per Month

Description

Existing Tariff as per


2015 Tariff Order
Above 5 HP and
Rs. 45 per KW of
less than 40 HP
billing demand
40 HP and above
Rs. 60 per KW of
but less than 67 HP billing demand
67 HP and above
Rs. 150 per KW of
billing demand

Proposed by
HESCOM
Rs. 45 per KW of
billing demand
Rs. 60 per KW of
billing demand
Rs. 150 per KW of
billing demand

iii. Energy Charges


Details
For the first 500 units
For the next 500
units
For the balance
units

Existing as per 2015


Tariff Order
475 paise per unit
555 paise per unit

577 paise/ unit


657 paise/ unit

585 paise per unit

687 paise/ unit

cxxxiv

Proposed by HESCOM

LT-5(b)- LT Industries:
Applicable to all areas under HESCOM
i) Fixed charges

Details

Existing as per 2015 Tariff Order

Fixed
Charges per
Month

Proposed by HESCOM

i)Rs. 25 per HP for 5 HP &


below.
ii) Rs. 30 per HP for above 5
HP & below 40 HP
iii) Rs. 35 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above

i) Rs. 25 per HP for 5 HP &


below
ii) Rs. 30 per HP for above 5
HP & below 40 HP
iii) Rs. 35 per HP for 40 HP &
above but below 67 HP
iv)Rs. 100 per HP for 67 HP &
above

ii) Demand based Tariff (optional)


Details

Description

Fixed
Charges
per Month

Above 5 HP and
less than 40 HP
40 HP and above
but less than 67 HP
67 HP and above

Existing Tariff as per


2015 Tariff Order
Rs. 45 per KW of
billing demand
Rs. 60 per KW of
billing demand
Rs. 150 per KW of
billing demand

Proposed by
HESCOM
Rs. 45 per KW of
billing demand
Rs. 60 per KW of
billing demand
Rs. 150 per KW of
billing demand

iii. Energy Charges


Details
For the first 500 units
For the next 500
units
For the balance
units

Existing as per 2015


Tariff Order
470 paise per unit
550 paise per unit

572 paise/ unit


652 paise/ unit

580 paise per unit

682 paise/ unit

cxxxv

Proposed by HESCOM

Existing ToD Tariff for LT5: At the option of the consumers


ToD Tariff
Time of Day

Increase (+ )/ reduction (-) in energy


charges over the normal tariff applicable
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 : At the option of the consumer
ToD Tariff
Time of Day
Increase (+ )/ reduction (-) in energy
charges over the normal tariff applicable
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
Commissions views / decisions:
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 Municipal Corporations.

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

Approved by the Commission

cxxxvi

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

Demand based Tariff (optional)


Fixed
Charges per
Month

Above 5 HP and less than 40


HP
40 HP and above but less
than 67 HP
67 HP and above

Rs. 50 per KW of billing


demand
Rs. 65 per KW of billing
demand
Rs. 150 per KW of billing
demand

ii) Energy Charges


Details

Approved by the Commission

For the first 500 units


For the next 500 units
For the balance units

495 paise/unit
585 paise/ unit
615 paise/unit
Approved Tariff for LT 5 (b):

Applicable to all areas other than those covered under LT-5(a)


i) Fixed charges
Details

Approved by the Commission

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

Above 5 HP and less than 40


HP
40 HP and above but less
than 67 HP
67 HP and above

cxxxvii

Rs. 50 per KW of billing


demand
Rs.65 per KW of billing
demand
Rs. 150 per KW of billing
demand

iii) Energy Charges


Details
For the first 500 units
For the next 500 units
For the balance units

Approved tariff
485 paise/ unit
570 paise/ unit
600 paise/unit

Approved ToD Tariff for LT5 : At the option of the consumer


ToD Tariff
Time of Day

Increase (+ )/ reduction (-) in energy


charges over the normal tariff applicable
(-)125 paise per unit
0
(+)100 paise per unit

22.00 Hrs to 06.00 Hrs


06.00 Hrs to 18.00 hrs
18.00 Hrs to 22.00 Hrs
6.

LT6 Water Supply Installations and Street Lights


HESCOMs Proposal:
The existing and the proposed tariffs are given below:
LT-6(a): Water Supply
Details

Fixed Charges per


Month
Energy Charges

Existing as per 2015 Tariff


Order
Rs. 35/HP/month

Proposed by HESCOM
Rs. 35/HP/month

340 paise/unit

442 paise/unit

LT-6 (b) : Public Lighting


Details
Fixed Charges
per Month
Energy Charges
Energy Charges
for LED Lighting

Existing as per 2014 Tariff


Order
Rs. 50/KW/month
500 paise/unit
400 paise/unit

Proposed by HESCOM
Rs. 50/KW/month
602 paise/unit
502 paise/unit

The Commission approves the tariff for this category as follows:


Tariff Approved by the Commission for LT-6 (a): Water supply
Details
Fixed Charges per
Month

Approved Tariff
Rs.45 /HP/month

cxxxviii

Energy Charges

390 paise/unit

Tariff Approved by the Commission for LT-6 (b): Public Lighting


Details
Fixed Charges per
Month
Energy Charges
Energy Charges
for LED/ Induction
Lighting
7.

Approved Tariff
Rs. 60/KW/month
550 paise/unit
450 paise/unit

LT 7- Temporary Installations and Advertising Hoardings:


HESCOMs Proposal:
The existing rate and the rate proposed are given below:
Temporary Supply
Existing as per 2015
Tariff Order

Details

a) Less than 67
HP:

Energy charge at 900


paise per unit subject
to a weekly minimum
of Rs. 160 per KW of
the sanctioned load.

Proposed by HESCOM

Energy charge at 1002 paise


per unit subject to a weekly
minimum of Rs. 160 per KW of
the sanctioned load.

TARIFF SCHEDULE LT-7(b)


LT 7(b)

Details

Power supply on Less than 67 HP:


permanent
connection basis

Proposed by HESCOM
Fixed Charges at Rs 40 per KW /month
Energy charges at 1002 paise / unit

Commissions Decision :
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:

APPROVED TARIFF SCHEDULE LT-7(a)


Applicable to Temporary Power Supply for all purposes.
cxxxix

LT 7(a)

Details

Temporary Power Less than 67 HP:


Supply
for
all
purposes.

Approved Tariff
Energy charges at 950 paise / unit
subject to a weekly minimum of Rs.170
per KW of the sanctioned load.

APPROVED TARIFF SCHEDULE LT-7(b)


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

Power supply on Less than 67 HP:


permanent
connection basis

Approved Tariff
Fixed Charges at Rs 50 per KW /month
Energy charges at 950 paise / unit

H.T. Categories:
Time of the Tariff (ToD)
The Commission decides to continue the mandatory Time of Day Tariff
for HT2(a), HT2(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), HT2(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.

HT-1 Water Supply & Sewerage


HESCOMs Proposal:

The Existing and the Proposed tariff are as given below:

Sl.
No.
1
2

Details
Demand
Charges
Energy Charges

Existing tariff as per 2015


Tariff Order
Rs.180 / kVA of billing
Demand / Month
410 paise per unit

cxl

Proposed by HESCOM
Rs.180 / kVA for billing
demand / Month
512 paise per unit

Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage


installations at the option of the consumer
Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(-) 125 paise per unit
0
(+) 100 paise per unit

Proposed ToD Tariff to HT-1


Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(- ) 125 paise per unit
0
(+) 100 paise per unit

Commissions decision:

The Commission approves the tariff for HT 1 Water Supply


and Sewerage category as below:

cxli

Approved Tariff for HT 1


Details
Demand
Charges
Energy Charges

Tariff approved by the Commission


Rs.190 / kVA of billing demand / Month
450 paise/ unit

Approved ToD tariff to HT-1 tariff to Water Supply &


Sewerage installations at the option of the consumer

Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs
9.

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(-) 125 paise per unit
0
(+)100 paise per unit

HT2 (a) HT Industries & HT 2(b) HT Commercial


HESCOMs Proposal:

The Existing and proposed tariff are as given below:


HT 2 (a) - HT Industries- Applicable to all areas of HESCOM
Details
Demand Charges
Energy Charges
(iii) For the first one
lakh units
(iv) For the
balance units

Existing tariff as per Tariff


Order 2015
Rs. 170 / kVA of billing
demand / month

Proposed by HESCOM
Rs. 170 / kVA of billing
demand / month

585 paise per unit

687 paise per unit

615 paise per unit

717 paise per unit

cxlii

Railway traction and Effluent Plants


Details

Existing tariff as per Tariff


Order 2015
Rs. 180 / kVA at billing
demand / month
555 paise per unit for all the
units

Demand Charges
Energy Charges

Proposed by HESCOM
Rs. 180 / kVA of billing
demand / month
657 paise per unit for all
the units

Existing ToD Tariff for HT-2(a)


Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(- )125 paise per unit
0
(+) 100 paise per unit

Proposed ToD Tariff for HT-2(a)


Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(- ) 125 paise per unit
0
(+) 100 paise per unit

Commissions Decision

The Commission approves the tariff for HT 2(a) category as


below:
Approved Tariff for HT 2 (a)
Applicable to all areas of HESCOM
Details
Demand Charges
Energy Charges
For the first one lakh units
For the balance units

Approved Tariff
Rs. 180 / kVA of billing demand / Month
620 paise/ unit
660 paise/ unit

Railway Traction & Effluent Treatment Plants


Details

Tariff approved by the Commission

cxliii

Demand Charges
Energy Charges

Rs. 190 / kVA of billing demand / Month


590 paise / unit for all the units
10.

HT-2 (b) HT Commercial

HESCOMs Proposal:
The Existing and proposed tariff are as given below:
HT 2 (b)-HT Commercial- Applicable to all areas of HESCOM
Details

Existing tariff as per Tariff


Proposed by HESCOM
Order 2015
Rs. 190 / kVA of billing Rs. 190 / kVA of billing
demand / month
demand / month

Demand Charges
Energy Charges
(i) For the first two
lakh units
(ii)For the balance
units

735 paise per unit

837 paise per unit

765 paise per unit

867 paise per unit

Proposed ToD Tariff to HT-2(b)


Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs

Increase (+) / reduction (-) in the energy


charges over the normal tariff applicable
(- ) 125 paise per unit
0
(+) 100 paise per unit

Commissions Decision
The Commission approves the following tariff for HT 2 (b) consumers:

Approved tariff for HT 2 (b) - HT Commercial


Applicable to all areas of HESCOM
Details
Demand Charges
Energy Charges
(i) For the first two lakh units
(ii) For the balance units

Tariff approved by the Commission


Rs.200/ kVA of billing demand / Month
785 paise per unit
815 paise per unit

Note: The above tariff under HT2 (b) is not applicable for construction of new
industries. Such power supply shall be availed under the temporary
category HT5.

cxliv

11.

HT 2 (c) Applicable to Hospitals and Educational Institutions:


The Existing and proposed tariff are as given below:
HT-2 ( c)(i) - Applicable to Government Hospitals & Hospitals run by
Charitable Institutions, ESI Hospitals,
Educational Institutions belonging to Government, Local Bodies, Aided
Institutions and Hostels of all Educational Institutions

Details

Existing Tariff as per Proposed by HESCOM


Tariff Order 2015
Rs. 170 / kVA of billing Rs. 170 / kVA of billing
demand / Month
demand / Month

Demand Charges
Energy Charges
(i) For the first one lakh units
(ii) For the balance units

560 paise per unit


610 paise per unit

662 paise per unit


712 paise per unit

Existing & Proposed Tariff for HT 2 (c) (ii)


Applicable to Hospitals/Educational Institutions
other than those covered under HT2(c) (i)

Details

Existing Tariff as per Tariff


Proposed by HESCOM
Order 2015
Rs.170 / kVA of billing demand Rs.170 / kVA of billing
/ Month
demand / Month

Demand Charges
Energy Charges
(i) For the first one lakh units
(ii) For the balance units

660 paise per unit


710 paise per unit

762 paise per unit


812 paise per unit

Commissions Decision:
The Commission approves the following tariff for HT-2(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.
Details

Tariff approved by the Commission

Demand Charges
Energy Charges
(i) For the first one lakh units
(ii) For the balance units

Rs.180 / kVA of billing demand / Month


600 paise per unit
650 paise per unit

Approved tariff for HT 2 (c) (ii)


Applicable to Hospitals & Educational Institutions

cxlv

other than those covered under HT2(c) (i)

Details

Tariff approved by the Commission

Demand Charges
Energy Charges
(i) For the first one lakh units
(ii) For the balance units

Rs. 180 / kVA of billing demand / Month


700 paise per unit
750 paise per unit

Time of the Day Tariff:


Approved ToD Tariff to HT-2(a), HT- 2(b) and HT2(c)
Time of day
22.00 Hrs to 06.00 Hrs next day
06.00 Hrs to 18.00 Hrs
18.00 Hrs to 22.00 Hrs
12.

Increase (+) / reduction (-)in the energy


charges over the normal tariff applicable
(- )125 paise per unit
0
(+)100 paise per unit

HT-3(a) Lift Irrigation Schemes under Government Departments /


Government owned Corporations/ Lift Irrigation Schemes under Pvt
/Societies:
HESCOMs Proposal:
The Existing and proposed tariff are given below:
HT- 3(a) (i) Applicable to LI Schemes under Government Departments /
Government owned Corporations
Details

Energy
Charges/
minimum
Charges

Existing charges as per Tariff


Order 2015
170 paise / unit
Subject to an annual minimum
of Rs.1000 per HP / annum

Proposed by HESCOM
272 paise / unit
Subject to an annual
minimum of Rs. 1000
per HP / annum

HT -3(a) (ii) Applicable to Private LI Schemes and Lift Irrigation Societies


fed through Express / Urban feeders

Details
Fixed Charges
Energy Charges

Existing Tariff as per Tariff Proposed by HESCOM


Order 2015
Rs. 30 / HP / Month of
Rs. 30 / HP / Month of
sanctioned load
sanctioned load
170 paise / unit
272 paise / unit

cxlvi

HT- 3(a) (iii) Applicable to Private. LI Schemes and Lift Irrigation


Societies
other than those covered under HT-3 (a)(ii)

Details
Fixed Charges
Energy Charges

Existing Tariff as per Tariff Proposed by HESCOM


Order 2015
Rs. 10 / HP / Month of
Rs. 10 / HP / Month of
sanctioned load
sanctioned load
170 paise / unit
272 paise / unit

Commissions Decision:
The Commission approves the following tariff for HT-3(a) consumers:
Approved tariff for HT 3 (a) (i)

Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations


Energy Charges /
Minimum Charges

200 paise/ unit


subject to an annual minimum of Rs. 1120
per HP / annum

Approved tariff for HT 3 (a) (ii)

Applicable to Private. LI Schemes and Lift Irrigation Societies fed through


express / urban feeders
Fixed Charges
Energy Charges

Rs. 40 / HP / Month of sanctioned load


200 paise / unit
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
Energy Charges

13.

Rs. 20 / HP / Month of sanctioned load


200 paise / unit

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,


Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut
Plantations:
HESCOMs Proposal:
The existing and the proposed tariff are given below:

cxlvii

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,


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

Existing tariff as per Tariff


Order 2015
Energy Charges / 370 paise / unit
minimum
subject
to
an
annual
Charges
minimum of Rs.1000 per HP
of sanctioned load

Proposed by HESCOM
472 paise / unit
subject to an annual
minimum of Rs.1000 per HP
of sanctioned load

Commissions Decision
The Commission approves the tariff for this category as indicated
below:
Approved Tariff
HT-3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,
Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut
Plantations:

Details
Energy Charges /
minimum Charges

Approved Tariff
400 paise / unit
subject to an annual minimum
of Rs. 1120 per HP of sanctioned
load
14.
HT-4- Residential Apartments/ Colonies:

HESCOMs Proposal:
The existing and proposed tariff for this category are given below:

Existing and proposed tariff for HT 4 - Residential Apartments/


Colonies
Applicable to all areas of HESCOM
Details
Demand Charges
Energy Charges

Existing tariff as per Tariff


Order 2015
Rs.100 / kVA of billing
demand
550 paise per unit

Commissions Decision

cxlviii

Proposed tariff by HESCOM


Rs.100 / kVA
demand
652 paise/ unit

of

billing

The Commission approves the tariff for this category as indicated


below:
Approved tariff
HT 4 Residential Apartments/ Colonies Applicable to all areas of
HESCOM
Demand Charges
Energy Charges

15.

Rs. 110 / kVA of billing demand


585 paise/ unit

TARIFF SCHEDULE HT-5


HESCOMs Proposal:
The existing and proposed tariff for this category is given below:
HT 5 Temporary supply
67 HP and above:
Existing
Fixed Charges / Rs.210/HP/Month for the
Demand Charges
entire sanction load /
contract demand

Proposed
Rs.210/HP/Month for the
entire sanction load /
contract demand

Energy Charge

1002 paise / unit

900 paise / unit (weekly


minimum of Rs.160/- per
KW is not applicable)

Commissions decisions:

TARIFF SCHEDULE HT-5


As approved in the Commissions Tariff Order dated 02nd March 2015,
this tariff is applicable to 67 HP and above 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.
Approved Tariff for HT 5 Temporary supply
67 HP and above:
Approved Tariff
Fixed Charges / Rs. 220/HP/Month for the entire sanction load /
Demand Charges
contract demand

cxlix

Energy Charges

950 paise / unit

The Approved Tariff schedule for FY17 is enclosed in Annex IV of this


Order.

6.6

Other Issues

6.6.1

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).

6.6.2 Determination of wheeling charges for FY17:


HESCOM in their filing has proposed the following Wheeling charges:
Injection Point

HT

LT

HT

24.15 [7.50%]

80.50 [16.04%]

LT

80.50 [16.04%]

56.35 [7.50%]

Drawal Point

Note: Figures in brackets are applicable loss.


HESCOM has stated that the above wheeling charges would be
applicable to all the Open Access or Wheeling transactions for using
the HESCOMs network, except for energy wheeled from NCE sources
to the consumers in the State.
Further, HESCOM has requested not to extend banking facility during
the summer months, as the cost of peak power would be five to six
times the average cost. Also it is stated that, if there is excess energy
available for banking, the concerned generators can be paid 85% of
the generic tariff or at the cost decided by the Honble Commission.

cl

The Commission in its preliminary observations had directed HESCOM


to justify with working details the need for doing away with banking
facility during summer months.
HESCOM in their replies has furnished the wheeled energy data
pertaining to few installations that have wheeled energy. The
Commission notes that HESCOM has only furnished data of wheeled
energy and has not justified its stand to show that banking has
affected them financially or in terms of technical constraints during
summer months. As such the request of HESCOM is not considered.
The Commission has considered the approved ARR pertaining to
distribution wires business and has proceeded determining the
wheeling charges as detailed below:

6.6.3 Wheeling within HESCOM 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
Sales-MU

719.68
10063.35

Wheeling charges- paise/unit


HT-network
LT-network

71.51
Paise/unit
21.45
50.06

In addition to the above, the following technical losses are applicable


to all open access/wheeling transactions:

cli

Loss allocation % loss


HT
5.90
LT

9.24

Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow
diagram furnished by HESCOM.

The actual wheeling charges payable (after rounding off) will depend
upon the point of injection & point of drawal as under:
paise/unit
Injection point

HT

LT

Drawal point
HT 22[5.90%]
LT 72[15.15%]

72[15.15%]
50[9.24%]

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 HESCOMs network,
except for energy transmitted or wheeled from Renewable sources to
the consumers in the State.

clii

6.6.4 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 are used,


Transmission Charges shall be payable to the Transmission
Licensee. Wheeling Charges of 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 &HESCOMs network and
100 units is injected, then at the drawal point the consumer is entitled
for 81.91 units, after accounting for Transmission loss of 3.47% &HESCOM
technical loss of 15.15%.
The Transmission charge in cash as determined in the Transmission Tariff
order shall be payable to KPTCL & Wheeling charge of 72 paise per
unit shall be payable to HESCOM. In case more than one ESCOM is
involved the above 72 paise shall be shared by all ESCOMs involved.
iii.

If ESCOMs network only is used, the Wheeling Charges of the


ESCOM where the power is drawn is payable and shall be
shared equally among the ESCOMs whose networks are used.

cliii

Illustration:
If a transaction involves injection to BESCOMs network & drawal at
HESCOMs network, and 100 units is injected, then at the drawal point
the consumer is entitled for 84.85 units, after accounting HESCOMs
technical loss of 15.15%.

The Wheeling charge of 72 paise per unit applicable to HESCOM shall be equally
shared between HESCOM& BESCOM.
6.6.5 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.

6.6.6 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 6.6.3 and 6.6.4 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.

6.7

Other tariff related issues:


i) Cross Subsidy Surcharge (CSS):
HESCOM in its tariff petition has proposed the Cross Subsidy surcharge
as indicated below:
Paise/unit

Voltage
Level
66KV &

HT-1

HT-2a

HT-2b

HT-2C

HT-4

HT-5

139.76

222.54

124.31

62.69

504.64

549.41

cliv

above
HT level11KV/33KV

139.76

222.54

124.31

62.69

504.64

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 cross subsidy surcharge.

Based on the above

methodology, the category wise cross subsidy will be as indicated


below:
Particulars
Average TariffPaise/unit
Cost of supply
at 5% margin
@ 66 kV and
above level
Cross subsidy
surcharge
paise/unit @ 66
kV & above
level
Cost of supply
at 5% margin
@ HT level
Cross subsidy
surcharge
paise/unit @ HT
level

HT-2
(C)

HT3 (a)
Lift
Irrigation

HT3 (b)
Irrigation &
Agricultural
Farms

HT-4
Residential
Apartments

902.87

735.25

181.60

398.01

625.67

1509.97

565.04

565.04

565.04

565.04

565.04

565.04

565.04

-66.23

156.66

337.83

170.21

-383.44

-167.03

60.63

944.93

607.04

607.04

607.04

607.04

607.04

607.04

607.04

607.04

-108.22

114.66

295.83

128.21

-425.44

-209.03

18.63

902.94

HT-1
Water
Supply

HT-2a
Industries

HT-2b
Commercial

498.81

721.70

565.04

HT5
Temporary

For the categories where the surcharge is negative, the surcharge is


made zero at the respective voltage level.

For the remaining

categories, the Commission decides to determine the surcharge at


75% (instead of the 80% considered in its tariff order dated 02.03.2015)
of the cross subsidy amount as worked out above, as the cross subsidy
surcharge has to be gradually reduced. Thus, the cross subsidy
surcharge is determined as under rounding off to nearest paise:
Paise/unit
Voltage
level
66 kV &
above

HT-1

HT-2a

HT-2b

HT-2c

HT-3a

HT-3b

HT-4

HT-5

118

253

128

45

709

clv

HT level-11
kV/33kV

86

222

96

14

677

The cross subsidy surcharge determined in this order shall be


applicable to all open access/wheeling transactions in the area
coming under HESCOM. However, the above CSS shall not be
applicable to captive generating plant for carrying electricity to the
destination of his 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. Further, the Commission directs the
Licensees to carry forward the amount realized under Open
Access/wheeling to the next ERC, as it is an additional income to the
Licensees.
ii) Rebate for use of Solar Water Heater:
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.
iii) Prompt payment incentive:
The Commission had approved a prompt payment incentive (i) in all
cases of payment through ECS and (ii) in the case of monthly bill
exceeding Rs.1,00,000/- (Rs. One lakh). The earlier rate of incentive was
0.25 % of the bill amount, the Commission decides to continue the
same.
iv) 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

clvi

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 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.
v) Power Factor:
The Commission in its previous order had retained the PF threshold limit
and surcharge, both for LT and HT installations at the then existing levels
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
vi) Rounding off of KW / HP:
In the 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 the purpose of billing and
the minimum billing shall be for a quarter KW.

vii) 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.
clvii

viii)

Security Deposit (3 MMD/ 2 MMD):

The Commission had issued 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 Honble High Court in
respect of WP 18215/2007.
ix) Mode of Payment by consumers:
The Commission, in its previous Order had approved revenue 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 Epayment up to the limit prescribed by the RBI.
Other ESCOMs 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 of all ESCOMs.

6.8

Cross Subsidy Levels for FY17:


The Honble Appellate Tribunal for Electricity (ATE), in its order dated 8 th
October, 2014, in Appeal No.42 of 2014, has directed the 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.

clviii

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 HESCOM and the cross subsidy thereon, is Indicated in ANNEXURE III of this Order. It is the Commissions endeavor to reduce the cross
subsidies gradually as per the Tariff policy.

6.9

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 15th December 2015 (within the time extended by
the Commission). As the tariff revision is effective from 1st April, 2016
onwards, ESCOMs would be recovering revenue for eleven months of
the Financial Year.
A statement indicating the proposed revenue and approved revenue
is enclosed vide Annexure III and detailed tariff schedule is enclosed
vide Annexure IV.

6.10

Summary of the Tariff Order:


The Commission has approved an ARR of Rs.6017.97 Crores for FY17
which includes the surplus for FY15 of Rs.105.14 Crores and the
Regulatory Asset of Rs.197.69 Crores, with a total gap in revenue of
Rs.481.87 Crores as against HESCOMs proposed ARR of Rs.7112.32
Crores.
The Commission has allowed recovery of entire gap in revenue with
additional revenue of Rs.481.87 Crores on Tariff Revision as against
the additional revenue of Rs.1102.36 Crores proposed by HESCOM
for FY17.
HESCOM had proposed an increase of 102 paise per unit for all
categories of consumers resulting in average increase in retail supply

clix

tariff by 18.34%.

The Commission has approved an average

increase of 48 paise per unit in the tariff. The average increase in


retail supply tariff of all the consumers for FY17 is 9%.

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.10 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 energy charges for commercial category is 20
paise per unit, for LT Industries category is in the range of 15
paise per unit to 30 paise per unit and for other categories is in
the range of 20 paise per unit to 50 paise per unit.

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.

Green tariff of additional 50 paise per unit over and above


the normal tariff which was introduced in the previous Tariff
Orders 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 cap on cost of short-term power purchase to meet
shortfall in supply is continued at Rs.4.50 per unit.

clx

6.11

Commissions Order
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
HESCOM for FY17 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, 2016.
3. This Order is signed dated and issued by the Karnataka Electricity
Regulatory Commission at Bengaluru this day, the 30th March, 2016

(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)


Chairman
Member
Member

clxi

APPENDIX
ISSUE OF NEW DIRECTIVES AND
REVIEW OF COMPLIANCE OF DIRECTIVES ISSUED BY THE
COMMISSION
1.

The following new directive is issued by the Commission


Directive on Energy Conservation:
In view of the increase in cost of electricity and the constraints in
capacity additions to generate additional power to meet the
increase in demand, it is imperative that all the consumers use
energy efficient equipment and adopt energy conservation
measures, in their daily activities to conserve electricity. To
achieve this, the Commission has notified the Demand Side
Management Regulations, 2015, on 28.07.2015. As per these
Regulations, the ESCOMs have to implement Demand Side
Management (DSM) and Energy Efficiency (EE) programmes in
their jurisdiction, to mitigate peak and energy shortages by
adoption of conservation technologies for more efficient use of
electricity. The objective is to flatten the load curve by reducing
the loads in their respective areas leading to reduction in system
peak load.
The Commission has noted that the ESCOMs have already
initiated the DELP (Domestic Efficient Lighting programme) for
supplying/distributing 9 watts capacity LED bulbs to

the

consumers at a subsidised price. This initiative will certainly help


conserve substantial quantum of energy used for domestic
lighting, provided all the consumers accept and adopt it.
clxii

In addition to the above initiative, the Commission notes that


there is a scope for energy conservation in use of equipment like
Air

Conditioners,

commercial

and

Fans,

Refrigerators

industrial

etc.,

installations.

Also,

in

domestic/

use

lamps/energy efficient lamps like induction lamps

of

LED

in all the

streetlight installations including high mast street light installations


should be considered so as to make energy conservation
measures more broad based across wider range of consumers.
Therefore, the Commission hereby directs 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, all new streetlight/high mast installations including
extensions made to the existing streetlight circuits shall be
serviced only with LED lamps/energy efficient lamps like
induction lamps.
Further, the Commission directs 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.
2.

Review of Compliance of Existing Directives:

clxiii

The

Commission

had

in

its

earlier

tariff

orders

and

other

communications issued several directives for compliance by the


HESCOM. While reproducing such directives, the compliance of the
directives as reported by the HESCOM is analysed in this Section.

i. Directive on implementation of Standards of Performance (SoP):

The Directive was:


The HESCOM is directed to strictly implement the specified Standards
of Performance while rendering services related to supply of power as
per the KERC (Licensees Standards of Performance) Regulations, 2004.
Further, the HESCOM is directed to display prominently 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 (Licensees Standards of Performance) Regulations, 2004
and Annexure-1 of the KERC (Consumer Complaints Handling
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.

Nature of
Service

Standards of
performance
(indicative
minimum time
limit for
rendering
services)

Primary
responsibility
centers where
to lodge
complaint

Next higher
Authority

Amount
payable to
affected
consumer

The HESCOM shall implement the above directives within one month
from the date of the order and report compliance to the Commission
regarding the implementation of the directives.
Compliance by the HESCOM

clxiv

As directed by the Commission, the HESCOM has displayed 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., in accordance with the Licensees Standards of
Performance Regulations, 2004 and Consumer Complaints Handling
Procedure Regulations, 2004, on the notice boards in all O&M sections,
O&M sub-divisions, divisions, Circles and Zonal offices and the same is
also hosted on the HESCOMs web site

hescom.co.in for the

information of consumers .
Further, action has been taken to display the coloured window size
sticker posters in Kannada in the premises of section offices and subdivision offices to draw the attention of the consumers visiting the
offices.
The HESCOM will also stress on the consumer education campaign in
order to create awareness among the consumers regarding the
services extended by the HESCOM.
Commissions Views
The Commission notes that the HESCOM has complied with the
directive

by

displaying

the

details

of

specified

Standards

of

Performance in Kannada on the notice boards in all its O & M sections


and subdivision offices for the information of the consumers. The
Commission directs the HESCOM to adhere to the specified standards
of performance while rendering services to ensure that consumer
complaints are attended to in a time bound manner.
The Commission reiterates its directive to the HESCOM to continue to
strictly implement the specified Standards of Performance while
rendering services related to supply of power as per the KERC
(Licensees Standards of Performance) Regulations, 2004. Compliance

clxv

of the same shall be submitted to the Commission on a quarterly basis


regularly.

ii. Directive on use of safety gear by linemen:


The directive issued was:
The Commission directs the HESCOM 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 HESCOM should sensitise the linemen
about the need for adoption of safety aspects in their work through
suitably designed training and awareness programmes. The HESCOM 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 HESCOM shall implement this
directive within one month from the date of the order and submit
compliance report to the Commission.
Compliance by the HESCOM
The HESCOM linemen are provided with adequate safety equipment
such as Helmets with Electronic Induction Tester, Hand Gloves, tool kits,
rain coats, gum boots etc., as personal protective equipment for the
purpose of safety of linemen and it is also ensured that all the linemen
are using the safety equipment provided to them while working on the
distribution network.
The HESCOM has procured 3,500 numbers of Helmets and 3,500 pairs of
Hand gloves and has distributed to all the lineman staff. The
Superintending Engineers of O & M Circles are authorized for
procurement of good quality Rain Coats and Gum Boots to all the

clxvi

linemen working under their jurisdiction. So far 1,722 linemen have


been provided with safety gear and procurement of safety gears to
remaining linemen is in process.
Further, the concerned officers are regularly cross checking the
compliance by linemen and taking disciplinary action on the
concerned if they are not using the safety gear provided to them.
The HESCOM is conducting regular training programmes to all the
linemen regarding safety aspects and prevention of electrical
accidents, as part of pre employment / pre-promotional training and
also conducting training under National training program for C &D
employees.

Commissions Views:
The Commission notes that the HESCOM has provided safety gadgets to
its linemen and also taken action to procure/provide additional safety
tools required for the linemen in the field. It is important that the
HESCOM should continue to focus on safety aspects to reduce the
number of electrical accidents occurring in the distribution system due
to negligence on the part of the field staff and also non-adherence of
safety procedures by them while working on the network. It is also
necessary that the frequency of imparting training to linemen should be
increased so that adherence to safety aspects becomes part of their
routine.
The Commission reiterates its directive that the HESCOM shall ensure
that all the linemen in its jurisdiction are provided with proper and
adequate safety gear and the linemen 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.

clxvii

iii. Directive on providing Timer Switches to Street lights by the


ESCOMs
The directive issued was:
The Commission directs the HESCOM to install timer switches using
own funds to all the street light installations in its jurisdiction wherever
the local bodies have not provided the same and later recover the
cost from them. The BESCOM 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 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
Compliance by the HESCOM
As per the directive of the Commission, the HESCOM has approached
the concerned Deputy Commissioners, Chief Executive Officers and
also the Local Presidents/ Executive Officers / Chairmen of the taluk
panchayths / city Municipal Corporations and town panchyaths and
appealed them to install the timer switches to streetlights which would
be mutually beneficial. The HESCOM officers were also directed to
contact the local civic authorities and stress the need for installing the
timer switches. Further, as regards installation of timer switches to
streetlights by the HESCOM and recover the cost from the local bodies,
the HESCOM is interacting with the concerned civic authorities and
appraised them that the HESCOM is willing to install the timer switches
out of its own funds and recover the cost later from the them.
The concerned HESCOM officers are also directed to contact the
concerned officials immediately and arrange to send the proposals/
action plan for installing the timer switches in their jurisdiction. In this

clxviii

regard, the HESCOM has already collected the data regarding the
number of timer switches required to be installed and it is found that
around 18,500 timer switches are required. The HESCOM will take
necessary action to see that the timer switches are installed at the
earliest and compliance in this regard will be submitted to the
Commission shortly.
Commissions Views
The Commission notes that the HESCOM so far has not installed timer
switches to streetlight installations in its jurisdiction.

The Commission

reiterates that the streetlight installations should be provided with timer


switches for

enabling them to be automatically switched on only

during the scheduled time.

This measure would not only save

significant quantum of energy that is currently wasted because of


inefficient and unreliable manual operation of the switches which
allow them to be lit unnecessarily even during day time, but also
ensure that streetlights are lit during the scheduled dark hours when
the general public require them.

As directed earlier the HESCOM

should install the timer switches at their cost and later recover it from
the local bodies. Persuading the local bodies to fix timer switches at
their own cost availing funds / grants received from Government and
other agencies for such programmes / works should also be explored
seriously.

Further, providing timer switches to streetlight installations in the


HESCOM also under Nagara Jyothi programme through M/s EESL
needs to be earnestly pursued with seriousness on the lines of the
BESCOM, to ensure installation of timer switches covering of all street
light installations in its jurisdiction. The progress /status in this regard shall
be reported to the Commission on a quarterly basis regularly.

clxix

The Commission reiterates its directive to the HESCOM that the


streetlight installations should be provided with timer switches for
ensuring prompt control and avoidance of wastage of electricity.
The Commission further directs the GESCOM that henceforth, the new
streetlight installations and any extension/modification to be carried
out to the existing streetlight installations shall be serviced only with
timer switches.

iv. 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 substation 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 substations and feeders
should be identified for load shedding for the minimum required
period with due intimation to the concerned subdivisions and
substations.
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 to 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.
6) Load shedding should be carried out in different sub-stations /
feeders to avoid frequent load shedding affecting the same substations / feeders.
clxx

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 interESCOM load adjustment during the month.
8) The ESCOMs shall submit to 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 had indicated that it would review
the compliance of directions on a monthly basis for appropriate orders.

Compliance by the HESCOM:


M/s KEONICS, Bengaluru, has developed a SDRA (SCADA Data
Reporting and Analysis) software application for providing Dash Board,
generating MIS and power supply status reports of all categories at all
levels in the HESCOM, which will be geographical area wise and
constituency wise using raw SCADA data. SDRA enables analysis of
huge volume of data recorded by SCADA system and producing
reports/alerts for effectively monitoring of the operations of 11KV
feeders.
The HESCOM is implementing SDRA software and the detailed work
award has already been issued to M/s KEONICS, Bengaluru, for

clxxi

implementation of the said application software. Data gathering, data


structuring and aggregation work for SDRA application is in progress.
Further, as per directions of the Commission, the HESCOM will continue
to comply with the directive on load shedding.
The HESCOM is arranging 7 hours of 3-phase power supply to rural
areas with continuous 1-phase power supply during evening time, 2224 hours of power supply to NJY and 24 hours for all remaining
categories of feeders with effect from 01.01.2015. The HESCOM will
furnish its projections of requirement of energy and availability from
different sources and any unavoidable load shedding for every
succeeding month in the last week of the preceding month to
Commission regularly.

Further, in case of any pre-arranged load shedding the same is being


published in local newspaper in advance and is uploaded in the
HESCOMs web site besides displaying on the notice boards of the
divisional/sub divisional /section offices. In case of any unscheduled
load shedding due to system constraints, the same is intimated to 24x7
Consumer Care Center in real time for communication to the
consumers. Further, a system of informing the consumers /public
through SMS in case of load shedding is under consideration.

Commissions Views:
The Commission observes that the HESCOM is not submitting its
projections

of

availability

and

demand

for

power

and

any

unavoidable load shedding required to be imposed for every


succeeding month in the last week of the preceding month, to the
Commission, regularly. The HESCOM shall henceforth submit the same
regularly to the Commission. The Commission also notes that the
HESCOM has not so far taken any action for providing information to

clxxii

the consumers through SMSes regarding the time and duration of load
shedding. This has to be expedited as the consumers need to be
informed through SMSes in addition to notifications in newspapers
/media regarding load shedding due to reasons such as system
constraints, breakdown of lines/equipment, maintenance etc. This
would address significantly the consumers dissatisfaction on this issue.
Further, it is also necessary to avoid load shedding involving the same
sub-stations/feeders; the same should be on rotation basis to avoid
inconvenience to consumers/public.
The Commission reiterates that the HESCOM shall comply with the
directive on load shedding and submit monthly compliance reports to
the Commission regularly.

v.

Directive on Establishing a 24x7 Fully Equipped Centralized


Consumer Service Center for Redressal of Consumer Complaints:
The directive was as below:
The HESCOM 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 their area of
supply are able to seek and obtain timely and efficient services /
redressal in the matter of their grievances.

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. Such a system should also generate daily reports
indicating the number/nature of complaints received, complaints
attended, complaints pending and reasons for not attending to the
complaints.

clxxiii

The HESCOM 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 is to be submitted to the Commission
within two months from the date of this Order.

Further, the Commission directs the HESCOM to establish/strengthen


24x7 service stations, equipping them with separate vehicles &
adequate line crew, safety kits and maintenance materials in all its
sub-divisions including rural areas for effective redressal of Consumer
complaints.
The Commission also directs the HESCOM to hold consumer interaction
meetings in each O & M sub-division once every two months
according to a published schedule and invite consumers in advance
to participate in such meetings to sort out their grievances. Such
meetings shall be chaired by officers of the level of Superintending
Engineers and attended by the concerned Divisional and subdivisional Engineers. The HESCOM shall submit compliance of the same
to the Commission once in a quarter.
Compliance by the HESCOM:
The HESCOM has taken various measures to popularize the Call Centre,
which is provided with a toll free number 1800 425 1033 and a short
code 1912 to enable the consumers to register all type of complaints
relating to supply of electricity. The HESCOM has introduced new
software through which the customer will come to know his/ her
complaint number via SMS to his/ her mobile which also has a facility
to

track

the

complaints.

The

HESCOM

has

been

publishing

advertisements for the benefit of the consumers in all local papers


regarding establishment of a Centralized Call Centre and the need to
register all the complaints with this Centre only.

clxxiv

All complaints are being received at the Centralized Call Centre only.
Each and every complaint is received on a helpline telephone number
by the desk operator and registered with a unique complaint Id which
the same is intimated to the consumers. The complaints are then
transferred online to the concerned section officer for resolving the
same. The reports are generated on a daily / monthly basis by
indicating the number / nature of complaints received /tracked and
monitored till its closure.
The HESCOM has directed all the concerned officials to accord top
priority for prompt/ speedy action in attending / resolving the
consumer complaints.
The HESCOM is conducting Consumer Interaction Meetings once every
two months at subdivision levels regularly and 60 such meetings have
been conducted during the current year. Further, the officials have
been directed to send personal invitation to the consumers to attend
the meetings and provide snap shots of the proceedings of the
meetings so as to enable to host on HESCOMs website.
The HESCOM has provided 464 linemen and 51 vehicles to service
stations to effectively deal with the consumer complaints relating to
restoration of supply of power.

Commissions Views:
The Commission notes that the HESCOM has taken certain measures
for redressal of consumer complaints but, it is necessary to take further
measures in this regard for effectively deal with consumer complaints
relating to supply of electricity. The HESCOM should continue to focus
on improving the consumer services and further reduce the consumer
complaint downtime to ensure prompt services to the consumers. The
HESCOM should ensure prompt response to consumer complaints
about

interruptions

in

power

clxxv

supply

due

to

breakdown

of

lines/equipment, replacement of faulty transformers etc. The HESCOM


should sensitize its field staff in this regard.
The Commission has noted that most of the consumers who
participated in the Public Hearing held by the Commission have
complained that the HESCOM is not efficiently rendering services to
them and also prior information is not given to them to attend
consumer interaction meetings held at the subdivisions. They have
requested that these aspects need to be improved so that the
complaints are resolved at the subdivision level. The Commission is also
of the opinion that the HESCOM should conduct consumer interaction
meetings at regular intervals and most of these complaints can be
resolved without escalating to higher authorities saving precious time
of the consumers.

The HESCOM shall continue to ensure that the

higher officers are present in such meetings held at the subdivisions to


effectively redress the grievances of the consumers.
1.1.

The Commission reiterates its directive to the HESCOM to publish the


complaint handling procedures / contact number of the Centralized
Consumer Service Centre regularly in the local media and other
modes periodically for the information of 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 the matter shall be submitted to the Commission
once in a quarter regularly.

clxxvi

vi. Directive on Energy Audit:

The Commission had directed the HESCOM 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 HESCOM 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 all 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 on the progress achieved in
respect of:

a)
b)
c)
d)

Number of DTCs existing in the Company.


Number of DTCs already metered.
Number of DTCs yet to be metered.
Time bound monthly programme for completion of work.

Compliance by the HESCOM


Energy Audit of towns/cities:
The energy audit of 16 towns which have population of more than
50,000 is being carried out in the HESCOM. Below mentioned matrix
shows average energy losses recorded from the FY15 and the FY16 in
the 16 towns.

Name of the towns / cities where loss range is


Year

>15%<=20
%

Below 15%

clxxvii

>20%
<=25
%

>
25%

FY15
FY16 (up to
Sept2015)

Hubli, Dharwad , Sirsi , Karwar, Dandeli, Gadag ,


Haveri, Ranebennur, Belgaum, Bijapur, Ilkal, Gokak,
Bagalkote , Jamakhandi, Rabkavi, Banahatti
Hubli, Dharwad, Sirsi, Karwar, Dandeli, Gadag
,Haveri, Ranebennur, Belgaum , Bijapur, Ilkal,
Gokaka, Jamakhandi, Nippani

Nippani
Rabkavi,
Bagalkote

It can be seen from the above that, for the FY15, out of 16 towns the
loss levels in 15 towns are less than 15 per cent. In the FY16, out of 16
towns, the loss levels in 14 towns are less than 15 per cent. Action will
be taken to bring down the losses to less than 15 per cent in Rabakavi
and Bagalakote during the remaining period of the FY16.
Action plan for reduction of high T&D and AT&C losses outlined as
below.

There are 2,600 feeders as on September, 2015 in the


HESCOM. All these feeders are being monitored continuously by way
of feeder-wise energy audit.
Re-conductoring of HT and LT lines have been proposed
wherever conductor capacity is found inadequate and is being
replaced by higher capacity conductors.

Replacement of 11 KV line Weasel conductor by Rabbit conductor in


selected 73 towns in phased manner.

Replacement of age old LT conductor by Rabbit conductor in


selected 73 towns in phased manner i.e., about average of 3,286 km
per annum.

Providing DTC metering in non-RAPDRP towns. Monitoring the energy


audit under NEF scheme is in progress.

Providing additional distribution transformers, Arial Bunched Cables,


maintenance works of DTCS, etc., in 25 towns under R- APDRP.

Providing additional distribution transformers to non-RAPDRP areas


under NEF scheme.

Providing UG cables / Arial Bunched Cables in 11 KV distribution


network for Belagavi, Hubli-Dharwad cities, under NEF Scheme.

Load balancing of DTCs and replacement of 10 years age old


electro mechanical meters by static meters.

clxxviii

As per the recent guidelines of the GoK, measures have been taken/
proposed

to

regularize

un-authorized

IP

sets

and

providing

infrastructure to these regularized IP sets, are proposed.

Energy audit of exclusive IP set feeders and the DTCs, feeding


predominantly IP sets are being done by taking readings every
month.

NJY feeders have been provided to arrange 24 hours of power


supply to villages in rural part of the HESCOM. Phase1 & 2 of the
project

is

nearing

completion.

When,

all

the

feeders

are

commissioned, the energy audit of NJY feeders will be more


accurate to quantify energy loss in rural areas. NJY 3rd phase project
has been proposed under NEF scheme for the balance feeders in
four districts and the tendering is in process.

Achieving 100 per cent reading and billing of LT installations and


minimizing the door lock and unread installations. Proper metering of
streetlight and water supply (LT-6) installations for monitoring the
consumption. It is proposed to provide timer switches to control OFF
and ON of streetlights in urban areas of the HESCOM.

To pool up vigilance & MT batches to create mass raids to detect


theft of energy and to arrest possible theft. Study of category wise
consumption pattern of LT3 and LT5 installations and thereby taking
measures like rating, sealing of terminal covers of energy meters with
numbered polycarbonate seals etc.

DTC Metering:
The project consists of supply, installation, commissioning, and
maintenance of composite thread through type meter box of class 1.0
with LT Electronic Tri-Vector Meter having AMR compliant with
associated CTs, Modem and other materials for DTC metering works
under competitive bidding is taken up. It covers supply, erection and
maintenance up to 5 years, in the non-RAPDRP town areas and rural
areas.

clxxix

Under R-APDRP part-A, DTC metering in 25 towns has been proposed.


But, due to erroneous data, the DTC wise energy auditing has not been
conducted for R-APDRP towns. The R-APDRP project leaders are taking
measures for correcting data. Once the defects in R-APDRP Go-live
system are attended/ removed, DTC wise energy audit in R-APDRP
towns will be conducted after obtaining correct data.
In the initial phase, tenders were invited for supply, installation,
commissioning and maintenance of composite thread through type
meter box of class 1.0 with LT Electronic Tri-Vector Meter, having AMR
compliant, with associated CTs, Modem and other materials for 22,693
un-metered non-IP set DTCs. The work is awarded to M/s. Asian Fab
Tech Limited, Bangalore in which metering of 18,235 DTCs is
completed.
Under phase-II of DTC metering tenders were invited for;

Metering of remaining 12,162 un-metered DTCs of non-RAPDRP


towns and non-IP sets.

Replacement of the existing meters of 1,942 DTCs in respect of


non-RAPDRP towns and 3,996 DTCs in respect of non-IP sets. The
work of metering of total 5,938 DTCs is awarded to M/s. Asian Fab
Tech Limited, Bangalore, in which metering of 998 DTCs is
completed. Once all the DTCs are fixed with meters, the DTC wise
energy audit will be done regularly and in consistent manner.
However, the HESCOM has already submitted DTC wise energy
audit information for the month of July, 15 input and August, 15
DCB for 423 DTCs. Further, for balance DTCs, the energy audit will
be furnished time to time along with feeder wise details.

clxxx

Commissions Views:
The Commission notes that the HESCOM has not submitted regularly
the monthly analysis of energy audit conducted in cities/towns
regularly. As seen from the consolidated energy audit statement for
the FY15 and for the period from April to September 2015, 3 of the 16
towns have distribution losses more than the mandated 15 per cent.
The Commission also notes that the HESCOM has initiated certain
measures to reduce the distribution losses and improving collection
efficiency to achieve the mandated losses of less than 15 per cent.
However, further remedial measures need to be continued to bring
down the loss figures well below the targeted levels. The HESCOM is
directed to initiate suitable measures to further bring down the loss
levels.
The Commission further notes that the DTC metering is completed for
18,235 DTCs out of the 22,693 DTCs in respect of 25 towns where
RAPDRP scheme is taken up. But, in spite of providing meters to
considerably a large number of DTCs, the HESCOM has not taken up
comprehensive energy audit reportedly due to erroneous data
/defects in R-APDRP Go-live system. There has been an inordinate
delay in tagging of consumer details with the feeders/DTCs by the
HESCOM. In fact, the HESCOM during the ESCOMs Review meetings
held in the Commission had committed to complete this exercise
before August 2014, but the progress achieved so far is not
satisfactory.
The HESCOM is directed to complete 100 per cent DTC metering along
with consumer indexing to take up energy audit of DTCs for which
meters have already been installed and to initiate corrective measures
for reducing distribution losses wherever they are above the standard
level. The compliance in respect of DTC wise energy audit conducted

clxxxi

with analysis and the remedial action initiated to reduce loss levels
shall be submitted every month regularly to the Commission.
Further, the HESCOM is directed to submit to the Commission the
consolidated energy audit report for the FY16, as per the formats
prescribed by the Commission, vide its letter No: KERC/D/137/14/91
dated 20.04.2015, before 15th May 2016.

vii. Directive on Implementation of HVDS:

In view of the obvious benefits in the introduction of HVDS in reducing


distribution losses, the Commission had directed the HESCOM 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.
Compliance by the HESCOM:

Preparation of estimates for implementation of HVDS in Sadalga Hobli


of Bhoj Section as per the guidelines issued by the KERC is in process.

As regards progress of implementation of HVDS in respect of 11KV


Kummur feeder of Byadagi sub-division, the project has been
completed on 31.01.2015. Post implementation of HVDS, third
party evaluation will be carried out by M/s. Central Power Research
Institute, Bangalore and issuing of work award for the same is in
process.
Further, the concept of HVDS is covered in the implementation of ongoing projects like regularization of un-authorized IP sets and NJY, in
which scope is given for running lengthier HT lines whereas LT line is
clxxxii

discouraged. Therefore, HVDS is not economically viable in other


places, as HT line is comparatively lengthier than LT line. The cost of
HVDS is also abnormally high, which the HESCOM cannot afford at this
stage and hence, exemption is sought form implementation of HVDS in
the HESCOM.

Commissions Views:
The Commission has been directing the ESCOMs to identify one subdivision 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 subdivisions. Further, with a view to
bring down the cost of implementation of HVDS, the Commission also
issued revised guidelines to all the ESCOMs to implement HVDS in
subdivisions/feeders

having

the

highest

distribution

losses.

The

Commission also, after verifying the DPR in respect of implementation


of HVDS in Sadalga Hobli of Bhoj Section has directed that the cost of
the project be reduced by reusing the existing poles, conductors, etc.,
in execution of works. However, the HESCOM has not taken up
implementation of the same in its jurisdiction despite these directions.
In the ESCOMs Review meeting held in the Commission, the HESCOM
was also directed to submit a detailed report on the viability of
implementation of HVDS scheme, for taking a view in the matter by the
Commission. However, the HESCOM so far has not submitted its report
in this regard.
As regards its intention that the implementation of High Voltage
Distribution System is not necessary as projects in respect of
implementation of NJY and regularization of unauthorized IP sets are in
progress, it is noted that the concept of HVDS and NJY is totally
different and the ESCOMs were directed to implement the HVDS for
the agricultural feeders segregated under NJY wherever high

clxxxiii

distribution losses are prevailing. Therefore, by implementing the HVDS


in such feeders, the losses could be reduced significantly.

Hence, the HESCOM is directed to follow the revised guidelines issued


by the Commission and to take up implementation of HVDS
programme in Sadalga Hobli and submit compliance of the same
from time to time to the Commission.

viii. Directive on NirantharaJyothi 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.

Compliance by the HESCOM:

The Detailed Work Award for implementation of NJY phase-1


comprising of 246 feeders spread over 20 Taluks was issued during MaySeptember 2011 with completion period of nine months. The inordinate
delay in implementation of the project is attributed to problems in the
field during the execution of works such as Right of Way (ROW) issues,
approval from Railway authorities, forest clearances, opposition from
farmers for erection of poles in their fields and labour problems faced
by the agency executing the work. As on 31.12.2015, 218 feeders have
been commissioned. The works in respect of the remaining feeders is in
various stages of completion and the feeders will be commissioned at
the earliest.
As directed by the Commission, the analysis for evaluating the benefits

clxxxiv

accrued to the system, in terms of reduction in failure of distribution


transformers, improvement in tail-end voltage and improvement in
supply, reduction in interruptions have been carried out through M/s
CPRI and the same is furnished.
The Detailed Work Award for NJY phase 2 comprising of 210 feeders
spread over 14 Taluks was issued during January-March 2012. As on
31.12.2015, 186 feeders have been commissioned, this constitutes 89
per cent of total feeders taken up for segregation. The works in respect
of the remaining feeders are in various stages of completion and the
same will be commissioned at the earliest.

Further, the feeders for

which the segregation work is completed have been commissioned


thus resulting in realization of envisaged benefits.
All efforts are being made to commission the remaining feeders under
both NJY phase-1 and

phase-2 in a time bound manner. Further,

action has been taken to ensure that NJY feeders are not tapped
illegally for operating IP sets. Further, M/s CPRI have furnished the
analysis reports in respect of some of the completed NJY feeders. The
report is submitted to the Commission.
Computation of IP consumption:
The HESCOM has 810 numbers of segregated agricultural feeders as at
the end of September, 2015. However, computation of IP set
consumption is made on the bases of exclusive IP feeder consumption,
wherever such feeders are more in numbers. In other cases, where
bifurcation is yet to be completed assessment IP set consumption is
being done on the basis of readings of meters fixed to DTCs feeding
predominant IP set loads.

Commissions Views:
The Commission notes that the HESCOM is yet to commission all the
feeders, both under NJY phase1 & 2 for which the segregation work
has been completed in all respects. The progress achieved in
clxxxv

implementing the works both under NJY phase1&2 is not satisfactory as


the same has been delayed inordinately. The delay in implementation
of NJY works in fact, has resulted in non-realization of envisaged
benefits set out in the DPR when the project was initiated.

The Commission directs the HESCOM to expedite commissioning of


balance feeders and to carry out the performance analysis of such
feeders to ensure that the objectives set out as per DPR are
accomplished.

Further, the Commission has noted that the HESCOM has carried out
the performance 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 increase in
metered consumption. The analysis reveals that there is overall
improvement in supply condition after implementation of NJY besides
benefiting the consumers in rural area resulting in a positive socioeconomic impact. The analysis also reveals that post implementation
of NJY; the consumers are satisfied as the numbers of hours of
availability of power has increased.

The HESCOM is directed to expedite execution of NJY works under


both phase1&2 and report compliance thereon to the Commission.
Further, the HESCOM shall ensure that NJY feeders are not tapped
illegally for running IP sets which would defeat the very purpose of
feeder separation scheme undertaken at huge cost.

Further, it is noted that the HESCOM has already segregated 428


feeders taken up both under phase1&2 works and consequently
agricultural feeders are exclusive from rural loads and the energy
consumed by the IP sets could be more accurately measured at the
11 KV feeder level at the sub-stations after duly allowing for distribution

clxxxvi

losses in 11 KV lines, distribution transformers and LT lines. The HESCOM


is directed to report every month, the total IP set consumption only on
the basis of data from agricultural feeder energy meters and furnish
the specific consumption of IP sets as per the formats prescribed by
the Commission enclosed vide its letter No: KERC/D/137/14/91 dated
20.04.2015, before 15th May 2016.
The HESCOM is also directed to continue to furnish feeder wise IP sets
consumption based on energy meter data in respect of agriculture
feeders segregated under NJY to the Commission every month.

ix.

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 HESCOM to
take up replacement of inefficient pumps with energy efficient pumps
approved by the Bureau of Energy Efficiency, at least in one subdivision in its jurisdiction.
Compliance by the HESCOM:

M/s Energy Efficiency Services Limited (EESL), New Delhi, is executing


the project on a pilot basis in Byadagi and Nippani sub-divisions, which
involves the replacement of 4,152 and 6,861 numbers of old pump sets
by new energy efficient pump sets, respectively.
Presently, in the first phase totally 590 pump sets both in Nippani and
Byadgi sub-divisions have been replaced by energy efficient pump
sets. Due to issues of Measurement & Verification (M&V) and Billing are
not resolved yet, approval was not accorded for replacement of
balance pump sets. However, M/s EESL, will be called for discussion to
sort out this issue.

clxxxvii

Observations
The bill raised by M/s EESL towards 5 feeders was amounting to Rs.10.23
Lakh based on 95 per cent of savings. One hour consumption of old
pump set has been measured by power analyzer i.e., rating of pump
sets carried out for 99 pump sets in respect of Benadi IP feeder in
Nippani sub-division.

The power recorded in respect of old pump was 608.36 kW. The
consumption per month was 608.36 KW x 6 hrs x 30 days=109,505
units per pump set.

The consumption recorded in respect of new pump was 391.1KW x


6 hrs x 30 days=70,398 units per month.

Accordingly, the average consumption of old pump=109,505/99


numbers=1,106 units / pump set / month and new pump=70,398/99
numbers =711 units / pump set / month.

Specific

consumption

allowed

by

the

KERC=8,244

units/12

months=687 units / pump set / month. Hence, the saving criteria


based on calculation per hour, per day, per month, appear to be
unscientific due to the following reasons:

The methodology as a thumb rule by multiplication of 6 hours x


number of days appears to be incorrect on the ground that
pump sets may not be running on all the days and for entire 6
hours.

Number of unscheduled interruptions on the rural feeder due to


heavy wind/ rain is also considerable.

The consumption depends on type of crop, humidity in the


atmosphere and also due to unseasonal rains.

If the criterion proposed by EESL is considered, then IP sets operating


for 6 hours per day throughout the year is unrealistic, as the IP sets are
normally not functional during rainy season and also during peak
summer due to drastic reduction in water table.

clxxxviii

Commissions Views:
The Commission notes that the HESCOM is implementing a pilot project
of DSM in agriculture in Nippani and Byadgi sub-divisions. It is observed
that not much progress has been achieved in this regard except
completion of replacement of 590 existing pumps. It appears that the
work is moving at a slow pace which needs to be expedited to reap
the expected benefits by implementing this project. It is important to
see that all the balance works relating to this project are expedited so
that the work is completed in a time bound manner and the farmers
are able to avail the benefits of this scheme.
Further, the HESCOM should also give emphasis on implementation of
DSM measures in the other parts of its jurisdiction in order to conserve
energy and also precious water for the benefit of farmers. The HESCOM
should focus its attention on implementation of DSM measures by
necessary coordination with all the stakeholders concerned to arrive at
an early agreement on a crucial measurement and verification
methodology to move forward for maximizing the benefits and scaling
up the same in whole of its jurisdiction.

The Commission during its review meetings with the ESCOMs held in the
Commission has been directing them to initiate DSM measures in any
one sub-division/taluk in order to assess the results of such measures
before scaling up in whole of its jurisdiction. The HESCOM is directed to
expedite the implementation of DSM project in Nippani and Byadgi
sub-divisions and complete at the earliest. The compliance thereon
shall be submitted to the Commission within three months from the date
of this order.

x.

Directive on Lifeline supply to Un-Electrified households:


The Commission had directed the ESCOMs to prepare a detailed and
time bound action plan to provide electricity to all the un-electrified

clxxxix

villages, hamlets and habitations in every taluk and to every household


therein.

The action plan shall 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 had 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.
Compliance by the HESCOM:
Details of the un-electrified households identified by the HESCOM and
the action taken to provide electricity to these households under
various schemes are as stated below.
Electrification of Rural households taken up under RGGVY 12th Plan:
In Haveri district, the number of villages proposed for intensive
electrification is 692. The number of habitations covered under this
scheme is 702. The un-electrified BPL households are 18,638 numbers
and APL households are 5,568 numbers. The project cost is Rs. 606.51
lakh. The approved project cost by the REC is Rs.590.99 lakh. The work
has been awarded to M/s Praveen Electrical Works, Gadag and the
same is in progress.
Electrification of un-electrified villages taken up under Deendayal
Upadhyaya Gram Jyoti Yojana scheme:

Rural electrification works in respect of 5 un-electrified villages in


Belgaum district is taken up. In this scheme, the number of BPL
households proposed is 70, the project cost is Rs.754 lakh and
tendering for the same is in process.

Rural electrification works in respect of 11 un-electrified villages in


Uttara Kannada district is taken up. In this scheme, the number of

cxc

BPL households proposed is 216, the project cost is Rs.1,387 lakh


and tendering for the same is in process.
1.2.

Rural electrification works in respect of 14 un-electrified villages in


Sirsi division coming under the jurisdiction of Uttara Kannada
district is taken up. In this scheme, the number of BPL households
proposed is 541, the project cost is Rs. 4458 lakh and tendering for
the same is in process.

Electrification of un-electrified rural households proposed under Deendayal


Upadhyaya GramJyoti Yojana (DDUGJY) scheme:
No. of rural
households proposed
to be electrified
including BPL under
DDUGJY

No. of BPL
households
proposed to be
electrified under
DDUGJY

Sl.
No.

Name of the
District

No. of unelectrified
households as per
Census 2011

Uttara
Kannada

24,529

22,680

20,510

Haveri

31,059

13,360

9,020

3
4
5
6
7

Gadag
Dharwad
Bijapur
Bagalkot
Belgaum
Total

27,070
10,489
9,611
43,478
1,24,951
2,71,187

21,946
10,489
69,611
34,885
1,16,495
2,89,466

21,946
10,142
13,176
12,739
78,018
1,65,551

1.3.

Rs. 48.38 crore is sanctioned to the HESCOM for providing access


to electricity to rural households under DDUGJY scheme.

Estimates are to be prepared and tender process is to be


initiated.

Electrification of Mettinagadde and 13 un-electrified habitations in Honnavar


Taluk of Uttara Kannada District:

Electrification of 83 rural households in Mettinagadde and 13 unelectrified habitations in Honnavar Taluk is proposed under this
project.

Detailed Work Award was issued to M/s. Mahesh Electricals &


Telecom, Pune, vide Letter No: HESCOM/SEE (PMC)/EE-P1/Indent839(A)/2014-15/Cys-763, for supply portion. Work has been
completed on 28.05.2015.

cxci

Latest status of electrification of un-electrified households:


1) Total number of un-electrified rural households including BPL
households as on 31.03.2015 is 3,30,412. Out of these, electrification of
18,638 BPL households is sanctioned under RGGVY 10th Plan for Haveri
district and the work is in progress.
2) Electrification of 2,89,526 rural households including 1,65,621 BPL
households was proposed under Deendayal Upadyaya Gram Jyoti
Yojana (DDUGJY) scheme at a cost of Rs.601.73 crore.
3) Subsequently, as per the reallocation from GoK, under DDUGJY fund
for electrification of un-electrified rural households was restricted to
Rs. 48.38 crore only.
4) Hence, out of 1,65,621 un-electrified BPL households, 18,638
households have already sanctioned under RGGVY 12th plan and
85,104 BPL households are proposed under DDUGJY scheme totaling
to 1,03,742 households.
5) Balance, 2,26,670 households (16,4791 APL households and 61,879
BPL households) are yet to be electrified.

Commissions Views:
The Commission observes that only a meager progress is achieved in
electrification of BPL households by the HESCOM. It is seen that most of
the electrification works are either in proposal stage or execution stage
and in fact, for 2,26,670 households, the HESCOM is yet to formulate a
scheme. The HESCOM needs to expedite electrification of households
with the seriousness this matter deserves. The electrification of
households has remained stagnant for the last many years leaving vast
numbers of households in the remote areas remain without basic need
of electricity. The programme should be implemented within in a time
frame to ensure that the people are provided with the basic need of
electricity at the earliest.

cxcii

The Commission, while reviewing the status of compliance of its


directives during the ESCOMs Review meetings, has been stressing
upon ESCOMs to initiate necessary action to provide electricity to the
un-electrified households with funding arrangement by RGGVY or any
other source. The HESCOM shall come out with an action plan to
implement the directive of the Commission for providing electricity to
the

un-electrified

households

in

its

jurisdiction

and

submit

compliance/progress achieved monthly to the Commission regularly.


Further, the Commission, concerned with the slow pace of progress of
this programme, in previous Tariff Order had directed the HESCOM 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. But, there is not much
progress in these aspects. The HESCOM is directed to expedite action
to provide electricity to the un-electrified households covering all the
remaining

households

within

the

targeted

time

fixed

by

the

Commission and report compliance to the Commission regarding the


monthly progress achieved from May, 2016 onwards. In the event of
non-compliance, the Commission may be constrained to initiate
penalty proceedings under section 142 of the Electricity Act, 2003.

xi.

Directive on sub-division as Strategic Business Units (SBU).


The present organizational set up of the ESCOMs at the field level
appears to be mainly oriented to 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 viability of the ESCOMs urgently calls for a change of
approach in this regard, so that the field level functionaries are made
accountable for ensuring realization of revenues corresponding to the
energy supplied in their jurisdiction.

cxciii

The Commission had directed the HESCOM 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.

Compliance by the HESCOM:


The progress of introduction of SBU in Shiggaon sub-division is given
below:
Mapping: As per DCB of September, 2015, there are 42,437
installations and 1,001 DTCs. Mapping of all installations, DTCs and
feeders are completed so that DTC wise, feeder wise sales figures
are accurate.
Station meters: There are 19 numbers of 11 kV feeders and 3
numbers of 33 kV stations. All the feeders meters have been
checked and calibrated for accuracy to ensure that feeder wise
input energy is accurate.
Highest feeder loss: Detailed checking of all the installations has
been done. Out of which 11 kV Motalli feeder which has recorded
53 per cent loss has been taken up for intensive monitoring.
Not recording meters (MNR): The work of replacement of 166 nonrecording meters, sealing of meters and detection of un-authorized
installations and regularization of the same was carried out. There
are no MNR meters in LT-3 and LT-5 tariff categories.
Replacement of meters: Estimates for replacement of electromechanical meters by electronic meter is proposed.
Additional DTCs: Additional DTCs are provided to reduce the losses.
Collection and Billing efficiency: In September 2015, 75 per cent
collection efficiency and 100 per cent billing efficiency achieved
respectively.
DTC metering: 100 per cent DTCs are metered in urban Area (141
numbers).

cxciv

T & D loss: Distribution losses reduced from 30 per cent in August,


2012 to 13.45 per cent in September, 2015.
Other details:
i.

Pursuing recovery of arrears of long disconnected installations


and withdrawal statements are being sent to reduce the closing
balance.

ii. Outsourcing staff to Shiggaon sub division is in process.


iii. 100 per cent metering of BJ KJ installations is completed.

Commissions Views:
The Commission notes that, the ESCOMs have expressed their difficulty
in introduction of SBU concept in their O & M divisions / sub divisions due
to implementation issues in the field. The Commission recognizes the
problems associated with implementation of SBU concept.

As an

alterantive, the Commission had instituted a study to make field


formations of the ESCOMs financially accountable without any
modification in their existing administrative set up. The Commission has
forwarded a report prepared by the consultants M/s PWC regarding
implementation on Financial Management Framework for distribution
utilities to take further action to implement a model suggested by the
consultant, in their jurisdiction to bring in accountability on the
performance of the divisions / sub-divisions in relation to the quantum of
energy received, sold and its cost so that they conduct their business on
commercial principles.
The HESCOM is therefore, directed to implement this financial
management framework model and report compliance thereon within
three months from the date of issue of this Order.

xii)

Directive on Prevention of Electrical Accidents:


The directive was as follows:

cxcv

The Commission has reviewed the electrical accidents that have


taken place in the State during the year 2014-15 and with regret noted
that as many as 564 people and 514 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.

Having considered the above matter, the Commission hereby directs


the HESCOM to prepare an action plan to effect improvements in
distribution networks and implement safety measures to prevent
electrical accidents. Detailed division wise action plans shall be
submitted by the HESCOM to the Commission.

Compliance by the HESCOM:


Following measures have been taken for prevention of electrical
accidents to employees/consumers/ Public.

Providing intermediate poles in lengthy spans 852 poles have


been provided.

Replacements of broken /deteriorated poles 266 poles have


been replaced.

Shifting of DTCs to safer places7 distribution transformers have


been shifted to safer places.

Replacement of deteriorated conductors 19.2 Km deteriorated


conductor has been replaced.

Shifting of HT/LT lines 55 Km of HT/LT line has been shifted to


provide safety clearance.

cxcvi

Reconductoring of 11kV line: The work covering 151 feeders with


1221 km has been tendered. The work in respect of 113 feeders
covering 866 km is completed. The balance work is in progress.

LT reconductoring: The work covering 581 DTCs with 1,049 km has


been tendered and the work in respect of 571 DTCs and 1,009 km
is in progress.

Preventive maintenance works in respect of lines/transformers is


being carried out regularly to reduce the accidents.

1.4.
Every year, budget provision is made for preventive measures to
reduce accidents. As a result, the number of accidents in some districts
has come down.

Further, action is being taken to educate the

employees regarding safe use of equipment and consumer awareness


programme about safety aspects is being conducted at the district
Headquarters. All efforts are being made to reduce the electrical
accidents occurring in the distribution system.

Commissions Views:
The Commission observes that despite the HESCOM taking various
remedial measures including rectification of hazardous installations in
its network, the number of fatal electrical accidents involving both
human and livestock has only increased which is of a serious concern.
This indicates that identification and rectification of all hazardous
installations is not completed.

The HESCOM should make more

concerted efforts for identification and rectification of all the


hazardous installations prevailing in the distribution system particularly
in densely populated areas & public places. The HESCOM also needs
to take up with the concerned local bodies regarding rectification of
the hazardous streetlight installations and other electrical works under
their control to ensure safety of the public. It is also necessary that the
HESCOM creates awareness through visual/print media continuously
about safety aspects among public to ensure that the attention on
safety aspects is maintained.

cxcvii

1.5.
1.6.
1.7.
1.8.

The Commission, during the Review meetings held with the ESCOMs
has been prompting the ESCOMs to take up periodical preventive
maintenance works, install LT protection to distribution transformers,
conduct regular awareness program for public on electrical safety
aspects in use of electricity and also about ensure use of safety tools
and tackles by their field staff besides imparting necessary training to
field staff at regular intervals. The HESCOM shall take effective steps to
achieve this.
1.9.
1.10.

Further, the HESCOM shall adhere to the best construction practices as


per the standards on construction/expansion of the distribution
network so that no maintenance is required for such network for a
reasonably long period of time. The HESCOM shall also conduct safety
audit and carryout preventive maintenance works as per the schedule
to keep the network equipment in a healthy condition.
1.11.

The Commission has already forwarded the Safety Technical Manual


prepared by a sub-Committee comprising of experts from the Advisory
Committee constituted by the Commission which should serve as a
useful guide for the field engineers to record all the technical
deficiencies prevalent in the distribution network and enable them to
take remedial measures on the basis of such an audit. In the Safety
Technical Manual detailed account of the steps to be taken on each
element of the distribution system is enumerated which would help the
field engineer in attending to the defects. The HESCOM is required to
circulate Safety Technical Manual among its field staff for necessary
guidance and also to continuously monitor the implementation of the
suggestions / recommendations contained in the reports.
1.12.

The Commission therefore reiterates its directive that the HESCOM shall
continue to take necessary measures to identify and rectify all the
hazardous locations/installations prevalent in its distribution system and

cxcviii

to provide LT protection to distribution transformers under an action


plan to prevent and reduce the number of fatal electrical accidents
occurring in the distribution system. The compliance regarding the same
shall be submitted to the Commission every month regularly.

cxcix

APPENDIX
-I
Objections related to Tariff Issues - MESCOM
Sl
No.
1

Objections

Replies by Licensee

The projected average power purchase


cost

does

not

decreasing
HESCOM

correspond

to

fuel
has

considered

the

prices.
a

linear

increase in the power purchase cost


without considering the distinct nature of
fixed (capacity) charges and variable
(energy) charges. The fixed charges for
a generating station ought to have

HESCOM has projected the individual


source wise power purchase cost as per
the details furnished by PCKL which is the
nodal agency for power purchase in
Karnataka. PCKL in turn has obtained the
details of power purchase cost from
generators like KPCL.

decreased on a year to year basis.


Commission's Views: The payment for power purchase is based on the tariff
determined as per Regulations issued by the CERC and also by the Commission. They
are based on norms stipulated under those Regulations.
2

The Commission had approved the short


term and medium term purchases for
279.55 MU at a cost of Rs.145.82 Crores
The short term/medium term power of based on the requirement of HESCOM
279.55 MUs has been procured at an and other ESCOMs and as per the
average rate of Rs.5.27 /kWh at a cost of allocation.

The

requirement

for

FY-15

Rs.145.82 crore. The short term/medium submitted by HESCOM was based on the
term power procurement over and projections which are bound to change
above the quantum approved in the when the demand for power purchase
tariff order and purchased at rates increases compared to the approved
exceeding the ceiling rate approved by quantum. In view of growing demand for
the Commission to the tune of Rs.17.96 power the distribution companies are
Crores should be disallowed.

forced to purchase excess power. Though


the price cap of Rs.4.50/- unit has been
fixed by the Commission, due approval is
taken by the concerned authorities when

cc

the purchase cost has exceeded the


price cap set by Commission.
Commission's Views: The State has faced shortage of power due to reduction of
availability from the expected sources, resulting in increase in the quantum of shortterm power purchase. These purchases are being made through competitive
bidding, duly complying with the provisions of the Electricity Act 2003.

The

Commission also notes that PCKL is indeed procuring power at exchange at lower
prices.
3

The employee expenses are 78% of the


total O&M expenses and R&M and A&G
expenses are 22% of the total O&M
expenses.

The

allowable

weighted

average inflation index is 7.22% for 201415 and 7.25% for 2016-17. Considering
the actual O&M expenses for 2013-14
without contribution to Pension and
Gratuity Trust, three year compounded
annual growth rate (CAGR) of the
number

of

installations,

the

actual

number of installations as per audited


accounts for the period FY12 to FY15, the
weighted

inflation

factor

2%,

of

factor,

the

efficiency

normative

O&M

expenses will be Rs.480.24 Crores for FY15


and Rs.522.23 Crores for FY17. Against
Rs.83.22 crore claimed as pension and
gratuity contributions, there was a cash
outgo of only Rs.21.51 crore. Hence, the
uncontrollable

O&M

expenses

on

account of pension and gratuity may be


limited to Rs.21.51 crore in 2014-15. The
interest earned on Pension and Gratuity
fund investments have to be accounted
for in the ARR/APR. Hence, the allowable

cci

The application for approval of Annual


Performance review for FY-15 along with
audited reports will be trued up by the
KERC in respect of O & M expenses for FY15. HESCOM has not invested the Pension
and Gratuity fund Contributions in the
interest bearing Govt., security bonds and
is not earning any interest. Hence, the
income (interest earned) in this aspect
cannot be taken in to account in the ARR
of HESCOM. The contribution to Pension
and Gratuity fund are calculated on
actual basis, the details of which are
submitted in reply to the preliminary
observation made by the Commission.
HESCOM has considered the WPI and CPI
considered by the Commission in its Tariff
Order 2015 of HESCOM for projecting O &
M expenses for the control period.

O&M expenses will be Rs.501.75 crore as


against Rs.580.95 crore claimed for 201415

and

Rs.522.33

crore

as

against

Rs.733.31 crore projected in 2016-17

Commission's Views: The matter is appropriately dealt in this Tariff Order.


4

The

consumer

security

deposits

are

Rs.542.72 crore in 2014-15 as per audited


accounts and have been projected to
be Rs.678.65 crore in 2016-17. HESCOM
has

utilized

the

consumer

security HESCOM has not invested the security

deposit as working capital and has deposit collected from the consumer in
deprived the consumers of a reduction any kind of interest bearing securities. The
in the ARR through interest earning on MYT regulations in Karnataka do not
the security deposits. HESCOM is double specifically mention about reduction of
charging the consumers by claiming security deposit from the working capital.
interest

on

working

capital

without

accounting for the consumer security


deposits which have been utilized as
working capital.
Commission's Views: The interest on working capital is being determined as per the
MYT Regulations.
5

The HESCOM has claimed the interest on


security deposits during 2016-17 at a rate
of 9%, which is not in consonance with
the clause 3.1 of the KERC (Interest on
Security

Deposit)

Regulations,

2005.

Hence, the Commission should consider

HESCOM abides by the decision taken the


Commission in this regard.

7.75% bank rate published by RBI for the


purposes of allowing the interest on
consumer security deposits for 2016-17
Commission's Views The interest on security deposit of consumers is being allowed as
per the provisions of the Electricity Act, 2003 and the Regulations issued by the

ccii

Commission.
6

Rs.18.64 crore in FY17 towards bad and


doubtful debts should to be disallowed.

The Commission will not allow in the ARR


but will consider in the truing up on case
to case basis.

Commission's Views: This issue has been suitably dealt with in this Tariff Order.
7

For any additional sale to the subsidized


consumers above the approved sales,
the

Government

has

to

release

additional subsidy at the average cost


of supply. If so, the consumers will be
entitled for a refund / tariff reduction of
Rs.509.11 crore in FY 2014-15 as against a

The additional subsidy requirement of


HESCOM for FY-15 payable by Govt. of
Karnataka will be decided on the basis of
average cost of supply after truing up for
FY-15

by

the

Commission.

surplus of Rs.132.41 crore computed by


the HESCOM.
Commission's Views: The reply furnished by the HESCOM is acceptable. However,
HESCOM shall endeavour to recover the arrears of subsidy and other receivables
from the Government to mitigate cash flow problems and to reduce the cost of
borrowing to meet the deficit. The Commission ensures that such cost does not
exceed the normative expenditure approved by it.
8

The actual cost of supply for each


HESCOM has not been able to adhere
to the mandate of the Tariff Policy of
designing tariff at 20 % of the average
cost

of

supply.

HESCOM

wants

subsidized

Any
to

category

benefit
confer

which
to

the

beyond

the

maximum of 20% should be recovered


through

Government

subsidy

and

cannot in any way be loaded to the


subsidizing consumers

consumer category is not yet done in


HESCOM, due to many reasons and the
tariff

is

determined

on

the

basis

of

average cost of supply. There will be many


practical

problems

in

adopting

this

concept. Firstly it may lead to tariff shock


to the low revenue yielding categories like
domestic and public utility installations.
Secondly there are a few categories
which are subsidized by Govt. whose
revenue realization rate is below the
average cost of supply.

Commission's Views: As directed by the Honble ATE, the Commission has


endeavored to reduce the cross subsidy gradually which is reflected in the current

cciii

order as well. The voltage wise cross subsidy levels have also been indicated in the
tariff order, as directed by the Honble ATE.
9

HESCOM has made contrary submissions


with regard to the proposal for increase
in demand charges. At page 188 of the
Petition, HESCOM has stated that it has
proposed revision of demand charges
by Rs.10/ kW for all LT categories and for
all HT categories, the fixed charges have
been proposed at Rs.200/kVA. However, HESCOM has not proposed any increase
in the proposed rate schedule as well as in fixed charges / Demand charges in the
in the notification published in the present petition for FY-17.
various newspapers, HESCOM has not
indicated any increase in the demand
charges. Recovery of demand charges
has been projected at Rs.240.86 crores in
Form D-21 (a) as well as Form D-21(b)
confirming that there is no proposal for
increase in demand charges.
Commission's Views This matter has been dealt with suitably in the Tariff Order.

10

As the capital cost of meters has been


accounted

for

expenditure
Meter

in

projected

rental

charges

the
by

capital
HESCOM,

would

entail

double allowance of the capital cost of


the meters. If the same is approved, the

HESCOM has not proposed meter rental


charges.

recovery of meter rent has to be


accounted for as other incomes and
reduced from the ARR
Commission's Views: Any income received by way of rentals, is rightly accounted as
other income and the consequent reduction in ARR passed on to the consumers,
11

HESCOM

has

published

in

the HESCOM has sought revision of tariff of

newspaper that, it has achieved a profit Rs.1.02 per unit by factoring the annual
of Rs.132.26 Crores during FY15 and that revenue requirement and the expected

cciv

there will be no deficit in 2016 as per revenue and to make good the gap of
tariff order dated 02.03.2015. Hence, the Rs.1102.36 Crores. The profit of Rs.132.26
proposal

to

hike

tariff

should

be crores

rejected.

has

been

deducted

while

computing the gap of Rs.1102.36 crores.

Commission's Views: The Commission has dealt with the matter appropriately in this
Tariff Order.
12

As the farmers have suffered crop loss


due to drought, the proposal for hike in
tariff needs to be rejected.

The revision of tariff is sought to make


good the gap of Rs.1102.36 crores which
includes power purchase cost and other
expenses.

Commission's Views: The matter is appropriately dealt in this Tariff Order.


13

To assess the consumption for energy


The bills for IP sets are not being issued balancing and to claim subsidy from the
once in 3 months as directed in the tariff Government, it is necessary to issue bills to
order.

IP sets every month and the same is not in


violation of the tariff order.

Commission's Views: The reply furnished by the HESCOM is reasonable.


14

The benefit of relief package ordered by


GoK on 9.3.2003 has not been extended
to the Farmers of Malnad region and
evasive

replies

are

given

when

The package amount has not been


released to HESCOM

approached.
Commission's Views. This is not an issue relating to tariff.
15

The directions of the GoK to pay


Rs.10000/-

per

IP

set

connection As the rate is fixed by the Government,

charges is a burden to the farmers who HESCOM will bring the request to the
have IP sets of 1 to 2 HP capacity and notice of the Government for suitable
hence, the charges should be reduced action.
to Rs.1000/- per IP set.
Commission's Views: The reply furnished by the HESCOM is acceptable.
16

Levy of both fixed charges and energy Fixed charges are collected on the basis
charges in the bill is not proper, instead, of fixed assets

of the

licensee

and

the fixed charges should be deducted charged from the consumers to improve
from the energy charges in the bill.

ccv

the distribution network and to provide

necessary facilities and maintain the lines,


irrespective of whether the consumers
consume as per the sanctioned load or
not. There is no provision to adjust the
minimum charge with energy charges.
Commission's Views The reply furnished by the HESCOM is acceptable.
17

The

tariff

discrimination

between

consumers of Urban and Rural areas is to


be removed and a uniform tariff is to be
introduced.

The Commission has fixed the differential


tariff and HESCOM will abide by the
orders.

Commission's Views The Commission is determining tariff for various category of


consumers in accordance with Section 62 of the Electricity Act 2003. The factors
determining the consumer tariff are discussed in the relevant chapter of the tariff
Order.
18

Since the data involved and furnished to


HESCOM is selling its Tariff petition book the Commission was in 3 books of about
at a cost of Rs.1000/- whereas it had 1000 pages, HESCOM has fixed the price
charged only Rs.300/- in previous years. on the basis of photo copying charges.
The common man cannot afford to However, the interested persons had the
purchase the book at high cost, hence it option of getting the photo copy of the
should be given free of cost.

required portion only by paying photo


copying charges.

Commission's Views The reply furnished by the HESCOM is reasonable.


19

HESCOM

has

published

the

tariff

proposals in two newspapers which do


not have wide publication and the last
date for filing the objections is not
indicated in the paper publication.

HESCOM has published the notification on


17th & 18th January 2016 in Vijayavani ,
Praja vani, Indian Expres, and Times of
India. This is done as per Regulations.

Commission's Views The reply furnished by the HESCOM is acceptable.

ccvi

20

The arrears of Rs.2161.61 Crores as on


31.03.2015 include the running bills, dues
There is a huge balance of Rs.2167.54
Crores to be collected from consumers
and the reasons for not collecting the
same are not explained. HESCOM has to
collect the arrears from the local bodies
and improve the collection efficiency
from

87%

to

100%.

Rs.454 Crores shown as receivables from


other ESCOMs/KPTCL has to be ordered
to be collected in a time bound
manner.

from the Government institutions, IP Set


arrears, etc. HESCOM is putting all efforts
to collect the arrears. Action is taken to
recover the arrears as per the Revenue
Recovery Act 1976 duly issuing the A B
& C forms. Even, in respect of the long
disconnected

installations,

cases

are

registered with the Vidyuth Lok Adalat for


recovery of arrears in all the sub divisions
which are monitored meticulously from
the Corporate Office.

Rs.454 Crores is

receivables from other ESCOMs, HESCOM


has to pay Rs.1357 Crores to other
ESCOMs.

Commission's Views: The reply furnished by HESCOM is reasonable. HESCOM shall


endeavour to recover the arrears of subsidy and other receivables from the
Government to mitigate cash flow problems and to reduce the cost of borrowing to
meet the deficit.
21

The capex of Rs.2 Crores sought by


HESCOM

for

installing

meters

to

unmetered BJ/KJ installations should be The proposal of capex of Rs.2 Crores is for
disallowed as the EA 2003, provides that, installing meters to very old installations for
no

power

without

supply

meter

and

should

be

when

given which

meters

were

not

fixed

while

meter providing service. Presently, no installation

becomes faulty, the same has to be is serviced without meter.


replaced by a good one by accounting
in R&M and O&M expenditure.
Commission's Views : The reply furnished by the HESCOM is reasonable.
22

HESCOM has made a willful default by HESCOM is in a financial crisis and hence
paying interest for late payment of bills could not pay the power bills of KPCL in
to an extent of Rs.140 Crores and the time.
same should be disallowed.

KPCL has levied interest on late

payments

ccvii

and

the

same

has

been

claimed by HESCOM.

Commission's Views: The Commission is not allowing any interest on the delayed
payment of power purchases in the ARR.
23

HESCOM

has

incurred

capital

expenditure of Rs.2 Crores more than the


approved

capex

in

NJY

and

reconductoring work. The benefits like,


reduction of losses, energy saved should

The Commission is conducting prudence


check of capital expenditure incurred for
FY15.

be quantified.
Commission's Views HESCOM has submitted the reasons for the variations in actual
capex as against approved figures. The Commission is also conducting prudence
check of the capex before allowing interest and depreciation on the capitalized
assets.
24

According to the report by Chartered


Accountants,

there

are

28

cases At present, the officers of MESCOM are

pending in which Rs.5.97 Crores has to the Appellate authorities for resolving the
be

received by HESCOM. HESCOM disputes in HESCOM. Action will be taken

should

take

measures

for

speedy to speed up the process.

disposal of cases.
Commission's Views: the Commission directs HESCOM to speed up the process.
25

As required under the Tariff Regulations, HESCOM has published its tariff petition,
HESCOM

has

not

published

the the

effect

of

true

up

of

FY14,

accounts for Base year, ensuing year consequential true up of FY15 and deficit
and control year.

for FY17.

Commission's Views: The reply furnished by the HESCOM is reasonable.


26

The Regulatory asset of Rs.197.69 Crores


ordered to be carried forward to FY16
has

been

wrongly

accounted

as

expenditure by HESCOM. The Regulatory


asset of FY13 should not be carried
forward to FY17.

As per the tariff orders of 2014 and 2015,


the Regulatory asset is to be carried
forward

to

FY17

and

HESCOM

included the carrying cost as per the


directions of the Commission.

Commission's Views: The Commission has suitably dealt with this issue in this Order.

ccviii

has

27

As the distribution loss is not computed


based

on

actual

consumption,

the

incentive for loss reduction should not be


allowed.

HESCOM has achieved a loss reduction of


16.74 % against the target level of 17.50%
fixed by the Commission and the incentive
as per the directions of the Commission is
to be allowed.

Commission's Views: The Commission has suitably dealt with this issue in this Order.
28

The IP set consumption arrived at by


HESCOM is an inflated figure. HESCOM
has shown the IP set consumption at
8735 units per IP set and estimated
6713.43

MU

for

FY17.

The

actual

consumption would be 3402.18 MUs.

HESCOM

has

arrived

consumption
readings

based

of

the

at

the

on

the

DTCs

IP

set

meter

predominantly

feeding IP Sets and the IP set consumption


arrived at by HESCOM is realistic.

Commission's Views: The Commission has suitably dealt with this issue in this Order.
Necessary directions have been issued to the HESCOM in the matter.
29

The Maximum demand charges and


Fixed charges for the installations should HESCOM

does

not

accept

for

the

be reduced on prorata basis for the proposal of prorata decreasing the fixed
duration

of

load

shedding.

The charges. The Fixed charges are claimed

Commission should reject the increasing for the creation and maintenance of the
the FC proposed by HESCOM as there is distribution system assets of HESCOM.
no basis for such claims.
Commission's Views: The fixed charge is being incurred by ESCOMs irrespective of the
quantum of energy supplied and has to be recovered.
30

The proposed billing on the basis of


KVAh should not be considered.

HESCOM

was

unable

to

furnish

the

information on KVAh billing sought by the


Commission.

Commission's Views: The Commission has suitably dealt with this issue in this Order.
31

The recruitment proposal initiated by


HESCOM will increase the burden on the
consumers, instead HESCOM could have
opted for outsourcing the staff.

HESCOM has taken decision to recruit


employees

commensurate

the

increase in distribution system and worksload norms and outsourcing is not a


feasible option.

Commission's Views : Reply furnished by HESCOM is acceptable.

ccix

with

32

HESCOM is not properly utilizing the


grants

of

Central

Government

for

schemes for the purpose set forth.

HESCOM

is

utilizing

the

Central

Government fund for the schemes. The


RGGVY and funds are utilized for RGGVY
and APDRP works only.

Commission's Views: The reply furnished by the HESCOM is acceptable.


33

As the application is not made within


120 days before the commencement of The

petition

is

filed

within

the

time

financial year, the application is not extended by the Commission.


maintainable.
Commission's Views: : HESCOM has filed its petition for truing-up for FY15 and
determination of Annual Revenue Requirement for FY17, FY18 and FY19 on 15th
December, 2015, within the time limit extended by the Commission. The Honble
Appellate Tribunal for Electricity (ATE), in the Case reported in 2010 ELR (APTEL) 0175
has held that if the Licensee is unable to file ARR petition due to some reasons, it will
not be proper to say that the application has to be rejected. What could be done in
such a situation is that the carrying cost can be denied and not the revenue
recoverable for the period of delay. In the present case, the revenue requirement
sought is from 1st April, 2016 up to 31st March 2019, and therefore, the time taken by
HESCOM for filing the application will not adversely affect the consumers interest and
hence, the petition is maintainable.
34

HESCOM has not indicated any step to


improve its efficiency to transfer the
benefit

of

efficiency

gains

to

the

consumers and in the absence of any


specific gains the application is not
maintainable. It has failed to improve
efficiency and has not complied with all
directives.

The

Commission

has

been

issuing

directives, reviewing the old directives and


issuing the new directives in order to
improve the efficiency of operation of
HESCOM and while fixing the tariff in terms
of MYT regulations the efficiency gains are
being passed on to the consumers.

Commission's Views: The sharing of gains and losses have been dealt with suitably in
this Tariff Order.
35

As per the tariff policy the tariff to be Due to difference in average cost of
fixed should be within +/- 20 % of the supply for different consumer categories,
cost to serve. Since the cost to serve of bringing tariff in line with the tariff policy
HESCOM has not been approved by the norms of +/- 20% has to be achieved in a

ccx

Commission, it is not possible to verify phased manner which otherwise may


whether the proposed tariff is within result
limits.

in

heavy

burden

on

some

consumers.

Commission's Views As directed by the Honble ATE, the Commission has endeavored
to reduce the cross subsidy gradually which is reflected in the current order as well.
The voltage wise cross subsidy levels have also been indicated in the tariff order, as
directed by the Honble ATE.
36

Subsidy is released by GoK as per the


Commission determined tariff in respect of
IP sets and BJ/KJ installations. Hence, the
The cost of power to IP Sets is being burden is not passed on to the consumers.
recovered from the Industrial consumers The Cross Subsidy from the high revenue
through cross subsidy, which is not paying consumers like commercial and
proper.

industrial

categories

contribute

cross

subsidy to low revenue paying consumers


like domestic and public utility installations
like street lights and water supply.
Commission's Views: The Electricity Act, 2003 envisages gradual reduction of cross
subsidies.

The Commission has endeavour to reduce the cross subsidy gradually

which is reflected in the current order as well.


37

Installation of Solar water heating system is


The existing rebate to installations with
solar water heating system has to be
continued and enhanced to Rs.100.

mandatory to some of the categories and


is continued since the issue of the order by
Government. Solar water heating system
rebate is continued. HESCOM opposes
any increase in the rebate.

Commission's Views: The Commission has suitably dealt with this issue in this Order.
38

HESCOM has stated that, the revenue


deficit for FY17 would be Rs.984 Crores
but, has mentioned that total revenue
deficit is Rs.1102.36 Crores.

The net revenue gap of Rs.1102.36 Crores


for FY-17 is furnished in Page No: 133 of the
application with all the details.

Commission's Views The Commission has suitably dealt with this issue in this Order.

ccxi

39

HESCOM has furnished the prescribed


formats A1 to A4 in page No 199 to 203
HESCOM has not furnished the data in
table A1 to A4 and table D1 to D24 and
ARR

and

hence

the

petition

is

incomplete.

relating profit & loss accounts, balance


sheet, cash flow & ARR. HESCOM has
furnished the expected revenue from
charges at existing tariff on page No 127
and 128 and also through D-2 and D-21
statements vide page No 219 - 220 and
Page No 272-275 respectively.

Commission's Views The Commission has suitably dealt with this issue in this Order.
40

HESCOM has not made available details


of slab wise sanctioned load, fixed
charges,

energy

charges

and

HESCOM has not offered any comment.

consumption.
Commission's Views: The Commission has suitably dealt with this issue in this Order.
41

HESCOM has not made available details


of GIS mapping of at least one feeder Geographical positioning system is taken
with transformer centers as directed by up in RAPDRP projects.
the Commission.
Commission's Views. Necessary directions have been issued to the HESCOM in the
matter.

42
HESCOM has not paid remuneration to HESCOM is paying the remuneration as
the non-official member of CGRF.

per norms.

Commission's Views: The reply furnished by the HESCOM is acceptable.


43

HESCOM agrees that the rural areas have


a
The ARR and tariff proposal of the
HESCOM

has

not

provided

any

concrete plan towards agricultural DSM.

tremendous

scope

in

load

management as the pump sets used for


irrigations purposes are highly inefficient.
But the replacement of pump set requires
huge investment. HESCOM is already
facing financial strain in view of huge
accumulated loss and cannot make huge

ccxii

investment

on

its

own.

However,

beginning has been made by taking up


pilot projects in two taluks of HESCOM
area.
Commission's Views The reply of the HESCOM is acceptable.

Commission would

monitor the progress of the proposed scheme.


44

HESCOM has proposed late payment


surcharge in the range of 12% to 24% per
annum. The rate of interest on advance
payment has been proposed at 4% per
annum.

The

interest

rate

on

late

payment surcharge and interest rate on

This aspect may be considered by the


Commission.

advance payment should be fixed at a


rate equivalent to the interest rate on
working capital.
Commission's Views: The Commission will deal with the matter appropriately in this
order.
45

There

are

no

separate

estimates

provided for technical and commercial


losses, except description of measures
aimed at reduction of the same. The
Commission
Licensee

may

to

either

require

the HESCOM welcomes the suggestion and in

out

proper

loss due course, HESCOM is prepared for study

carry

estimation studies for assessment of of such possible segregation.


technical and commercial losses under
its supervision, or initiate a study itself to
segregate

voltage

wise

distribution

losses.
Commission's Views: The Commission is issuing directives on energy audit and voltage
wise loss segregation.
46

An

appropriate

roadmap

for

100% All categories are metered in HESCOM

metering of particularly IP Sets should be except agricultural category and some in


approved by the Commission and a BJ / KJ Category. Action is being taken to

ccxiii

realistic time frame should be laid. The fix the meters to remaining unmetered
road

map

should

provide

for installations in BJ/ KJ category.

disincentives in case of slippages /


noncompliance

by

the

Licensee

towards the targets set for metering.


Commission's Views: This issue has been dealt in this order.
Objections related to Quality of Service:
47

HESCOM has failed in implementing SoP Consumers can file complaints against
Regulations.

the

officers

of

HESCOM

and

claim

compensation as per SoP Regulations.


Commission's Views: This is not tariff related issues.
48

Maintenance of the street lights is the


HESCOM has not complied with the responsibility of local bodies. HESCOM has
directions of the Commission to install to invest on timer switches and letters
timer switches to street lights. The street have been written to respective local
lights glow during the day time.

bodies as the cost of timer switches has to


be borne by them.

Commission's Views: This issue has been dealt separately in this order.
49

HESCOM has to reduce distribution loss As the length of the LT lines supplying
from 17% to 10% by reducing LT line power to IP Sets and rural areas is more,
length, adding DTCs, installing shunt the distribution loss is more. The loss will be
capacitors,

conducting

distribution reduced after feeder separation under

system studies etc.,

NJY Scheme.

Commission's Views: Necessary directions have been issued to the HESCOM in the
matter.
50

HESCOM has not conducted consumer HESCOM will take action against the
interaction meetings as directed by the officers who have not conducted the
Commission.

consumer meetings.

Commission's Views: The reply furnished is acceptable


51

Victims of Electrical accidents and crop HESCOM

will

take

steps

to

reduce

loss due to electrical accidents are to be accidents and the compensation is paid
compensated adequately.

as per rules.

Commission's Views: This issue has been dealt separately in this order.

ccxiv

52

Tendering
HESCOM is yet to electrify several unelectrified households in Uttarkannada
District.

process

is

initiated

for

electrification of un-electrified households


in

Karwar

and

Sirsi

divisions.

For

unelectrified hamlets in Honnavar and


Methinagadde, electricity will be provided
under DDUGJY.

Commission's Views: The reply furnished is acceptable.


53

The sales proposed at 5.57% to 7.66% by Based on the demand for energy during
HESCOM cannot be achieved, if the the past 4-5 years and increase in the
interruption

and

load

shedding

is number of consumer installations, the

continued.

estimation of sales made is proper.

Commission's Views: The matter is appropriately dealt in this Tariff Order.


54

HESCOM has shown an efficiency factor The efficiency factor is fixed by the
of 2% in O&M cost without any basis.

Commission.

Commission's Views : The reply furnished by the HESCOM is acceptable.


55

HESCOM has not shown compensation


given

to

consumers

under

SoP

Regulations, in the other expenses.

The

compensation

provided

to

the

consumers under SoP Regulations is very


meager and hence the same is not
separately shown in other expenses.

Commission's Views: The reply furnished by the HESCOM is reasonable.


56

In

the

absence

of

publication

of As per section 126 of the Electricity Act,

guidelines about vigilance activities, the 2003, action is taken in case of theft of
public are put to hardship by the energy. Suitable action will be taken after
vigilance raids.

discussing with the concerned.

Commission's Views: The reply furnished is acceptable.


57

As per section 23 of the Act, HESCOM


should have taken approval of the
Commission for load shedding, but,
HESCOM is resorting to unscheduled
load shedding on its own which is
adversely affecting the industries.

HESCOM is informing the consumers in


advance

about

the

scheduled

load

shedding. Unscheduled load shedding is


resorted

to,

only

under

inevitable

circumstances.

Commission's Views: The reply furnished by the HESCOM is acceptable.


58

ALDC which will help in monitoring of ALDC (Area load Despatch Centre) is
loads is not operational in HESCOM

ccxv

established long back and is functioning

at Corporate Office of HESCOM.

Commission's Views: The Reply furnished by the HESCOM is acceptable.


59

The details of action taken by HESCOM in


HESCOM

has

not

educated

the

consumers on prevention of accidents.


The Number of Fatal and Non-fatal
accidents are not furnished.

preventing the electrical accidents are


furnished on page No 26 of the petition.
The details of electrical accidents in FY-14,
FY-15 & FY-16 are furnished in para 12 of
the reply to the preliminary observations
made by the Commission.

Commission's Views: The Reply furnished by the HESCOM is acceptable. The


Commission is reviewing regularly the performance of the HESCOM in handling these
issues.
60

The

Electrical equipment procured by

HESCOM is

of poor quality as the HESCOM is procuring quality materials

conductors are snapping even without checked by TA & QC wing and other third
rainfall and transformers are failing within party agencies.
3 months.
Commission's Views: The reply furnished is reasonable.
61

The inventory of assets updated by the The asset registers are maintained in
officers is not being cross verified by the division offices and audited regularly by
higher officers.

AG and Statutory auditors.

Commission's Views: The Reply furnished by the HESCOM is acceptable.


62

The outsourced meter readers should be


directed to wear uniforms and display
their ID cards during meter reading

The

meter

provided

readers

with

of

uniforms

HESCOM
and

are

identity

cards. However, the out sourced persons


are not provided with uniforms

Commission's Views. The reply furnished is acceptable.

Specific requests
63

Laghu Udyog Bharathi has requested to


make ToD optional as industries are
facing difficulties due to compulsory

ccxvi

HESCOM will abide by the decision of the


Commission.

implementation of ToD.

Commission's Views.

TOD metering is a demand side measure to clip the peak

demand. As per the existing TOD structure, penalty is being levied for consumption
during 6 PM to 10 PM and incentive is being extended for consumption during 10 PM
to 6 AM. There is no case for review of ToD for the present.
64

Sri G Hegde, Kadekodi has requested


that, ATP counters should be open from
8Am to 8 PM to enable consumers to

HESCOM will explore the possibilities.

pay bills.
Commission's Views The reply furnished is acceptable.
65

Sri G G Hegde, Kadekodi has requested


that, substations are to be established
at Sampakanda and Banavasi village to

HESCOM has not offered any comment.

reduce the 11kV line length.


Commission's Views: Though the issue is not related to Tariff issue, establishing of a
substation should be based on the requirements. Hence, the Commission directs
HESCOM to study the case and act on it.
66

Sri G G Hegde, Kadekodi has requested Transfer


that,

of

subsidy

amount

to

the

the subsidy amount released by consumer account is not possible as, the

GoK for IP set and BJ/KJ has to be subsidy


remitted to the consumers accounts

is

the

tariff

paid

by

the

Government for free supply consumers.

Commission's Views The reply furnished by the HESCOM is reasonable.


67

Sri G G Hegde, Kadekodi has requested


that, a separate tariff needs to be fixed
as six dams and one Nuclear plant have
been established in Uttara Kannada

HESCOM does not agree to the proposal

District and people have sacrificed their


property.
Commission's Views: The Commission is determining tariff for various category of
consumers in accordance with Section 62 of the Electricity Act 2003, and request
made is not consonance with the said provisions.
68

Sri Praveen Sood, IPS, Additional Director All offices are categorized under LT3,
General

of

Police,

Administration, irrespective of the nature of the activities.

ccxvii

Bengaluru, has requested to include If police stations are brought under LT2 (a)
police stations under LT2 (a) category category, there will be disparity among
instead of LT3 category considering the offices and loss of revenue to HESCOM.
nature of service rendered by the Police
to the citizens.
Commission's Views: The reply furnished by the HESCOM is in order.
69

Sri Rangarej R.K has requested that, the


Photo labs should be removed from LT5 The

present

categorization

is

proper.

and brought under LT3 category and However, the Commission may take a
Cinema halls should be brought under view in the matter,
LT5 category.
Commission's Views: The current categorization of tariff is in order.
70

Sri Rangarej R.K has requested that,


Drinking water supply units should be HESCOM agrees to the proposal.
supplied with discounted Tariff.
Commission's Views: The Commission had appropriately dealt with the matter in this
order.

71

Sri Rangarej R.K has requested that, the


Commission should not consider the hike
in

tariff for the Kalyana mantapa as

proposed by Karnataka Vidhana Sabha


Committee, as it will have an impact on

HESCOM has proposed higher tariff for


Kalyana

mantapa

as

marriages

are

conducted on luxurious scales.

comman man.
Commission's Views: The Commission has appropriately dealt with the matter in this
order.
72

Sri P.N Karanth has stated that, the


demand based tariff is existing only for LT3
and LT5. The demand based tariff needs
to be extended to other LT categories
such as) LT2 (b), LT4, LT6 and LT7. The
consumer will not have any unnecessary
interference
vigilance

like

raids.

meter
The

testing

exact

and

load

on

transformer can be calculated and large

ccxviii

The categorization of installations in under


the purview of the Commission. Demand
based tariff may be considered for LT2 (b)
category. However, for LT4, LT6 & LT7
demand based tariff may not serve the
purpose.

capacity transformers can be avoided.


Commission's Views : Demand based tariff is provided to LT3 and LT5 category having
connected load of 5kW and above. As per the provisions of demand based tariff, the
consumers can have the load more than the sanctioned load in his premises. In case
of LT2(a) as per the Regulations, fixed charges for domestic and A.E.H category shall
be based on the sanctioned load, irrespective of the connected load, as long as the
load limiter is working in good condition. Hence, demand based tariff is not suitable
for this category. Other categories such as LT2(b) (except educational institutions),
LT4, LT6 and LT7 should not have the load more than sanctioned load. As, the meters
fixed to these categories of installations have no option for recording maximum
demand.

The gist of the submissions made during the Public Hearing, held on
03.03.2016.
1

Overhead

conductors

should

the

replaced by UG/AB cable to prevent


accidents and reduce interruptions in
rural areas. The compensation paid by
HESCOM to the victims is inadequate
and needs to be enhanced.
2

The works should be awarded to local


contractors instead of awarding the
works of the entire district to a single
company.

IP Set and BJ/KJ consumers should be


charged at least nominal tariff instead of
free supply.

The functioning of consumer advocacy


in the Commission needs to be restarted.

The

interruption

on

Kumta

to

Madanagere 34km, 11kV line is very high


and HESCOM needs to construct a
substation at Madanagere to improve

ccxix

HESCOM has replied to the points raised


by the public.

the power position.


6

Supply of energy meters in Divisions are


not as per the requirement. Sufficient
number of meters should be kept in
stock. The MNR meters are to be
replaced immediately.

Bill collection counters are to be opened


at panchayat levels and quality of print
in the bills should be improved.

The

consumer

should

be

informed

through SMS about the load shedding in


advance.
9

Since

10%

supervision

charge

is

collected on the Deposit Contribution


Works (DCW), any observation made by
the Electrical inspectorate should be
attended by HESCOM itself

without

insisting the consumer to attend the


observations.
10

Where the infrastructure is created by


the Industrial consumers, concession in
tariff should be given to such consumers.

11

The

problems

associated

with

the

INFOSYS software issues should be sorted


out immediately.
12

In order to reduce the time taken to


sanction the temporary power supply,
AEE Ele O&M subdivision should be
delegated with the power to sanction
power up to 50KW.

13

HESCOM is not sealing the energy meters


and load limiters in the consumers
premises despite continuous follow up.

14

The appeal proceedings in back billing

ccxx

cases needs to be expedited.


15

As alternate fuel is available in Malnad


region for heating water, Solar water
heater should not be made compulsory.

16

The consumer interaction meetings and


awareness

programmes

are

not

regularly conducted. Hence, Rs.50 Lakh


earmarked for the purpose should not
be allowed.
17

The performance by Vigilance squad is


not

proportionate

to

the

high

expenditure spent on vigilance.


18

PF incentive should be given for HT


consumers for maintaining PF above 0.9.

19

The ETP plants are not being given


rebate as provided for in the tariff.

20

In ToD billing, treatment of taxation is not


uniform among ESCOMs.

21

Low voltage problem in Sirsi Taluk should


be

rectified

by

installing

additional

transformers.
22

Collecting arrears in respect of long


disconnected installations over 20 years
is not proper

23

HESCOM has no authority for collection


of service tax on the works executed
under self-execution.
Commission's Views: The Commission has considered the points raised by the public
and the replies given by HESCOM while passing this order wherever found
appropriate.

ccxxi

ANNEXURE - I
ESCOMS TOTAL APPROVED POWER PURCHASE FOR FY17
ENERGY
ALLOWE
D (MU)

CAPACIT
Y
CHARGES
(RS Cr)

ENERGY
CHARG
ES (RS
Cr)

TOTAL
COST
(RS Cr)

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

7538.53

619.64

2327.80

2947.44

3.91

NAME OF THE GENERATING STATION

PER UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS


RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

1510.85

211.06

454.42

665.49

4.40

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

2823.10

295.60

1035.95

1331.55

4.72

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

3054.06

444.06

1014.43

1458.49

4.78

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

2720.23

0.00

849.12

849.12

3.12

TOTAL KPCL THERMAL

17646.77

1570.36

5681.72

7252.08

4.11

N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

3246.74

197.69

739.53

937.23

2.89

N.T.P.C-RSTP-III (1X500MW)

819.69

75.28

192.48

267.76

3.27

NTPC-Talcher (4X500MW)

2765.03

213.25

400.36

613.61

2.22

Simhadri Unit -1 &2 (2X500MW)

1490.74

226.09

363.15

589.24

3.95

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS Stage I


&2 &3 (3X500MW)

1081.78

174.91

222.18

397.09

3.67

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW)

950.35

68.49

228.93

297.41

3.13

Neyveli Lignite Corporation_NLC TPS-II STAGE 2 (4X210MW)

1280.64

105.25

308.49

413.73

3.23

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)

731.33

90.16

182.73

272.90

3.73

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)

865.82

111.21

199.16

310.37

3.58

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN) (2X500MW)

1442.76

185.27

371.08

556.34

3.86

CGS SOURCES

MAPS (2X220MW)

249.31

0.00

49.86

49.86

2.00

Kaiga Unit 1&2 (2X220MW)

922.44

0.00

274.89

274.89

2.98

Kaiga Unit 3 &4 (2X200MW)

1001.80

0.00

298.54

298.54

2.98

NPCIL-Kudan Kulam Atomic Power Generating Station (KKNPP)


(1X1000MW)

1527.09

0.00

455.07

455.07

2.98

DVC-Unit-1 &2 Meja TPS (2x500MW)

1574.83

274.91

360.39

635.30

4.03

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

1574.83

261.62

349.87

611.49

3.88

TOTAL CGS

21525.17

1984.13

4996.71

6980.84

3.24

7462.68

1325.73

1767.94

3093.67

4.15

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

4203.20

20.49

182.11

202.60

0.48

MAHATMA GANDHI HYDRO ELECTRIC POWER HOUSE_MGHE


(4x21.6+4x13.2)

180.68

2.32

17.79

20.11

1.11

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

527.47

24.38

55.93

80.30

1.52

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

2923.95

19.16

229.11

248.27

0.85

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

1087.86

11.82

129.40

141.22

1.30

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

523.72

27.51

80.48

107.99

2.06

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS

ccxxii

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

65.15

1.14

29.76

30.90

4.74

KADRA POWER HOUSE_KPH (3x50)

355.25

19.15

47.57

66.72

1.88

KODASALLI DAM POWER HOUSE_KDPH (3x40)

325.56

12.00

34.43

46.42

1.43

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

91.67

1.96

14.77

16.74

1.83

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6) HYDRO


STATIONS_SHIVA & SHIMSHA

310.76

3.54

27.46

31.00

1.00

MUNIRABAD POWER HOUSE (2x9+1x10)

109.63

0.43

8.68

9.11

0.83

10704.90

143.90

857.48

1001.38

0.94

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39)

111.61

65.09

0.00

65.09

5.83

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)

32.47

2.64

0.00

2.64

0.81

TOTAL OTHER HYDRO

144.08

67.73

0.00

67.73

4.70

1108.80

0.00

558.84

558.84

5.04

3826.75

0.00

1368.74

1368.74

3.58

12.86

0.00

4.32

4.32

3.36

MINI HYDEL-IPPS

1344.12

0.00

450.45

450.45

3.35

CO-GEN/CAPTIVE

172.09

0.00

65.02

65.02

3.78

BIOMASS

196.60

0.00

97.72

97.72

4.97

SOLAR-IPP

1261.40

0.00

784.50

784.50

6.22

32.89

0.00

19.63

19.63

5.97

6846.71

0.00

2790.38

2790.38

4.08

TOTAL KPCL HYDRO


OTHERS

SHORT TERM POWER


SHORT TERM POWER
NON-CONVENTIONAL ENERGY SOURCES
WIND-IPPS
KPCL-WIND (9x0.225+10x0.230)

SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL NCE
TRANSMISSION CHARGES
PGCIL CHARGES

949.21

949.21

0.44

KPTCL CHARGES

3092.77

3092.77

0.47

19.99

19.99

0.003

20715.0
2

25806.8
9

3.94

SLDC & POSOCO CHARGES


TOTAL INCLUDING TRANSMISSION & LDC CHARGES

65439.11

5091.87

ESCOMS TOTAL APPROVED POWER PURCHASE FOR FY18


ENERGY
ALLOWED
(MU)

CAPACI
TY
CHARGE
S (RS Cr)

ENERGY
CHARGES
(RS Cr)

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

6696.43

560.42

2109.13

NAME OF THE GENERATING STATION

TOTAL
COST
(RS Cr)

PER UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS


2669.54

3.99

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

1603.00

221.33

480.87

702.20

4.38

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

3241.00

330.35

1213.08

1543.43

4.76

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

3294.00

472.15

1116.01

1588.16

4.82

ccxxiii

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

4489.07

459.67

1429.28

1888.95

4.21

TOTAL KPCL THERMAL

19323.50

2043.91

6348.37

8392.29

4.34

N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

3246.74

197.69

754.32

952.02

2.93

N.T.P.C-RSTP-III (1X500MW)

819.69

75.28

196.33

271.61

3.31

CGS SOURCES

NTPC-Talcher (4X500MW)

2765.03

213.25

408.37

621.62

2.25

Simhadri Unit -1 &2 (2X500MW)

1490.74

226.13

370.41

596.55

4.00

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS Stage I


&2 &3 (3X500MW)

1081.78

176.33

226.63

402.96

3.72

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW)

950.35

68.49

233.50

301.99

3.18

Neyveli Lignite Corporation_NLC TPS-II STAGE 2 (4X210MW)

1280.64

105.25

314.66

419.90

3.28

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)

731.33

90.16

186.39

276.55

3.78

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)

865.82

111.21

203.14

314.36

3.63

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN) (2X500MW)

1442.76

185.27

378.50

563.77

3.91

MAPS (2X220MW)

249.31

0.00

50.86

50.86

2.04

Kaiga Unit 1&2 (2X220MW)

922.44

0.00

280.39

280.39

3.04

Kaiga Unit 3 &4 (2X200MW)

1001.80

0.00

304.51

304.51

3.04

NPCIL-Kudan Kulam Atomic Power Generating Station (KKNPP)


(1X1000MW)

1527.09

0.00

464.17

464.17

3.04

DVC-Unit-1 &2 Meja TPS (2x500MW)

1574.83

274.91

367.60

642.51

4.08

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

1574.83

261.62

356.86

618.49

3.93

TOTAL CGS

21525.17

1985.60

5096.64

7082.24

3.29

7462.68

1325.73

1803.30

3129.03

4.19

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

5469.75

20.28

248.69

268.97

0.49

MAHATMA GANDHI HYDRO ELECTRIC POWER HOUSE_MGHE


(4x21.6+4x13.2)

195.03

2.32

20.00

22.32

1.14

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

567.27

24.35

62.23

86.58

1.53

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

2987.82

18.88

245.91

264.79

0.89

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

1103.85

11.67

137.97

149.64

1.36

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

447.48

27.51

70.91

98.42

2.20

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

63.36

1.14

30.59

31.73

5.01

KADRA POWER HOUSE_KPH (3x50)

355.41

19.15

49.59

68.74

1.93

KODASALLI DAM POWER HOUSE_KDPH (3x40)

330.66

12.00

36.43

48.43

1.46

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

90.09

1.25

15.25

16.49

1.83

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6) HYDRO


STATIONS.

330.66

3.54

30.45

33.99

1.03

MUNIRABAD POWER HOUSE (2x9+1x10)

103.95

0.43

8.62

9.06

0.87

12045.33

142.53

956.63

1099.16

0.91

TOTAL KPCL HYDRO


OTHER HYDRO

ccxxiv

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39)

111.61

68.99

0.00

68.99

6.18

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)

32.47

2.64

0.00

2.64

0.81

TOTAL OTHER HYDRO

144.08

71.64

0.00

71.64

4.97

3981.63

0.00

1424.99

1424.99

3.58

12.86

0.00

4.32

4.32

3.36

MINI HYDEL-IPPS

1344.81

0.00

450.68

450.68

3.35

CO-GEN/CAPTIVE

172.09

0.00

64.12

64.12

3.73

BIOMASS

262.15

0.00

135.15

135.15

5.16

SOLAR-IPP

2588.38

0.00

1314.95

1314.95

5.08

32.89

0.00

19.63

19.63

5.97

8394.81

0.00

3413.83

3413.83

4.07

PGCIL CHARGES

958.70

958.70

0.45

KPTCL CHARGES

3171.28

3171.28

0.46

25.80

25.80

0.00

21774.55

27343.96

3.97

NON-CONVENTIONAL ENERGY SOURCES


WIND-IPPS
KPCL-WIND (9x0.225+10x0.230)

SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL NCE
TRANSMISSION CHARGES

SLDC & POSOCO CHARGES


TOTAL INCLUDING TRANSMISSION & LDC CHARGES

68895.57

5569.41

ESCOMS TOTAL APPROVED POWER PURCHASE FOR FY19


ENERGY
ALLOWED
(MU)

CAPACI
TY
CHARGE
S (RS Cr)

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

6696.43

579.68

NAME OF THE GENERATING STATION

ENERGY
CHARGES
(RS Cr)

TOTAL
COST
(RS Cr)

PER UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS


2151.31

2730.99

4.08

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

1603.00

219.91

490.49

710.40

4.43

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

3241.00

336.83

1237.34

1574.17

4.86

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

3294.00

464.75

1138.33

1603.09

4.87

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

4611.00

464.76

1497.46

1962.23

4.26

YERMARUS THERMAL POWER STATION_YTPS (2x800)

1547.46

204.23

413.13

617.36

3.99

TOTAL KPCL THERMAL

20992.89

2270.16

6928.07

9198.23

4.38

N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

3246.74

197.69

769.41

967.10

2.98

N.T.P.C-RSTP-III (1X500MW)

819.69

75.28

200.26

275.54

3.36

CGS SOURCES

NTPC-Talcher (4X500MW)

2765.03

213.25

416.53

629.79

2.28

Simhadri Unit -1 &2 (2X500MW)

1490.74

226.13

377.82

603.96

4.05

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS Stage I


&2 &3 (3X500MW)

1081.78

176.33

231.16

407.49

3.77

Neyveli Lignite Corporation_NLC TPS-II STAGE I (3X210MW)

950.35

68.49

238.17

306.66

3.23

ccxxv

Neyveli Lignite Corporation_NLC TPS-II STAGE 2 (4X210MW)

1280.64

105.25

320.95

426.20

3.33

Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)

731.33

90.16

190.12

280.28

3.83

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)

865.82

111.21

207.21

318.42

3.68

NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN) (2X500MW)

1442.76

185.27

386.07

571.33

3.96

MAPS (2X220MW)

249.31

0.00

51.88

51.88

2.08

Kaiga Unit 1&2 (2X220MW)

922.44

0.00

285.99

285.99

3.10

Kaiga Unit 3 &4 (2X200MW)

1001.80

0.00

310.60

310.60

3.10

NPCIL-Kudan Kulam Atomic Power Generating Station (KKNPP)


(1X1000MW)

1527.09

0.00

473.46

473.46

3.10

DVC-Unit-1 &2 Meja TPS (2x500MW)

1574.83

274.91

374.95

649.86

4.13

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

1574.83

261.62

364.00

625.62

3.97

TOTAL CGS

21525.17

1985.60

5198.58

7184.17

3.34

7462.68

1325.73

1839.36

3165.10

4.24

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

5469.75

19.16

260.88

280.04

0.51

MAHATMA GANDHI HYDRO ELECTRIC POWER HOUSE_MGHE


(4x21.6+4x13.2)

195.03

2.32

20.83

23.16

1.19

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

567.27

24.35

64.43

88.78

1.57

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

2987.82

18.78

258.39

277.17

0.93

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

1103.85

9.89

144.98

154.87

1.40

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

447.48

27.36

73.19

100.54

2.25

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

63.36

1.14

32.33

33.47

5.28

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)
KPCL HYDEL STATIONS

KADRA POWER HOUSE_KPH (3x50)

355.41

19.15

51.70

70.85

1.99

KODASALLI DAM POWER HOUSE_KDPH (3x40)

330.66

11.69

37.98

49.67

1.50

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

90.09

0.39

16.02

16.41

1.82

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6) HYDRO


STATIONS_SHIVA & SHIMSHA

330.66

3.54

31.75

35.29

1.07

MUNIRABAD POWER HOUSE (2x9+1x10)

103.95

0.43

8.68

9.11

0.88

12045.33

138.20

1001.17

1139.37

0.95

PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION (6x39)

111.61

73.13

0.00

73.13

6.55

TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)

32.47

2.64

0.00

2.64

0.81

TOTAL OTHERS

144.08

75.78

0.00

75.78

5.26

4649.94

0.00

1669.14

1669.14

3.59

12.86

0.00

4.32

4.32

3.36

TOTAL KPCL HYDRO


OTHERS

NON-CONVENTIONAL ENERGY SOURCES


WIND-IPPS
KPCL-WIND (9x0.225+10x0.230)
MINI HYDEL-IPPS

1443.36

0.00

483.69

483.69

3.35

CO-GEN/CAPTIVE

172.09

0.00

64.12

64.12

3.73

BIOMASS

262.15

0.00

135.15

135.15

5.16

SOLAR-IPP

3692.28

0.00

2076.14

2076.14

5.62

ccxxvi

SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)

32.89

0.00

19.63

19.63

5.97

NTPC- SOLAR

0.00

0.00

0.00

0.00

0.00

10265.57

0.00

4452.20

4452.20

4.34

PGCIL CHARGES

968.29

968.29

0.45

KPTCL CHARGES

3472.60

3472.60

0.48

27.85

27.85

0.00

23888.11

29683.58

4.10

TOTAL NCE
TRANSMISSION CHARGES

SLDC & POSOCO CHARGES


TOTAL INCLUDING TRANSMISSION & LDC CHARGES

72435.72

ccxxvii

5795.47

ANNEXURE-II
APPROVED POWER PURCHASE FOR HESCOM - FY17
NAME OF THE GENERATING STATION

% SHARE
OF
ENERGY
ALLOWE
D

ENERGY
ALLOWE
D (MU)

CAPACI
TY
CHARGE
S (RS Cr)

ENERGY
CHARGE
S (RS Cr)

TOTAL
COST
(RS Cr)

PER
UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS


RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

15.396

1160.624

95.399

358.386

453.784

3.910

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

19.458

293.975

41.068

88.420

129.488

4.405

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

19.458

549.307

57.517

201.570

259.087

4.717

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

19.458

594.247

86.404

197.384

283.788

4.776

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

19.458

529.291

0.000

165.217

165.217

3.121

TOTAL KPCL THERMAL

17.722

3127.444

280.387

1010.977

1291.364

4.129

N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

19.458

631.737

38.467

143.895

182.362

2.887

N.T.P.C-RSTP-III (1X500MW)

19.458

159.491

14.648

37.453

52.100

3.267

NTPC-Talcher (4X500MW)

19.458

538.009

41.494

77.900

119.394

2.219

19.458

290.062

43.992

70.660

114.652

3.953

19.458

210.489

34.033

43.232

77.265

3.671

19.458

184.914

13.326

44.543

57.869

3.130

19.458

249.181

20.478

60.024

80.503

3.231

19.458

142.299

17.543

35.556

53.099

3.732

19.458

168.468

21.639

38.752

60.391

3.585

19.458

280.727

36.048

72.203

108.251

3.856

CGS SOURCES

Simhadri Unit -1 &2 (2X500MW)


NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS
Stage I &2 &3 (3X500MW)
Neyveli Lignite Corporation_NLC TPS-II STAGE I
(3X210MW)
Neyveli Lignite Corporation_NLC TPS-II STAGE 2
(4X210MW)
Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)
Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)
NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN)
(2X500MW)
MAPS (2X220MW)

19.458

48.509

0.000

9.702

9.702

2.000

Kaiga Unit 1&2 (2X220MW)

19.458

179.485

0.000

53.487

53.487

2.980

Kaiga Unit 3 &4 (2X200MW)

19.458

194.925

0.000

58.088

58.088

2.980

19.458

297.134

0.000

88.546

88.546

2.980

NPCIL-Kudan Kulam Atomic Power Generating Station


(KKNPP) (1X1000MW)
DVC-Unit-1 &2 Meja TPS (2x500MW)

19.458

306.424

53.491

70.124

123.615

4.034

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

19.458

306.424

50.905

68.076

118.981

3.883

TOTAL CGS

19.458

4188.279

386.065

972.239

1358.304

3.243

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)

19.458

1452.058

257.956

343.998

601.954

4.146

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

26.742

1124.034

5.480

48.699

54.179

0.482

MAHATMA GANDHI HYDRO ELECTRIC POWER


HOUSE_MGHE (4x21.6+4x13.2)

19.458

35.156

0.452

3.462

3.913

1.113

19.458

102.633

4.743

10.882

15.625

1.522

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

19.458

568.930

3.727

44.580

48.307

0.849

KPCL HYDEL STATIONS

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

19.458

211.671

2.300

25.178

27.478

1.298

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

19.458

101.903

5.353

15.659

21.012

2.062

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

19.458

12.677

0.222

5.791

6.013

4.743

KADRA POWER HOUSE_KPH (3x50)

19.458

69.123

3.726

9.256

12.982

1.878

KODASALLI DAM POWER HOUSE_KDPH (3x40)

19.458

63.346

2.334

6.698

9.033

1.426

ccxxviii

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

19.458

17.837

0.382

2.874

3.257

1.826

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6)


HYDRO STATIONS

19.458

60.466

0.690

5.342

6.032

0.998

MUNIRABAD POWER HOUSE (2x9+1x10)

19.458

21.331

0.084

1.689

1.773

0.831

TOTAL KPCL HYDRO

22.318

2389.108

29.493

180.110

209.603

0.877

OTHERs
PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION
(6x39)
TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)

19.458

21.717

12.665

0.000

12.665

5.832

19.458

6.318

0.514

0.000

0.514

0.813

TOTAL OTHERS

19.458

28.035

13.179

0.000

13.179

4.701

SHORT TERM POWER

19.458

215.746

0.000

108.737

108.737

5.040

320.075

320.075

3.570

RENEWABLE SOURCES
WIND-IPPS

896.570

0.000

KPCL-WIND (9x0.225+10x0.230)

0.000

0.000

0.000

0.000

#DIV/0!

MINI HYDEL-IPPS

38.640

0.000

12.944

12.944

3.350

CO-GEN/CAPTIVE

95.170

0.000

36.000

36.000

3.783

BIOMASS

0.000

0.000

0.000

0.000

0.00

288.070

0.000

179.260

179.260

6.223

3.080

0.000

1.850

1.850

6.006

1321.530

0.000

550.130

550.130

4.163

PGCIL CHARGES

184.693

184.693

0.44

KPTCL CHARGES

611.370

611.370

0.48

4.130

4.130

0.003

3966.384

4933.463

3.878

TOTAL
COST
(RS Cr)

SOLAR-IPP
SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL RENEWABLE SOURCES
TRANSMISSION CHARGES

SLDC & POSOCO CHARGES


TOTAL AVAILABILITY INCLUDING, TRANSMISSION & LDC
CHARGES

19.458

12722.20
0

967.079

APPROVED POWER PURCHASE FOR HESCOM - FY18


% SHARE
OF
ENERGY
ALLOWE
D

ENERGY
ALLOWED
(MU)

CAPACI
TY
CHARGE
S (RS Cr)

ENERGY
CHARGE
S (RS Cr)

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

19.421

1300.542

108.841

409.622

518.463

3.987

RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

19.421

311.325

42.985

93.392

136.377

4.381

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

19.421

629.448

64.158

235.598

299.756

4.762

NAME OF THE GENERATING STATION

PER UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS

ccxxix

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

19.421

639.742

91.698

216.746

308.444

4.821

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

19.421

871.841

89.275

277.587

366.862

4.208

TOTAL KPCL THERMAL

19.421

3752.898

396.957

1232.944

1629.901

4.343

CGS SOURCES
N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

19.421

630.562

38.395

146.500

184.895

2.932

N.T.P.C-RSTP-III (1X500MW)

19.421

159.195

14.620

38.131

52.751

3.314

NTPC-Talcher (4X500MW)

19.421

537.009

41.417

79.311

120.727

2.248

Simhadri Unit -1 &2 (2X500MW)

19.421

289.523

43.918

71.939

115.858

4.002

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS


Stage I &2 &3 (3X500MW)

19.421

210.097

34.246

44.014

78.260

3.725

19.421

184.571

13.301

45.350

58.651

3.178

19.421

248.718

20.440

61.111

81.551

3.279

19.421

142.035

17.511

36.199

53.710

3.781

19.421

168.155

21.599

39.454

61.052

3.631

19.421

280.205

35.981

73.510

109.491

3.908

19.421

48.419

0.000

9.878

9.878

2.040

Neyveli Lignite Corporation_NLC TPS-II STAGE I


(3X210MW)
Neyveli Lignite Corporation_NLC TPS-II STAGE 2
(4X210MW)
Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)
Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)
NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN)
(2X500MW)
MAPS (2X220MW)
Kaiga Unit 1&2 (2X220MW)

19.421

179.151

0.000

54.455

54.455

3.040

Kaiga Unit 3 &4 (2X200MW)

19.421

194.563

0.000

59.139

59.139

3.040

NPCIL-Kudan Kulam Atomic Power Generating Station


(KKNPP) (1X1000MW)

19.421

296.582

0.000

90.149

90.149

3.040

DVC-Unit-1 &2 Meja TPS (2x500MW)

19.421

305.854

53.392

71.393

124.785

4.080

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

19.421

305.854

50.811

69.308

120.119

3.927

TOTAL CGS

19.421

4180.493

385.631

989.840

1375.472

3.290

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)

19.421

1449.358

257.476

350.226

607.702

4.193

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

19.421

1062.303

3.940

48.299

52.239

0.492

MAHATMA GANDHI HYDRO ELECTRIC POWER


HOUSE_MGHE (4x21.6+4x13.2)

19.421

37.878

0.451

3.884

4.335

1.144

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

19.421

110.172

4.730

12.086

16.815

1.526

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

19.421

580.277

3.667

47.759

51.426

0.886

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

19.421

214.383

2.267

26.795

29.062

1.356

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

19.421

86.907

5.343

13.772

19.115

2.199

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

19.421

12.305

0.221

5.941

6.162

5.008

KADRA POWER HOUSE_KPH (3x50)

19.421

69.026

3.719

9.631

13.350

1.934

KODASALLI DAM POWER HOUSE_KDPH (3x40)

19.421

64.219

2.330

7.076

9.406

1.465

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

19.421

17.497

0.242

2.961

3.203

1.831

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6)


HYDRO STATIONS

19.421

64.219

0.688

5.913

6.602

1.028

MUNIRABAD POWER HOUSE (2x9+1x10)

19.421

20.189

0.084

1.675

1.759

0.871

TOTAL KPCL HYDRO

19.421

2339.374

27.682

185.790

213.472

0.913

OTHERS
PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION
(6x39)
TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)

19.421

21.677

13.400

0.000

13.400

6.182

19.421

6.306

0.513

0.000

0.513

0.813

TOTAL OTHERs

19.421

27.983

13.913

0.000

13.913

4.972

KPCL HYDEL STATIONS

RENEWABLE SOURCES

ccxxx

WIND-IPPS

958.560

0.000

343.164

343.164

3.580

KPCL-WIND (9x0.225+10x0.230)

0.000

0.000

0.000

0.000

#DIV/0!

MINI HYDEL-IPPS

38.640

0.000

12.944

12.944

3.350

CO-GEN/CAPTIVE

95.170

0.000

36.000

36.000

3.783

BIOMASS

0.000

0.000

0.000

0.000

#DIV/0!

574.550

0.000

291.920

291.920

5.081

3.080

0.000

1.850

1.850

6.006

1670.000

0.000

685.879

685.879

4.107

PGCIL CHARGES

186.193

186.193

0.45

KPTCL CHARGES

589.720

589.720

0.44

4.800

4.800

0.004

4225.392

5307.052

3.955

SOLAR-IPP
SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL RENEWABLE SOURCES
TRANSMISSION CHARGES

SLDC & POSOCO CHARGES


TOTAL INCLUDING, TRANSMISSION & LDC CHARGES

19.421

13420.106

1081.659

APPROVED POWER PURCHASE FOR HESCOM - FY19


% SHARE
OF
ENERGY
ALLOWE
D

ENERGY
ALLOWED
(MU)

CAPACI
TY
CHARGE
S (RS Cr)

ENERGY
CHARGE
S (RS Cr)

RAICHUR THERMAL POWER STATION_RTPS 1-7 (7x210)

19.001

1272.381

110.144

408.768

518.912

4.078

NAME OF THE GENERATING STATION

TOTAL
COST
(RS Cr)

PER UNIT
RATE
(RS/
Kwh)

KPCL THERMAL STATIONS


RAICHUR THERMAL POWER STATION_RTPS 8 (1x250)

19.001

304.584

41.785

93.197

134.982

4.432

BELLARY THERMAL POWER STATIONS_BTPS-1 (1x500)

19.001

615.819

64.001

235.106

299.107

4.857

BELLARY THERMAL POWER STATIONS_BTPS-2 (1x500)

19.001

625.889

88.307

216.293

304.601

4.867

BELLARY THERMAL POWER STATIONS_BTPS-3 (1x700)

19.001

876.131

88.309

284.532

372.841

4.256

YERMARUS THERMAL POWER STATION_YTPS (2x800)

19.001

294.032

38.805

78.499

117.303

3.989

TOTAL KPCL THERMAL

19.001

3988.836

431.352

1316.395

1747.746

4.382

CGS SOURCES
N.T.P.C-RSTP-I&II (3X200MW+3X500MW)

19.001

616.909

37.564

146.195

183.758

2.979

N.T.P.C-RSTP-III (1X500MW)

19.001

155.748

14.304

38.051

52.355

3.362

NTPC-Talcher (4X500MW)

19.001

525.381

40.520

79.145

119.665

2.278

Simhadri Unit -1 &2 (2X500MW)

19.001

283.254

42.968

71.789

114.757

4.051

NTPC Tamilnadu Energy Company Ltd (NTECL)_Vallur TPS


Stage I &2 &3 (3X500MW)

19.001

205.548

33.504

43.922

77.427

3.767

19.001

180.574

13.013

45.255

58.268

3.227

19.001

243.333

19.998

60.984

80.981

3.328

19.001

138.959

17.132

36.124

53.255

3.832

Neyveli Lignite Corporation_NLC TPS-II STAGE I


(3X210MW)
Neyveli Lignite Corporation_NLC TPS-II STAGE 2
(4X210MW)
Neyveli Lignite Corporation_NLC TPS I EXP (2X210MW)

ccxxxi

Neyveli Lignite Corporation_NLC TPS2 EXP (2X250MW)


NLC TAMINADU POWER LIMITED (NTPL) (TUTICORIN)
(2X500MW)
MAPS (2X220MW)

19.001

164.514

21.131

39.371

60.502

3.678

19.001

274.138

35.202

73.356

108.559

3.960

19.001

47.371

0.000

9.857

9.857

2.081

Kaiga Unit 1&2 (2X220MW)

19.001

175.272

0.000

54.341

54.341

3.100

Kaiga Unit 3 &4 (2X200MW)

19.001

190.350

0.000

59.016

59.016

3.100

NPCIL-Kudan Kulam Atomic Power Generating Station


(KKNPP) (1X1000MW)

19.001

290.160

0.000

89.961

89.961

3.100

DVC-Unit-1 &2 Meja TPS (2x500MW)

19.001

299.232

52.236

71.244

123.480

4.127

DVC-Unit-7 & 8-KODERMA TPS (2x500MW)

19.001

299.232

49.711

69.164

118.874

3.973

TOTAL CGS

19.001

4089.973

377.281

987.776

1365.057

3.338

TOTAL MAJOR IPPS


UDUPI POWER CORPORATION LIMITED_UPCL (2x600)

19.001

1417.975

251.901

349.495

601.396

4.241

SHARAVATHI VALLEY PROJECT_SVP (10x103.5+2x27.5)

19.001

1039.301

3.640

49.570

53.211

0.512

MAHATMA GANDHI HYDRO ELECTRIC POWER


HOUSE_MGHE (4x21.6+4x13.2)

19.001

37.057

0.441

3.959

4.400

1.187

GERUSOPPA_GPH (SHARAVATHI TAIL RACE_STR) (4x60)

19.001

107.786

4.627

12.242

16.870

1.565

KALI VALLEY PROJECT_KVP (2x50+5x150+1x135)

19.001

567.712

3.568

49.096

52.664

0.928

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5)

19.001

209.741

1.879

27.547

29.426

1.403

ALMATTI DAM POWER HOUSE_ADPH (1x15+5x55)

19.001

85.025

5.198

13.906

19.104

2.247

BHADRA HYDRO ELECTRIC POWER HOUSE_BHEP


((1x2+2x12)+(1x7.2+1x6))

19.001

12.039

0.217

6.144

6.360

5.283

KADRA POWER HOUSE_KPH (3x50)

19.001

67.531

3.638

9.824

13.462

1.993

KODASALLI DAM POWER HOUSE_KDPH (3x40)

19.001

62.828

2.222

7.217

9.438

1.502

GHATAPRABHA DAM POWER HOUSE_GDPH (2x16)

19.001

17.118

0.074

3.043

3.117

1.821

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA (2x8.6)


HYDRO STATIONS

19.001

62.828

0.673

6.033

6.706

1.067

MUNIRABAD POWER HOUSE (2x9+1x10)

19.001

19.751

0.082

1.649

1.731

0.877

TOTAL KPCL HYDRO

19.001

2288.720

26.260

190.230

216.490

0.946

19.001

21.208

13.896

0.000

13.896

6.552

19.001

6.169

0.502

0.000

0.502

0.813

19.001

27.377

14.398

0.000

14.398

5.259

516.809

516.809

3.590

KPCL HYDEL STATIONS

OTHERs
PRIYADARSHINI JURALA HYDRO ESLECTRIC STATION
(6x39)
TUNGABHADRA DAM POWER HOUSE_TBPH (4x9+4x9)
TOTAL OTHERs
RENEWABLE SOURCES
WIND-IPPS

1439.580

0.000

KPCL-WIND (9x0.225+10x0.230)

0.000

0.000

0.000

0.000

#DIV/0!

MINI HYDEL-IPPS

38.640

0.000

12.944

12.944

3.350

CO-GEN/CAPTIVE

95.170

0.000

36.000

36.000

3.783

BIOMASS

0.000

0.000

0.000

0.000

#DIV/0!

625.560

0.000

518.250

518.250

8.285

3.080

0.000

1.850

1.850

6.006

2202.030

0.000

1085.854

1085.854

4.931

PGCIL CHARGES

183.983

183.983

#DIV/0!

KPTCL CHARGES

650.080

650.080

#DIV/0!

5.210

5.210

#DIV/0!

SOLAR-IPP
SOLAR-KPCL (YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)
(3x1+3x1+1x3x1x5)
TOTAL RENEWABLE SOURCES
TRANSMISSION CHARGES

SLDC & POSOCO CHARGES

ccxxxii

TOTAL INCLUDING, TRANSMISSION & LDC CHARGES

ccxxxiii

19.001

14014.912

1101.192

4769.022

5870.214

4.189

Annexure - III
PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-17 OF HESCOM
With ref. to
ACS
Proposed by HESCOM Approved as per RST
Sales-M U Revenue
Sales-M U Revenue
Sl No

Category

Description

Rs. crores

Average
Le v e l o f
C ro s s
Realisation in
S
ubs
idy in %
Rs. Per Kw h

With ref. to voltage


w ise COS*
Level of
Cross
Subsidy in
% (LT&HT)

Level of
Cross
Subsidy in
% (EHT)

Rs. crores

1 LT-1[fully subsidised by Bhagya Jyothi/Kutir Jyothi


GoK]*
2 LT-2(a)(i)

4 LT-2(a)(ii)
5 LT-2(b)(i)

93.41

61.09

90.84

54.32

5.98

0.00

-1.97

940.95

523.60

942.22

478.64

5.08

-15.05

-16.72

546.83

251.00

531.72

226.06

4.25

-28.90

-30.30

10.73

8.94

11.41

8.94

7.84

31.05

28.47

3.70

2.83

3.94

2.72

6.90

15.71

13.43

305.70

286.51

308.35

268.92

8.72

45.84

42.97
29.50

Dom. / AEH - Applicable to City


Municipal Corporations areas and
all area under Urban Local
Bodies.
Dom. / AEH - Applicable to areas
under Village Panchayats
Pvt. Educational Institutions
Applicable to all areas of Local

6 LT-2(b)(ii)

7 LT-3(i)

8 LT-3(ii)
9 LT-4(a)*

Bodies including City Corporations


Pvt. Educational Institutions
Applicable to areas under Village
Panchayats
Commercial - Applicable in areas
under all ULBs including City
Corporations.
Commercial - Applicable to areas
under Village Panchayats
IP<=10HP

10 LT-4(b)

IP>10HP

11 LT-4 (c) (i)

Pvt. Nurseries, Coffee & Tea


Plantations of sanctioned load of
10 HP & below
Pvt. Nurseries, Coffee & Tea

12 LT-4 (c) (ii)

134.80

114.50

132.15

104.39

7.90

32.10

6317.43

3853.63

5619.82

3124.62

5.56

-7.02

-8.85

17.47

6.43

17.47

6.10

3.49

-41.62

-42.77

1.30

0.47

1.30

0.41

3.15

-47.87

-48.90

Plantations of sanctioned load of


13 LT-5(a)

above 10 HP
LT Industrial

LT-5(b)

0.18

0.08

0.18

0.09

5.00

-19.14

-20.73

92.05

69.55

93.12

64.72

6.95

16.23

13.95

220.93

162.85

223.60

154.36

6.90

15.44

13.17

-24.22

-25.71

14 LT-6

Water supply

231.47

110.07

231.47

104.89

4.53

15 LT-6

Public lighting

134.86

84.89

137.51

80.06

5.82

-2.64

-4.56

16 LT-7(a)

Temporary supply

14.61

14.64

14.61

13.88

9.50

58.87

55.74

9066.42

5551.08

8359.71

4693.12

5.61

-6.12

-7.97

239.32

132.88

229.75

113.94

4.96

-17.07

-9.17

-2.95

1013.41

789.06

1013.41

729.69

7.20

25.41

31.88

40.91

135.84

119.82

132.59

116.73

8.80

47.22

61.24

72.28

40.22

29.37

40.24

27.04

6.72

12.36

23.06

31.49

42.92

33.76

42.90

32.25

7.52

25.73

37.70

47.13

164.90

44.85

152.02

30.40

2.00

-66.56

-63.37

-60.86

61.10

16.74

56.28

11.79

2.09

-64.95

-61.62

-58.99

4.67

1.35

4.47

1.05

2.35

60.59

-56.83

-53.88

-29.31

LT - TOTAL
1 HT-1
2 HT-2(a)

Water supply & sew erage

3 HT-2(b)

Commercial

4 HT-2( c) (i)

Govt./ Aided Hospitals &


Educational Institutions
Hospitals and Educational
Institutions other than covered
under HT-2( c) (i)
Lift Irrigation - Applicable to lift
irrigation schemes under Govt
Dept, / Govt. ow ned Corporations
Lift Irrigation - Applicable to

5 HT-2( c) (ii)

6 HT-3(a)(i)

7 HT-3(a)(ii)

Industrial

Private lift irrigation schemes Lift


Irrigaton societies on
8 HT-3(a)(iii)

urban/express feeders
LI schemes other than those

0.15

0.07

0.16

0.06

0.00

-37.29

-31.32

10 HT-4

covered under HT 3(a)(ii)


Irrigation & Agriculture
Farms,Govt. Horticultural Farms,
Pvt.Horticulture Nurseries,
Coffee, Tea,Cocanut & Arecanut
Plantations
Residential Apartments -Colonies

14.01

9.56

14.01

9.13

6.52

8.94

19.32

27.49

11 HT-5

Temporary supply

17.83

22.02

17.83

22.33

12.52

109.44

129.39

145.10

HT - TOTAL

1734.37

1199.49

1703.65

1094.42

6.42

7.42

17.66

25.71

Total

10800.79

6750.57

10063.35

5787.53

5.75

-3.84

5.98

0.00

9 HT - 3b

Misc. Revenue

234.76

230.44

Pow er supply to Hukeri RECS


Grand Total

0.00
10800.79

6985.33

10063.35

6017.97

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance, HESCOM

ccxxxiv

shall raise demand & collect CDT of Rs.5.98/unit by BJ/KJ & Rs.5.56/unit from IP set Consumers.
* Voltage w ise cost of supply per unit to: LT Rs: 6.10, HT Rs.5.46 & EHT- Rs.5.11

Page - 218

ANNEX - IV

ELECTRICITY TARIFF - 2017

K.E.R.C. ORDER DATED: 30th March,2016


Effective for the Electricity consumed from the first meter
reading date falling on or after 01.04.2016

Hubli
Electricity Supply Company Ltd.,

ccxxxv

ELECTRICITY TARIFF-2017
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 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 Karnataka State.

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:
1 HP=0.746 KW. 1HP=0.878 KVA.

ccxxxvi

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 demands 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 nonpayment. 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

ccxxxvii

Cheque amount upto


Rs. 10,000/Cheque amount of
Rs. 10,001/- and upto
Rs. 1,00,000/Cheque amount above
Rs. 1 Lakh:

2
3
13.

5% of the amount subject to a


minimum of Rs100/3% of the amount subject to a
minimum of Rs 500/2% of the amount subject to a
minimum of Rs 3000/-

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 Bhagya Jyothi and Kutir Jyothi 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)
(b)
(c)
(d)
(e)

17.

Interest on arrears of Electricity Tax


Arrears of Electricity Tax
Arrears of Interest on Electricity charges
Arrears of Electricity charges
Current months dues

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)

18.

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.
The bill amount shall be paid within 15 days from the date of
presentation of the bill failing which the interest becomes payable.

ccxxxviii

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.
21.

In case of multiple connections in a building, all the meters shall be


provided at one easily accessible place in the ground floor.
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
under Tariff schedule LT 1 & LT2 (a)
b
Three Phase Domestic installations
under Tariff schedule LT2 (a) and
Single Phase Commercial & Power
installations.
c
All LT installations with 3 Phase supply
other than LT2 (a)
d
All HT& EHT installations

22.

Rs.20/-per Installation.
Rs.50/-per Installation.

Rs.100/-per
Installation.
Rs.500/-per
Installation.

Revenue payments up to 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.
account shall be made by cash

Payments under other heads of


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 /
on line E-Payment @ www.billjunction.com at counters 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
i) The industries that intend to avail this benefit shall have Electronic TriVector 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

ccxxxix

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 months notice in
case he intends to change his working season.

25

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


fullcalendar 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.

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
department.

ccxl

from the Income Tax

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 also
decided to extend the same to newly introduced HT2(c) consumers
with a contract demand of 500 KVA and above. Further, the optional
ToD would continue as existing earlier for HT2(a) and HT2(b) consumers
with contract demand of less than

500 KVA. Also the ToD for HT1

consumers on optional basis would continue 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 of the 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 months bill:

29.

(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
Conditions of Supply of Electricity of the Distribution Licensees in the
State of Karnataka and amendments issued thereon from time to time
ccxli

and Regulations issued under 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
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---

ccxlii

ELECTRICITY TARIFF2017
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.

ccxliii

ELECTRICITY TARIFF - 2017


PART-1
HIGH TENSION SUPPLY
Applicable to Bulk Power Supply at Voltages of 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.
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 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.

ccxliv

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 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 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 up to 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.

ccxlv

(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) 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) 0.8949 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.

I
n respect of Residential Quarters/ Colonies availing Bulk power supply
by tapping the main HT supply, the energy consumed by such Colony

ccxlvi

loads, metered at single point, shall be billed under HT-4 tariff schedule.
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 HT4 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. 25 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
[Applicable to Water Supply, Drainage / Sewerage water treatment
plant and Sewerage Pumping installations, belonging to Karnataka

ccxlvii

Urban Water Supply and Sewerage Board, other local bodies, State
and Central Government.
RATE SCHEDULE
Demand charges
Rs.190/kVA of billing demand/month
Energy charges
450 paise/unit

ToD Tariff at the option of the Consumer


Time of Day

Increase + / reduction (-) in energy


charges over the normal tariff applicable
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
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 HT4 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

ccxlviii

Mills, Toy/wood industries, Satellite communication centers, and


Mineral water processing plants / drinking water bottling plants.
RATE SCHEDULE
HT-2(a): Applicable to all areas of HESCOM.
.Demand charges Rs.180kVA of billing demand/month
Energy charges
For the first one lakh units
620 paise per unit
For the balance units
660 paise per unit
Railway Traction and Effluent Treatment Plants
Demand charges Rs.190/kVA of billing demand/month
590 paise per unit for all the units
Energy Charges
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 Centres, BPO/KPO.
RATE SCHEDULE
HT-2 (b): Applicable to all areas of HESCOM
Demand charges
Rs.200 /kVA of billing demand/month
Energy charges
For the first two lakh units
785 paise per unit
For the balance units
815 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 and Hostels
of all Educational Institutions.
Demand charges
Rs.180/kVA of billing demand /month
Energy charges
For the first one lakh units
600 paise per unit
For the balance units
650 paise per unit

RATE SCHEDULE
HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than
those covered under HT-2 (c)(i).

ccxlix

Demand charges

Rs.180/kVA of billing demand/month

Energy charges
For the first one lakh units
700 paise per unit
For the balance units
750 paise per unit
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,
canteens,
yard
lighting,
water
pumping
and
advertisement within the premises.
2. Energy can be used for construction, modification and
expansion purposes within the premises.
TOD Tariff applicable to HT 2(a), HT2(b) and HT2(c) category.
Time of Day
Increase + / reduction (-) in energy charges
over the normal tariff applicable
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
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
200 paise per unit subject to an
annual minimum of Rs.1120 per
HP/Annum
HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:
Connected to Urban/Express feeders
Fixed Charges
Rs.40 /HP/per month of sanctioned load
Energy charges
200 paise/unit
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.20 /HP/per month of sanctioned
load
Energy charges
200 paise/unit
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
400 paise per unit subject to an
annual minimum of Rs.1120/- per HP
of sanctioned load.
Note: These installations are to be billed on quarter yearly basis.
TARIFF SCHEDULE HT-4
Applicable to Residential apartments and colonies (whether situated
outside or inside the premises of the main HT Installation) availing

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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.

Demand charges
Energy charges
NOTE:

RATE SCHEDULE
Applicable to all areas
Rs.110/- per kVA of billing demand/
month
585 paise/unit

(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
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 SCHEDULE HT-5
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 / Rs.220/HP/month for the entire sanction load /
Demand Charges
contract demand
Energy Charges
950 paise / unit

Note:
1. Temporary power supply with or without extension of distribution
main shall be arranged through a prepaid 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.

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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 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-2017
PART-II
LOW TENSION SUPPLY
(400 Volts Three Phase and
230Volts Single Phase Supply)

HESCOM

ELECTRICITY TARIFF - 2017


PART-II
LOW TENSION SUPPLY
(400 Volts Three Phase and
230Volts Single Phase Supply)
CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:
1. In 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

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Demand recorded is more than the sanctioned load, penal charges at


two times the normal rate shall apply.
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
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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.
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 people, 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 case of installations covered under Tariff
category LT 3, LT4, LT 5, & LT 6, where motive power is involved.
(i)

(ii)

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.
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)
(b)

0.8449 to be rounded off to 0.84


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.
(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

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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
Distribution Licensees in the State of Karnataka.
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, etc.,
with the approval of the Licensee. The energy used for such operation,
shall be metered separately by providing alternate switch and charged at

cclvi

LT Industrial Tariff (Only Energy charges) during the period of alternative


use. However, if the energy used both for IP Set and alternate 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 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

premises

of

Commercial / Industrial Units respectively.


23. Fluorescent fittings shall be provided by the Licensee for the Streetlights in
the case of villages covered under the Licensees 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.
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.

cclvii

26.

Seasonal Industries:
a) The industries who intend to utilize seasonal industry benefit, shall
comply with the conditionalities under Para no. 25 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.5.98 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.5.98 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 18 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).
TARIFF SCHEDULE LT-2(a)
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
Consultancy in

(i) Engineering

(c)

(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

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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 up to 1 HP.
Also applicable to the installations of (i) Hospitals, Dispensaries, Health
Centers 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.

cclix

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.30/- per KW
For every additional KW Rs.40/- per KW
Energy charges
For 0 - 30 units (Lifeline 300 Ps/unit
consumption)
31 to 100 units 440 paise /unit
101 to 200 units 590 paise /unit
Above 200 units 690 paise /unit
LT-2(a)(ii): Applicable to Areas under Village Panchayats
Fixed charges per month
For the first KW
Rs.20/- per KW
For every additional KW Rs.30/- per KW
Energy charges
For 0 - 30 units (Lifeline 290 paise /unit
consumption)
31 to 100 units 410 paise /unit
101 to 200 units 560 paise /unit
Above 200 units 640 paise /unit
TARIFF SCHEDULE LT-2(b)

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.
[[[[[

RATE SCHEDULE
LT 2 (b) (i): Applicable to City Municipal Corporations and all other Urban
Local Bodies
Fixed charges

Rs.45 per KW subject to a minimum of Rs.75 per


month

Energy charges

0 to 200 units 625 paise /unit


Above 200 units 745 paise /unit

LT-2(b)(ii): Applicable in Areas under Village Panchayats


Fixed charges
Rs.35 per KW subject to a minimum of Rs.60 per
month
Energy charges
0 to 200 units 570 paise /unit
Above 200 units 690 paise /unit
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.

cclx

4.

5.

(a) Use of power within the consumers 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.
The laboratory installations in educational institutions are allowed to
install connected machinery up to 4 times the sanctioned load. The fixed
charges shall however be on the basis of sanctioned load.
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.
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
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.
TARIFF SCHEDULE LT-3
Applicable to Commercial Lighting, Heating and Motive Power
installations of Clinics, Diagnostic Centers, X Ray units, Shops, Stores,
Hotels / Restaurants / Boarding and Lodging Homes, Bars, Private guest
Houses, Mess, Clubs, Kalyan Mantaps / 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, Xerox 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
cafs, Internet surfing cafs, Call centers, Information Technology (IT)

cclxi

enabled services, I.T. based medical transcription centers, Private


Hostels not covered under LT -2 (a), Paying guests accommodation
provided in an independent / exclusive premises.
RATE SCHEDULE
LT-3 (i): Applicable to City Municipal Corporations and all other urban local
bodies
Fixed charges
Energy charges

Rs.50 per KW per month


For 0 - 50 units

715 paise /unit

Above 50 units

815 paise /unit

Demand based tariff (optional) where sanctioned load


is above 5 KW but below 50 KW
Fixed charges
Rs.65 per KW
Energy charges
As above

RATE SCHEDULE
LT-3 (ii): Applicable in Areas under Village Panchayats
Fixed charges
Rs.40 per KW per month
Energy charges
For 0 - 50 units
665 paise /unit
Above 50 units

765 paise /unit

Demand based tariff (optional) where sanctioned load


is above 5 KW but below 50 KW
Fixed charges
Rs.55 per KW per month
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 people.

5.Demand based Tariff at the option of the Consumer can be


adopted as per Para 1 of the conditions applicable to LT
installations.
cclxii

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.

cclxiii

cclxiv

TARIFF SCHEDULE LT-4 (a)


Applicable to I.P. Sets up to and inclusive of 10 HP
Fixed charges
Energy charges

RATE SCHEDULE
Free

Commission Determined Tariff (CDT) for LT4 (a) category is 556 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 556 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.40 per HP per month.
Energy charges
280 paise per unit
TARIFF SCHEDULE LT-4 (c) (i):
Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber
plantations of sanctioned load up to and inclusive of 10 HP.
RATE SCHEDULE
Fixed charges
Rs.30 per HP per month.
Energy charges
280 paise per unit
TARIFF SCHEDULE LT-4 (c)(ii):
Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber
plantations of sanctioned load above 10 HP.
RATE SCHEDULE
Fixed charges
Rs.40 per HP per month.
Energy charges
280 paise per unit
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
Distribution Licensees in the State of Karnataka.
2) The motor of IP set installations can be used with an alternative drive for other
agricultural operations like sugar cane crusher, coffee pulping, 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. If the energy used both for
IP Set and alternate 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.

cclxv

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.
TARIFF SCHEDULE LT-5
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., exclusive Tailoring
Shops, 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. 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
cclxvi

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
centers, 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
Details

Approved by the Commission

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

cclxvii

Demand based Tariff (optional)


Fixed
Charges per
Month

Above 5 HP and less than 40


HP
40 HP and above but less
than 67 HP
67 HP and above

Rs.50 per KW of billing


demand
Rs.65 per KW of billing
demand
Rs.150 per KW of billing
demand

ii) Energy Charges


Details

Approved by the Commission

For the first 500 units


For the next 500 units
For the balance units

495 paise/unit
585 paise/ unit
615 paise/unit

Tariff for LT 5 (b):


Applicable to all areas other than those covered under LT-5(a)
i. Fixed charges
Fixed Charges
per Month

i) Rs.30 per HP for 5 HP & below


ii) Rs.35 per HP for above 5 HP & below 40 HP
iii) Rs.40 per HP for 40 HP & above but below 67 HP
iv)Rs.100 per HP for 67 HP & above

ii. Demand based Tariff (optional)


Fixed
Above 5 HP and less than 40 HP
Charges
40 HP and above but less than
per Month 67 HP
67 HP and above

Rs.50 per KW of billing demand


Rs.65 per KW of billing demand
Rs.150 per KW of billing demand

iii. Energy Charges


0 to 500 units 485 paise /unit
501 to 1000 units 570 paise /unit
Above 1000 units 600 paise /unit
TOD Tariff applicable to LT-5: At the option of the Consumer
Time of Day
Increase+ / reduction (-) in energy
charges over the normal tariff applicable
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
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

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during the month which ever 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. 26 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.
TARIFF SCHEDULE LT-6
Applicable to water supply and sewerage pumping installations and
also applicable to 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 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.
RATE SCHEDULE
Water Supply- LT-6 (a)
Fixed charges
Rs.45 HP/month
Energy charges
390 paise /unit
Public lighting- LT-6 (b)
Fixed charges
Rs.60/KW/month
Energy charges
550 paise /unit
Energy Charges for LED/ Induction 450 paise/unit
Lighting

TARIFF SCHEDULE LT-7


Temporary Supply and Permanent Supply to Advertising Hoardings

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TARIFF SCHEDULE LT-7(a)


Applicable to Temporary Power Supply for all purposes.
LT 7(a)

Details

Temporary Power Less than 67 HP:


Supply
for
all
purposes.

Approved Tariff
Energy charges at 950 paise / unit
subject to a weekly minimum of Rs.170
per KW of the sanctioned load.

TARIFF SCHEDULE LT-7(b)


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

Power supply on Less than 67 HP:


permanent
connection basis

Approved Tariff
Fixed Charges at Rs.50 per KW / month
& Energy charges at 950 paise / unit

Note:
1. Temporary power supply with or without extension of distribution main shall
be arranged through a prepaid 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 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-

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