Chapter - 3 Truing Up For Fy-21

TRUING UP OF FY-21
CHAPTER – 3
TRUING UP FOR FY-21
BESCOM is seeking the true up 2020-21 in line with regulations of the Hon’ble
Commission in its Terms and Conditions for Determination of Tariff for Distribution
and Retail Sale of Electricity Regulations, 2006 has specified scope of truing up under
the head 2.8.5, the extract is reiterated:
“2.8.5
The scope of the annual performance review shall be a comparison of the

performance of the Licensee with the approved forecast of ARR and ERC.
Upon completion of annual performance review, the Commission shall pass
an order recording:
a) Any financial loss or gain on account of variation in power purchase cost

either on account of change in hydro-thermal mix or other uncontrollable
factors and the mechanism by which the licensee shall pass through such
gains or losses.
b) The approved aggregate gain or loss to the Licensee on account of other

Uncontrollable factors and the mechanism by which the Licensee shall pass
through such gains or losses.
c) The approved aggregate gain or loss to the Licensee on account of

Controllable factors and the mechanism to share such gains or losses.
d) The approved modifications to the forecast for the remainder period of the
Control period, if any.”
Therefore based on the above, BESCOM is now seeking true-up of 2020-21
Karnataka Electricity Regulatory Commission (KERC) approved the Annual Revenue

Requirement (ARR) of BESCOM for FY-21 in its Tariff Order 2020, dated 4 th Nov 2020.
Annual Accounts for FY-21 is finalized, audited by the Statutory Auditors and certified
by Accountant General of India. BESCOM is submitting Truing up of FY-21 before the
Commission based on this audited accounts.
MYT for 6th Control Period from FY-23 to FY-25 Page 13

TRUING UP OF FY-21
1. Truing up of Approved Revenue and Actual Revenue:
In the Tariff Order 2020, dtd 04.11.2020 the Hon’ble Commission had approved sale
of energy of 29,950.51 MU for FY-21. Against the same, BESCOM has actually billed
25262.93 MU as sale of energy.
Table 3.1
Approved Actual
Tariff Category Consumer Category
(MU) (MU)
LT-1 BJ/KJ BJ/KJ<=40 Units 170.94 181.77
LT-2a Domestic AEH 7815.71 7160.88
LT-2b Pvt. Installation 59.71 32.16
LT-3 Commercial 2426.36 1669.67
LT-4 (b) IP Sets-More than 10HP 1.47 1.73
Private Horticulture Nurseries,
LT-4 (c) 5.56 5.46
Coffee & Tea Plantations
LT-5 LT Industries 1297.11 1038.44
LT-6-(a) Water Supply 1848.63 1238.3
LT-6-(b) Street Light 583.55 491.96

LT-6© Electric vehicle 0 0.03
LT-7 Temporary Power Supply 214.62 187.06
HT-1 HT Water Supply 783.18 796.61
HT-2 (a) HT Industries 4576.34 3505.08
HT-2 (b) HT Commercial 2448.41 1466.98
Hospitals run by Govt. Charitable
HT-2C 381.94 243.04
institutions etc.
HT-3(a)& (b) HT Irrigation & LI Societies 77.82 95.38
HT-4 Res. Apartments 80.58 79.15
HT-5 HT Temporary 94.86 87.75
Sub-Total other than BJ/KJ & IP sets 22866.79 18281.47
LT-1 BJ/KJ BJ/KJ>40 Units 46.93 71.28
LT-4(a) IP Sets IP Sets-Less than 10HP 7036.79 6910.20
Sub Total BJ/KJ & IP sets 7083.72 6981.48
Total 29950.51 25262.93
From the above table it can be seen that the energy sales of BESCOM has declined
from the approved sales by 4688 MU. Due to COVID lockdown commercial and
industrial installations were shut down up to the end of September-20. Electricity
demand dropped to lesser levels during lockdown, with drastic reductions in services

TRUING UP OF FY-21
and industry only partially offset by higher residential use. The major reductions in
energy sales when compared with the approved sales are in LT-2a, LT-5, LT-6W/S,
HT-2a, HT-2b and HT-2c category. The reduction in energy sales of LT-2a category
may be contributed to demand side management initiatives like installing LED lights,
solar water heaters etc. The progress and energy savings of Hosa Belaku scheme,
Pavan scheme and solar water heater are depicted in the below table:
Table 3.2
Sl Cumulative Energy Saving

Particulars
No Progress (Nos) in MU's
9W LED bulbs (December 2015
1 1,13,78,948 762.64
to September-2021
20Watts LED tube light (January-
2 2,74,378 24.64
2017 to September-2021
BEE 5Star rated ceiling fan April-
3 41,757 3.11
2017 to September-2021
Solar water heater:
Total SWH installed from December-2007 to September-2021: 7,51,969
Energy savings in MU: 744.5

Table 3.3
The Progress and energy savings of HosaBelaku scheme, Pavan Scheme

and Solar Water Heater during FY-21 is tabulated below:
Progress in Nos for Annual Energy
Particulars
(FY-21) Savings in MU
9W LED bulbs 3,16,573 4.09
20W Tube light 0 0
BEE Star rated Ceiling

0 0
fan
Solar Water Heater 35,044 16.09
Total 20.18

TRUING UP OF FY-21
Like all economic activities, Bangalore Electricity Supply Company too saw metered
sales plummet during FY-21. HT sales reduced by 24.5% from April to November when
compared to 2019–20 financial year, and LT sales by 9.5% for the same period. The
HT consumers have continued exiting the BESCOM network by opting for open
access. For FY-21, 4290.11MU is procured by HT consumers through wheeling/open
access, captive/non-captive. Hence, there is a fall in HT consumption than the
approved sales. The details of energy sales procured by HT consumers from BESCOM
and energy sales procured by HT consumers from open access/wheeling for the years
2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 are depicted in the table below:
Table 3.4
Energy Procured Energy procured by Total BESCOM

by HT HT consumers sales & OA/
Year Category
consumers from under Open access/ wheeling
BESCOM (MU) wheeling (MU) consumption (MU)
2016-17 4456.17 1962.38 6418.55
2017-18 4470.59 2557.85 7028.44
2018-19 HT-2A 4512.96 2639.87 7152.84
2019-20 4139.15 2765.90 6905.05
2020-21 3505.08 2867.42 6373.05
2016-17 2619.62 997.88 3617.5
2017-18 2562.32 945.57 3507.89
2018-19 HT-2B 2448.41 1551.30 3999.71
2019-20 2345.62 1758.64 4104.26
2020-21 1466.98 1352.27 2819.25
2016-17 270.05 43.89 313.94
2017-18 312.39 50.27 362.66
HT-2C
2018-19 321.45 68.81 390.26
2019-20 331.51 79.74 411.25
2020-21 243.04 70.61 313.65
There is no major increase in actual sales over the approved sales in any of the
categories.

TRUING UP OF FY-21
For FY-21, actual specific consumption for IP set is 7331 units/IP/annum as against
the approved specific consumption of 7411 units/IP/annum, the difference being 80
units/IP/annum.
Table 3.5
FY-21 FY-20 FY-21

Particulars
(Appd.) (Actuals) (Actuals)
LT-4a Installations (Nos.) 964463 933908 951183
Midyear installations (Nos.) 949463 942546
LT-4a Sales(MU) 7036.79 6910.2
Specific consumption in
7411 7331
units/IP/annum
7 years specific consumption in units/IP/annum,
Table 3.6
Particulars FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21

LT4a -
Installations 691785 768516 809170 841228 872229 904463 933908 951183
(Nos.)
Midyear
installations 730151 788843 825199 856729 888346 919186 942546
(Nos.)
LT4a - Sales(MU) 5759 6190 7285 6289 7202 6916 6910.2
Specific
consumption in 7888 7847 8829 7341 8108 7524 7331
units/IP/annum
Though there is a decrease in energy sales from the approved figures of the
Commission for FY-21, there is increase among few categories over the previous year
FY-20, On the whole there is reduction of 2572 MU. The comparison between the
actual sales for FY-20 and FY-21 is shown in the below table:

TRUING UP OF FY-21
Table 3.7 Sales in MU
Category FY-20 FY-21 Difference

LT-2a 7285.82 7160.88 -124.94
LT-2b 56.57 32.16 -24.41
LT-3 2240.82 1669.66 -571.15
LT-4 (b) 1.35 1.73 0.38
LT-4 (c) 5.67 5.46 -0.21
LT-5 1217.67 1038.44 -179.23
LT-6-WS 1317.38 1238.30 -79.08
LT-6-SL/EV 524.64 491.99 -32.65
LT-7 205.45 187.06 -18.39
HT-1 762.04 796.61 34.57
HT-2 (a) 4173.06 3505.08 -667.98
HT-2 (b) 2345.62 1466.98 -878.64
HT2C 331.52 243.04 -88.48
HT-3(a)& (b) 58.42 95.38 36.96
HT-4 78.30 79.15 0.85
HT-5 89.48 87.75 -1.73
Sub-Total other than
20693.81 18099.68 -2594.13
BJ/KJ & IP sets
LT-1 BJ/KJ 224.43 253.04 28.61
LT-4 (a)IP Sets 6916.36 6910.20 -6.16
Sub Total BJ/KJ &
7140.79 7163.25 22.46
IP sets
Total 27834.60 25262.93 -2571.67
There is reduction in all metered category sales over the previous years. There is also
reduction in the agricultural category sales over the previous year.
Energy Requirement:
Table 3.8
Particulars Approved Actuals Variation

Sales in MU 29950.51 25262.93 -4687.58
Percentage distribution losses in % 11.65 11.63 -0.02
Distribution losses in MU 3949.33 3323.69 -625.64
Energy at interface point in MU 33899.84 28586.62 -5313.22
Percentage transmission losses in % 3.039 4.59 1.56
Total energy requirement in MU 34962.35 29963.43 -4998.92

TRUING UP OF FY-21
From the above table, it can be seen that BESCOM has purchased 29963.43 MU as
per the annual accounts, which is less by 4998.92 MU compared to the approved
quantum of power purchase i.e., 34962.35 MU. From the above table, it can also be
seen that there is reduction in the energy sales of BESCOM by 4687.58 MU as against
the approved energy sales of 29950.51 MU.
T&D loss for FY-21 and FY-22 (Sept-21):
The details of the month wise distribution loss for the year FY-21 (excluding roof top
solar energy of 28.72 MU) is shown in the below table:
Table 3.9
Total Input
Metered Total Energy %
Energy to Unmetered
Month Sales in Sales in Loss in Distribution
BESCOM in Sales MU
MU MU MU Loss
MU
1 2 3 4=2+3 5=1-4 6=5/1
Apr-20 2458.32 1563.14 857.23 2420.37 37.95 1.54%
May-20 2532.92 1363.32 711.89 2075.22 457.70 18.07%
Jun-20 2276.81 1585.69 615.59 2201.28 75.53 3.32%
1st Quarter 7268.05 4512.15 2184.72 6696.87 571.18 7.86%
Jul-20 1991.23 1503.24 482.00 1985.24 5.99 0.30%
Aug-20 2091.38 1485.05 285.69 1770.75 320.63 15.33%
Sep-20 1924.74 1528.57 358.62 1887.19 37.55 1.95%
2nd Quarter 6007.35 4516.87 1126.31 5643.17 364.18 6.06%
Oct-20 2079.55 1523.46 220.09 1743.55 336.00 16.16%
Nov-20 2264.13 1574.37 308.11 1882.47 381.65 16.86%
Dec-20 2506.92 1523.15 581.64 2104.79 402.13 16.04%
3rd Quarter 6850.59 4620.98 1109.84 5730.81 1119.78 16.35%
Jan-21 2650.08 1585.30 781.93 2367.23 282.84 10.67%
Feb-21 2599.97 1586.37 828.24 2414.61 185.36 7.13%
Mar-21 3210.59 1502.35 879.17 2381.51 829.08 25.82%
4th Quarter 8460.63 4674.02 2489.34 7163.35 1297.28 15.33%
Cum FY-21 28586.62 18324.01 6910.20 25234.21 3352.41 11.73%

TRUING UP OF FY-21
T&D Loss for FY-22 (upto Sept-21):

Table 3.10
Total Input Unmetere Total Energy %
Metered
Month Energy to d Sales Sales in Loss in Distributio
Sales in MU
BESCOM in MU MU MU MU n Loss
1 2 3 4=2+3 5=1-4 6=5/1
Apr-21 2987.73 1816.92 934.08 2751.00 236.73 7.92%
May-21 2368.14 1779.12 762.72 2541.84 -173.70 -7.33%
Jun-21 2225.21 1549.36 533.91 2083.26 141.95 6.38%
1st Qtr 7581.09 5145.39 2230.71 7376.10 204.99 2.70%
Jul-21 2236.75 1517.32 491.94 2009.25 227.50 10.17%
Aug-21 2376.49 1677.42 356.20 2033.62 342.87 14.43%
Sep-21 2430.27 1729.66 421.02 2150.68 279.59 11.50%
2nd Qtr 7043.51 4924.39 1269.16 6193.55 849.96 12.07%
Cum FY-
14624.60 10069.79 3499.86 13569.65 1054.95 7.21%
22
BESCOM endeavours for taking Distribution Losses to the lowest possible level.
BESCOM has achieved a significant reduction in distribution losses during recent
years. These efforts shall be continued and will be enhanced in coming years.
However, loss reduction is a slow process and to maintain the rate with which it has
been decreasing is a difficult task. The reduction in HT Sales and increase in LT sales
has also impacted the distribution losses. BESCOM, hence requests the Hon’ble
Commission to approve the actual Distribution Loss.
Revenue Realized:
As against KERC approved revenue of Rs.23,173.84 Crs., BESCOM has been able to
realize an amount of Rs.19,680.84 Crs.

TRUING UP OF FY-21
Table 3.17 Amount in Crs.
Opening Net of Net

Units Sold Openin Bal - Unbilled Revenue
No of Demand
Description Tariff (Units in g Unbilled provision Demand
Consumers Revenue
MU) Balance provision & as per
A/c 23.4 reversal Accounts
BJ/KJ ( Upto 40
798035 181.77 68.70 6.83 130.75 3.18 133.93
Units )
LT 1
BJ/KJ (Above 40
45358 71.28 72.46 3.27 31.51 -0.92 30.59
Units )
Lighting and AEH LT 2 8608419 7193.04 146.05 343.12 5091.20 27.71 5118.91
Commercial
LT 3 1181325 1669.66 41.34 106.27 1732.94 36.48 1769.42
Lighting
IP Sets (10HP &
BELOW)
FREEZED 1356.10 0.00
BALANCE Upto
31-07-2008
IP Sets (10HP &
LT 4B 222 1.73 4.11 0.06 1.02 0.01 1.03
Above)
Pvt. HortI, Nuris,
Coffee LT 4C 1814 5.46 4.13 0.20 2.97 0.11 3.08
& Tea Plant
LT Industries LT 5 225890 1038.44 24.42 40.91 862.91 31.14 894.05
Water Supply LT 6 A 87660 1238.30 2326.42 52.15 667.91 16.78 684.69
Street lights LT 6 B 70424 491.96 373.19 22.36 360.98 5.58 366.56
Electric Vehicle LT 6 C 38 0.03 0.00 0.00 0.04 0.01 0.06
Temporary Supply
LT 7A 827827 186.31 -60.12 21.86 385.33 5.22 390.55
(LT)
Temporary Supply
LT 7B 4299 0.75 0.10 0.10 1.17 -0.01 1.16
(LT)
Pending for
reconciliation of 97.14 0.00 0.00 0.00 0.00
Sundry debtors
LT TOTAL I 11851311 12078.72 4454.03 597.13 9268.74 125.29 9394.03
Water Supply &
Sewerage HT 1 278 796.61 67.84 38.11 458.92 13.68 472.61
Pumping
HT Industries HT 2A 7702 3476.36 54.70 264.62 3252.49 90.64 3343.13
HT Commercial HT 2B 7843 1466.98 -14.04 201.80 1926.23 -0.14 1926.10
HT Hospitals HT 2C 904 243.04 -2.45 23.92 234.18 1.32 235.50
HT Lift Irg.
HT 3A 49 94.01 38.03 1.48 27.12 1.41 28.52
Societies
HT Lift Irg.
Schemes & Govt HT 3B 16 1.37 0.10 0.07 0.70 0.02 0.72
Hort.
HT Residential
HT 4 465 79.15 3.81 5.32 59.85 0.70 60.55
Apartment
Temporary Supply HT 5 1671 87.75 -15.77 8.49 118.14 4.94 123.08

TRUING UP OF FY-21
(HT)
Power Purchase
(Auxiliary cons.) 28.72 3.36 0.00 16.47 0.00 16.47
HT & SRTPV
HT TOTAL II 18928 6274.01 135.56 543.80 6094.11 112.59 6206.70
TOTAL 1 (LT +
III 11870239 18352.72 4589.60 1140.93 15362.85 237.87 15600.72
HT+Temporary)
IP Sets (10HP &
BELOW)FREE
LIGHTING From
LT 4A 951183 6910.20 2071.24 229.98 2630.07 162.81 2792.89
01-08-2008
(Subsidy Due for
GOK)
Total -2 12821422 25262.93 6660.84 1370.91 17992.92 400.69 18393.61
Less : Provision
for withdrawal of
14.18 14.18
Revenue
Demand
Less: Withdrawal
of revenue
7.68 7.68
demand as credit
adjustment.
Less :Credit
Adjustment
117.88 117.88
through Balance
Transfer system
Unbilled and
400.69 400.69
adjustments
Other Operating
114.90 114.90
Income
Write back taken
0.15 0.15
to revenue
FAC 214.39 214.39
Cross subsidy
surcharge and
309.88 309.88
additional
surcharge
Interest 386.97 386.97
Total - 3 0 0.00 0.00 0.00 1287.23 0.00 1287.23
Grand Total 12821422 25262.93 6660.84 1370.91 19280.16 400.69 19680.84
Due to the COVID pandemic the metered category sales for FY-21 has reduced by
2572 MU over the previous year FY-20. This in turn has reduced the revenue demand
by Rs.1310 Crores for FY-21 over FY-20.
Revenue from Operations:

TRUING UP OF FY-21
For the year

ended on 31st
Particulars
March 2021 (Ind
AS)
Sale of Power LT category (including unbilled revenue) 12485.77
Sale of Power HT category (including unbilled revenue) 6308.67
Total (A) 18794.44
Other Operating Income
Reconnection Fee (D & R) 0
Public lighting Maintenance Charges -
Service Connection 66.72
Other Receipts from consumers 16.79
Delayed payment charges from consumers 386.97
Registration fee towards SRTPV connection (Solar
0.57
rooftop PV system
Facilitation fee towards SRTPV connection (Solar rooftop
0
PV system)
Fuel Adjustment Charges 214.39
Cross subsidy surcharge and additional surcharge 309.88
Recoveries for theft of power 18.17
Meter Rent Collected from prepaid Consumer 12.64
Total (B) 1026.14

Total (A)+(B) 19820.59
Less: Provision for withdrawal of Revenue Demand 14.18
Less: Withdrawal of revenue demand as credit
7.68
adjustment.
Less: Credit Adjustment through Balance Transfer
117.88
system
Grand Total 19680.84
Revenue realized through tariff is compared with the approved revenue from tariff for
FY-21 in the below table:
Table 3.13 Amount in Crs

TRUING UP OF FY-21
Category Wise Cross Subsidy Calculation- FY-21

TRUING UP OF FY-21
Avera
Approved ge Level Actuals Level of
Reali of Cross Average Cross
zatio Subsidy Realizat Subsidy Differen
Sl
Category Revenue n in in % ion in in % with ce in
No Revenue
Sales-MU Rs. Rs. with Sales-MU Rs. Per ref. to Rev
8.14 ref. to Rs. Crores Kwh ACS
crores
Per ACS Rs.8.66
Kwh
LT-1[fully
1 subsidise 170.94 139.15 8.14 0.00 181.77 133.93 7.37 -17.53% -23.48
d by GoK]
2 LT-1 46.93 25.15 5.36 -34.14 71.28 30.59 4.29 -101.81% -31.14
3 LT-2(a)(i) 7008.10 5233.32 7.47 -8.23 6361.35 4584.17 7.21 -20.17% -924.76
4 LT-2(a)(ii) 807.61 576.90 7.14 -12.22 799.54 502.58 6.29 -37.77% -189.82
5 LT-2(b)(i) 51.90 47.92 9.23 13.47 27.77 27.86 10.03 13.69% 3.81
6 LT-2(b)(ii) 7.81 6.10 7.81 -4.05 4.39 4.34 9.90 12.49% 0.54
7 LT-3(i) 2204.83 2346.76 10.64 30.80 1472.34 1579.19 10.73 19.26% 304.14
8 LT-3(ii) 221.53 208.11 9.39 15.44 197.33 190.23 9.64 10.17% 19.35
9 LT-4(a)(i)* 7036.79 2955.45 4.20 -48.39 6910.20 2792.89 4.04 -114.27% -3191.3
10 LT-4(b) 1.47 0.84 5.71 -30.16 1.73 1.03 5.98 -44.91% -0.46
11 LT-4 © 5.56 2.96 5.32 -74.83 5.46 3.08 5.65 -53.36% -1.64
12 LT-5(a) 932.88 846.62 9.08 11.52 701.20 613.70 8.75 1.05% 6.47
13 LT-5(b) 364.23 370.42 10.17 24.98 337.24 280.35 8.31 -4.17% -11.70
14 LT-6a 1848.63 1040.29 5.63 -30.85 1238.30 684.69 5.53 -56.62% -387.67
15 LT-6b 583.55 453.07 7.76 -4.59 491.96 366.56 7.45 -16.23% -59.48
16 LT-6c 0.03 0.06 19.11
17 LT-7a 214.62 345.07 16.08 220.94 187.06 391.71 20.94 58.64% 229.72
LT -
21507.38 14598.13 6.79 -16.59 18988.9 12186.96 151.21 -34.93% -4257.4
TOTL
1 HT-1 783.18 501.40 6.40 -21.33 796.61 472.61 5.93 -45.97% -217.26
2 HT-2(a)(i) 2692.71 2783.05 10.34 27.01 1943.42 1959.42 10.08 14.11% 276.42
3 HT-2(a)(ii) 1883.63 1797.46 9.54 17.27 1561.66 1400.19 8.97 3.41% 47.79
4 HT-2(b)(i) 2271.63 2947.87 12.98 59.47 1362.04 1801.58 13.23 34.53% 622.06
5 HT-2(b)(ii) 176.78 195.38 11.05 35.82 104.95 124.52 11.86 27.01% 33.63
6 HT-2(c)(i) 186.08 164.43 8.84 8.59 125.41 109.54 8.73 0.85% 0.93
7 HT-2(c) (ii) 195.86 206.36 10.54 29.47 117.63 125.97 10.71 19.13% 24.10
8 HT-3(a)(i) 68.45 20.53 3.00 -63.13 94.00 28.50 3.03 -185.6% -52.90
9 HT-3(a)(ii) 8.44 2.75 3.26 -59.96 0.01 0.02 15.69 44.80% 0.01
10 HT - 3b 0.93 0.52 5.59 -31.71 1.37 0.72 5.28 -64.07% -0.46

TRUING UP OF FY-21
11 HT-4(a) 80.58 67.84 8.42 3.46 79.15 60.55 7.65 -13.20% -8.00
12 HT-5 94.86 147.60 15.56 91.21 87.75 123.08 14.03 38.26% 47.09
HT -
8443.13 8835.20 10.46 28.59 6274.01 6206.70 9.89 12.46% 773.41
TOTL
TOTL 29950.51 23433.33 7.82 - 25262.9 18393.66 7.28 -18.94% -3484.04
Misc.
938.53 1287.24 1287.24
Revenue
Grand
29950.51 24371.86 8.14 - 25262.9 19680.89 7.79 -11.16% -2196.8
Total
From the above table, it can be seen that there is a reduction in HT sales of 2169 MU
from the approved level. This has resulted in the percentage reduction of cross subsidy
component of 16.13% (28.59%-12.46%). Increase in IP sales needs to be compensated
with increase in cross subsidy component of 65.88% (-48.39%-(-114.27%)).
The Hon’ble Commission approved the Tariff Order 2020 on 04.11.2020 and approved
a revenue gap of Rs.1198.02 Crores. But due to the COVID-19 pandemic which had
resulted in setback of all economic activities hugely affecting all the sections of the
society, socially and economically, Commission decided to treat Rs.698.85 Crores as
regulatory asset to be recovered over next two years in FY-22 and FY-23. Balance of
the revenue gap i.e. Rs.499.18 Crores alone was allowed to be collected from the
consumers. Hence, the Revenue realization has declined. It can be seen from the
above table that the average realization rate has decreased from the approved Rs.8.14
per unit to Rs.7.79 per unit. There is decrease in actual revenue of Rs.4691 Crores
over the approved revenue. This Revenue impact is due to reduction of sales during
COVID lockdown. BESCOM has been hit on two fronts one being the decrease in cross
subsidy component and the other being the reduced revenue due to the pandemic.
This has increased the financial burden of BESCOM.
Power Purchase Cost:
The Hon’ble Commission in its Tariff Order 2020, dtd 04.11.2020 has approved the
Power Purchase quantum of 34962.35 MU and Power Purchase cost of

TRUING UP OF FY-21
Rs.18534.89Crs. and the Average Power Purchase rate at Rs. 5.30/unit. As against
the approved Average Power Purchase rate the actual Average Power Purchase cost
incurred by BESCOM is Rs. 5.70/unit. Detailed summary of the power purchase is
shown in the below table:
Table 3.14
Approved power purchase for FY 21 Actual power purchase from April 20 to Mar 21
% Capacity Capacity
share Energy Energy
NAME OF THE of Allowed charges variable charges Total cost Allowed charges variable charges Total cost
GENERATING energy (MU) (Rs (MU) (Rs
STATION allowed crore) crore)
Avg Avg Avg Avg
Amt in Amt in Amt in Amt in Amt in Amt in
cost/ cost/ cost/ cost/
Crs Crs Crs Crs Crs Crs
unit Rs unit Rs unit Rs unit Rs
KPCL Thermal
Stations
Raichur
Thermal Power
50.73 3550.60 448.27 1232.06 3.47 1680.33 4.73 1716.19 420.86 507.17 2.96 928.03 5.41
station RTPS 1-
7 (7x210)
Raichur
Thermal Power
57.70 807.80 123.90 285.96 3.54 409.86 5.07 68.63 11.93 23.40 3.41 35.33 5.15
station_ RTPS 8
(1x250)
Bellary
Thermal Power
57.70 701.83 188.17 280.03 3.99 468.20 6.67 251.58 167.30 71.55 2.84 238.85 9.49
station_ BTPS-
1 (1x500)
Bellary
Thermal Power
57.70 761.74 263.43 277.27 3.64 540.70 7.10 764.39 263.24 208.56 2.73 471.81 6.17
station_ BTPS-
2 (1x500)
Bellary
Thermal Power
57.70 1387.16 435.57 479.95 3.46 915.52 6.60 637.17 532.00 182.42 2.86 714.42
station_ BTPS-
3 (1x700)
YTPS Unit- 1 57.70 1069.92 818.88 395.87 3.70 1214.75 11.35 1807.60 684.40 515.48 2.85 1199.88 6.64
TOTAL KPCL
8279.05 2278.22 2951.14 5229.36 6.32 5245.57 2079.74 1508.58 2.88 3588.32 6.84
THERMAL
CGS Sources
N.T.P.C-RSTP-
I&II
53.00 1174.01 103.57 315.81 2.69 419.38 3.57 1316.96 111.58 312.97 2.38 424.55 3.22
(3X200MW+
3X500MW)
N.T.P.C-RSTP-
53.00 316.05 27.32 85.97 2.72 113.29 3.58 314.48 27.03 74.62 2.37 101.65 3.23
III (1X500MW)
NTPC-Talcher
53.00 1198.75 95.41 238.55 1.99 333.96 2.79 1315.77 100.04 261.14 1.98 361.19 2.75
(4X500MW)
Simhadri Unit -
1 &2 53.00 535.51 106.97 190.64 3.56 297.61 5.56 475.41 108.85 147.96 3.11 256.81 5.40
(2X500MW)
NTPC
Tamilnadu
Energy
Company Ltd
53.00 396.23 101.61 158.10 3.99 259.71 6.55 157.10 106.64 64.25 4.09 170.89 10.88
(NTECL)_
Vallur TPS
Stage I &2 &3
(3X500MW)

TRUING UP OF FY-21
Neyveli Lignite
Corporation_NL
53.00 391.15 36.09 111.48 2.85 147.57 3.77 393.76 31.43 105.47 2.68 136.90 3.48
C TPS-II STAGE
I (3X210MW)
Neyveli Lignite
Corporation_NL
53.00 543.55 50.46 154.91 2.85 205.37 3.78 303.29 27.42 86.08 2.84 113.50 3.74
C TPS-II STAGE
2 (4X210MW)
Neyveli Lignite
Corporation_NL
53.00 410.39 37.75 106.70 2.60 144.45 3.52 308.08 38.26 75.50 2.45 113.77 3.69
C TPS I EXP
(2X210MW)
Neyveli Lignite
Corporation_NL
53.00 321.30 99.64 85.15 2.65 184.79 5.75 233.27 60.58 62.44 2.68 123.02 5.27
C TPS2 EXP
(2X250MW)
NLC Tamilnadu
Power Ltd.
(NTPL) 53.00 606.00 118.34 186.04 3.07 304.38 5.02 560.99 122.64 172.13 3.07 294.77 5.25
(TUTICORIN)
(2X500MW)
MAPS
53.00 45.51 13.06 2.87 13.06 2.87 59.87 15.54 2.60 15.54 2.60
(2X220MW)
Kaiga Unit 1&2
(2X220MW) 53.00 447.78 188.52 4.21 188.52 4.21 1099.46 376.11 3.42 376.11 3.42
&3&4
Kaiga Unit 3
53.00 455.51 191.77 4.21 191.77 4.21 0.00
&4 (2X200MW)
NPCIL-
KudanKulam
Atomic Power
Generating 53.00 672.96 286.01 4.25 286.01 4.25 1325.53 542.77 4.09 542.77 4.10
Station (KKNPP
U1
(1X1000MW)
NPCIL-
KudanKulam
Atomic Power
Generating 53.00 793.98 337.44 4.25 337.44 4.25
Station
(KKNPP)
U2(1X1000MW)
DVC-Unit-1 &2
Meja TPS 53.00 615.75 108.04 185.34 3.01 293.38 4.76 688.15 108.00 189.79 2.76 297.79 4.33
(2x500MW)
DVC-Unit-1 &2
53.00 769.69 155.78 206.28 2.68 362.06 4.70 1002.29 155.87 250.03 2.49 405.90 4.05
koderma
Kudgi 49.00 588.00 473.78 222.85 3.79 696.63 11.85 1410.92 738.69 432.18 3.06 1170.87 8.30
NNTPS 53.00 242.37 59.10 54.78 2.26 113.88 4.70 116.79 21.51 26.46 2.27 47.97 4.11
TOTAL CGS
Energy @
10524.49 1573.86 3319.40 3.15 4893.26 4.65 11082.14 1758.53 3195.46 48.34 4953.99 4.47
KPTCl
periphery
TOTAL MAJOR
IPPS
UDUPI POW ER
CORPORATION
50.00 1800.00 570.60 653.40 3.54 1224.00 6.80 1078.23 545.69 375.72 3.48 921.41 8.55
LIMITED_UPCL
(2x600)
KPCL HYDEL
STATIONS
SHARAVATHI
VALLEY
PROJECT_SVP 42.00 2101.34 96.66 3.54 96.66 0.46 2014.52 5.54 111.04 0.55 116.58 0.58
(10x103.5+2x27.
5)

TRUING UP OF FY-21
MAHATMA
GANDHI
HYDRO
ELECTRIC 24.80 64.43 4.57 4.54 4.57 0.71 81.60 0.44 5.64 0.69 6.08 0.75
POWER
HOUSE_ MGHE
(4x21.6 +4x13.2)
GERUSOPPA_G
PH
(SHARAVATHI
24.80 130.30 23.06 5.54 23.06 1.77 115.97 3.96 15.84 1.37 19.79 1.71
TAIL
RACE_STR)
(4x60)
KALI VALLEY
PROJECT_KVP 43.00 1341.17 96.56 6.54 96.56 0.72 1520.74 6.63 105.75 0.70 112.38 0.74
(2x50+6x150)
VARAHI
VALLEY
24.80 250.11 35.02 7.54 35.02 1.40 271.51 2.35 34.29 1.26 36.64 1.35
PROJECT_VVP
(4x115+2x4.5)
VARAHI
VALLEY
6.80 6.80
PROJECT_VVP
3&4)
ALMATTI DAM
POWER
24.80 107.77 17.46 8.54 17.46 1.62 157.25 4.96 25.05 1.59 30.00 1.91
HOUSE_ADPH
(1x15+5x55)
BHADRA
HYDRO
ELECTRIC
POWER 24.80 11.87 6.48 9.54 6.48 5.46 13.50 0.19 5.73 4.25 5.92 4.39
HOUSE_BHEP
((1x2+2x12)+
(1x7.2+1x6))
KADRA POWER
HOUSE_KPH 24.80 91.93 22.62 10.54 22.62 2.46 98.36 3.03 15.59 1.58 18.62 1.89
(3x50)
KODASALLI
DAM POWER
24.80 86.07 15.23 11.54 15.23 1.77 91.85 1.97 12.14 1.32 14.11 1.54
HOUSE_ KDPH
(3x40)
GHATAPRABHA
DAM POWER
24.80 16.88 3.48 12.54 3.48 2.06 26.61 0.18 4.22 1.59 4.40 1.65
HOUSE _GDPH
(2x16)
SHIVASAMUDR
AM (4x4+6x3) &
SHIMSHAPURA 24.80 72.28 2.96 13.54 2.96 0.41 77.23 0.86 7.18 0.93 8.04 1.04
(2x8.6) HYDRO
STATIONS.
MUNIRABAD
POWER HOUSE 24.80 22.68 2.54 14.54 2.54 1.12 25.02 0.08 2.13 0.85 2.21 0.88
(2x9+1x10)
TOTAL KPCL
4296.83 0.00 326.64 108.48 326.64 0.76 4494.16 30.18 351.39 0.78 381.57 0.85
HYDRO
OTHER HYDRO
PRIYADARSHINI
JURALA
HYDRO 49.79 77.94 29.21 6.47 29.21 3.75 94.25 31.48 31.48 3.34
ESLECTRIC
STATION (6x39)
TUNGABHADRA
DAM POWER
49.79 13.47 1.51 0.90 1.51 1.12 19.00 0.54
HOUSE_TBPH
(4x9+4x9)
TOTAL OTHER
91.41 30.72 0.90 30.72 4.87 113.25 0.00 31.48 0.00 32.02 3.34
HYDRO

TRUING UP OF FY-21
RENEWABLE
SOURCES OF
ENERGY
SOURCES
WIND-IPPS 2939.71 1143.55 1143.55 3.89 2474.91 953.22 953.22 3.85
KPCL-WIND
(9x0.225+10x0.2 10.08 4.04 4.04 4.01 7.13 2.79 2.79 3.92
30)
MINI HYDEL-
456.95 152.16 152.16 3.33 546.35 173.03 173.03 3.17
IPPS
CO-GEN 0.00 0.00
CAPPTIVE 65.19 25.95 25.95 3.98 0.00
BIOMASS 63.62 34.35 34.35 5.40 91.59 52.14 52.14 5.69
Banked energy
24.55 7.56 7.56
non solar
SOLAR 0.00 0.00
Mega Solar
2528.94 1042.79 1042.79 4.12 485.93 324.52 324.52 6.68
scheme
Land owned
0.00 231.24 145.38 145.38 6.29
farmer scheme
Taluks wise 472.07 146.81 146.81 1325.53 574.09 574.09 4.33
Solar-New Park-
Pavagada VGF 0.00 #DIV/0! 949.44 448.86 448.86 4.73
scheme seci
Solar-New Park-
1028.43 291.05 291.05 2.83 1503.58 419.54 419.54 2.79
Pavagada
bundled power
46.64 56.21 59.13 59.13 10.52 44.72 50.35 50.35 11.26
(NVVN)
bundled power
46.39 579.59 278.21 278.21 4.80 575.90 302.55 302.55 5.25
(NSM)
SOLAR-KPCL
3.50 2.10 2.10 6.00 3.43 2.08 2.08 6.05
(YELESANDRA,)
SRPTV 92.18 57.72 57.72 106.86 45.82 45.82 4.29
Solar Banked
15.52 3.50 3.50
energy
TOTAL NCE 8296.47 0.00 3237.86 0.00 3237.86 3.90 8386.68 0.00 3505.44 0.00 3505.44 4.18
NTPC bundled
power coal old 46.64 144.47 58.37 58.37 4.04 145.58 67.02 67.02 4.60
(nvvn)
NTPC bundled
power coal 46.39 936.58 281.91 281.91 3.01 741.63 280.71 280.71 3.79
new (pavgada)
Power purchse
from Co- gen - 593.04 308.97 308.97 5.21 850.66 432.68 432.68 5.09
Medium Term
UI -144.31 -35.19 -35.19
Short term sale
2.35 2.35
(OS Charges)
TRANSMISSION
CHARGES
PGCIL
751.48 751.48 1436.25 1436.25
CHARGES
KPTCL
2179.29 2179.29 1970.43 1970.43
CHARGES
SLDC 11.92 11.92 12.83 12.83
POSOCO
CHARGES & 1.32 1.32 6.89 6.89
PCKL Rev
Energy
-1275.57 -591.32 -591.32
balancing
IEX sale -775.16 -238.19 -238.19
Inter ESCOM 20.58 8.66 8.66
Prior period 347.01
TOTAL
INCLUDING
TRANSMISSIO 34962.34 7366.69 11168.41 116.07 18534.89 5.30 29963.43 4414.14 12903.85 17082.88 5.70
N & LDC
CHARGES

TRUING UP OF FY-21
• For comparing the approved and actual power purchase details, the IEX sale
quantum and cost (Rs.238.19 Crores) has been deducted from the Total sale and
quantum for FY-21.
• The above table depicts the source wise increase in actual power purchase cost
as against the approved power purchase cost during FY-21. BESCOM’s actual
energy input is nearly 5000 MU less than the approved energy input for FY-21,
there is decrease of Rs.1452Crs in the actual power purchase cost against the
approved power purchase cost for FY-21, and this is due to reduction in the
input energy during the pandemic.
• BESCOM has sold 775.16MU in IEX at an average rate of Rs.2.38/unit which

has resulted in Rs.238.19 Crs. The said amount is depicted in Other Income.
Hence total power purchase cost is Rs. 17082.89 Crs.
• The difference of approved and actual PGCIL charges amounts to Rs.684.77 Crs.
• BESCOM has paid nearly 1278.26 Crores towards fixed cost without purchasing
any power from thermal stations having higher variable cost.
Table 3.15
Power Purchase Cost approved Actual Power Purchase Cost

Variation FY-21
by the Commission FY-21 FY-21
Source of Power Per

Per Unit Per Unit
Energy in Cost in Energy in Cost in Energy in Cost in Unit
cost in cost in
MU Rs Cr MU Rs Cr MU Rs Cr cost in
Rs Rs
Rs
KPCL Hydel Energy 4296.83 326.65 0.76 4494.16 381.57 0.85 197.33 54.92 0.09
KPCL Thermal Energy 8279.05 5229.36 6.32 5245.57 3588.32 6.84 -3033.48 -1641.04 0.52
CGS Energy 10524.49 4893.24 4.65 11082.14 4953.99 4.47 557.65 60.75 -0.18
UPCL 1800.00 1224.00 6.80 1078.23 921.41 8.55 -721.77 -302.59 1.75
Renewable Energy 9970.56 3887.11 3.90 10124.53 4285.85 4.23 153.98 398.74 0.33
Other State Hydel 91.41 30.72 3.36 113.25 32.02 2.83 21.84 1.30 -0.53
UI Trading -144.31 -32.84 2.44 -144.31 -32.84 2.44
PGCIL & POSOCO Charges 751.48 1436.25 684.77
ENERGY Balancing -1275.57 -591.32 4.64 -1275.57 -591.32 4.64

KPTCL Transmission &
SLDC and PGCIL POSOCO 2192.53 1990.15 -202.38
Charges
Prior periods and others -754.58 117.48 -2.71 -754.58 117.48 -2.71
TOTAL 34962.34 18534.89 5.30 29963.42 17082.89 5.70 -4998.91 -1452.00 0.40

TRUING UP OF FY-21
PGCIL transmission cost:
The power transmission from Central Sector Generating Stations is either through the
PGCIL lines or any lines constructed by developer selected through competitive
bidding route from the generating plants. ESCOMs have to pay POC (Transmission
charges) to PGCIL / Independent Power Transmission Utility for transmitting the CGS
power and power from other States.
Central Electricity Regulatory Commission (Sharing of Inter‐State Transmission

Charges and Losses), Regulations 2020 came into force with effect from 01.11.2020.
National Load Despatch Centre (NLDC) as the Implementing Agency under Sharing
Regulations 2020 has been entrusted with the responsibility of computation of Inter
State Transmission Charges (ISTS) and losses. As per Regulation (14)(5)(b),
Transmission Charges payable by DICs shall be notified by the Implementing Agency
by 25th day of the month following billing period. The computation of transmission
charges shall be done on the basis of inputs received from ISTS Licensees, DICs /
States, CTU as per the Regulations.
As per Central Electricity Regulatory Commission (Sharing of Inter-State Transmission

Charges and Losses) Regulations, 2020, the ESCOMs shall have to make transmission
charges on the following components;
1) National Component (NC);

2) Regional Component (RC);
3) Transformer Component (TC); and
4) AC System Component (ACC).
1. National Component (NC):
National Component shall be sum of the following components:
 National Component-Renewable Energy (NC-RE); and

 National Component-HVDC (NC-HVDC).
a) National Component-Renewable Energy shall comprise of the Yearly

Transmission Charges for transmission systems developed for renewable
energy projects as identified by the Central Transmission Utility.
b) National Component-HVDC shall comprise of the following:

TRUING UP OF FY-21
i) 100% of Yearly Transmission Charges for “back-to-back HVDC”

transmission system;
ii) 100% of Yearly Transmission Charges for Biswanath-Chariali/ Alipurdwar
to Agra HVDC transmission system;
iii) Yearly Transmission Charges of Mundra–Mohindergarh 2500 MW HVDC
transmission system corresponding to 1005 MW capacity
c) The Yearly Transmission Charges for the National Component shall be shared
by all drawee DICs and injecting DICs with untied LTA in proportion to their
quantum of Long Term Access plus Medium Term Open Access and untied
LTA respectively.
2. Regional Component- shall be sum of the following components:
a) Regional Component of HVDC (RC-HVDC) comprising of 70% of Yearly

Transmission Charges of HVDC transmission systems planned to supply
power to the concerned region, except HVDC transmission systems covered
as above
b) Yearly Transmission Charges for static compensators (STATCOMs), static
VAR compensators (SVCs), bus reactors, spare transformers, spare reactors
and any other transmission element(s) located in the concerned region and
identified by the Central Transmission Utility as being critical for providing
stability, reliability and resilience in the grid.
c) Yearly Transmission Charges covered under sub-clause (a) of Clause (1) of
this Regulation shall be shared by drawee DICs of the receiving region and
injecting DICs with untied LTA in the receiving region, in proportion to their
quantum of Long Term Access plus Medium Term Open Access and untied
LTA, respectively.
d) Yearly Transmission Charges covered under sub-clause (b) of Clause (1) of
this Regulation shall be shared by drawee DICs of the region and injecting
DICs (with untied LTA) of the same region, in proportion to their quantum of
Long Term Access plus Medium-Term Open Access and untied LTA,
respectively.

TRUING UP OF FY-21
3. Components and sharing of Transformer Component (TC)

i) Transformer Component for a State shall comprise of Yearly Transmission
Charges for inter-connecting transformers (ICTs) planned for drawal of
power by the concerned State. A list of such transformers for each State
shall be provided by the Central Transmission Utility to the Implementing
Agency.
ii) Transformer Component for a State shall be borne and shared by the drawee
DICs located in the concerned State in proportion to their Long Term Access
plus Medium Term Open Access.
4. Components and sharing of AC System Component (ACC)

a) AC System Component shall have following components:
(i) Usage Based Component (AC-UBC); and
(ii) Balance Component (AC-BC).
b) The Yearly Transmission Charges of AC-UBC shall be shared by drawee

DICs and injecting DICs with untied LTA corresponding to their respective
usage of the transmission lines, in accordance with Regulation 9 of these
regulations.
As per Regulation 24(2), Implementing Agency shall publish the peak block of the
billing period on the first day of the month following the billing period.
Based on inputs furnished by DICs/ States, all India basic network has been
prepared along with node wise generation and demand as per the peak block and
made it available on POSOCO website on 15 th of each month for review and
comments of DICs/ States in line with the notified procedures with the last date
for submission of comments as 18th each month.
The usage part of AC system charges has been computed by running AC load
flow and determining the utilization of the lines with respect to SIL of the lines.
For SIL of lines at various voltage levels, annexure -II to Regulations has been
followed.

TRUING UP OF FY-21
AC Usage Base Charges (AC-UBC) thus determined has been used for
apportionment through hybrid method and computed total aggregated nodal
charges in for each drawee DIC and injecting DICs having untied LTA.
b. The Yearly Transmission Charges under AC-BC shall be the balance Yearly
Transmission Charges for AC System Component after apportioning the
charges for AC-UBC.
c. Transmission charges under AC-BC shall be shared by all drawee DICs and
injecting DICs with untied LTA in proportion to their quantum of Long Term
Access plus Medium Term Open Access and untied LTA respectively.
d. Based on the above methodology and mechanism, Transmission Charges
paid by ESCOMs for the year from April 2021 to September-2021 is as
below;
Table 3.16 (Rs. In Crs.)
Usage
Balance Regio Transfo Total
based
LTA AC National nal rmers Bilateral Transmi
Month AC
Demand system component Comp compon charges ssion
system
charges onent ent charges
charges
NC- NC+HV
AC-UBC AC-BC RC TC
RE DC
Apr-21 5796 49.62 92.55 4.82 11.16 7.45 9.60 0.32 175.53
May-21 5884 55.29 108.90 5.37 12.44 8.39 10.63 0.35 201.39
Jun-21 5824 40.18 103.95 5.15 11.92 7.99 10.17 0.34 179.71
Jul-21 5887 45.70 109.06 5.60 12.45 8.33 10.58 0.35 192.08
Aug-21 5897 32.78 103.96 5.49 12.13 8.13 10.20 0.34 173.02
Sep-21 5666 30.81 103.84 5.40 11.94 8.10 10.54 0.35 170.99
In addition to the above, 800 kV Raighar – Paglur HVDC system has

commissioned during 2020-21 and 2021-22. The expected additional PoC
charges would be Rs. 40.73 Crs/month translating to Rs.488.76 Crs/ per
annum. The details of the lines commissioned and expected YTC of these lines is
as below;

TRUING UP OF FY-21
Table 3.17
Capital YTC (in
cost Lakhs
Scheme Asset details Petition No. COD
(2021-
(in Lakhs)
22)
± 800KV 6000MW Raigarh
(HVDC Station) – Pugalur
(HVDC Station) HVDC
Link along with ±
685/TT/2020 06.09.2020 949401.26 132035
800KV 1500 MW(Pole-I) H
VDC terminals each at
Raigarh (HVDC Station) &
Pugalur (HVDC Station)
±800kV 1500 MW (Pole-II)
HVDC terminals each at
I 09.03.2021 120232.06 16207.94
173/TT/2021
±800kV 1500 MW (Pole-
III) HVDC terminals each
13.07.2021 219076.79 27199.89
at Raigarh (HVDC Station)
& Pugalur (HVDC Station)
±800kV 1500 MW (Pole-IV)
HVDC terminals each at
Not yet filed 25.10.2021
a) 400kV Pugalur (HVDC
Station) - Pugalur
(Existing) (Quad) D/C
Transmission line along
with associated bays at
Pugalur (HVDC Station) &
Pugalur (Existing)
693/TT/2020 06.09.2021 57775.16 7660.18
Substation and b) 400kV
Pugalur (HVDC Station) –
Arasur (Quad) D/C
Transmission line along
with associated bays at
Pugalur (HVDC Station) &
Arasur station
II c.PUGALUR- TVLM 400KV Not yet filed 25.10.2021
AC LINE
d. PUG - EDAYARPLYM
400KV AC LINE E.
EDYRPLYM- UPET

TRUING UP OF FY-21
DC400KV
(Pugalur, Tamil Nadu) –
North Trichur (Kerala) –
Pole –II
III Scheme #3: Pugalur- 172/TT/2021 517625.68 68735.11
09.03.2021
Trichur 2000MW VSC
based HVDC System”.
Total capital cost Rs. in crore 18641.1
The above charges vary on month to month depending on load, generation, usage of
lines and transmission charges of additional lines added to the system.
In case POC charges are not paid within due date, PGCIL is operating the regulation of
power supply, wherein lower cost of Central Generation Stations has been curtailed.
Therefore, ESCOMs have to arrange payment to PGCIL as per the Regulation
computed by NLDC & SRPC.
In accordance with the above provisions, the transmission charges payable to PGCIL is
computed for the energy projected to be drawn from CGS/Other States (as worked out
by PCKL) and factored into the power purchase cost.
The Hon’ble Commission has been approving the PGCIL Transmission cost over the
years for BESCOM. However, the PGCIL cost is not being approved in full as
projected quoting the provisions of Central Electricity Regulatory Commission (Sharing
of Inter‐State Transmission Charges and Losses), Regulations 2020 and relying on the
November, 2020 bill amount. As a result, there has been substantial reduction in
PGCIL Cost considered for computing power purchase cost taken to ARR.
However, the Hon’ble Commission is considering the actual PGCIL cost during the
true up exercise. Consequently, the difference in cost will be recovered after a span of
two years. The effect of this would be that, BESCOM has to meet this expenditure (not
approved portion of expenditure in ARR) without any income (source) during the year
and the same would get added to the deficit after one year (i.e. after true up). As the
amount is significant, this will adversely affect the cash flow and financials of the
company.
A comparison of the actual PGCIL transmission cost as against the PGCIL cost
approved by the Commission in Tariff Order and True Up Order are shown below:
Table 3.18

TRUING UP OF FY-21
PGCIL Cost
Year File Approved Actuals Difference
1480.5
FY-22 8 751.11 515.31*
1305.7
FY-21 5 751.48 1436.25 684.77
1125.7
FY-20 0 829.46 1630.14 800.68
FY-19 845.90 758.7 1252.01 493.31
FY-18 633.50 520.23 1016.23 496.00
*Amount incurred up to Sept 2021.
The Hon’ble Commission is requested to consider the above facts and the significant
impact of PGCIL cost on the cash flow and financials of BESCOM, allow the cost in full
as filed subject to truing up through Annual Review of Performance.
Due to the above, the increase in the actual power purchase cost as against approved
power purchase cost for BESCOM is Rs.1452 Crs. for FY-21.
BESCOM most respectfully submits that the above changes are beyond the reasonable
control of BESCOM but well within the regulatory provisions for consideration in true
up. Hon’ble Commission in its MYT Order has stated that, since the power purchase
cost are uncontrollable as per MYT regulations, any excess quantum or cost will be
trued up in the Annual Performance Review of the respective years. Hence, BESCOM
requests the Hon’ble Commission to approve the power purchase expenses for FY-21
as per the Audited Accounts.
Renewable Purchase Obligation (RPO) target for FY-21:
As per KERC (Procurement of Energy from Renewable Sources)(Sixth Amendment)

Regulations, 2018, target for FY-21 for Non-Solar RPO is 12% of the total power
procurement and target for Solar RPO is 8.5% of the total power procurement.
The Commission approved the power procurement of 34962.347 MU which includes

7660.67 MU of energy from NCE sources for FY-21 to BESCOM. The actual percentage
of Non Solar to the total purchase is 15.68 % and solar energy works out to 20.47% of
the actual power purchase. Details are as under.

TRUING UP OF FY-21
Table 3.19
Total energy in MU 29917.66
less: KPCL hydro 4494.16
less: Other Hydro 113.91
Add: hydel energy under drawn
251.46
from energy Balancing
25561.0
Net energy for RPO compliance 5
Non Solar Energy:

Table 3.20
Source Energy in MU
Co-generation 840.47
Biomass 91.59
Mini Hydel 546.35
Wind mill 2474.91
KPCL Wind 7.13
Shimsha & mani 20.70
Banked energy 0.00
Non solar Total (15.68%) 3981.15
Target @ 12% 3067.33
Solar Energy:
Table 3.21
Total energy in MU Energy in MU
PPA route including roof top and
4498.84
KPCL solar
Bundled power 620.62
Banked energy 152.10
Solar Total (20.47%) 5271.56
Target @8.5% 2172.69
BESCOM has exceeded both the Non-Solar RPO and solar RPO during FY-21.

TRUING UP OF FY-21
Capital Expenditure for FY-21:
The capital expenditure incurred for FY-21 is depicted in the table below:
Table 3.22 Rs in Crs
Budget approved and expenditure details for the FY 2020-21

Approved by
Particular of the works under Expenditure
Sl. No. KERC for the
Major/ Minor heads incurred
FY 2020-21
1 Ganga kalyana Works 80 78.34
2 Service connection works 66.85 86.43
3 Water Works 23.67 0
4 11 KV Evacuation line 185 68.31
Providing Additional DTC's
5 77 29.1
/Enhancement of DTCs
Strengthening of HT network
6 including OH/UG cable, Covered 258.75 79.08
conductor and AB cable
Strengthening of LT network
7 including OH/UG cable, Covered 197 67.9
conductor and AB cable
8 SDP Progress 30 0
Local planning, Safety works,
9 93.8 50.43
Emergency / Calamity Works
A E&I Total 1012.07 459.58
10 Smart grid & EV 45.96 0.32
11 NJY 25 40.37
12 DDUGJY 90.75 45.02
13 IPDS 151.25 57.46
14 Civil 100 52.67
15 IT initiative 77 5.4
Meters and Commercial (with
16 250 17.4
relevant accessories)

TRUING UP OF FY-21
17 DSM 100 0
18 UNIP 80 272.36
19 HVDS 61 96.78
Erection of distribution transformer
20 0 -0.01
centers using 11 mts Spun poles
21 Model Sub division 290.22 127.79
22 Technology Innovative Center 27.58 -4.57
23 Corporate reserve fund 50 74.06
24 Auto reclosure and sectionalizer 0 22.55
25 Model Village 10 3.7
26 Smart city 80 8.74
27 Replacement of faulty transformer 167.58
Conversion of overhead lines into
28 778.99
UG/AB cable
B Projects Total 1438.76 1766.6
C Grand Total (A+B) 2450.83 2226.18
The expenditure booked by BESCOM is more than the KERC approved Capital
expenditure for FY-21.
Operation and Maintenance Expenses:
The Commission, in its Tariff Order 2020, dated 04.11.2020 had approved the
Operation and Maintenance Expenses (O&M Expenses) of Rs.2365.61 Crs., O&M
Expenses includes, Repair and Maintenance expenses, Employee cost and
Administrative and General Expenditure. Commission is approving O&M Expenses
through formula on normative basis. Factors contributing for increase in O&M
expenses are Inflation index and consumer growth rate. Increases in cost by these
indices are reduced to an extent of predetermined BESCOM’s efficiency factor of 1%.
For-21, to arrive at normative O&M expenses, Commission considered Whole sale

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 adopted the methodology followed by

TRUING UP OF FY-21
CERC with CPI and WPI in a ratio of 80:20, allowing annual escalation rate for FY21
at 6.96%.
Approved O&M expenses for FY-21 as per Tariff Order 2020, dated 04.11.2020 is
shown below:
Table 3.23
Particulars FY-21
No. of Installations 1,30,01,326
CGI based on 3 Year CAGR 4.96%
Inflation index 8.26%
Base Year O&M Cost with P&G
contribution (FY-19 as per actuals)
plus additional P&G contribution of 1878.08
Rs.68.28 Crores on account of
revision of contributory rates
Total allowable O&M Expenses-
2365.61
Rs. Crs
Employee expenses comprise of salaries, dearness allowance, terminal benefits in the

form of pension & gratuity, leave encashment and staff welfare expenses.
Administrative expenses mainly comprise of rents, telephone and other

communication expenses, professional charges, conveyance and travelling allowances,
other debits etc.
Repairs and Maintenance Expenses go towards the day to day upkeep of the
distribution network of the company and form an integral part of the company’s efforts
towards reliable and quality power supply as also in the reduction of losses in the
system. The following table provides the summary of O&M Expenses (net off
Capitalization) for the FY 2020-21 as per audited accounts, O&M expenses are as
follows:

Particulars Accounts(21)
Other operating (Repair & Maintenance)
172.18
expenses
Employee Benefits Expense 1494.33
Other expenses 365.82
Total 2032.33

TRUING UP OF FY-21
It is noticed that some expenses which are separately approved as per regulatory
formats are added in A&G expenses (other expenses as per audited accounts).
As at 31st
Particulars March 2021
(Ind AS)
Rent expense 25.58
Postage stamps & Telephone charges 9.26
Remuneration to contract agencies 233.14
Professional, legal and consultancy 5.69
Conveyance & Travel expenses 54.97
Fees & Subscriptions. 5.03
Printing & Stationery. 5.25
Advertisement Expenses. 1.66
Computer stationary and floppies. 0.8
Contributions. 0.19
Electricity Charges. 4.37
Miscellaneous including provisions
Rates & Taxes 1.1
Insurance/fee
Security Charges
Water Charges 0.9
DSM Expenses 0.42
Miscellaneous expenses. 16.08
Details of Payments to Auditors (including
legal & Professional charges)
a) Audit Fees
- Statutory Audit Fees 0.12
- Tax Audit Fees -
Expenses towards CSR- (Corporate Social
-
Responsibilities)
Less:-Other Expenses charged to capital works
-0.78
(Credit Account)
Sub total -1 363.78

TRUING UP OF FY-21
Small & Low value items Written off. 0.31

Asset decommissioning cost. 0.41
Sub total -2 0.71
Bank charges 26.73
Stamp duty 0.92
Sub total -3 27.65
Provision Against ex-employee recoverable
Provision against receivables 10.63
Miscellaneous losses and Write offs including
2.04
provisions
Provision for Loss on obsolescence of stores,
0.04
etc. in stock
Sub total -4 12.7
Interest on belated payment for power
129.13
Purchase
Provision for Bad & doubtful debts 12.1
Sub total -5 141.23
Total (Sub total 1+2+3+4+5) 546.08
Items added to other expenses (A&G) are removed and added to the respective heads
for the purpose of regulatory computation.
Current
Sl No. PARTICULARS Year
2020-21
1 Rent 25.58
2 Postage stamps & Telephone charges 9.26
3 Remuneration to contract agencies 233.14
4 Professional, legal and consultancy 5.69
5 Conveyance & Travel expenses 54.97
6 Fees & Subscriptions 5.03
7 Printing & Stationery 5.25
8 Advertisement Expenses 1.66
9 Computer stationary and floppies 0.80

TRUING UP OF FY-21
10 Contributions 0.19
11 Electricity Charges 4.37
12 Miscellaneous including provisions 2.04
13 Rates & Taxes 1.10
14 Water Charges 0.90
15 DSM Expenses 0.42
16 Miscellaneous expenses 16.08
Details of Payments to Auditors (including legal &
Professional charges)
17 a) Audit Fees
18 - Statutory Audit Fees 0.12
19 - Tax Audit Fees 0.00
20 - GST 0.00
Expenses towards CSR- (Corporate Social
21 0.00
Responsibilities)
TOTAL 366.60
The audited O&M Expenses (net off Capitalization) for the FY 2020-21 as per
regulatory formats are as follows:

Particulars Actual (FY-21)
Other operating (Repair & Maintenance) expenses
excluding Rs. 0.47 Crs towards material cost 172.18
variance
Employee Benefits Expense excluding expense
1494.33
capitalised of Rs.6.38 Crs.
Other expenses excluding expense capitalised of
365.82
Rs.0.78 Crs.
Total 2032.33
Commission is approving the O&M expenses on normative basis by considering

weighted inflation index of composite series of CPI and WPI and consumer growth rate.

TRUING UP OF FY-21
Actual inflation rate and consumer growth rate for FY-21 is now available. Considering
the actual data, normative O&M expenses is computed as under.
Central Electricity Regulatory Commission (CERC) vide notification dated 23.04.2021

notified the escalation rates 2021 for (i) annual escalation rate for escalable
transmission charges for the purpose of evaluation; (ii) discount rate for computation
of levelized transmission charges for evaluation; and (iii) annual inflation rate for
escalable transmission charges for the purpose of payment by arriving composite
series of CPI at 55% and WPI at 45%.
Table 3.28
Product
45% 55%of Composite YT/Y1 Year-
Year WPI CPI Ln Rt [(t-1) x
of WPI CPI series =Rt 1(t-1)
(Ln Rt)
4=45% 5=55%
1 2 3 6=(4+5)
of (2) of (3)
2009 81.9 54.5 36.86 29.98 66.83
2010 89.7 61.1 40.37 33.61 73.97 1.11 0.1 1 0.10
2011 98.2 66.5 44.19 36.58 80.77 1.21 0.19 2 0.38
2012 105.7 72.7 47.57 39.99 87.55 1.31 0.27 3 0.81
2013 111.1 80.6 50 44.33 94.33 1.41 0.34 4 1.38
2014 114.8 85.7 51.66 47.14 98.80 1.48 0.39 5 1.95
2015 110.3 90.8 49.64 49.94 99.58 1.49 0.4 6 2.39
2016 110.3 95.3 49.64 52.42 102.05 1.53 0.42 7 2.96
2017 114.1 97.6 51.35 53.68 105.03 1.57 0.45 8 3.62
2018 118.9 102.4 53.51 56.32 109.83 1.64 0.5 9 4.47
2019 121.2 110.2 54.54 60.61 115.15 1.72 0.54 10 5.44
2020 121.8 116.3 54.81 63.97 118.78 1.78 0.58 11 6.33
A = Sum of "product" 29.83
B= 6 times (6 x A) 179
C= (n-1) x n x (2n-1); n = No. of Years of data = 12 3036
D = B/C 0.06
g (Exponential Factor) = Exponential (D) -1 0.06
e = Annual Escalation Rate (%) = g x100 6.07
Recomposing the above table by considering CPI at 80% and WPI at 20% being the
weightage of employee expense as percentage of total O&M cost for CPI (WI) and the
weightage of R&M and A&G as a percentage of total O&M cost for WPI respectively.
Actual weighted inflation is as follows.

TRUING UP OF FY-21
Table 3.29
Year- Product
20% 80% Composite YT/Y1 Ln
Year WPI CPI 1(t- [(t-1) x
of WPI of CPI series =Rt Rt
1) (Ln Rt)
4=20% 5=80%
1 2 3 6=(4+5)
of (2) of (3)
2009 81.90 54.50 16.38 43.6 59.98
2010 89.70 61.10 17.94 48.88 66.82 1.11 0.11 1 0.11
2011 98.20 66.50 19.64 53.20 72.84 1.21 0.19 2 0.39
105.7
2012 72.70 21.14 58.16 79.30 1.32 0.28 3 0.84
0
111.1
2013 80.60 22.22 64.48 86.70 1.45 0.37 4 1.47
0
114.8
2014 85.70 22.96 68.56 91.52 1.53 0.42 5 2.11
0
110.3
2015 90.80 22.06 72.64 94.70 1.58 0.46 6 2.74
0
110.3
2016 95.30 22.06 76.24 98.30 1.64 0.49 7 3.46
0
114.1
2017 97.60 22.82 78.08 100.90 1.68 0.52 8 4.16
0
118.9 102.4
2018 23.78 81.92 105.70 1.76 0.57 9 5.10
0 0
121.2 110.2
2019 24.24 88.16 112.40 1.87 0.63 10 6.28
0 0
121.8 116.3
2020 24.36 93.04 117.40 1.96 0.67 11 7.39
0 0
A = Sum of "product" 34.05
B= 6 times (6 x A) 204.28
C= (n-1) x n x (2n-1); n = No. of Years of data = 12 3036
D = B/C 0.07
g (Exponential Factor) = Exponential (D) -1 0.07
e = Annual Escalation Rate (%) = g x100 6.96
Weighted inflation rate to be considered for FY-21 is 6.96%.
Consumer Growth rate:
For the purpose of computation of normative O&M expenses, Commission in its Tariff
Order -2020, dated 04.11.2020 has considered three year compounded annual growth
rate (CAGR) of the number of installations.

TRUING UP OF FY-21
Similarly, BESCOM has considered the CAGR for 3 years and computed the consumer
growth rate for FY-21 which is tabulated as under:
Table 3.30
Particulars Numbers
Consumers as on 31.03.2018 (As per Accounts) 11244760

Consumer as on 31.03.2021(As per Accounts) 12821422
Annual Growth rate 4.47%
Based on the above inputs, O&M cost for FY-21 on normative basis is tabulated as
under.
Formula for working out the O&M expenses on normative basis as prescribed by the
Commission in its Tariff Order-2008 dated 11.1.2008 is as follows:
O&M Cost t = O&M Cost t-1 * (1 + WII + CGI – X)
Where,
‘O&M Cost t’ is the normative O&M cost approved by the Commission for the financial year t
‘WII’ is the weighted inflation index of CPI and WPI based on the contribution of employee cost,
R&M and A&G towards the total O&M cost
‘CGI’ is the Consumer growth index, which is linked to increase (CAGR) in no of consumers from
FY03 to FY07 which is 5.47%
‘X’ is the efficiency factor. For BESCOM the Commission fixes the same as 1%
Here ‘t’ year = FY-21, t-1= FY-20, WII= 6.96%, CGI=4.47%, X=1%
Table 3.31
Particulars FY-21
Weighted Inflation Index (WII) 6.96

Consumer Growth Index (CGI) based on 3 Year CAGR 4.47
True up O & M expenses for FY20 in Rs. Crs 2000.52
O&M expenses in Rs. Crs = t-1 cost * (1+WII+CGI-X) 2209.20
Commission in its Tariff Order 2021, dated 09.06.2021 has trued up the O&M
expenses for FY-20 as Rs.2092.48 Crs. But the Commission noted that the actual
O&M expenses as per the audited accounts inclusive of additional O&M expenses of
Terminal benefits is Rs. 2000.52 Crores for FY-20. The Commission in order to reduce
the burden on the consumers, decides to limit allowable O&M expenses to the level of
actuals and approved Rs.2000.52 Crores towards total O&M expenses for FY-20.

TRUING UP OF FY-21
Hence, an amount of Rs. 2000.52 Crs is considered as true up O&M expenses for FY-
20 as O&M Cost t-1.
Since, the base year data i.e. FY-20 includes the O & M expenses which excludes the
latest contribution to the P & G Trust as per KPTCL Order No. KRPGT/KC123/P7/21-
22/CYS-03, dated 28.05.2021 with effect from 01.04.2018. BESCOM has considered
the latest revision in the contribution to the P & G Trust.

Particulars FY21
Normative O&M expenses 2209.20
Additional employees Cost for FY-19 revision of
53.79
contribution to P&G Trust)
Additional employees Cost for FY-20(revision of
25.20
contribution to P&G Trust)-FY
Additional employees Cost for FY-21 (revision of

22.98
contribution to P&G Trust)
Allowable O&M expenses for FY21 2311.17
Comparison of approved, actual and proposed for truing up for FY-21 is depicted
below:
Approved by the Actuals as Proposed for

Particulars Commission for per Truing UP on
FY-21 Accounts normative basis
O&M Expenses 2365.61 2230.37 2311.17
Commission is requested to true up the O&M expenses of Rs. 2311.17 Cr. on

normative basis.
Depreciation:

TRUING UP OF FY-21
BESCOM submits that for FY-21, the Hon’ble Commission in it Tariff Order 2020,
dated 04.11.2020 has considered the Depreciation in accordance with the provisions
of the KERC (Terms and Conditions for determination of Tariff) Regulations, 2006. On
the similar line BESCOM is claiming the depreciation. A comparison of Depreciation
expense approved by the Hon’ble Commission and actual depreciation expenses of
BESCOM is shown in the following table.

Particulars Approved Actual Deviation
Depreciation on Buildings 14.34 11.59 -2.75
Depreciation on Civil works (pipeline,
sewage, drainage, water supply etc.,) 0.34 0.36 0.02
Depreciation on Other Civil Works 0.15 0.18 0.03
Depreciation on Plant and Machinery 203.44 253.44 50.00
Depreciation on lines, cable, network
etc., 635.27 763.03 127.76
Depreciation on Vehicles 2.18 1.93 -0.25
Depreciation on furniture, fixtures 1.07 1.11 0.05
Depreciation on Office equipment 0.96 1.21 0.25
Depreciation on intangible assets 0.00 28.91 28.91
Depreciation charged on released
material intended to re-use 2.48 3.70 1.22
Total 860.23 1065.48 205.25
Less: Depreciation Withdrawn from
contributions / subsidies as per Ind
AS 20 253.88 244.34 -9.54
Depreciation for the year 606.35 821.14 214.79
Ministry of Corporate Affairs (MCA) has issued Indian Accounting Standards (IND AS),
which is applicable to BESCOM from FY-17 with comparative period of one year. In
pursuance with Ind AS 20, Government Grants/subsidies received from the
Government or other authorities towards capital expenditure as well as consumer’s
contribution to capital works are treated initially under deferred income and taken to
fixed assets based on commissioning of the assets and depreciation is charged in
accordance with the class of assets it belongs.
The proportion equivalent to % of depreciation charged for plant and machinery/line
and cables are reckoned as basis for arriving at depreciation write back against such
quantum received over the year including current financial year under

TRUING UP OF FY-21
grants/subsidies/consumer contribution and the same is charged back as income and

shown distinctively in depreciation schedule in the statement of Profit and Loss.
Depreciation amount of Rs. 1065.48 Crs is worked out as per annual accounts for FY-
21. After deducting an amount of Rs. 244.34 Crs. as per Ind AS 20, the net
depreciation works out to Rs. 821.14 Crs.
Commission is requested to true up the depreciation of Rs.821.14 Cr. as per actual.
Interest and Finance Charges:
As per MYT regulations, Commission is allowing actual interest incurred on the loans
borrowed towards creation of Capital Assets, interest paid towards consumer deposit
and interest on working capital on normative basis.
Breakups of interest and finance charges are as under:
 Long term loan
The interest expenditure on account of long-term loans depends on the outstanding

loan, repayments, and prevailing interest rates on the outstanding loans. Further, the
projected capital expenditure and the funding of the same also have a major bearing
on the long-term interest expenditure.
As per the final Accounts, an amount of Rs. 7343.04 Crore of long term borrowings
are existing as at the end of FY-21 Details of loans outstanding and interest paid are
shown below:
FY-21
Total
Sl Financial Interes
Openin loan at Repaymen
No institutions/Banks New loan t for
g the end t of Closing Bal
addition the
Balance of the principal
year
year
Secured Loans
Loans from REC
1 92.34 92.34 15.39 11.58 76.95
(DTC metering)
Loans from REC
2 171.86 171.86 28.64 21.35 143.22
(NJY Phase-2 ) -
Loan from REC
3 0.00 0.01 0.00
APDRP (10 Towns) - -
Loan from PFC-
4 58.73 58.73 58.73
RAPDRP (PartB) - -
Loan from PFC-
5 RAPDRP (PartB) 113.84 113.84 11.99 12.50 101.85
(counter funding)
6 REC-HVDS 159.75 159.75 22.82 17.73 136.93

TRUING UP OF FY-21
-
7 REC_UAIP 176.95 176.95 25.28 20.13 151.67
-
REC-General
8 226.73 226.73 32.39 25.64 194.34
Capex
9 REC-Static meters 84.66 84.66 10.58 10.10 74.08
REC-RGGVY-12th
10 2.91 2.91 0.32 2.91
Plan -
11 REC-NJY phase-3 646.18 40.53 686.71 78.19 73.23 608.52
12 REC_HVDS-Phase2 151.40 151.40 16.82 15.82 134.58
13 REC UNIP 747.04 60.30 807.34 83.45 807.34

-
14 REC DDUGJY 70.60 70.60 6.91 70.60
- -
15 REC IPDS 137.40 137.40 13.38 137.40
-
loans from
16 Commercial Bank- 547.70 999.29 1546.99 101.15 79.05 1445.84
SBI
Loan from
17 Commercial Bank- 53.43 53.43 0.91 0.14 52.52
-
BOI
Loan from
18 commercial bank- 949.61 1081.57 2031.18 104.24 117.40 1926.94
Canara
Loan from
commercial bank-
19 282.63 45.55 328.18 57.89 32.29 270.29
Bank of
Maharashtra
Loan from
20 Commercial Bank- 0.00 0.00
-
SBM
Loan from
21 Commercial Bank- 133.67 3.58 137.25 23.67 11.40 113.58
Bank of Baroda
Loan from
22 commercial bank- 116.95 116.95 0.02 116.95
- -
Indian Bank
Karnataka Urban
Infrastructure
Development
23 212.69 212.69 7.30 212.69
Finance -
Corporation
Ltd(KUIDFC)
Total Secured
4754.00 2613.89 7367.89 529.96 559.75 6837.93
Loans
UNSECURED
LOANS
Loan from GoK-
1 0.11 0.11 0.11 0.03
PMGY -
Loan from GoK-
2 8.34 8.34 4.17 1.35 4.17
APDRP
Loan from GoK-
3 0.94 0.94 0.94
Into free - -
Loan from GoK-
4 0.94 0.94 0.94 0.25
RGGY -
Loan from GoK-
5 229.29 229.29 229.29 1.81
JICA -
6 GOK interest free 500.00 500.00 500.00

TRUING UP OF FY-21
loan towards KPC

- - -
dues
739.62 739.62 234.51 3.44 505.11
-
Total Long term
5493.62 2613.89 8107.51 764.47 563.19 7343.04
loan
Interest is calculated on the normative average loan availed during the year using
Weighted average interest rate as shown in following table:
FY-21
(Amount in Crs)
Particulars Approved Actuals
Opening Balance Long term
5333.61 5,493.62
Loans
Add new loans 1000 2,613.89
Less: Repayments 487.35 764.47
Total Loan at the end of the
5846.26 7343.04
year
Average loan 5589.94 6,418.33
Weighted average rate of
8.74 8.77
interest in %
Interest on long term loans 488.65 563.19
Interest paid on Long Term borrowings for the year FY-21 is Rs.563.19. Weighted
Average interest rate works out at 8.77%.
As per KERC (Terms and Conditions for determination of Tariff for Distribution and
Retail sale electricity ((second amendment), Regulations 2015, “For the purpose of
allowing interest on Loans during APR, the rate of interest shall be the weighted
average rate of interest incurred by licensee”. BESCOM request the Hon’ble
Commission to consider Rs 563.19 Crs as interest on Long term loans.
 Short term loan and Over drafts.
To meet the day to day expenditure i.e., for working capital, BESCOM borrowed short
term loan and over drafts. As per the final Accounts, an amount of Rs. 5194.88 Crore
of short term and over draft borrowings are existing as at the end of the year FY-19.

TRUING UP OF FY-21
Details of loans outstanding and interest paid are shown below:
New Total loan Repayment Interest

Short term Opening Closing
loan at the end of for the
loans Balance Bal
addition of the year principal year
Bank of Baroda 1,250.00 5,000.00 6,250.00 5,000.00 92.11 1,250.00
Union Bank Of
249.95 250 499.95 312.52 3.7 187.43
India
SBI & SBI
730.38 1,050.00 1,780.38 1,015.89 64.05 764.49
COVID
BOB-COVID - 155 155 11.75 9.52 143.25
Bank of India 300.01 300 600.01 116.72 22.74 483.29
Union Bank 237.49 - 237.49 237.49 21.97 -
Canara Bank &
Canara covid, 125.03 765 890.03 478.31 25.56 411.72
WCDL
REC STL 25 300 325 25 1.7 300
Total short
2,917.86 7,820.00 10,737.86 7,197.68 241.35 3,540.18
term loan (A)
BANK OVER
- - - - -
Drafts
Bank of Baroda 287.23 287.23 6.31 15.53 280.92

-
Vijaya Bank - - - - - -
Canara Bank 996.21 - 996.21 19.59 79.98 976.62
Syndicate Bank 347.78 - 347.78 209.02 20.43 138.76
Bank of India 198.85 9.23 208.08 14.07 208.08
State Bank of
- - - - - -
Mysore
State Bank of
88.08 88.08 37.76 6.95 50.32
India -
Over Draft
1,918.15 9.23 1,927.38 272.68 136.96 1,654.70
Total (B)
Total short
term loan
4,836.01 7,829.23 12,665.24 7,470.36 378.31 5,194.88
(working
Capital) (A+B)
Interest on working capital:
As per the Audited Accounts, BESCOM has paid interest on working capital. BESCOM

TRUING UP OF FY-21
further submits that the working capital is mainly required to meet the liabilities.
Short term borrowing and over drafts for the year FY-20 is Rs.5194.88 Crs. BESCOM
has incurred an amount of Rs 378.31 Crores towards interest on short term loans and
bank overdrafts. Details are shown below:
Hon’ble Commission in its Tariff Order 2020, dated 04.11.2020 has considered only
11% as rate of interest on working capital for FY-21.
Computed interest on working capital on normative basis is as under:

Sl.No Particulars Approved Actual

1 One-sixth of the revenue 3862.31 3280.14
One-twelth of the amount of O&M
2 197.28 192.43
Expenses
1% of Opening Balance of Gross Fixed
3 162.21 178.25
Assets
Total 4221.80 3650.82
Allowable Interest on working capital
4 464.40 412.54
at 11.30%
Actual interest incurred for working
5 378.31
capital
6 Savings to the Normative cost 34.23
Allowable interest on working
7 capital (50% of savings+ actual cost) 395.43
(As per amended version)
As per KERC (Terms and Conditions for determination of Tariff for Distribution and
Retail sale electricity (second amendment), Regulations 2015, it is stated that
“Provided that, during Annual Performance Review, the Commission shall
consider the allowable interest on working capital calculated on normative
basis at the available base rate of interest as on 1 st April of the financial year
as notified by RBI plus 250 basis points. If the actual expenditure is less than
the normative amount, the allowable interest on working capital shall be
limited to actual expenditure plus fifty percent of the difference between the
actual expenditure and the amount as calculated on normative basis.”
As per RBI notification Base Rate for April 2021: Min 7.40 % and Max 8.80 % (8.80% +

TRUING UP OF FY-21
250 points =11.3%). The allowable interest on working capital as per the regulation is
11.30%.
The Hon’ble Commission in its Tariff Order 2020, dtd 04.11.2020 has considered
MCLR for loan with a tenure of one year as 7.60%-7.85%, considered interest on
working capital at 11% per annum for FY-21.
BESCOM requests the Hon’ble Commission to allow interest on working capital on

normative basis calculated as per RBI base rate which works out to Rs.395.43 Crs.
Interest on consumer Security Deposit:
In accordance with the KERC (Interest on Security Deposit) Regulations 2005, the
interest rate on consumer security deposit to be allowed is the bank rate prevailing on
the 1stof April of the financial year for which interest is due. As per Reserve Bank of
India notification dated 1st April, 2020, notified bank rate was 4.65%.
Actual interest paid to consumer security deposit against the approved is tabulated
below:
Particulars Approved Actuals

Open balance of Consumer
4214.69 4582.21
Security deposit(01.04.2020)
Added for FY-21 300 324.26
Consumer Security at the end of

4514.69 4906.47
year
Weighted Average 4364.69 4744.34
Rate of interest 5.40% 4.65%
Calculated interest on consumer
235.69 220.61
security Deposit
Interest on Consumer Security
179.67
deposit paid
Commission is requested to allow Rs.179.67 Crs as interest on consumer security

deposit for FY-21.
Other finance charges:

TRUING UP OF FY-21
BESCOM submits that it has incurred Other Finance Charges amounting to Rs. 35.81
Crs during the FY-21 as against Commission approved amount of Rs.12 Crs.

Other finance charges Approved Actuals-21
Bank Charges 26.73
Stamp duty 0.92
Guarantee Commission to GoK 8.16
Interest on Security Deposit from
0.00
staff
Interest paid to service tax
0.00
department
Total 12.00 35.81
Expenses capitalized:
As per the audited accounts following are the expenses capitalized. Hon’ble
Commission is requested to allow Rs.152.95 Cr to capitalize for FY-21 as against
Commission approved amount of Rs.130.37 Crs.
Expenses Capitalised Approved Actuals
Interest Capitalized 145.79
Employee Cost 6.38
Repair and Maintenance 0.47
Administrative and general expenses 0.78
Total 130.37 153.42
Interest and Finance Charges approved, actual and proposed for truing up for FY-21 is
tabulated as under:
Approved by the Actual as Proposed for

Particulars Commission for per truing up on
FY-20 Accounts-21 normative basis
Interest on Loan Capital 488.65 563.19 563.19
Interest on Working Capital 464.40 378.31 395.43
Interest on Consumer Security
235.69 179.67 179.67
Deposit
Other Interest & Finance 12.00 8.16 35.81

TRUING UP OF FY-21
Charges
Less: interest & other expenses
130.37 145.79 153.42
Capitalized
Total 1070.37 983.54 1020.69
The Commission is requested to approve the interest and finance charges of

Rs.1020.69.15 Crs, for FY-21.
Other Debits:
Commission is approving the other debits based on actuals. As per accounts other
debits are as under:
Other Debits Actuals-21

Small & Low value items Written off 0.31
Asset decommissioning cost 0.41
Material cost variance 11.40
Miscellaneous losses and Write offs including
2.04
provisions
Bad Debts written off 0.00
Interest on belated payment for power purchase 129.13
Provision for Loss on obsolescence of stores, etc. in
0.04
stock
Provision against receivables 10.63
Total 153.96
Commission is requested to consider Rs. 153.96 Crs., as other debits for FY-21.
The delayed payment of power purchase bills to Power Generators attracts 1.5% to 2%
interest as late payment charges as per the provisions of the PPA. So far, Hon’ble
Commission has not allowed late payment charges if any, on the ground that ESCOMs
are supposed to collect their revenue demand in full and discharge the liabilities in full
in time.
Due to Covid-19 pandemic, the energy sales in FY 2021 impacted the in the first half
of the year. Due to lockdown and restrictions, the industrial and commercial
establishments were shut for almost 6 months. Consequently, there was steep

TRUING UP OF FY-21
decrease in revenue demand as well as collections. There was loss of cross subsidy
amount also during this period as these consumers were contributing the same.
The sales of BESCOM witnessed a reduction of 9.24% on a YoY basis for FY-2021.
However, there has been improvement since October 2020 and the demand has
improved close to pre-covid levels. For FY2021, the sales stood at 25263 MU as
compared to 27835 MU in the corresponding period of the previous year. The
corresponding HT sale for FY-21 is 6274 MU as compared to 7838 MU in the previous
year. The reduction in sales and revenue demand for FY-21 over FY-20 is shown
below:
Table 3.44
% Revenue
Tariff % Sales
Demand
LT -5.04 -3.11
HT -19.96 -16.49
Total -9.24 -7.04
BESCOM owes a total of Rs.9144 Crores dues to Generating Companies as September

2021. The total overdue amount, which was not cleared even after 45 days of grace
period offered by generators, stood at Rs.7715 crore. Power producers give 45 days to
ESCOMs to pay bills for electricity supply. After that, outstanding dues become
overdue and generators charge penal interest on that amount.
Due to the COVID pandemic during 2020-21, BESCOM has realized Rs.4691 Crores
less than the approved revenue. This shortfall in revenue ultimately resulted in default
in payment of power purchase bills and high-level payments owed to generation
companies (GENCOs).
For the above stated reasons the Hon’ble Commission is requested to allow the
interest on belated payment to generators of Rs. 129.13 Crores for 2020-21 as a
special case to help BESCOM to tide over the cash crunch problem.
Return on Equity:
The Commission in Tariff Order 2020, dated 04.11.2020 stated that, in accordance
with the provisions of the MYT Regulations, return on equity has considered at 15.5%
duly grossed up with the applicable Minimum Alternate Tax (MAT) of 18.8886%.
Further, an amount of Rs.100.00 Crores of recapitalized consumer security deposit as

TRUING UP OF FY-21
net-worth is considered as per the orders of the Hon’ble Appellate Tribunal for
Electricity in Appeal No.46/2014.
Return on Equity computed and Approved for FY-21 is as follows:

Approved Return on Equity for FY-21
Table 3.45 Amount in Rs. Crs
Particulars FY-21
Opening balance of paid up share capital 546.92
Share deposit 1056.70
Reserve and Surplus 22.19
Less: Recapitalised Security Deposit -100.00
Total Equity 1525.81
Approved Return on Equity with MAT 288.20
Following points are placed for kind consideration of the Commission.

As per Accounts of FY-21, debit and equity ratio for FY-21 is tabulated as under:
As per accounts Debt Equity Ratio:
Table 3.46
%age of
Normative Normative %age of
actual
Particulars GFA Debt Equity Debt@70 Equity@30 actual debt
Equity
% of GFA % of GFA on GFA
on GFA
Opening 17,824.8 5,493.6
1343.54 12477.4 5347.5 30.82% 7.54%
Balance 9 2
Closing 7,343.0
20060.14 1566.92 14042.1 6018.0 36.61% 7.81%
Balance 4
From the above table, the percentage of debt to gross fixed asset is within the norms
framed by the Commission under MYT Regulations.
Disallowance on ATE Appeal No. 46/2014: Deduction of Rs.

100/- cr. for computation of equity.
The Commission is deducting Rs. 100 Cr. from the equity for computation of equity by
referring the Hon’ble Tribunal order in Appeal No. 46/2014 dated 17 th Sept 2014
Dr.Subrahmanya Bhat, S/O Dr.Bheema Bhat, Residing at Hegdekodi, Veerakambha
Village, Bantval Taluk, Post-Kodapadavu-574 222 Karnataka State Versus KERC and
MESCOM.

TRUING UP OF FY-21
The extract of the findings of the Tribunal Order on this issue is reiterated as under
and emphasis is made by underling the word for better explanation:
“The Fifth Issue is relating to the Computation of Return on Equity.
44. According to the Appellant, the State Commission has ignored the fact of
capitalization of consumer security despot amounting to Rs.49.03 Crores for the
purpose of calculating ROE for the Respondent No.2. The Respondent No.2 is
claiming ROE on the same and the interest on the consumer security is passed
through in the APR as well. The State Commission should have disallowed ROR on
the said amount of Rs.49.03 Crore.
45. According to the learned Counsel for the State Commission, this issue is covered
by the judgment dated 2.1.2013 of this Tribunal in Appeal No.108 of 2010.
According to the learned Counsel for the MESCOM (R-2), the consumer’s deposit was
capitalized as per the Government Order dated 31.5.2003 and they are claiming
interest paid on consumer security deposit as pass through and also ROE strictly in
accordance with the provisions of the MYT Regualtions and once the asset has been
capitalized in the books, the ROE will accrue in such capitalized assets. He has also
relied on the decision of the Tribunal in Appeal No.108 of 2013.
46. Admittedly, the consumer security deposit has been capitalized pursuance to the
State Govt order and the Respondent No.2 is claiming ROE on such capitalized sum.
We feel that the consumer security deposit is not a capital asset on which ROE can be
claimed. Even if the State Government has ordered capitalization of consumer
security deposit and accordingly the balance sheet of the Distribution Companies has
been drawn up with gross fixed assets including the consumer security deposit, the
State Commission should have deducted the amount of consumer security deposit
while allowing ROE on the equity component of the capital cost.
47. As already held by this Tribunal, the State Commission is not bound to follow the
audited accounts and the State Commission can scrutinize the same and allow the
expenditure only after prudence check. By allowing ROE on consumer security
deposit and also allowing interest paid by the Distribution Licensee to the consumers
against consumer security deposit in the ARR of the Distribution Licensee, the
consumer has been burdened unreasonably. On one hand the Distribution Company
has been allowed ROE on the security deposit which is contributed by the consumer
and on the other hand the interest paid to the consumer on such deposit is also
allowed as a pass through in the tariff to be recovered from the consumers. This is
wrong.

TRUING UP OF FY-21
48. Hence, we find force in the arguments of the Appellant that ROE on consumer
security deposit amount capitalized in the books of accounts of the Distribution
Licensee should not have been allowed in the ARR of the Distribution Licensee.
Accordingly, we direct the State Commission to adjust the excess amount of ROE
allowed in the Impugned Order from FY 2011-12 onwards in the APR/True up for
these years to provide relief to the consumers.
49. The learned Counsel for the State Commission and the Respondent No.2 has
argued that the issue is covered by the decision of this Tribunal in Appeal No.108 of
2010 as against the Appellant. We do not agree with the same. In the judgment
dated 2.1.2013 in Appeal No.108 of 2010, this Tribunal did not go into the issue of
inclusion of the consumer security deposit in the gross fixed assets of the Distribution
Company and consequent allowance of ROE on the same being passed on in the ARR
and retail supply tariff. The Tribunal only noted the statement of the State
Commission that the interest is being paid regularly to the consumers on the
consumer’s deposit despite the capitalization of the security deposit and held that the
issue has become in fructuous.
50. Another issue raised by the Appellant is that the State Commission has violated
the MYT Regulations in so far as ROR in APR as well as ARR are concerned and the
State Commission has allowed ROE on the equity component (aggregate of equity and
free reserve) without considering the debt equity ratio, as per the Regulations.
51. According to the learned Counsel for the State Commission, gross asset in FY
2011-12 is Rs.218 Crores and increase in equity is Rs.57.20 Crore which would
show that component of equity was less than 30%.
52. We find that the State Commission has not shown the break-up of GFA into debt
and equity component. In the absence of the opening and closing GFA figures and
corresponding debt and equity components, we are not able to find whether the debt
equity ratio and ROE has been allowed as per the Regulations. The State
Commission is directed to transparently show the opening and closing GFA along
with break-up into equity and loan component in the tariff order henceforth. The
State Commission is also directed to consider the contentions of the Appellant while
truing-up the accounts for the FYs 2011-12 to 2014-15. Accordingly, this issue is
decided in favour of the Appellant.
From the above Hon’ble Tribunal decided the issue that the Capitalized portion of
Consumer security deposit shall be deducted while allowing ROE. The implied aspect

TRUING UP OF FY-21
in the same order is that the State Commission is not bound to follow the audited
accounts and the State Commission can scrutinize the same and allow
Commission’s kind attention is drawn to the Chapter No. 4 in on page No.60 to 62 of

the Tariff Order -2009 issued on 25 th November 2009. Commission noted the break
up furnished by the BESCOM for capitalization Consumer Meter Security Deposit (Not
consumer security deposit) and others. Details in the said order are reiterated as
under.
“4.10 Directive - 10
Directive on Analysis of Consumers’ Security Deposit (Page 29 of Tariff Order dated

11.01.2008)
The relevant extract of the tariff order is as under:
The Commission notes that, besides the above objector, the FKCCI and many other objectors
have been repeatedly raising the issue of differences in the closing balances and opening
balances of consumers’ security deposit, but no satisfactory answer has been provided by
BESCOM. BESCOM is therefore directed to make an analysis of the closing balances and
opening balances before and after the formation of BESCOM, in consultation with KPTCL and
highlight the factual position as to whether a part of the consumer deposits has been
capitalized as equity by the GoK, while arriving at the opening balance sheet figures of
BESCOM. Since this is a matter, which involves public money, the Commission expects that, all
the adjustments made should be brought out in a clear and transparent manner. BESCOM
shall file a status report along with details in this regard within two months from the date of
issue of this order.
Compliance:
The GoK vide Order No: D18/PSR 2003/Bangalore dated 31.05.2003 approved to
recapitalize net worth of KPTCL/ESCOMs by utilizing the balances of meter equipment security
deposit existing in the books of ESCOMs aggregating to Rs.205 Crores. Further, the GoK has
assured the contingent liability arising on account of recapitalization as and when it arises.
KPTCL was consulted on the captioned subject and KPTCL has clarified vide letters dated 15th
&16th May 2008. The separation of Transmission and Distribution business was done
considering Accounting units as the basis. The segregated figures were made available to
GoK, for verifying the Opening Balance Sheets of new Companies. GoK vide Order
dt.31.05.2003 notified the Opening Balance Sheet of KPTCL and ESCOMs as on 31.05.2002.
After notification, the sum total of Trial balance rendered by the Accounting units as on
31.05.2002 under each ESCOM and KPTCL was tallied after taking into BRP Adjustments.
As per May 2002 Closure Accounts, the Security Deposit held by the Accounting units under
the jurisdiction of BESCOM was Rs.632 cores. The Amount of Security deposit from the

TRUING UP OF FY-21
consumer notified as Opening Balance by GoK was also Rs.632 Crores and as such no BRP
adjustment was made in respect of Security Deposit from the consumers.
However, GoK vide Order dt.31.05.2003, approved recapitalization of the net worth of
KPTCL/ESCOMs utilizing the balances of meter equipment security deposit existing in the
books of ESCOMs aggregating to Rs.205 Crores. The details of adjustments along with
accounting code and ESCOMs wise are shown below.
Security Deposit – Adjustment
Table– 3.47 Amount in Rs. Crores

Accounting
Nomenclature BESCOM MESCOM HESCOM GESCOM TOTAL
Codes
Security deposit for meter
47.603 85.97 47.72 32.29 17.57 183.55
equipment’s
47.604 Revenue suspense 12.07 1.08 0.99 0.04 14.18
Voluntary loan contribution by IP
47.605 2.4 0.12 0.01 0.03 2.56
consumers
Revenue collection pending
47.606 0.99 0.11 0.02 4.07 5.19
classification over sundry debtors
Total 101.43 49.03 33.31 21.71 205.5
GoK resorted to recapitalization of Deposits to ensure providing viable opening balance sheets
to ESCOMS with ideal Debt: Equity Ratio. This metering security deposit is refundable to the
consumer at the time of termination of contract (permanent disconnection) & the corresponding
obligation in respect of such deposits would stand transferred to the GoK.
Commission’s Views:
The information furnished by BESCOM has been communicated to the FKCCI. The Commission
has informed FKCCI to contact BESCOM, in case further clarification in the matter is required. “
As per the above data, BESCOM’s capitalized consumer meter security deposit is
Rs.85.97 Crs. and not Rs. 100 Crs. Hence, Commission is requested to correct the
amount as Rs. 85.97 Crs. instead of Rs.100/- Cr.
Further, Commission kind attention is drawn for the Annual Account of BESCOM for
the year 2011-2012, 2012-13 and 2013-14 vide Note No.20 ‘Other Income ‘head.
Amount received from the Government of Karnataka under tripartite agreement was
credited to other income instead of reducing the receivable from the Government of
Karnataka. Details are as under:
Table – 3.48
Amount in
Year Nomenclature
Crs.
2011-12 Subsidy received from GOK 10.93
Total 31.16

TRUING UP OF FY-21
Since the amount is credited to other income, Commission has already considered the
amount as a reduction in ARR of respective years for truing of respective years,
BESCOM requests the Commission to credit this amount against the capitalized
consumer security deposit and balance to be considered as reduction in the equity. It
is submitted that, Hon’ble Appellate Tribunal for Electricity ruled in the appeal No.
46/2014 that the State Commission is not bound to follow the audited accounts and
the State Commission can scrutinize the same and allow the expenditure only after
prudence check.
Commission is requested to look into the accounts submitted by the Commission for
the year FY-12, FY-13 and FY-14 and to consider the BESCOMs request. Amount to
be considered for reduction is tabulated below:
Table– 3.49
Sl.NO. Particulars Amount in Crs.
1 Security deposit for meter equipment 85.97

Less: Amount considered as other
2 income for the year from 2011-12,2012- 31.16
13 and 2013-14
Amount to be considered for reduction in
equity consequent to capitalization of 54.81
consumer meter security deposit
Government of Karnataka induced the equity for FY-21. The details are as follows:
Table 3.50
Additional Equity No of RoE allowed Rs.

Crores Received on
received during FY-21 months Crs.
EN 353 PSR 2020 9.19 15.09.2020 6 0.71
EN 353 PSR 2020 9.19 05.01.2021 2 0.24
EN 86 PSR 2019 9.19 09.03.2021 0 0.00
EN 321 PSR 2020 42.17 25.08.2020 7 3.81
EN 321 PSR 2020 42.17 05.01.2021 2 1.09
EN 321 PSR 2020 42.17 09.03.2021 0 0.00
EN 322 PSR 2020 0.44 29.08.2020 7 0.04

EN 322 PSR 2020 0.44 05.01.2021 2 0.01
EN 322 PSR 2020 0.44 09.03.2021 0 0.00
EN 322 PSR 2020 0.06 29.08.2020 7 0.01

TRUING UP OF FY-21
EN 322 PSR 2020 0.06 05.01.2021 2 0.00

EN 322 PSR 2020 0.06 09.03.2021 0 0.00
TOTAL 155.58 5.91
For FY-21, Government of Karnataka induced Rs.155.58 Crs. towards equity under
different occasions as tabulated above. The Commission is requested to consider the
same for computation of return on equity.
With the above back ground BESCOMs calculated eligible return on equity as under
for FY-21.
Table 3.51
Particulars FY-21
Opening balance of paid up share
1,343.54
capital
Share deposit 273.44
Equity addition during the year 38.13
Reserve and Surplus -1.16
Less: Recapitalised Security Deposit -54.81
Total Equity 1599.14
Return on Equity @15.5% 247.87
Commission is requested to consider Rs. 247.87 Crs. as RoE for FY-21.
Income Tax
As per the Audited Annual Accounts for FY-21, an amount of Rs.36.38 Crores paid
towards Current tax Liability. The Commission is allowing the actual tax paid by the
Company.
Other income:
Commission in its Tariff Order 2020 dated 04.11.2020 had approved other income to
an extent of Rs. 441.89 Crs. for FY-21

TRUING UP OF FY-21
As per the audited accounts for FY-21 other income is tabulated as under:
Particulars 2020-21
Interest on Income 9.01
Profit on sale of stores 0.01
Losses/gain relating to fixed Assets 5.20
Rent 3.06
Incentive Received 143.91
Value of materials found excess during
0.07
physical verification
Miscellaneous 29.48
Interest subsidy received under National
0.00
Electricity Fund Scheme
Rebate 0.5% for Collection of Electricity
6.50
Duty
Revenue from sale of power through Indian
238.20
Energy Exchange (IEX)
TOTAL 435.44
Major portion of other income is from incentives received i.e., Rs.143.91 Crs.
With efficient financial management, power purchase bills are being paid in advance
to earn incentives on this count. Company is drawing overdraft from the commercial
bank and making advance payments to the Generators to earn arbitrage in the
difference of interest on over draft and the incentive earned.
In this context National Tariff policy, is also quoted for supporting the claims. National
tariff policy states that
“…….Making the distribution segment of the industry efficient and solvent is
the key to success of power sector reforms and provision of services of
specified standards. Therefore, the Regulatory Commissions need to strike
the right balance between the requirements of the commercial viability of
distribution licensees and consumer interests. Loss making utilities need to
be transformed into profitable ventures which can raise necessary resources
from the capital markets to provide services of international standards to

TRUING UP OF FY-21
enable India to achieve its full growth potential. Efficiency in operations

should be encouraged. Gains of efficient operations with reference to
normative parameters should be appropriately shared between consumers
and licensees…………….”
State Commission is disallowing the interest on belated power purchase payment bills
under the concept that interest on working capital is being passed through. On the
same lines, Incentive earned by the Distribution Company should be allowed to be
retained by the Distribution Company as an efficiency gain.
BESCOM is facing serious cash flow problems. Under recovery of costs over the years
ended in poor financial position. If the efficiency parameters are not appraised and not
fully allowed to retain it will result in disallowing the costs and capturing the income.
BESCOM requests the Hon’ble Commission to share the efficiency gain by at least
100% as a special case for FY-21.
Revised other income is tabulated as under:
Particulars 2020-21
Interest on Income 9.01
Profit on sale of stores 0.01
Losses/gain relating to fixed Assets 5.20
Rent 3.06
Incentive Received (100% of Rs 143.91) 143.91
Value of materials found excess during physical
0.07
verification
Miscellaneous 29.48
Interest subsidy received under National
0.00
Electricity Fund Scheme
Rebate at 0.5% for Collection of Electricity Duty 6.50
Revenue from sale of power through Indian
238.20
Energy Exchange (IEX)
TOTAL 435.44
Commission is requested to consider Rs.435.44Crs. as other Income for FY-21.

TRUING UP OF FY-21
Exceptional Items:
To comply with the decision of State Cabinet meeting held on 10.01.2017, Government
of Karnataka vide its order (1) G.O.No: EN03/PSR/ 2016/P-03 Dated 31-03-2017 has
accorded approval for securitization of Gram Panchayath electricity dues of
Rs.3766.81 crores (including interest) outstanding as at the end of March 2015 among
all Escoms of Karnataka, out of Rs 3766.81,BESCOM Portion of Receivable securitized
amount is Rs.1797.39 crs (both principal and Interest as at the end of March-2015).
The following course of action adhered to comply with the GOK order thereto:
1. Power Company of Karnataka Limited was appointed as nodal agency for

implementing the securitization of Gram Panchayat dues with the following
responsibilities
a) Raising loan from Banks or any other financial institutions to an extent of
Rs.3766.81 Crs and the best possible rate considering that this loan will be
virtually works out to be riskless.
b) Entering into agreement for borrowings and documentations. Releasing of
the borrowed fund to KPCL on behalf of ESCOMs as per the approval of the
Govt. for arranging periodical repayment of loans raised under this
securitization scheme and also for maintaining the accounts relating to
securitization, debt servicing etc.
c) Authorized to borrow additional sum from any other Financial
Institutions /Banks within the approved terms and conditions.
In accordance with GOK Order No:EN03/PSR/ 2016/P-03 dated:31.03.2017, PCKL

has securitised the Receivable of RLB by availing loans for various Financial
Institutions with terms and condition attached as per GOK order and KPC Power
Purchase dues are settled to the extent of securitised amount in phased manner.
BESCOM Portion of RLB Electricity dues as on 31.03.2015 is Rs.1797.39 crs stands

adjusted to consumer account and effected on 31/03/2018 in the system under the
ambit of said securitization scheme. Divisions have adjusted the amount through
Advice of Transfers (ATs) and accordingly the amount stands adjusted to concerned
R.R. No at all the O&M Divisions under BESCOMs jurisdiction.

TRUING UP OF FY-21
In the context of arrears as at the end of March 2015 getting adjusted during the end
of March 2018 at divisional level units of BESCOM, the interest for the principal
outstanding as at the end of March 2015 has accumulated in the system for the
period between 01.04.2015 to 31.03.2018.
Government order dated, 31.03.2017 vide per Para X (Page No.04) has ordered for
waiver off of interest accumulated for the period 2015-16 only Further as per the
proceedings of the meeting held on 13.02.2020 on RLB and ULB electricity dues
payable to ESCOMs by the Govt. Departments chaired by the Chief Secretary GoK, it
was instructed all ESCOMs to withdraw the accumulated interest on the securitization
amount (balance as at the end of 31.03.2015) for the period 2015-16 and furthermore
it was also instructed for withdrawal (Waive-off) of accumulated interest amount
continued for the further period beyond 01.04.2016 with the approval of the Board of
Directors.
Details were obtained from all the O&M divisions, and accumulated interest for three
years period is Rs.374.85 crores This was arrived with the assistance of TRM Agency
under for NON-RAPDRP RLB installations also.
Interest accumulated from 01.04.2015 to 31.03.2018 in respect of RLB Installations in

RAPDRP area (INFOSYS) worked out with the assistance of INFOSYS is Rs.14.46
crores.
Therefore, a total amount of Interest of Rs.389.31 crores needs to be withdrawn as

per the GOK order. The Interest withdrawal statement has been duly audited by the
Accounts Officer (I/A) O&M Divisions & Certified by the CGM (I/A), Corporate Office,
BESCOM. The same has been accounted for True up of FY-21.

TRUING UP OF FY-21
ABSTRACT of Truing up of FY-21:
Based on the above analysis, the summary of ARR (after sharing of efficiency gains &
losses) for the Wires Business and Supply Business, as per Audited Account and as
approved by the Hon’ble Commission, for 2020-21 is presented in the table below.
Table 3.54 Amt in Crs
Abstract of Truing up for FY-21

Particulars Approved Actual Trued up
Revenue at existing
tariff in Rs. Crs.
Revenue from tariff and
1 20303.51 16540.15 16540.15
Misc. Charges
Tariff Subsidy from
2 125.98 138.75 138.75
BJ/KJ
3 Tariff Subsidy from IP 2744.35 3001.94 3001.94
Total Revenue 23173.84 19680.84 19680.84
Expenditure in Rs.
Crs.
4 Power Purchase Cost 16343.68 13901.56 13901.56
Transmission charges
5 2179.288 1970.43 1970.43
of KPTCL
Transmission charges
6 0 1436.25 1436.25
of PGCIL
SLDC/POSOCO
7 11.923 12.83 12.83
Charges
Power Purchase Cost
including cost of 18534.94 17321.07 17321.07
transmission
8 Employee Cost 1500.71 1699.35
Repairs and
9 183.58 195.80
Maintenance
1 Admin & General
546.08 416.01
0 Expenses
Total O&M Cost 2365.64 2230.37 2311.17
1
Depreciation 606.35 821.14 821.14
1
Interest & Finance

TRUING UP OF FY-21
Charges
1 563.1
Interest on Loans 488.65 563.19
2 9
1 Interest on Working
464.38 378.31
3 capital 395.44
1 Interest on consumer
235.69 179.67
4 deposits 179.67
1 Other Interest &
12 8.16
5 Finance charges 35.81
1 Less interest & other
130.37 145.79
6 expenses capitalized 153.42
Total Interest and
1070.35 983.54 1020.69
Finance charges
1
Other debits 0.00 153.96
7
1 Net Prior period
8 debit/credits
1
Return on Equity 288.20 208.25 247.9
9
Funds towards
2
Consumer Relations/ 1 0
0
Consumer
2 Income tax/ Deferred
120.17 36.38
1 tax liability
2
Other Income 441.98 435.44 435.44
2
2 Deficit for FY-19 carried
1947.34
3 forward
Exceptional Items 389.31 389.31
ARR 24371.79 21638.41 21866.14
GAP -1198.02 -1957.57 -2185.29
Sales 29950.51 25262.93 25262.93

Average cost of supply 8.14 8.57 8.66
Considering Aggregate Revenue Requirement and total Revenue, the revised gap works
out to deficit of Rs. 2185.29 as against Rs. 1198.02 Crs., surplus approved in Tariff
Order 2020, dated 04.11.2020 by the Hon’ble Commission.
Average Cost of Supply:
Commission determined the average cost of supply at Rs.8.66 per unit for FY-21.
Actual Average Cost of Supply is tabulated below:
Table 3.55 Amt in Crs

TRUING UP OF FY-21
FY-21
Particulars
Approved Actual
Net ARR (in Crs.) 24371.79 21866.14
Approved/Actual Sales(MU) 29950.51 25262.93
Average Cost of Supply (Rs./unit) 8.14 8.66
As per proposed trued up figures, average cost of supply shoots up to Rs. 8.66 per
unit as against approved average cost of Supply of Rs. 8.14 per unit.
Thus the actual Revenue Gap for FY-21 works out to deficit of Rs. 2185.29 Crs.
BESCOM requests the Hon’ble Commission to allow BESCOM the true up requirement
as submitted above.
COVID Impact during FY-21:

1. Energy Sales and tariff realization:
The energy sales in FY2021 were impacted particularly in the first half of the year due to
the Covid-19 pandemic. The sales witnessed a reduction of 15.2% on a YoY basis in H1
FY2021. However, there has been improvement since October 2020 and the demand has
improved close to pre-covid levels. For FY2021, the sales stood at 25262.95 MU as
compared to 27834.60 MU in the corresponding period of the previous year. There is
reduction of 9% in overall sales over the previous years. There is also reduction of 20%
in HT sales over the previous year.
As against KERC approved revenue of Rs.23173.84 Crs., BESCOM has been able to
realize an amount of Rs.19680.84 Crs. for FY-21. Due to the COVID pandemic the
sales for FY-21 has reduced by 2572MU over the previous year FY-20. This in turn
has reduced the revenue demand by Rs.3493 Crores for FY-21 over FY-20.
2. Power purchase costs
Power purchase cost for FY2021 was expected to reduce given that the
Government has reduced allocation of expensive thermal power from 66-67%
levels to about 50-53% levels. In the Tariff Order 2020, dtd 04.11.2020, for FY-21
the power purchase cost was approved at Rs.18535 Crores and average power

TRUING UP OF FY-21
purchase cost approved was Rs.5.30 per unit. As against the approved quantum,
the actual power purchase cost is Rs.17083 Crores and the actual average power
purchase cost is Rs. 5.70 per unit. Though the power purchase cost has reduced
(due to COVID pandemic lockdown) as against the approved quantum, the
average power purchase cost has increased over the approved level by 40
paise /unit. If BESCOM had incurred the power purchase cost as per the
approved average power purchase of Rs.5.30/unit then BESCOM’s power
purchase cost would have been Rs.15885 Crores. There is an increase of Rs.1198
Crores in actual power purchase cost for FY-21.
3. Equity infusion by GOK
The equity received from GOK is Rs. 155.58 crore for FY-21
4. Impact on cash flows
Energy sales and collections were impacted due to Covid during the first half of
FY2021.
The GoK vide Govt Order No: ENERGY 128 PSR 2020, Bangalore, Dated:
08.05.2020. Accorded approval to give following reliefs / incentives to the
electricity consumers for the months of April, May & June 2020:
1. The Demand / Fixed Charges payable by consumers who are recognized as
MSME industries and hold valid certificate in that regard can avail waiver of
demand and fixed charges for the months of April and May 2020.
2. The Demand / Fixed charges payable by industries other than industries
having valid certification as MSME for the months of April and May 2020 shall
be deferred until 30.06.2020.
3. Other relief / incentives given to all category of consumers for the months of
April, May and June 2020 i.e., upto 30.06.2020 as follows:
i. Consumers who promptly pay the bills raised by ESCOMs shall be entitled
to an Incentive / Rebate for prompt payment by way of adjustment in the
subsequent month’s bill subject to a ceiling limit of Rs. 1 Lakh for HT
installations and Rs. 10,000 for LT installations.
The incentive for prompt payment to be allowed shall be as follows:

TRUING UP OF FY-21
 Between 1 to 5 days: 1%
 Between 6 to 15 days: 0.50%
 No rebate for payment between 15 to 30 days.
Note: This incentive/rebate shall be in addition to the existing prompt payment incentive,
if any, provided to the consumer under the relevant Tariff orders.
ii. Interest for belated payments: The time for payment of dues in terms of
the bills raised shall hereby stand extended by a period of an additional 15
days, beyond the 15 days normally provided. For the said period of 30
days, (i.e.,15 days available for payment + 15 days grace period), no
interest shall be levied. In respect of Electricity dues which have remained
unpaid for a period of 30 days, from the date of presentation of the bills,
simple interest at the rate of 0.5% per month, for the actual number of
days delay in payment by the consumer will be levied. The minimum
interest leviable for delayed payment shall be Re. 1/- in respect of LT
installations and Rs.100/- in respect of HT installations.
iii. Advance payment: Consumers are permitted to pay 12 months bills in
advance, by way of cheque / Demand draft / any digital mode to the
ESCOM’s. A consumer, who pays such bills in advance for the period of 12
months, shall be entitled to incentive at the rate of 0.50% per month for
the time for which advance payment is made. The interest would be
calculated on the reducing balance after deduction of the electricity billed
for the month. Such incentive at the rate of 0.50% shall be given to the
consumers as an adjustment in the subsequent bill.
iv. Providing installments / part payment: As per the manual of delegation of
financial powers, ESCOMs to provide installments for a period of 3 months
subject to levy of interest as per sl.no 3(ii), if any consumer represents in
writing to the Sub-Divisional Officer (Local Office) for payment of April
2020 & May 2020 monthly bills in installments.
v. Disconnection for non-payment: There shall be no disconnection of
electricity supply by the ESCOMs for non-payment of dues for the months
of April and May 2020 till 30th June 2020, subject to any provision to pay
such dues by installments provided by ESCOM’s as per 3(iv) above.
Relief / Incentives extended as per the above Government Order to all
Consumers during lock down period FY 2020-21.

TRUING UP OF FY-21
Table 3.56
Sl. No of Amount
REBATE TYPE
No. beneficiaries (Rs in Crs.)
COVID19:MSME Waive Off on
1 9556 32.32
Demand/Fixed Charges
COVID19:MSME WaiveOff on
2 Demand/Fixed Charges (Reconciled 1026 3.58
during March Final Accounts)
TOTAL MSME Wavier OFF 10582 35.90
COVID19:Non MSME Industrial

3 Consumers DC/FC Deferred for the 144594 1.71
month of April & May 2020 ( Interest )
COVID19: Ranga Mandira WaiveOff
4 5 0.05
on Demand/Fixed Charges
5 COVID19 Prompt Payment Incentive 15101236 9.31
6 COVID-19 Advance Payment Incentive 13 0.00
LPC (Late Payment Charges) due to
7 Extension of due Date & reduction of 0 77.45
ROI
Grand TOTAL 15256430 124.42
5. Moratorium availed
During COVID lockdown, the Company had availed moratorium on the interest
and principal on loans earlier. However, entire interest has been repaid by
August 31, 2021. Further, principal repayments have also been made to
REC/PFC and thus there is no impact on moratorium. For the remaining banks,
Company has availed moratorium on the principal payments on some of the
loans.
6. Liquidity Relief Package
BESCOM has availed Rs. 1925 crore of loans from SBI and Canara Bank at
competitive interest rates of 7.45%/7.50% under the liquidity relief scheme by
discoms. The tenor of these loans is 10 years and the loans are guaranteed by

TRUING UP OF FY-21
Government of Karnataka. Karnataka discoms have opted for loans from

nationalized banks as opposed to PFC/REC due to competitive interest rates. The
proceeds have been used to make payments to central generators and IPPs.
7. COVID Loans
In addition to the above, the Company has also availed COVID loans to the tune
of Rs. 590 crore from various banks to meet its funding requirements.
The waiver of fixed charges to MSME installations affects the liquidity position of the
Company, thereby impairing the ability to pay to the generating and transmission
companies. MoP,GoI vide Letter dated:06.04.2020 had clarified that the Transmission
charges of PGCIL and Capacity Charges of CGS Generators are to be paid.
BESCOM cashflow allows company to discharge its day-to-day obligations using the
normal cash inflow. Any depletion in the cash inflow would adversely affect the
payments. In such a situation, the Demand/Fixed charges waived off has forced the
company to defer its operational obligations. Due to this, providing uninterrupted
power supply to consumers was also extremely difficult.
Hon’ble Commission is requested to consider all the above facts which were due to
Covid pandemic situation while determining the ARR after Annual Review of
Performance and approve the submissions made by BESCOM.

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TRUING UP OF FY-21

The scope of the annual performance review shall be a comparison of the

a) Any financial loss or gain on account of variation in power purchase cost

b) The approved aggregate gain or loss to the Licensee on account of other

c) The approved aggregate gain or loss to the Licensee on account of

Therefore based on the above, BESCOM is now seeking true-up of 2020-21

Karnataka Electricity Regulatory Commission (KERC) approved the Annual Revenue

MYT for 6th Control Period from FY-23 to FY-25 Page 13

1. Truing up of Approved Revenue and Actual Revenue:

LT-6-(a) Water Supply 1848.63 1238.3

LT-6-(b) Street Light 583.55 491.96

MYT for 6th Control Period from FY-23 to FY-25 Page 14

Sl Cumulative Energy Saving

Solar water heater:

Total SWH installed from December-2007 to September-2021: 7,51,969

Energy savings in MU: 744.5

The Progress and energy savings of HosaBelaku scheme, Pavan Scheme

9W LED bulbs 3,16,573 4.09

20W Tube light 0 0

BEE Star rated Ceiling

Solar Water Heater 35,044 16.09

MYT for 6th Control Period from FY-23 to FY-25 Page 15

Energy Procured Energy procured by Total BESCOM

MYT for 6th Control Period from FY-23 to FY-25 Page 16

FY-21 FY-20 FY-21

LT-4a Installations (Nos.) 964463 933908 951183

Midyear installations (Nos.) 949463 942546

LT-4a Sales(MU) 7036.79 6910.2

7 years specific consumption in units/IP/annum,

Particulars FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21

MYT for 6th Control Period from FY-23 to FY-25 Page 17

Table 3.7 Sales in MU

Category FY-20 FY-21 Difference

Particulars Approved Actuals Variation

MYT for 6th Control Period from FY-23 to FY-25 Page 18

T&D loss for FY-21 and FY-22 (Sept-21):

MYT for 6th Control Period from FY-23 to FY-25 Page 19

T&D Loss for FY-22 (upto Sept-21):

Jun-21 2225.21 1549.36 533.91 2083.26 141.95 6.38%

1st Qtr 7581.09 5145.39 2230.71 7376.10 204.99 2.70%

Jul-21 2236.75 1517.32 491.94 2009.25 227.50 10.17%

Aug-21 2376.49 1677.42 356.20 2033.62 342.87 14.43%

Sep-21 2430.27 1729.66 421.02 2150.68 279.59 11.50%

2nd Qtr 7043.51 4924.39 1269.16 6193.55 849.96 12.07%

MYT for 6th Control Period from FY-23 to FY-25 Page 20

Table 3.17 Amount in Crs.

Opening Net of Net

MYT for 6th Control Period from FY-23 to FY-25 Page 21

Revenue from Operations:

MYT for 6th Control Period from FY-23 to FY-25 Page 22

Table 3.12 Amount in Crs.

For the year

Cross subsidy surcharge and additional surcharge 309.88

Recoveries for theft of power 18.17

Meter Rent Collected from prepaid Consumer 12.64

Total (B) 1026.14

Table 3.13 Amount in Crs

MYT for 6th Control Period from FY-23 to FY-25 Page 23

Category Wise Cross Subsidy Calculation- FY-21

MYT for 6th Control Period from FY-23 to FY-25 Page 24

10 HT - 3b 0.93 0.52 5.59 -31.71 1.37 0.72 5.28 -64.07% -0.46

MYT for 6th Control Period from FY-23 to FY-25 Page 25

TOTL 29950.51 23433.33 7.82 - 25262.9 18393.66 7.28 -18.94% -3484.04