Goa Gazette, No. 1819-2, 18 April 2018

click here for IIIF manifest

SERIES I No. 2

Panaji, 18th April, 2018 (Chaitra 28, 1940)

EXTRAORDINARY

No. 2

GOVERNMENT OF GOA

Department of Power

Office of the Chief Electrical Engineer ___

for the Electricity Department, Government of Goa.

Notification

120/03/JERC-MYT/CEE/Tech

The Electricity Department, Government of Goa, filed its petition for Annual Performance Review of FY 2016-17 & FY 2017-18, Retail supply of Tariff for FY 2018-19 and True-up for FY 2013-14, according to the Regulations and as per the procedures outlined in section 61, 62 & 64 of the Electricity Act, 2003, before the Hon'ble Joint Electricity Regulatory Commission for the States of Goa and Union Territories.

In exercise of the powers conferred under various sections of the Electricity Act, 2003 and all powers enabling therein, on behalf of the Joint Electricity Regulatory Commission for the State of Goa and Union Territories, has issued the tariff order dated 28th March, 2018 which is attached herewith for Determina- tion of Tariff for FY 2018-19 with effective from 1st April, 2018 and shall remain valid till issuance of further orders of the Commission, In consequence to the above Tariff Order, the State Government is intending to provide subsidy to the following categories in order to give relief against the Tariff hike:

(1) LT Domestic Consumers who is having monthly consumption only upto 200 Units.

(2) LT Agriculture Pump Sets/Irrigation.

Orders in regard to providing above subsidy is in process and once the same is issued the subsidy granted will be credited to the respective consumers starting from the consumption from 1st April, 2018 in the subsequent billing months.

The above is hereby brought to the notice

of the public.

By order and in the name of the Governor

of Goa.

N. N. Reddy, Chief Electrical Engineer &

ex officio Additional Secretary (Power).

Panaji, 17th April, 2018.

JOINT ELECTRICITY REGULATORY COMMISSION For the State of Goa and Union Territories, 2nd Floor, HSIIDC Office Complex, Vanijya Nikunj, Udyog Vihar, Phase-V, Gurugram-122016 (Haryana) Phone: 0124-2875302 Fax: 0124-2342853 Website: www.jercuts.gov.in Email: [email protected]

__

TARIFF ORDER

True-up of the FY 2013-14 and Approval of Aggregate Revenue Requirement (ARR) and Determination of Retail Tariff for the FY 2018-19

Petition No. 249/2017

For

Electricity Department, Government of Goa (EDG)

28th March, 2018

_____

Table of Contents

1. Chapter 1: Introduction

55

1.1. About Joint Electricity Regulatory Commission (JERC) 1.2. About Electricity Department, Government of Goa (EDG) 1.3. JERC Tariff Regulations, 2009 1.4. Multi-Year Distribution Tariff Regulations, 2014 1.5. Filing and Admission of the Present Petition 1.6. Interaction with the Petitioner 1.7. Notice for Public Hearing 1.8. Public Hearing

55 55 55 56 56 56 57 58

2. Chapter 2: Summary of Suggestions/Objections received, Response from the Petitioner and

the Commission's Views

58 2.1. Regulatory Process 58 2.2. Suggestions/Objections, Response of the Petitioner and Commission's Comments 58

3. Chapter 3: True-up of FY 2013-14 3.1. Background 3.2. Energy Sales 3.3. Inter-State Transmission loss 3.4. Intra-State Transmission & Distribution (T&D) loss 3.5. Power Purchase Quantum & Cost 3.6. Renewable Purchase Obligation (RPO) 3.7. Energy Balance 3.8. Operation & Maintenance (O&M) Expenses 3.9. Capitalisation

64 64 64 65 66 67 70 70 71 7448 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 3.10. Depreciation 3.11. Interest and Finance Charges 3.12. Return on Capital Base 3.13. Interest on Security Deposits 3.14. Interest on Working Capital 3.15. Provision for Bad & Doubtful Debts 3.16. Non-Tariff Income (NTI) 3.17. Revenue from Sale of Surplus Power 3.18. Aggregate Revenue Requirement (ARR) 3.19. Revenue at Existing Retail Tariff 3.20. Standalone Revenue Gap/Surplus

75 77 78 79 80 81 81 82 82 83 85

85 4. Chapter 4: True-up of the FY 2014-15, FY 2015-16 and FY 2016-17 4.1. Applicable provisions of JERC for the State of Goa and Union Territories (Terms and Conditions for Determination of Tariff) Regulations, 2009 85 4.2. Approach for the True-up of the FY 2014-15 and FY 2015-16 and FY 2016-17 86

5. Chapter 5: Annual Performance Review of FY 2017-18 5.1. Background 5.2. Approach for the Review for the FY 2017-18

87 87 87

6. Chapter 6: Determination of Aggregate Revenue Requirement for the FY 2018-19 88 88 6.1. Background 6.2. Approach for determination of ARR for the FY 2018-19 89 6.3. Projection of Number of Consumers, Connected Load and Energy Sales 89 6.4. Energy Savings under Domestic Efficiency Lamp Programme (DELP) 90 90 6.5. Inter-State Transmission Loss 91 6.6. Intra-State Transmission and Distribution (T&D) Loss 91 6.7. Power Purchase Quantum & Cost 95 6.8. Renewable Purchase Obligation (RPO) 96 6.9. Energy Balance 97 6.10. Operation & Maintenance (O&M) Expenses 97 6.11. Capitalisation 97 6.12. Depreciation 98 6.13. Interest and Finance Charges 98 6.14. Return on Equity (RoE) 99 6.15. Interest on Security Deposits 99 6.16. Demand Side Management (DSM) Expenses 100 6.17. Interest on Working Capital 101 6.18. Non-Tariff Income (NTI) 101 6.19. Aggregate Revenue Requirement (ARR) 101 6.20. Revenue at Existing Retail Tariff 104 6.21. Standalone Revenue Gap/Surplus

7. Chapter 7: Tariff Principles and Design 7.1. Overall Approach 7.2. Applicable Regulations 7.3. Revenue Gap/Surplus at Existing Tariff 7.4. Treatment of the Revenue Gap/Surplus and Tariff Design

105 105 105 107 107

8. Chapter 8. Open Access Charges for the FY 2018-19 8.1. Wheeling Charges 8.2. Additional Surcharge 8.3. Cross-Subsidy Surcharge

115 115 117 119

9. Chapter 9: Tariff Schedule 9.1. Tariff Schedule 9.2. Applicability

121 121 12349 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 9.3. General Terms and Conditions 9.4. Schedule of Miscellaneous Charges

131 135

10. Chapter 10. Fuel and Power Purchase Adjustment Mechanism 10.1. Legal Provisions 10.2. Existing formula 10.3. Need to review the existing mechanism 10.4. New formula

138 138 139 142 144

11. Chapter 11: Directives 11.1. Directives continued in this Order 11.2. New Directives issued in this Order 11.3. Directives dropped in this Order

148 148 154 154

Annexures Annexure 1: Public Notices published by the Commission Annexure 2: Public Notices published by the Petitioner Annexure 3: List of Stakeholders

155 155 160 163

List of Tables

Table 1: Timelines w.r.t the Petition filed by EDG

54 Table 2: Timelines of the interaction with the Petitioner

57 Table 3: Details of Public Notices published by the Commission

57 Table 4: Details of Public Notices published by the Petitioner

57 Table 5: Energy Sales (MU) trued-up by the Commission

65 Table 6: Inter-State transmission loss (%)

66 Table 7: Intra-State distribution loss (%)

66 Table 8: Power Purchase cost submitted by the Petitioner (In Rs. Cr)

67 Table 9: Power Purchase Quantum (MU) and cost (Rs Cr) approved by the Commission 69 Table 10: Energy Balance (MU) submitted by Petitioner

70 Table 11: Energy Balance (MU) approved by Commission at State Periphery 71 Table 12: Employee Expenses submitted by the Petitioner (In Rs. Cr)

72 Table 13: Employee Expenses approved by Commission (In Rs. Cr)

72 Table 14: A&G Expenses submitted by Petitioner (In Rs. Cr)

73 Table 15: A&G Expenses approved by Commission (In Rs. Cr)

73 Table 16: R&M Expenses approved by Commission (In Rs. Cr)

74 Table 17: O&M Expenses approved by Commission (In Rs. Cr)

74 Table 18: Capitalisation approved by Commission (In Rs. Cr)

75 Table 19: Depreciation submitted by Petitioner (In Rs. Cr)

75 Table 20: Depreciation Rate (%)

76 Table 21: Depreciation approved by Commission (In Rs. Cr)

76 Table 22: Interest and Finance charges approved by Commission (In Rs. Cr) 78 Table 23: Interest on Consumer Security Deposits submitted by Petitioner (In Rs. Cr) 79 Table 24: Interest on Consumer Security Deposits approved by Commission (In Rs. Cr) 79 Table 25: Interest on Working Capital approved by Commission (In Rs. Cr) 80 Table 26: Non-Tariff Income as submitted by Petitioner (In Rs. Cr)

81 Table 27: Non-Tariff Income approved by Commission (In Rs. Cr)

81 Table 28: Non-Tariff Income approved by Commission (In Rs. Cr)

82 Table 29: Aggregate Revenue Requirement approved by Commission for FY 2013-14 (In Rs. Cr) 82 Table 30: Revenue at existing tariff submitted by the Petitioner for FY 2013-14 (In Rs. Cr) 83 Table 31: Revenue at existing tariff approved by Commission for FY 2013-14 (In Rs. Cr) 84 Table 32: Standalone Revenue Gap/Surplus approved by Commission for FY 2013-14 (In Rs. Cr) 8550 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 Table 33: No. of Consumer, Connected Load and Energy Sales approved by Commission 90 Table 34: Energy Savings under DELP (MU)

90 Table 35: Inter-State Transmission Loss (%)

91 Table 36: Intra-State T&D loss (%)

91 Table 37: Power Purchase Quantum (MU) and cost (Rs. Cr) approved by Commission 93 Table 38: Summary of Renewable Purchase Obligation (RPO) (MU)

95 Table 39: Cost towards compliance of Renewable Purchase Obligation (RPO) (In Rs. Cr) 96 Table 40: Energy Balance (MU) approved by Commission

96 Table 41: O&M Expenses approved by Commission (In Rs. Cr)

97 Table 42: Capitalisation approved by the Commission (In Rs. Cr)

97 Table 43: Depreciation approved by Commission (In Rs. Cr)

98 Table 44: Interest and Finance Charges approved by Commission (In Rs. Cr) 98 Table 45: RoE approved by Commission (In Rs. Cr)

99 Table 46: Interest on Security Deposits approved by Commission (In Rs. Cr) 99 Table 47: DSM Expenses as approved by Commission (In Rs. Cr)

100 Table 48: Interest on Working Capital approved by Commission (In Rs. Cr) 100 Table 49: Non-tariff Income approved by Commission (In Rs. Cr)

101 Table 50: Aggregate Revenue Requirement approved by Commission for FY 2018-19 (In Rs. Cr) 101 Table 51: Revenue submitted by Petitioner (In Rs. Cr)

102 Table 52: Revenue from existing retail tariff for FY 2018-19 (In Rs. Cr)

103 Table 53: Standalone Revenue Gap/Surplus approved by Commission (In Rs. Cr) 105 Table 54: Standalone Revenue Gap/Surplus submitted by Petitioner (In Rs. Cr) 107 Table 55: Standalone Revenue Gap/Surplus determined by Commission (In Rs. Cr) 107 Table 56: Retail Tariff proposed by Petitioner

108 Table 57: Existing and approved tariff

111 Table 58: Revenue from approved retail tariff (In Rs. Cr)

113 Table 59: Tariff increase approved by Commission

114 Table 60: Revised Revenue Gap/ Surplus approved by Commission (In Rs. Cr) 114 Table 61: Cost of Supply and tariff increase with and without Govt. Budgetary support 115 Table 62: Wheeling Charge calculation as submitted by Petitioner

116 Table 63: Allocation matrix approved by Commission

116 Table 64: Parameters assumed for voltage wise allocation of wheeling costs 117 Table 65: Wheeling Charges approved by Commission

117 Table 66: Additional Surcharge approved by Commission

118 Table 67: Cross-Subsidy Surcharge as proposed by the Petitioner

119 Table 68: Voltage wise losses assumed by Commission

119 Table 69: Energy Input at each voltage level (MU)

120 Table 70: Parameters used for allocation of fixed costs

120 Table 71: Voltage Wise Cost of Supply (VCoS)

120 Table 72: Cross-Subsidy Surcharge approved by Commission (Rs/kWh) 121 Table 73: Tariff Schedule

121 Table 74: Applicability of Tariff Schedule

123 Table 75: Applicability of ToD Tariff

134 Table 76: Schedule of Miscellaneous Charges

135 Table 77: Key Takeaways

143Table 78: Rapproved determined by Commission for FY 2018-19 148 Table 79: List of Stakeholders 163 51 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018

List of abbreviations

Before the

Joint Electricity Regulatory Commission

For the State of Goa and Union Territories, Gurugram

QUORUM Shri. M. K. Goel (Chairperson) Smt. Neerja Mathur (Member) Petition No. 249/2017

In the matter of

Approval for the True-up of the FY 2013-14, Annual Performance Review (APR) of the FY 2017- -18 and Aggregate Revenue Requirement (ARR) and Tariff proposal for the FY 2018-19.

And in the matter of

Electricity Department, Government of Goa (EDG)……………………………………….. Petitioner

ORDER

Dated: 28th March 2018

a) This Order is passed in respect to the Petition filed by the Electricity Department, Government of Goa (EDG) (herein after referred to as "The Petitioner" or "EDG" or "The Licensee") for approval of True-up of the FY 2013-14, Annual Performance Review of the FY 2017-18, Aggregate Revenue Requirement (ARR) and Tariff proposal for the FY 2018-19 before the Joint Electricity Regulatory Commission (herein after referred to as "The Commission" or "JERC").

b) On receipt of the Petition, the Commission scrutinised its contents and requisitioned further information/clarifications on the data gaps observed in the Petition to take a prudent view of the Petition. The Commission also held a Technical Validation Session to determine its sufficiency and the veracity of the information submitted. Further, suggestions/comments/objections were invited from the public/stakeholders. A Public Hearing was held and the stakeholders/public were heard. The schedule of activities performed in the course of this quasi-judicial process are given below:

Table 1: Timelines w.r.t the Petition filed by EDG

c) The tariff, as detailed in the Chapter "Tariff Schedule," Open Access Charges and other provisions as approved in this Order shall come into force from 1st April, 2018 and shall remain valid till further Orders of the Commission.

d) The licensee shall publish the revised Tariff Schedule and the salient features of tariff within one week of receipt of the Order in three daily newspapers in the respective local54 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 languages of the region, besides English, having wide circulation in their respective areas of supply.

e) Ordered as above, read with the attached document giving detailed reasons, grounds and conditions.

-Sd-

-Sd-

Neerja Mathur M.K. Goel

(Member)

(Chairperson)

JOINT ELECTRICITY REGULATORY COMMISSION (For the State of Goa and Union Territories)

Place: Gurugram

Date: 28th March, 2018.

(Certified Copy)

Keerti Tewari

1. Chapter 1: Introduction

1.1. About Joint Electricity Regulatory Commission (JERC)

In exercise of powers conferred by the Electricity Act 2003, the Central Government constituted the Joint Electricity Regulatory Commission for all the Union Territories except Delhi to be known as "Joint Electricity Regulatory Commission for the Union Territories" vide Notification No. 23/52/2003-R&R dated 2 May, 2005. Later with the joining of the State of Goa, the Commission came to be known as "Joint Electricity Regulatory Commission for the State of Goa and Union Territories" (hereinafter referred to as "JERC" or "the Commission") vide Notification No. 23/52/2003-R&R (Vol. II) dated 30 May, 2008.

JERC is an autonomous body responsible for regulation of the Power Sector in the State of Goa and Union Territories of Andaman & Nicobar Islands, Lakshadweep Island, Chandigarh, Daman & Diu, Dadra & Nagar Haveli and Puducherry, consisting of generation, transmission, distribution, trading and use of electricity etc. Its primary objective includes taking measures conducive to the development of the electricity industry, promoting competition therein, protecting the interests of consumers and ensuring supply of electricity to all areas.

1.2. About Electricity Department, Government of Goa (EDG)

The Electricity Department was formed in January 1963 under the Government of Goa. It is the only licensee operating in the State of Goa for Transmission and Distribution of Electricity. The power requirement of the State is met through its share from Central Sector Generating Stations (CGS), Co-Generation Plants & IPP's operating within the territory and from Open Market.

1.3. JERC Tariff Regulations, 2009

The Commission notified the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Terms and Conditions for Determination of Tariff) Regulations, 2009 on55 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 9th February, 2009 applicable to the whole of the State of Goa and the Union Territories of Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry. The Regulations were applicable till the FY 2015-16 till the MYT Distribution Tariff Regulations, 2014 were notified by the Commission on 30th June 2014.

1.4. Multi-Year Distribution Tariff Regulations, 2014

The Commission notified the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (except Delhi) (Multi-Year Distribution Tariff) Regulations, 2014 on 30th June, 2014 applicable for a three year Control period starting from FY 2015-16 till FY 2017-18. The Commission subsequently notified the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (except Delhi) (Multi-Year Distribution Tariff) (First Amendment) Regulations, 2015 on 10th August, 2015 shifting the MYT Control Period to FY 2016-17 to FY 2018-19. These Regulations are applicable to all the distribution licensees in the State of Goa and Union Territories of Andaman & Nicobar Islands, Lakshadweep Island, Chandigarh, Daman & Diu, Dadra & Nagar Haveli and Puducherry.

1.5. Filing and Admission of the Present Petition

The Electricity Department, Government of Goa (EDG) filed the Petition for True-up of the FY 2013-14, APR of the FY 2016-17 and FY 2017-18 and ARR and Tariff Proposal for the FY 2018-19 vide letter dated 7th December, 2017. On preliminary scrutiny of the Petition, certain data gaps were observed on which the reply of the Petitioner was sought. The Petition was also scrutinized in terms of the JERC (Conduct of Business) Regulations, 2009. The Petition was admitted on 11th December, 2017 and numbered as Petition No. 249/2017. A letter indicating gaps in the information as well as the documentation was sent to the Petitioner.

1.6. Interaction with the Petitioner

The Order has referred at numerous places to various actions taken by the "Commission." It may be mentioned for the sake of clarity that the term "Commission," except for the Hearing and Orders, denotes the Secretariat of the Commission responsible for carrying out technical due diligence and validation of data of the Petitions filed by the utilities, obtaining and analysing information/clarifications received from the utilities, and submitting relevant issues for consideration of the Commission.

A preliminary scrutiny/analysis of the Petition was conducted and certain deficiencies were observed. Accordingly, deficiency notes were issued to the Petitioner. Further, additional information/clarifications/justifications were solicited from the Petitioner as and when required. The Commission and the Petitioner also discussed various concerns of the Petitioner and key data gaps, which included Energy Sales, revenue from retail tariff, capitalisation, tariff proposal etc. The Petitioner submitted its response on the issue through various letters.

The Commission conducted the Technical Validation Session (TVS) with the Petitioner at the Commission's office in Gurugram, during which the discrepancies in the Petition were discussed and additional information required by the Commission were sought. Subsequently, the Petitioner submitted replies to the issues raised in these sessions and provided56 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 documentary evidence to substantiate its claims regarding various submissions. The following table provides the list of interactions with the Petitioner along with the date:

Table 2: Timelines of the interaction with the Petitioner

1.7. Notice for Public Hearing

Public Notices were published by the Commission in the leading newspapers as tabled below, giving due intimation to the stakeholders, consumers and the public at large about the Public Hearing to be conducted by the Commission.

Table 3: Details of Public Notices published by the Commission

Copies of the Public Notices published by the Commission for intimation of the Public Hearing are attached as Annexure 1 to this Order. These notices were also uploaded on the Commission's website.

The Public Notice was published by the Petitioner in the following newspapers for inviting objections/suggestions from the stakeholders on the Tariff Petition:

Copies of the Public Notices published by the Petitioner for intimation of the Public Hearing are attached as Annexure 2 to this Order.

1.8. Public Hearing

The Public Hearing was held on 31st January 2017 from 10:00 A.M. onwards at "Ravindra Bhawan" at Goa to discuss the issues related to the Petition filed by the Petitioner. The issues and concerns raised by the stakeholders in writing and as voiced by them during the hearing have been examined by the Commission. The issues discussed during the public hearing and/or written comment made by the stakeholders, the responses of the Petitioner thereon and the views of the Commission, have been summarized in Chapter 2 of this Order.

2. Chapter 2: Summary of Suggestions/Objections received, Response from the

Petitioner and the Commission's Views

2.1. Regulatory Process

On admitting the Petition, the Commission directed the Petitioner to make copies of the Petition available to the public, upload the Petition on the website and also publish the same in the newspapers in an abridged form in the given format duly inviting comments/objections from the public as per the provisions of the MYT Regulations, 2014.

The Public Hearing was held on 31st January 2018 from 10:00 A.M. onwards at Goa. During the Public Hearing, some of the stakeholders who had submitted their comments in writing also presented their views in person before the Commission. Other participants from the general public, who had not submitted written objections earlier, were also given an equal opportunity to present their views/suggestions in respect of the Petition.

The list of the stakeholders is attached as Annexure 3 to this Order.

2.2. Suggestions/Objections, Response of the Petitioner and Commission's Comments

The Commission is appreciative of the efforts of various stakeholders in providing their suggestions/comments/observations to make the process responsive and efficient. The relevant observations of the stakeholders have been suitably considered by the Commission while finalizing this Tariff Order. The submissions of the stakeholders, response of the Petitioner and views of the Commission are summarized below:

2.2.1. Procurement of power from cheaper solar energy sources

Stakeholder's Comment:

The Petitioner should procure power from cheaper solar energy sources that will reduce the power purchase cost. Further, the status of fulfillment of RPO has not been submitted.

Petitioner's Response:

It is submitted that ED-Goa has almost complied with the backlog of the Renewable Power Obligations (RPO) up to FY 2016-17, ED-Goa further submits that from FY 2017-18 onwards ED-Goa has been procuring renewable Power as per requirement to meet the Renewable Power Obligations on year on year basis. Government of Goa has issued Solar Power Policy 2017 to further enable cheaper and local power in the State of Goa. The consumers are also requested to avail the facility of net metering and earn on generating solar power and supplying to ED-Goa.

Commission's View:

The Commission has taken note of the Petitioner's submission. The Commission has dealt appropriately with the compliance towards RPO for FY 2018-19 while approving the Power Purchase Cost of FY 2018-19 in the Chapter 6 of this Order. The Petitioner has not yet submitted the Petition for True-up of FY 2016-17, therefore, the Commission is unable to verify the Petitioner's submission of clearing all the pending backlog in FY 2016-17.

The Commission directs the Petitioner to give wide publicity to the Solar Policy, 2017 and facilitate the stakeholders in Rooftop Solar Power Generation within the State of Goa. In view of cheaper renewable power available now, the Petitioner needs to continue to purchase physical solar or non-solar power to fulfill its RPO compliance.

2.2.2. Power Supply in the State is not reliable

Stakeholder's Comment:

The quality and reliability of supply in the State is very poor in the State. Further, Power distribution infrastructure is not capable of handling the growing power demand of the State.

Petitioner's Response:

EDG has been taking several measures to improve the infrastructure of the State. ED-Goa has planned for the IT initiatives and distribution infrastructure improvement plan which broadly includes 400KV S/S at Xeldem/Dharbandora for interlinking Western Grid with Southern Grid, as any breakdown causes for black out or load shedding, additional 220/33KV S/S at Tuem, Saligao, Verna and inter connecting 220KV lines from Amona to Cuncolim, New 33/11KV Sub-station (Badem, Mandrem, Karaswada, Calangute, Sal, Altinho-Panaji, Navelim, Colva, Balli and Dhabal) to reduce loading on existing transformers, reduce 11KV feeder length and to cater additional growth, Underground cabling works, ABC works etc. Further, EDG has implemented LED lighting scheme. The scheme also includes Centralized Control and Monitoring System (CCMS) for remote switching on/off of lights which will be effective from 1st April 2018.

Commission's View:

The Commission has received various complaints against the Petitioner with regards to the quality and reliability of supply in the State. The Petitioner during the past few years has been undertaking lower capitalisation and R&M expenses than approved which clearly implies that enough efforts are not being undertaken to supply quality/reliable power to the consumers. The Commission directs the Petitioner to increase its efforts towards augmenting and maintaining the requisite infrastructure to meet the growing demand and avoid any kind of supply constraints to consumers.

2.2.3. Creation of new category for Electric Vehicles

Stakeholder's Comment:

A new category for Electric Vehicle should be created that will cater to the increasing demand of power due to commercialization of Electric Vehicles.

Petitioner's Response:

It is submitted that determination of tariff is a matter under purview of the Commission and is determined based on the principles of Electricity Act, 2003 and National Tariff Policy 2006.

However ED-Goa submits that till the time there is development on a large scale on Electric Vehicles and Charging Stations, LT/HT Commercial Tariff be made applicable. For e.g. In Maharashtra presently LT/HT Commercial tariff is applicable if consumer uses the electricity for charging his own vehicles at his premises.

Commission's View:

The Commission has noted the submission of the Petitioner. The Commission believes that the demand for charging infrastructure for electric vehicles will increase in the near future due to increased commercialization. However, the Commission doesn't find it practical to consider the consumers under this category under LT/HT Commercial, as suggested by the Petitioner. The Commission would require the Petitioner to submit data on the number of consumers, connected load and the anticipated demand to enable the Commission to determine the tariff accurately as it will impact the Petitioner's revenue. The Petitioner in this regard is directed to submit a proposal for creation of any such category backed with the requisite data along with the next tariff petition.

2.2.4. Submission of Fixed Asset Register (FAR)

Stakeholder's Comment:

The valuation of assets as per FAR submitted for FY 2013-14 has increased by almost two and a half times as compared to approved. The FAR has been prepared without any basis.

Petitioner's Response:

In regard to the re-valuation of assets, it is submitted that the Commission in its Tariff order dated 27th June 2012 for FY 2011-12 had considered "Nil" opening value of Gross Fixed Asset (GFA) as Audited Accounts and Fixed Asset Register were not available from FY 2006-07 onwards. Accordingly ED-Goa was directed in the said order to undertake preparation of FAR & FS on commercial/regulatory principles.

The Commission in its Order dated 23rd May 2017 has approved Gross Fixed Assets (GFA) for FY 2011-12 and FY 2012-13 post its review & prudence check, as per Audited Accounts and also taking into consideration Fixed Asset Register.

It is submitted that it is misconception of objectioner that assets are revalued and audited without any basis. It is submitted that FAR is prepared by Independent agency and the values of FAR are part of audited annual accounts which is certified by CAG from time to time for respective financial years. It is humbly submitted that asset value is same as per original cost/ /book value and it is just that Commission is considering the GFA value in truing-up process after prudence check and on receipt of audited annual accounts only.

Commission's View:

The Commission has noted the submission of the Petitioner. The valuation of the assets had been revised by the Commission in the last Tariff Order while undertaking the True-up of FY 2011-12 and FY 2012-13. This was done based on the audited FAR submitted by the Petitioner for the years prior to FY 2013-14 and after proper prudence check by the Commission. The Commission while undertaking the True-up of FY 2013-14 in this Order has considered the same opening GFA as the closing GFA as approved in the True-up of FY 2012-13. The addition in GFA has been approved based on the FAR submitted by the Petitioner for FY 2013-14 duly audited by an Independent Agency.

2.2.5. Wastage of electricity in Govt. offices

Stakeholder's Comment:

Lights are on in government offices even during the daytime leading to wastage of power.

Petitioner's Response:

The Petitioner clarified during the hearing that officers and staff of various government offices are being briefed regularly for conservation of electricity.

Commission's View:

The Commission notes the submission of the Petitioner and advises it to regularly issue appropriate circulars to various departments/offices to make them aware about the benefits of conservation of electricity. Suitable stickers for electricity conservation at appropriate places may be pasted to remind the users to switch of the lights, when not required.

2.2.6. Implementation of Demand Side Management (DSM)

Stakeholder's Comment:

The Petitioner should implement DSM which will help in reducing the cost of power and conserve electricity.

Petitioner's Response:

EDG has taken various measures under Demand Side Management (DSM) program which include Energy Efficiency measures also. DSM Programs are aimed to reduce consumption at consumer end and lower the peak demand. DSM also includes use of energy efficient appliances by consumers. EDG has taken various measures under LED lighting scheme, replacement of around 1.95 Lakhs conventional street light fixtures has already been done. The scheme also includes Centralised Control and Monitoring System (CCMS) for remote switching on/off of lights. Besides this, EDG has also has been undertaking various DSM schemes such as:

• Jyotirmay Goa Scheme–around 8.20 lakhs LED bulbs (3 LED of 9 W to each household of Goa) were distributed under the scheme.

• UJALA (DELP)–Distribution of LED bulbs on subsidized cost to household consumers which can save energy by up to 80%.

• Street Lighting National Programme (SLNP)–Replacement of 1.66 lakh Nos. existing conventional street lights throughout the entire State of Goa by high quality energy efficient smart LED fixtures/lights with around 4200 Nos. of Centralised Control and Monitoring System (CCMS).

• Demonstration of energy efficient technologies through demonstration projects and LED village campaign.

The Petitioner shall continue undertaking a lot of these kind of initiatives for increased energy saving energy and reduce the cost of power purchase.

Commission's View:

The Commission has noted the submission of the Petitioner. The Petitioner should widely promote the initiatives among the public to create awareness. The stakeholder is requested to get in contact with the nearest EDG office to avail the benefits of these schemes. The Commission has allowed Rs 3.03 Cr towards DSM expenses in the ARR of FY 2018-19.

2.2.7. Submission of Energy Audit Report

Stakeholder's Comment:

EDG should provide an action plan with timelines for preparation of Energy Audit Report. In case of non-compliance, the Commission should initiate action.

Petitioner's Response:

DT metering is pending for 250 Distribution Transformer (DTs) (out of total 6154 DTs). Further, the department is also facing teething issues with respect to modems, sims, communications etc. where meters are installed and the same are being addressed. EDG aims to complete DT metering within next 4-6 months. EDG also submits that non-working energy meters are being replaced. Work Order for 1.50 Lakh meters has already been issued and work is expected to commence shortly. Order for another 1.50 Lakh meters will be placed by end of FY 2017-18. Once the above activities are completed, energy audit can be taken as per directives of the Commission.

Commission's View:

The Commission directs the Petitioner to complete the process of DT and Feeder metering and take up the Energy Audit of the State on priority.

2.2.8. Unbundling and Corporatisation

Stakeholder's Comment:

Unbundling and Corporatisation has still not happened.

Petitioner's Response:

It is submitted that ED-Goa has pursued this matter with Government of Goa and ED-Goa is yet to receive any specific directives on the same.

Commission's View:

The Commission has directed the Petitioner to submit the proposal to the State Govt. by 30th June 2018. Till such time a decision is taken by the State Govt. ring fencing of the transmission functions should be initiated. Further, it is directed that the Petitioner should increase its efforts towards making the State Load Dispatch Center (SLDC) fully operational.

2.2.9. Issue of Solar Policy

Stakeholder's Comment:

The Petitioner has still not finalised the Solar Policy of the State.

Petitioner's Response:

It is submitted that Solar Energy Policy 2017 has been issued by Goa Energy Development Agency (GEDA) with due approval of Government of Goa.

Commission's View:

The Commission has noted the Petitioner's response. The Petitioner is directed to widely publicise the Solar Policy and upload the same on its website for the benefit of the general public. The Petitioner is also directed to submit a copy of the Policy to the Commission.

2.2.10. Residential apartments are being rented out as Commercial/Paying Guests

accommodation and are still paying Domestic tariff.

Stakeholder's Comment:

Several tourists are staying in Rent-Back-Apartments in the coastal villages of Goa but pay residential rates instead of commercial, as the Department officials are making no attempt to take any action in the matter, thereby resulting in a revenue loss of crores of rupees.

Petitioner's Response:

It is submitted that there is already a provision in the Tariff Order dated 23rd May 2017 under LT & HT Commercial category for "Houses with Rent back facilities". The consumers having houses with rent back facilities are supposed to take LT/HT Commercial connection (which has higher tariff than domestic category).

Commission's View:

The Commission has taken note of the Petitioner's submission. The Commission directs the Petitioner to ensure that every consumer is given connection based on the categories they come under to avoid any kind of malpractices. The stakeholder is requested to report specific cases, if any, to nearby EDG office so that necessary action can be taken in this regard.

2.2.11. Proposed tariff hike is not justified

Stakeholder's Comment:

The proposed tariff hike to recover the revenue gap is not justified. No tariff hike should be done similar to the previous year.

Petitioner's Response:

It is submitted that out of total revenue gap computed for FY 2018-19, the tariff hike of less than 5% is sought and rest is funded from the budgetary support. Last year there was no tariff hike and the entire burden was borne by the Government of Goa. Considering other inflations across sectors over 2 years which is in the range of 5-8% p.a., the tariff hike of less than 5% is justified. However determination of tariff is in the purview of the Commission.

Commission's View:

The Commission has noted the Petitioner' submission. The Commission has determined the Revenue gap for the FY 2018-19 based on the revised estimate of Power Purchase Cost of FY 2018-19. The Commission believes that the tariff should progressively reflect the cost of supply. The Commission while determining the tariff for FY 2018-19 has considered the prudent cost of the Petitioner and has accordingly determined the tariff for each consumer category.

2.2.12. Implementation of LED Street Lights

Stakeholder's Comment:

Street Lights across many areas in the villages are yet to be deployed with LED Lights

Petitioner's Response:

EDG has already completed the replacement of around 1.95 Lakhs conventional street light fixtures. The scheme also includes Centralised Control and Monitoring System (CCMS) for remote switching on/off of lights. Installation of the same is in progress. Street light is to be maintained and monitored by M/s EESL for the period of 10 years. Work is targeted for completion by March 2018. This will have energy saving of ~27 MU every year.

Commission's View:

The Commission has taken note of the Petitioner's submission. The Commission directs the Petitioner to expedite the process of replacing the conventional street lights with LED lights and submit a compliance status report of the same to the Commission at the earliest.

3. Chapter 3: True-up of FY 2013-14

3.1. Background

The Commission issued the Order on Aggregate Revenue Requirement (ARR) and Retail Tariff for the FY 2013-14 on 31st March 2013. Subsequently, the Commission issued the Tariff Order for FY 2014-15, determining the Aggregate Revenue Requirement (ARR) and tariff for FY 2014-15 and Annual Performance Review of FY 2013-14 on 15th April 2014 (hereinafter referred to as the "APR Order").

The True-up of the FY 2013-14 is to be carried out as per Regulation 8 (2) of the JERC Tariff Regulations, 2009:

(2) (i) After audited accounts of a year are made available, the Commission shall undertake

similar exercise as above with reference to the final actual figures as per the audited accounts.

This exercise with reference to audited accounts shall be called 'Truing Up'.

(ii) The Truing Up for any year will ordinarily not be considered after more than one year of

'Review'.

(3) The revenue gap of the ensuing year shall be adjusted as a result of review and truing up

exercises.

(4) While approving such expenses/revenues to be adjusted in the future years as arising out

of the Review and/or Truing up exercises, the Commission may allow the carrying costs as

determined by the Commission of such expenses/revenues. Carrying costs shall be limited to the

interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission that

the revision is necessary due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee

may, any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such change of consumer mix and additional supply of

power and also indicate the manner in which the licensee proposes to meet the cost for such

change of consumer mix and additional supply of power.

(7) The Commission may consider granting approval to such proposals provided the cost of

additional supply is ordinarily met by the beneficiary category."

In this Chapter, the Commission has analysed all the elements of actual revenue and expenses for the FY 2013-14 and has carried out the True up of expenses and revenue with reference to the actual figures (final) as per the audited accounts, after a prudence check and has permitted necessary adjustments in cases where variations are for reasonable and justifiable reasons.

3.2. Energy Sales

Petitioner's Submission

The Petitioner has submitted the total quantum of energy sales for FY 2013-14 as 3070.56 MU as against an approved energy sales quantum of 2961.80 MU in the APR Order.

Commission's Analysis

The Commission, after going through the submissions of the Petitioner including the audited accounts, has considered the energy sales as 3,070.56 MU as submitted by the Petitioner for the purpose of True-up of the FY 2013-14 as shown in the table on the next page:

Table 5: Energy Sales (MU) trued-up by the Commission

The Commission approves the energy sales as 3070.56 MU in the True-up of FY 2013-14.

3.3. Inter-State Transmission loss

Petitioner's submission

Petitioner has submitted the Inter-State transmission loss of 4.68% against a loss of 4.47% approved in the APR Order.

Commission's analysis

The Commission has verified the Inter-State losses from the supporting documentary evidence submitted by the Petitioner and as per information available on WRPC/SRPC websites. The Commission accordingly trues-up the Inter-State Losses as shown in the table below.

Table 6: Inter-State transmission loss (%)

The Commission trues-up Inter-State Transmission Loss as 4.68% in the True-up of the

FY 2013-14.

3.4. Intra-State Transmission & Distribution (T&D) loss

Petitioner's submission

The Petitioner has submitted that it has achieved an Intra-State T&D loss of 11.16% in the FY 2013-14 against an approved loss of 12.00%.

Commission's analysis

The Petitioner in its submission has failed to submit the Energy Audit Report of the State for FY 2013-14. In the absence of the Energy Audit Report, the Commission, for verification of the Intra-State T&D loss levels has relied on the information of energy drawal at state periphery, available on the Western and Southern Region Power Committee websites and the energy sales as approved above. Therefore, in accordance with the information available on the websites, the Commission approves Intra-State T&D loss of 11.16% for the FY 2013-14 against an approved loss of 12.00% in the APR Order.

The Petitioner in the Technical Validation Session (TVS) held at the Commission's office submitted that due to change in billing agencies, EDG has witnessed a transitional change in energy accounting and billing in the past few years prior to FY 2017-18 which has resulted in distortion in energy sales. The impact of the same can be observed in FY 2013-14 as well. Therefore, in the absence of reliable sales figures for FY 2013-14, the Commission has decided not to consider any incentive for the overachievement of T&D Loss target in the FY 2013-14.

The table below provides the Intra-State T&D loss approved in the APR of FY 2013-14, Petitioner's submission and as approved by the Commission now.

Table 7: Intra-State distribution loss (%)

The Commission, while Trueing up for FY 2013-14, has considered the actual Intra-State

T&D loss of 11.16% for the FY 2013-14.

3.5. Power Purchase Quantum & Cost

Petitioner's submission

The Petitioner submitted that it meets its total energy requirement from its allocation from the Central Generating Stations (CGS) and Co-generating Companies like Goa Energy Pvt. Ltd and Goa Sponge & Power Ltd. Energy requirement is also met through NVVNL and through IPP (Reliance Infra). The Power Purchase Cost has been submitted as incurred by the Petitioner in FY 2013-14. The Power Purchase cost also includes ED, Cess, Incentive etc. and supplementary charges considered on actual basis.

The transmission charges comprise of transmission charges of Western Region and Southern Region.

With regards to Renewable Purchase Obligation (RPO), the Petitioner submitted that the matter has been pursued in case No. 61/2012. The Petitioner submitted that the Non-Solar RPO is being met through purchase of Co-generation power and the same has been acknowledged by the Commission vide its Order dated 27th December 2013 in case No. 61/2012.

The power purchase quantum and cost for FY 2013-14, as submitted by the Petitioner has been shown in the following table:

Table 8: Power Purchase cost submitted by the Petitioner (in Rs Cr)

Commission's analysis

The Petitioner procures power mainly from NTPC Stations, NPCIL stations, Co-Generating Plants and IPP's. No power has been purchased through IEX/Bilateral Purchase etc. The Petitioner submitted the overall Power Purchase cost as Rs 1078.46 Cr inclusive of transmission charges but exclusive of revenue from UI Underdrawal/sale due to surplus power.

The Commission has verified the power purchase details as submitted by the Petitioner in its Petition with the publicly available information from the Regional Energy Accounts (REA) maintained by Western Region Power Committee (WRPC) for the Central Generating Stations (CGS). Further, apart from Western Region, the Petitioner also gets supply from the Southern Region from the NTPC's Ramagundam Thermal Power Station. The Commission has validated the power purchase details pertaining to this station from the publicly available information from the Regional Energy Accounts (REA) maintained by Southern Region Power Committee (SRPC). The Commission has verified the power purchase quantum and cost as per the monthly and station-wise bills submitted by the Petitioner. The cost has further been reconciled with the audited annual accounts of FY 2013-14.

The Petitioner has accounted for the revenue from UI Underdrawal separately and Income from Trading/Power Exchange as part of the Non-Tariff Income (NTI) and adjusted them both in the Overall ARR. Further, it has been noticed that the Petitioner although has considered the quantum of UI Underdrawal in the Total Power Purchase Quantum but has omitted the revenue pertaining to this UI Underdrawal in the Total Power Purchase Cost. The Commission, for the purpose of finalization of the Power Purchase Cost in the True up of FY 2013-14 has considered both the Income from UI Underdrawal and Trading/Power Exchange along with the Power Purchase cost approved now.

Other expenses such as the Transmission Charges and the Other Charges submitted have been considered as per actuals incurred by the Petitioner.

The Petitioner submitted that no cost has been incurred towards the compliance of Renewable Purchase Obligation (RPO) in FY 2013-14. The compliance status of RPO has been discussed in detail in the subsequent section. The table below provides the summary of the power purchase quantum and the cost approved by the Commission for FY 2013-14.

Table 9: Power Purchase Quantum (MU) and cost (Rs Cr) approved by the Commission

The Commission approves power purchase quantum of 3616.94 MU and cost of Rs 1066.85

Cr in the True-up of the FY 2013-14.

3.6. Renewable Purchase Obligation (RPO)

As per Clause 1, sub-clause (1) of the JERC for the State of Goa and UTs (Procurement of Renewable Energy) Regulations, 2010

"Each distribution licensee shall purchase electricity (in kWh) from renewable energy sources,

at a defined minimum percentage of the total consumption of all the consumers in its area during

a year."

The Commission, in its Business Plan Order dated 22nd December, 2015 issued in the Petition No. 186/2015, had reiterated that all the pending RPOs upto the FY 2015-16 must be fulfilled by the Petitioner by 31st March, 2016 and no backlog would be allowed to be carried forward to the MYT Control Period from FY 2016-17 to FY 2018-19.

The Petitioner for FY 2013-14 has not incurred any costs towards compliance of RPOs as mentioned in the previous section. The Petitioner has further submitted that it has completely fulfilled its RPO (both solar and non-solar) target till FY 2015-16 partly by way of purchase of physical power and partly by RECs.

The Petitioner had made the similar submission before the Commission in the True-up of FY 2011-12 and FY 2012-13 in the previous Tariff Order. The Commission at that time had not accounted for any cost or disincentive towards non-compliance of RPO till FY 2012-13. The Commission believed that since the actual cost towards compliance has been incurred only in FY 2015-16, therefore, the same shall be accounted for in the True-up for FY 2015-16.

In view of the above and keeping similar approach as adopted by the Commission towards RPO Compliance in True-up of FY 2011-12 and FY 2013-14, the Commission has not considered any cost towards RPO compliance in the FY 2013-14. The same shall be considered at the time of True-up of the FY 2015-16.

3.7. Energy Balance

Petitioner's submission

The Petitioner has submitted the energy balance as shown in the following table.

Table 10: Energy Balance (MU) submitted by Petitioner

Commission's analysis

The information submitted by the Petitioner on power purchase quantum, UI over/under drawl, IEX/Bilateral purchase etc. has been examined and accordingly the energy balance for FY 2013-14 has been derived. The Commission has determined the energy balance at the Periphery of the State of Goa. The following table provides the energy balance approved in the APR of FY 2013-14, the Petitioner's submission and now trued-up by the Commission.

Table 11: Energy Balance (MU) approved by Commission at State Periphery

3.8. Operation & Maintenance (O&M) Expenses

The Operation & Maintenance Expenses comprise of the Employee Expenses, Administrative and General Expenses (A&G) and the Repair & Maintenance Expenses (R&M). The O&M Expenses have been approved in accordance with the Tariff Regulations, 2009 and the audited accounts submitted by the Petitioner for FY 2013-14.

3.8.1. Employee Expenses

Petitioner's submission

The Petitioner has incurred actual employee expenses of Rs 170.07 Cr against the approved expenses of Rs 144.21 Cr in the APR of FY 2013-14.

The following table provides the employee expenses as submitted by the Petitioner:

Table 12: Employee Expenses submitted by the Petitioner (In Rs Cr)

The Petitioner further submitted that the Employee Expenses for FY 2013-14 are on the higher side, on account of increase in Dearness Allowance, HRA and travel allowance, out of which the Dearness Allowance is an uncontrollable factor. The Dearness Allowance accounts to approx. 35% to 40% of the total employee expenses.

Commission's analysis

The Commission observes that the employee expenses approved in the past were based on the estimates prepared on cash basis and not accrual basis. The Petitioner had submitted and prepared the audited accounts prepared on commercial principles for the first time in the previous Tariff Order while undertaking the True-up of FY 2011-12 and FY 2012-13.

Since, the Base Employee Expenses considered while projecting the Employee Expenses for FY 2013-14 in the APR of FY 2013-14 were determined differently, the Commission finds it appropriate to consider the actual employee costs as available in the audited accounts for the purpose of the True-up of the FY 2013-14.

Further, the Petitioner has considered an expense towards CGRF of Rs 0.33 Cr separately in the ARR. The Commission, for the purpose of True-up, has considered this expense along with the Employee Expenses due to its inherent nature.

The table below provides the employee expenses approved in the APR Order, submitted by the Petitioner and now approved by the Commission.

Table 13: Employee Expenses approved by Commission (In Rs Cr)

The Commission approves Employee Expenses of Rs 170.40 Cr in the True-up of FY 2013-14.

3.8.2. Administrative and General (A&G) Expenses

Petitioner's submission

The Petitioner has incurred A&G expenses of Rs 18.54 Cr against the approved expenses of Rs 9.08 Cr in the APR Order.

The following table provides the A&G expenses as submitted by the Petitioner:

Table 14: A&G Expenses submitted by Petitioner (In Rs Cr)

Commission's analysis

Similar to the approach followed while approving the Employee Expenses, the Commission approves the A&G Expenses as per the audited accounts for the purpose of True-up of the FY 2013-14. The table below provides the A&G Expenses approved in the APR of FY 2013-14, the Petitioner's submission and the expenses now approved by the Commission.

Table 15: A&G Expenses approved by Commission (In Rs Cr)

The Commission approves the Administrative & General (A&G) expenses of Rs 18.54 Cr in

the True-up of FY 2013-14.

3.8.3. Repair & Maintenance Expenses (R&M)

Petitioner's submission

The Petitioner has incurred R&M expenses of Rs 21.45 Cr against the approved expenses of Rs 19.61 Cr in the APR Order. The Petitioner submitted that it has been undertaking various R&M activities as a step towards improvement of systems, reduction in breakdowns, and reduction in response time and increasing preventive maintenance. R&M expenses are necessary for maintenance of infrastructure and for ensuring proper Standards of Performance of the Petitioner.

Commission's analysis

Similar to the approach followed while approving the Employee expenses and A&G expenses above, the Commission approves the R&M Expenses as per actual audited accounts of FY 2013- 14:

Table 16: R&M Expenses approved by Commission (In Rs Cr)

The Commission approves the Repair & Maintenance (R&M) expenses of Rs 21.45 Cr in the

True-up of FY 2013-14.

3.8.4. Total Operation and Maintenance Expenses (O&M)

The following table provides the O&M Expenses approved in the APR of FY 2013-14, Petitioner's submission and O&M now trued-up by the Commission.

Table 17: O&M Expenses approved by Commission (In Rs Cr)

The Commission approves the Operation & Maintenance (O&M) expenses of Rs 210.39 Cr in

the True-up of FY 2013-14.

3.9. Capitalisation

Petitioner's submission

The Petitioner submitted the actual capitalisation for the FY 2013-14 as Rs 66.35 Cr against an approved capitalization of Rs 191.44 Cr

Commission's analysis:

The Commission with regards to capitalisation submitted by the Petitioner, sought details of the assets created out of Loan/Equity/Govt. Grant/Consumer Contribution etc. In reply, the Petitioner submitted that majority of capital assets are created out of the equity contribution from Govt. of Goa and the actual borrowing of loan is only to the extent of the R-APDRP scheme. The capitalization is inclusive of assets created out of the Electricity Development Fund which is treated as Government Grant. The Petitioner further submitted that no assets have been created out of Consumer Contribution.

It is observed that the capital expenditure and capitalisation achieved by the Petitioner is much lower than approved by the Commission in the APR Order. Lower capital expenditure signifies that enough efforts have not been undertaken in enhancing the reliability of supply to consumers. It also signifies that sufficient measures aren't being taken to provide electricity74 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 supply to un-electrified areas and equipping the distribution infrastructure with the growing demand. Accordingly, the Commission directs the Petitioner to increase its efforts towards undertaking capital expenditure activities necessary for improving the service quality and targeting 24x7 supply to all consumers.

The Commission has examined the Fixed Asset Register (FAR) as submitted by the Petitioner in detail and accordingly approves the capitalisation as shown in the following table.

Table 18: Capitalisation approved by Commission (In Rs Cr)

The Commission approves Capitalisation of Rs 66.35 Cr in the True-up of FY 2013-14.

3.10. Depreciation

Petitioner's submission

The Petitioner has submitted the actual depreciation of assets as per the audited annual accounts of FY 2013-14. The depreciation is arrived in annual accounts for FY 2013-14 based on the rates specified by the Commission in the Tariff Regulations, 2009.

The depreciation as claimed by the Petitioner has been tabulated in the table below:

Table 19: Depreciation submitted by Petitioner (In Rs Cr)

Commission's analysis

In respect of depreciation, the Commission has followed Regulation 26 of the Tariff Regulations, 2009, as under:

"26. Depreciation

(1) For the purpose of tariff, depreciation shall be computed in the following manner:

(i) The value base for the purpose of depreciation shall be the historical cost of the assets, that is

actual expenses limited to approved capital cost where such capital cost has been approved by

the Commission:

Provided that land is not a depreciable asset and its cost shall be excluded from the capital cost

while computing depreciation.

(ii) The historical cost of the asset shall include additional capitalization.

(iii) The historical cost shall include foreign currency funding converted into equivalent rupees at

the exchange rate prevalent on the date when foreign currency was actually availed but not

later than the date of commercial operation.

(iv) Depreciation for generation and transmission assets shall be calculated annually as per

straight-line method over the useful life of the asset at the rate of depreciation specified by the

Central Electricity Regulatory Commission from time to time.

As per the norms specified in the Tariff Regulations, 2009 the Commission has verified the asset wise capitalisation of the Petitioner and has accordingly derived the weighted average rate of depreciation based on the asset wise depreciation rate prescribed in the CERC Tariff Regulations, 2009, given in the following table:

Table 20: Depreciation Rate (%)

Based on the above depreciation rates and the actual asset addition during the year the weighted average depreciation rate is computed as 5.27% against a rate of 5.28% approved in the APR Order. The Commission has not considered depreciation on assets created from the Electricity Duty Fund as the same has been treated as a Grant from the Government of Goa.

The Commission has calculated the depreciation on average Gross Fixed Assets (GFA) with the opening GFA considered equivalent to the closing GFA as approved in the True-Up of FY 2012-13, in the Order dated 23rd May, 2017. It is pertinent to mention here that the Commission had revised the GFA value in accordance with the Fixed Asset Register (FAR) of FY 2011-12 and FY 2012-13 while undertaking the True-up of the respective years. Accordingly, the Commission approves the GFA and Depreciation as per the revised opening balance of FY 2013-14. The following table provides the calculation of depreciation during the FY 2013-14:

Table 21: Depreciation approved by Commission (In Rs Cr)

The Commission approves depreciation of Rs 44.29 Cr in the True-up of FY 2013-14.

3.11. Interest and Finance Charges

Petitioner's submission

The Petitioner submitted that majority of capital assets are created out of the equity contribution from the Government of Goa. Interest on Loan has been estimated based on the normative loan calculation whereby 70% of the opening GFA and the capitalization during the year have been considered as normative debt. The Interest expense arrived is based on normative loan considered to the extent of capitalization during the year after deducting the Electricity Duty available as Grant.

Opening balance of normative loan for FY 2013-14 considered as per the approved normative loan in truing up of FY 2012-13. Further, the rate of interest has been considered as State Bank of India Prime Lending Rate (SBI PLR) of 14.45% (rate as on 1st April, 2013).

In addition to the above, the Petitioner has also claimed certain financial charges related to bank charges, LC charges, etc.

Commission's analysis:

Regulation 25 of the Tariff Regulations, 2009 states:

" 1) For existing loan capital interest and finance charges on loan capital shall be computed on

the outstanding loans, duly taking into account the rate of interest and schedule of repayment as

per the terms and conditions of relevant agreements.

2) Interest and finance charges on loan capital for new investments shall be computed on the

loans, duly taking into account the rate of interest and the schedule of repayment as per the

terms and conditions of relevant agreements. The rate of interest shall, however, be restricted to

the prevailing Prime Lending Rate of the State Bank of India.'' (Read SBI Advance Rate)

Further as per Regulation 23 of the said Tariff Regulations, 2009:

"23. Debt-Equity Ratio

1) For the purpose of determination of tariff, debt-equity ratio in case of existing, ongoing as well

as new projects commencing after the date of notification of these Regulations shall be 70:30.

Where equity employed is more than 30%, the amount of equity for the purpose of tariff shall be

limited to 30% and the balance amount shall be considered as loan. Where actual equity

employed is less than 30%, the actual debt and equity shall be considered for determination of

tariff:

2) Provided that the Commission may, in appropriate cases, consider equity higher than 30% for

the purpose of determination of tariff, where the generating company or the licensee is able to

establish to the satisfaction of the Commission that deployment of equity more than 30% is in the

interest of the general public.

3) The debt and equity amounts arrived at in accordance with sub-regulation (1) above shall be

used for all purposes including for determining interest on loan, return on equity, Advance

against Depreciation and Foreign Exchange Rate Variation:

4) Provided that in the case of an Integrated Utility, till the time it remains Integrated Utility, it

shall be entitled to return on its capital base as per Schedule VI to the repealed Electricity

(Supply) Act, 1948."

Accordingly, the Commission for the purpose of funding of the capitalisation has considered the normative debt-equity ratio of 70:30. The addition in loan has been considered with respect to77 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 the total capitalization during the year excluding the assets created out of the Electricity Duty Fund.

The Commission for the purpose of calculation of Interest on Loan has considered an interest rate equivalent to the SBI PLR @ 14.45%, as on 1st April, 2013. The interest has been calculated on the average loan during the year with the opening loan considered equivalent to the closing loan approved in the True-Up of FY 2012-13. Repayment of the loan has been considered at 10% of the opening loan amount. Additionally, the Commission also allows expenditure towards financing charges as per actuals as reflected in the annual accounts.

The following table provides the Interest and Finance charges as approved by the Commission:

Table 22: Interest and Finance charges approved by Commission (In Rs Cr)

The Commission approves Interest and Finance Charges of Rs 24.15 Cr in the True-up of the

FY 2013-14

3.12. Return on Capital Base

Petitioner's submission

The Petitioner has calculated the return on capital base at 3%. The return is calculated on the Net Fixed Assets (NFA) considering Gross Block inclusive of Capital Works in Progress (CWiP) and thereby deducting the accumulated depreciation.

Commission's analysis:

Regulation 24 (1) of the JERC Tariff Regulations, 2009 with regards to Return in Equity specifies the following:

"Subject to the proviso to Regulation 23(2), Return on Equity shall be computed on the paid up

equity capital determined in accordance with Regulation 23 and shall be guided by the Central

Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 as

amended by the CERC from time to time. The same principles will apply for distribution business

also as far as possible."

The Commission, similar to the methodology adopted in the True-ups of FY 2011-12 and FY 2012-13 in the Tariff Order of last year, has determined the Return on Capital Base based on the Gross Fixed Assets as approved above and the Opening Cumulative Depreciation as on 1st April, 2013, as reflected in the audited annual accounts. The table below shows the computation of the Return on Capital Base as approved in the APR Order, the Petitioner's submission and the Return now approved by the Commission.

Return on Capital Base approved by Commission (In Rs Cr)

The Commission approves a Return on Capital Base as Rs 17.98 Cr in the True-up of FY

2013-14.

3.13. Interest on Security Deposits

Petitioner's submission

The Interest on Security Deposit calculated by the Petitioner on normative basis has been shown in the table below:

Table 23: Interest on Consumer Security Deposits submitted by Petitioner (In Rs Cr)

The Petitioner has determined the Interest on Security Deposits on normative basis as per Tariff Regulations, 2009 but has not considered the same in the ARR as no interest has been paid to consumers in the FY 2013-14.

Commission's analysis:

As the Petitioner has not paid any Interest on Security Deposit to consumers, the Commission does not approve any Interest on Security Deposit in FY 2013-14. The following table provides the interest on security deposit as approved in the APR of FY 2013-14, the Petitioner's submission and the interest now approved by the Commission:

Table 24: Interest on Consumer Security Deposits approved by Commission (In Rs Cr)

The Commission approves Interest on Security Deposit as nil in the True-up of FY 2013-14.

3.14. Interest on Working Capital

Petitioner's submission

The Petitioner has determined the Interest on Working Capital on normative basis considering sum of the following:

a. Power purchase cost.

b. Employees cost.

c. Administration & general expenses.

d. Repair & Maintenance expenses.

e. Sum of two months requirement for meeting Fuel cost.

The Interest Rate has been considered as SBI PLR as on 1stApril, 2013.

Commission's analysis:

As per Regulation 29 of the Tariff Regulations, 2009:

"(3) Subject to prudence check, the working capital for integrated utility shall be the sum of one

month requirement for meeting:

a. Power purchase cost.

b. Employees cost.

c. Administration & general expenses.

d. Repair & Maintenance expenses.

e. Sum of two month requirement for meeting Fuel cost.

5) The rate of interest on working capital shall be equal to the short term Prime Lending Rate of

State Bank of India on the 1st April of the relevant financial year. The interest on working capital

shall be payable on normative basis notwithstanding that the generating company/licensee has

not taken working capital loan from any outside agency or has exceeded the working capital

loan amount worked out on the normative figures."

The Commission has considered the calculation of the different components of the Working Capital on the basis of the stipulated norms. The Commission has deducted average consumer security deposit from the Working Capital requirement as reflected in the audited annual accounts of FY 2013-14. The Commission has considered the SBI PLR as applicable on 1st April, 2013. Accordingly, the Interest on Working Capital has been calculated, as shown in the table below:

Table 25: Interest on Working Capital approved by Commission (In Rs Cr)

The Commission approves the Interest on Working Capital as 12.62 Cr in the True-up of FY

2013-14.

3.15. Provision for Bad & Doubtful Debts

Petitioner's submission

The Petitioner submitted that it has created a provision of Rs 2.96 Cr towards Bad and Doubtful Debts in the annual accounts of FY 2013-14.

Commission's analysis:

As specified in Regulation 28 of the Tariff Regulations, 2009 (to be read with the format):

"The Commission may, after the generating company/licensee gets the receivables audited,

allow a provision for bad debts up to 1% of receivables in the revenue requirement of the

generating company/licensee."

It is observed that as per the audited accounts, the licensee has not written off any amount in the FY 2013-14. Therefore, the Commission does not approve any amount under the provision for bad and doubtful debts.

The Commission approves nil provision of Bad & Doubtful Debts in the True-up of

FY 2013-14.

3.16. Non-Tariff Income (NTI)

Petitioner's submission

The Petitioner submitted NTI of Rs 17.02 Cr in the True-Up of FY 2013-14 against Rs 22.55 Cr approved by the Commission in the ARR for FY 2013-14. The Non–Tariff Income as submitted by the Petitioner has been shown in the table below:

Table 26: Non-Tariff Income as submitted by Petitioner (In Rs Cr)

Commission's analysis:

The Commission has authenticated the submission of the Petitioner from the audited accounts and found the same to be correct. Further, the Commission as discussed while truing up the Power Purchase Cost had considered the revenue from Trading of Power and Power Exchange as part of the Power Purchase Cost. Accordingly, the Commission approves the same remaining NTI as submitted by the Petitioner. The NTI approved in the APR Order, Petitioner's submission and now approved by the Commission is shown in the table below:

Table 27: Non-Tariff Income approved by Commission (In Rs Cr)

The Commission approves Non-Tariff Income of Rs 15.76 Cr in the True-up of FY 2013-14.

3.17. Revenue from Sale of Surplus Power

Petitioner's submission

The Petitioner has earned a revenue of Rs 10.34 Cr from sale of surplus power/UI Underdrawal.

Commission's analysis:

The Commission as discussed while approving the Power Purchase Cost has considered the revenue from sale of surplus power/UI Underdrawal along with the Total Power Purchase Cost due to its inherent nature.

The revenue from sale of surplus power/UI Underdrawal as approved in the APR Order, Petitioner's submission and now trued-up by the Commission is shown in the following table:

Table 28: Non-Tariff Income approved by Commission (In Rs Cr)

The Commission approves Rs 10.34 as revenue from sale of surplus power/ UI Overdrawal

and has considered the same along with the Total Power Purchase cost approved in the

True-up of FY 2013-14.

3.18. Aggregate Revenue Requirement (ARR)

Petitioner's submission

Based on the expenses as detailed above, the net aggregate revenue requirement of Rs 1373.50 Cr is submitted for approval in the True-up of FY 2013-14.

Commission's analysis

The Commission on the basis of the detailed analysis of the cost parameters of the ARR has considered and approved the revenue requirement in the True-up of FY 2013-14 as given in the following table:

Table 29: Aggregate Revenue Requirement approved by Commission for FY 2013-14 (In Rs Cr)

The Commission approves net Aggregate Revenue Requirement of Rs 1360.51 Cr in the

True-up of FY 2013-14.

3.19. Revenue at existing Retail Tariff

Petitioner's submission

The Petitioner has submitted the net actual revenue for the FY 2013-14 as Rs 1060.29 Cr against revenue of 990.86 Cr approved by the Commission in the APR Order. The table below provides the revenue at existing tariff as submitted by the Petitioner:

Table 30: Revenue at existing tariff submitted by the Petitioner for FY 2013-14 (In Rs Cr)

Commission's analysis

The Commission has verified revenue from the sale of power within the State in the FY 2013-14 from the audited accounts.

The category-wise revenue as approved in the APR Order, the Petitioner's submission and the revenue now Trued-up by the Commission is shown in the following table:

Table 31: Revenue at existing tariff approved by Commission for FY 2013-14 (In Rs Cr)

The Commission approves the revenue from the sale of power as Rs 1060.29 Cr in the

True-up of the FY 2013-14.

3.20. Standalone Revenue Gap/Surplus

Petitioner's submission

Based on the ARR submitted and the revenue from retail tariff, the standalone revenue gap of Rs 313.21 Cr is arrived at in the True-up of FY 2013-14.

Commission's analysis

The Commission, based on the approved ARR and the retail tariff has arrived at the Revenue Gap/Surplus as follows:

Table 32: Standalone Revenue Gap/Surplus approved by Commission for FY 2013-14

(In Rs Cr)

The Commission, in the True-up of FY 2013-14 approves a standalone gap of Rs 300.22 Cr.

The Petitioner has submitted that the entire gap for the FY 2013-14 is committed to be

funded by the Government of Goa by way of budgetary support. The Petitioner in this

regard had submitted the letter dated 1st March, 2013 from the Government of Goa wherein

the Govt. had assured that it would provide the requisite budgetary support to meet the

deficit at the existing tariff for the FY 2013-14. In view of the budgetary support for the FY

2013-14 from the Government of Goa, the Commission approves Nil net revenue gap in the

True-up for the FY 2013-14.

4. Chapter 4: True-up of the FY 2014-15, FY 2015-16 and FY 2016-17

4.1. Applicable provisions of JERC for the State of Goa and Union Territories (Terms and

Conditions for Determination of Tariff) Regulations, 2009

The True-ups of FY 2014-15 and FY 2015-16 are to be carried out as per Regulation 8 (2) of the Tariff Regulations, 2009:

(2) (i) After audited accounts of a year are made available, the Commission shall undertake

similar exercise as above with reference to the final actual figures as per the audited accounts.

This exercise with reference to audited accounts shall be called 'Truing Up'.

(ii) The Truing Up for any year will ordinarily not be considered after more than one year of

'Review'.

(3) The revenue gap of the ensuing year shall be adjusted as a result of review and truing up

exercises.

(4) While approving such expenses/revenues to be adjusted in the future years as arising out of

the Review and/or Truing up exercises, the Commission may allow the carrying costs as

determined by the Commission of such expenses/revenues. Carrying costs shall be limited to the

interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission that

the revision is necessary due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee may,

any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such change of consumer mix and additional supply of

power and also indicate the manner in which the licensee proposes to meet the cost for such

change of consumer mix and additional supply of power.

(7) The Commission may consider granting approval to such proposals provided the cost of

additional supply is ordinarily met by the beneficiary category."

The True-up of FY 2016-17 the 1st year of the MYT Control Period, is to be carried out as per Regulation 8 (2) of the MYT Regulations, 2014:

"8. Annual Review of Performance and True-up

(2) After audited accounts of a year are made available, the Commission shall undertake similar

exercise as above with reference to the final actual figures or the provisional actual accounts as

available as per the audited accounts. This exercise with reference to audited accounts shall be

called 'Truing Up'.

The Truing Up for any year will ordinarily not be considered after more than one year of 'Review'.

(3) The revenue gap/surplus, if any, of the ensuing year shall be adjusted as a result of review

and truing up exercises.

(4) While approving such expenses/revenue to be adjusted in the future years as arising out of

the Review and/or Truing up exercises, the Commission may allow the carrying costs as

determined by the Commission of such expenses/revenue. Carrying costs shall be limited to the

interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission that

the revision is due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee may,

any time during the year make an application to the Commission for its approval. The

application will demonstrate the need for such additional supply of power and also indicate the

manner in which the licensee proposes to meet the cost for such additional supply of power.

4.2. Approach for the True-up of the FY 2014-15 and FY 2015-16 and FY 2016-17

Petitioner's submission:

The Petitioner submitted that the finalization of audited accounts for the FY 2014-15 and FY 2015-16 is in process and the Commission shall be approached for truing-up at a later date when the audited accounts are available. Further, the provisional figures are available for FY 2016-17 and the finalization of accounts is under process. Based on the provisional accounts, the Petitioner has requested to approve the provisional actual figures of the FY 2016-17 for determination of ARR & Revenue gap and treatment thereof.

Commission's analysis:

The Commission notes that the Petitioner has not submitted the audited accounts prepared on commercial principles for the FY 2014-15, FY 2015-16 and FY 2016-17. The Commission in its previous Orders had stressed upon the requirement of the audited accounts to bring in more accuracy in the estimates made by the Commission. The Tariff Regulations, 2009 and MYT Regulations, 2014 also require the licensee to file the True up along with the audited accounts in the filing.

The Commission now directs the Petitioner to prepare and submit the audited accounts from the FY 2014-15 onwards based on commercial principles along with the True-up Petitions by 30th November 2018.

The True-up would therefore be taken up only after submission of the audited accounts. Accordingly, the Commission has decided not to consider True-up for the FY 2014-15, FY 2015-16 and FY 2016-17 in the current Order.

5. Chapter 5: Annual Performance Review of FY 2017-18

5.1. Background

The Tariff Order for the FY 2017-18 was issued by the Commission on 23rd May, 2017 approving the Aggregate Revenue Requirement (ARR) and tariff for the FY 2017-18. The Annual Performance Review for the FY 2017-18 is to be carried out in accordance with the Regulation 8 of the JERC for the State of Goa and Union Territories (except Delhi) (Multi-Year Distribution Tariff) Regulations, 2014:

"(1) The Commission shall undertake a review along with the next Tariff Order of the expenses

and revenue approved by the Commission in the Tariff Order. While doing so, the Commission

shall consider variations between approvals and revised estimates/actuals of sale of electricity,

income and expenditure for the relevant year and permit necessary adjustments/changes in case

such variations are for adequate and justifiable reasons. Such an exercise shall be called

'Review'.

……(3) The revenue gap/surplus, if any, of the ensuing year shall be adjusted as a result of

review and truing up exercises.

(4) While approving such expenses/revenue to be adjusted in the future years as arising out of

the Review and/or Truing-up exercises, the Commission may allow the carrying costs as

determined by the Commission of such expenses/revenue. Carrying costs shall be limited to the

interest rate approved for working capital borrowings.

(5) For any revision in approvals, the licensee would be required to satisfy the Commission that

the revision is due to conditions beyond its control.

(6) In case additional supply is required to be made to any particular category, the licensee may,

any time during the year make an application to the Commission for its approval.

The application will demonstrate the need for such additional supply of power and also indicate

the manner in which the licensee proposes to meet the cost for such additional supply of

power."

5.2. Approach for the Review for the FY 2017-18

Petitioner's submission:

The Petitioner has submitted the APR of FY 2017-18 based on the actual performance during the H1 (April-September 2017) of the year and the revised estimates for H2 (October 2017- -March 2018) of the year. The projections for H2 of FY 2017-18 are arrived at by expected escalation over performance of H1.

Commission's analysis:

The Commission for the purpose of estimating the energy demand of the State sought the information of historical sales, number of consumers and connected load of the previous 5 years till FY 2017-18 (till December 2017) from the Petitioner. The Petitioner was also asked to provide87 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 month on month information for the last 3 years from FY 2014-15 to FY 2016-17. Various anomalies and gaps are observed in the data provided, which are listed as follows:

• Data on Energy Sales, Number of Consumers and Connected Load for FY 2015-16 was not submitted.

• Overall Energy Sales were reducing by almost 26% in March 2017 vis-à-vis February 2017.

• Energy sales for Domestic category were submitted as 0.49 MU in March 2017 vis-à-vis average of ~65 MU in earlier months.

• Energy Sales submitted for FY 2014-15 were observed to be higher than FY 2016-17 by almost ~400 MU.

From the various discrepancies as shown above, it is evident that the base data for projecting the energy sales for FY 2017-18 is not reliable.

In the Technical Validation Session (TVS) held at the Commission's office, the Petitioner was asked to submit justifications for these discrepancies. The Petitioner submitted that there were issues related to billing of energy to consumers for a few months in H2 of FY 2015-16 due to changeover of the billing agencies and the transition period thereof. The primary problem was non-billing in certain months of FY 2015-16 and adjustment of the same in FY 2016-17 resulting in lower billing than what should have been in FY 2015-16 and higher billing in FY 2016-17. The Petitioner further submitted that the meter reading and billing was maintained by different agencies separately in each division, and each agency had its separate logic for bill calculation and bill generation. However, now a common agency has taken over all the billing and collection data for HT and LT consumers and a common process is followed for all the divisions to avoid ambiguity in the process and data. While the process is streamlined, a lot of errors in the legacy data have been discovered and the error rectification process is going on.

The Petitioner was asked to provide the segregated quantum of month on month sales, however, the Petitioner expressed its inability to provide this segregated information at this stage as the information is present in the form of software dump and the analysis and segregation of the information will take considerable time.

The Commission is of the view that due to this distortion observed in energy sales, it is not possible to project the energy sales for FY 2017-18 as no definite trends can be observed. It is not prudent to approve the revised power purchase requirement and revenue from retail sale on the basis of the unreliable information presently available. Therefore, the Commission shall consider the actual performance at the time of the True-up of the FY 2017-18 once the audited accounts are submitted by the Petitioner.

Accordingly, the Commission has decided not to consider the Annual Performance Review of the FY 2017-18.

Chapter 6: Determination of Aggregate Revenue Requirement for the FY 2018-19

6.1 Background

The ARR for FY 2018-19 was approved in the MYT Order issued for the 1st Control Period (FY 2016-17 to FY 2018-19). In this Chapter the Commission determines the Aggregate Revenue Requirement (ARR) for the FY 2018-19 based on the actual information available for the previous years and the various norms defined in the MYT Order. The determination of Aggregate Revenue Requirement for the FY 2018-19 is to be carried out as per the following provisions of Regulation 6 of the JERC for the State of Goa and Union Territories (except Delhi) (Multi-Year Distribution Tariff) Regulations, 2014:

"6. ARR Forecast

6.1 The applicant shall, based on the Business Plan as approved by the Commission by Order,

submit the forecast of Aggregate Revenue Requirement and expected revenue from tariff, for the

Control Period by a Petition in accordance with the JERC (Terms & Condition for determination

of Tariff) Regulations, 2009 by 30th November of the year prior to the commencement of the

Control Period and accompanied by such fee payable, as specified in the JERC (Conduct of

Business) Regulations, 2009.

6.2 The forecast of Aggregate Revenue Requirement shall be developed using the assumptions

relating to the behaviour of individual variables that comprise the Aggregate Revenue

Requirement during the Control Period.

6.3 The forecast of expected revenue from tariff and charges shall be developed based on the

following:

(a) Estimates of quantum of electricity to be supplied to consumers and wheeled on behalf of

Distribution System Users for each financial year within the Control Period; and

(b) Prevailing tariff as at the date of making the application."

6.2. Approach for determination of ARR for the FY 2018-19

The Petitioner has submitted the same ARR for the FY 2018-19 as approved in the MYT Order dated 18th April, 2016 along with an additional provision of Interest on Security Deposit. The Petitioner has computed revenue from the sale of power on the basis of the Retail Tariff approved by the Commission in the Tariff Order for FY 2017-18. As the Commission is not undertaking any review for the FY 2017-18 for the reasons detailed in the previous chapter, the Commission is retaining the projections and consequently costs for the FY 2018-19 at the same level as approved in the MYT Order dated 18th April, 2016 excluding the power purchase cost.

The Commission believes that the projections of Power Purchase Quantum and Cost approved in the MYT Order were based on historical trends and figures. Since the majority of the power procured by the Petitioner is from Central Generating Stations, it is prudent to revise the Power Purchase Cost based on the latest Tariff Orders issued by the Central Electricity Regulatory Commission (CERC) for the Control Period FY 2014-15 to FY 2018-19. Accordingly, the Commission has determined the revised Power Purchase Cost based on the same energy sales and Intra-State T&D loss as approved in the MYT Order for FY 2018-19. Resultantly, the Commission has also determined the Renewable Purchase Obligation (RPO) and the Interest on Working Capital which are dependent on the Power Purchase Cost. The Commission has determined the revenue from sale of power based on the approved energy sales, number of consumers and connected load in the MYT Order for FY 2018-19 to calculate the revenue gap for the year.

6.3. Projection of Number of consumers, Connected Load and Energy Sales Petitioner's

Submission

The Petitioner has considered the same number of consumers, connected load and energy sales as approved in the MYT Order.

Commission's Analysis

The Commission for the reasons as discussed above approves the same number of consumers, connected load and energy sales as approved in the MYT Order.

Table 33: No. of Consumer, Connected Load and Energy Sales approved by Commission

The Commission approves Number of consumers as 620847, Connected Load as 2480929

kW/kVA and Energy Sales as 3644.93 MU in the ARR of FY 2018-19

6.4. Energy savings under Domestic Efficiency Lamp Programme (DELP)

Petitioner's Submission

The Petitioner has considered the same energy savings under DELP as approved by the Commission in the MYT Order.

Commission's analysis

The Commission in the ARR of FY 2018-19 considers the same energy savings as approved in the MYT Order.

Table 34: Energy Savings under DELP (MU)

The Commission approves Energy Savings of 78.60 MU in the ARR of FY 2018-19.

6.5. Inter-State Transmission Loss

Petitioner's Submission

The Petitioner has considered the same Inter-State Transmission Loss as approved in the MYT Order.

Commission's analysis

The Commission in the ARR of FY 2018-19 considers the Inter-State Transmission loss levels same as approved in the MYT Order.

Table 35: Inter-State Transmission Loss (%)

The Commission approves Inter–State Transmission Loss of 3.66% for power received from

stations of Western Region and 7.50% for power received from stations of Southern Region

in the ARR of FY 2018-19.

6.6. Intra-State Transmission and Distribution (T&D) loss

Petitioner's Submission

The Petitioner has considered the same Intra-State T&D Loss as approved in the MYT Order.

Commission's analysis

The Commission approves the Intra-State T&D loss at the same level as approved in the MYT Order.

The following table provides the Intra-State T&D loss approved in the MYT Order, the Petitioners submission and T&D Loss now approved by the Commission.

Table 36: Intra-State T&D loss (%)

The Commission approves Intra-State T&D loss of 10.75% in the ARR of FY 2018-19.

6.7. Power Purchase Quantum & Cost

Petitioner's Submission

The Petitioner has considered the same power purchase cost as approved by the Commission in the MYT Order for FY 2018-19.

Commission's Analysis

The Commission has projected the power purchase quantum and cost for FY 2018-19 based on the actual monthly power purchase data for 9 months of FY 2017-18 and 12 months data for FY 2016-17, FY 2015-16 and FY 2014-15, as submitted by the Petitioner. For projecting availability of power, firm allocation from various generating stations has been considered. The source wise methodology followed for projecting the quantum and cost of power procurement has been detailed below:

6.7.1. Availability of power

Availability of energy from NTPC and NPCIL stations:

• The energy availability from all the NTPC and NPCIL stations have been done based on average Plant Load Factor (PLF) of the respective stations in the last 4-5 years depending on the status of operation of the plant during the year.

• The energy availability from Kawas Gas Power Plant (KGPP) and Jhanor-Gandhar Power Plant (JGPP) has been estimated based on the average PLF of the plant during first 9 months of FY 2017-18.

• No energy has been projected from Kakrapara Atomic Power Station (KAPS) as no energy has been scheduled from April-December 2017 as the plant is shutdown for maintenance.

Availability of energy from Co-Generation Plants:

• The energy availability from all the Co-Generation plants namely Vedanta Plant-1, Vedanta Plant-2 and Goa Sponge Pvt. Ltd. has been considered the same as in FY 2016-17 based on the provisional data submitted by the Petitioner.

Availability of energy from Renewable Energy Stations:

• The energy availability from Renewable Energy Plants namely NVVNL Hydro, SECI, and NVVNL Solar have been estimated based on the average PLF achieved by the plants in the first 9 months of FY 2017-18.

Availability from Ratnagiri Gas Power Plant (RGPPL):

• The State of Maharashtra (which has 95% share allocation from RGPPL) is not scheduling power because of non-availability of natural gas and hence non-availability of technical minimum schedule to run the plant. For the period from April-December 2017, no power was purchased. Therefore, the Commission has not considered any availability of power from this station.

Availability of energy from New Stations

• It is expected that the Kameng Hydro Electric Plant (HEP) of NEEPCO will achieve COD by the starting of FY 2018-19. Accordingly, the Commission has considered the energy availability from this station based on parameters notified in the CERC Tariff Regulations, 2014.

Availability of energy from Open Market/Unscheduled Interchange

• The energy deficit/surplus for the FY 2018-19, as discussed in the section on energy balance later in the Order, has been assumed to be purchased/sold in the open market.

• No power has been projected under UI Under-drawal/Over-drawal.

6.7.2. Power Purchase Cost

Variable Charges:

• The per unit variable costs have been computed by taking the average of the actual per unit variable cost during the months of October-December 2017 for all the stations.

• For procurement of power from the Open Market, the Average Round the Clock (RTC) rate for the Western Region during the calendar year 2017 has been considered.

Fixed Charges:

• The fixed costs for CGS have been considered based on the Tariff Orders issued by the CERC for the respective Central Generating Stations.

• For Cogeneration and Renewable Energy Stations, the tariff has been considered as per the PPA's and Tariff Orders of respective stations.

• The fixed cost has been apportioned on the basis of the Petitioner's share in each station and the average annual plant availability factor achieved during the last five years by the plant.

• For new stations, since no source specifying the tariff is available in the public domain, the Commission has considered an average rate of Rs 5.00/kwh.

Other Charges:

No other charges have been considered for the FY 2018-19.

6.7.3. Transmission Charges

The Commission has projected the transmission charges payable to PGCIL based on the total capacity of the transmission network allocated to the Petitioner.

The transmission charges are determined based on the latest quarterly Point of Connection (PoC) rates approved by the Central Electricity Regulatory Commission (CERC) in accordance with Regulation 17(2) of the Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010.

6.7.4. Total Power Purchase Quantum and Cost

The following table provides the Power Purchase Quantum and cost approved by the Commission for FY 2018-19:

Table 37: Power Purchase Quantum (MU) and cost (Rs Cr) approved by Commission

The Commission approves the quantum of power purchase for the FY 2018-19 as 3995.89

MU at the State Periphery with a total cost of Rs 1329.68 Cr.

6.8. Renewable Purchase Obligation (RPO)

Petitioner's Submission

The Petitioner has considered the same cost towards RPO, as approved by the Commission, in the MYT Order.

Commission's analysis:

As per Clause 1, Sub-clause (1) of the JERC for the State of Goa and UTs (Procurement of Renewable Energy) Regulations, 2010

"Each distribution licensee shall purchase electricity (in kWh) from renewable energy sources, at

a defined minimum percentage of the total consumption of all the consumers in its area during a

year."

The Commission notified the JERC (Procurement of Renewable Energy), (Third Amendment) Regulations, 2016 on 22nd August 2016 and approved the revised RPO targets, as per which the Petitioner has to purchase 9.00% of its total consumption (including 3.60% from Solar) from renewable sources for the FY 2018-19. Further, the Regulation states that the obligation has to be calculated on the mix of consumption excluding power from hydropower sources. Accordingly, the Commission has determined the RPO on revised energy sales as shown in the table below.

The Petitioner is procuring physical power from solar and hydro plants. However, the physical power is not enough to fulfill the standalone RPO for FY 2018-19. Therefore, the Commission has considered the remaining RPO to be fulfilled by the purchase of Renewable Energy Certificate (REC). The Commission has assumed the rate of purchase for both solar and non-solar REC as Rs 1.50/ kWh (IEX Average Clearing Price Rate) due to non –availability of solar REC's in the market. The total cost towards RPO compliance has been considered in the total power purchase cost approved earlier.

In accordance with the JERC for the State of Goa and UTs (Procurement of Renewable Energy) Regulations, 2010 the Commission has determined the following Renewable Purchase Obligation for the Petitioner for FY 2018-19:

Table 38: Summary of Renewable Purchase Obligation (RPO) (MU)

The cost towards compliance of RPO computed by the Commission has been shown in the following table.

Table 39: Cost towards compliance of Renewable Purchase Obligation (RPO) (In Rs Cr)

The cost towards RPO has already been considered in the total power purchase cost approved by the Commission in the previous section.

6.9. Energy Balance

Commission's analysis

Based on the approved energy sales and the revised estimates of the Power purchase quantum, the Commission approves the energy balance as shown in the following table:

Table 40: Energy Balance (MU) approved by Commission

The Commission approves an energy deficit of 268.78 MU in FY 2018-19. The Commission

directs the Petitioner to purchase this deficit power from open market or other cheaper

sources rather than from costlier power stations. The Commission has considered the cost

towards this shortfall along with the Power Purchase Cost as approved earlier.

6.10. Operation & Maintenance (O&M) Expenses

Petitioner's Submission

The Petitioner has considered the same O&M Expenses as approved in the MYT Order.

Commission's analysis

The following table provides the O&M expenses approved in the MYT Order, Petitioner's submission and now approved by the Commission.

Table 41: O&M Expenses approved by Commission (In Rs Cr)

The Commission approves the Operation & Maintenance (O&M) expenses of Rs 326.82 Cr in

the ARR of FY 2018-19.

6.11. Capitalisation

Petitioner's Submission

The Petitioner has considered the same Capitalization as approved in the MYT Order.

Commission's analysis:

The Commission approves the same Capitalization as approved in the MYT Order.

Table 42: Capitalisation approved by the Commission (In Rs Cr)

The Commission approves Capitalization of Rs 685.27 Cr in the ARR of FY 2018-19.

6.12. Depreciation

Petitioner's Submission

The Petitioner has considered the same depreciation as approved in the MYT Order.

Commission's analysis:

The Commission approves the same depreciation as approved in the MYT Order.

Table 43: Depreciation approved by Commission (In Rs Cr)

The Commission approves depreciation of Rs 91.59 Cr in the ARR of FY 2018-19.

6.13. Interest and Finance Charges

Petitioner's Submission

The Petitioner has considered the same Interest and Finance Charges as approved in the MYT Order.

Commission's analysis:

The Commission also approves the same Interest and Finance Charges as approved in the MYT Order.

Table 44: Interest and Finance Charges approved by Commission (In Rs Cr)

The Commission approves Interest and Finance Charges as Rs 107.19 Cr in the ARR of FY

2018-19.

6.14. Return on Equity (RoE)

Petitioner's submission

The Petitioner has considered the same RoE as approved in the MYT Order.

Commission's analysis:

The Commission, similar to above, approves the same RoE as approved in the MYT Order.

Table 45: RoE approved by Commission (In Rs Cr)

The Commission approves Return on Equity of Rs 83.27 Cr in the ARR of FY 2018-19.

6.15. Interest on Security Deposits

Petitioner's submission:

The Petitioner has considered the same Interest of Security Deposit as approved in the MYT Order. Further, the Petitioner has requested the Commission to allow the provision of unpaid security deposit of Rs 9.15 Cr to be included in the total revenue gap to be recovered in the FY 2018-19.

Commission's analysis:

The Commission has considered the same Interest on Security Deposit as approved in the MYT Order. The Commission has not considered any provision for unpaid Interest on the Consumer Security Deposit. The Commission will consider the interest paid on consumer security deposits for the previous years as and when the same is paid to consumers on actual basis as per the audited accounts.

Table 46: Interest on Security Deposits approved by Commission (In Rs Cr)

The Commission approves Interest on Security Deposit as Rs 7.02 Cr in the ARR of FY

2018-19.

6.16. Demand Side Management (DSM) Expenses

Petitioner's submission

The Petitioner has considered the expenses towards DSM as approved in the MYT Order.

Commission's analysis:

The Commission approves the same DSM expenses as approved in the MYT Order.

Table 47: DSM Expenses as approved by Commission (In Rs Cr)

The Commission approves DSM Expenses as Rs 3.03 Cr in the ARR of FY 2018-19.

6.17. Interest on Working Capital

Petitioner's Submission

The Petitioner has considered the same Interest on Working Capital as approved in the MYT Order.

Commission's analysis:

Since the Power purchase cost has been revised, the same has an impact on the Interest and Working Capital. The Interest on Working Capital has been calculated based on the normative principles outlined in the JERC (Multi-Year Distribution Tariff) Regulations, 2014. Regulation 25 of the MYT Regulations, 2014 states the following:

Working capital for retail supply activity of the licensee shall consist of:

(i) Receivables of two months of billing

(ii) Less power purchase cost of one month

(iii) Less consumer security deposit but excluding Bank Guarantee/Fixed Deposit Receipt

(iv) Inventory for two months based on annual requirement for previous year.

The rate of interest on working capital shall be equal to the base rate for the State Bank of India

on the 1st April of the relevant financial year. The interest on working capital shall be payable on

normative basis notwithstanding that the licensee has not taken working capital loan from any

outside agency or has exceeded the working capital loan worked out on the normative figures."

The Commission has determined the Interest on Working Capital in accordance with the Regulation as cited above. The Interest Rate has been considered as the prevailing SBI Base rate. The table below provides the Interest in Working Capital as approved in the MYT Order and now approved by the Commission:

Table 48: Interest on Working Capital approved by Commission (In Rs Cr)

The Commission now approves the Interest on Working Capital as Rs 10.68 Cr in the ARR of

FY 2018-19.

6.18. Non-Tariff Income (NTI)

Petitioner's submission

The Petitioner has considered the same NTI as approved in the MYT Order.

Commission's analysis:

The Commission also approves the same NTI as approved in the MYT Order.

Table 49: Non –tariff Income approved by Commission (In Rs Cr)

The Commission approves Non-Tariff Income of Rs 6.74 Cr in the ARR of FY 2018-19.

6.19. Aggregate Revenue Requirement (ARR)

Petitioner's submission

The Petitioner has considered the same ARR for FY 2018-19 as approved in the MYT Order along with an additional provision of Interest on Security Deposit.

Commission's analysis

On the basis of the above, the Commission approves the revenue requirement for the FY 2018-19 as shown in the table below:

Table 50: Aggregate Revenue Requirement approved by Commission

for FY 2018-19 (In Rs Cr)

The Commission approves net ARR of Rs 1952.54 Cr for the FY 2018-19.

6.20. Revenue at existing Retail Tariff

Petitioner's submission

The Petitioner has submitted the revenue from sale of power at existing tariff as Rs 1593.75 Cr based on the approved energy sales, connected load and number of consumers in the MYT101 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 Order. The revenue for FY 2018-19 has been computed based on the retail tariff notified by the Commission in the Tariff Order for the FY 2017-18 dated 23rd May 2017. The table below provides the category wise revenue computed by the Petitioner for FY 2018-19.

Table 51: Revenue submitted by Petitioner (In Rs Cr)

Commission's analysis

The category wise/sub-category wise and slab wise revenue at retail tariff is determined as per the applicable tariff rates. The revenue from demand charges and the energy charges have been projected for each category/sub-category and slab. The revenue from LT-AG-Allied Activities, HT-AG-Allied activities, HT Temporary and Single Point Supply categories has not been computed due to non-availability of data on energy sales, connected load and number of consumers for these categories. The category/sub-category/slab wise revenue as computed by the Commission for FY 2018-19 has been shown in the following table:

Table 52: Revenue from existing retail tariff for FY 2018-19 (In Rs Cr)

The Commission has determined revenue from sale of power at existing tariff as Rs 1536.97

Cr for FY 2018-19.

6.21. Standalone Revenue Gap/Surplus

Petitioner's submission

Based on the ARR submitted and the revenue from retail tariff, a standalone revenue gap of Rs. 473.03 Cr has been determined by the Petitioner for FY 2018-19.

Commission analysis

Based on the approved ARR and existing retail tariff, the following Revenue Gap/Surplus is arrived at for the FY 2018-19:

Table 53: Standalone Revenue Gap/Surplus approved by Commission (In Rs Cr)

The standalone gap at existing retail tariff is Rs 415.57 Cr for FY 2018-19. The estimated gap

is considered while determining the retail tariff for FY 2018-19, as discussed in the

subsequent Chapter.

7. Chapter 7: Tariff Principles and Design

7.1. Overall Approach

The Commission while designing retail tariffs for FY 2018-19 has kept in view the principles of determination of tariff set out in the Electricity Act, 2003 (EA, 2003), Tariff Policy, 2016 and the MYT Regulations, 2014.

The Commission in this Tariff Order, has tried to meet the objectives of the EA 2003, as set out in its Preamble, including the protection of the interest of consumers, the supply of electricity to all areas and the rationalisation of tariffs. The EA, 2003 also directs to maintain a healthy balance between the interests of the Utilities and the reasonableness of the cost of power being supplied to consumers. The Commission has also taken into consideration the Licensees submissions as well as the public responses in these proceedings.

The supply of electricity to all the people is an essential driver for development, and also influences social and economic change. Since, the majority of the energy sales within the Licensees jurisdiction is of industrial nature, the Commission has attempted to ensure that, while industries and commerce are promoted, it is not at the cost of other segments of society.

7.2. Applicable Regulations

Regulation 36 of the MYT Regulations, 2014 states the following:

"a. The Commission shall gradually move towards reduction of cross subsidy in accordance with

Electricity Act, Tariff Policy and such other guidelines of the government as applicable.

b. The Distribution Licensee shall compute the consumer category-wise cost of supply as per the

methodology elaborated below.

c. Allocation of Cost: The Cost to serve shall be allocated to the consumer categories in the

following manner:

Step 1: Functional Demarcation of Cost – Total cost shall be divided on the basis of functions

performed such as power purchase, distribution etc.

Step 2: Classification of Cost –Each of the functionalized costs shall be further classified, based

on its intrinsic nature into Demand related cost, Energy related cost and Customer related cost.

Demand related costs shall generally be of fixed nature, related to capacity creation and shall

include interest on capital borrowing, depreciation etc. Energy cost shall be related to quantum

of electricity consumption of consumer, such as fuel cost, interest on working capital, etc.

Consumer related cost shall include operating expenses associated with meter reading, billing

and accounting.

Step 3: Allocation of Cost

(i) Allocation of Demand Costs: Demand costs of all three functions shall be allocated among

consumer categories on the basis of average coincident peak demand of the tariff

categories (average of past 12 months). To facilitate determination of average coincident

peak demand for the various tariff categories, load research shall be made an integral part

of the operations of the DISCOMs and systematic load research exercises shall be initiated.

(ii) Allocation of Energy Costs: Energy related costs of Distribution functions shall be

allocated to consumer categories on the basis of ratio of electricity consumption of each

consumer category to the total electricity consumption under the purview of the

Distribution Licensee. Energy related costs of Power purchase shall be allocated to various

tariff categories on the basis of block approach on merit order dispatch and incremental

principle, where each tariff category shall be allocated the incremental (energy related)

power purchase cost on the basis of their respective share in the incremental power

purchase. For the purpose of operationalizing the block approach and incremental

principle, the Commission shall identify and notify a suitable year as the "base year".

(iii) Allocation of Customer Costs: Customer related costs shall be allocated to consumer

categories on the basis of the ratio of number of consumers in each category to total

number of consumers under the purview of the Distribution Licensee.

d. Summation of allocated Demand cost, Energy cost and Customer cost across functions shall be

total Cost to serve for respective consumer categories. Cost to serve reduced by revenue from a

consumer category shall give total subsidy for that category. Total subsidy for a consumer

category reduced by Government subsidy, if any, shall be cross-subsidy for that consumer

category.

e. The consumers below poverty line who consume power below a specified level, say 30 units

per month, shall receive a special support through cross subsidy.

f. Cross-subsidy surcharge and additional surcharge in Open Access

(i) The amount received or to be received by the licensee on account of cross-subsidy

surcharge and additional surcharge, as approved by the Commission from time to time in

accordance with the Regulations specified by the Commission, shall be shown separately

against the consumer category that is permitted open access as per the phasing plan.

(ii) Cross-subsidy surcharge and additional surcharge shall be shown as revenue from the

tariff from the consumer categories who have been permitted open access and such

amount shall be utilized to meet the cross-subsidy requirements of subsidized categories

and fixed costs of the Distribution Licensee arising out of his obligation to supply. Provided

that the licensee shall provide such details in its annual filings.

g. Tariff Design

(i) The Commission shall be guided by the objective that the tariff progressively reflects the

efficient and prudent cost of supply of electricity.

(ii) After the costs have been allocated based on the method specified in clauses I and (d)

above, tariffs for different consumer categories shall be designed with due regard to

factors provided under section 62(3) of the Act.

(iii) The time of day tariff would be structured across three time slabs to denote normal, peak

and off-peak periods. The time-periods would vary according to different seasons of the

year i.e. summer, winter and the monsoon season. The peak tariff would be 10%-20%

higher than the normal tariff and the off-peak tariff would be priced 5%-10% lower than

the normal tariff.

(iv) Time of Day tariff may be introduced in a phased manner, wherein in phase 1 it would be

for HT Consumers, in phase 2 – for LT consumers consuming more than 25 KW and in

phase 3 for LT consumers consuming more than 10 KW."

7.3. Revenue Gap/Surplus at existing tariff

Petitioner's Submission

The Petitioner has proposed a standalone revenue gap of Rs 473.03 in FY 2018-19. The Petitioner has submitted that the cumulative revenue gap from FY 2014-15 to FY 2017-18 is not being claimed, the same shall be submitted once the audited annual accounts are prepared for respective years. The standalone revenue gap as submitted by the Petitioner has been tabulated below:

Table 54: Standalone Revenue Gap/Surplus submitted by Petitioner (In Rs Cr)

Commission's analysis

The Commission in the True-up of FY 2013-14 approved the revenue gap/surplus as nil. Further, the Commission has not approved any revenue gap for FY 2014-15 to FY 2016-17 due to non– availability of audited annual accounts and for FY 2017-18 due to unreliable data. Therefore, the Commission approves the standalone revenue gap for FY 2018-19 as follows:

Table 55: Standalone Revenue Gap/ Surplus determined by Commission (In Rs Cr)

The Commission has computed a standalone revenue gap of Rs 415.57 Cr in the FY 2018-19

at the existing tariff.

7.4. Treatment of the Revenue Gap/ Surplus and Tariff Design

The revenue gap of Rs 415.57 Cr, signifies that the revenue from the existing tariff is not commensurate with the costs incurred by the Petitioner. Therefore, in order to fulfill this revenue deficit and to be financially sustainable, the retail consumer tariffs are required to be increased. The Commission has accordingly dealt with this gap in the following section.

7.4.1. Tariff Proposal

Petitioner's Submission

The Petitioner has proposed to recover the revenue gap of Rs 473.03 Cr, partly from proposed tariff increase and partly from budgetary support from the Govt. of Goa. The Petitioner has proposed an average tariff hike of 4.95% that will earn an additional revenue of Rs 78.94 Cr. The107 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 remaining gap of Rs 394.09 Cr is proposed to be met from the budgetary support from the Government.

The category wise existing and proposed tariff submitted by the Petitioner is as under:

Table 56: Retail Tariff proposed by Petitioner

Commission's analysis

As discussed above, the Commission has determined the retail tariff for the FY 2018-19 in accordance with the principles stated in the Electricity Act, 2003 Tariff Policy, 2016, and the MYT Regulations, 2014.

Tariff design in general is guided by the following principles:

1. Cost reflective: The tariffs determined should efficiently reflect the cost of supply for each consumer category.

2. Progressive tariffs: Ensuring progressivity among tariffs by having telescopic tariff slab within a consumer category which encourages efficient consumption and at the same time promotes intra-category cross-subsidy by way of charging higher tariff for higher consumption to subsidise the lower consumption consumers.

3. Revenue neutrality: There should be no impact on the utility's yearly revenue due to rationalization of tariffs i.e. the overall status quo should be maintained.

4. Revenue stability: Utilities should ensure adequate fixed cost recovery from fixed/demand charges.

5. Affordability: Assessing affordability of electricity for Domestic & Commercial consumers for defining slab ranges and setting tariffs.

6. Avoiding tariff shocks: Tariff shocks should be prevented and consumers should be kept informed about the future trends in tariffs.

7. Demand management and grid stability: Demand management and grid stability should be ensured with demand-based tariffs.

8. Simplified tariff structure: Tariff structure should be simplified to make it easily administrable by the utility and easy to understand for the consumer.

9. Smart tariff design: Tariff rate design should take into consideration trends in electric power such as small scale renewable generation by consumers, energy efficiency, electric vehicle charging, etc.

Keeping in view the above principles and the Petitioner's submission the Commission has determined and modified the Retail Tariff for FY 2018-19 as per the following:

1. The Commission in accordance with the Petitioner' submission has limited the average tariff hike with the remaining gap to be recovered from Govt's budgetary support as discussed in subsequent sections. A relatively higher tariff increase has been done for cross-subsidized categories such as Domestic and Agriculture than cross-subsidizing categories such as Commercial and Industrial category in order to ensure that tariffs progressively reflect the cost of supply.

2. The consumers under the Commercial category having connected load between 20-90 kW used to pay a monthly Demand charge based on both per connection basis as well as on connected load basis. The Commission in this Order has done away with the monthly fixed charge on per connection basis and approved a fixed charge only on the basis of connected load.

7.4.2. Tariff Increase and Schedule:

As described earlier, the current tariff is not covering the entire cost of the Petitioner for FY 2018-19 necessitating an increase in Retail Tariff. The existing retail tariff and tariff now approved by the Commission for each consumer category has been shown in the table below:

Table 57: Existing and approved tariff

Further, the Petitioner has submitted a proposal for recovery of service charge from consumers availing power from MSEDCL. The Commission is of the view that schedule of miscellaneous charges have already been approved by the Commission for various services. The Petitioner is directed to submit a separate proposal along with citations of relevant regulations/judgements for determination of charges and information on the consumer number, connected load and energy sales for these type of consumers.

7.4.3. Revenue from Approved Retail Tariff for FY 2018-19

Based on the retail tariff approved above, the Revenue from approved tariff is shown in the table below. The revenue from LT-AG-Allied Activities, HT-AG-Allied Activities, HT Temporary and Single Point Supply has been not been computed due to non-availability of data on energy sales, connected load and number of consumers for these categories.

Table 58: Revenue from approved retail tariff (In Rs Cr)

The Commission approves revenue from approved Retail Tariff of Rs 1634.92 Cr for the FY

2018-19.

The average increase in the retail tariff now approved by the Commission vis-à-vis the prevailing tariff is 6.37%. The table below provides the category wise Average Cost of Supply (ACoS), Existing Average Billing Rate (ABR), Approved ABR and the existing and approved recovery vis-à-vis the (ACoS).

Table 59: Tariff increase approved by Commission

7.4.4. Revised Revenue Gap/Surplus

The Govt. of Goa through its letter No. 1/14/2017-Fin/(Bud)/dated 14th December, 2017 has conveyed its consent for providing the required budgetary support to meet the revenue gap for the year as may be approved by the Commission.

In view of above, the Commission approves the revenue gap as follows:

Table 60: Revised Revenue Gap/Surplus approved by Commission (In Rs Cr)

The Commission approves Final Revenue gap for the FY 2018-19 as nil.

7.4.5. Government Budgetary Support

The Commission has approved an overall revenue gap of Rs 415.27 Cr at existing tariff in FY 2018-19. This gap is recovered partly by increase in retail tariff and partly by budgetary support from Govt. of Goa. In case this gap had to be entirely fulfilled by revenue from consumers then it would have demanded an overall average increase of 27.04%. The Commission, in FY 2018-19, has approved an average tariff increase of 6.37%. In case the Govt. had not provided the budgetary support, then an average increase of 19.43% over and above the approved tariff increase would have been required which would have led to a tariff shock to consumers.

It is observed that the Govt. of Goa has been providing budgetary assistance to the Petitioner during the past few years. The Commission in this matter would like to point out the over reliance of the Petitioner on Govt.'s budgetary support. The Petitioner should prepare itself of the repercussions in case the Govt. withdraws the support in the future.

The table below provides the average tariff increase and ABR with and without Govt. budgetary support. The ABR without the Government Budgetary support has been calculated considering the same per unit Gap of Rs 0.87/kWh (Difference between ACoS and ABR at Approved Tariff with Govt. Budgetary Support) is loaded equally among all consumer categories.

Table 61: Cost of Supply and tariff increase with and without Govt. Budgetary support

8. Chapter 8. Open Access Charges for the FY 2018-19

8.1. Wheeling Charges

8.1.1. Allocation Matrix - Allocation of ARR into Wheeling and Retail Supply of Electricity

Petitioner's submission:

The Petitioner has bifurcated the ARR into Wheeling and Retail Supply Charges based on the methodology adopted by the Commission in the Tariff Order of FY 2017-18. The Petitioner has submitted the Wheeling Charges as shown in the table below:

Table 62: Wheeling Charge calculation as submitted by Petitioner

Commission's analysis:

The Commission feels that there has to be a proper bifurcation of all expenses between the functions of the wheeling business (wire business) and the retail supply business. The Commission for the purpose of bifurcation of wheeling and retail ARR, is guided by the Staff Paper on "Operationalisation of Open Access in the State of Goa and UT's". The allocation between wheeling and retail supply business for the FY 2018-19 as per the ARR approved in this Order is provided in the table below:

Table 63: Allocation matrix approved by Commission

To determine the wheeling charges, the wheeling costs are allocated on the basis of voltage levels. The wheeling charges are levied for the distribution network utilized by the Open Access consumers and primarily comprises of O&M Expenses and other costs as provided in the table above.

The methodology adopted for allocating the derived wheeling costs at respective voltage levels has been elaborated as follows:

• O&M Expenses consisting of Employee, A&G and R&M expenses are allocated to each voltage level on the basis of number of consumers

• All expenses other than the O&M expenses are allocated to each voltage level on the basis of voltage wise asset allocation. The Petitioner in this regard was directed to submit116 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 the voltage wise asset allocation but has failed to submit the desired information and in the absence of such information, the Commission has assumed the voltage wise asset allocation.

• The resultant cost at HT/EHT voltage level derived after performing the above steps is then divided between LT and HT/EHT voltage level on the basis of input energy at respective voltage levels, since the HT/EHT network is used by consumers of both HT/EHT and LT voltage levels.

The energy input has been determined assuming the cumulative loss level of HT/EHT voltage as 3.64%, which is the same as approved in the Tariff Order of FY 2017-18. The Petitioner in this regard has failed to submit the voltage wise losses. The resultant losses have been loaded to the LT voltage level in order to maintain the overall Intra-State T&D loss at 10.75% as approved in the ARR of FY 2018-19.

Table 64: Parameters assumed for voltage wise allocation of wheeling costs

Accordingly, the Commission approves the Wheeling Charges as shown in the table below:

Table 65: Wheeling Charges approved by Commission

The Commission approves wheeling charge of Rs 2.84/ kWh at LT voltage level and

Rs. 0.26/kWh at HT/EHT voltage level

8.2. Additional Surcharge

Petitioner's submission:

The Petitioner has not proposed any additional surcharge in the Petition for approval.

Commission's analysis:

The Commission has notified the Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Connectivity and Open Access in Intra-State Transmission and Distribution) Regulations, 2017. The Regulation 4.5 (1) of the said Regulations states the following:

"An Open Access Consumer, receiving supply of electricity from a person other than the

Distribution Licensee of his area of supply, shall pay to the Distribution Licensee an additional

surcharge in addition to wheeling charges and cross-subsidy surcharge, to meet the fixed cost of

such Distribution Licensee arising out of his obligation to supply as provided under sub-section

(4) of Section 42 of the Act:

Provided that such additional surcharge shall not be levied in case Open Access is provided to a

person who has established a captive generation plant for carrying the electricity to the

destination of his own use."

Regulation 4.5 (2) of the said Regulations stipulates:

This additional surcharge shall become applicable only if the obligation of the Licensee in terms

of power purchase commitments has been and continues to be stranded or there is an

unavoidable obligation and incidence to bear fixed costs by the Licensee consequent to such a

contract. However, the fixed costs related to network assets would be recovered through

wheeling charges.

Further, Regulation 5.2 (1) (b) states the following:

The quantum of drawal of electricity by a partial Open Access Consumer from the Distribution

Licensee during any Time Block of a Day should not exceed the "Admissible Drawl of Electricity

by the Open Access Consumer" which is the difference of Contract Demand and maximum

quantum of Open Access for which approval has been granted by the Nodal Agency.

[Illustration: If an Open Access Consumer with a Contract Demand of 10 MW has been given an

approval for a maximum Open Access quantum of 6MW for a period of 3 Months, the Admissible

Drawl of Electricity from the Distribution Licensee during any Time Block shall be 4 MW for any

Day during a period of 3 Months.]"

Therefore, in accordance with the above Regulations, the Commission has determined the Additional Surcharge as per the following:

Table 66: Additional Surcharge approved by Commission

Earlier, a consumer availing Open Access was required to pay fixed charges on the contracted load even when the load was drawn partially from the Distribution Licensee. In addition, the consumer was also required to pay wheeling charges, additional surcharge and the cross-subsidy surcharge. As per the Open Access Regulations, 2017, a consumer now is only required to pay fixed charges on Admissible Drawal rather than on the total contracted load.

The Commission approves an Additional Surcharge of Rs 0.88/kwh for FY 2018-19.

The Commission directs the Petitioner to submit quarterly details of the power stranded on account of consumers opting for open access alongwith the Additional Surcharge recovered from these consumers. The Commission will analyse the information and change the applicable Additional Surcharge, if required.

8.3. Cross-Subsidy Surcharge

Petitioner's submission:

As per the National Electricity Policy, a surcharge is to be levied by the respective State Commission on consumers switching to alternate supplies under the open access. This is to compensate the host distribution licensee serving such consumers who are permitted Open Access under Section 42 (2) of the Electricity Act, for loss of cross-subsidy element built into the tariff of such consumers. An additional surcharge may also be levied under sub-section (4) of Section 42 of the said Act for meeting the fixed cost of the distribution licensee arising out of its obligation to supply in cases where consumers are allowed open access.

Cross-subsidy surcharge (CSS) has been determined in accordance with the formula specified in the Tariff Policy, 2016.

The category-wise CSS applicable arrived on consideration of the components ABR, C, L & D as proposed by the Petitioner is as follows:

Table 67: Cross-Subsidy Surcharge as proposed by the Petitioner

Commission's analysis:

The Commission in this Order has calculated the cross-subsidy surcharge with respect to voltage wise cost of supply. The following approach has been adopted to determine the voltage wise cost of supply:

• Voltage Wise losses are assumed for HT/EHT voltage level. The remaining losses are adjusted in the LT voltage level in order to maintain the Intra-State T&D losses at 10.75%, as approved in the ARR for FY 2018-19. Voltage wise losses assumed at each level have been shown in the table below:

Table 68: Voltage wise losses assumed by Commission

Using these losses the energy input at each voltage level is determined based on the energy sales. The table below shows the energy input at each voltage level119 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018

Table 69: Energy Input at each voltage level (MU)

Now the overall ARR approved for FY 2018-19 is divided into variable and fixed ARR with variable ARR comprising of variable component of the power purchase cost and fixed ARR comprising of all the other costs.

The fixed component comprising of fixed cost of power purchase, O&M etc. is further allocated to each voltage category as per the following principles:

• The fixed cost of power purchase is assigned to each voltage level on the basis of energy input at respective voltage levels.

• The O&M expenses are allocated to each voltage level on the basis of the number of consumers. The resultant cost allocated to HT/EHT level is then further allocated between HT/EHT and LT level on the basis of input energy, as the HT/EHT network is utilized by both LT and HT/EHT network consumers.

• The remaining fixed costs are allocated on the basis of voltage wise asset allocation assumed earlier and further allocated to respective voltage levels on the basis of input energy.

Table 70: Parameters used for allocation of fixed costs

The Variable component of the Power purchase cost is allocated on the basis of energy input.

The Voltage wise cost of supply (VCoS) is then determined on the basis of energy sales of respective categories.

Accordingly, the VCoS is determined as shown in the table below:

Table 71: Voltage Wise Cost of Supply (VCoS)

This, VCoS is then used to determine the Cross-Subsidy Surcharge at each voltage level.

Table 72: Cross-Subsidy Surcharge approved by Commission (Rs/kWh)

The Commission approves nil Cross-Subsidy Surcharge at LT Voltage level and Rs 1.56/kWh

at HT/EHT Voltage level, in FY 2018-19.

9. Chapter 9: Tariff Schedule

9.1. Tariff Schedule

Table 73: Tariff Schedule

9.2. Applicability

Low Tension Category - Applicable to Power Supply of Voltages at 230V and 440V Voltages when the Sanctioned Load is below 100 KVA/90 KW/120 HP and power is supplied at single/ /three phase.

High Tension/Extra High Tension Category-Applicable to Power Supply of Voltages at 11KV/33KV/110KV and above i.e. High/Extra High Voltages when the Contracted Demand is above 100 KVA/ 90 KW/120 HP and power is supplied at three phase.

Table 74: Applicability of Tariff Schedule

1) These tariffs are proposed to be made applicable from 1st April 2018 and shall remain valid till further Orders of the Commission.

Tariffs are subject to revision and/or surcharge that may be levied by ED-Goa from time to time as per the directives of the Commission.

2) The tariffs are exclusive of electricity duty and taxes levied by the Government or other competent authority from time to time which are payable by the consumers in addition to the charges levied as per the tariffs.

3) Unless otherwise agreed to, these tariffs for power supply are applicable for supply at one point only.

4) Unless specifically stated to the contrary the figures of energy charges relate to rupee per unit (kWh) charge for energy consumed and fixed charge relates to a month.

5) If the energy supplied for a specific purpose under a particular tariff is used for a different purpose not contemplated in the contract for supply and/or for which a higher tariff is131 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 applicable, it shall be deemed as unauthorized use of electricity and shall be assessed under the provisions of section 126 of the Electricity Act, 2003 and Supply Code Regulation 2010 notified by the JERC.

6) If connected load of a domestic category is found to be at variance with the sanctioned/contracted load as a result of replacement of appliances such as lamps, fans, fuses, switches, low voltage domestic appliances, fittings, it shall not fall under Section 126 and Section 135 of the EA 2003.

7) Fixed charges, wherever applicable, will be charged on pro-rata basis from the date of release of connection. These shall be double in case bi-monthly billing is carried out and shall be proportionately calculated as per the number of days of billing, Similarly slabs of energy consumption shall also be considered accordingly in case of bi-monthly or periodic billing.

8) The consumption for factory lighting/pump house lighting shall be billed as per respective main tariff category. A separate energy meter for recording energy consumed towards factory lighting for new installation need not be provided. For the existing installations, till the factory lighting meter's mains are shifted to main meter, the total energy consumption shall be arrived at by adding the energy consumption of the main energy meter and the factory lighting meter.

9) Supply of power in all cases shall be subject to the execution of Agreement between the Electricity Department, Goa and consumers and as per the JERC (Electricity Supply Code) Regulation 2010. The other conditions, definitions etc. shall be applicable as per the Electricity Act 2003 and various JERC Regulations, such as Standards of Performance, Supply Code, Conditions of Supply, Distribution Code etc., issued from time to time.

10) Billing of Demand in excess of Contracted Demand

The billing shall be on the maximum demand recorded during the month or 85% of contracted demand whichever is higher. If in any month, the recorded maximum demand of the consumer exceeds its contracted demand, that portion of the demand in excess of the contracted demand shall be billed at double the normal rate. Similarly, energy consumption corresponding to excess demand shall also be billed at double the normal energy rate.

The definition of the maximum demand would be in accordance with the provisions of the JERC (Electricity Supply Code) Regulations, 2010. If such over-drawal is more than 20% of the contracted demand then the connection shall be disconnected immediately.

Explanation:

Assuming the contract demand as 100 kVA, maximum demand at 120 kVA and total energy consumption as 12000 units, then the consumption corresponding to the contract demand will be 10,000 units (12000 X 100/120) and consumption corresponding to the excess demand will be 2000 units. This excess demand of 20 kVA and excess consumption of 2000 units will be billed at twice the respective normal rate. e.g. in case of HTI/Industrial category, excess demand and consumption will be billed at the rate of Rs 500 per kVA per month and Rs 9.00/kWh respectively. Connections drawing more than 120 kVA shall be disconnected immediately.

11) The adjustment because of Fuel and Power Purchase Cost variation shall be calculated in accordance with the FPPCA formula separately notified by the Commission under the132 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 Regulation. Such charges shall be recovered/refunded in accordance with the terms and conditions specified in the FPPCA formula.

12) The values of the 'K' factor applicable for the different consumer categories for use in the FPPCA formula shall be as specified in Section 7.4.3 of this Tariff Order.

13) Power Factor Charges for HT and EHT

a) 'Power Factor' means, the average monthly power factor and shall be the ratio expressed as a percentage of the total kilowatt hours to the total kilovolt ampere hours supplied during the month; the ratio being rounded off to two decimal figures.

b) The consumer shall maintain the monthly average power factor of the supply not less than 90% (lagging). If the monthly average power factor of (a) consumer falls below 90% (0.9 lagging), such consumer shall pay a surcharge in addition to his normal tariff @ 1% on billed demand and energy charges for each fall of 1% in power factor upto 70%(lagging).

c) In case the monthly average power factor of the consumer is more than 95% (95% lagging), a power factor incentive @ 1% on demand and energy charges shall be given for each increase of 1% in power factor above 95% (lagging).

d) If the average power factor falls below 70% (lagging) consecutively for 3 months, the licensee reserves the right to disconnect the consumer's service connection without prejudice for the levy of the surcharge.

14) For staff quarters, rest/guest houses, street lighting in the colony of a factory which is situated separately from the main factory and for distribution lines, service lines, etc. permitted to be owned and maintained by the HT consumer owning the factory, there shall be a separate connection and such energy consumed shall be charged under Single Point Supply.

15) Advance Payment Rebate: If payment is made in advance well before commencement of the consumption period for which the bill is prepared, a rebate @ 1% per month shall be given on the amount (excluding security deposit, taxes and duties) which remains with the licensee at the end of the month. Such rebate, after adjusting any amount payable to the licensee, shall be credited to the account of the consumer.

If payment is made in advance along with prior declaration of premises to be closed for a certain period of time, a rebate of 1% per month shall be given on the amount (excluding security deposit, taxes and duties) which remains with the licensee at the end of the month. Such rebate, after adjusting any amount payable to the licensee, shall be credited to the account of the consumer.

16) Prompt Payment Rebate: If payment is made at least 7 days in advance of the due date of payment a rebate for prompt payment @ 0.25 % of the bill amount (excluding taxes and duties) shall be given. Those consumers having arrears shall not be entitled for such rebate and the amount paid will first be used to set off past liabilities.

17) Delayed Payment Charges (DPC): In case the electricity bills are not paid within the due date mentioned on the bill, delayed payment charges of two percent (2%) (computed on a daily basis on the outstanding bill from the due date till the date of payment) shall be levied133 OFFICIAL GAZETTE — GOVT. OF GOA SERIES I No. 2 (EXTRAORDINARY No. 2) 18TH APRIL, 2018 on the bill amount. However, if a consumer makes part payment of a bill (in exceptional circumstances, with prior approval of the Chief Electrical Engineer), within the due date, then the delayed payment charges shall be applicable only on the amount which was not paid within the due date.

Such surcharge shall be rounded off to the nearest multiple of one rupee. Amount less than 50 paise shall be ignored and amount of 50 paise or more shall be rounded off to the next rupee.

If the consumer fails to pay the energy bill presented to him by the due date the department shall have the right to disconnect the supply after giving 15 days' notice as per provision of the Electricity Act 2003 and Supply Code Regulations 2010 of JERC as amended from time to time.

In case of non-realization of payment through Cheque, a penalty of 5% of the cheque amount in addition to the Delayed Payment Charges (DPC) will be levied on the consumers.

18) Time of Day Tariff (ToD ):

i. Under the Time of Day (ToD) Tariff, electricity consumption and maximum demand in respect of HT/EHT consumers for different periods of the day, i.e. normal period, peak load period and off peak load period, shall be recorded by installing a ToD meter.

ii. The maximum demand and consumption recorded in different periods shall be billed at the following rates on the tariff applicable to the consumer.

Table 75: Applicability of ToD Tariff

iii. Applicability and Terms and Conditions of TOD tariff:

a) TOD tariff is mandatory for HT/EHT consumers and shall be optional for LT industrial and commercial consumers

b) The facility of aforesaid TOD tariff shall not be available to HT/EHT consumers having captive power plants and/or availing supply from sources other than ED-Goa through wheeling of power.

c) The HT/EHT industrial consumers who have installed standby generating plants shall also be eligible for the aforesaid TOD tariff.

d) In the event of applicability of TOD tariff to a consumer, all other terms and conditions of the applicable tariff shall continue to apply.

9.4. Schedule of Miscellaneous Charges

Table 76: Schedule of Miscellaneous Charges