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KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2017

OF

BESCOM

ANNUAL PERFORMANCE REVIEW FOR FY16

&

REVISION OF ANNUAL REVENUE REQUIREMENT

FOR FY18

&

REVISION OF RETAIL SUPPLY

TARIFF FOR FY18

11th April 2017

6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001

Phone: 080-25320213 / 25320214

Fax : 080-25591412 / 25320338

Website: www.karnataka.gov.in/kerc - E-mail: [email protected]

http://www.karnataka.gov.in/kerc

ii

C O N T E N T S

CHAPTER

Page No.

1.0 Bangalore Electricity Supply Company Ltd 3

1.1 BESCOM at a Glance 5

1.2 Number of Consumers, Sales in MU to various

categories of Consumers and details of Revenue

for FY-16

5

2.0 Summary of Filing & Tariff Determination Process 7

2.1 Preliminary Observations of the Commission 7

2.2 Public hearing Process 8

2.3 Consultation with the Advisory Committee of the

Commission.

9

3 Public Consultation-Suggestions/Objections and

Replies

10

3.1 List of Persons who have filed written objections

10

3.2 List of Persons who have made oral Submissions

11

4 Annual Performance Review for FY16 17

4.0 BESCOM’s Application for APR for FY16 17

4.1 BESCOM’s Submission 17

4.2 BESCOM’S Financial Performance as per

Audited Accounts for FY16.

19

4.2.1 Sales for FY16 20

4.2.2 Distribution Losses for FY16 29

4.2.3 Power Purchase for FY16 30

4.2.4 RPO Compliance by BESCOM for FY16 33

4.2.5 Operation and Maintenance Expenses 36

4.2.6 Depreciation 40

4.2.7 Capital Expenditure for FY-16 42

4.2.8 Interest and Finance Charges 56

4.2.9 Other Debits 61

4.2.10 Net Prior Period Charges 62

4.2.11 Return on Equity 62

4.2.12 Income Tax 65

4.2.13 Other Income 65

4.2.14 Fund towards Consumer Relations/Consumer

Education.

66

4.2.15 Carrying cost on Regulatory Asset 67

4.2.16 Revenue Demand for FY16 68 4.2.17 Subsidy for FY16 69

4.3 Abstract of Approved ARR for FY16 70

4.4 Gap in Revenue for FY16 71

5.0 Revised Annual Revenue Requirement for FY 18

Application.

72

5.1 Annual Performance Review for FY16 73

5.2 Revised Annual Revenue Requirement for FY18 74

iii

5.2.1 Capital investments for FY18 74

5.2.2 Sales Forecast for FY18 76

5.2.3 Distribution Losses for FY18 89

5.2.4 Power Purchase for FY18 91

5.2.5 RPO Target for FY18 95

5.2.6 O & M Expenses for FY18 97

5.2.7 Depreciation 101

5.2.8 Interest on Capital Loans 103

5.2.9 Interest on Working Capital 105

5.2.10 Interest on Consumer Security Deposit 106

5.2.11 Other Interest & Finance Charges 107

5.2.12 Interest & other expenses capitalised 108

5.2.13 Return on Equity 108

5.2.14 Other Income 111

5.2.15 Fund towards Consumer Relations/Consumer

Education

111

5.3 Contribution towards Pension & Gratuity Trust 112

5.4 Abstract of Revised ARR for FY18 113

5.5 Segregation of ARR into ARR for Distribution

Business and ARR for Retail Supply Business

115

5.6 Gap in Revenue for FY18 116

6 Determination of Retail Supply Tariff for FY18 118

6.0 Revision of Retail Supply Tariff for FY18- BESCOM’s

Proposals and Commission’s Decisions.

118

6.1 Tariff Application 118

6.2 Statutory provisions guiding determination of

Tariff

118

6.3 Factors considered for Tariff setting 119

6.4 New Tariff proposals by BESCOM 120

6.5 Revenue at existing tariff and deficit for FY18 129

6.6 Category-wise existing, proposed and approved

Tariff

130

6.7 Wheeling and Banking charges 161

6.7.1 BESCOM’s proposal 161

6.7.2 Wheeling within BESCOM Area. 162

6.7.3 Wheeling of Energy using Transmission Network

or Network of more than one Licensee

163

6.7.4 Charges for wheeling of Energy by RE

Sources(NON-REC ROUTE) to Consumers in the

State

164

6.7.5 Charges for wheeling Energy by RE Sources

wheeling energy from the State to a

Consumer/Others outside the State and for

those opting for Renewable Energy

Certificate(REC)

164

6.8 Banking Charges and Additional Surcharge 165

6.9 Cross SUBSIDY Surcharge(CSS) 166

6.10 Other issues 168

6.10.1 Tariff for Green Power 168

6.11 Other Tariff related issues 169

iv

6.12 Cross Subsidy Levels for FY18 171

6.13 Effect of Revised Tariff 171

6.14 Summary of the Tariff Order 172

6.15 Commission’s Order 174

Appendix 175

Appendix-1 223

v

LIST OF TABLES

Table

No.

Content Page

No.

4.1 APR for FY16-BESCOM’s Submission 18

4.2 Financial Performance of BESCOM for FY16 19

4.3 BESCOM’s Accumulated Profits/Losses 20

4.4 Approved and Actual Sales for FY16 21

4.5 Format for IP Set Consumption as per feeder wise

data

25

4.6 Approved sales for FY16 under APR 28

4.7 Power Purchase for FY16-Approved and Actuals 30

4.8 Short fall in supply from KPCL Stations 31

4.9 RPO Compliance as reported by BESCOM 33

4.10 Non Solar RPO Compliance by BESCOM 34

4.11 Solar RPO Compliance by BESCOM 35

4.12 O & M expenses of BESCOM as per Audited

Accounts for FY16

36

4.13 Normative O & M Expenses-BESCOM’s submission 36

4.14 Approved O & M expenses as per Tariff Order dated

02.03.2015

37

4.15 Allowable inflation for FY16 38

4.16 Allowable O & M expenses for FY16 40

4.17 Depreciation for FY16-BESCOM’s submission 41

4.18 Allowable Depreciation for FY16 41

4.19 Capital expenditure for FY-16 BESCOM’s submission 42

4.20 Approved and Actual Capex incurred –FY12 to FY16 47

4.21 Total works and selected samples for Prudence

check

49

4.22 Summary of Prudence check findings for FY16 50

4.23 Details of Not prudent and Conditionally Prudent

works

50

4.24 Summary of works having Cost overrun 51

4.25 Summary of works having Time overrun 51

4.26 Details of Amounts disallowed in APR FY16 53

4.27 Interest on Capital Loans- BESCOM’s Submission 56

4.28 Allowable Interest on Capital Loans-FY16 57

4.29 Interest on Working Capital- BESCOM’s Submission 58

4.30 Allowable Interest on Working Capital for FY16 59

4.31 Interest on Consumer Security Deposits for FY16-

BESCOM’s Submission

59

4.32 Allowable Interest and Finance Charges. 61

4.33 Other Debts – BESCOM’s Submission 61

4.34 Net Prior Period Charges-BESCOM’s Submission 62

4.35 Return on Equity-BESCOM’s Submission 62

4.36 Status of Debt Equity Ratio for FY16 63

4.37 Allowable Return on Equity 64

4.38 Return on equity for the additional equity received

during FY16

64

vi

4.39 Other income- BESCOM’s Submission 65

4.40 Allowable Other Income for FY16 66

4.41 Approved ARR for FY16 as per APR 70

5.1 Revised ARR for FY18-BESCOM’s Submission 72

5.2 Capital Investment for FY-18 BESCOM’s Submission 74

5.3 Midyear No of IP sets Installations and IP Set

Consumption

85

5.4 Format for furnishing IP Sets Consumption 88

5.5 BESCOM’s Approved Sales 88

5.6 Approved & Actual Distribution Losses FY11 to FY16 90

5.7 Approved Distribution Losses for FY18 91

5.8 Power Purchase Cost as filed by BESCOM for FY18 91

5.9 Approved Power Purchase Quantum and Cost for the

State

94

5.10 Approved Power Purchase Cost of BESCOM for FY18 94

5.11 Anticipated Capacity addition of RE Sources in FY18 95

5.12 Anticipated Energy from of RE Sources in FY18 96

5.13 Normative O&M expenses for FY18- BESCOM’s

Submission

98

5.14 Revised O&M expenses for FY18- BESCOM’s Proposal 98

5.15 Approved O &M expenses for FY18 as per Tariff Order

dtd 30-3-2016

98

5.16 Approved O &M expenses for FY18 100

5.17 Depreciation FY18- BESCOM’s Submission 101

5.18 Approved Depreciation for FY18 102

5.19 Interest on Capital Loan-BESCOM’s Proposal 103

5.20 Approved interest on Loans for FY18 104

5.21 Interest on Working Capital-BESCOM’s Submission 105

5.22 Approved interest on Working Capital for FY18 106

5.23 Interest on Consumer Security Deposits- BESCOM’s

Submission

106

5.24 Approved Interest on Consumer Security Deposits for

FY18

107

5.25 Approved Interest and Finance Charges for FY18 108

5.26 Return on Equity- BESCOM’s Submission 109

5.27 Status of Debt Equity Ratio for FY 18 110

5.28 Approved Return on Equity for FY18 110

5.29 Approved Revised ARR for FY18 114

5.30 Approved Segregation of ARR-FY18 115

5.31 Approved revised ARR for Distribution Business –FY18 115

5.32 Approved ARR for Retail Supply Business-FY18 116

5.33 Revenue Gap for FY18 117

6.1 Revenue Deficit for FY18 129

6.2 Wheeling Charges 162

vii

LIST OF ANNEXURES

SL.NO. DETAILS OF ANNEXURES Page

No.

1 ESCOM’s Total Approved Power Purchase for FY18 260

2 BESCOM’s Approved Power Purchase for FY18 263

3 Proposed and Approved Revenue and Realisation

and Level of Cross Subsidy for FY18 of BESCOM

266

4 Electricity Tariff – 2017 267

ABBREVIATIONS

AEH All Electric Home

ABT Availability Based Tariff

A & G Administrative & General Expenses

ARR Annual Revenue Requirement

ATE Appellate Tribunal for Electricity

BBMP Bruhut Bangalore Mahanagara Palike

BDA Bangalore Development Authority

BESCOM Bangalore Electricity Supply Company

BST Bulk Supply Tariff

BWSSB Bangalore Water Supply & Sewerage Board

CAPEX Capital Expenditure

CCS Consumer Care Society

CERC Central Electricity Regulatory Commission

CEA Central Electricity Authority

CESC Chamundeshwari Electricity Supply Corporation

CPI Consumer Price Index

CWIP Capital Work in Progress

DA Dearness Allowance

DCB Demand Collection & Balance

DPR Detailed Project Report

EA Electricity Act

EC Energy Charges

ERC Expected Revenue From Charges

ESAAR Electricity Supply Annual Accounting Rules

ESCOMs Electricity Supply Companies

FA Financial Adviser

FKCCI Federation of Karnataka Chamber of Commerce & Industry

FR Feasibility Report

FoR Forum of Regulators

FY Financial Year

GESCOM Gulbarga Electricity Supply Company

viii

GFA Gross Fixed Assets

GoI Government Of India

GoK Government Of Karnataka

GRIDCO Grid Corporation

HESCOM Hubli Electricity Supply Company

HP Horse Power

HRIS Human Resource Information System

ICAI Institute of Chartered Accountants of India

IFC Interest and Finance Charges

IW Industrial Worker

IP SETS Irrigation Pump Sets

KASSIA Karnataka Small Scale Industries Association

KEB Karnataka Electricity Board

KER Act Karnataka Electricity Reform Act

KERC Karnataka Electricity Regulatory Commission

KM/Km Kilometre

KPCL Karnataka Power Corporation Limited

KPTCL Karnataka Power Transmission Corporation Limited

KV Kilo Volts

KVA Kilo Volt Ampere

KW Kilo Watt

KWH Kilo Watt Hour

LDC Load Despatch Centre

MAT Minimum Alternate Tax

MD Managing Director

MESCOM Mangalore Electricity Supply Company

MFA Miscellaneous First Appeal

MIS Management Information System

MoP Ministry of Power

MU Million Units

MVA Mega Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

NFA Net Fixed Assets

NLC Neyveli Lignite Corporation

NCP Non Coincident Peak

NTP National Tariff Policy

O&M Operation & Maintenance

P & L Profit & Loss Account

PLR Prime Lending Rate

PPA Power Purchase Agreement

PRDC Power Research & Development Consultants

REL Reliance Energy Limited

R & M Repairs and Maintenance

ROE Return on Equity

ROR Rate of Return

ix

ROW Right of Way

RPO Renewable Purchase Obligation

SBI State Bank of India

SCADA Supervisory Control and Data Acquisition System

SERCs State Electricity Regulatory Commissions

SLDC State Load Despatch Centre

SRLDC Southern Regional Load Dispatch Centre

STU State Transmission Utility

TAC Technical Advisory Committee

TCC Total Contracted Capacity

T&D Transmission & Distribution

TCs Transformer Centres

TR Transmission Rate

WPI Wholesale Price Index

WC Working Capital

x

KARNATAKA ELECTRICITY REGULATORY COMMISSION,

BENGALURU - 560 001

Dated 11th April, 2017

In the matter of:

Application of BESCOM in respect of the Annual Performance Review for FY16,

Revision of Annual Revenue Requirement for FY18 and Revision of Retail

Supply Tariff for FY18, under Multi Year Tariff framework.

Present: Shri M.K.Shankaralinge Gowda Chairman

Shri H.D.Arun Kumar Member

Shri D.B.Manival Raju Member

O R D E R

The Bangalore Electricity Supply Company Ltd., (hereinafter referred to

as BESCOM) is a Distribution Licensee under the provisions of the

Electricity Act, 2003, and has, on 30.11.2016, filed the following

applications for consideration and orders:

a) Review of Annual Performance for the financial year 2015-16

(FY16) and approval of revised ARR thereon.

b) Approval of Revised ARR for the financial year 2017-18 (FY18).

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

2017-18 (FY18).

xi

The BESCOM has also subsequently filed on 16.02.2017, an amendment

application to its application for revision of Retail supply Tariff for FY18.

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

of the Electricity Act, 2003, and the KERC (Terms and Conditions for

Determination of Tariff for Distribution and Retail Sale of Electricity) Regulations

2006, as amended and other enabling Regulations, the Commission has

considered the applications and also the views and objections submitted by

the consumers and other stakeholders. The Commission’s decisions are

brought out in the subsequent Chapters of this Order.

xii

CHAPTER – 1

INTRODUCTION

1.0 Bangalore Electricity Supply Company Limited- (BESCOM):

The BESCOM is a Distribution Licensee under Section 14 of the Electricity

Act, 2003 (hereinafter referred to as the ‘Act’). The BESCOM is

responsible for purchase of power, distribution and retail supply of

electricity to its consumers and also for providing infrastructure for

Open Access, Wheeling and Banking in its area of operation, which

includes eight Districts of the State as indicated below:

1. Bengaluru

Rural

2. Bengaluru

Urban

3.

Chikkaballapura

4. Chitradurga

5. Davanagere

6. Kolar

7. Ramanagara

8. Tumakuru

The BESCOM is a company registered under the Companies Act, 1956,

incorporated on 30th April, 2002. The BESCOM commenced its

operations on 1stJune, 2002.

At present BESCOM’s area of operation is structured as follows:

xiii

O&M Zones O&M Circles O&M Divisions

Bengaluru Metropolitan

Area

Bengaluru North Circle

Malleshwaram

Peenya

Hebbal

Bengaluru East Circle

Shivajinagar

Vidhanasoudha

Inidranagar

Bengaluru South Circle

Koramangala

HSR Layout

Jayanagar

Bengaluru West Circle

RajaRajeshwarinagar

Rajajinagar

Kengeri

Bengaluru Rural Area

Bengaluru Rural Circle

Nelamangala

Chandapura

Yelahanka

Ramanagara

Kolar Circle

Chikkaballapur

Chinthamani

Kolar

KGF

Chitradurga

Tumkur Circle

Tumakuru

Tiptur

Madhugiri

Davangere Circle

Davangere

Harihara

Hiriyur

Chitradurga

xiv

The O & M divisions of BESCOM are further divided into one hundred

and sixteen sub-divisions with each of the sub-divisions having two to

three O & M section offices.

The section offices are the base level offices looking into operation

and maintenance of the distribution system in order to provide reliable

and quality power supply to the BESCOM’s consumers.

1.1 BESCOM at a glance:

The profile of BESCOM is as indicated below:

1.2

Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue for FY16 as

filed by BESCOM are as follows:

Sl.

No. Particulars (As on 30-09-2016) Figures

1. Area Sq. km. 41092

2. Districts Nos. 8

3. Taluks Nos. 46

4. Population lakhs 207

5. Consumers Nos. 1,03,96,06

4

6. Zone Nos. 3

7. DTCs Nos. 246419

8. Assets Rs. in Crores 18912.22

9. HT lines Ckt. Kms 91247.57

10. LT lines Ckt. Kms 163815.60

11. Total employees

strength:

A Sanctioned Nos. 21819

B Working Nos. 14189

12. Energy Sales for FY16 MU 24538.19

13. Revenue Demand for

FY16

Rs. in Crores 14148.24

14. Revenue Collection for

FY16

Rs. in Crores 14076.65

xv

As on 31.03.2016

CATEGORY No. of

Installations

Sales in

MU

Revenue

in Rs.

Crores.

Domestic 7569933 6252.68 3027.99

Commercial 950825 4368.98 3876.38

Industrial 195749 5743.61 4138.51

Agriculture 809212 6246.90 1599.84

Others 621246 1926.23 1505.56

Total 10146965 24538.40 14148.28

BESCOM has filed its application for Annual Performance Review for FY16,

approval of Revised Annual Revenue Requirement (ARR) for FY18 and Revision

of Retail Supply Tariff for FY18.

BESCOM’s applications, the objections / views of stakeholders thereon and the

Commission’s decisions are discussed in detail, in the subsequent Chapters of this

Order.

xvi

CHAPTER – 2

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

The Commission in its Tariff Order dated 30th March, 2016 had

approved the ARR for FY17 to FY19 and the Retail Supply Tariff of

BESCOM for FY17 under the MYT principles for the fourth control period

of FY17 to FY19. BESCOM in its present application filed on 30th

November, 2016 has sought Annual Performance Review for FY16

based on the audited accounts, approval of Revised ARR for the

second year of the fourth control period i.e. FY18 and Revised Retail

Supply Tariff for FY18.

BESCOM, in its application, has made the following new proposals:

i) Increase in fixed charge for HT Consumers;

ii) Change in Wheeling and Banking facility;

iii) Revision of Open Access Charges;

iv) Inclusion of morning peak hours under ToD tariff;

v) Revision of Specific Consumption of IP Sets;

vi) Tariff for Auxiliary Consumption by KPTCL Sub Stations;

2.1 Preliminary Observations of the Commission:

After the scrutiny of applications, the Commission communicated its

preliminary observations to BESCOM on 20th December, 2016. The

preliminary observations were mainly on the following points:

Capital Expenditure

Energy Sales

Assessment of IP set consumption

RPO Compliance

Power Purchase

Cross Subsidy Surcharge

Distribution Losses

xvii

Issues pertaining to items of revenue and expenditure

Compliance to Directives.

Financial implications on the new proposals.

BESCOM has furnished its replies on 30th December, 2016. The Commission

had issued Rejoinders to the replies vide Commission letter dated 10th

January, 2017, the replies to the Rejoinder were received vide letter dated

16th January 2017. The replies furnished by BESCOM are considered in the

respective Chapters of this Order.

2.2 Public Hearing Process:

As per the provisions of the Electricity Act 2003, the Karnataka

Electricity Regulatory Commission (Terms and Conditions for

Determination of Tariff for Distribution and Retail Sale of Electricity)

Regulations, 2006, read with the KERC Tariff Regulations 2000, and the

KERC (General and Conduct of Proceedings) Regulations, 2000, the

Commission, vide its letter dated 10th January, 2017, treated the

application of the BESCOM as a petition and directed the BESCOM to

publish the summary of the application for APR of FY16, approval of

Revised ARR for FY18 and retail supply tariff for FY18, in the

newspapers, to call for objections, from the interested

persons/stakeholders.

Accordingly, BESCOM has published the Notices in the newspapers as

follows:

Name of the News Paper Language Date of Publication

Deccan Herald English 08-1-2017

&

09-1-2017

The Hindu

Samyukta Karnataka

Kannada Vijaya Karnataka

The BESCOM’s application on APR of FY16, Revised ARR for FY18 and

Revision of Retail supply tariff for FY18, were also hosted on the web-sites of

BESCOM and KERC for the ready reference and information of the

stakeholders and the general public.

xviii

In response to the application of BESCOM, the Commission has received

Nine statements / letters of objections. BESCOM has furnished the replies to

all these objections. The Commission has also held a Public Hearing on 20th

February, 2017 at the Court Hall of the Commission in Bengaluru. The

details of the written / oral submissions made by various stake holders and

the response from BESCOM thereon have been discussed in Chapter – 3

and Appendix-1, appended to this Order.

BESCOM has subsequently filed an amendment application to its tariff

application on 16th February, 2017, and the Commission vide its order dated

20th February, 2017, had ordered BESCOM to publish the summary of

amendment application in the newspapers calling for objections. BESCOM

has published the notification on 22nd February, 2017, inviting objections from

the interested persons to be filed within 30 days from the date of the

notification published in the newspapers as follows:

Name of the News Paper Language Date of Publication

The Times of India English 22-2-2017

&

22-2-2017 Vijaya Vani Kannada

2.3 Consultation with the Advisory Committee of the Commission:

The Commission has discussed the proposals of the KPTCL and all the

ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.

During the meeting the following important issues were discussed:

Performance of KPTCL / ESCOMs during FY16

Major items of expenditure of KPTCL / ESCOMs for FY18

Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while

passing the Order.

xix

CHAPTER – 3

PUBLIC CONSULTATION

SUGGESTIONS / OBJECTIONS & REPLIES

3.1 As per the provisions of the section 64 of the Electricity Act, 2003, the

Commission has undertaken the process of public consultation, to

invite suggestions/views/objections from the interested stake-holders

and the general public on the application filed by BESCOM for

Annual Performance Review for FY16 and Revision of Retail Supply

Tariff for FY18. In the written submissions filed as well as during the

public hearing, the Stake-holders and the public have raised several

objections/ made suggestions, on the BESCOM’s Tariff Application

dated 30.11.2016. The names of the persons who have filed written

objections and made oral submissions are given below:

List of persons who have filed written objections

Sl.

No.

Appli

catio

n No.

Name & Address of Objectors

1

AE-

01

Sri. Prem Chand, Chief Electrical Traction Engineer, South

Western Railway.

2 AE-

02

Smt. Shroti Bhatia, VP (Regulatory Affairs & Communication),

Indian Energy Exchange.

3 BB-

01

Sri. Raju Bhatnagar, Secretary General, Bangalore Chamber

of Industry and Commerce.

4 BB-

02

Sri.T.V. Mohandas Pai, Vice President, B.PAC

5 BB-

03

Sri. G.N. Krishnappa, Energy Engineering, Bangalore

6 BB-

04

Sri. Keshav .K, General Secretary, Malur KIADB Area

Industries Association.

7 BA-

01

Doddanavar Global Energy Pvt Ltd

8 BA-

02

Dr. Sujay Rama Prasad, Hon. Secretary, Association of

Diagonostic Centres.

9 BA-

03

Sri. Prakash, Hon Secretary, Peenya Industries Association.

10 BA-

04

Laghu Udyog Bharati - Karnataka

11 BA-

05

Sri. Prem Chand, Chief Electrical Traction Engineer, South

Western Railway.

12 BA-

06

Sri. G. Manjunath, Chandapura, Bengaluru

13 BA- Sri. B. Praveen, Hon General Secretary, KASSIA.

xx

07

14 BA-

08

Sri. R. Ramanna, Bangalore Water Supply and Sewerage

Board.

15 BA-

09

Sri. M. Lokraj, Secretary General I/c, Federation of Karnataka

Chambers of Commerce and Industry.

The objections/ suggestions mainly pertain to:

(i) Tariff;

(ii) Quality of Power Supply and Service;

(iii) Compliance of Commission’s directives; and

(iv) Certain specific requests.

The summary of the objections, the BESCOM’s reply and the

Commission’s view are annexed as Appendix-1 to this Order.

3.2 List of the persons, who made oral submissions during the Public

Hearing, held on 20.02.2017.

SL.

No.

Names & Addresses of Objectors

1 Sri.T.V.Mohandas Pai, Vice President, & Sri Harish, B.PAC

2 Dr.G.S. Subba Rao, Sri. M.G.Prabhakar & Sri.Umesh, FKCCI.

3 Sri. V.G. Pandit & Sri A.N. Ramanujam. Association of

Diagonostic centres

4 Smt. B.S. Anuradha, BCIC

5 Dr. M.R. Ranganatha, Bharatiya Kissan Sangha, Chief of

Karnataka Agri Economic Cause

6 Sri.M.G. Shanthappa Gowda, Bharatiya Kissan Sangha.

7 Sri.A. Padmanabha, President, KASSIA.

8 Sri. Mallappa Gowda, Panel Chairman, Energy, KASSIA

9 Sri Venkatesh S Arbatti, Advocate for BWSSB.

10 Sri. M.R. Krishna Murthy & Sri K.R. Lashmikantha, PIA.

11 Sri Manjunatha.G, Secretary, Bharatiya Kissan Sangha,

Chandapura.

12 Sri. S.V. Nesargi, DGEPL

13 Sri. Chetan Jain, IEX

14 Sri. Satish Bharatiya Kissan Sangha, Turuvekere.

15 Sri. Sreedhar & Sri. Hemantha,Bharatiya Kissan Sangha,

Gubbi.

16 Sri. G.N Krishnappa, Electrical Contractor, Bengaluru.

17 Sri. Srinivasalu, South Western Railways. Bengaluru

18 Sri. Muralidhar Rao, PRAJA, Bengaluru.

3.2 Following are the additional points made during the Public Hearing:

xxi

1) The distribution losses in a few districts are more than the

Commission approved level and same should be debited to the

BESCOM’s account.

2) Quality of power supply should be improved.

3) Tariff applicable to HT category should be reduced.

4) Due to underperformance of KPCL’s thermal plants, reduced

quantities of thermal power have been supplied at a higher

cost of Rs.4.26 per unit as against the Commission approved

price of Rs.3.90 per unit.

5) Open access should be encouraged by reducing open access

charges.

6) IP set consumption is more than the approved level and the

same should not be allowed.

7) Inter-ESCOM energy balancing should be for a short period and

it should not burden the BESCOM.

8) Un-metered power supply and theft of energy is high in

BESCOM.

9) Amended petition filed on 16.02.2017 should not be considered,

since, no opportunity of 30 days’ time given for public to

respond. OPs cannot be filed on the same issues covered in

tariff matters and these proposals are not in line with the

Regulations/Act.

10) Incentives sought by BESCOM for reducing the distribution losses

should not be allowed.

11) Short term power purchase cost below Rs.4.50 per unit only

should be allowed

12) Prudence check on CAPEX should be done by involving the

consumers.

13) O&M cost is very high and excess controllable expenditure

should be disallowed.

xxii

14) Incentive for the consumers should be given for prompt

payment.

15) The proposed restriction of 3 months’ period in respect of

wheeling and banking of renewable energy is not as per the

Act.

16) Separate tariff category should be introduced for Micro, Small

and Medium Enterprises (MSME) and also voltage-wise tariff

should be introduced.

17) Proposal of modified time of the day(TOD) tariff should not be

accepted and the TOD should be made optional instead of

being mandatory

18) Prepaid meters should be introduced for all the industries.

19) Diagnostic centres should be categorized under tariff schedule

HT-2 (c) (ii) instead of HT-2(b).

20) Financial losses of BESCOM should not be passed on to the end

consumers.

21) Since there is no buffer stock of Transformers in O & M

Subdivision, Gubbi, the replacement of faulty Transformers is not

carried out by BESCOM within the prescribed duration of 72

hours as per SoP.

22) There is no representation of farmers in CGRF

23) Metering of IP Sets should be done and the subsidy amount per

IP Set should be transferred to the farmers directly under the

Direct Benefit Transfer (DBT) scheme.

24) After truing up of FY16, the power purchase cost per unit has

increased by Rs.1.00.

25) Excess amount of Rs.175 Crores spent by BESCOM over and

above the approved amount in respect of NJY Scheme should

be disallowed.

26) There is inordinate delay in implementation of Distribution

Automaton System (DAS) Project and BESCOM should estimate

the quantifiable efficiency gains on account of implementation

of the same.

xxiii

27) BESCOM is paying highest salaries to its employees.

28) Cross subsidy should be reduced to 20% of the energy charges.

29) Fixed charges should not be increased and also there is no

justification from BESCOM for this.

30) Contribution towards P&G to an extent of Rs.729.40 Crores

should not be allowed.

31) Due to improper maintenance by BESCOM, the power supply

interruptions are more and the same has been not informed to

KERC.

32) Incentive for Solar water heating should be continued.

33) Tariff schedule of HT-1 pertaining to BWSSB should not be

increased, since the cost of Electricity is 64% of water tariff

Revenue of BWSSB.

34) While arranging power supply under temporary category,

prepaid meters should be provided across the Bengaluru.

Further billing should be done on Monthly basis.

35) Privatization in distribution activity of power sector is very much

needed.

36) Timer switches are not provided to street lights.

37) The increase in cost of replacement of faulty transformers to an

extent of Rs.95.52 Crores should not be allowed.

38) The expenditure made by BESCOM towards implementation of

HVDS project is 200% more than the approved cost and hence

the excess amount spent should not be allowed.

39) The ratio of HT: LT should be brought down to 1:1.

40) Single meter should be installed at residence cum P G

accommodation. Buildings.

41) BESCOM should take up proper maintenance of HT installations

by replacing faulty spares like CTs and PTs, within the stipulated

time limit to reduce the financial loss to the company.

xxiv

42) Categorization of ready mix concrete (RMC) has been

inadvertently left out in tariff orders 2015 and 2016. This needs to

be included.

BESCOM had filed an Amendment petition on 16.02.2017, seeking

approval for:

a) Creation of additional slabs in respect of Domestic

consumers – LT2(a)(i) and (ii) and revision the tariff as

suggested therein;

b) Concessional tariff of Rs.5.98 per unit for street lights using

LED bulbs and higher tariff of Rs.11 per unit for street lights

not using LED bulbs; and

c) Increasing the demand charges and reduction in energy

charges in respect of all the HT Installations.

BESCOM had published a summary of the Amendment Petition in the

newspapers on 22.02.2017 seeking the objections/ comments/

suggestion from the stakeholders.

In response to the summary of amendment application published in

the newspapers, the following stakeholders have filed written

comments:

SL.No. Names & Addresses of Objectors

1. FKCCI, Bangalore

2. Consumer Care Society, Bangalore

3. Doddanavar Global Energy Pvt Ltd

4. Sharavathi Conductors Pvt. Ltd.

5. M/s. Bharti Airtel Limited, Bengaluru

6. M/s Indus Towers Limited, Bengaluru.

7. M/S Reliance JIO Infocomm Limited, Mumbai

8. M/s ATC Telecom Infrastructure Pvt Ltd, Bengaluru.

9. M/s Vodafone Mobile Services Ltd, Bengaluru.

10. M/s Reliance Communication Ltd, Bengaluru.

The Commission held a public Hearing on the Amendment Petition on

24.03.2017 at 11.30 Am in the Commission’s office.

xxv

The following is the list of persons, who attended the hearing held in

this regard on 24th March, 2017.

SL.No. Names & Addresses of Objectors

1. Sri M.C. Dinesh, President, Dr. G.S. Subba Rao and Sri

Umesh, FKCCI

2. Smt. Revathi Ashok, BPAC.

3. Smt. Mangal Jyothi IWPA.

4. Sri. Soubhik Das, BCIC,

5. Sri M.L. Ashok and Sr. Raja Rao, Consumer Care

Society

6. Sri Chethan Jain, IEX

The Managing Director, BESCOM, made a presentation before the

Commission to justify the amendments sought by the BESCOM.

The following is the gist of objections raised by the participants:

1. Increase in the Fixed Cost should be related to the cost of assets,

but the BESCOM has not furnished any details of the assets in its

petition.

2. For justifying increase in fixed cost, details of stranded cost are not

provided.

3. While the proposal for increase in fixed cost is welcome, the

overall pricing should be competitive and result in increase in the

efficiency.

4. The rates suggested under telescopic slab deprive the consumers

of the existing benefits. The benefits of lower slab rates are

available even in the slabs of Income Tax as well as BWSSB tariffs.

Hence, the prayer for approval of telescopic slabs should be

rejected.

5. The proposal to incentivise usage of LED bulbs for street lights is

welcome but it may add to the mounting arrears from the urban

and local bodies.

Some of the participants raised issues relating to wheeling and

banking of energy. The Commission informed that a separate

opportunity would be given to express their views.

While passing the orders, the prayer by the BESCOM and the

objections of the stakeholders have been kept in view, by the

Commission.

xxvii

CHAPTER – 4

ANNUAL PERFORMANCE REVIEW FOR FY16

4.0 BESCOM’s Application for APR for FY16:

BESCOM has filed its application for Annual Performance Review (APR)

for FY16 and Revision of ARR and retail supply tariff for FY18 on 30th

November, 2016. BESCOM has sought approval of its revised ARR in the

Annual Performance Review (APR) for FY16 based on the Audited

Accounts.

The Commission in its letter dated 20th December, 2016 had

communicated its preliminary observations to the application.

BESCOM, in its letter dated 30th December, 2016 has furnished its replies

to the preliminary observations of the Commission. Further, the

Commission on validation of the applications had sought additional

information/details in its letter dated 10th January, 2017. In reply,

BESCOM vide its letter dated 16th January, 2017 has furnished

additional information/details.

The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013

had approved BESCOM’s Annual Revenue Requirement (ARR) for FY14

– FY16. Further, in its Tariff Order dated 2nd March, 2015, the Commission

had approved the APR for FY14 and had revised the ARR along with

Retail Supply Tariff for FY16.

The revised Annual Revenue Requirement (ARR) of BESCOM for FY16,

based on the audited accounts, is discussed in this Chapter.

4.1 BESCOM’s Submission:

BESCOM has submitted its proposals for revision of ARR for FY16 based

on the Audited Accounts as follows:

xxviii

TABLE – 4.1

APR for FY16 – BESCOM’s Submission Amount in Rs. Crores

Sl.

No Particulars As Filed

1 Energy at Gen Bus in MU 29161.67

2 Energy at Interface in MU 27893.50

3 Distribution Losses in % 12.03

Sales in MU

4 Sales to other than IP & BJ/KJ 18276.96

5 Sales to BJ/KJ 71.31

6 Sales to IP 6189.90

Total Sales 24538.17

Revenue

7 Revenue from tariff and Misc. Charges 12205.55

8 Tariff Subsidy to BJ/KJ 30.81

9 Tariff Subsidy to IP Sets 1585.26

Total Revenue 13821.62

Expenditure

10 Power Purchase Cost 11364.09

11 Transmission charges of KPTCL 1225.91

12 SLDC Charges 10.53

Power Purchase Cost including cost of

transmission 12600.53

13 Employee Cost 912.76

14 Repairs & Maintenance 83.37

15 Admin. & General Expenses 223.21

Total O&M Expenses 1219.34

16 Depreciation 290.60

Interest & Finance charges

17 Interest on Loans 266.02

18 Interest on Working capital 342.45

19 Interest on consumer deposits 245.24

20 Other Interest & Finance charges 23.53

21

Less interest & other expenses

capitalised 146.85

Total Interest & Finance charges 730.39

22 Other Debits 16.25

23 Net Prior Period Debit/Credit -11.57

24 Return on Equity 108.00

25 Provision for taxation 24.51

26 Other Income 40.35

ARR 14937.70

27

Incentives for performance on

distribution loss reduction 190.92

Net ARR 15128.62

Carrying cost on Regulatory Asset to be

recovered in FY17 117.40

xxix

Net ARR for FY16 15246.02

BESCOM has reported a gap in revenue of Rs.1424.40 Crores for FY16,

considering a revenue of Rs.13821.62 Crores against a net ARR of

Rs.15246.02 Crores.

4.2 BESCOM’s Financial Performance as per Audited Accounts for FY16:

An overview of the financial performance of BESCOM for FY16 as per

its Audited Accounts is given below:

TABLE – 4.2

Financial Performance of BESCOM for FY16

Amount in Rs. Crores

Sl.

No. Particulars FY16

Receipts

1 Revenue from Tariff and misc. charges 12532.16

2 Tariff Subsidy including Truing up Subsidy 2158.04

Total Revenue 14690.20

Expenditure




Power Purchase Cost including cost of transmission 12601.01

6 O&M Expenses 1167.38







12 Less Interest and other expenses capitalized 146.85

Total Interest & Finance charges 699.75


14 Net Prior Period Debit/Credit 11.57

15 Exceptional items (54.77)

16 Other income (167.21)

17 Income tax 24.52

Net ARR 14582.19

As per the Audited Accounts, BESCOM has earned a profit of Rs.108.01

Crores for FY16. The profits / losses reported by BESCOM in its audited

accounts in the previous years are as follows:

xxx

TABLE – 4.3

BESCOM’s Accumulated Profits / Losses

Particulars Rs.

Crores

Accumulated losses as at the end of FY10 (350.88)

Profit earned in FY11 0.20

Profit earned in FY12 118.14

Losses incurred in FY13 (432.77)

Profits earned in FY14 76.10



Accumulated losses as at the end of FY16 (367.76)

As seen from the above table, the accumulated losses are Rs.367.76

Crores as at the end of FY16.

The Commission has taken up the Annual Performance Review for

FY16, duly considering the actual revenue and expenditure as per the

Audited Accounts vis-à-vis the revenue/expenditure approved by the

Commission in its Tariff Order dated 2nd March, 2015. The item-wise

review of expenditure and the decisions of the Commission thereon

are discussed in the following paragraphs:

4.2.1 Sales for FY16:

I. Energy Sales data for FY15:

The Commission, in its preliminary observations, had directed BESCOM

to adopt the category-wise and total sales for FY15 as approved in the

Tariff Order dated 30.03.2016 and accordingly revise the sales data in

Table-1.4 and Table 1.6 of the Tariff Petition.

BESCOM, in its replies to the preliminary observations, has stated that

there is no need to revise the data as it had compared two year’s

actual data as per the audited accounts. However, as directed by the

xxxi

Commission, BESCOM has revised the sales data in the Table-1.4 and

Table- 1.6, vide its replies dated 16.01.2016,

II. Annual Performance Review for FY16

1. Sales-Other than IP sets:

The Commission in its Tariff Order dated 02.03.2015 had approved total

sales to various consumer categories at 25341.90 MU as against the

BESCOM proposal of 25787.19 MU. The Actual sales of BESCOM as per

the current APR filing [D-2 FORMAT] is 24538.17 MU indicating a shortfall

in sales to the extent of 803.73 MU when compared to the approved

sales.

The category-wise sales approved by Commission in its Tariff Order

dated 02.03.2015 and the actuals for FY16 are indicated in the

following table:

TABLE- 4.4

Approved and Actual Sales for FY16 (Energy in MU)

Category Approved Actuals

Difference

between

Actuals &

Approved

LT-2a* 5824.79 6056.05 231.26

LT-2b 43.07 42.59 -0.48

LT-3 1712.49 1754.07 41.58

LT-4b 3.71 3.44 -0.27

LT-4c 6.11 4.61 -1.50

LT-5 1167.20 1150.39 -16.81

LT-6 474.54 404.68 -69.86

LT-6 449.53 366.26 -83.27

LT-7 167.43 167.52 0.09

HT-1 743.65 672.75 -70.90

HT-2a 5804.90 4593.21 -1211.69

HT-2b 2969.56 2614.90 -354.66

HT-2c 89.68 232.53 142.85

HT-3a & b 18.98 57.11 38.13

HT-4 116.07 96.59 -19.48

HT-5 66.30 74.22 7.92

Sub total 19658.00 18290.92 -1367.08

BJ/KJ 58.64 57.45 -1.19

IP 5625.26 6189.80 564.54

Sub total 5683.90 6247.25 563.35

xxxii

Grand total 25341.90 24538.17 -803.73

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

The major categories contributing to the reduction in sales as

compared to the approved figures are LT Water Supply (69.86 MU), LT-

Street Lighting (83.27 MU), HT Industries (1211.69 MU) and HT

Commercial (354.66 MU). On the other hand, major categories

contributing to the increase in sales in respect of the approved figures

are LT 2(a) (231.26 MU), LT-3(41.58 MU), HT2(c) (142.85 MU), HT3 (38.13

MU) and IP Sets (564.54 MU).

The observations of the Commission with respect to sales for FY-16 and

the replies of BESCOM are discussed below:

a) BESCOM was directed to analyze the reasons for reduction in sales

to HT categories.

BESCOM in its reply dated 20.12.2016, has stated that the HT-sales

has reduced due to consumers opting out of the grid and that in

FY-16, HT consumers had procured 2000 MU through wheeling and

banking.

The Commission notes that in the table at page-19 of replies to

preliminary observations in respect of APR for FY16, the energy

under wheeling & banking is indicated as 1590 MU, whereas in the

replies dated 16.01.2017, the same is indicated as 1329 MU. Thus the

Commission notes that there is inconsistency in the data furnished

about the energy accounted under Open Access/Wheeling and

has therefore considered the data as per the replies dated

16.01.2017. Nevertheless, the Commission notes that the wheeled

energy has grown by about 16% in FY16 as compared to the

energy wheeled in FY15.

b) The Commission had asked BESCOM to furnish the data of sales to

HT2(a) and HT2(b) categories along with the consumption from

open access / wheeling for the period 2011-12 to 2014-16.

BESCOM in its replies dated 20.12.2016, had replied that energy

procured from generators in HT sales cannot be ascertained.

However, BESCOM had furnished the cumulative sales to HT-2a,

xxxiii

HT2b and HT2c categories along with the energy procured through

open access/wheeling. Subsequently, in its replies dated

16.01.2017, BESCOM has furnished the details of energy wheeled to

HT-2a, HT-2b and HT-2c categories separately.

c) Regarding reconciliation of the actual sales figures for FY16

indicated at page-8 and Table 2.3 with the figures indicated in D-2

format, BESCOM has replied that there is a difference of 0.23 MU

owing to rounding off the data to two decimal points in the format.

The Commission has taken note of the reply furnished.

d) BESCOM was directed to confirm as to whether the category-wise

sales indicated in D-2 format is excluding unbilled sales and if

unbilled sales are included, to furnish category-wise break up of

unbilled sales.

BESCOM in its replies has clarified that sales of 24538 MU for FY-16

does not include unbilled sales. It is noted here that in the Tariff

Order-2016, the Commission had not allowed unbilled sales while

truing up for FY-15, for the reasons stated in that order.

e) BESCOM was directed to furnish the number of installations shifted

from HT2a, HT2b and HT-4 categories to HT-2c category and the

corresponding sales figures for FY14, FY15 and FY16, in order to

estimate the impact of shifting of these installations.

BESCOM has replied that the above data is not available. The

Commission would like to point out that BESCOM should be able to

furnish the required data in view of computerization of the billing

activity. BESCOM is therefore directed to ensure that in future all the

required details are furnished without any excuse.

2. Sales to IP sets:

xxxiv

i) The Commission in its Tariff Order dated 2nd March, 2015, had

approved the specific consumption of IP-sets as 7,795

units/installation/annum for FY16, whereas as per the data of IP-set

consumption reported by the BESCOM in its tariff filing, the specific

consumption works out to 7,846 units / installation / annum, which

corresponds to an increase in the specific consumption by 51

units/installation / annum. The total IP-set consumption reported for

the FY16 as per the Format D-2 filed by the BESCOM is 6,189.80 MU,

whereas the IP-set consumption approved by the Commission was

5,625.26 MU. The difference in consumption between the

approved and reported for FY16 is 564.54 MU. Thus, the quantum of

sales to the IP-sets’ category has exceeded the approved

quantum by 564.54 MU and the specific consumption has

increased by 51 units / installation / annum for the FY16.

ii) Further, the Commission had approved 7,29,150 as the number of

IP-set installations for the FY16, but, the actual number of

installations for which the electricity is being supplied, as reported

by the BESCOM, is 8,09,178. The difference in the number of

installations being 80,028 which corresponds to 11 percent increase

in the number of installations, as against the approved number of

installations for the FY16. The BESCOM has reported that the

increase in the number of installations over the approved number

of installations for the FY16 is due to the fact that, it has regularized

a large number of un-authorized IP-sets in the field under the

Regularization Scheme.

iii) The Commission, in its Tariff Order dated 2nd March, 2015, had

directed the BESCOM to compute IP-set consumption on the basis

of meter readings of agricultural feeders segregated under NJY

scheme, for the reason that the energy consumed by the IP-sets

could be accurately measured at 11 kV level at the substations

after allowing the losses prevailing in the distribution system, and to

xxxv

report the same in the following format, prescribed by the

Commission.

TABLE-4.5

Format for IP set Consumption as per feeder-wise data

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

.

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral

fee

de

rs a

t th

e

sub

sta

tio

ns

pe

rta

inin

g t

o t

he

div

isio

n

Dis

trib

utio

n lo

ss(1

1k

V lin

e,

DTC

s,&

LT

lin

e)

Plu

s sa

les

to

oth

er

co

nsu

me

rs if

an

y, in

MU

( lo

sse

s in

all t

he

ag

ric

ultu

ral fe

ed

ers

on

ly t

o

be

co

nsi

de

red

)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g t

he

Dis

trib

utio

n

loss

(1

1k

V &

LT)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts c

on

ne

cte

d

to t

he

ag

ric

ultu

ral fe

ed

ers

in

the

su

bd

ivis

ion

Av

era

ge

co

nsu

mp

tio

n o

f IP

/

mo

nth

(sp

ec

ific

co

ns

in u

nits

/IP

/mo

nth

)

Tota

l n

o o

f IP

se

ts in

th

e

sub

div

isio

n (

as

pe

r D

CB

)

Tota

l sa

les

of

IP s

ets

in

MU

1 2 3 4 5 6=(4-5) 7 8 9 10=8*9

April

to

March

Subdivision-1

Subdivision-2

Subdivision

iv) The Commission has been following this methodology since 2014

(Tariff Order dated 12th May, 2014, for FY15), considering the fact

that the ESCOMs have bifurcated the 11 KV feeders into separate

rural and agricultural feeders. Earlier to this, in the absence of

meters to IP-set installations, the Commission had allowed the

ESCOMs to assess the IP-set consumption, based on the readings of

the sample meters fixed to the distribution transformer Centers

(DTCs) predominantly feeding to IP-set loads. The sample was

selected in such a manner that two to three DTCs feeding

predominantly to IP-set loads per O&M section were covered so

that in each subdivision about ten such DTCs were covered. As per

this methodology, the overall IP-consumption for the Company

was being assessed on the basis of metered consumption arrived

at from such sample meters fixed to DTCs.

xxxvi

v) As per the IP-set data for FY13 submitted to the Commission by the

BESCOM, 729 DTCs covering 7,825 IP-sets out of the total 6,52,054

IP-sets in its jurisdiction was considered for assessing the total IP-set

consumption for the Company. It is noted that the sample IP-sets

considered to assess the total IP-set consumption for FY13, based

on the sample DTCs meter readings constituted only 1.2 per cent.

This means a small sample of IP-sets was considered while arriving

at the total consumption as compared to a large sample (55% in

March, 2017) being considered now after segregating the feeders

under NJY. Therefore, for computing the overall IP-set consumption

the latter method (consumption recorded in the meters fixed to

segregated feeders) is a better representation in terms of metered

consumption, as compared to the methodology followed earlier.

vi) Accordingly, the BESCOM was directed to furnish 11 kV feeder-wise

IP-set consumption based on energy meters’ reading data in

respect of agriculture feeders segregated under NJY scheme, duly

deducting the distribution losses prevailing in 11 kV lines, distribution

transformers, and LT system, to the Commission, every month.

However, the BESCOM has not been submitting the IP-set

consumption data based on the segregated agricultural feeders

regularly, to the Commission.

vii) The Commission, in its preliminary observations, had raised the

issue of increase in both sales and number of installations as well

as specific consumption of IP-set category and had also directed

the BESCOM to furnish necessary month-wise feeder-wise data as

per the energy recorded in the segregated agricultural feeders,

in support of its claims of IP-set consumption for the FY16.

viii) The BESCOM, in its reply to the preliminary observations, had

submitted the consolidated month-wise IP-set consumption data

in respect of the exclusive agricultural feeders segregated under

NJY by deducting the uniform energy losses of 10 per cent

prevailing in its 11 kV distribution system, for FY16, to the

xxxvii

Commission. Further, it had stated that, the consumption of IP-sets

has increased as compared to the approved quantum in view of

servicing of a large number of IP-sets under the Regularization

Scheme during the FY16. The Commission had observed that the

data of IP-set consumption from the exclusive agricultural feeders

considering a uniform loss at 10 per cent, had many

inconsistencies in respect of total consumption, total number of

IP-sets serviced and specific consumption arrived as compared

with the data filed by the BESCOM in the format D-2 of its Tariff

filing and its replies to the Commission’s observations. Further, the

Commission had observed that the increase in IP sales for the

FY16 may be partly due to the fact that the BESCOM has serviced

a larger number of IP-sets under regularization scheme, than it

had projected earlier.

ix) Accordingly, the Commission’s observations were communicated

to the BESCOM in the form of rejoinders, directing it to rectify the

discrepancies pointed out duly computing the IP-set consumption

on the basis of segregated agricultural feeders, reworking the

energy losses as per the BESCOM’s energy flow diagram.

x) In response, the BESCOM has submitted details of IP-set

consumption and has sought some more time to compute the

revised IP-set consumption based on the meter reading data of

agricultural feeders segregated under NJY, reworking the energy

losses prevailing in the 11 kV distribution system, as directed. On

verification of the IP-consumption data furnished in respect of

agriculture feeders, it was observed that the distribution loss

figures reckoned to compute the net IP-set consumption in the

feeders, is not based on actual calculation considering the

distribution network sketches.

xi) The BESCOM vide its letter No. BESCOM/BC-26/F-2411/2009-

10/1315, dated 30th January, 2017, has submitted the revised IP-

set consumption for FY16 as 5777.77 MU, as against 6,189.80 MU

xxxviii

indicated earlier, based on the segregated agricultural feeders,

duly revising the energy losses to 13.22 per cent (instead of 10 per

cent losses considered earlier in the format D2 of its Tariff filing).

The Commission notes that considering the revised consumption

of 5777.77 MU would result in a difference in consumption to an

extent of 412.03 MU. The BESCOM has not submitted its

justification in support of it. Hence, the Commission decides to

disallow a consumption of 412.03 MU from 6189.80 MU considered

by BESCOM in its tariff application.

xii) In view of the above discussion, the Commission decides to

approve IP set consumption of 5777.77 MU based on the revised

meter reading data of the segregated agricultural feeders for the

FY16, as against 6,189.80 MU shown by the BESCOM, in its Tariff

filing, by disallowing sales to an extent of 412.03 MU.

Accordingly, the Commission approves total sales of BESCOM as per

actuals except in respect of IP sets for the reasons discussed above.

The abstract of approved sales after APR of FY16 is as follows:

TABLE- 4.6

Approved sales for FY16 under APR Energy in MU’s

Category Approved as per

Tariff Order dated

02.03.2015

As filed by

BESCOM

Approved

as per

APR

LT-2a* 5824.79 6056.05 6056.05

LT-2b 43.07 42.59 42.59

LT-3 1712.49 1754.07 1754.07

LT-4b 3.71 3.44 3.44

LT-4c 6.11 4.61 4.61

LT-5 1167.20 1150.39 1150.39

LT-6 474.54 404.68 404.68

LT-6 449.53 366.26 366.26

LT-7 167.43 167.52 167.52

HT-1 743.65 672.75 672.75

HT-2a 5804.90 4593.21 4593.21

HT-2b 2969.56 2614.90 2614.90

HT-2c 89.68 232.53 232.53

HT-3a & b 18.98 57.11 57.11

xxxix

HT-4 116.07 96.59 96.59

HT-5 66.30 74.22 74.22

Sub total 19658.00 18290.92 18290.92

BJ/KJ 58.64 57.45 57.45

IP 5625.26 6189.80 5777.77

Sub total 5683.90 6247.25 5835.22

Grand total 25341.90 24538.17 24126.14

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

Thus, the Commission approves total sales of 24126.14 MU for FY16 after

APR.

4.2.2 Distribution Losses for FY16:

BESCOM’s Submission:

BESCOM, in its application as per the audited accounts has

reported actual distribution losses of 12.03% as against

distribution losses of 13.40% approved by the Commission for

FY16. Accordingly, BESCOM as per the provisions of the MYT

Regulations has claimed an incentive of Rs.190.92 Crores.

Subsequently, BESCOM has revised the sales to IP Sets for FY16 in

its letter dated 30th January 2017, as discussed in the earlier

paragraphs of this Order.

Commission’s analysis and decisions:

The Commission in its Tariff Order dated 2nd March, 2015 had

approved distribution losses for FY16 shown as under:

Range of Distribution losses FY16

Upper limit 13.60%

Average 13.40%

Lower Limit 13.20%

xl

BESCOM, in the tariff application dated 30th November, 2016

had reported distribution losses of 12.03% based on the energy

input at interface points and sales as per audited accounts for

FY16. However, in its replies to the preliminary observations,

BESCOM has revised the sales to IP sets as 5777.77 MU by

considering the metered data of segregated feeders under NJY,

as against the consumption of 6189.80 MU considered in its tariff

application, as per audited accounts for FY16. Based on this

revised IP set consumption, the total sales works out to 24126.14

MU instead of 24538.17 MU as considered in its tariff application.

Based on the energy input as stated earlier and the revised sales,

the distribution loss works out to 13.51% as detailed below:

1 Energy at Interface Points in MU 27893.40

2 Total sales in MU 24126.14

3 Distribution losses as a percentage of

input energy at IF points 13.51%

The Commission notes that, as the revised loss levels fall within

the approved range of losses for FY16, the question of allowing

any incentive would not arise. Also since the revised loss levels

are within the bands prescribed by the Commission, the question

of levy of any penalty for non-achievement of loss targets will

also not arise.

4.2.3 Power Purchase for FY16:

BESCOM Submission:

The Commission in its Tariff order dated 2nd March, 2015, had approved

source-wise quantum and cost of power purchase for FY16. BESCOM,

in its application has submitted the details of actual power purchase

for FY16 for the purpose of Annual Performance Review. The details of

power purchase are as under:

TABLE – 4.7

Power Purchase for FY16- Approved and Actuals

xli

* Source : D1 format

Commission’s analysis and decisions;

1. The actual power purchase for FY16, as filed by BESCOM for

approval of Annual Performance Review is 29161.67MU amounting

to Rs 12601.01 Crores, as against the approved quantum of

30419.09 MU amounting to Rs11840.15 Crores. This represents

reduction in quantum of power purchased to an extent of 1257.42

MU and increase in the cost by Rs. 760.39 Crores. This is reflected in

reduced sales (as reported by BESCOM) to an extent of 803.73 MU

in FY16 with reference to the approved sales.

Source of Generation

Actuals for FY16 Approved for FY16 Difference-between Actuals

and Approved-for FY16

% increase

(+)/decrease (-)

over an approved

figures

Energy

in MUs

Cost in Rs

Cr.

Rate

in Rs

per

Unit

Energy

in MUs

Cost in Rs

Cr.

Rate

in Rs

per

Unit

Energy

in MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy Cost

KPCL Hydel

Stations 1949.26 175.85 0.90 3314.70 205.55 0.62 -1365.44 -29.70 0.28 -41.19 -14.45

KPCL-

Thermal

Stations

8693.14 3699.57 4.26 10793.62 4214.12 3.90 -2100.48 -514.55 0.35 -19.46 -12.21

CGS 8240.82 2577.84 3.13 7265.97 2229.28 3.07 974.85 348.56 0.06 13.42 15.64

Major IPPs 5104.06 2139.78 4.19 4992.75 2063.20 4.13 111.31 76.58 0.06 2.23 3.71

IPPs -Minor

(NCE

Projects)

2736.34 995.85 3.98 3277.10

1202.25 3.67 -560.76 -206.40 -0.03 -16.5 -17.17

Other

States

Projects

10.72 30.55 28.5

0 80.90 14.56 1.80 -70.18 15.99 26.70 -86.75 109.82

Short

/Medium

term

3599.55 1804.77 4.84 694.06 364.38 5.25

2905.49 1440.39 -0.24 418.62 395.30

UI Charges 319.74 94.87

Section 11 1324.37 619.41

Transmissio

n Charges

(KPTCL &

PGCIL)

1717.07

1531.00

186.07

12.15

SLDC

Charges

(POSOOC

& SLDC)

12.11

15.81

3.70

23.40

Energy

Balancing -2816.33 -1269.73 4.51

Others

Charges 3.07

TOTAL 29161.67 12601.01 4.32 30419.09 11840.15 3.89 -1257.42 760.39 0.43 -4.13 6.43

xlii

2. As against the approved quantum of 30419.10MU, the actual power

purchased by BESCOM is 29161.67 MU for FY16, which is about

4.13% less than the approved quantum.

3. On an analysis of the source-wise approved and actual power

purchases, the following deviations in the quantum of energy

purchased and its cost are observed:

i. There is shortfall in supply from sources of power from KPCL Hydel

and KPCL Thermal projects as indicated below:

TABLE-4.8 Short-fall in supply from KPCL Stations

Source of

Generation

Shortfall in energy

compared with approved

availability in MU

Cost Difference between

actual and approved in

Rs Crs.

KPCL Hydel 1365.44 29.70

KPCL Thermal 2100.48 514.55

Total 3465.92 544.25

The shortfall from the above sources, has been met by un-

requisitioned surplus power from CGS & major IPP sources apart

from purchases from short-term & medium–term sources to a tune

of 3599.55 MU at a cost of Rs.1804.77 Crores and power purchase

under section 11 of the EA, 2003, to a tune of 1324.37 MU at a

cost of Rs.619.41 Crores BESCOM has incurred an additional cost

Rs.760.39 Crores on account of overall deficit in the availability of

power.

ii. The change in the source-wise mix of supply, reconciliation of

energy and its cost among ESCOMs has resulted in increase in

average power purchase cost of BESCOM to Rs.4.32 per KWh as

against the approved rate of Rs.3.89 per KWh.

4. In order to ensure proper accounting of energy and its cost by the

ESCOMs, BESCOM is directed to reconcile the inter-ESCOM energy

exchanges and their costs every month and it shall collect/pay the

xliii

amounts out of the tariff subsidy received from the Government of

Karnataka.

5. The Commission notes that, so far the SLDC has not implemented the

intra-state ABT. As per the directions issued by the Government of

Karnataka, vide its letter dated 28th January, 2016, intra-State ABT

has to be implemented immediately by the KPTCL and ESCOMs. The

Commission therefore directs the SLDC, KPCL and the BESCOM to

take appropriate action immediately to implement intra-state ABT

and to host the details thereof, on their respective websites.

6. The power purchases made by the BESCOM during FY16 from

different sources of generation also include the energy purchased

under Section 11 of the Electricity Act, 2003, in pursuance of a

Government Order dated 16.09.2015. The Government, in the said

order, had fixed a provisional tariff of Rs.5.08 Per unit subject to

determination of final tariff by this Commission. The Commission in its

order dated 18th August, 2016, has fixed the final tariff at Rs.4.79 per

unit and has ordered recovery of the difference amount (Rs.5.08-

4.79) from the generators. However, some of the generators have

filed petitions before the Hon’ble ATE, while a few other generators

have filed review petitions before this Commission. The Hon’ble ATE

has ordered the ESCOMS not to recover the difference amount

pending disposal of the petitions. Hence the power purchase cost

allowed in this order is subject to the decisions of the Hon’ble ATE

and also this Commission on such pending petitions.

Accordingly, the Commission decides to approve power purchases of

29161.67 MU at a cost of Rs. 12601.01 Crores for the purpose of Annual

Performance Review for FY16.

4.2.4 Renewable Purchase Obligation (RPO) compliance by BESCOM for

FY16:

1. BESCOM in its petition has filed the details of RPO compliance for solar

and non-solar RPO for 2015-16 as indicated below:

xliv

TABLE-4.9

RPO Compliance as Reported by BESCOM

Million Units

Energy Purchased 29161.67

Non-Solar energy to be procured at 10% target 2916.17

Non-Solar energy actually procured 3759.78

Non-Solar compliance as percentage of energy

purchased

12.89

Solar energy to be procured at 0.25% target 72.90

Solar energy actually procured 131.86

Solar compliance as percentage of energy purchased 0.45

The Commission in its preliminary observations had noted that the

quantum of renewable energy purchased is indicated as 4048.84 MU in

table-2.7, whereas the same is indicated as 3891.63 MU in table 2.10.

Therefore, BESCOM was directed to reconcile the figures and confirm

the correct figures.

BESCOM in its replies to preliminary observations had stated that the

figures indicated at Table-2.7 of the application are computed for

different analysis and the same cannot be compared with figures of

Table 2.10 of the application and hence, had requested to consider

the data as per Table 2.10 of the application for the purpose of RPO.

Subsequently, BESCOM vide its letter dated 10.02.2017 has furnished

reconciled data confirming 3891.63 MU as the renewable energy

purchase.

The Commission has relied upon the subsequent reply furnished by

BESCOM confirming 3891.63 MU as the renewable energy purchase.

For validating the RPO compliance, the Commission had directed

BESCOM to furnish the data as per the specified format, duly

reconciling the data with the audited accounts. BESCOM in its replies

has furnished the following data:

a. Non-solar RPO: 1

xlv

TABLE-4.10

Non-Solar RPO Compliance by BESCOM

No. Particulars Quantum

in MU

Cost- Rs.

Crores.

1 Total Power Purchase quantum from all sources 29161.67 12600.58

2 Non–solar Renewable energy purchased under

PPA route at Generic tariff including Non-solar RE

purchased from KPCL

2653.49 939.07

3 Non –solar Short-Term purchase from RE sources,

excluding sec-11 purchase

552.80 280.82

4 Non –solar Short-Term purchase from RE sources

under sec-11

553.49 281.17

5 Non-solar RE purchased at APPC 0 0

6 Non-solar RE pertaining to green energy sold to

consumers under green tariff

0 0

7 Non-solar RE purchased from other ESCOMs 0 0

8 Non-solar RE sold to other ESCOMs 0 0

9 Non-solar RE purchased from any other source

like banked energy purchased at 85% of

Generic tariff

0 0

10 Total Non-Solar RE Energy Purchased

[No 2+ No.3+No.4+No.5 +No.7+No.9]

3759.78 1501.06

11 Non-Solar RE accounted for the purpose of RPO

[ No.10- No.5-No.6-No.8]

3759.58 501.06

12 Non-solar RPO complied in % [No11/No1]*100 12.89

b. Solar RPO:

TABLE-4.11 Solar RPO Compliance by BESCOM

No. Particulars Quantum

in MU

Cost- Rs.

Crores.

1 Total Power Purchase quantum from all sources 29161.67 12600.58

2 Solar energy purchased under PPA route at Generic

tariff including solar energy purchased from KPCL

75.05 53.89

3 Solar energy purchased under Short-Term, excluding

sec-11 purchase

0

4 Solar Short-Term purchase from RE under sec-11 0

5 Solar energy purchased under APPC 0

6 Solar energy pertaining to green energy sold to

consumers under green tariff

0

xlvi

7 Solar energy purchased from other ESCOMs 0

8 Solar energy sold to other ESCOMs 0

9 Solar energy purchased from NTPC (or others) as

bundled power

56.80 60.26

10 Solar energy purchased from any other source like

banked energy purchased at 85% of Generic tariff

0

11 Total Solar Energy Purchased

[No2+ No.3+No.4+No.5+No.7+No.9+No.10]

131.85 114.15

12 Solar energy accounted for the purpose of RPO [

No.11- No.5-No.6-No.8]

131.85 114.15

13 Solar RPO complied in %

[No12/No.1]*100

0.45

The Commission has perused the data furnished and the explanation

submitted by BESCOM. The Commission notes that at sl.no.11 of the

table relating to Non-solar RPO, the total cost is wrongly indicated as

Rs. 501.06 Crs. instead of 1501.06 Crs.

The Commission has approved total input energy of 29161.67 MU for

FY16 in its APR. Thus, BESCOM was required to purchase 2916.17 MU of

Non-solar energy and 72.90 MU of solar energy to meet its RPO targets.

The Commission notes that in non-solar energy of 2653.49 MU under

PPA route, BESCOM has not considered 7.80 MU KPCL Wind Power and

6.10 MU of TBHE. The total non-solar energy purchased would be

3773.68MU. Thus, BESCOM has achieved 12.94% of non-solar and 0.45%

of solar RPO for FY16. As a result, BESCOM has over-achieved its non-

solar and solar RPO targets by 2.94% percentage points and 0.20

percentage points respectively.

4.2.5 Operation and Maintenance Expenses:


BESCOM in its application has sought approval of O&M

expenditure of Rs.1219.34 Crores for FY16. As per the audited

accounts, BESCOM has incurred O & M expenses of Rs.1167.38

Crores as detailed below:

TABLE – 4.12

O&M Expenses of BESCOM as per Audited Accounts for FY16

xlvii

Amount In Rs. Crores

Repairs & Maintenance 83.37

Employee Expenses 860.80

A&G expenses 223.21

O&M expenses 1167.38

BESCOM has requested the Commission to consider indexation

ratio of CPI: WPI at 74: 26 for working out the weighted inflation

rate at 6.78% calculated on one-year CPI & WPI index from

January- December, 2015 and has arrived at the normative

O&M expenditure after factoring in the CAGR of growth in the

number of consumers at 7.44% computed based on the

consumer growth as per actuals of FY16 over FY15 (One year)

with the base O & M expenses as per APR of FY15. BESCOM has

projected the normative O&M expenses as follows:

TABLE – 4.13

Normative O & M Expenses – BESCOM’s submission

Particulars FY16

Consumer growth rate as per actual (CGI) 7.44%

Weighted Inflation Index (WII) 6.78%

O&M Cost of FY15 as per APR Rs.in Crs. 919.68

O&M Index= 0&M (t-1)*(1+WII+CGI-X) Rs.in Crs. 1041.26

Further, BESCOM has claimed that it has incurred additional O&M

Expenses of Rs.15.06 Crores on account of recruitment during FY16,

which is to be treated as uncontrollable expenditure. Also, an amount

of Rs.12.79 Crores is claimed as uncontrollable expenditure on account

of modification of 59000 Group Operating Switches (GOS) operating

pipes provided for distribution transformers in BESCOM. An amount of

Rs.150.23 Crores has been claimed as uncontrollable expenditure

towards Pension and Gratuity contribution. Thus, BESCOM has claimed

uncontrollable O&M expenditure of Rs.178.08 Crores in addition to the

normative O&M expenses of Rs.1041.26 Crores. The total O&M

expenses claimed by BESCOM for FY16 are Rs.1219.34 Crores.

xlviii


The Commission in its Tariff Order dated 2nd March, 2015 had approved

O&M expenses for FY16 as detailed below:

TABLE – 4.14

Approved O&M Expenses as per Tariff Order dated 02.03.2015

Particulars FY16

No. of installations as per actuals as per Audited

Accts 10099416

Weighted Inflation Index 6.69%

CGI based on 3 Year CAGR 6.73%

Actual O&M expenses for FY13-Rs.in Crores. 901.15

Total Approved O&M Expenses for FY16 – Rs.in

Crores 1205.01

The Commission in its preliminary observations had sought the details of

certain expenses booked under A&G expenses by BESCOM during

FY16. BESCOM in its replies has stated that it has incurred expenses of

Rs.118.07 Crores towards remuneration to contract agencies and that

an amount of Rs.43.66 Crores has been incurred towards conveyance

and travel expenses. Further, an amount of Rs.3.38 Crores is incurred

on Legal, Professional and Consultancy charges. Though BESCOM has

furnished the Division-wise amount of expenditure incurred, it has not

furnished the details of expenditure incurred against the above

expenses.

The Commission in its Tariff Orders has been stressing the need to

initiate adequate measures to control the O&M expenses so as to be

within the approved figures.

BESCOM has again sought consideration of one-year data of WPI and

CPI for determining the inflation index and consumer growth rate.

The Commission reiterates its earlier view that, one-year data of WPI

and CPI and consumer growth rate does not reflect the true indices

due to situational variations, if any. Further, the Commission in its Order

dated 7th January, 2016 in RP No.5/2014, has decided to allow O & M

expenses as per the norms of the MYT Regulations. Thus, in

xlix

accordance with the methodology adopted while approving the ARRs

for FY14-16 and subsequent APRs, the Commission proceeds with the

determination of the normative O & M expenses based on the 12-year

data of WPI and CPI and three year CAGR of consumers.

Considering the Wholesale Price Index (WPI) as per the data available

from the Ministry of Commerce & Industry, Government of India and

Consumer Price Index (CPI) as per the data available from the Labour

Bureau, Government of India and adopting the methodology followed

by the CERC, with CPI and WPI in a ratio of 80: 20, the allowable

inflation for FY16 is computed as follows:

TABLE-4.15

Allowable Inflation for FY16

Year WPI CPI Composite

Series Yt/Y1=Rt Ln Rt

Year

(t-1)

Product

[(t-1)*

(LnRt)]

2004 98.72 111.1 108.624

2005 103.37 115.8 113.314 1.04 0.04 1 0.04

2006 109.59 122.9 120.238 1.11 0.10 2 0.20

2007 114.94 130.8 127.628 1.17 0.16 3 0.48

2008 124.92 141.7 138.344 1.27 0.24 4 0.97

2009 127.86 157.1 151.252 1.39 0.33 5 1.66

2010 140.08 175.9 168.736 1.55 0.44 6 2.64

2011 153.35 191.5 183.87 1.69 0.53 7 3.68

2012 164.93 209.3 200.426 1.85 0.61 8 4.90

2013 175.35 232.2 220.83 2.03 0.71 9 6.39

2014 182.00 246.90 233.92 2.15 0.77 10 7.67

2015 177.03 261.42 244.542 2.25 0.81 11 8.93

A= Sum of the product column 37.56

B= 6 Times of A 225.37

C= (n-1)*n*(2n-1) where n= No. of years of data=12 3036.00

D=B/C 0.07

g(Exponential factor)= Exponential (D)-1 0.0771

e=Annual Escalation Rate (%)=g*100 7.71

While determining the normative O & M expenses for FY16, the

Commission has considered the following aspects:

a) The actual O & M expenses allowed for FY13 excluding contribution

to Pension and Gratuity Trust as base year data.

l

b) The three year compounded annual growth rate (CAGR) 6.89% of

the number of installations considering the actual number of

installations as per the audited accounts up to FY16.

c) The weighted inflation index (WII) at 7.71% as computed above.

d) Efficiency factor at 1% as considered in the earlier two control

periods.

Thus, the normative O & M expenses for FY16 will be as follows:

Particulars FY16

No. of Installations As per actuals as per Audited Accts 10146965

Weighted Inflation Index 7.71%

Consumer Growth Index (CGI) based on 3 Year CAGR 6.89%

Actual O & M expenses for FY13 excluding P&G

contribution (base figure for FY14-16)-Rs.in Crores. 737.09

O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores 1044.76

The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust and

additional employee cost on account of recruitment during FY16.

BESCOM, as per its audited accounts has incurred an amount of

Rs.150.23 Crores towards contribution to Pension and Gratuity Trust for

FY16. Further, BESCOM in its application has stated that it has incurred

an amount of Rs.15.06 Crores as additional expenses on account of

recruitment of personnel to fill up the existing vacancies during FY16.

BESCOM has also requested to consider the work awarded amount of

Rs.12.79 Crores towards modification of 59000 Group Operating

Switches’ (GOS) operating pipes provided for distribution transformers

in BESCOM as uncontrollable expenditure.

The Commission decides to treat employee costs on account of

recruitment and contribution to P&G Trust as uncontrollable O&M

expenses. This component has been allowed in addition to the

normative O&M expenses to enable BESCOM to meet its actual

employee costs. Considering the uncontrollable O & M expenses, the

total allowable O & M expenses for FY16 works out to Rs.1210.05 Crores.

The claims towards expenditure for modification of 59000 Group

li

Operating Switches’ (GOS) operating pipes provided for distribution

transformers being the part of the R&M expenses, is already covered

under R&M expenses of the audited accounts which falls under

normative controllable O&M expenses. Hence the Commission has not

allowed this expenditure separately. Nevertheless, the O&M expenses

now allowed on normative basis are more than the actual O&M

expenses incurred by BESCOM for FY16.

The allowable O&M expenses for FY16 are as follows:

TABLE – 4.16

Allowable O & M Expenses for FY16


Sl.


1 Normative O & M expenses 1044.77

2 Additional employee cost (uncontrollable

O & M expenses)

165.29

3 Allowable O & M expenses for FY16 1210.06

Thus, the Commission decides to allow an amount of Rs.1210.06 Crores

as O&M expenses for FY16.

4.2.6 Depreciation:


BESCOM in its applications has claimed an amount of Rs.290.60 Crores

as depreciation worked out after deducting an amount of Rs.128.96

Crores being the depreciation amount withdrawn on account of assets

created out of consumers’ contributions / grants as per Accounting

Standards (AS) – 12 as detailed below:

TABLE – 4.17

Depreciation for FY16 – BESCOM’s Submission


Particulars FY16

Gross fixed assets at the beginning of the year 7074.36

Additions during the year 2025.28

Deductions during the year 198.90

Gross fixed assets at the end of the year 8900.74

Depreciation provided 419.55

Average rate of Depreciation 5.24%

lii

Less: Depreciation withdrawn from contribution as per AS 12 128.95

Net Depreciation 290.60

The BESCOM has requested the Commission to allow depreciation

amount of Rs.290.60 Crores for FY16.


In accordance with the provisions of the KERC (Terms and Conditions

for Determination of Tariff) Regulations, 2006 and amendments

thereon, the allowable depreciation for FY16 has been determined by

the Commission duly considering the data of assets as per the audited

accounts as follows:

TABLE – 4.18

Allowable Depreciation for FY16


Particulars

Opening

Balance

of Asset

as on

01.04.2015

Closing

Balance

of Asset

as on

31.03.2016

Depreciation

for FY16

Buildings 79.36 106.77 3.64

Civil 3.39 4.07 0.19

Other Civil 0.81 1.61 0.04

Plant & M/c 1499.28 1986.52 113.38

Line, Cable Network 5441.73 6742.16 299.91

Vehicles 18.68 24.46 1.19

Furniture 11.64 13.62 0.60

Office Equipment 11.92 13.97 0.60

Intangible Assets 4.88 7.72

Sub Total 7071.69 8900.92 419.56

Less Depreciation on account

of assets created out of

consumer contribution / grants

128.96

Net allowable depreciation 290.60

Considering the opening and closing balance of gross blocks of fixed

assets for FY16 and the depreciation as per annual accounts, the

weighted average rate of depreciation works out to 5.25%.

As per the audited accounts for FY16, an amount of Rs.128.96 Crores

on account of depreciation on assets created out of consumer’s

liii

contribution and grants on actual basis is considered for computation

of allowable depreciation for FY16.

Based on the above, the Commission decides to allow the actual net

depreciation of Rs.290.60 Crores for FY16.

4.2.7 Capital Expenditure for FY16:

a) Capital Expenditure of BESCOM:

BESCOM’s submission:

The BESCOM has reported a capital expenditure of Rs.1374.31 Crores

(pages 14 & 15 of the application) as against the Commission

approved capex of Rs.627 Crores for FY16, Whereas, in Format D17,

BESCOM has shown a capital expenditure of Rs.1805.43 Crores. The

details of the category wise Capital expenditure stated to have been

incurred for FY 16, is shown below:

Table-4.19

Capital expenditure for FY16- BESCOM’s Submission


Sl.

No Schemes

Approved

Capex

Expenditure

incurred

1 E&I works

A 11 KV Lines for New Stations 80 33.48

B 11 KV Other Work+ DTCs including

dedicated DTCs for DWS Schemes. 70 22.23

C Re- conductoring of ACSR /Rabbit to

Coyote in Bangalore Urban 30 18.53

D Re-conductoring of LT line using Rabbit

conductor 20 17.88

E Re- conductoring (Improvement works on 11

KV Rural Feeders) 20 -

F Strengthening of 11 KV UG cable Network

with RMUs 25 45.09

2 NJY 177.47

3 Providing infrastructure to Un authorized IP

Sets 60 212.34

4 (A) DTC Metering Programme Non RAPDRP

Area 30 18.81

(B) Replacing Mechanical Meter By

Electrostatic. 20

69.77

(C) Smart Meter, HT- TOD Meter Replacing

MNR etc. 30

5 RAPDRP & DAS 121.97

6 Service connections 25 58.64

liv

7 Replacement of failure DTCs by new ones 15 95.52

8 A)Civil Engineering works, DSM & Others 25 34.97

B)Consumer Education 1 -

9 HVDS 255.77

10 Providing fault locators 1

11 Electrification Hamlets /Villages 5 -

12 Energisation of IP Sets 20 -

13 T &P and Computers, IT initiative, TIC 10 36.94

14 Other works including Safety measures fund,

Local Planning, Emergency restoration, TIC 20 67.43

15 Providing AB Cable 120 10.93

16 Ganga Kalyana 57.5

17 DDUGJY 1.24

18 IPDS 3.21

19 One Time Maintenance 13.00

20 RGGVY 12th plan 1.60

Total 627 1374.31

BESCOM has clarified in the replies to preliminary observations that, the

difference in Capital expenditure shown as Rs.1805.43 Crores and the

category wise expenditure indicated at Rs.1374.31 Crores is due to the

inclusion of capex under consumer contribution in Rs.1805.43 Crores

shown in D17.

Commission’s analysis and decision:

In the Tariff Order dated 2nd March, 2015, the Commission had

approved an amount of Rs.627 Crores towards capital expenditure for

FY16, against the BESCOM’s proposed capex of Rs.2050 Crores, as

BESCOM had indicated a loan amount of Rs.604 Crores for FY16.

From the above table, it is seen that, the capital expenditure incurred

by BESCOM at Rs.1374.31 Crores is in excess of the approved capex to

an extent of Rs.747.31 Crores for FY16. The Commission notes that, the

capex incurred beyond the approved amounts would necessitate

incurring additional amounts towards interest and depreciation

affecting the approved ARR and the retail supply tariff. In view of this,

the Commission has been directing all the ESCOMs to plan their capex

carefully so as to ensure that they do not exceed the capex

achievement by a huge margin which will have a substantial impact

on the tariff to the end consumers.

lv

BESCOM in its reply to the preliminary observations has stated that, out

of Rs.1374.31 crores, it has utilized Rs.870.27 Crores for spill over works

and Rs.504.02 Crores for meeting the new works of FY16. Also, BESCOM

in its replies to the rejoinder has stated that, a capex of Rs.627 Crores

for FY16 has been approved by the Commission for new works and its

capex for new works is well within the approved capex of Rs.627

Crores. It is to be noted here that, the Commission approves capex of

ESCOMs for the financial years to facilitate execution of its new works

as well as spill over works and the capex approval for the financial year

will not be segregated as stated above. Also, there is no instance of

any ESCOM separately seeking capex approval for the new works and

spill over works, in any of the financial year in the past.

BESCOM has stated that, a capex of Rs.870.27 Crores is used for

spillover works. This clearly shows that, a large number of works were

kept pending execution under the spillover/ongoing category every

year. BESCOM needs to monitor the works properly to complete them

within the time frame and categorize them without undue delay.

From the above table it is seen that, the works like “E&I of 11 kV Lines

for New Substations, 11 kV Other Work and DTCs including dedicated

DTCs for Drinking Water Schemes and Re- conductoring of ACSR

/Rabbit to Coyote in Bangalore Urban”, are very essential for

improvement of the ESCOM’s network strengthening and loss

reduction. But the BESCOM has achieved progress of less than 50% of

the approved capex on these works. The BESCOM, in its response to

the Commission’s preliminary observations has not furnished a

satisfactory reply on this aspect. BESCOM should note that, the E&I

work would help to improve its distribution system network connectivity,

reduce technical losses and improve reliability of the system. Therefore,

BESCOM ought to have incurred approved capex in full for these

works.

In respect of “NJY programme”, BESCOM has incurred a capex of

Rs.177.47 Crores and the Commission had sought the details of the

lvi

analysis it has carried out on the benefits earned. BESCOM in its replies

to preliminary observations made by the Commission has stated that,

pre and post implementation analysis of NJY has been carried out by a

third party agency and has listed some of the benefits accrued as

below:

a) After implementation of NJY programme, BESCOM is providing

24X7 hours power to non-agricultural loads in rural areas and has

achieved improvement in quality of power supply with improved

standard of living,

b) The metered consumptions in Rural areas has increased by 25%,

c) The NJY has reduced the failure of Distribution transformers,

d) NJY has resulted in better consumer satisfaction and

encouragement of rural Industries.

In respect of “Replacing Mechanical Meter by Electrostatic/Smart

Meter, HT- ToD Meter, Replacing MNR etc.”, BESCOM has incurred a

capex of Rs.69.77 Crores as against the approved capex of Rs.50

Crores. BESCOM in its replies to the Commission’s preliminary

observations has stated that, the higher capex in this category is due

to procurement of static meters which have advantages of higher

accuracy, recording demand, registering of information on pilferages

and also, to avoid consumer grievances on average billing and

accuracy issues.

Under the item of “Replacement of failed Distribution Transformers by

new ones”, the BESCOM has shown a capex of Rs.95.52 Crores which

does not appear to be correct. The Commission had pointed out the

discrepancy in the accounting practice in the previous year also and

all ESCOMs had agreed to set right the same. BESCOM in its replies to

preliminary observations has only furnished data on number of failed,

repaired and new transformers used to replace failed ones. But, has

not clarified the reasons sought for showing the capex of Rs.95.52

lvii

Crores. Moreover, the scrapped transformers being 879 in numbers,

BESCOM has procured 1236 numbers of new transformers and incurred

only Rs.12.72 Crores. BESCOM should note that, only the failed

transformers which are beyond repairs due to burning / fully damaged

are to be scraped and could be replaced by new transformers and

such transformers can be accounted under capex. The charges

incurred for the repairs of failed Transformers are to be accounted

under Revenue Expenditure.

In respect of “Distribution Automation System (DAS) & Smart Grid (SG)

programme”, BESCOM has indicated a capex of Rs.44.25 Crores.

BESCOM in its replies to the Commission’s preliminary observations has

submitted the details of progress of work of DAS programme, but, it has

not indicated as to when the DAS programme will be completed and

commissioned. The Commission notes that this work has been going on

since a long time and directs BESCOM to ensure early completion of

the work with a view to ensure that the intended benefits of the scheme

are realised without any further delay.

In respect of “HVDS”, works BESCOM has achieved a capex of

Rs.255.77 Crores. The Commission had sought the details of this scheme

and its post- commissioning analysis. BESCOM in its replies to preliminary

observations has stated that, a third party analysis has been awarded

and the outcome will be submitted to the Commission after receipt of

the report.

A capex of Rs.13 Crores for “One-time maintenance of distribution

system” has been incurred by BESCOM. BESCOM in its replies to

preliminary observations made by the Commission has furnished the

details of the works carried out in the O&M Divisions and stated that,

the works are being inspected by a third party for analysis of the pre

and post-commissioning scenarios. BESCOM has stated that, the report

will be submitted to the Commission after the third party submits the

analysis.

lviii

In respect of works taken up under “TENDER SURE projects”, which are

infrastructure projects of BBMP Bengaluru, it is stated that, the works are

taken up as capital works of BESCOM, whereas, such works shall have

to be treated as Deposit Contribution Works (DCW). Since this work is

being executed by the BBMP, the amount incurred on its execution has

to be recovered from BBMP, and it cannot form part of capex

programme of BESCOM.

The BESCOM’s explanation on this is not acceptable and the

Commission directs BESCOM to collect an amount of Rs.44.30 Crores

stated to have been incurred against TENDER SURE works from BBMP

and report the same to the Commission separately. If the amount is not

collected by BESCOM, the same would be disallowed during APR of

FY17.

Further, it is noted that BESCOM has been incurring capex over and

above the approved amounts from the past four years as indicated

below:

Table-4.20

Approved and Actual Capex incurred –FY12 to FY16

Amount in Rs. Crores. Particulars FY12 FY13 FY14 FY15 FY16

Capital investment

approved by the

Commission

660.00 510.00 848.00 763.00 627.00

Actual capital

investment incurred as

per audited accounts

557.68 851 1052 1782.85 1805.43

Shortfall (-)/ Excess -102.32 341 204 1019.85 1178.43

Percentage

achievement 84.49 167% 124% 233.7% 287.94%

From, the above information, it is evident that, there is no proper

planning of capital expenditure, budgetary control and monitoring to

ensure that the capex amounts spent are well within the allotted funds.

Further, the Commission had issued “Capital Expenditure Guidelines for

ESCOMs” in which the capital investment planning process and

prioritization and post commissioning analysis to be adopted by the

lix

ESCOMs, have been emphasized. The Commission notes that BESCOM

is yet to implement the said guidelines issued by the Commission.

The BESCOM, in its replies to the rejoinders, has explained that, the

excess expenditure over and above the approved amount is due to,

the inclusion of capex in respect of NJY works, HVDS works, consumer

contribution works, IPDS and RAPDRP works which are being provided

with grants from Government of India and Government of Karnataka.

The Commission, after reviewing the progress achieved in the capex

for FY16 and considering the replies furnished by BESCOM, decides to

allow the capex of Rs.1374.31 Crores, subject to disallowance if any, as

per the results of the prudence check of capital expenditure for FY16,

as discussed below.

b) Prudence check of capital expenditure and material procurement of

BESCOM for FY16:

The Commission has got the Prudence checks of capital expenditure

for FY16, done through third party verification of the capital works

categorized and the material procurement of BESCOM during FY16.

This was taken up in two parts:

i. Prudence check of execution of the capital works of FY16.

ii. Prudence check of Material Procurement process of FY16.

i. Prudence check of execution of the capital works of FY16

The capital expenditure as proposed by BESCOM is being allowed by

the Commission as per the filing every year, subject to prudence

check. Accordingly, the prudence check of the capital expenditure

incurred by BESCOM for the FY16 was got done by the Commission by

engaging the services of M/s. Power Research and Development

Consultants Pvt. Ltd. (PRDCL) as consultant, being the lowest bidder for

the said job, through a transparent process of e-tendering to evaluate

lx

the works categorized during FY16, which includes the spill over works

of earlier year’s and the new works of FY16.

M/s PRDCL has stated that, it has received a list of 69,728 works costing

Rs.1575.87 Crores from BESCOM, in which 26457 works were costing

more than Rs.1 Lakh with a total cost of Rs.1353.06 Crores. M/s PRDCL

has drawn the required sample size from the list provided as per the

guideline issued and the terms of the reference prescribed in the bid

document and the scope of the work issued by the Commission. The

total works and selected samples for prudence check are shown

below:

TABLE – 4.21

Total works and selected samples for Prudence check

Particulars

As per List furnished As per sample

selected

No. of

Works Cost

No. of

Works

Cost

Works costing more than Rs.6

lakhs 2230 971.52 125 227.47

Works costing between Rs.3 to

Rs.6 lakhs 3383 98.78 52 2.26

Works costing less than Rs.6 lakhs 20844 282.76 42 1.10

Total 26457 1353.06 219 230.83

M/s PRDCL has stated that, they have verified the data received from

the O&M divisions and examined the works by conducting the site

visits. Various details like, energy savings, benefits derived and details

regarding the execution of respective works were collected and

reviewed. Further, in the grading of the works M/s PRDCL has observed

that, out of 206 works evaluated (13 works were not evaluated), five

works were found to be just qualified as prudent, 194 works were

graded at 61-70 marks, seven works were found to be excelling by

getting more than 71 marks, seven works were found to be

conditionally prudent and one work is not meeting the prudence

norms.

lxi

As per the report of the consultant, the following is the summary of

Prudence check findings for FY16:

TABLE – 4.22

Summary of Prudence check findings for FY16

Particulars Numbers Cost in Rs.

Crores

Works costing Rs.6 Lakhs and above

considered as samples 125 227.47

Works costing between Rs.3 Lakhs and Rs.6

Lakhs considered as samples 52 2.26

Works costing below Rs.3 Lakhs considered

as samples 42 1.1

Works not meeting

the norms of

prudence

Rs.6 Lakhs and above Nil -

Rs.6 Lakhs and Rs.3

Lakhs 01 0.0348

below Rs.3 Lakhs Nil -

Total works not meeting the norms of

prudence as stipulated in the guidelines

issued by this Commission

01 0.0348

M/s PRDCL has furnished the details of works not meeting prudence

norms and the works which are conditionally prudent as follows:

TABLE – 4.23

Details of Not Prudent and Conditionally Prudent works

Division Work nomenclature Cost Rs.

Lakhs

Non- Prudent work

Rajajinagar

Enhancement of 100kva to 250kva Distribution

Transformer of N3TC-319, S.C. Gangabyraiah TC in O &

M-7 area, N3 S/D, Basaveshwaranagar, Rajajinagar

Division, BESCOM on total turnkey basis

3.48L

Conditionally prudent works

Chandapura

11 KV New Feeder/link line under RAPDRP scheme, from

Attibele MUSS for bifurcation of F-15 feeder by using

3*400 Sq. mm UG Cable – Attributable to KPTCL

99.17

Hebbal

Evacuation of new feeder from Sahakaranagara MUSS

to Agrahara layout to reduce the overload of existing F-

14 feeder from Sahakaranagara MUSS in O & M Unit-

20A, C8 sub-division (W.O. No T-4023 dated 03.11.2015),

153.95

Chitradurga RAPDRP -B project at Chitradurga town 1487

Kanakapura

Arranging 62HP+960W power supply to concrete

product industry in favor of Manjula w/o Sreekantha G T

at Gollanadoddi in Harohalli section, Harohalli sub

division

2.86

Tumkur Conversion of existing LT distribution system into high 262.57

lxii

voltage distribution system (HVDS) for MF-9 D.G. Hally

feeder of Hebbur section in RSD2 sub-division

Tumkur

Conversion of existing LT distribution system into high

voltage distribution system (HVDS) for MF-4 Mallasandra

feeder of S. Nagara section in RSD2 sub-division

85.7

Tumkur


voltage distribution system (HVDS) for MF-4 F2 Mulukunte

feeder of Honnudike section in CSD3 sub-division

594.76

Tumkur


voltage distribution system (HVDS) for MF-4 F-8 M

Gollahalli feeder of Honnudike section in RSD1 sub-

division

452.72

Total 3138.73

Further the consultant, who has carried out the prudence check of

KPTCL has stated that, one project not meeting the norms of Prudence

in KPTCL needs to be attributed to BESCOM for the following reasons:

It is observed that the 66/11 kV Srigandadakavalu

Substation, in Bengaluru transmission zone remains unutilized

in spite of it being ready in all respect as BESCOM has not

connected required load through 11kV feeders to the

station. In this case KPTCL may not be penalized for the

project not meeting prudence norms. The responsibility

should be fixed on the BESCOM for its failure to execute the

required number of 11kV feeders from this substation.

The summary of works which are having cost overrun as well as time

overrun are shown as follows:

TABLE – 4.24

Summary of Works having Cost overrun

Particulars Within 10% 10-25% Above 25%

Rs.6 Lakhs and above 19 14 08

Rs.6 Lakhs and Rs.3 Lakhs 06 04 03

below Rs.3 Lakhs 07 01 00

TABLE – 4.25

Summary of Works having Time overrun

Particulars Within Year Between one and

two Years Above 2 Years

Rs.6 Lakhs and above 26 03 05

Rs.6 Lakhs and Rs.3 Lakhs 06 02 02

lxiii

below Rs.3 Lakhs 06 00 01

M/s PRDCL has made some important observations as follows:

a) In case of a few NJY works, field works are completed, but the

assets are not categorized due to various reasons, primarily

because of noncompliance of conditions and bills not submitted

by the contractors. In general, the categorization of assets has

been delayed by a few months for majority of the projects.

b) Some of the works were yet to be categorized or are partly

categorized as the contractors reportedly have failed to submit

the bills and joint inventory statements.

c) In a few other cases there have been delays in categorization,

due to delay in submission of completion reports of works from

the field officials.

The Commission had forwarded the copy of the Prudence check

Report submitted by the Consultant to BESCOM along with the report

in respect of KPTCL for its views/comments and justification if any on

the non-prudent works for being treated as meeting to norms of

prudence to reach the Commission on or before 20th March, 2017.

BESCOM in its letter dated 20th March, 2017 has stated that, the project

in which the 250kVA transformer was shifted has been brought back to

its original place on 7.2.2017. But, the consultant has clearly mentioned

that, even during the writing of the draft report which was

subsequently submitted to the Commission on 21st February 2017, it had

contacted the officials of BESCOM and confirmed that, the transformer

has not been put back into its original place. The extract of the

annexure to the prudence check report is shown below:

“Even till this day of writing this report, 250kVA transformer had

not been reinstalled and the present load is fed by 100kVA

transformer itself”

Further, BESCOM, in respect of the conditionally prudent works, has

furnished very general replies.

lxiv

The Commission has verified the reply by BESCOM and the views

/comments and the justifications for the works to be treated as

meeting prudence norms though treated as not meeting the

prudence norms by the consultants. The Commission has decided that,

the interest and depreciation pertaining to the cost of works termed as

not meeting prudence norms are to be disallowed as shown below:

TABLE – 4.26

Details of Amounts disallowed in APR FY16 Sl

No Particulars


1 Total cost of categorized works eligible for prudence

check 1353.06

2 Total cost of the sample works 230.83

3

Cost of sample works not meeting prudence norms (01

work with cost of Rs.3.48Lakh against a sample basket

of 24 works with Rs.1.22 Crore in the category of

additional transformers 2648 Nos. and total cost of

Rs.41.78Crores)

0.0348

4

Percentage of cost not meeting prudence norms with

respect to the total samples considered in the

category (Rs.3.48 Lakh against a sample basket of 24

works with Rs.1.22 Crore)

2.852

5

Overall cost of capex in the category not meeting

prudence norms compared with the cost of the total

cost of the category of Additional transformers

(2.852% of sample basket escalated to total capex

under the respective category of works of

Rs.41.78Crores)

1.19

6 The cost of KPTCL works not meeting the norms of

Prudence attributable to BESCOM 3.98

7 Total amount of capex not meeting the norms of

prudence (=5+6) 5.17

8

Amount to be disallowed towards works not meeting

prudence norms calculated on the basis of weighted

average interest & weighted average depreciation

on the capex to be disallowed.

0.564

Thus, the Commission decides to deduct an amount of Rs.0.564 Crores

towards disallowance of interest and depreciation on the imprudent

capital works for FY16 in the revised approved ARR for FY18 as

discussed in the subsequent chapter of this Order.

ii. Prudence check of Material Procurement process of FY16:

lxv

The BESCOM is carrying out the Capital works through total turnkey as

well as partial turnkey. In some cases, the agency or the contractor

assigned with the partial turnkey would also invest in some of the

smaller materials whenever it is necessary. While procuring the

materials at large quantities, it is very essential for BESCOM to see that,

no stock is kept idle for a longer period and the material procurement

and distribution is carried out in a prudent manner. The Commission has

been instructing the consultants to also carry out prudence check of

the material procurement process in all the ESCOMs along with the

prudence check of execution of works.

M/s PRDC has stated that, BESCOM has considered all the aspects

related to procurement and has procured the materials as per the

requirement after due process of “e-tendering” duly following the

Transparency Act. However, the Government of Karnataka has

exempted the utilities from the Transparency Act, in respect of

purchase of materials directly from certain firms like KAVIKA without

calling for tenders. Some materials for works are also directly

purchased through rate contract basis from the firms, with whom

BESCOM has entered into agreement after necessary bidding

processes.

Some of the observations made on the procurement are:

a) The materials are procured through the process of e-tendering

duly following the regulations as per KTPP Act.

b) Procurement of Distribution Transformers is exempted from the KTPP

Act.

c) There were 4397 nos. of 25 kVA capacity transformers in stock at

the beginning of the year. 9,320 transformers were procured during

the year against 32,220 transformers ordered and 12,994 were

utilized for works. Only 1,046 transformers remained in stock at the

end of the year. These are proposed to be utilized for NJY works,

HVDS works, UNIP regularization works etc.

lxvi

d) Opening balance of 63 kVA transformers at the beginning of the

year was 436 nos. Orders were placed for procurement of 4,440

transformers of this rating, against which 2,306 were supplied. 2,318

transformers were utilized for works were utilized and remaining 326

(including O.B) were in stock as on 31.3.2016.

e) Opening balance of 100 kVA transformers was 155nos. at the

beginning of the year. Procurement orders were placed for 2,730

transformers out of which 1,042 transformers were received. A total

of 1,091 transformers were utilized or works and remaining 11 only

was held in stock at the end of the year.

f) In respect of 250 kVA transformers, 267 were received during the

year, to add to the opening stock of 45 nos whereas, 301

transformers were utilized for works, balance 11 only remained in

stock at the end of the year. Orders had been placed on firms

to supply 680 transformers of this capacity.

g) No new transformers of 500 kVA were ordered 14 of the 15

transformers that were available in stock and were utilized for

works and at the end of the year only one transformer remained

in stock.

h) In respect of HT aerial bunched cables, opening balance was

8.456 km, no procurement was made in FY16, 7.5 km of

conductor was issued for works and remaining 0.9km was in

stock as on 31.3.2016

i) LT, AB cable opening balance was 33.7 km, 100 km was

procured, 47.3 km was issued and remaining 94.36 km was

available in stock at the end of the year.

Further, considering the size of BESCOM’s jurisdiction and consumer

base of 101.46 lakhs, handling an energy consumption of 29,161.67 MU

with a network of HT lines of 89,297.69 ckt kms and LT network of

16,3045.47 ckt kms, and 2,36,672 number of transformers, the stock of

various materials quantity stated above is acceptable.

The Commission after noting the above observations of the consultant:

i. Directs BESCOM to take action to make the conditionally prudent

works to meet the norms of prudence and furnish compliance,

lxvii

failing which the applicable weighted average interest and

depreciation cost of the conditionally prudent works will be

disallowed during APR of FY17.

ii. Directs BESCOM to take action to rectify the work termed as not

meeting prudence check and report.

iii. Directs BESCOM to Monitor the works, complete and categorize

the works within the target time.

iv. Directs BESCOM to monitor the stock position continuously to see

that, no material is kept as idle stock.

4. 2.8 Interest and Finance Charges

a) Interest on Capital loan:


BESCOM in its application has claimed an amount of Rs.266.03

Crores towards interest on long term loans drawn from banks /

financial institutions. The details of interest on loans claimed by

BESCOM are as follows:

TABLE – 4.27

Interest on Capital Loans- BESCOM’s Submission


Particulars FY16

Long term Loan outstanding as on 31.03.2015 2663.74

Less repayments 159.30

Long term Loan outstanding as on 31.03.2016 2504.44

Average loan for the year 2584.09

New Loans availed during the year 845.35

Interest on long term loans 266.03

Considering the opening balance of loans, fresh borrowings and

the repayment of loans during FY16, the weighted average rate

of interest on the average loan amount works is stated to be

7.76%. BESCOM has requested the Commission to allow an

lxviii

amount of Rs.266.03 Crores for FY16 towards interest on long term

loans.


The Commission has considered the opening and closing balances of

long term loans as per the audited accounts for FY16 and

repayments/new loans as per format D9 of the application as shown

below:

TABLE – 4.28

Allowable Interest on Capital Loans – FY16


Particulars FY16

Opening Balance Secured Loans 2628.66

Opening Balance Un-secured Loans 40.07

Total opening balance of loans 2668.73

Add new Loans 851.82

Less Repayments 159.30

Total loan at the end of the year 3361.25

Average Loan 3014.99

Interest on long term loans as per audited accounts for

FY16 266.03

Considering the average loan of Rs.3014.99 Crores and an amount of

Rs.266.03 Crores incurred towards interest on long term loans, the

weighted average of interest works out to 8.82% which is lesser than the

prevailing interest rates.


towards interest on loan for FY16.

b) Interest on Working Capital:


BESCOM has furnished the details of short term loans/overdraft

borrowed during the year FY16 to meet its day to day

expenditure (working capital). BESCOM has indicated the

lxix

opening and closing balances of short term loans/overdraft at

Rs.2819.99 Crores and Rs.3674.54 Crores respectively for FY16.

The interest on short term loan/overdraft is indicated at Rs.311.81

Crores. The weighted average rate of interest is 9.60% p.a.

In accordance with the provisions of the MYT Regulations,

BESCOM has computed the normative interest on working

capital of Rs.342.45 Crores based on short term prime lending

rate of SBI of 14.75% p.a. for FY16 limited to the actual

expenditure plus 50% of the difference between the actual

expenditure and the amount calculated on normative basis as

detailed below:

TABLE – 4.29

Interest on Working Capital - BESCOM’s Submission


Particulars FY16

One-twelfth of the amount of O&M Expenses 100.59

Opening GFA as per Audited Accounts 7074.76

Stores, materials and supplies at 1% of Opening

balance of GFA 70.75

One-sixth of the Revenue 2358.04

Total Working Capital 2529.38

Rate of Interest (% p.a.) 14.75%

Interest on Working Capital 373.08

Actual Interest incurred for FY-16 311.81

50% of the difference of interest incurred and

interest on normative basis 30.64

Normative Interest on Working capital 342.45


As per the audited accounts, BESCOM has incurred interest on working

capital of Rs.311.81 Crores on short term borrowings/overdrafts during

FY16.

The concept of charging interest on the basis of prime lending rate of

SBI no more exists as the interest rates by commercial banks and

lxx

financial institutions are governed by the base rate of interest declared

by RBI during FY16. At present, the interest rates are based on Marginal

Cost of fund based Lending Rates (MCLR) effective from 1st July, 2017.

As per the BESCOM’s application, it is stated that short term loans for

FY16 have been availed at a weighted average rate of interest of

9.60%. However, for computation of normative interest on working

capital, the Commission decides to consider the base rate of interest

of 9.25% with spread of 250 basis points and to allow short term loans at

a normative interest of 11.75% for FY16.

As per the KERC (Terms and Conditions for Determination of Tariff)

Regulations, 2006 and amendments thereon, the Commission has

computed the allowable interest on working capital for FY16 as follows:

TABLE – 4.30

Allowable Interest on Working Capital for FY16

Amount in Rs . Crores

Particulars FY16


Opening GFA 7079.23

Stores, materials and supplies 1% of Opening balance of GFA 70.79




Normative Interest on Working Capital 295.32

Actual interest on WC as per audited accounts for FY16 311.81

Allowable Interest on Working Capital 295.32

Since the actual interest on working capital is more than the normative

interest on working capital, the Commission, as per the provisions of the

MYT Regulations decides to limit the allowable interest on working

capital to the normative levels.


towards interest on working capital for FY16.

c) Interest on Consumer Deposits:


lxxi

BESCOM in its application has claimed an amount of Rs.245.24

Crores towards payment of interest on consumer security

deposits for FY16.

TABLE – 4.31

Interest on consumer security deposits for FY16 – BESCOM’s Submission


Particulars FY16

Opening balance of Consumer Deposits 2831.86

Closing balance of consumer deposits. 3233.34

Average Consumer deposit for FY16 3032.60

Interest on consumer deposits 257.77

Bank Rate of Interest -% 8.50%

Actual interest provision made for FY16 245.24


The Commission notes that, the interest on consumer security deposits

amounting to Rs.245.24 Crores claimed by BESCOM as per the audited

accounts for FY16 works out to a weighted average rate of interest of

8.09%. As per the KERC (Interest on Security Deposit) Regulations, 2005,

the interest on consumer deposits is to be allowed as per the bank rate

prevailing as on the 1st of April of the relevant year. The bank rate as

on 1st April, 2015 was 8.50%. The actual weighted average rate of

interest is below the applicable bank rate.


towards interest on consumer security deposits for FY16.

d) Other Interest and Finance charges:

BESCOM has claimed an amount of Rs.23.52 Crores towards other

interest and finance charges for FY16 which includes charges payable

to banks / financial institutions and guarantee commission payable to

GoK and also stamp duty. The Commission notes that as per the

audited accounts an amount of Rs.12.74 Crores is incurred towards

Bank charges and an amount of Rs.9.73 Crores is paid to GoK as

guarantee commission besides payment of Rs.1.05 Crores for stamp

lxxii

duty on availment of loans. Hence, the Commission decides to allow

an amount of Rs.23.52 Crores as other interest and finance charges for

FY16.

e) Capitalization of Interest and other expenses:

BESCOM in its application has claimed, as per the audited accounts,

an amount of Rs.146.85 Crores towards capitalization of interest on

loan and other operation and maintenance expenses for FY16. The

same has been considered for computation of APR for FY16.

Thus the allowable interest and finance charges for FY16 are as follows:

TABLE – 4.32

Allowable Interest and Finance Charges


Sl.


1. Interest on Loan capital 266.03

2. Interest on working capital 295.32

3. Interest on consumer deposits 245.24

4. Other interest and finance charges 23.52

5. Less Interest and other expenses capitalized 146.85

6. Total interest and finance charges 683.26

4.2.9 Other Debits:


BESCOM, in its application has claimed an amount of Rs.16.25

Crores towards other debits as detailed below:

TABLE – 4.33

Other Debits-BESCOM’s Submission


Sl

No Particulars FY16

1 Small and Low value items written

off 0.16

2 Losses/gains relating to Fixed assets 6.91

3 Assets decommissioning cost (0.11)

4 Bad debts written off 0.22

lxxiii

5 Miscellaneous losses and write offs 10.89

6 Material cost variance (1.82)

Total 16.25


The Commission notes that as per the audited accounts for FY16, an

amount of Rs.16.26 Crores has been factored as other debits as stated

by BESCOM in its application.

Therefore, the Commission decides to consider an amount of Rs.16.26

Crores as other debits for FY16.

4.2.10 Net Prior Period Charges:


BESCOM in its application, as per the audited accounts, has

claimed an amount of Rs.11.57 Crores towards Prior Period

Expenses as detailed below:

TABLE – 4.34

Net Prior Period Charges-BESCOM’s Submission


Particulars FY16

Prior period Credits (9.99)

Prior period expenses 21.56

Net prior period Expenses 11.57


As per the Audited Accounts for FY16, the prior period debit is Rs.21.56

Crores on account of employee costs, A&G expenses and under

provided depreciation and other expenses of earlier years. Further, the

prior period credit of Rs.9.99 Crores is on account of excess provision for

depreciation and other income related to prior period. Hence, the

Commission decides to allow net prior period expenses of Rs.11.57

Crores for FY16.

4.2.11 Return on Equity:

lxxiv


BESCOM in its application has claimed Return on Equity of

Rs.107.12 Crores for FY16 as detailed below:

TABLE – 4.35

Return on Equity – BESCOM’s Submission


Particulars FY16

Opening Equity 697.99

Less: Consumer meter security deposit capitalized

54.81

Equity addition during the year 97.02

Closing equity for the year 740.20

Average Equity for FY16 691.09

Return on equity @ 15.50% 107.12

However, BESCOM in its application under revenue requirement format

has considered RoE of Rs.108.00 Crores for FY18. BESCOM has

requested to allow Rs.108.00 Crores as RoE considering only the equity

without taking into account the accumulated losses.


The closing balances of gross fixed assets along with break-up of equity

and loan component and the details of GFA, debt and equity (net-

worth) for FY16 as per actual data as per the audited accounts are

indicated as follows:

TABLE – 4.36

Status of Debt Equity Ratio for FY16 Amount in Rs. Crores

GFA

(Closing

Balance)

Debt

(Closing

Balance)

Equity

(Net-

worth)

(Closing

Balance)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age

of

actual

debt on

GFA

%age

of

actual

equity

on GFA

8908.47 3361.26 327.26 6235.93 2672.54 37.73 3.67

From the above table it is evident that the debt and equity amounts

llie within the normative amounts (in the debt equity ratio of 70:30) on

the closing balances of GFA for FY16.



computed the allowable Return on Equity at 15.5% on equity plus the

accumulated balance of profit/loss as per audited accounts as at the

lxxv

beginning of the year and also factoring recapitalization of security

deposit of Rs.100.00 Crores in compliance with the Orders of the

Hon’ble ATE in appeal No.46/2014. The allowable RoE for FY16 is

determined as follows:



computed the allowable Return on Equity at 15.5% on equity plus

accumulated balance of surplus/deficit as at the beginning of the

year besides allowing taxes as per actuals. Considering the status of

equity as per the audited accounts for FY16, the allowable RoE is

determined as follows:

TABLE – 4.37

Allowable Return on Equity Amount in Rs. Crores

Particulars FY16

Paid Up Share Capital 546.92

Share deposit 151.08

Reserves and Surplus as on 01.04.2016 (475.77)

Recapitalization of security deposit (100.00)

Total Equity 122.23

Return on equity @ 15.50% 18.95

Considering the total equity of Rs.222.23 Crores as at the beginning of the

FY16 and factoring the recapitalization of security deposit of Rs.100.00

Crores in compliance with the Orders of the Hon’ble ATE in appeal

No.46/2014, BESCOM has a net worth of Rs.122.23 Crores.

Further, as reported by BESCOM, an additional equity of Rs.97.02 Crores

has been received from Government of Karnataka during the year.

Considering the actual date of receipt of this additional equity, the

Commission as per provisions of the MYT Regulations, has determined the

allowable return on additional equity as detailed below:

TABLE-4.38

Return on equity for the additional equity received during FY16

Additional Equity received during FY16 Amount

in Crs

Received

on

No. of

Months

RoE

allowed

EN 56 PSR 2014 P dated 26.03.2015 2.2 4.4.2015 11 0.31

EN 16 PSR 2015 dated 26.06.2015 2.25 10.7.2015 8 0.23

EN 16 PSR 2015 dated 26.06.2015 0.5 10.7.2015 8 0.05

lxxvi

EN 11 PSR 2015 dated 25.08.2015 12 8.9.2015 6 0.93

EN 16 PSR 2015 dated 01.09.2015 20 8.9.2015 6 1.55

EN 10 PSR 2015 P1 dated9.11.2015 4.5 14.12.2015 3 0.17

EN 10 PSR 2015 P1 dated9.11.2015 1 14.12.2015 3 0.04

EN 16 PSR 2015 P1 dated3.12.2015 20 14.12.2015 3 0.78

EN 11 PSR 2015 dated30.12.2015 5.57 7.1.2016 2 0.14

EN 16 PSR 2015 P1 dated10.2..2016 2.3 23.02.2016 1 0.03

EN 16 PSR 2015 P1 dated10.2.2016 0.49 23.02.2016 1 0.01

EN 11 PSR 2015 P1 dated 18.2.2016 6.21 5.3.2016 0 0.00

EN 16 PSR 2015 dated29.02.2016 20 5.3.2016 0 0.00

TOTAL 97.02 4.24

Return on Equity allowed on Additional Equity Infusion in FY16 4.24

Thus, the Commission decides to allow Return on Equity of Rs.23.19

Crores for FY16.

4.2.12 Income Tax:

As per the audited accounts, the BESCOM has incurred an expenditure of

Rs.24.51 Crores towards payment of Income Tax for FY16. In accordance

with the provisions of the MYT Regulations, the Commission decides to

allow the actual Income Tax of Rs.24.51 Crores paid for FY16.

4.2.13 Other Income:


The BESCOM in its application has claimed an amount of Rs.40.35

Crores as other income for FY16 as against the actual other income of

Rs.167.21 Crores as per the audited accounts for FY16. The BESCOM, in

its claims has requested to allow retaining the interest of Rs. 5.45 Crores

earned on bank fixed deposits, incentive of Rs.116.78 Crores earned for

prompt payment of power purchase bills and miscellaneous income of

Rs.5.00 Crores earned in the process of recruitment of employees.

The details of the other income indicated by the BESCOM for

FY16 are as under:

TABLE – 4.39

Other Income – BESCOM’s Submission


Particulars FY16

lxxvii

Rent 3.56

Miscellaneous 30.93

Rebate at 0.5% for collection of Electricity

Duty 3.04

Interest on Bank Deposits 2.82

Total other income 40.35


As per the audited accounts, an amount of Rs.167.21 Crores is

indicated as other income for FY16. The Commission notes that any

income earned during the course of business on account of prompt

payments to the Generators, interest earned on fixed deposits and

miscellaneous income etc., has to be passed on to the consumers as

they bear the entire cost of operation of the distribution company

including return on the equity. Hence there is no justification for

claiming other income as Rs. 40.35 Crores even though an amount of

Rs.167.21 Crores has been accounted as other income in the audited

accounts for FY16.

However, Commission, as decided in the earlier Tariff Orders, in order to

encourage and bring in financial discipline in timely payment of

monthly power purchase bills, decides to continue to allow10% of the

total incentive amounting to Rs.11.68 Crores on account of timely

payment of power purchase bills to be retained by the BESCOM for

FY16. The Commission also decides that the entire amount of Rs.8.28

Crores earned by the BESCOM by way of interest on bank fixed

deposits should be included in other income, since the BESCOM has

deposited the funds available from the business. Further, the

Commission considers the entire amount of Rs.35.94 Crores of

miscellaneous income reported by the BESCOM in its audited

accounts, as other income. Thus after deducting the incentive amount

of Rs.11.68 Crores and considering the entire amount of interest earned

on fixed deposits and the miscellaneous income, the Commission

decides to allow an amount of Rs.155.53 Crores as other income for

FY16 as detailed below:

TABLE – 4.40

Allowable Other Income for FY16

lxxviii


Particulars FY16

Rent 3.56

Miscellaneous 35.94

Rebate at 0.5% for collection of Electricity Duty 3.04

Interest on Bank Deposits 8.28

90% of the incentives received on prompt payment of

power purchase bills 105.10

Profit/Loss on sale of stores (0.71)

Others 0.32

Total other income 155.53

4.2.14 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.1.00 Crore per year

towards consumer relations / consumer education. BESCOM in its application

had not reported any expenditure towards Consumer Relations/ Consumer

Education incurred separately during FY16. The Commission in its

preliminary observations had sought the details of expenditure incurred, if

any.

BESCOM in its replies to the Commission’s preliminary observations has

informed that an amount of Rs.3.83 Crores has been incurred towards

consumer awareness programmes on safety measures, energy conservation

and demand side management initiatives under a separate head of account.

The Commission notes that these expenses have been factored in the

audited accounts under A&G expenses. It is also observed that the majority

of the expenditure reported is of repetitive nature, paid to a few firms for

similar activities. The expenditure reported by BESCOM is inclusive of

expenses towards activities other than those intended in Rs.1.00 Crores

earmarked in the ARR. Hence, considering the overall expenditure reported

by BESCOM, the Commission decides to limit the allowable expenses to

Rs.1.00 Crores in the APR as expenses towards consumer relations /

consumer education for FY16. The balance amount is already considered

while computing the O & M expenses on normative basis as discussed

in the earlier paragraphs of this Chapter.

4.2.15 Carrying cost on Regulatory asset:

BESCOM in its application has claimed an amount of Rs.117.40 Crores as

carrying cost on Regulatory Asset (RA) of Rs.611 Crores of FY13 and

Rs.367.33 Crores of FY14.

lxxix

The Commission in its Tariff Order dated 12th May, 2014 had set aside an

amount of Rs. 611 Crores as Regulatory Asset to be recovered equally in

FY16 and FY17. The Commission had also decided to allow carrying cost at

12% per annum on the amount of RA, to be assessed at the time of APR of

FY16 and FY17. It is to be noted that the Commission, in its Tariff Order

dated 2nd March, 2015 has already factored an amount of Rs.305.50 Crores

of Regulatory Asset (being 50% of the total RA of Rs.611 Crores) in the

revised ARR of FY16 which was allowed to be recovered through the retail

supply tariff determined for FY16. The Commission in its Tariff Order date

30th March, 2016 while approving the APR for FY15 has not allowed carrying

cost on the RA of Rs.611 Crores as the revenue earned was adequate to

meet the expenditure incurred during FY15, that is the Regulatory Asset

which was estimated earlier, did not materialize as the Revenue (in FY15)

was adequate to meet the expenses. However, in the computation for APR

of FY16 being taken up now, it is noted that the revenue earned during FY16

is insufficient to meet the expenditure and hence, the Commission decides to

allow the carrying cost of Rs.36.66 Crores computed at 12% p.a on the 50%

of the RA amount of Rs.305.50 Crores for FY16.

As regards the claims of carrying cost on the deficit amount of Rs.367.33

Crores on account of APR for FY14, it is to be noted that as per the

Commission’s Tariff Order dated 2nd March, 2015, this deficit has already

been included in the revised ARR for FY16 and allowed to be recovered in

the retail supply tariff for FY16, without treating the deficit as Regulatory

Asset. The Commission has been conducting the APR annually based on

Audited Accounts, which are compiled and audited during the following

financial year. Hence the financial status (either surplus or deficit) is known

only after the accounts are audited and certified. Any surplus/deficit in

revenue, found in the audited accounts is factored in the ARR for the year for

which revision of retail supply tariff is due. Hence, the question of allowing

carrying cost on the deficit of Rs.367.33 Crores reckoned in the APR for 14,

in the present APR for FY16 does not arise, as the said deficit is already

included in the retail supply tariff of FY16.

It is to be further noted that the RA of Rs.611 Crores has already been

included in the Tariff Order dated 30th March, 2016, (Para-5.3- Treatment of

Regulatory Asset & Carrying cost). After considering the revenue deficit of

lxxx

FY14 and deficit in ARR of FY16, an amount of Rs. 541.97 Crores being the

net amount of Regulatory Asset, has been included in the ARR of FY17 for

tariff computations for FY17 and thus there is no RA to be carried forward

after FY17.

4.2.16 Revenue Demand for FY16:

BESCOM in its application has considered Rs.13821.62 Crores as the

revenue from sale of power and miscellaneous charges as against the

revenue of Rs. 14148.23 Crore indicated in the audited accounts for

FY16. It is observed that, BESCOM while computing the revenue has not

considered an amount of Rs.326.62 Crore being the interest levied on

belated payment of electricity bill from IP Set, Water Supply and Street

Light installations. The reason stated by BESCOM is that, as the

Government is releasing the subsidy amount on quarterly basis in

advance, no interest is to be captured for IP sets demand. Further,

BESCOM has stated that as the Govt. has paid the water supply and

street light installations energy bills issued for the consumption during

FY16, the interests charged on these installations towards the arrears

pertaining to the previous year’s cannot be factored as revenue

demand.

The Commission, as per the audited accounts of BESCOM for FY16, has

considered the total amount of revenue from sale of power and

miscellaneous charges of Rs.14148.23 Crore. The Commission notes that

an amount of Rs.326.62 Crore towards interest levied on belated

payment of electricity bill amount from IP set, water supply and street

light installations during FY16 has been included as revenue in the

audited accounts for FY16. Therefore, the Commission is unable to

accept the contentions of BESCOM to exclude the same while

computing the revenue for APR. The Commission notes that any

amount of revenue and miscellaneous charges raised and accounted

in the consumers’ accounts and included in the audited accounts of

the BESCOM, has to be recognized as revenue to meet the approved

ARR for FY16.

lxxxi

As discussed in the preceding section of this Chapter, the IP set

consumption is reduced from 6189.80MU to 5777.77 MU, a reduction of

412.03 MU. Hence, the revenue from sales to IP Set consumers is Rs.

1487.20 Crores instead of Rs. 1585.26 Crores reported as per the

audited accounts.

In view of the above, the total revenue considered for APR is Rs.

14050.17 Crores as against Rs.13821.62 Crores claimed by BESCOM for

FY16.

4.2.17 Subsidy for FY16:

The Commission in its tariff order dated 2nd March, 2016 has approved

tariff subsidy of Rs. 1371.60 Crores towards sale of power to BJ/KJ and IP

sets for FY 16 in accordance with the prevailing Government Order.

The Commission in computation of APR for FY16 has approved the

revised tariff subsidy of Rs.1518.01Crores towards sale of power to BJ/KJ

and IP sets for FY 16

4.3 Abstract of Approved ARR for FY16:

As per the above item-wise decisions of the Commission, the

consolidated Statement of ARR for FY16 is as follows:

TABLE – 4.41

Approved ARR for FY16 as per APR Amount in Rs.

Crores

Sl.

No Particulars

APR FY16

As

Approved As Filed As per APR

1 Energy at Gen Bus 30419.09 29161.67 29161.67

2 Energy at Interface in MU 29263.16 27893.50 27893.40

3 Distribution Losses in % 13.40% 12.03% 13.51%

4 Sales in MU

5 Sales to other than IP & BJ/KJ 19658.00 18290.92 18290.92

6 Sales to BJ/KJ 58.64 57.45 57.45

7 Sales to IP 5625.26 6189.80 5777.77

8 Total Sales 25341.90 24538.17 24126.14

Revenue in Rs Crs

8 Revenue from tariff and Misc. Charges 12802.71 12205.55 12532.16

9 Tariff Subsidy to BJ/KJ 32.78 30.81 30.81

10 Tariff Subsidy to IP Sets 1338.82 1585.26 1487.20

lxxxii

11 Total Revenue 14174.31 13821.62 14050.17

Expenditure in Rs Crs

12 Power Purchase Cost 10608.94 11364.09 11364.57

13 Transmission charges of KPTCL 1216.91 1225.91 1225.91

14 SLDC Charges 14.29 10.53 10.53

15


transmission 11840.14 12600.53 12601.01



18 Admin & General Expenses 223.21

19 Total O&M Expenses 1205.01 1219.34 1210.06

20 Depreciation 167.31 290.60 290.60


21 Interest on Loans 261.59 266.02 266.03

22 Interest on Working capital 287.77 342.45 295.32

23 Interest on belated payment on PP Cost 0.00 0.00 0.00

24 Interest on consumer deposits 244.89 245.24 245.24

25 Other Interest & Finance charges 7.63 23.53 23.52

26 Less interest & other expenses capitalised 50.00 146.85 146.85

27 Total Interest & Finance charges 751.88 730.39 683.26

28 Other Debits 0.00 16.25 16.26

29 Net Prior Period Debit/Credit 0.00 -11.57 11.57

30 RoE 0.00 108.00 23.19

31 Provision for taxation 0.00 24.51 24.51

32

Funds towards Consumer Relations/Consumer

Education 1.00 0.00 1.00

33 Other Income 219.44 40.35 155.53

34 ARR 13745.90 14937.70 14705.92

35 Deficit for FY14 carried forward 367.33 0.00

36

Penalty for increase in distribution losses and

disallowance of imprudent capex as KERC

Order dated 14.01.2016 in Case No 12/2013 7.96

37

Incentives / penalties for performance on

distribution losses 190.92 0.00

38 Net ARR 14105.27 15128.62 14705.92

39

Carrying Cost on RA of Rs.305.50 Crs. at 12%

Regulatory asset to be recovered in FY16 &

FY17 611.00 117.40 36.66

40 Net ARR for FY16 14716.27 15246.02 14742.58

41 Net Regulatory asset to be recovered in FY17 541.96 - -

42 Net ARR after Regulatory Asset 14174.31 15246.02 14742.58

43

Gap in Revenue for FY16 0.00 1424.40 692.42

4.4 Gap in Revenue for FY16:

lxxxiii

As against an approved ARR of Rs.14174.31 Crores, the Commission

after the Annual Performance Review of BESCOM for FY16 decides to

allow a net ARR of Rs.14742.58 Crores for FY16. Considering the revenue

of Rs.14050.17 Crores, the deficit of Rs.692.42 Crores is determined for

the year FY16.

The Commission decides to carry forward the deficit of Rs.692.42 Crores

of FY16 to the proposed ARR for FY18 as discussed in the subsequent

Chapter of this Order.

lxxxiv

CHAPTER – 5

REVISED ANNUAL REVENUE REQUIREMENT FOR FY18

5.0 Revised Annual Revenue Requirement (ARR) for FY18

BESCOM’s Application:

BESCOM in its application dated 30th November, 2016, has sought

approval of the Commission for the revised ARR for FY18. The summary

of the proposed revised ARR for FY18 is as follows:

TABLE – 5.1

Revised ARR for FY18-BESCOM’s Submission Amount in Rs. Crores

Sl.


1 Energy at Gen Bus in MU 31270.90

2 Transmission Losses in % 3.37%

3 Energy at Interface in MU 30217.10

4 Distribution Losses in % 12.75%

Sales in MU

5 Sales to other than IP & BJ/KJ 19457.73

6 Sales to BJ/KJ 68.87

7 Sales to IP 6837.80

8 Total Sales 26364.40

Revenue at existing tariff in Rs Crs

9 Revenue from Tariff and Misc. Charges 13016.45

10 Tariff Subsidy from BJ/KJ 41.04

11 Tariff Subsidy from IP 1955.61

12 Total Existing Revenue 15013.10





16


transmission 13884.89




20 Total O&M Expenses 1491.59


22 Interest & Finance charges

23 Interest on Capital Loans 351.43


25 Interest on belated payment on PP Cost 0.00


lxxxv


28 Less interest & other expenses capitalised 82.00

29 Total Interest & Finance charges 951.47


31 Net Prior Period Debit/Credit 0.00


33

Funds towards Consumer

Relations/Consumer Education 1.00

34

Provision for contribution to Pension &

Gratuity Trust (Government Liability) 729.37


ARR 17491.57

Deficit for the year (2478.47)

36 Deficit for FY16 carried forward (1424.40)

Net ARR 18915.97

The BESCOM has requested the Commission to approve the revised

Annual Revenue Requirement of Rs.18915.97 Crores for FY18.

Considering the estimated revenue of Rs. 15013.10 Crores based on

the existing retail supply tariff, BESCOM has projected a revenue gap

of Rs. 3902.87 Crores for FY18 including the carried forward gap of

revenue of Rs.1424.40 Crores of FY16. In order to bridge this gap in

revenue, BESCOM, in its application has proposed increase in retail

supply tariff by 148 paise per unit in respect of all the categories of

consumers including BJ/KJ and IP set consumers for FY18.

Subsequently, BESCOM in its petition dated 16th February, 2017 has filed

amendments to its tariff proposals without affecting the ARR for FY18.

The same has been dealt with in Chapetr-6 of this Order.

5.1 Annual Performance Review for FY16:

As discussed in the preceding chapter of this Order, the Commission

has carried out the Annual Performance Review for FY16 based on the

audited accounts furnished by BESCOM. Accordingly, a deficit of

Rs.692.42 Crores of FY16 is carried forward into the ARR of FY18.

lxxxvi

5.2 Revised Annual Revenue Requirement for FY18:

The item-wise expenditure proposed by BESCOM and approved by the

Commission for FY18 is discussed in this Chapter as follows:

5.2.1 Capital Investments for FY18:

BESCOM’s submission:

BESCOM has projected a capital expenditure of Rs.967.30 Crores

without deviating from its earlier MYT proposal submitted for FY18. The

category wise capital investment plan proposed by BESCOM is as

under:

Table -5.2

Capital Investment for FY18 - BESCOM’s Submission


Sl.

No Particulars FY 18

1 11 KV Evacuation & Link Lines 72.05

2

Safety and Strengthening of HT/LT

network including OH/UG cable and AB

cable works

38.33

3 HT Reconductoring 29.60

4 LT Reconductoring 29.63

5 Providing Additional DTC's/Enhancement

of DTC's 48.83

6

Planned works (RE / SCP / TSP/Drinking

Water Ganga Kalyana and service

connection)

47.21

7 Local Planning 36.01

8 RMU Works 4.232

9 Safety Measures/ Hazardous (shifting DTC

at school premises) 12.74

10 OH to UG Conversion 2.10

11 Infrastructure to Unauthorized IP sets 5.19

12 Providing & replacement of RMUs 0.59

13 Replacement of meters, Smart meters,

replacement of HTMC of HT installation 23.77

14 DTC Metering programme 2.00

15 IPDS 100.00

16 DDUGJY 100.00

17 HVDS 100.00

18 NJY Phase-3 250.00

19 DSM 64.97

Total 967.30

lxxxvii


In its MYT application for the 4th control period, the BESCOM had stated

that, the capex of Rs.967.30 proposed for FY18 would undergo revision

in view of possible additions depending on the requirement. Further,

BESCOM had requested for additional capex of Rs.3251.48 Crores in

the middle of FY17. Against this proposal, the Commission had

permitted the BESCOM to invest a total capex upto Rs.2000 crores for

FY17. BESCOM has not furnished the status of capital expenditure for

FY17, while seeking capex of Rs.967.30 Crores for FY18. This indicates

that, BESCOM has not put in any effort to plan the capital investment in

line with the “Capital Expenditure Guidelines for ESCOMs” issued by the

Commission. This would lead to BESCOM spending on capex in an

unplanned manner in each financial year.

The Commission has observed that, the capital expenditure by

BESCOM is exceeding the approved amount by a huge margin

consistently over the last four years. However, BESCOM has not made

any effort to streamline and plan its capex to ensure that, it does not

exceed the planned capex. Therefore, BESCOM needs to plan and

project its capex commensurate with:

a) The network strengthening and expansion required

/requirement,

b) Improvement of power supply reliability,

c) The target date for completion of each of the project,

d) loss reduction trajectory.

Further, BESCOM should strictly follow the “Capital Expenditure

Guidelines for ESCOMs” in which the capital investment planning

process and prioritization and post-commissioning analysis to be

adopted by the ESCOMs are elaborated. The Commission has been

directing the ESCOMs to conduct energy audit by listing out high loss

making 11kV feeders and take up strengthening works to reduce

losses. Prioritization of such projects has to be taken up for execution,

lxxxviii

based on payback period and benefit to cost ratio. BESCOM has

failed to establish that it has moved in this direction.

BESCOM should prepare a realistic plan of its capex program based on

the load forecast and network expansion plan as per the “Capital

Expenditure Guidelines for ESCOMs” issued by the Commission, duly

prioritizing the works. It is not desirable to approach the Commission in

the middle of the year seeking additional/higher capex. Any

additional capex required shall be met only through re-appropriation

of approved amounts for the prioritized category within the overall

capex.

With the above observations, the Commission decides to consider the

capex of Rs.967.30 Crores as proposed by BESCOM for FY18.

5.2.2 Sales Forecast for FY18:

A. Sales & No. of Installations other than BJ/KJ and IP sets:

1. The BESCOM in its Tariff application has stated that the number of

installations for FY18 has been estimated by doubling the half year

number of consumers for FY17 and considering one year CAGR with

the following deviations:

I. For LT4(a))-IP sets, 20,000 additions in installations is considered

for FY18; and

II. Wherever the CAGR is negative or exorbitant, FY17 numbers are

retained.

2. Further, the BESCOM has stated that, the sales for FY18 have been

estimated considering the following:

a) The sales for FY17 is estimated considering a certain

percentage over sales in first half of the year;

b) IP set sales is estimated considering specific consumption of

8037/IP/annum;

lxxxix

c) BJ/KJ sales for FY17 is not doubled as, a part of sales is

considered under LT2a.

B. The Commission’s observations on sales forecast for FY18 and the

replies furnished by BESCOM thereon are as follows:

i) LT (1) – BJ/KJ category:

a. It was observed that, BESCOM has retained the BJ/KJ sales at

the half-year level of 66.35 MU for FY17, in spite of indicating

additions in the number of installations during second half of

FY17. The BESCOM shall explain the reasons for the same.

The BESCOM in its replies has stated that it has envisaged

addition of 60345 installations under RGGVY during XII plan,

which is added to LT-1 category resulting in the increase in the

number of installations, while for the estimation of energy sales

any installation consuming more than 18 units/month is

considered under LT-2a category.

BESCOM earlier had not clearly indicated as to how many

installations would consume more than 18 units /month, against

the envisaged addition of 60345 numbers. Subsequently, in its

replies dated 16.01.2017, BESCOM has furnished the breakup of

number of installations under BJ/KJ consuming upto 18

units/month/installation and those consuming above 18

units/installation/month. Since the number of installations as on

30.11.2016 was greater than the year-end break-up figures

furnished by BESCOM, the Commission has retained the number

of installations as on 30.11.2016 for FY17 and has worked out the

sales to this category based on specific consumption of FY16.

For FY18, the break-up of number of installations is considered as

submitted by BESCOM in its replies dated 16.01.2017. Further,

considering the recent announcement of the State Government

in the Budget for FY17-18 to increase the consumption cap for

BJ/KJ installations to 40 units /installation /month, suitable

xc

addition has been made to the estimated consumption under

this category.

b. The BESCOM was directed to furnish the breakup of installations

consuming less than or equal to 18 units and also above 18 units

for the 2015-16 and estimates for FY17 to FY18. BESCOM has

furnished the above details in its replies dated 16.01.2017.

ii) In the case of LT2(b), LT 4(c), HT-2a, HT 2(b), HT3(a) and HT4, it

was pointed out that, the number of installations as on

30.09.2016 compared to 31.03.2016 has reduced [Ref page 71

of the filing]. Therefore, BESCOM was directed to explain the

reasons for such reduction, especially in the case of HT

installations, during the first half of FY17, as to whether some of

the installations have been surrendered. BESCOM was directed

to furnish the category-wise opening balance of number of

installations as on 31.03.2016, installations added during the FY17

as on 30.11.2016 and installations surrendered during FY17/as on

30.11.2016.

The BESCOM, while furnishing the sub-division-wise details of HT

installations, from March-2016 to November-2016, has stated

that, BESCOM has noticed a reduction in the number of HT-

installations.

The Commission observes that the details of installations, as on

31.03.2016, the addition to the installations during the FY17 as on

30.11.2016 and the installations surrendered during the FY17 as

sought by the Commission is not furnished.

The BESCOM was informed that considering one-year growth

rate for estimation would not reflect the underlying trend.

Therefore, the BESCOM was advised to reconsider adopting

CAGR, based on three to five years’ data, for estimating the

number of installations and sales. Further, it was noted that the

growth rates considered for estimating the number of

xci

installations for all the categories, except LT-6 water supply, is

lower as compared to the normal growth rates. For categories

where there is a positive growth rate, the BESCOM has

considered zero growth and hence the BESCOM was directed

to furnish reasons for the same.

It is stated by the BESCOM that, as the projected year is very

close, one-year CAGR is considered and that a negative growth

rate is replaced by zero growth rate. Further, it is stated that the

CAGR is a useful measure over multiple time period and not for

one year.

The Commission reiterates that adoption of one-year growth

rate for estimation of the number of installations and sales would

not reflect the underlying trend. The approach of the

Commission in estimating the number of installations and sales

for the FY18 is discussed in the subsequent paragraphs.

C. The observations of the Commission on growth rates considered

for FY18 and replies furnished by BESCOM are as follows:

i) The growth rate considered for LT2 (b) is lower considering

the previous year’s growth rate of 4.34% and the CAGR

being in the range of 7.33% to 8.24%. The BESCOM shall

furnish the reasons for the same. The BESCOM has stated

that the LT-2b sales is only 0.26% of total LT-sales.

The Commission reiterates its observations and its approach

is discussed in the subsequent paragraphs, as under

ii) The BESCOM shall analyze and furnish the reasons for

negative growth in the FY16 in respect of LT-6 Water Supply

(WS), LT-6 Street Light (SL), HT-2a, HT-2b and HT-4 categories.

The BESCOM has informed that the negative growth rate in

HT-2a and HT-2b is due to the consumers going in for open

xcii

access and the reasons for the negative growth in other

categories are being looked into.

The Commission, taking note of the replies, is of the view that

such an analysis to find out the reasons for the negative

growth would help the BESCOM to evolve better sales

strategies.

iii) The reasons for abnormal growth in the FY16, in the case of

HT-3 category, shall be furnished. The BESCOM has replied

that the same is being looked into.

To validate the sales, the Commission had requested,

category-wise information (No. of Installations and the sales

in MU), in a prescribed format. The BESCOM has furnished the

above information.

3. The Commission’s approach for estimating the number of

installations and energy sales for the Financial Year FY18:

The methodology adopted by the Commission to estimate the

number of installations and sales to categories other than BJ/KJ and

IP sets is discussed as below:

i) No. of Installations:

While estimating the number of installations (excluding BJ/KJ

and IP), the following approach is adopted:

a. The base year number of installations for the FY17 is modified

duly validating the revised estimate furnished by the

BESCOM in the current filing and the data available, as on

30.11.2016. The Commission has validated both the number

of installations and energy sales to various category of

consumers, considering the actuals as on as on 30.11.2016,

and has estimated the number of installations and energy

sales for the remaining period, reasonably, keeping in view

the number of installations and energy sales as on 31.03.2016

xciii

as well. Accordingly, the base year estimation has been

revised, which has an impact on the estimates on number of

installations and sales for FY18.

b. Wherever the number of installations estimated by the

BESCOM for the FY18 is within the range of the estimates

based on the CAGR for the period FY11 – FY16 and for the

period FY13 - FY16, the BESCOM’s estimates are retained.

c. Wherever the number of installations estimated by the

BESCOM for the FY18 is lower than the estimates based on

the CAGRs for the period FY11 – FY16 and for the period

FY13 - FY16, the estimates based on the lower of the CAGRs

are considered.

d. Wherever the number of installations estimated by the

BESCOM for the FY18 is higher than the estimates based on

the CAGRs for the period FY11 – FY16 and for the period

FY13 - FY16, the estimates based on the higher of the CAGRs

are considered.

e. For LT4 (b), the number of installations are worked out on the

basis of five year CAGR, as the number proposed by the

BESCOM is far below the actual figures for FY-16.

f. For LT4(c), LT-7, HT-2(c) and HT-5 categories, the estimates of

the BESCOM are retained, as the growth rate for these

categories is not consistent.

Based on the above approach, the total number of installations

(excluding BJ/KJ and IP) estimated and approved by the

Commission for FY18 is 9611811 as against 9541400 proposed by

the BESCOM.

ii) Energy Sales:

xciv

A. For categories other than BJ/KJ and IP sets, generally the sales

are being estimated based on the following approach:

a. The base year sales for FY17 as estimated by BESCOM are

validated duly considering the actual sales up to

November, 2016 and modified suitably as stated earlier.

b. Wherever the sales estimated by the BESCOM for the FY18

is within the range of the estimates based on the CAGRs for

the period FY11 – FY16 and for the period FY13 - FY16, the

estimates of BESCOM are retained.

c. Wherever the sales estimated by the BESCOM for the FY18

is lower than the estimates based on the CAGRs for the

period FY11 – FY16 and for the period FY13- FY16, the

estimates based on the lower of the CAGRs are

considered.

d. Wherever sales estimated by the BESCOM for FY18 is higher

than the estimates based on the CAGRs for the period

FY11 – FY16 and for the period FY13 - FY16, the estimates

based on the higher of the CAGRs are considered.

e. For LT4(b) and LT -6 public lighting, the sales are worked out

based on the specific consumption of FY16.

f. For LT4(c), LT-7, HT-2(c) and HT-5 categories, BESCOM’s

estimates are retained, as the growth rate for these

categories is not consistent.

g. In respect of HT2(a) category, the sales estimate based on

the analysis of open access impact is considered. It may

be noted that based on the methodology indicated at

paras b, c and d above, the sales growth would be

negative, in spite of positive growth in the number of

installations. Further, it is observed that the sales for FY17

has been underestimated by the BESCOM, which has an

xcv

impact on the estimates made by the BESCOM for FY18.

Therefore, the sales estimate based on the analysis of open

access impact is considered as reasonable for FY18.

h. For HT2(b) category, the sales estimate based on the

CAGR for the period FY11 to FY16 is considered. It may be

noted that based on the methodology specified at paras

b, c and d above, the sales growth would be negative, in

spite of positive growth in the number of installations.

Further, based on the OA transaction impact analysis, the

sales growth would be high if the recent trends are kept in

view. Therefore, CAGR for the period FY11 to FY16 is

considered as reasonable.

i. In respect of HT-3 category sales, the BESCOM’s estimate

for FY18 is not reasonable as the BESCOM’s estimate of

10.46 MU is far below the consumption of 53.01 MU for FY16,

despite increase in the number of installations. Therefore,

the Commission has estimated the sales based on the

specific consumption of FY16.

Based on the above approach, the sales (excluding BJ/KJ and

IP) estimated and approved by the Commission for FY18 is

19820.85 MU as against 19383.97 MU proposed by the BESCOM.

B. Sales to BJ/KJ and IP sets:

a) Sales to BJ/KJ installations:

The electricity consumption to this category up to 18 units per

installation per month hitherto was being subsidized by the

Government of Karnataka and any installation under this

category consuming more than 18 units per month was billed

under relevant LT 2(a) category. However, the Government of

Karnataka in its Budget for 2017-18 has announced that it would

extend the subsidy to BJ/KJ installations consuming upto 40 units

per installation per month. Hence, the Commission has

xcvi

reckoned the above and has worked out the subsidy

accordingly.

Considering the specific consumption and the number of

installations, for FY16, for installations consuming upto 18 units

and above 18 units as per the actual data furnished by

BESCOM, the total sales estimated for this category for FY18

works out to 130.37 MU. Considering the total number of BJ/KJ

installations of 785408 for FY18 as proposed by BESCOM, the

specific consumption works out to 13.83 units per installation per

month which is less than 40 units per installation per month

announced by the Government for the purpose of subsidy.

Thus, the entire consumption of 130.37 MU is considered for the

purpose of estimating the subsidy for this category. However,

the BESCOM while claiming the subsidy shall consider only such

installations which consume up to 40 units per installation per

month and any installation under this category consuming more

than 40 units shall be billed under the relevant LT 2(a) category.

b) IP set sales projections for ARR of FY18

The Commission, in its Tariff Order dated 30th March, 2016, had

approved specific consumption of IP sets as 8,037 units /

installation / annum for the control period FY17 to FY19.

However, based on the actual data of sales to IP sets as

reported by the BESCOM in its Tariff application, the Commission

had approved the specific consumption as 7,795

units/installation/annum, for the FY16.

Further, the IP sales reported as per Format D-2 is 6,189.80 MU as

against the approved sales of 5,625.26 MU, for FY16, that is an

increase of 564.54 MU. However, the BESCOM in its subsequent

communication dated 30th January, 2017, to the Commission

has submitted the revised sales of IP sets, based on the specific

consumption arrived at from the meter readings of segregated

agricultural feeders, as 5,777.77 MU, for FY16. This indicates an

increase in sales to an extent of 152.51 MU which can be partly

xcvii

attributed to servicing of a large number of IP sets under

Regularization Scheme. It is noted that the BESCOM has already

segregated substantial number of feeders under NJY as

exclusive agricultural feeders and rural feeders, which means

that power supply to IP sets could be regulated resulting in

reduction in the agricultural consumption during the FY16.

The specific consumption works out to 7,324

units/installation/annum on the basis of the revised sales

quantum of 5,777.77 MU reported by the BESCOM for FY16. It is

observed that the specific consumption of 7,324

units/installation/annum for FY16 is less than the approved

specific consumption of 7,795 units / installation /annum by 471

units /installation/annum. Hence, it is appropriate to consider

the specific consumption of 7,324 units/installation/annum for

the ARR of FY18 also, considering the fact that this specific

consumption is arrived at on the basis of metered consumption

in respect of agricultural feeders segregated under NJY. In view

of this, the Commission decides to approve the specific

consumption of 7,324 units/installation /annum for the ARR of

FY18.

Further, it is noted that the BESCOM has estimated the number

of IP-set installations as 8,50,790, as against the estimated

number of installations of 8,40,790 for FY17 i.e. an increase of

20,000, for the FY18 in the current Tariff filing. In view of this, the

Commission has considered the number of IP-sets as submitted

by the BESCOM for the FY18 without any modifications. Hence,

based on the estimated number of installations for the FY17 and

the FY18 as reported by the BESCOM, the mid-year number of

installations is determined and the sales to IP-set consumers are

indicated as below:

TABLE-5.3

Mid-Year No. of IP set Installations & IP set Consumption

xcviii

Particulars

As filed by the

BESCOM

As approved

by the

Commission

FY17 FY18 FY18

No of installations 8,30,790 8,50,790 8,50,790

Mid-Year no. of

installations 8,40,790 8,40,790

Specific consumption in

units/installation/annum 8,133 7,324

Sales in MU 6,837.80 6,157.95

Accordingly, the Commission approves 6,157.95 MU as energy

sales to IP-sets as against the BESCOM’s projections of 6,837.80

MU, for the FY18. The number of installations approved for FY18 is

8,50,790. This approved IP set consumption for FY18 is with the

assumption that the Government of Karnataka would release full

subsidy to cover the approved quantum of IP-sales. However, if

there is any reduction in the subsidy allocation by the GoK, the

quantum of sales to IP sets of 10 HP and below, shall be

proportionately regulated.

During the course of Public hearing held by the Commission,

the representatives of certain Farmers’ Association have

suggested that the Government may consider paying the

subsidy directly to the farmers against their IP Set consumption.

They have also expressed that meters could be installed to their

IP Sets, by the ESCOMs to whom energy charges would be paid

by the farmers.

The Commission is of the view that implementing the suggestion

of direct remittance of subsidy to the farmers would encourage

metering of the IP Sets enabling proper accounting of energy

and also facilitate accurate computation of losses in the

distribution system. The Commission notes that the Government

of Karnataka would have to formulate suitable policy in the

matter.

xcix

Further, the Commission notes that the BESCOM was directed to

take up GPS survey of IP sets in order to identify the

defunct/dried up/not-in-use installations in the field and to take

necessary action to arrive at the correct number of IP sets by

deducting such IP sets from its account, on the basis of GPS

survey report. The BESCOM has reported that it has completed

GPS survey of 60 per cent of the feeders and has identified

around 1.53 lakhs installations as not-in-use and around 1.23

lakhs as unauthorized installations during the survey undertaken

in FY13. As considerable time has lapsed after such partial

survey, the BESCOM has sought time up to April 2017 to

revalidate the same and also to complete the survey of

remaining installations, to enable it to arrive at correct number

of dried up/defunct/not-in-use wells, so as to take further action

to deduct such IP-set installations, from its accounts.

In this regard, the BESCOM is directed to complete the GPS

survey of IP-sets within the targeted time as requested by it and

submit compliance thereon to the Commission. In view of

pendency of the GPS survey of IP-sets, the number of

installations estimated for FY17 as well as for FY18 are subject to

change based on the full GPS survey. As mentioned above, the

Commission, in the absence of survey reports, has considered

the estimated number of installations for FY17 and FY18 as

reported by the BESCOM for the present. However, on

completion of the GPS survey, the BESCOM shall arrive at the

correct number of IP-sets existing in the field duly deducting

from its account the number of dried up/defunct/not-in-use

wells based on the GPS survey results. Therefore, any variation in

sales due to change in number of installations in the FY18 would

be trued up during the Annual Performance Review, for the FY18.

Further, it is noted that the BESCOM has already segregated 704

agriculture feeders from rural loads under NJY phase1, 2 & 3 and

c

segregation work of remaining feeders’ under phase 3, is in

progress. After complete segregation, the energy consumed by

the IP-sets could be more accurately measured at the 11 KV

feeder level at the sub-stations after allowing for distribution

system losses in 11 KV lines, distribution transformers and LT lines.

Hence, the Commission reiterates its direction that the BESCOM

shall report to the Commission, the overall IP-set consumption on

the basis of the specific consumption arrived at from the

consumption data of energy meters in respect of agriculture

feeders segregated under NJY only, every month, regularly, as

per the following format:

ci

TABLE-5.4

Format for furnishing IP sets Consumption

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

. o

f

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral

fee

de

rs a

t th

e s

ub

sta

tio

ns

pe

rta

inin

g t

o

the

su

b-d

ivis

ion

Dis

trib

utio

n lo

ss(1

1k

V lin

e, D

TCs,

& L

T lin

e)

Plu

s sa

les

to o

the

r c

on

sum

ers

if a

ny

, in

MU

( lo

sse

s in

all t

he

ag

ric

ultu

ral fe

ed

ers

on

ly t

o b

e c

on

sid

ere

d)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g t

he

Dis

trib

utio

n lo

ss (

11k

V lin

e, D

TCs

&LT

lin

e)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts (

tota

l-

drie

d u

p)

co

nn

ec

ted

to t

he

ag

ric

ultu

ral

fee

de

rs in

th

e

sub

div

isio

n

Ave

rag

e c

on

sum

ptio

n

of IP

se

ts/

mo

nth

(sp

ec

ific

co

ns

in u

nits

/IP/m

on

th)

Tota

l n

o o

f IP

sets

(to

tal-

drie

d u

p)

in

the

su

bd

ivis

ion

(a

s p

er

DC

B)

Tota

l sa

les

of IP

se

ts in

MU

Be

gin

nin

g o

f

the

Mo

nth

Se

rvic

ed

du

rin

g M

on

th

Mid

-Mo

nth

Be

gin

nin

g o

f

the

Mo

nth

Se

rvic

ed

du

rin

g

Mo

nth

Mid

-Mo

nth

1 2 3 4 5 6=(4-5) 7 a 7 b

7c

=

(7a+7b)/

2

8=6/7c 9 a 9 b

9c

=

(9a+

9b)/2

10=8*9

c

April to

March

Subdivisi

on-1

Subdivisi

on-2

Subdivisi

on….

Note:

(1) If the agricultural feeders are not yet segregated under NJY in any sub-division, then

the specific consumption of the division / circle / zone / company (where NJY is taken

up) shall be considered to compute the IP consumption of such sub-division.

(2) No. of dried up IP-set installations shall be deducted from the accounts, while arriving

at the month-wise and subdivision-wise specific consumption and total sales.

Based on the above discussions, the category wise approved number

of installations and sales for the year FY 18 vis-à-vis the estimates made

by BESCOM is indicated as follows:

TABLE-5.5

BESCOM’s Approved Sales

Category

FY18 FY18

Number of Installations Energy Sales

BESCOM’s

estimate Approved

BESCOM’s

estimate Approved

No. No. MU MU

LT-2a 7503214 7531435 6945.64 6966.38

LT-2b 10991 11791 46.96 49.07

LT-3 1020584 1050594 1998.94 2000.85

LT-4 (b) 497 989 2.36 4.60

LT-4 (c) 1461 1461 4.9 4.90

LT-5 195150 204043 1187.24 1187.24

cii

LT-6-WS 74479 73529 448.19 453.97

LT-6-PL 62360 63907 353.24 391.17

LT-7 658436 658436 158.63 158.63

HT-1 218 232 738.04 738.04

HT-2 (a) 6140 6808 4409.04 4663.23

HT-2 (b) 5565 6209 2613.05 2666.85

HT2C 651 651 272.01 272.01

HT-3(a)& (b) 34 43 10.46 72.84

HT-4 256 316 118.91 114.7

HT-5 1364 1364 76.36 76.36

Sub-Total other than BJ/KJ & IP

sets 9541400 9611811 19383.97 19820.85

LT-1 BJ/KJ 785408 785408 142.65 130.37

LT4 (a)IP Sets 850790 850790 6837.8 6157.95

Sub Total BJ/KJ & IP sets 1636198 1636198 6980.45 6288.31

Total 11177598 11248009 26364.42 26109.16

5.2.3 Distribution Losses for FY18:


As per the audited accounts for FY16, the BESCOM has reported

distribution losses of 12.03% as against an approved loss level of 13.40%.

However, as discussed in the previous chapter of this Order, based on

the revised consumption of IP Sets, the distribution losses for FY16 is

13.51%. The Commission in its Tariff Order dated 30th March, 2016 had

fixed the target level of losses for FY18 at 12.75%. BESCOM in its

application has proposed to retain the loss levels of 12.75% for FY18.

Commission’s Analysis and Decisions:

The performance of BESCOM in achieving the loss targets set by the

Commission in the past six years is as follows:

ciii

TABLE – 5.6

Approved & Actual Distribution Losses-FY11 to FY16

Figures in % Losses

Particulars FY11 FY12 FY13 FY14 FY15 FY16

Approved Distribution

losses

14.75 14.50 14.00 13.80 13.60 13.40

Actual distribution

losses

14.48 14.46 14.20 13.89 14.78* 13.51*

*Actual losses for FY15 are reported as 13.53%. As per Commission’s APR the losses for FY15 is 14.78% after validation of

sales.

*Actual losses for FY16 are reported as 12.03%. As per Commission’s APR the losses for FY16 is 13.51% after validation of

sales.

BESCOM having declared to have already achieved distribution loss

level of 12.03% in FY16, has projected a higher loss level of 12.75% for

FY18. The distribution loss projections indicated by the BESCOM shows

an increase from the existing reported loss level. The Commission has

allowed the capex as proposed by BESCOM and substantial capital

expenditure is consistently being incurred by the BESCOM in

strengthening its distribution network with the aim to reduce the loss

levels. Investments in improvements of the existing distribution system

would enable the BESCOM to reduce the distribution losses besides

increasing the reliability and quality of power supply to end consumers.

Contrary to the objectives of such investments, the loss levels proposed

by BESCOM are at a higher level as compared to the actual loss levels

declared to have been achieved in FY16. The increased distribution

losses projected by BESCOM for FY18 is not acceptable, because as

reported by it, BESCOM has already achieved distribution losses of

12.03% in FY16 itself. Hence, the Commission, in its preliminary

observations had stressed on the need of further reduction in the

distribution loss levels proposed by the BESCOM, for FY18, duly

considering the past and the present capex. However, the BESCOM

has not proposed any changes to its proposed loss levels.

civ

Based on the achievements made by BESCOM in the reduction of

distribution loss during the previous years and the revised loss levels for

FY16 besides considering the capex incurred so far along with the

proposed capex for FY18, the Commission decides to fix the following

distribution loss targets for FY18:

TABLE – 5.7

Approved Distribution Losses for FY18

Figures in % Losses

Particulars FY18

Upper limit 13.00

Average 12.50

Lower limit 12.00

5.2.4 Power Purchase for FY18


BESCOM has submitted the power purchase requirement along with its

cost including the transmission charges and SLDC charges, in D-1

Format. BESCOM has sought approval of the Commission for purchase

of power to an extent of 31271MU at a Cost of Rs. 13884.89 Crores for

the FY18, which includes transmission charges and SLDC charges

The cost of power purchase has been considered by the BESCOM as

per the norms defined in the contracts (PPAs)/Regulations and based

on the Tariff indicated by the KPCL, for its Stations. In respect of Central

Generating Stations, DVC Stations and UPCL Stations, the cost is

considered as per the tariff determined by CERC. The details of

source-wise energy and cost is indicated below:

Table-5.8

Power Purchase Cost as filed by BESCOM for FY18

Source of Power

Power Purchase Cost as filed by BESCOM

Energy in MU Cost in Rs. Crs

Cost Per

Unit in

Rupees

KPCL Hydel Energy 3612.54 381.37 1.06

cv

KPCL Thermal

Energy

9262.47 4023.73 4.34

CGS Energy 9708.70 3451.57 3.56

IPP 3566.26 1512.17 4.24

NCE 4468.63 1927.53 4.31

Other State Hydel 14.74 25.63 17.38

Short Term/Medium

term

637.66 286.947 4.50

KPTCL Transmission

charges

1640.78

PGCIL Charges 633.50

POSOCO Charges 1.66

Total 31271.00 13884.89 4.44


The energy requirement of the ESCOMs, including BESCOM is being

met by Karnataka Power Corporation Limited (KPCL) Generating

Stations, Central Generating Stations (CGS), Major Independent Power

Producers (IPPs) and Minor Independent Power Producers (RE sources)

through long term Power Purchase Agreements.

The Commission has considered the availability of energy as furnished

by KPCL for its generation and by SRPC/CEA in respect of Central

Generating Stations (CGS). The availability of CGS stations is based on

the share of Karnataka, as notified by MoP from time to time. However,

the availability of energy from CGS thermal Generating units has been

considered duly limiting the quantum of energy as per the requirement

of ESCOMs, to meet the sales target on the basis of merit Order

dispatch.

The energy availability for FY18 from the upcoming thermal projects of

750MW unit No. 3 of Bellary Thermal Power Station (BTPS), 2X800 MW

units of Yeramaras Thermal Power Station (YTPS) and 1X800MW of

Kudagi plant of NTPC, has not been considered by the BESCOM, since

these units are under trial Operation and are yet to stabilize. The

Commission has decided to consider the energy availability from these

units in line with the LGBR furnished by the NTPC for the 1X800 MW unit

of Kudagi Power Plant for the FY18. However, the energy has been

considered from these units by limiting the quantum of energy as per

the requirement of ESCOMs, to meet the sales target on the basis of

merit order despatch. It is expected that any surplus energy available

cvi

from tied up sources of energy would be traded by the ESCOMs

through PCKL on commercial principles. Similarly, any requirement

over and above the quantum approved in this Tariff Order shall be

procured from the tied up sources only.

While approving the cost of power purchase, the Commission has

determined the quantum of power from various sources in

accordance with the principles of merit order schedule and despatch

based on the ranking of all approved sources of supply, according to

the merit order of the variable cost.

After a detailed analysis of the rates claimed by the BESCOM, the

Commission has arrived at the power purchase cost to be allowed in

the ARR for the FY18.

The fixed charges and the variable charges for the Central Generating

Stations, UPCL Stations and the DVC Stations are reckoned based on

the Tariff determined by the CERC and the CERC norms. The

transmission charges payable to PGCIL are arrived at with 5% annual

escalation on the base figure for FY16.

The fixed charges and the variable charges for the State owned

Thermal and Hydel Power Stations are based on the tariff approved by

the Commission and the norms in the PPAs wherever the tariff is

regulated as per the PPAs. In respect of upcoming new stations only

variable charge has been considered.

The variable costs of thermal stations and UPCL are considered based

on the recent power purchase bills passed by the BESCOM duly

keeping in view the substantial increase in the fuel costs. This is subject

to adjustment in the FAC exercise/Annual Performance Review of FY18.

The ESCOM-wise share of the quantum of power from different sources

of generation is as per the allocation given by the Government of

Karnataka.

The Source-wise approved power purchase quantum for the State (of

all ESCOMs) and its cost are as under:

TABLE-5.9

Approved Power Purchase Quantum & Cost- For the State

Source of Power

Power Purchase

Energy

(MU)

Amount in

Rs. Crores

Cost/Unit in

Rupees.

cvii

KPCL Thermal Energy 16071.68 6963.89 4.33

CGS Energy 20542.91 7283.67 3.55

IPP 6712.00 3288.88 4.90

KPCL Hydel Energy 11668.46 926.33 0.79

OTHER HYDRO 119.37 49.54 4.15

NCE 7165.41 2980.86 4.16

NTPC Bundled power 582.21 258.46 4.44

Power purchase from Co gen 1300.00 451.10 3.47

Short term Power Purchase 1120.00 467.04 4.17

Short term Purchase from MSEDCL 294.00 106.43 3.62

TRANSMISSION CHARGES

PGCIL CHARGES

1066.00

KPTCL CHARGES

2753.70

SLDC

24.77

POSOCO CHARGES

3.48

TOTAL INCLUDING TRANSMISSION

& SLDC CHARGES 65576.04 26624.15 4.06

The Source wise approved Power Purchase quantum and cost of

BESCOM is as under:

TABLE-5.10

Approved Power Purchase Cost of BESCOM for FY18

Source of Power

Power Purchase Cost as filed

by BESCOM

Power Purchase Cost as

approved by the Commission

Energy in

MU

Cost in Rs

Cr

Per Unit

Cost in

RS

Energy in

MU

Cost in

Rs Cr

Per Unit

Cost in

RS

KPCL Hydel Energy 3612.54 381.37 1.06 2833.31 316.57 1.12

KPCL Thermal

Energy

9262.47 4023.73 4.34 9180.34 3980.56 4.34

CGS Energy 9708.70 3451.57 3.56 9698.31 3438.63 3.55

UPCL 3566.26 1512.17 4.24 3855.76 1889.32 4.9

Renewable Energy 4468.63 1927.53 4.31 3933.88 1594.87 4.05

Other State Hydel 14.74 25.63 17.38 56.36 23.39 4.15

Short Term/Medium

term

637.66 286.947 4.50 1321.73 499.95

PGCIL Charges 633.49 520.23

KPTCL Charges 1640.78 1347.80

SLDC & POSOCO

Charges

1.66 12.99

Total 31271.00 13884.89 4.44 30879.69 13624.31 4.41

The details of station-wise / Source-wise power purchased quantum &

cost for the State and BESCOM are shown in Annexure-I & Annexure-II

respectively.

5.2.5 RPO target for FY18:

cviii

1. The Commission had directed the BESCOM to submit the estimates

for complying with solar and non-solar RPO for 2017-18, including

cost implication for purchasing RECs, if any.

The BESCOM in its replies has stated that as per the data furnished

in D1-Format, it would be able to meet the RPO target for FY18.

2. Further, the Commission had directed BESCOM to furnish certain

details, with respect to the renewable energy purchase estimates

made for the FY18. The BESCOM in its replies has furnished the

following details:

TABLE-5.11

Anticipated Capacity Addition of RE Sources in FY18

Source Capacity

under PPA

in MW as on

30.11.2016

Anticipated capacity

addition under PPA

during the remaining

period of FY17 in MW

Anticipated

capacity addition

under PPA during

FY18 in MW

Wind 1120.75 78 27.79

Mini-hydel 158.65 0 0

Co-generation 0 0 0

Biomass 59.50 0 0

Waste to Energy 156.00 0 0

Solar 0 0 638.70

3. The contribution of Solar Power should be computed duly

considering the present status of the Solar projects for which the

BESCOM has entered into PPA. Hence, the Commission had

requested BESCOM to furnish certain data on solar power projects.

The BESCOM has furnished the details as under:

cix

TABLE-5.12

Anticipated Energy from RE Sources in FY18

Type of Solar Plant

Capacity

in

MWp

Estimated Energy

contribution and

cost for FY17

Estimated Energy

contribution and

cost for FY18

Qty

(MU)

Cost

(Rs. Crs)

Qty

(MU)

Cost

(Rs. Crs)

Solar Rooftop

plants of < 500KW

12.74 20.12 9.61 20.12 9.61

Solar Rooftop

plants of >500KW

18.99 29.98 14.33 29.98 14.33

1-3 MW Projects

allotted to Farmers

by KREDL.

162 0 0 269.63 94.37

20 MW Projects

Taluk wise issued by

KREDL.

536 0 0 892.12 312.24

Other MW scale

projects

0 0 0 0 0

Total 729.73 50.10 23.94 1211.85 430.55

Note: 1. 15 MW of SRTPV which are under progress not accounted.

2. 50% of energy is assumed to be exported under net-metering under

SRTPV already commissioned @ Rs.9.56/unit.

Commission’s observations on BESCOM’s RPO Submissions:

Regarding Non-Solar RPO, the Commission notes that:

a. As per D-1 Format, the non-solar renewable energy is estimated as

2718.32.

b. BESCOM has considered addition of wind projects to the extent of

106 MW by 2017-18, which should generate around 250 MU at 27%

CUF, whereas BESCOM has considered only 56 MU as per the D-1

Format.

c. With the estimated energy of 31,271 MU for FY18 and considering

the excess solar energy of 1359.42, BESCOM, as per its filing, is likely

to achieve Non-solar RPO of 13.04% as against target of 12% for

FY18.

As far as solar RPO is concerned, the Commission notes that:

a. As per D-1 Format, the solar renewable energy is estimated as

1750.31 MU.

b. With the estimated energy of 31271 MU for FY18, the BESCOM is

likely to meet solar RPO of 5.59% against target of 1.25% for FY18.

cx

c. In its replies to the preliminary observations, BESCOM has estimated

solar energy as 1211.85 MU, which is not in tune with the data

furnished in D-1 Format. Considering 1211.85 MU, BESCOM would

meet solar RPO of 3.87%.

Commission’s Analysis:

The Commission has approved power purchase quantum of 30879.69

MU for FY18. The Non-solar RPO target at 12% would be 3705.56 MU.

The Commission has approved purchase of 3339.56 MU from non-solar

RE sources. Thus, BESCOM would be able to procure 3339.56 MU as

against an estimated RPO of 3705.56 MU, resulting in shortfall of 366.00

MU, which could be met by the anticipated surplus solar energy of

581.68 MU, as discussed earlier in this Chapter. Therefore, the need for

purchasing RECs may not arise.

However, in case there is a shortfall based on the actuals, BESCOM

may purchase RECs at the market rates, which would be considered

by the Commission in the APR of FY18.

The Commission has approved power purchase quantum of 30879.69

MU for FY18. The Solar RPO target at 1.25 % would be 386.00 MU. The

Commission has approved purchase of 967.68 MU of Solar energy.

Thus, BESCOM would exceed the solar RPO by 581.68 MU, which shall

be utilized to meet the shortfall in non-solar RPO. In case, there is any

need to buy Solar RECs to fully meet the solar RPO, the cost thereon

would be factored in the APR of FY18.

5.2.6 O & M Expenses for FY18:

BESCOM’s Proposal:

The BESCOM, in its application, has considered the actual O&M

expenses of Rs.1183.70 Crores which includes actual plus additional

employee cost of Rs.30.27 Crores on account of recruitment of 2426

employees during FY16 and factored inflation index of 7.24%, three

year CAGR of 6.25% for FY17 and 5.78% for FY18, for computing the

consumer growth index for projecting O&M expenses of Rs.1491.59

Crores for FY18 as detailed below:

TABLE-5.13

cxi

Normative O & M Expenses for FY18- BESCOM’s submission

Sl.No. Particulars FY-16 FY-17 FY-18

1 Inflation index in% 7.24 7.24

2 Consumer Growth Index in % 6.25 5.78

3 BESCOM efficiency in % 1.00 1.00

4 Base year O&M Cost in Rs.Crs. 1183.70

6 O&M expenses t-year= 0&M (t-

1)*(1+WII+CGI-X) (Rs.Crs) 1331.54 1491.59

Based on the normative O&M expenses, the breakup of projected O &

M expenses, as furnished by the BESCOM, for the FY18, is as follows:

TABLE – 5.14

Revised O&M Expenses for FY18- BESCOM’s Proposal


Sl.


1 Employee cost 1103.78

2 Other Expenses (Administrative and General

expenses)

283.40

3 Repairs and Maintenance expenses 104.41

Total O & M Expenses 1491.59

Commission’s analysis &decision:

The Commission, in its MYT Order dated 30th March, 2016, while

deciding the ARR for each year of the control period FY17-19, had

approved, an O&M expenses, of Rs. 1510.01 Crores for FY 18 based on

the actual expenses, including contribution to P & G, as per the

audited accounts for FY15, as follows:

TABLE-5.15

Approved O&M Expenses for FY18 as per

Tariff Order dated 30th March, 2016

Particulars FY16 FY17 FY18

No. of Installations 10574032 1116202

3

CGI based on 3 Year CAGR 6.01% 5.73%

Weighted Inflation index 7.24% 7.24%

Base Year O&M expenses (as per actuals

of FY15)-Rs. Crs 1201.45

Total O&M Expenses-Rs. Crs

1348.61 1510.01

cxii

As per the norms specified under the MYT Regulations, the O & M

expenses are controllable expenses and the distribution licensee is

required to incur these expenses within the approved limits.

The BESCOM has claimed additional O&M expenses of Rs.30.27 Crores

for FY16 owing to recruitment of employees during FY16. Further, it is

stated that additional employees would be recruited in FY17 and the

financial impact will be Rs.35 Crores for FY18. However, in the Format

D6 (a) of the application, BESCOM had indicated the same number of

employees working for the period FY16 to FY18. Therefore, the

Commission in its preliminary observations had sought details of the

employees working in each year of the control period along with the

cost implications.

The BESCOM, in its replies, has stated that, the officers and employees

working in the BESCOM are employed by KPTCL and their retirement is

published annually and hence factoring the employee cost due to

recruitment and retirements is a difficult task. Accordingly, BESCOM

has not furnished the financial implication for FY18.

In the absence of supporting data for claiming additional employee

cost due to proposed addition of employees for FY18, the Commission

is of the view that such expenses could be factored and considered

only when they are actually incurred by the distribution licensee.

Further, as decided in the MYT Order dated 30th March, 2016, the

Commission will look into the issue of revision of pay scale, at the time

of approving the APR for FY18 when the actual impact of revision of

pay scales is reported by BESCOM, as per its audited accounts.

In view of the above discussion, the Commission has computed the O

& M expenses for FY18, duly considering the actual O & M expenses of

FY16 as per the audited accounts (being the latest data available as

per the audited accounts) to arrive at the O & M expenses for the

base year i.e. FY16. The actual O& M expenses inclusive of contribution

to P&G Trust for FY16 is Rs.1167.38 Crores. Considering the Wholesale

cxiii

Price Index (WPI) as per the data available from the Ministry of

Commerce & Industry, Government of India and Consumer Price Index

(CPI) as per the data available from the Labour Bureau, Government

of India and adopting the methodology followed by CERC with CPI

and WPI in a ratio of 80: 20, the allowable annual escalation rate for

FY18 is 7.71%.

For the purpose of determining the normative O & M expenses for FY18,

the Commission has considered the following:

e) The actual O & M expenses incurred as per the audited accounts

inclusive of contribution to the Pension and Gratuity Trust to

determine the O & M expenses for the base year FY16.

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

number of installations considering the actual number of

installations as per the audited accounts upto FY16 and as

projected by the Commission for FY17 and FY18.

g) The weighted inflation index (WII) at 7.71%.

h) Efficiency factor at 1% as considered in the MYT Order.

The above parameters have been computed duly considering the

same methodology as is being followed in the earlier Tariff Orders of

the Commission and the relevant Orders of this Commission on various

Review Petitions.

Accordingly, the normative O & M expenses for FY18 are as follows:

TABLE – 5.16

Approved O & M expenses for FY18

Particulars FY16 FY17 FY18

No. of Installations 10654404 11248009

CGI based on 3 Year CAGR 6.28% 6.00%

Inflation index 7.71% 7.71%

Base Year O&M expenses (as per

actuals of FY16 )-Rs .Crs 1167.38

Total allowable O&M Expenses-Rs. Crs 1486.60

cxiv

Since, the base year data includes the O & M expenses inclusive of

contribution to the P & G Trust, the Commission has not considered

allowing separately the contribution to the P & G Trust.

Thus, the Commission decides to approve O&M expenses of Rs.1486.60

Crores for FY18.

5.2.7 Depreciation:


The BESCOM, in its application has claimed depreciation of Rs.374.34

Crores for FY18 on the projected gross fixed assets without considering

the cost of retirement of assets during the respective years. After

deducting an amount of Rs.144.50 Crores of deprecation on assets

created out of grants and consumer contribution, the net depreciation

claimed by BESCOM is as detailed below:

TABLE – 5.17

Depreciation-FY18- BESCOM’s Submission


Particulars FY18

Buildings 3.93

Civil 0.21

Other Civil 0.09

Plant & M/c 120.14

Line, Cable Network 391.42

Vehicles 1.17

Furniture 0.86

Office Equipment’s 1.02

Sub Total 518.84

Depreciation Withdrawn AS12 144.50

Total 374.34


The Commission, in accordance with the provisions of the MYT

Regulations and amendments issued thereon, has determined the

depreciation for FY18 considering the following:

cxv

a) The actual rate of depreciation of category-wise assets has been

determined considering the depreciation and gross block of

opening and closing balance of fixed assets, as per the audited

accounts for FY16.

b) The actual rate of depreciation, so arrived at, is considered, to

allow the depreciation on the gross block of opening and closing

balances of fixed assets projected by BESCOM, in its application for

FY18 and factoring the actual cost of retirement of assets as per the

audited accounts for FY16 and projection thereon for FY17 and

FY18.

c) The depreciation on account of assets created out of consumers

contribution / grants are considered (deducted), based on the

opening and closing balance of such assets duly considering the

addition of assets as proposed by the BESCOM, at the weighted

average rate of depreciation as per actuals in FY16.

Accordingly, the depreciation for FY18 is arrived at as follows:

TABLE – 5.18

Approved Depreciation for FY18


Particulars FY18

Buildings 4.94

Civil 0.23

Other Civil 0.06

Plant & M/c 146.77

Line, Cable Network 385.26

Vehicles 1.35

Furniture 0.71

Office Equipment’s 0.80

Sub Total 540.11

Depreciation Withdrawn AS12 166.35

Total 373.76

Thus, the Commission decides to approve an amount of Rs.373.76

Crores towards depreciation for FY18.

cxvi

5.2.8 Interest on Capital Loans:

BESCOM’s proposal:

BESCOM in its application has stated that, during FY16 majority of the

Capital Loans have been availed from Rural Electric Corporations

(REC) at the interest rates in the range of 11.50% to 12.50%. Based on

the loan balances, the interest on the capital loan for FY18 is estimated

at Rs.351.43 Crores. In projecting the interest on capital loan, BESCOM

has considered the average rate of Interest of 7.77% on existing loans

and 11.75% for the new loans. The weighted average rate of interest

claimed by BESCOM is 8.41% for FY18.

The BESCOM has requested to approve interest on capital loans for

FY18 as follows:

TABLE – 5.19

Interest on Capital Loan– BESCOM’s Proposal



Based on the approved capex, the requirement of new capital loan is

Rs.674.00 Crores for FY18. Further, the Commission has considered the

repayment of loan as proposed by the BESCOM at Rs.382.68 Crores for

FY18.

Particulars FY18

Opening Balance of Capital Loans 3695.07

Less Repayments 382.68

Total Loan at the end of the year 3312.39

Average Loan for the year 3503.73

Interest on existing loans @ 7.77% 272.24

Add: New Loans 674.00

Interest on New Loan @ 11.75% 79.20

Total Interest on Capital Loans 351.43

Weighted Average rate of interest 8.41%

cxvii

As per the audited accounts and as per the APR of FY16, the BESCOM

had incurred interest on capital loan at a weighted average rate of

interest of 8.82% p.a. This rate of interest is considered for the existing

loan balances for which interest has to be factored during FY17.

Further, for the year FY18, the weighted average rate of interest of the

preceding year has been considered on the existing loan balances.

The Commission has considered new loans, in compliance of the debt

equity ratio of 70:30 as per the MYT Regulations.

The Commission notes that, the present interest rates by commercial

banks and financial institutions are charged mainly on the basis of

Marginal Cost of fund based Lending Rates (MCLR). These rates are

comparatively lower than the base rates considered earlier. Further, in

view of the changing economic situation, it is observed that there is

considerable reductions in the MCLR and also downward trend is

evident in the interest rates. Hence, in such a situation, the Commission

is of the view that, the ESCOMs can avail Capital loans at competitive

interest rates which would be less than the proposed rates of BESCOM.

The Commission notes that, the present SBI MCLR rate for capital loans

with a tenure of 3 years is 8.15%. Considering the present MCLR, the

Commission decides to allow an interest rate of 11.00% for FY18 for new

Capital loans. It shall be noted that, the rate of interest now considered

by the Commission on the new capital loans is subject to review during

APR.

Accordingly, the approved interest on loans for FY18 is as follows:

TABLE – 5.20

Approved Interest on Loans for FY18 Amount in Rs. Crores

Particulars FY18

Opening Balance long term loans 3706.54

Add new Loans 674.00

Less: Repayments 382.68

Total loan at the end of the year 3997.86

Average Loan 3852.20

Weighted average rate of interest in % 9.21%

Interest on long term loans 354.81

cxviii

Thus, the Commission decides to approve interest of Rs.354.81 Crores

on Capital loans for FY18.

5.2.9 Interest on Working Capital:


The BESCOM has claimed interest on working capital, based on the

norms prescribed in the MYT Regulations, and considering the rate of

interest as per the short term prime lending rate by SBI, at 14.05% p.a.

The interest on working capital, computed by BESCOM, is as follows:

TABLE – 5.21

Interest on Working Capital – BESCOM’s Submission


Particulars FY18

1/12th Operation and Maintenance expenses 123.97

1% of Gross fixed assets at the beginning of the year 101.82

2 months Receivables 2484.76

Estimated Working Capital 2710.55

Rate of Interest 14.05%

Interest on working capital 380.83


The Commission in its MYT Order dated 30th March, 2016 while deciding

the ARR for each year of the control period FY17-19, had approved

Interest on working capital of Rs. 323.77 Crores for FY18.

The Commission has been computing the interest on working capital as

per the norms specified under the MYT Regulations, which consists of

one month’s O & M expenses, 1% of opening GFA and two months’

revenue. Further, the claims of BESCOM based on prime lending rate of

SBI no more exists. The Banks / Financial institutions have switched over

from PLR to base rate and now from base rate to MCLR. At present

these financial entities are offering new loans only on MCLR basis,

cxix

whereas BESCOM is still insisting applicability of SBI PLR rates for allowing

interest on working capital. BESCOM has not considered the amended

provisions of the MYT Regulations. As discussed earlier, the MCLR for

loans with tenure of one year is 8.00%. Therefore, the Commission

decides to considers interest on working capital at 11% p.a. for FY18.

Accordingly, the approved interest on working capital for FY18 is as

follows:

TABLE – 5.22

Approved Interest on Working Capital for FY18


Particulars FY 18


Opening Gross Fixed Assets (GFA) 9992.43

Stores, materials and supplies 1% of Opening

balance of GFA 99.92





Thus, the Commission hereby approves interest on working capital of

Rs.311.72 Crores for FY18.

5.2.10 Interest on Consumers’ Security Deposit:


The BESCOM in its application has claimed interest on consumers’

security deposit of Rs.291.02 Crores for FY18 duly considering the

addition of deposits for each year of the control period FY18 based on

Bank rate of 7.75 per cent. The interest on consumers’ security deposit

projected for FY18 is as follows:

TABLE – 5.23

Interest on Consumer Security Deposits- BESCOM’s Submission Amount in Rs. Crores

Particulars FY18

Average Consumer Security Deposit 3755.08

Rate of Interest 7.75%

Interest on consumer security deposit 291.02

cxx


In accordance with the KERC (Interest on Security Deposit) Regulations,

2005, the interest rate on consumers’ security deposit to be allowed is

the bank rate prevailing on the 1st of April of the financial year for

which interest is due. As per Reserve Bank of India Notification dated

4th October, 2016, the applicable bank rate is 6.75%. The Commission

has considered the same, for computation of interest on consumers’

security deposits for FY18.

The Commission has considered the consumers’ security deposits as

per the audited accounts of FY16 for onward projection for FY18. Also,

the Commission is considering the average of the opening and closing

balances of consumers’ deposits of the relevant year. The interest on

consumers’ deposits, approved for FY18 is as follows:

TABLE – 5.24

Approved Interest on Consumers’ Security Deposits for FY18


Particulars FY18

Opening balance of consumers’ security deposits 3623.25

Proposed addition of deposits during FY18 400.00

Closing balance of consumers’ security deposits 4023.35

Average Consumers’ Security Deposits for FY18 3823.35

Bank rate to be allowed as per Regulations 6.75%

Approved Interest on average Consumers’ Security

Deposit 258.08

Thus, the Commission decides to approve interest on consumers’

security deposits of Rs.258.08 for FY18.

5.2.11 Other Interest and Finance Charges:

The BESCOM has claimed an amount of Rs.10.19 Crores towards other

interest and finance charges for FY18. Considering, the expenditure on

this item in the earlier years, the Commission decides to allow an

amount of Rs.10.19 Crores towards interest and finance charges for

FY18.

cxxii

5.2.12 Interest and other expenses Capitalized:

The BESCOM has claimed an amount of Rs.82.00 Crores towards

capitalization of interest and other expenses during FY18. Considering,

the capital expenditure incurred and the expenses capitalized in the

previous years, the Commission decides to allow capitalization of

interest and other expenses of Rs.82.00 Crores, as proposed by

BESCOM for FY18.

The abstract of approved interest and finance charges for FY18 are as

follows:

TABLE – 5.25

Approved Interest and finance charges for FY18


Particulars FY18

Interest on Loan Capital 354.81


Interest on Consumers Security Deposit 258.08

Other Interest & Finance Charges 10.19

Less Interest & other expenses capitalized (82.00)

Total Interest & Finance Charges 852.80

5.2.13 Return on Equity:


The BESCOM in its application has claimed Return on Equity of Rs.

114.73 Crores for FY18 based on the opening balance of Share Capital,

Share deposit and recapitalized amount of security deposit. BESCOM

has not considered the accumulated surplus/ deficit under Reserves

and Surplus account. BESCOM has stated that the accumulated deficit

is not to be considered in computation of return on equity as any loss in

the distribution business will be compensated in the future years while

carrying out Annual Performance Review and that the equity will be

restored. The Return on Equity claimed by BESCOM is as detailed

below:

cxxiii

cxxiv

TABLE-5.26

Return on Equity- BESCOM Submission


Particulars FY18

Opening balance of share capital 546.91

Share deposit 248.10

Less recapitalized security deposits (54.81)

Total Equity 740.20

Return on Equity @ 15.50% 114.73


The Commission has considered the actual amount of share capital,

share deposits and reserves & surplus as per the audited accounts for

FY16 for arriving at the allowable equity base for the control period

FY18.

The Commission, in accordance with the provisions of the MYT

Regulations, and amendment thereon, has considered 15.5% of Return

on Equity duly grossed up with the applicable Minimum Alternate Tax

(MAT) of 21.342%. This works out to 19.706% per annum. Further, as per

the decision of the Commission in the Review Petition No.6/2013 and

Review Petition No. 5/2014, and the amended provisions of the MYT

Regulations, the Return on Equity is to be computed based on the

opening balances of share capital, share deposits and accumulated

balance of deficit under reserves and surplus account. Further, an

amount of Rs.100.00 Crores of recapitalized consumer security deposit

as net-worth is considered as per the orders of the Hon’ble Appellate

Tribunal for Electricity in Appeal No.46/2014. Accordingly, the claims of

BESCOM on admissibility of ROE without considering the accumulated

deficit amount in computation of equity is not provided for.

Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing

balances of gross fixed assets along with break-up of equity and loan

component in the Tariff Order henceforth, the details of GFA, debt and

equity (net-worth) for FY18 are indicated as follows:

cxxv

TABLE – 5.27

Status of Debt Equity Ratio for FY18

Amount in Rs.

Crores

Year Particulars GFA Debt

Equity

(Net-

worth)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age

of

actual

debt

on

GFA

%age

of

actual

equity

on

GFA

FY18

Opening

Balance

9992.43 3706.54 389.22

Closing

Balance

10579.43 3997.86 449.55 7405.60 3173.83 37.79% 4.25%

From the above table it is seen that the actual amounts of debt &

equity are within the normative levels with reference to the closing

balances of GFA for FY18. Further, the Commission would review the

same during the Annual Performance Review, for FY18, based on the

actual data, as per the audited accounts.

Accordingly, the Return on Equity that could be approved for FY18,

works out as follows:

TABLE – 5.28

Approved Return on Equity for FY18


Particulars FY18

Opening Balance of Paid Up Share Capital 546.915

Share Deposit 259.34

Reserves and Surplus (317.03)

Less Recapitalised Security Deposit (100.00)

Total Equity 389.22

Approved Return on Equity with MAT 76.70

Thus, the Commission decides to approve Return on Equity of Rs.76.70

Crores, for FY18.

cxxvi

5.2.14 Other Income:


BESCOM has claimed an amount of Rs.55.82 Crores as other income

for the FY18. BESCOM has proposed this amount considering the 5%

increase over the actual other income earned in FY16 excluding

incentives on prompt payment of power purchase bills.


The other income received by the BESCOM mainly includes income

from miscellaneous recoveries, interest on bank deposits, rent from staff

quarters and sale of scrap, profit on sale of stores besides incentives for

timely payment of power purchase bills. The actual ‘other income’ as

per the audited accounts for FY16 is Rs.167.20 Crores. The Commission

notes that, the BESCOM, in its projection of other income for the control

period has not included estimated incentives likely to be earned on

account of timely payment of power purchase bills.

On the basis of other income earned by the BESCOM in the past three

years and considering a nominal escalation of 5% p.a, the Commission

decides to approve other income of Rs.192.84 Crores for FY18.

5.2.15 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.1.00 Crore per

year for meeting the expenses towards consumer relations / consumer

education. This amount is earmarked to conduct consumer

awareness and grievance redressal meetings periodically and

institutionalize a mechanism for addressing common problems of the

consumers. The Commission has already issued guidelines for

consumer education and grievance redressal activities.

The Commission decides to continue providing an amount of Rs.1.00

Crore for each year of the control period FY18, towards meeting the

expenditure on consumer relations / consumer education.

cxxvii

The Commission directs BESCOM to furnish a detailed plan of action for

utilization of this amount and also maintain a separate account of

these funds and furnish the same at the time of APR.

5.3 Contribution towards Pension and Gratuity Trust

BESCOM in its application has claimed an amount of Rs.729.37 Crores

towards the arrears of contribution to P&G Trust not released by the

Government of Karnataka.

The Commission in its preliminary observations had informed BESCOM

to furnish reasons /justifications for inclusion of this amount in the

proposed ARR for FY18 to be recovered from the consumers as part of

the retail supply tariff during FY18 in contravention of the Commission’s

decision in Tariff Order 2016.

In its replies to the Commission’s preliminary observations, BESCOM has

stated that it has included an amount of Rs. 729.37 Crores towards

BESCOM portion of arrears of contribution to P&G Trust not released by

the Government of Karnataka, in accordance to the instructions issued

by the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3

dated 16.09.2016.

It is to be noted that, the Commission in its Order dated 30th March,

2016 has already dealt with this issue and had observed that,

a) 'As per Rule 4(13) of the Karnataka Electricity Reforms (Transfer of

Undertakings of KPTCL and its Personnel to Electricity Distribution

and Retail Supply Companies) Rules, 2002, notified by the

Government on 31.05.2002, the State Government is liable for

funding the pension and gratuity liability of existing pensioners as on

the effective date of Second Transfer Scheme.

b) The Government, as per its order dated 19.12.2002, has adopted

“pay as you go” approach to meet the pension and gratuity

requirements of existing pensioners on the effective date of second

cxxviii

transfer Scheme. With this arrangement, the GoK is liable to meet

the pension and gratuity requirement of existing pensioners.’

Thus, as per the provisions of the prevailing Rules and Government

Orders issued thereon, the Commission had earlier decided that this

liability cannot be passed on to the consumers, through tariff.

In spite of this Order of the Commission, BESCOM has claimed this

liability (in the proposed ARR for FY18, whereas, the same should have

been borne by the Government of Karnataka.

The Commission reiterates its earlier decision that, as per Rule 4(13) of

the Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL

and its Personnel to Electricity Distribution and Retail Supply

Companies) Rules, 2002, notified by the Government on 31.05.2002

and Government Order No. DE 15 PSR 2002 Dated 19.12.2002, the

amount in question is liable to be borne only by the Government of

Karnataka and cannot be passed on to the consumers, through tariff.

In view of the above, the Commission is unable to accept the claims

of BESCOM to allow an amount of Rs.729.37 Crores being the State

Government’s liability towards arrears of contribution to P&G Trust in the

ARR for FY18.

5.4 Abstract of Revised ARR for FY18:

In the light of the above analysis and decisions of the Commission, the

following is the approved revised ARR for FY18:

cxxix

TABLE – 5.29

Approved Revised ARR for FY18 Amount in Rs.

Crores

Sl.

No Particulars

FY18

As

Approved

in the MYT

Order

As per

application

filed on

30.11.2016

As

Revised &

Approved

Revenue at existing tariff in Rs Crs

1

Revenue from tariff and Miscellaneous

Charges 13016.45 13821.23

2 Tariff Subsidy from BJ/KJ 41.04 77.70

3 Tariff Subsidy from IP 1955.61 1761.17

Total Revenue at Existing Tariff 15013.10 15660.10


4 Power Purchase Cost 11587.95 12249.11 12265.18

5 Transmission charges of KPTCL

1622.58 1622.58 1347.80

6 SLDC Charges 13.20 13.20 11.33


transmission 13223.73 13884.89 13624.31




Total O&M Expenses 1510.01 1491.59 1486.60

10 Depreciation 300.20 374.34 373.76


11 Interest on Loans 319.09 351.43 354.81

12 Interest on Working capital 323.77 380.83 311.72

13 Interest on belated payment on PP Cost

14 Interest on consumer deposits 280.70 291.02 258.08

15 Other Interest & Finance charges 10.19 10.19 10.19

16 Less interest & other expenses capitalised 82.00 82.00 82.00

Total Interest & Finance charges

851.75 951.47 852.80

17 Other Debits 0.00 0.00 0.00

18 Net Prior Period Debit/Credit

0.00 0.00 0.00

19 Return on Equity 40.54 114.73 76.70

20

Funds towards Consumer

Relations/Consumer Education 1.00 1.00 1.00

21 Other Income 213.00 55.82 192.84

22

Provision for contribution to P&G Trust

(GoK Liability) 729.37 0.00

23

Disallowance of Interest and Depreciation

on imprudent investments in FY16 0.56

24 ARR 15714.23 17491.57 16221.77

25 Deficit for the year

0.00 -2478.47

26 Deficit for FY16 carried forward

-1424.40 -692.42

cxxx

27 Net ARR 15714.23 18915.97 16914.19

5.5 Segregation of ARR into ARR for Distribution Business and ARR for Retail

Supply Business:

BESCOM in its application has proposed the segregation of ARR into

ARR for Distribution Business and ARR for Retail Supply Business at the

same ratio as proposed in its MYT application for FY17-19. The

Commission decides to continue the same ratio of segregation of ARR

into ARR for distribution business and ARR for retail supply business as

approved in its Tariff Order dated 30th March, 2016, as detailed below:

TABLE – 5.30

Approved Segregation of ARR – FY18

Particulars Distribution

Business

Retail Supply

Business

O&M 56% 44%

Depreciation 88% 12%

Interest on Loans 100% 0%

Interest on Consumer Deposits 0% 100%

RoE 50% 50%

GFA 88% 12%

Non-Tariff Income 19% 81%

Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:

TABLE – 5.31

APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18 Amount in Rs. Crores

Sl. No Particulars FY18

1 R&M Expenses

832.50

2 Employee Expenses

3 A&G Expenses


Interest & Finance Charges




8 Less interest & other expenses capitalised 82.00

9 Total 1481.24



12 NET ARR 1482.95

cxxxi

TABLE – 5.32

APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18


Sl. No Particulars FY18

1 Power Purchase 12265.18

2 Transmission Charges 1359.13

3 R&M Expenses

654.11

4 Employee Expenses

5 A&G Expenses


Interest & Finance Charges




Total 14855.67

10 ROE 38.35


12

Fund towards Consumer Relations /

Consumer Education 1.00

13 NET ARR 14738.82

5.6 Gap in Revenue for FY18:

As discussed above, the Commission decides to approve the revised

Annual Revenue Requirement (ARR) of BESCOM for its operations in

FY18 at Rs.16914.19 Crores as against BESCOM’s application proposing

the revised ARR of Rs.18915.97 Crores by including the revenue deficit

of Rs.1424.40 Crores for FY16. The approved ARR includes an amount of

Rs.692.42 Crores which is determined as the deficit in FY16 as discussed

in Chapter-4. Based on the existing retail supply tariff, the total

realization of revenue will be Rs.15660.10 Crores which is Rs.1254.09

Crores less than the projected revenue requirement for FY18.

The net ARR and the gap in revenue for FY18 are shown in the following

table:

cxxxii

TABLE – 5.33

Revenue gap for FY18

Particulars FY18

Net ARR including carry forward gap of FY16 (in Rs. Crores) 16914.19

Approved sales (in MU) 26109.16

Average cost of supply (in Rs./unit) 6.48

Revenue at existing tariff (in Rs. Crores) 15660.10

Gap in revenue (in Rs. Crores) (1254.09)

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

above approved ARR is detailed in the following Chapter.

cxxxiii

CHAPTER – 6

DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18

6.0 Revision of Retail Supply Tariff for FY18-BESCOM’s Proposals and

Commission’s Decisions:

6.1 Tariff Application

As per the Tariff application filed by the BESCOM, it has projected an

unmet gap in revenue of Rs.3902.86 Crores for FY18, which also

includes the gap in revenue of Rs.1424.40 for FY16. In order to bridge

this gap in revenue, BESCOM has proposed a uniform tariff increase of

148 paise per unit, in respect of all the categories of consumers.

Subsequently, BESCOM has filed an amendment application by

proposing the increase the energy charges to domestic category with

telescopic tariff and increase in demand charges and reduction of

energy charges in respect of HT category of consumers.

In the previous chapters of this order, the process of Annual

Performance Review (APR) for FY16 and the revision of ARR for FY18

has been discussed. The various aspects of determination of tariff for

FY18 are discussed in this Chapter.

6.2 Statutory Provisions guiding determination of Tariff

As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the

following factors, while, determining the tariff so that -

the distribution and supply of electricity are conducted on

commercial basis;

competition, efficiency, economical use of resources, good

performance, and optimum investment are encouraged;

the tariff progressively reflects the cost of supply of electricity, and

also reduces and eliminates cross subsidies within the period to be

specified by the Commission;

efficiency in performance is to be rewarded: and

that a multi-year tariff framework is adopted.

cxxxiv

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

Karnataka Electricity Reform Act 1999, empowers the Commission to

specify, from time to time, the methodologies and the procedure to be

observed by the licensees in calculating the Expected Revenue from

Charges (ERC). The Commission determines the Tariff in accordance

with the Regulations and the Orders issued by the Commission from time

to time.

6.3 Factors Considered for Tariff setting:

The Commission has considered the following relevant factors for

determination of retail supply tariff:

a) Tariff Philosophy:

As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply in respect of consumers

whose ability to pay is considered inadequate and also fix tariff at

or above the average cost of supply for categories of consumers

whose ability to pay is considered to be higher. Thus, the system of

cross subsidy continues. However, the Commission has taken due

care to progressively bring down the cross subsidy levels as

envisaged in the Tariff Policy 2016 issued by the Government of

India.

b) Average Cost of Supply:

The Commission has been determining the retail supply tariff based

on the average cost of supply. The KERC (Tariff) Regulations, 2000,

as amended from time to time, require the licensees to provide

details of embedded cost of electricity voltage / consumer

category-wise. The distribution network of Karnataka is such that, it

is difficult to segregate the common cost between voltage levels.

Therefore, the Commission has decided to continue the average

cost of supply approach for recovery of the ARR. With regard to

the indication of voltage- wise cross subsidy with reference to the

cxxxv

voltage-wise cost of supply, the same is indicated in the Annexure

to this Order.

c) Differential Tariff:

The Commission has been determining differential retail supply tariff

for consumers in urban and rural areas, beginning with its Tariff

Order dated 25th November, 2009. The Commission decides to

continue the same in the present order also.

Further, in this Tariff Order, the slab-rates for BESCOM’s domestic

consumers for levying energy charges are in variance with other

ESCOMs, which is in partial acceptance of the BESCOM’s prayer in

its amended petition dated 16th February, 2017, as discussed later in

this Chapter.

6.4 New Tariff Proposals by BESCOM:

i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-

stations:

BESCOM, in its tariff application dated 30th November, 2016,

besides seeking revision of retail supply tariff for all the

categories of consumers, has prayed for determination tariff for

the Auxiliary Consumption of KPTCL Stations. Other ESCOMs

namely, CESC and MESCOM have also filed separate Petitions

before this Commission seeking tariff determination for auxiliary

consumption of KPTCL’s substations.

BESCOM Submission:

BESCOM has requested fixation of tariff for KPTCL’s Auxiliary

consumption on the following grounds:

1. The power utilized by KPTCL Substations for auxiliary

consumption purpose is supplied by ESCOMs through a

separate feeder or local feeder. The power so supplied by

ESCOMs is from the pooled purchase of power from different

cxxxvi

sources at different rates. The cost incurred in procurement

of power by the ESCOMs, need to be paid by the KPTCL.

2. The auxiliary consumption of PGCIL stations, being the

transmission utility, is being billed under commercial tariff.

3. The auxiliary consumption of KPTCL Substations is being billed

at average power purchase cost of the ESCOMs where the

substations are geographically located, from June, 2005 to

October 2016 as per the KPTCL’s letter dated 15.12.2005.


The treatment of the electricity consumption of KPTCL’s substations

has been a matter of contention between KPTCL and ESCOMs.

While the KPTCL has been urging the Commission to treat the

consumption of its substations as transmission loss, the ESCOMs

have been requesting the Commission to fix a commercial tariff.

The BESCOM in its letter dated 29.05.2015, had requested the

Commission to approve the Commercial tariff to the auxiliary

consumptions in respect of KPTCL Sub-stations. After examining the

issue in detail, the Commission had clarified that as per the

provisions of Regulation 3.3 of the KERC (Terms and Conditions for

Determination of Transmission Tariff) Regulations, 2006, the charges

for the auxiliary consumptions of KPTCL substations used for the

purpose of air-conditioning, lighting etc. are part of the normative

operation and maintenance expenses of KPTCL and hence the

charges for the same have to be borne by KPTCL. Further, the

Commission also notes that, the KPTCL while computing the

transmission losses, is not considering the electricity consumption of

its sub-stations as part of the transmission loss. Accordingly, the

Commission vide its letter No. B/07/05/451 dated 23.06.2015, had

clarified that since there is no specific category in the present tariff

schedule for billing the auxiliary consumption of KPTCL Substations,

the ESCOMs should seek determination of tariff in respect of sale of

power to KPTCL substations under the provisions of clause 3.05 of

cxxxvii

the Conditions of Supply of Electricity by Distribution Licensees in

the State of Karnataka. Accordingly, the ESCOMs have filed the

petitions.

From the submissions made by BESCOM, it is clear that, the power

utilized by KPTCL Sub-stations for the consumption purpose is being

supplied by the ESCOMs through a separate / local feeder. Since,

KPTCL is responsible for accounting the energy purchased by the

ESCOMs upto the interface point of the ESCOMs and the energy

utilized by KPTCL Substations for auxiliary consumption purpose has

not been recognized in computation of transmission losses, the

energy supplied from the distribution network of the ESCOMs for

the consumption of the KPTCL Sub stations has to be accounted

and charged in accordance with the provisions of the KERC (Terms

and Conditions for Determination of Transmission Tariff)

Regulations, 2006.

Now, keeping in view the request of the ESCOMs, the issue before

the Commission is whether to fix a commercial tariff or a tariff

equal to the State’s average power purchase cost, to bill the

auxiliary consumption of KTPCL Sub-stations. The Commission notes

that any tariff charged to bill the KPTCL’s substations consumption,

shall have to be ultimately recovered through transmission tariff,

which in turn, is passed on to the end consumers in the form of

retail supply tariff. In order to minimise the burden on the retail

supply consumers, the Commission decides as follows:

In accordance with the provisions of Regulation 3.3 of the KERC

(Terms and Conditions for Determination of Transmission Tariff),

Regulations, 2006 and amendment thereon and Clause 3.05 of the

Conditions of Supply of Electricity by Distribution Licensees in the

State of Karnataka, the power supplied by the ESCOMs to the

KPTCL’s Substations for auxiliary consumption purposes, the

Commission decides to fix a single part tariff rate at the State

Average Power Purchase Cost, as approved by the Commission, in

the Tariff Orders issued from time to time.

cxxxviii

Further, for the energy consumption by KPTCL’s Sub-stations for

auxiliary purposes, during the previous periods, the ESCOMs shall

bill it at the average power purchase cost of the State, as

determined by the Commission in the Tariff Orders issued from time

to time.

ii) Amendment Petition seeking increase in demand charges of HT

Installations and modification of slabs for Domestic Consumers:

BESCOM in its amendment petition dated 16th February, 2017, has

requested for:

d) Creation of additional slabs in respect of Domestic consumers –

LT2(a)(i) and (ii) and revision the tariff as suggested therein;

e) Concessional tariff of Rs.5.98 per unit for street lights using LED

bulbs and higher tariff of Rs.11 per unit for street lights not using

LED bulbs; and

f) Increasing the demand charges and reduction in energy

charges in respect of HT 1, HT 2(a) (b) (c) and HT 4 Installations.

The Commission has dealt with these issues as follows:

iii) Creation of additional slabs in respect of Domestic consumers:

BESCOM has proposed telescopic tariff in respect of domestic

consumers of areas of BBMP and all other urban local bodies, as

follows:

1. Rs.3.60 per unit up to 30 units.

2. Rs.5.30 for all the units consumed in the month, if the

consumption exceeds 31 units and up to 100 units.


consumption exceeds 101units and up to 200 units.

4. Rs.6.40 for all the units from 1 to 300 units consumed in the

month

5. Rs.6.90 for all the units consumed from 301 units to 400 units in

the month

cxxxix

6. Rs.7.20 for all the units consumed from 401 to 500 units in a

month.

7. Rs.7.50 for all the units consumed above 500 units per month.

In respect domestic consumers of village panchayat areas, the

BESCOM has proposed the following slab rates:

1. Rs.3.50 per unit up to 30 units.


consumption exceeds 31 units and up to 100 units.


consumption exceeds 101units and up to 200 units.

4. Rs.6.10 for all the units from 1 to 300 units consumed in the

month

5. Rs.6.70 for all the units consumed from 301 units to 400 units in

the month

6. Rs.7.10 for all the units consumed from 401 to 500 units in a

month.

7. Rs.7.40 for all the units consumed above 500 units per month.

Consumers’ Response:

The consumers have opposed the proposal to introduce telescopic

scales for the following reasons:

i) The proposal is against the principle of natural justice as the slab

system and benefit of slab system is allowed to all the tax payer

/ consumers by the Income Tax and the BWSSB.

ii) In a situation where there is surplus power, higher consumption

should be encouraged by offering lower tariff. BESCOM’s

proposal is against this spirit.

iii) The proposal is an attempt to address the issue of HT consumers,

who are exiting the BESCOM net by opting for open access,

which would in effect amount to collecting increased tariff from

the domestic consumers and giving it to rich HT consumers.

iv) The increase in tariff should be uniformly spread over all the

consumers and in case if any concession is to be extended, the

cxl

Government should provide subsidy for such concessions. The,

BESCOM is trying to take over the role of the Government.

cxli

Commission’s Analysis and decisions:

While submitting the new proposal, the BESCOM has furnished details

of additional revenue likely to be realised from these categories. But

while doing so, it has not furnished the basis for projecting the sales and

connected load under each slab and the financial impact on the

consumers. Thus, the proposal is incomplete in so far as the revenue

estimates are concerned. However, BESCOM has stated that the

proposed ARR will not undergo any change as the increase in revenue

from a few consumer categories would get setoff against reduction in

tariff to other consumers.

The Commission would like to point out that the tariff structure in

respect of domestic consumers is uniform across the State. The

Government of Karnataka has also favoured a uniform tariff in the

State. Keeping this in view, the Commission is unable to accept the

proposal of the BESCOM to introduce telescopic slabs with a different

tariff structure to BESCOM consumers. The Commission also

appreciates the point that in the current surplus power situation higher

consumption should not be discouraged but encouraged especially

by cross subsidizing consumers. However, considering the large

consumer base of domestic consumers in BESCOM area, the

Commission has considered a change in the slabs of domestic

consumers under tariff schedule LT2(a)(i) and LT2(a) (II), without

changing the basic tariff structure. The details of the same are

indicated in the respective tariff schedules, of this order.

iv) Concessional tariff for street lights using LED bulbs and higher tariff for

street lights not using LED bulbs:

The Commission does not find merit in the proposal, since the dis-

incentive for non-use of LED bulbs is too harsh and if implemented,

would only add to the huge revenue arrears already existing in this

category, besides defeating the principles of cross subsidy surcharge.

The Commission decides to continue to extend the existing incentive

for usage of LED bulbs for street light installations, as indicated in the

respective Tariff Schedules of the Tariff Order.

cxlii

v) Increase in Demand Charges and reduction in energy charges to all

the HT consumers

BESCOM in its petition dated 16th February, 2017 has proposed

increase in Demand Charges (Fixed Cost) and reduction in energy

charges to all the HT consumers for the following reasons:

i) The ratio of fixed and variable cost of power purchase cost

payable to the private generators is 33: 67.

ii) All the ESCOMs in the state are recovering the fixed cost of their

distribution network in the ratio of 11:89.

iii) BESCOM is recovering 22% of the fixed cost through energy

charge (variable charge) and since the HT consumers are opting

for open access, it is not able to recover the variable costs which

include the fixed cost by Rs.10/- (Rupees Ten only) Per

KVA/HP/KW for all the consumers.

iv) The contribution of Fixed cost is only 11% of the ARR and the

remaining fixed cost is camouflaged in the energy charges,

which are higher.

With the above justification, the BESCOM has proposed to increase the

Demand charges upto Rs.250 per KVA of the billing demand from the

existing Demand Charge of Rs.180 -200 per KVA. BESCOM has also

proposed reduction energy charges ranging between 45 Paise to 95

paise per unit to the various categories of HT consumers.

Consumers’ Response:

The representatives of small-scale industries have opposed the

proposal for increasing the Demand Charges. They have contended

that BESCOM has not furnished the working details of fixed charges

and its percentage to the total fixed charges being incurred. It is

submitted that as per the provisions of the Electricity Act, 2003, the

BESCOM should realise the cost of supply from all the categories of

consumers and should not confine recovery of fixed cost only to a

specific category of consumers.

cxliii


.

BESCOM, in its petition has considered the recovery of Fixed Cost (FC)

of generation sources and the distribution network. It has not

considered the FC involved in transmission of power and the SLDC

charges which are one of the major components of the ARR. Further,

seeking increase in demand charges only for HT consumers and

increase in energy charges for higher slabs of domestic consumers

while reducing the energy charges to HT consumers does not appear

to a proper approach to retain HT consumers, in its fold. Any proposal

to encourage sale or to improve the ESCOM’s finances should be

made by keeping the interest of all the consumers in mind and the

treatment to various class of consumers across the ESCOM should be

just and equitable. Hence, the Commission is unable to accept the

proposal of BESCOM to increase the Demand Charges of its HT

consumers and also to selectively increase the energy charges under

higher slabs of domestic consumers.

The Commission in its Tariff Order dated 30th March, 2016 had

considered increase in demand charges to the consumers of all the

ESCOMs in the State.

“As per the new Tariff Policy issued by the Ministry of Power,

Government of India, dated 28th January, 2016, two-part Tariff

featuring separate fixed and variable charges shall be

introduced for all consumers. In order to ensure their financial

viability, it is imperative that the fixed expenditure incurred by

the ESCOMs is recovered in the form of fixed charges. On a

study of the existing rate of fixed charges levied on the

consumers and the amount collected thereon, it is observed

that fixed charges need to be increased gradually to meet the

above objective”.

In pursuance of the above, the Commission has again reviewed the

status of recovery of fixed charges while revising the tariff for FY18. The

cxliv

fixed costs to be incurred by BESCOM to supply power to its consumers

for FY18, consists of the following components:

Activity Total Fixed Cost to be

incurred -Rs. Crs.

Generation 2648.78

Transmission including SLDC charges 1881.02

Distribution network cost 1483.41

Total Fixed cost of BESCOM 6013.21

The approved Net ARR of BESCOM is Rs. 16914.19 Crores out of which,

RS.6013.21 Crores is towards fixed cost. As per the existing Revenue

rates, BESCOM recovers an amount of Rs. 1922.71 Crores towards the

fixed cost, which accounts for recovery of 32% of the fixed cost,

incurred by the BESCOM.

Since the Commission has decided to increase the FC year on year

gradually, an increase ranging between Rs. 10 to Rs.20 has been

considered now while approving the tariff to various categories of

consumers. The details of the actual increase are indicated in the tariff

schedule of each of the consumer categories.

vi) Introduction of morning peak from 6 AM to 10 AM under ToD billing:

In respect of HT consumers, the ESCOMS have proposed to introduce

ToD billing for morning peak between 6 AM to 10AM in addition to the

prevailing ToD billing for usage of energy during evening peak (6 p.m.

to 10 p.m.) and not to allow any incentive for off peak usage (during

night hours) against the existing rate of Rs.1.25 per unit.

BESCOM has submitted that the ToD billing is to encourage the HT

consumers to shift their load from peak hours to non-peak hours by

incentivising them and also to levy a penalty to discourage usage of

energy during peak hours. It has also cited the examples of Delhi,

cxlv

Mumbai and Gujarat where ToD billing is prevailing for both morning

and evening peak usage as compared to the State’s single ToD billing

for evening peak usage. The off peak incentive helps in shifting the

load curve to night hours which is helpful for optimum power

generation during night hours.

Consumers across the State have opposed this proposal and have

requested the Commission to make the ToD billing optional instead of

making it mandatory.

The Commission has examined the issue in detail. It is found that during

most part of the year, the morning peak usage is higher than the

evening peak usage. In the absence of penal charges during the

morning peak, the tendency to use the power in the morning peak is

more as compared to the evening peak. The system of ToD billing for

morning peak is also prevalent in the States referred to above. Hence,

the Commission decides to introduce ToD billing in respect of HT

consumers for morning peak between 6 AM to 10AM in addition to the

prevailing ToD billing for usage of energy during evening peak (6 p.m.

to 10 p.m.) and also to reduce the incentive for off-peak usage (during

night hours) to Re1/ per unit as against the existing rate of Rs.1.25 per

unit. The necessary changes in the ToD billing are indicated in the

respective Tariff schedule of the HT Consumers, in this Tariff Order.

6.5 Revenue at existing tariff and deficit for FY18:

The Commission in its preceding Chapters has decided to carry

forward the gap in revenue of Rs.692.42 Crores of FY16 to the ARR of

FY18. The gap in revenue for FY18 is proposed to be filled up by revision

of Retail Supply Tariff, as discussed in the following paragraphs of this

Chapter.

Considering the approved ARR for FY18 and the revenue as per the

existing tariff, the gap in revenue for FY18 is as follows:

TABLE – 6.1

Revenue Deficit for FY18 Amount Rs. in Crores

Particulars Amount

cxlvi

Approved Net ARR for FY18 including gap of FY16 16914.19

Revenue at existing tariff 15660.10

Surplus / (- )Deficit (1254.09)

Additional Revenue to be realised by Revision of

Tariff

1254.09

Accordingly, in this Chapter, the Commission has proceeded to

determine the Revised Retail Supply Tariff for FY18. The category-wise

tariff as existing, as proposed by BESCOM and as approved by the

Commission are as follows:

6.6 Category-wise Existing, Proposed and Approved Tariffs:

1. LT-1 Bhagya Jyothi:

The existing tariff and the tariff proposed by BESCOM are given below:

Sl.

No

Details Existing as per 2016

Tariff Order

Proposed by BESCOM

1 Energy charges

(including recovery

towards service main

charges)

596 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

744 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

Commission’s Views/ Decision

The Government of Karnataka has continued its policy of providing

free power to all BJ/KJ consumers with a single outlet, whose

consumption is not more than 40 units per month vide Government

Order No. EN12 PSR 2017 dated 20th March, 2017 (instead of

the earlier limit of 18 units per month). Based on the present average

cost of supply, the tariff payable by these BJ/KJ consumers is revised to

Rs.6.48 per unit.

Further, the ESCOMs have to claim subsidy for only those consumers

who consume 40 units or less per month per installation. If the

consumption exceeds 40 units per month or if any BJ/KJ installation is

found to have more than one outlet, it shall be billed as per the Tariff

Schedule LT 2(a).

The Commission determines the tariff (CDT) in respect of BJ / KJ

installations as follows:

cxlvii

LT – 1 Approved Tariff for BJ / KJ installations

Commission determined Tariff Retail Supply Tariff

determined by the

Commission

648 paise per unit,

Subject to a monthly minimum of

Rs.30 per installation per month.

-Nil-*

Fully subsidized by GoK

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by these

Consumers is shown as nil. However, if the GOK does not release the subsidy in

advance, a Tariff of Rs.6.48 per unit subject to a monthly minimum of Rs.30 per

installation per month, shall be demanded and collected from these consumers.

2. LT2 - Domestic Consumers:


The details of the existing and proposed tariff under this category are

given in the Table below:

Proposed Tariff for LT-2 (a)

LT-2 a (i) Domestic Consumers Category

Applicable to areas coming under Bruhat Bangalore Mahanagara

Palike (BBMP), Municipal Corporations and all Urban Local Bodies

Details Existing as per 2016 Tariff

Order Proposed by BESCOM As per Revised proposal

by BESCOM dated

16.02.2017:

Fixed Charges

per Month

For the first KW Rs.30 For the first KW Rs.30 For the first KW Rs.30

For every additional KW

Rs.40


Rs.40


Rs.40

Energy Charges

0-30 units

(life line

Consumption )

0 to 30 units:300 paise/unit 0 to 30 units: 448

paise/unit

0 to 30 units:

360paise/unit

Energy Charges

exceeding 30

units per month

31 to 100 units:440

paise/unit

31 to 100 units: 588 paise

/ unit

31 to 100 units: 530 paise/

unit (for all units from 1 to

100 units).

101 to 200 units:590 paise

/unit


/unit

101 to 200 units:710paise

/unit (for all units from 1

to 200 units).

Above 200 units:690paise

/unit

Above 200 units:838paise

/unit



to 300 units).



to 400 units).



to 500 units).

cxlviii

Above 500 KWH: 750

paise for all units

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

Applicable to Areas under Village Panchayats

Details Existing as per 2016 Tariff Order

Proposed by BESCOM As per Revised proposal by

BESCOM dated 16.02.2017

Fixed charges per

Month

For the first KW Rs.20 For the first KW Rs.20 For the first KW Rs.20


Rs.30

For every additional

KW Rs.30

For every additional

KW Rs.30

Energy Charges

0-30 units ( life line

Consumption )

Upto 30 units:290 paise

/unit


/unit 0 to 30 units: 350paise/unit

Energy Charges

exceeding 30

Units per month


/ unit


/ unit

31 to 100 units: 490paise

/ unit (for all units from 1 to

100 units).


/unit


/unit


/unit (for all units from 1 to 200

units).

Above 200 units: 640 paise

/unit

Above 200 units:788 paise

/unit



units).



units).


/unit (for all units from 1 to

5500 units).

Above 500 KWH: 740 paise for

all units

Commission’s decision

As made out in para 6.4(iii), the Commission decides to change the

existing slab system of billing the energy consumption and continue

with the two tier tariff structure in respect of the domestic consumers as

shown below:

(i) Areas coming under Bruhat Bangalore Mahanagara Palike (BBMP)

Area, Municipal Corporations and all Urban Local Bodies.

(ii) Areas under Village Panchayats.

The Commission approves the tariff for this category as follows:

Approved Tariff for LT 2 (a) (i) Domestic Consumers

Category:

Applicable to Areas coming under Bruhut Bangalore Mahanagara

Palike (BBMP) Municipal Corporations and all Urban Local Bodies

cxlix

Details Tariff approved by the

Commission

Fixed charges per Month For the first KW: Rs.40/-

For every additional KW Rs.50/-

Energy Charges up to 30 units per

month (0-30 units)-life line consumption.

Upto 30 units: 325paise/unit

Energy Charges in case the

consumption exceeds 30 units per

month

31 to 100 units:470 paise/unit

101 to 200 units:625 paise/unit

201 to 300 units: 730 paise/unit


Above 400 units: 740 paise/unit

Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats

Details Tariff approved by the Commission

Fixed Charges per Month For the first KW: Rs.25/-

For every additional KW Rs.40/-

Energy Charges up to 30

units per month (0-30 Units)-

Lifeline Consumption

Up to 30 units: 315 paise/unit

Energy Charges in case the

consumption exceeds 30

units per month


101 to 200 units:595paise/unit



LT2 (b) Private and Professional Educational Institutions& Private

Hospitals and Nursing Homes:


The details of the existing and the proposed tariff by BESCOM under

this category are given in the Table below:

LT 2 (b) (i)Applicable to areas under BBMP, Municipal Corporations

Areas and all urban Local Bodies

Details Existing as per 2016 Tariff Order Proposed by BESCOM

Fixed

Charges per

Month

Rs.45 Per KW subject to a

minimum of Rs.75 per month

Rs.45 Per KW subject to a

minimum of Rs.75 per

month

Energy

Charges

For the first 200 units 625

paise per unit

For the first 200 units 773

paise per unit

cl

Above 200 units 745 paise per

unit

For the balance units 893

paise per unit

LT 2 (b)(ii) Applicable to Areas under Village Panchayats


Order

Proposed by BESCOM

Fixed

Charges per

Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Energy

Charges

For the first 200 units: 570

paise per unit

For the first 200 units:718

paise per unit

Above 200 units: 690 paise

per unit

For the balance units:838

paise per unit


As in the previous Tariff Order the Commission decides to continue the

two tier tariff structure as follows:

(i) Areas coming under BBMP, Municipal Corporation and all urban

local bodies.


Approved Tariff for LT 2 (b) (i)

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable to areas under BBMP, Municipal Corporations and all other

urban Local Bodies.


Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85

per Month

Energy Charges 0-200 units: 650 paise/unit


Approved Tariff for LT 2 (b) (ii)

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable in Areas under Village Panchayats


Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per

Month

Energy Charges 0-200 units: 595 paise/unit


3. LT3- Commercial Lighting, Heating& Motive Power:


cli

The existing and proposed tariff are as follows:

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

Applicable to Areas coming under BBMP, Municipal Corporation and

urban local bodies


Order

Proposed by BESCOM

Fixed charges per

Month

Rs.50 per KW Rs.50 per KW

Energy Charges For the first 50 units:715

paise per unit

For the first 50 units:863paise

per unit


paise per unit

For the balance units: 963

paise per unit

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

but below 50 KW.


Fixed

charges


Energy

Charges


per unit


per unit


paise per unit


paise per unit

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

Applicable to areas under Village Panchayats


Order

Proposed by BESCOM

Fixed Charges

per Month


Energy Charges For the first 50 units:665paise

per unit

For the first 50 units:813

paise per unit

For the balance

units:765paise per unit

For the balance

units:913paise per unit

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

but below 50 KW


Order

Proposed by

BESCOM

Fixed Charges

per Month


Energy Charges For the first 50 units:665paise

per unit

For the first 50

units:813

paise per unit


paise per unit

For the balance

units:913 paise per

unit

clii

Commission’s Views/ Decision

As in the previous Tariff Order, the Commission decides to continue

with the two tier tariff structure as below:

(i) Areas coming under BBMP, Municipal Corporations and other

urban local bodies.


Approved Tariff for LT- 3 (i)Commercial Lighting, Heating& Motive

Applicable to areas under BBMP, Municipal Corporations and other

Urban Local Bodies

Details Approved by the Commission

Fixed Charges per Month Rs.60 per KW

Energy Charges For the first 50 units: 750 paise/ unit

For the balance units: 850 paise/unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.75 per KW

Energy Charges For the first 50 units:750paise /unit

For the balance units:850 paise/unit

Approved Tariff forLT-3 (ii) Commercial Lighting, Heating and

Motive

Applicable to areas under Village Panchayats


Fixed charges per

Month

Rs.50 per KW

Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

Approved Tariff for Demand based tariff (Optional)where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.65 per KW

Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

4. LT4-Irrigation Pump Sets:

cliii


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

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets upto and inclusive of 10 HP


Tariff Order

Proposed by BESCOM

Fixed charges per Month Nil Nil

Energy charges CDT 286paise per unit Free (In case GoK does not

release the subsidy in

advance, CDT of 434paise

per unit will be demanded

and collected from

consumers)

Commission’s Decision

The Government of Karnataka has extended free supply of power to

farmers as per Government Order No. EN 55 PSR 2008 dated

04.09.2008. As per this policy of GoK, the entire cost of supply to IP sets

up to and inclusive of 10 HP is being borne by the GoK through tariff

subsidy. In view of this, all the consumers under the existing LT-4(a) tariff

are covered under free supply of power.

Considering the cross subsidy contribution from categories other than

IP Sets and BJ/KJ Categories, the Commission determines the tariff for

IP Sets under LT4(a) category as follows:

Approved CDT for IP Sets for FY18

Particulars BESCOM

Approved ARR in Rs. Crore 16914.19

Revenue from other than IP & BJ/KJ

installations in Rs. Crore 14772.95

Amount to be recovered from IP & BJ/KJ

installations in Rs. Crore 2141.24

Approved Sales to BJ/KJ installations in MU 130.37

Revenue from BJ/KJ installations at Average

Cost of supply in Rs. crore 84.48

Amount to be recovered from IP Sets

category in Rs. crore 2056.76

Approved Sale to IP Sets in MU 6157.95

Commission Determined Tariff (CDT) for IP

set Category for FY18 in Rs/Unit 3.34

cliv

Accordingly, the Commission decides to approve tariff of Rs.3.34 per

unit as CDT for FY18 for IP Set category under LT4 (a). In case the GoK

does not release the subsidy in advance, a tariff of Rs.3.34 per unit shall

be demanded and collected from these consumers.

Approved by the Commission

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets up to and inclusive of 10 HP


Fixed charges per Month

Energy charges

Nil*

CDT (Commission Determined Tariff):

334 paise per unit

* In case the GoK does not release the subsidy in advance, a tariff of

Rs.3.34 per unit shall be demanded and collected from these

consumers.

The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level

for properly assessment of distribution losses and to enable detection

and prevention of commercial loss. In view of substantial progress in

implementation of feeder segregation under NJY scheme, the ESCOMs

were also directed to submit IP set consumption on the basis of the

meter readings of the 11 kV feeders at the substation level duly

deducting the energy losses in 11kV lines, distribution transformers & LT

lines, in order to compute the consumption of power by IP sets

accurately. Further, in the Tariff Order 2016, the ESCOMs were also

directed to take up enumeration of IP sets, 11 KV feeder-wise by

capturing the GPS co-ordinates of each live IP set in their

jurisdiction. In this regard, the Commission has noted that the ESCOMs

have complied partly with these directions and they have initiated

measures to achieve full compliance. The ESCOMs need to ensure full

compliance as this has direct impact on their revenues and tariff

payable by other categories of consumers.

clv

For the forgoing reasons, the Commission directs the ESCOMs as

follows:

The ESCOMs shall manage supply of power to the IP sets for the FY18,

so as to ensure that it is within the quantum of subsidy committed by

the GoK. They shall procure power which is proportional to such supply.

In case the ESCOMs opt to supply power to the IP sets in excess of the

quantum corresponding to the amount of subsidy the GoK has assured

to be released for FY18, the difference in the amount of subsidy relating

to such supply shall be claimed from the GoK. If the difference in

subsidy is not paid by the GoK, the same has to be collected from the

IP set consumers.

LT4 (b) Irrigation Pump Sets above 10 HP:

BESCOM’s Proposal

The Existing and proposed tariff for LT-4(b) are as follows:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP


Order

Proposed by BESCOM

Fixed charges per

Month

Rs.40 per HP Rs.40 per HP

Energy charges for

the entire

consumption

280 paise per unit 428 paise per unit

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

LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea

& Rubber plantations up to & inclusive of 10 HP


Order

Proposed by BESCOM

Fixed charges per

Month


Energy charges for

the entire

consumption

280 paise per unit 428 paise per unit

LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &

Rubber plantations above 10 HP


Order

Proposed by BESCOM

clvi

Fixed charges per

Month


Energy charges for

the entire

consumption

280paise per unit 428paise per unit

Approved Tariff:

The Commission decides to revise the tariff in respect of these

categories as shown below:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP

Fixed charges per Month Rs.50 per HP

Energy charges for the entire

consumption

300 paise/unit

LT4(c) (i) - Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber plantations up to & inclusive of 10 HP


Energy charges 300 paise / unit

LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea&

Rubber plantations above 10 HP


Energy charges 300 paise/unit

5. LT5 Installations-LT Industries:


The existing and proposed tariffs are given below:

clvii

LT-5 (a) LT Industries:

Applicable to Bruhat Bangalore Mahanagara Palike (BBMP) and

Other Municipal Corporation areas

i) Fixed charges


Fixed

charges

per Month

i) Rs. 35 per HP for 5 HP &

below

ii) Rs. 35 per HP for above 5 HP

& below 40 HP

iii) Rs. 45 per HP for 40 HP &

above but below 67 HP

iv)Rs. 110 per HP for 67 HP &

above

i) Rs. 35 per HP for 5 HP & below

ii) Rs. 35 per HP for above 5 HP &

below 40 HP

iii) Rs. 45 per HP for 40 HP &


iv)Rs. 110 per HP for 67 HP &

above

Demand based Tariff (Optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by

BESCOM

Fixed

Charg

es per

Month

Above 5 HP and less

than 40 HP

Rs.55 per KW of billing

demand

Rs.55 per KW of

billing demand

40 HP and above but

less than 67 HP


demand

Rs.75 per KW of

billing demand

67 HP and above Rs.160 per KW of

billing demand

Rs.160 per KW of

billing demand

ii) Energy Charges


Tariff Order

Proposed by BESCOM

For the first 500 units 510paise per unit 658paise/ unit

For the balance

units

630paise per unit 778paise /unit

clviii

LT-5 (b) LT Industries:

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

i) Fixed charges


Demand based Tariff (optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by

BESCOM

Fixed Charges per Month

Above 5 HP and

less than 40 HP

Rs.50 per KW of

billing demand

Rs.50 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.65 per KW of

billing demand

Rs.65 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

ii) Energy Charges


Tariff Order

Proposed by BESCOM

For the first 500 units 485paise per unit 633paise/ unit

For the next 500 units 570paise per unit 718paise/ unit

For the balance units 600paise per unit 748paise/ unit

Existing ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy

charges over the normal tariff applicable

22.00 Hrs to 06.00 Hrs (-) 125 paise per unit

06.00 Hrs to 18.00 hrs 0

Fixed Charges per Month

i)Rs.30 per HP for 5 HP &

below

ii) Rs.35 per HP for above 5 HP

& below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

i) Rs.30 per HP for 5 HP &

below

ii) Rs.35 per HP for above 5

HP & below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

clix

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff



06.00 Hrs to 10.00 Hrs (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 hrs (+) 100 paise per unit

22.00 Hrs to 06.00 Hrs 0

Commission’s Decision:

Time of the Day Tariff:

The decision of the Commission in its earlier Tariff Orders, providing for

mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers

with a contract demand of 500 KVA and above is continued. The

optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)

consumers with contract demand of less than 500 KVA. Further, for LT5

and HT1 consumers, the optional ToD is continued as existing.

The Commission has decided to continue with two tier tariff structure

introduced in the previous Tariff Orders, which are as follows:

i) LT5 (a): For areas falling under BBMP and Municipal Corporations

ii) LT5 (b): For areas other than those covered under LT5 (a) above.

Approved Tariff:

The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given

below:

Approved Tariff for LT 5 (a):

Applicable to areas under BBMP and other Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month

i) Rs.40 per HP for 5 HP & below

ii) Rs.45 per HP for above 5 HP & below 40 HP

iii) Rs.60 per HP for 40 HP & above but below 67 HP

iv) Rs.120 per HP for 67 HP & above

Demand based Tariff (optional)

clx

Fixed

Charges per

Month

Above 5 HP and less than 40

HP


demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.170 per KW of billing

demand

ii) Energy Charges


For the first 500 units 525 paise/unit

For the balance units 650 paise/ unit

Approved Tariff for LT 5 (b):

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

i) Fixed charges

Details Approved Tariff

Fixed

Charges

per Month



iii) Rs.55 per HP for 40 HP & above but below 67 HP

iv)Rs.110 per HP for 67 HP & above

ii) Demand based Tariff (optional)

Details Description Approved Tariff

Fixed Charges per

Month

Above 5 HP and

less than 40 HP


demand

40 HP and above

but less than 67 HP


demand


demand

iii) Energy Charges

Details Approved tariff

For the first 500 units 500 paise/ unit

For the next 500 units 590 paise/ unit

For the balance units 620 paise/unit

As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a)

& (b): At the option of the consumers

ToD Tariff




10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 hrs (+) 100 paise per unit

22.00 Hrs to 06.00 Hrs (-) 100 paise per unit

clxi

6. LT6 Water Supply Installations and Street Lights:


The existing and the proposed tariffs are given below:

LT-6(a) : Water Supply


Order

Proposed by BESCOM

Fixed charges per

Month

Rs.45/HP/month Rs.45/HP/month

Energy charges 390 paise/unit 538 paise/unit

LT-6 (b) : Public Lighting


Order

Proposed by BESCOM

Fixed charges per

Month

Rs.60/KW/month Rs.60/KW/month

Energy charges

without LED bulbs

550 paise/unit 698 paise/unit

Energy charges for

LED / Induction

450 paise/unit 598 paise/unit

As discussed earlier in this Chapter, the Commission has not accepted

the proposal to charge double the tariff for the streetlights installations

not using LED bulbs. Hence, Commission approves the tariff for these

categories are as follows:

Tariff Approved by the Commission for LT-6 (a): Water supply


Fixed Charges per

Month

Rs.55/HP/month


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


Fixed charges per

Month

Rs.70 /KW/month


Energy charges

for LED / Induction

Lighting

485 paise/unit

7. LT 7- Temporary Supply & permanent supply to Advertising Hoardings:


The existing rate and the proposed rate are given below:

clxii

Tariff Schedule LT-7(a)

Applicable to Temporary power Supply for all purposes.

a) Less than 67

HP:

Energy charge at

950paise per unit

subject to a weekly

minimum of Rs.170 per

KW of the sanctioned

load.

Energy charge at 1098paise

per unit subject to a weekly

minimum of Rs.170 per KW of

the sanctioned load.

TARIFF SCHEDULE LT-7(b)

Applicable to power supply to Hoardings & Advertisement boards

on Permanent connection basis

a) Less than 67

HP:

Fixed Cost Rs.50 per

KW/ month of the

sanctioned load.

Fixed Cost Rs.50 per KW/

month of the sanctioned load.

Energy charge at 950

paise per unit

Energy charge at 1098 paise

per unit


As decided in the previous Tariff Order, the tariff specified for

installations with sanctioned load / contract demand above 67 HP

shall be covered under the HT temporary tariff category under HT5.

With this, the Commission decides to approve the tariff for LT-7

category as follows:

TARIFF SCHEDULE LT-7(a)

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 1000 paise / unit

subject to a weekly minimum of Rs.190

per KW of the sanctioned load.



Tariff Order

Proposed by BESCOM


Tariff Order

Proposed by BESCOM

clxiii

Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW / month


H.T. Categories:

Time of Day Tariff (ToD)

The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a),HT-2(b) and HT2(c) consumers with a contract demand

of 500 KVA and above. Further, the optional ToD will continue as

existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract

demand of less than 500 KVA. The details of ToD tariff are indicated

under the respective tariff category.

8. HT1- Water Supply & Sewerage


The existing and proposed tariff are as given below:

The Existing and the proposed tariff – HT-1 Water Supply and Sewerage

Installations

Sl.

No.

Details Existing tariff as per

2016Tariff Order

Proposed Tariffs by

BESCOM dated

30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017

1 Demand

charges

Rs.190 / kVA of billing

demand / month

Rs.190 / kVA for billing

demand / month

Rs.250 / kVA for billing

demand / month

2 Energy charges 450 paise per unit 598 paise per unit 547 paise per unit

Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit

Proposed ToD Tariff to HT-1 category:

Time of day Increase (+) / reduction (-) in the energy


clxiv




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

Commission’s decision:

As discussed earlier in this chapter, the Commission approves the tariff for HT 1 Water Supply & Sewerage

category as below:

Details Approved Tariff for HT 1

Demand

charges

Rs.200 / kVA of billing demand / month

Energy charges 485 paise/ unit

As discussed earlier in this chapter, the approved ToD tariff to HT-1 tariff to

Water Supply & Sewerage installations at the option of the consumer is as

follows:

06.00 Hrs. to 10.00 hours (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit

9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial



Existing & proposed tariff – HT – 2 (a) (i) – HT Industries

Applicable to Bruhat Bangalore Mahanagara Palike (BBMP)&Municipal

Corporation area

Details Existing tariff as

per Tariff Order

2016

Proposed Tariff by

BESCOM dated

30.11.2016

As per revised proposal

by BESCOM dated

16.02.2017

Demand charges Rs. 190 / kVA of

billing demand /

month

Rs. 190 / kVA of billing

demand / month


demand / month

Energy charges

(i) For the first

one lakh units

(ii) For the

balance units

625paise per unit

675paise per unit

773paise per unit

823paise per unit

708 paise per unit

758 paise per unit



clxv

Existing & proposed tariff – HT – 2 (a) (ii) - HT Industries

Applicable to areas other than those covered under HT-2(a)(i)

Details Existing tariff as

per Tariff Order

2016

Tariff Proposed by

BESCOM dated

30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017


billing demand /

month

Rs. 180 / kVA of

billing demand /

month


demand / month

Energy charges

(iii) For the first

one lakh units

(iv) For the

balance units

620 paise per unit

660paise per unit

768paise per unit

808paise per unit

673 paise per unit

713 paise per unit

Railway traction and Effluent Plants {both Under HT2 (a)(i) &

HT2a(ii)}


Tariff order 2016

Tariff Proposed by

BESCOM dated

30.11.2016


by BESCOM dated

16.02.2017

Demand charges Rs. 190 / kVA at billing

demand / month


demand / month


demand / month

Energy charges 590paise per unit for

all the units

738 paise per unit for all

the units

668 paise per unit for all

the units

Existing ToD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(a)




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

Tariff for Metro Rail Corporation


Tariff Order 2016

Tariff Proposed by

BESCOM dated

30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017

Demand charges Rs. 190 / kVA of billing

demand / month


demand / month


demand / month

Energy charges 570paise per unit for

all the units

718paise per unit for

all the units

648 paise per unit for

all the units for all the

units.

clxvi


Approved Tariff for HT – 2 (a) (i) :

As discussed earlier in this chapter, the Commission approves the tariff for HT 2(a) category as below:

i) Approved Tariff for HT2(a)(i)

Applicable to areas under BBMP and Municipal Corporations


Demand charges Rs.210 / kVA of billing demand / month

Energy charges

For the first one lakh units 665 paise/ unit


ii) Approved Tariff for HT – 2 (a) (ii)

Applicable to areas other than those covered under HT-2(a) (i)



Energy charges

For the first one lakh units 660 paise/ unit


As discussed earlier in this chapter, the approved ToD tariff to HT2(a)(i) &

(ii) tariff.


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs (-)100 paise per unit

iii) Railway Traction & Effluent Treatment Plants under both HT2a(i) & HT2

a(ii)


Demand charges Rs. 210 / kVA of billing demand / month

Energy charges 620 paise / unit for all the units



clxvii

iv) Approved Tariff for Metro Rail Corporation

Details Tariff Approved by the Commission

Demand Charges Rs.210 per KVA of the billing

demand / month

Energy Charges for entire consumption 600 paise per unit

10. HT-2 (b) HT Commercial



Existing and proposed tariff HT – 2 (b) (i) HT Commercial

Applicable to BBMP& Municipal Corporation Area


Tariff Order 2016

Tariff Proposed by BESCOM

dated 30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017

Demand charges Rs.210 / kVA of billing

demand / month


demand / month


demand / month

Energy charges

(i) For the first

two lakh units

805paise per unit

953paise per unit

888 paise per unit

(ii)For the

balance units

835paise per unit 983paise per unit 918 paise per unit

Existing and proposed tariff HT – 2 (b) (ii) HT Commercial

Applicable to areas other than those covered under HT-2(b) (i)


Tariff Order 2016

Tariff Proposed by

BESCOM dated

30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017


demand / month


demand / month


demand / month

Energy charges

(i) For the first two

lakh units

785paise per unit

933paise per unit

872 paise per unit

(ii)For the balance

units

815paise per unit 963paise per unit 902 paise per unit

Existing ToD Tariff for HT-2(b)




06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(b)




clxviii

10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0


The Commission has taken note of the issue raised by the consumer of

Diagnostic centres and their request to classify under HT-2(c)(ii)

category. The Commission has examined the issue in detail and

decides to classify the HT power supply to Diagnostic centres running

on commercial lines, under HT-2(b) category.

As discussed earlier in this chapter, the Commission approves the

following tariff for HT 2 (b) consumers:

Approved tariff for HT – 2 (b) (i)

Applicable to areas under BBMP& Municipal Corporations



Energy charges

(i) For the first two lakh units 845 paise per unit

(ii) For the balance units 855 paise per unit

Approved tariff for HT – 2 (b) (ii) - HT Commercial

Applicable to all areas other than those covered under HT-2(b) (i)

above



Energy charges

(i) For the first two lakh units 825 paise per unit


Note: The above tariff under HT2 (b) is not applicable for construction of new

industries. Such power supply shall be availed only under the temporary

category HT5.

Approved ToD Tariff for HT-2(b)(i) & (ii)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit

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



clxix

The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 2 (c) (i)

Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI

Hospitals

and

Universities, Educational Institutions belonging to Government, Local Bodies and

Aided Institutions and Hostels of all Educational Institutions


Tariff Order 2016

Tariff Proposed by

BESCOM dated

30.11.2016

As per revised

proposal by BESCOM

dated 16.02.2017


demand / month


demand / month


demand / month

Energy charges

(i) For the first one

lakh units

600 paise per unit 748 paise per unit 703 paise per unit

(ii) For the balance

units

650 paise per unit 798 paise per unit 753 paise per unit

Existing and proposed tariff for HT – 2 (c) (ii) –

Applicable to Hospitals and Educational Institutions other than those covered under

HT2(c) (i)


Tariff Order 2016

Tariff Proposed by

BESCOM dated

30.11.2016


by BESCOM dated

16.02.2017


billing demand /

month

Rs. 180 / kVA of

billing demand /

month


demand / month

Energy charges

(i) For the first one

lakh units

700 paise per unit 848paise per unit 753 paise per unit

(ii) For the balance

units

750 paise per unit 898paise per unit 803 paise per unit

Existing ToD Tariff for HT-2(c)(i) & (ii)




06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs 0

clxx


The Commission approves the following tariff for HT2(c) consumers.

Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI

Hospitals,

Universities and Educational Institutions belonging to Government& Local Bodies,

Aided Educational Institutions and Hostels of all Educational Institutions


Demand charges Rs.200/ kVA of billing demand / month

Energy charges

(i) For the first one lakh units 640 paise per unit


Approved tariff for HT – 2 (c) (ii)

Applicable to Hospitals/Educational Institutions other than those covered under

HT2(c) (i)



Energy charges

(i) For the first one lakh units 740 paise per unit


As discussed earlier in this Chapter, the approved ToD for Tariff to HT-2(c)

(i) & (ii)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit

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

Government owned Corporations/ Lift Irrigation Schemes under Pvt

./Societies:

The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes

HT 3(a) (i) Applicable to LI Schemes under Government Departments /

Government owned Corporations

Details Existing charges as per Tariff Proposed charges by



clxxi

Order 2016 BESCOM

Energy

charges/

Minimum

charges

200 paise / unit

Subject to an annual minimum

of Rs.1120 per HP / annum

348 paise / unit

Subject to an annual

minimum of Rs. 1120

per HP / annum

HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

Fed through Express / Urban feeders

Details Existing Tariff as per Tariff

Order 2016

Proposed by BESCOM

Fixed charges Rs. 40 / HP / Month of

sanctioned load

Rs. 40 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348paise / unit

HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

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

Details Existing Tariff as per Tariff

Order 2016

Proposed by BESCOM

Fixed charges Rs.20 / HP / Month of

sanctioned load

Rs.20 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348paise / unit


The Commission approves the following tariff for HT3(a) consumers:

Approved tariff for HT 3 (a) (i)

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

Energy charges /

Minimum charges

225 paise/ unit subject to an annual

minimum of Rs. 1240 per HP / annum

Approved tariff for HT 3 (a) (ii)

Applicable to Private LI Schemes and Lift Irrigation Societies fed through

express / urban feeders

Fixed charges Rs.50 / HP / Month of sanctioned load


Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies

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

Fixed charges Rs.30 / HP / Month of sanctioned load


clxxii

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

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:


The existing and the proposed tariff are given below:

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

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:

Details Existing Tariff Order 2016 Proposed tariff by BESCOM

Energy charges /

minimum

charges

400 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load

548 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load


The Commission approves the tariff for this category as indicated

below:

Approved Tariff

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

Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut

Plantations:


Energy charges /

minimum charges

425 paise / unit subject to an

annual minimum of Rs.1240 per

HP of sanctioned load

14. HT4- Residential Apartments/ Colonies:


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

Existing and proposed tariff for HT – 4 - Residential Apartments/

Colonies

HT – 4 Applicable to all areas.

Details Existing Tariff Order

2016

Tariff Proposed by

BESCOM dated

30.11.2016

As per revised

proposal by

BESCOM dated

16.02.2017


demand

Rs.110 / kVA of

billing demand

Rs.250 / kVA of

billing demand

Energy charges 585 paise per unit 733 paise/ unit 648 paise/ unit

clxxiii


As discussed earlier in this chapter, the Commission approves the tariff

for this category as indicated below:

Approved tariff

HT – 4 Residential Apartments/ Colonies Applicable to all areas

Demand

charges

Rs.120 / kVA of billing demand

Energy

charges

620 paise/ unit

15. TARIFF SCHEDULE HT-5



HT – 5 – Temporary supply

67 HP and above: Existing Proposed

Fixed charges /

Demand Charges

Rs.220/HP/month for the

entire sanction load /

contract demand

Rs.220/HP/month for the

entire sanction load /

contract demand

Energy Charge 950 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)

1098 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)



HT – 5(a) – Temporary power supply to Bangalore

International Exhibition Centre

67 HP and above: Existing Proposed

Fixed charges /

Demand Charges

Not Applicable

Not Applicable

Energy Charge 1050 paise / unit 1198 paise / unit

Commission’s Views/Decisions:

TARIFF SCHEDULE HT-5

(i) As approved in the Commission’s Tariff Order dated 6th May,

2013, this Tariff is applicable to 67 HP and above hoardings and

clxxiv

advertisement boards and construction power for industries

excluding those category of consumers covered under HT2(b)

Tariff schedule availing power supply for construction power for

irrigation and power projects and also applicable to power

supply availed on temporary basis with the contract demand of

67 HP and above of all categories.

Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff

Fixed Charges / Demand

Charges

Rs.240 /HP/month for the entire

sanction load / contract demand

Energy Charges 1000 paise / unit

TARIFF SCHEDULE HT-5 (a)

Applicable to power supply availed on temporary basis with the

contract demand of 67 HP and above by Bangalore International

Exhibition Centre.

Approved Tariff for HT-5(a) – Temporary supply


Fixed Charges / Demand

Charges

Not Applicable


The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this

Order.

6.7 Wheeling and Banking Charges:

6.7.1 BESCOM Proposal: BESCOM in its tariff filing have proposed the Wheeling charges

depending upon the point of injection and point of drawal, as

indicated below:

Injection Point HT LT

Drawal Point

HT 19.30 [3.61%] 64.35 [9.06%]

LT 64.35 [9.06%] 45.04 [5.45%]

Note: Figures in brackets are applicable loss.

BESCOM has stated that the above wheeling charges be made

applicable to all the Open Access/Wheeling transactions for using their

clxxv

network, except for energy wheeled from NCE sources to the

consumers in the State.

The approach of the Commission regarding wheeling & banking

charges is discussed in the following paragraphs:

The Commission has considered the approved ARR pertaining to

distribution wires business and has proceeded determining the

wheeling charges as detailed below:

6.7.2 Wheeling within BESCOM Area:

The allocation of the distribution network costs to HT and LT networks for

determining wheeling charges is done in the ratio of 30:70, as was

being done earlier. Based on the approved ARR for distribution

business, the wheeling charges to each voltage level is worked out as

under:

TABLE- 6.2

Wheeling Charges

Distribution ARR-Rs. Crs 1482.95

Sales-MU 26109.16

Wheeling charges- paise/unit 56.80

Paise/unit

HT-network 17.04

LT-network 39.76

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

to all open access/wheeling transactions:

Loss allocation % loss

HT 2.58

LT 8.88

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

The actual wheeling charges payable (after rounding off) will depend

upon the point of injection & point of drawal as under:

clxxvi

paise/unit

Injection point

Drawal point

HT LT

HT 17(2.58%) 57(11.46%)

LT 57(11.46%) 40(8.88%) Note: Figures in brackets are applicable loss

The wheeling charges as determined above are applicable to all the

open access or wheeling transactions for using the BESCOM network,

except for energy transmitted or wheeled from renewable sources to

the consumers within the State.

6.7.3 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF

MORE THAN ONE LICENSEE

In case, the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or

network of more than one licensee, the charges shall be as indicated

below:

i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the

Transmission Licensee.

ii. If the Transmission network and the ESCOMs’ network are used,

Transmission Charges shall be payable to the Transmission

Licensee. Wheeling Charges shall be payable to the ESCOM

where the power is drawn and it shall be shared equally among

the ESCOMs whose networks are used.

Illustration:

If a transaction involves transmission network & BESCOM’s

network and 100 units is injected, then at the drawal point the

consumer is entitled for 85.56 units, after accounting for

Transmission loss of 3.37% & BESCOM’s technical loss of 11.46%.

The Transmission charge in cash as determined in the

Transmission Tariff Order shall be payable to KPTCL & Wheeling

Charge of 57 paise per unit shall be payable to BESCOM. In

clxxvii

case more than one ESCOM is involved, the above 57 paise

shall be shared by all the ESCOMs involved.

iii. If ESCOMs’ network only is used, the Wheeling Charges is

payable to the ESCOM where the power is drawn and it shall be

shared equally among the ESCOMs whose networks are used.

Illustration:

If a transaction involves injection to MESCOM’s network & drawl

at BESCOM’s network, and 100 units is injected, then at the

drawl point the consumer is entitled for 88.54 units, after

accounting BESCOM’s technical loss of 11.46%.

The Wheeling charge of 57 paise per unit payable to BESCOM

shall be equally shared between MESCOM & BESCOM.

6.7.4 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE)

TO CONSUMERS IN THE STATE

The separate Orders issued by the Commission from time to time in

the matter of wheeling and banking charges for RE sources (non-

rec route) wheeling energy to consumers in the State shall be

applicable.

6.7.5 CHARGES FOR WHEELING ENERGY BY RE SOURCES FROM THE STATE TO A

CONSUMER/OTHERS OUTSIDE THE STATE AND FOR THOSE OPTING FOR

RENEWABLE ENERGY CERTIFICATE [REC]

In case the renewable energy is wheeled from the State to a

consumer or others outside the State, the normal wheeling charges

as determined in para 6.7.2 and 6.7.3 of this Order shall be

applicable. For Captive RE generators including solar power

projects opting for RECs, the wheeling and banking charges as

specified in the Orders issued by the Commission from time to time

shall be applicable.

6.8 BANKING CHARGES AND ADDITIONAL SURCHARGE

BESCOM in its tariff filing had requested the following:

a. To allow the banking facility for a period of 3-months from the date

of generation.

clxxviii

b. Not to allow withdrawal of banked power during peak and ToD

hours.

c. If banked energy is not utilized within the period of three months

from the date of power banked, it shall automatically lapse and

no charges shall be paid.

d. To levy additional surcharge on OA consumers who draw power

from utility even after opting for OA.

The Commission in its preliminary observations had directed BESCOM

to justify the above requests in terms of detailed financial impact

analysis.

BESCOM in its replies to the preliminary observations had furnished

month-wise details of energy consumed out of the total wheeled

energy for only one entity namely RAMCO Cements Ltd., and has

stated that during the crucial period of second half of the year, RE

generators draw banked energy and that there is a difference in the

cost of purchase during second half and first half of the year. The

Commission notes that BESCOM has not carried out any financial

impact analysis. Therefore, the Commission in its further observations

had requested BESCOM to analyse the financial impact. BESCOMS in

its reply to the rejoinder has stated that it has worked out the financial

impact for 11 numbers of IPP’s and HT consumers for the period of

FY15, FY16 and FY17 and has submitted a statement. As per the

statement BESCOM has worked out loss of Rs.12 Crores in FY15, Rs. 9.8

Crores in FY16 and Rs. 4.85 Crores in FY17 under the assumption that it

would have sold 1.94 million units in FY15, 1.84 million units in FY16 and

1.13 million units in FY17.

The Commission notes that all the ESCOMs except CESC, have filed

separate petitions seeking modifications to the existing banking

facility. Further, all the ESCOMs have filed petitions separately to

introduce additional surcharge. The above issues pertaining to

banking facility and additional surcharge are being dealt separately

by the Commission in those petitions. Till such time the Orders are

clxxix

passed in those petitions, the existing banking facility shall be

continued and no additional surcharge is payable.

6.9 CROSS SUBSIDY SURCHARGE[CSS]:

BESCOM in its tariff petition has worked out the Cross Subsidy

surcharge as per the Tariff Policy-2016 and has worked out the

surcharges as indicated below:

Paise/unit Voltage

Level

HT-1 HT-2a HT-2b HT-2C HT-3b HT-4 HT-5

66KV &

above

57.62 177.09 211.89 183.88 169.60 153.30 240.49

HT level-

11KV/33KV

15.31 177.09 211.89 183.88 169.60 153.30 240.49

The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs:

The Commission in its MYT Regulations has specified the methodology

for calculating the CSS as per Tariff Policy 2006. Meanwhile, the

Central Government has issued the new Tariff Policy 2016, wherein a

revised methodology has been specified for determining CSS. So far,

the Commission, for determining the CSS had adopted the

methodology specified in the earlier Tariff Policy of 2006. However,

considering that such Tariff Policy has been replaced now by the Tariff

Policy-2016 and that a few ESCOMs including BESCOM have sought

determination of CSS under such new Tariff Policy, the Commission

decides to adopt the methodology specified in the latest Tariff Policy

2016 for determination of CSS in this Tariff Order for FY18. Action shall

be taken to amend the relevant Regulations for adoption of the

revised methodology for determination of CSS. Based on this

methodology, the category-wise cross subsidy will be as indicated

below:

Paise/unit

Particulars Category

Tariff

Average

Cost of

supply @

66 kV and

Average

Cost of

supply at HT

level**

Cross subsidy

surcharge

paise/unit @ 66

kV & above

Cross

subsidy

surcharge

paise/unit @

20% of

tariff

payable

by

clxxx

above

level*

level as per

formula

HT level as

per formula

relevant

category

1 2 3 4 8 9 10

HT-1

Water

Supply

536.76 410.53 445.45 126.23 91.32 107.35

HT-2a(i)

Industries 794.49

410.53 445.45 383.96 349.04 158.90

HT-2a(ii)

Industries 762.23

410.53 445.45 351.70 316.79 152.45

HT-2b(i)

Commercial 955.17

410.53 445.45 544.64 509.73 191.03

HT-2b(ii)

Commercial 962.09

410.53 445.45 551.56 516.64 192.42

HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17

HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94

HT3 (a)(i)

Lift Irrigation 225.48

410.53 445.45 -185.05 -219.97 45.10

HT3 (a)(ii)


410.53 445.45 -92.47 -127.38 63.61

HT3 (a)(iii)


410.53 445.45 -147.86 -182.77 52.53

HT3 (b)

Irrigation &

Agricultural

Farms

426.55

410.53 445.45

16.02 -18.90 85.31

HT-4

Residential

Apartments

662.71

410.53 445.45 252.18 217.27 132.54

HT5

Temporary 1642.58

410.53 445.45 1232.05 1197.14 328.52

*Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09/unit and transmission losses of 3.37%.

** Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09Ps/unit and transmission losses of 3.37%, HT distribution network / wheeling charges of

20.81Ps/unit and HT distribution losses of 3.77%.

Note: The carrying cost of regulatory asset for the current year is zero.

As per the Tariff Policy 2016, while limiting the CSS so as not to exceed

20% of the tariff applicable to relevant category, the CSS (after

rounding off to nearest paise) is determined as under:

Cross Subsidy Surcharge for FY18

Paise/unit

Particulars

66 kV

&

above

HT level-11

kV/33kV

HT-1 Water Supply 107 91

HT-2a(i) Industries 159 159

HT-2a(ii) Industries 152 152

HT-2b(i) Commercial 191 191

HT-2b(ii) Commercial 192 192

HT-2 (C)(i) 147 147

HT-2 (C)(ii) 164 164

HT3 (a)(i) Lift Irrigation 0 0

HT3 (a)(ii) Lift Irrigation 0 0

clxxxi

HT3 (a)(iii) Lift Irrigation 0 0

HT3 (b) Irrigation &

Agricultural Farms 16

0

HT-4 Residential Apartments 133 133

HT5 Temporary 329 329 Note: wherever CSS is negative, it is made zero

The cross subsidy surcharge determined in this order shall be

applicable to all open access/wheeling transactions in the area

coming under BESCOM. However, the above CSS shall not be

applicable to captive generating plant for carrying electricity to the

destination of its own use and for those renewable energy generators

who have been exempted from CSS by the specific Orders of the

Commission.

The Commission directs the Licensees to account the transactions

under open access separately.

6.10 Other Issues:

6.10.1 Tariff for Green Power:

In order to encourage generation and use of green power in the State,

the Commission decides to continue the existing Green Tariff of 50

paise per unit as the additional tariff over and above the normal tariff

to be paid by HT-consumers, who opt for supply of green power from

out of the renewable energy procured by distribution utilities over and

above their Renewable Purchase Obligation (RPO).

6.11 Other tariff related issues:

i) Rebate for use of Solar Water Heater:

While some of the ESCOMs have requested to discontinue the Solar

rebate to consumers, the consumers have requested to increase

the Solar Rebate. Since the use of Solar Water Heaters is

advantageous to both the ESCOMs and the consumers, the

Commission has decided to retain the existing rebate of 50 paise

per unit subject to a maximum of Rs.50 per installation per month

for use of solar water heaters.

ii) Prompt payment incentive:

clxxxii

The Commission had approved a prompt payment incentive at the

rate of 0.25% of the bills amount (i) in all cases of payment through

ECS; and (ii) in the case of monthly bill exceeding Rs.1,00,000/-

(Rs.one lakh), where payment is made 10 days in advance of due

date and (iii) advance payment of exceeding Rs.1000 made by the

consumers towards monthly bills. The Commission decides to

continue the same.

iii) Relief to Sick Industries:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, had accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. However, in view of issue of the G.O No.CI2 BIF 2010,

dated 21.10.2010, the Commission has accorded approval to the

ESCOMs for implementation of the reliefs extended to sick industrial

units for their revival / rehabilitation on the basis of the orders issued

by the Commissioner for Industrial Development and Director of

Industries & Commerce, Government of Karnataka.

iv) Power Factor:

The Commission in its previous order had retained the PF threshold

limit and surcharge, both for LT and HT installations at the levels

existing as in the Tariff Order 2005. The Commission has decided to

continue the same in the present order as indicated below:

LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive

power is involved): 0.85

HT Category: 0.90

v) Rounding off of KW / HP:

clxxxiii

In its Tariff Order 2005, the Commission had approved rounding off

of fractions of KW / HP to the nearest quarter KW / HP for the

purpose of billing and the minimum billing being for 1 KW / 1HP in

respect of all the categories of LT installations including IP sets. This

shall continue to be followed. In the case of street light installations,

fractions of KW shall be rounded off to the nearest quarter KW for

the purpose of billing and the minimum billing shall be for a quarter

KW.

vi) Interest on delayed payment of bills by consumers:

The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission

decides to continue the same in this Order also.

vii) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued the K.E.R.C. (Security Deposit)

Regulations, 2007 on 01.10.2007and the same has been notified in

the Official Gazette on 11.10.2007. The payment of security deposit

shall be regulated accordingly, pending orders of the Hon’ble High

Court in WP No.18215/2007.

viii) Mode of Payment by consumers:

The Commission, in its previous Order had approved revenue

payment in cash/cheque/DD of amounts up to and inclusive of

Rs.10,000/- and payment of amounts above Rs.10,000 to be made

only through cheque. The consumers can also make payment of

power bills through Electronic Clearing System(ECS)/ Credit card/

online E-payment up to the limit prescribed by the RBI,

RTGS/NEFT/on line E-Payment / Digital mode of payments as per

the guidelines issued by the RBI wherever such facility is provided

by the Licensee in respect of bill payments, up to the limit

prescribed by the RBI.

BESCOM in its application had proposed to consider the collection of

power supply bills above One lakh rupees, through RTGS/NEFT. The

Commission has examined the request of BESCOM, and decides to

clxxxiv

approve the payment of power supply bills above One lakh rupees,

through RTGS/NEFT, at the option of the consumer.

6.12 Cross Subsidy Levels for FY18:

The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated 8th

October, 2014, in Appeal No.42 of 2014, has directed the Commission

to clearly indicate the variation of anticipated category-wise average

revenue realization with respect to overall average cost of supply in

order to implement the requirement of the Tariff Policy that tariffs are

within ±20% of the average cost of supply, in the tariff orders being

passed in the future. It has further directed the Commission to also

indicate category-wise cross subsidy with reference to voltage-wise

cost of supply so as to show the cross subsidies transparently.

In the light of the above directions, the variations of the anticipated

category-wise average realization with respect to the overall average

cost of supply and also with respect to the voltage-wise cost of supply

of BESCOM and the cross subsidy thereon, is Indicated in ANNEXURE- III

of this Order. It is the Commission’s endeavour to reduce the cross

subsidies gradually as per the Tariff policy.

6.13 Effect of Revised Tariff:

As per the KERC (Tariff) Regulations 2000, read with the MYT Regulations

2006, the ESCOMs have to file their applications for ERC/Tariff before

120 days of the close of each financial year in the control period. The

Commission observes that the ESCOMs have filed their applications for

revision of tariff on 30th November, 2016. As the tariff revision is effective

from 1st April, 2017 onwards, the ESCOMs would be recovering revenue

as per the revised tariff for eleven months of the Financial Year (Except

in case where the billing cycle is lesser than a month).

A statement indicating the proposed revenue and approved revenue

is enclosed vide Annexure-III and detailed tariff schedule is enclosed

vide Annexure IV.

6.14 Summary of the Tariff Order:

clxxxv

The Commission has approved an ARR of Rs.16914.19 Crores for FY18,

which includes the deficit for FY16 of Rs.692.42 Crores with a total

gap in revenue of Rs.1254.09 Crores as against BESCOM’s proposed

ARR of Rs.18915.97 Crores.

The Commission has allowed recovery of entire gap in revenue with

additional revenue of Rs.1254.09 Crores on Tariff Revision as against

the additional revenue of Rs.3902.87 Crores proposed by BESCOM

for FY18.

BESCOM in its filing dated 30.11.2016 had proposed an increase of

148 paise per unit for all categories of consumers resulting in

average increase in retail supply tariff by 26%. The Commission has

approved an average increase of 48 paise per unit. The average

increase in retail supply tariff of all the consumers for FY18 is 8%.

BESCOM in its subsequent petition dated 16.02.2017, has

proposed to increase tariff to LT2-Domestic consumers and

increase in demand charges and reduction of energy

charges for HT categories.

The Commission has allowed for recovery of additional

revenue partly by increase in fixed charges ranging from Rs.5

per KW/HP/KVA to Rs.20 per KW/HP/KVA.

The Commission has allowed for recovery of additional

revenue partly by increase in the energy charges in the range

of 15 paise per unit to 50 paise per unit.

The increase in the energy charge for Domestic category up

to 30 to 100 units is 25/30 paise per unit.

The increase in the LT industries category is in the range of 15

paise per unit to 20 paise per unit and for other categories,

the increase is in the range of 20 paise per unit to 50 paise per

unit.

clxxxvi

In order to increase the sales under HT industry and HT

commercial category, the increase in energy charges in the

2nd slab is 20 paise per unit as against the 40 paise per unit

increase under 1st slab for consumption upto 1 lakh / 2 lakh

unit per month.

Time of the day tariff which was made mandatory in the previous

Tariff Orders for installations under HT2 (a),HT2 (b) and HT2(c) with

contract demand of 500KVA and above is continued in this Order.

The Commission has introduced Time of Day billing for

morning peak period from 06.00 hours to 10.00 hours in

respect of LT/ HT consumers in addition to the prevailing ToD

billing.

A rebate of 50 paise per unit is allowed for effluent treatment

plant installed within the industrial premises under HT-2(a) tariff

schedule.

Green tariff of additional 50 paise per unit over and above

the normal tariff, which was introduced a few year ago for HT

industries and HT commercial consumers at their option, to

promote purchase of renewable energy from ESCOMs, is

continued in this Order.

As in the previous Orders, the Commission has continued to

provide a separate fund for facilitating better Consumer

Relations /Consumer Education Programmes.

The Commission has introduced additional slab and rates

under Domestic category.

The Commission has decided to impose penalty upto Rs.one

lakh per sub division on ESCOMs who fail to conduct

Consumer Interaction Meetings at least once in three months

clxxxvii

and such penalty would be payable by the concerned

officers of the ESCOMs.

6.15 Commission’s Order

1. In exercise of the powers conferred on the Commission under

Sections 62, 64 and other provisions of the Electricity Act, 2003, the

Commission hereby determines and notifies the retail supply tariff

of BESCOM for FY18 as stated in Chapter-6 of this Order.

2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling on or

after 1st April 2017.

3. Consequent to the issue of this Tariff Order, the petitions filed by

BESCOM vide OP.No.87 of 2016, OP.No.88 of 2016 & OP No.89 of

2016 stand disposed of.

4. This Order is signed dated and issued by the Karnataka Electricity

Regulatory Commission at Bengaluru this day, the 11th April, 2017.

Sd/- Sd/- Sd/-

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

Chairman Member Member

clxxxviii

APPENDIX

NEW DIRECTIVES

AND

REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED BY THE

COMMISSION

1. The following new directives are issued by the Commission:

i. Directive on conducting Consumers’ Interation Meetings in the O &

M sub-divisions for redressal of consumer complaints:

During the Public Hearings held by the Commission to hear the

views, comments & suggestions of the consumers and other

stakeholders on the ESCOMs’ Tariff applications, it was brought to

the notice of the Commission by many consumers that the

Consumer Interaction Meetings chaired by the Superintending

Engineers, in the O&M sub-divisions of ESCOMs are not being

conducted regularly, thus denying them of the opportunity to

attend such meetings to air their complaints/ grievances

pertaining to supply of electricity and any other issues. The

consumers have urged the Commission to ensure that ECOMS

take necessary action to make the sub-divisions conduct

Consumer Interaction meetings regularly to hear and address the

consumer grievances.

The Commission strongly opines that if the ESCOMs conduct

consumer interaction meetings regularly, not only most of the

grievances of the consumers could be redressed in such meetings,

the ESCOMS could also redesign/realign their operations and

investments on capital and other works to optimally deliver better

and satisfactory service to the consumers. Such development

could also increase the efficiency and revenues of the ESCOMs.

Hence, the Commission hereby directs the BESCOM to ensure that

Consumer Interaction Meetings chaired by the Superintending

clxxxix

Engineers, are conducted in each O&M sub-division according to

a pre-published schedule, at least once in every three months.

Further, the consumers shall be invited to such meetings in

advance through emails, letters, notices on BESCOM’s website,

local newspapers etc., to facilitate participatiion of maximum

number of consumers in such meetings. The BESCOM should

ensure that the proceedings of such meetings are recorded and

uploaded on its website, for the information of consumers.

Compliance in this regard shall be reported once in three months

to the Commission, indicating the date, the number of consumers

attending such meetings and the status of redressal of their

complaints.

If the BESCOM fails to ensure conduct of the Consumer Interaction

Meetings as directed, the Commission would consider imposing a

penalty of upto Rs one lakh per O&M sub-division per quarter for

each instance of non-compliance, and also direct that such

penalty shall be recovered from the concerned Superintending

Engineer who fails to conduct such meetings.

ii. Directive on preparation of energy bills on monthly basis by

considering 15 minute’s time block period in respect of EHT/HT

consumers importing power through power exchange under Open

Access

The Commission has noticed that, year on year, there has been a

substantial increase in the number of EHT and HT consumers of the

distribution licensees opting for open access resulting in substantial

volume of energy being procured through Power Exchanges,

which imposes a burden on the SLDC, in grid management.

Further, in accordance with the stipulations in Clause 6.3 (f) of the

the Karnataka Electricity Grid Code (KEGC), 2015, under the

chapter on Operation Planning, in order to facilitate demand

estimation for operational purpose, the distribution licensee

(ESCOM) is required to provide to the SLDC, on a day ahead basis,

at 09.00 hours each day, its estimated demand for each 15-minute

cxc

block, for the ensuing day. The distribution licensee is also,

required to provide to the SLDC, the estimates of loads that may

be shed, when required, in discrete blocks, with the details of

arrangements of such load shedding. Consequent to such

stipulation the ESCOMs are required to prepare monthly energy

bills in respect of EHT/HT consumers importing power through power

exchange under Open Access, by considering 15 minute’s time

block. However, it is observed that except in rare cases, this billing

requirement is not being complied with the ESCOMs.

In view of this, the Commission directs the BESCOM to ensure

preparation of energy bills on monthly basis by considering the 15

minute’s time block period in respect of EHT/HT consumers

importing power through power exchange under Open Access.

The BESCOM shall implement the directive forthwith and the

compliance regarding the same shall be submitted monthly from

May, 2017 onwards, to the Commission, regularly.

2. Review of Compliance of Existing Directives:

The Commission, in its earlier Tariff Orders and communications had

issued several directives for compliance by the BESCOM. An analysis

of such directives and their compliance is as under:

i. Directive on Energy Conservation:

The Commission had directed the ESCOMs to service all the new

installations only after ensuring that the BEE ***** (Bureau of Energy

Efficiency five-star rating) rated Air Conditioners, Fans, Refrigerators,

etc., are being installed in the applicant consumers’ premises.

Similarly, ESCOMS were directed to ensure that all new streetlight/high

mast installations including extensions made to the existing streetlight

circuits are serviced only with LED lamps/energy efficient lamps like

induction lamps.

cxci

Further, the Commission had directed the ESCOMs to take up

programmes to educate all the existing domestic, commercial and

industrial consumers, through media and distribution of pamphlets

along with monthly bills, regarding the benefits of using five-star rated

equipment certified by the Bureau of Energy Efficiency in reducing their

monthly electricity bills and conservation of precious energy.

Compliance by the BESCOM:

The BESCOM has issued a circular to all its officers vide dated

30.07.2016, to use only BEE five-star rated Energy Efficient Appliances.

The BESCOM has sold 57,86,236 number of LED bulbs through M/s EESL

during the period from 23.12.2015 to 31.10.2016. There is an

approximate savings of 140 MU of energy, on account of use of these

LED bulbs.

Further, the BESCOM has taken up several initiatives to create

awareness among the public on energy conservation through various

modes of communication such as distribution of pamphlets, printing

slogans on the backside of the monthly electricity bills, advertisement

near railway reservation counters through DDIS system, magazines,

stalls etc.

Commission’s Views: The Commission notes that the BESCOM has not submitted the

compliance regularly on implementation of the directive. It is also

observed from the BESCOM’s report that it has merely issued a circular

to all its officers to use BEE five-star rated Energy Efficient Appliances,

and has not taken any further effective steps in the field to ensure

service to all new installations only with BEE five-star rated Air

Conditioners, Fans, Refrigerators, etc., in the applicant consumers’

premises. The BESCOM should focus on effective implementation of this

directive by reviewing periodically the progress/status of

implementation of its circular instructions by its field officers and take

corrective action wherever necessary.

Further, it is also important that the BESCOM draws up a continuous

awareness programme to educate the consumers about the benefits

cxcii

of using the energy efficient appliances in their premises and ensure

increase in use of energy efficient appliances.

The Commission reiterates that the BESCOM shall service all the new

installations only after ensuring that the BEE ***** (Bureau of Energy

Efficiency five-star rating) rated Air Conditioners, Fans, Refrigerators,

etc., are being installed in the applicant consumers’ premises and the

compliance thereon shall be reported to the Commission once in a

quarter regularly.

ii. Directive on implementation of Standards of Performance (SoP)

The directive issued was as follows:

“The BESCOM is directed to strictly implement the specified Standards

of Performance while rendering services related to supply of power as

per the KERC (Licensee’s Standards of Performance) Regulations, 2004.

Further, the BESCOM is directed to display prominently, in both

Kannada & English languages, the details of various critical services

such as replacing the failed transformers, attending to fuse off call /

line breakdown complaints, arranging new services, change of faulty

meters, reconnection of power supply, etc., rendered by it as per

Schedule-1 of the KERC (Licensee’s Standards of Performance)

Regulations, 2004 and Annexure-1 of the KERC (Consumer Complaints

Handling Procedure) Regulations, 2004, on the notice boards in all the

O & M sections and O & M sub-divisions, in its jurisdiction for the

information of consumers as per the following format:

Nature of

Service

Standards of

Performance

(indicative

minimum time limit

for rendering

services)

Primary

responsibility

centers where

to lodge

complaint

Next

higher

Authority

Amount

payable to

affected

consumer

The BESCOM shall implement the above directive within one month

from the date of this order and report compliance to the Commission

regarding the implementation of the directives”.


cxciii

The BESCOM vide letter No. BC-26/F-2411/2009-10/517, dated

14.08.2015, has submitted the compliance to the Commission, it is

stated that as per the directions of the Commission, the details of the

specified Standards of Performance in accordance with the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and the KERC

(Consumer Complaints Handling Procedure) Regulations, 2004, have

been displayed in both Kannada and English on the notice boards in

all the O&M section and sub-division offices.

BESCOM

O & M Sub-divisions O & M Sections

Total

Nos

No. of sub-

divisions

where SoP

parameters

displayed

Balance

Likely date

of

completion

Total

Nos

No. of

sections

where SoP

parameters

displayed

Balance

Likely date

of

completion

120 120 0 NA 460 460 0 NA

The BESCOM in its Tariff application vide page number 91, has furnished

the compliance relating to display of SoP in both Kannada and English

on the notice boards of all the O&M sections & sub-divisions. Hence,

BESCOM has requested the Commission to drop the directive.

Commission’s Views: The Commission while noting the compliance furnished, reiterates that

the BESCOM shall continue to comply with its earlier directive by

displaying the details of SoP in all its O&M section and sub-division

offices for the information of the consumers, and also to adhere to the

specified standards of performance in rendering various services to

consumers in a time bound manner.

The Commission notes that, during the Public Hearings held on the

ESCOMs’ Tariff petitions, the consumers participating in the hearing

have stated that, the ESCOMs, contrary to their submission before the

Commission on compliance of the directive issued by the Commission,

have not displayed the SoP parameters on the notice boards in the

O&M offices and also not adhered to the timelines stipulated in the SoP.

They have sought the intervention of the Commission to ensure that the

ESCOMs comply with the directive on SoP.

cxciv

The Commission notes that the situation indicates that there is lack of

effective supervision over the functioning of field offices by the ESCOMs

especially in rendering services relating to supply of power to the

consumers.

Therefore, the Commission once again reiterates its directive to the

BESCOM to continue to strictly implement the specified SoP while

rendering services related to supply of power as per the KERC

(Licensee’s Standards of Performance) Regulations, 2004 and directs

the BESCOM to monitor effective implementation of the directive on

SoP in all its O&M offices. The Commission shall initiate appropriate

action on any instance of breach of its directive.

iii. Directive on use of safety gear by linemen


“The Commission directs the BESCOM to ensure that all the linemen in

its jurisdiction are provided with proper and adequate safety gear and

also ensure that the linemen use such safety gear provided while

working on the network. The BESCOM should sensitise the linemen

about the need for adoption of safety aspects in their work through

suitably designed training and awareness programmes. The BESCOM is

also directed to device suitable reporting system on the use of safety

gear and mandate supervisory/higher officers to regularly cross check

the compliance by the linemen and take disciplinary action on the

concerned if violations are noticed. The BESCOM shall implement this

directive within one month from the date of this order and submit

compliance report to the Commission.”


The following safety measures are being implemented:

I. Safety goggles, safety shoes and safety belts are procured and

issued to field staff.

cxcv

II. Tenders were called for safety materials like safety gloves, safety

helmets and rainwear, Purchase Order is placed for rubber

gloves. The tender for safety helmets and rainwear was opened

and is under technical evaluation.

III. Instructions are issued from corporate office to follow the safety

protocol at work field.

IV. On every Monday morning, the section officer explains about

safety aspects and use of safety gadgets during the work, to all

the linemen under his jurisdiction. The section officer also

instructs the linemen not to take up the work without availing

line-clear/ work-permit and creating safe working zone.

V. Surprise inspection of works is being carried out to check

whether the safety materials are used, safety zone is created

etc., as per the check list provided. Casual leave for one day is

deducted if any of the staff is found not using the safety tools

provided to them.

Commission’s Views:

It is important that the BESCOM should continue to focus on safety

aspects to reduce the electrical accidents occurring due to

negligence and non-adherence of safety procedures by the field staff

while working on the distribution network. Further, the linemen should

be given training periodically on adherence to safety aspects so that it

becomes part of their routine.

The Commission reiterates its directive that the BESCOM shall ensure

that, all the linemen in its jurisdiction are provided with proper and

adequate safety gear and ensure that they use the safety gear

provided to them while attending to their duites in the field. The

compliance in this regard shall be submitted once in a quarter to the

Commission regularly.

iv. Directive on providing Timer Switches to Streetlights by the

ESCOMs

cxcvi


“The Commission directs the BESCOM to install timer switches using own

funds to all the streetlight installations in its jurisdiction wherever the

local bodies have not provided the same and later recover the cost

from them. The BESCOM shall also take up periodical inspection of

timer switches installed and ensure that they are in working conditions.

They shall undertake necessary repairs/replacement work, if required

and later recover the cost from local bodies. The compliance

regarding the progress of installation of timer switches to streetlight

installations shall be reported to the Commission within three months of

the issue of the Order”.


The progress of installation of timer switches to streetlight installations as

on 30.09.2016 is as under:

BESCOM

Total No. of

existing

streetlight

installations as

on

September16

No. of

installations

provided with

timer switches

as on

September16

No. of timer

switches in

working

condition as

on

September16

No. of timer

switches not

in working

condition as

on

September16

Balance No.

of timer

switches to

be fixed as on

September16

A B C D E=A-C

52,817 15,313 12,636 3,308 40,181 The BESCOM has issued a circular vide dated 15.09.2016 directing the

field staff to install timer switches to new streetlight installations and any

extension/modification carried out to the existing streetlight installations

shall also be serviced only with timer switches.

The BBMP/local bodies are maintaining the streetlight installations.

Hence, the work of providing timer switches to the streetlights has to be

taken up by BBMP/local bodies only and in this regard letters will be

addressed to them.

Further, the Government of Karnataka has initiated “Nagara Jyothi”

through M/s EESL, a joint venture of the MoP, GoI, for replacement of

existing SV/MV/FL streetlight fixtures by the energy efficient LED lamps

with provision of smart timer switches in urban local bodies, vide GoK

Order No. EN/52/VSC/2015, dated 17.06.2015. Since the initiative is

being taken up by the Government and the project is taken up by

Urban Development Department, it is requested to exclude the above

cxcvii

directive.

Commission’s Views

The Commission observes that there are around 3,300 number of timer

switches provided to the streetlight installations which are not

functioning as reported by the BESCOM. But, the BESCOM does not

seem to have initiated any action to coordinate with the concerned

authorities for necessary repair/replacement of such non-working timer

switches. The inaction by the BESCOM has resulted in non-utilization of

timer switches already installed to properly regulate the illumination of

streetlights aimed at avoiding wastage of electricity.

It is also noted that providing timer switches to streetlight installations

under “Nagara Jyothi” programme through M/s EESL covering all

streetlight installations has not yet taken off. The same should be

pursued with utmost seriousness. The progress /status in this regard shall

be reported to the Commission on a quarterly basis, regularly.

Further, wherever feasible the BESCOM should install the timer switches

at its cost and later recover the cost from the concerned local bodies.

The BESCOM is also directed to persuade the local bodies to install

timer switches at their cost availing funds / grants received from the

Government and other agencies for such programmes.

The Commission reiterates its directive that the BESCOM shall ensure

that, the new streetlight installations and any extension/modification to

be carried out to the existing streetlight installations shall be serviced

only with timer switches.

v. Directive on load shedding:

The Commission had directed that:

1) Load shedding required for planned maintenance of transmission /

distribution networks should be notified in daily newspapers at least

24 hours in advance for the information of consumers.

cxcviii

2) The ESCOMs shall on a daily basis estimate the hourly requirement

of power for each sub-station in their jurisdiction based on the

seasonal conditions and other factors affecting demand.

3) Any likelihood of shortfall in the availability during the course of the

day should be anticipated and the quantum of load shedding

should be estimated in advance. Specific sub-stations and feeders

should be identified for load shedding for the minimum required

period with due intimation to the concerned sub-divisions and sub-

stations.

4) The likelihood of interruption in power supply with time and duration

of such interruptions may be intimated to consumers through SMS

and other means.

5) Where load shedding has to be resorted due to unforeseen

reduction in the availability of power, or for other reasons,

consumers may be informed of the likely time of restoration of

supply through SMS and other means.

6) Load shedding should be carried out in different sub-stations /

feeders to avoid frequent load shedding affecting the same sub-

stations / feeders.

7) The ESCOMs should review the availability of power with respect to

the projected demand for every month in the last week of the

previous month and forecast any unavoidable load shedding after

consulting other ESCOMs in the State about the possibility of inter-

ESCOM load adjustment during the month.

8) The ESCOMs shall submit to the KERC their projections of availability

and demand for power and any unavoidable load shedding for

every succeeding month in the last week of the preceding month

for approval.

9) The ESCOMs shall also propose specific measures for minimizing

load shedding by spot purchase of power in the power exchanges

or bridging the gap by other means.

10) The ESCOMs shall submit to the Commission substation-wise and

feeder-wise data on interruptions in power supply every month

before the 5th day of the succeeding month.

cxcix

The Commission had directed that the ESCOMs shall make every effort

to minimize inconvenience to consumers by strictly complying with the

above directions. The Commission had indicated that it would review

the compliance of directions on a monthly basis for appropriate orders.


The prevailing power supply arrangements in the BESCOM is indicated

as follows:

a) Load Restriction:

Presently there is no load restriction; in case of any major outages

in the generating stations, the load restriction is planned as below.

Priority-1: NJY feeders, 2 to 4 hours in a day on rotational basis.

Priority-2: Town feeders (other than Bengaluru city), 2 to 4 hours

in a day on rotational basis.

Priority-3: Domestic/residential feeders in Bengaluru city, 2 to 4

hours on rotational basis.

Priority-4: Commercial feeders in Bengaluru city, 2 hours on

rotational basis.

Priority-5: Staggering of holidays for industrial feeders.

b) Hours of power supply for agricultural feeders:

o Rural mixed feeders: 3 phase, 6 to 7 hours, single phase, 7 to 8

hours.

o Exclusive agriculture feeders: 3 phase, 6 to 7 hours, single phase,

7 to 8 hours.

Consequent to depleted storage of water in major Hydel reservoirs of

Linganamakki, Supa & Mani, to meet the peak demand of ensuing

summer days, presently Hydel generation is being restricted to 10.5 MU

per day from these power plants.

However, to meet the deficit of power, the following measures have

been taken by the BESCOM:

Purchase of power through the Energy Exchange (IEX), 200-300

MW between 00.00 hrs and 11.00 hrs, 500-750 MW between

11.00 hrs and 18.00 hrs, based on the day ahead availability

declared by the SLDC and the anticipated demand based on

previous days recorded demanded with seasonal conditions.

cc

Purchase of power to an extent of 215 MW of BESCOM share

from Damodar Valley Corporation through PPA.

Hydro generation will be increased during ensuing summer

and school examinations.

Further, at present, the BESCOM has developed a web-based SDRA

application which utilizes the SCADA data and generates MIS reports

on power supply position, performance of feeders and also hours of

power supply in geographical area-wise, pubic constituency-wise and

also BESCOM O&M unit-wise. Using this software, SMS are being sent to

public representatives. The information regarding scheduled

outages of 11kV feeders, 66 KV lines and sub-stations, will be

uploaded on its website- BESCOM.ORG for public information

(automatically through LC portal).

As regards sending of SMS about load shedding to the public /

consumers, the same is in process. Also, integration of this application

with computers of sub-station log book application developed by the

KPTCL, to fill up the gaps in the data acquired through SCADA, is in

progress.

The BESCOM has also developed web-based Feeder Shutdown

Protocol (FSP) application which support the process of 11 KV feeder

selection on indiscriminating basis for load shedding in the event of

unscheduled outage which can be a result of loss of generating unit or

loss of major transmission unit.

As of now, the BESCOM is furnishing day ahead requirement to the

SLDC for the requirement of power and based on the requirement and

availability, the SLDC is allocating the power. In future, the BESCOM will

furnish the projected requirement on month ahead basis to the

Commission.

As per the Commission’s directive, the details of both scheduled and

un-scheduled load shedding due to system constraints is uploaded

day ahead in the BESCOM’s website for public information.

Urjamithra Programme:

cci

Urjamithra programme is an initiative of Ministry of Power,

Government of India, which provides outage management and

notification platform for dissipating the outage information to

power distribution consumers across India through

SMS/email/push notification.

Objective of this programme is to share the information with

consumers about outages in rural and urban areas through

SMS/email/push notification.

In this regard consumer data collection is in progress.


The Commission notes that the BESCOM is arranging 7 to 8 hours of

single phase power supply on exclusive agriculture feeders

segregated under NJY scheme. This is over and above 6-7 hours of 3

phase power. While the intention of providing single phase power may

be for use in non-IP set purpose, past experience has indicated that it

can be easily used for running IP sets and the ESCOMs have not been

able to technically stop such misuse. Just to stop such misuse, NJY is

being implemented and BESCOM’s action of equating both exclusive

agriculture feeder and NJY feeder though for limited hours goes

against the scheme of segregation of feeders . The BESCOM is directed

reexamine its action and also explain as to why it is extending single

phase power supply on exclusive agriculture feeders on par with NJY

feeders.

Further, the Commission notes that the BESCOM has not expedited the

‘application software’ which it has been reportedly developing

through Consultants for integration with the SCADA data to enable

providing information to the consumers through SMS in advance about

the time and duration of probable interruptions. There is no progress in

this regard as the status is the same as compared to the previous year.

The Commission notes that the BESCOM has not effectively and

ccii

satisfactorily complied with the directive on load shedding. The

BESCOM shall expedite development of necessary software and other

process required to inform consumers through SMS regarding both

scheduled and un-scheduled load sheddings due to reasons such as

system constraints, breakdowns of lines/equipment, maintenance etc.,

This would significantly address the “consumers’ dissatisfaction” on this

issue and prevent inconvenience/disruption caused to industrial

consumers.

Further, the Commission observes that the BESCOM is not submitting its

projections of availability and demand for power and any

unavoidable load shedding for every succeeding month in the last

week of the preceding month to the Commission regularly. The

BESCOM shall henceforth submit the same regularly to the Commission

without fail.

The Commission reiterates that the BESCOM shall comply with the

directive on load shedding and submit monthly compliance reports

thereon to the Commission regularly.

vi. Directive on Establishing a 24x7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer Complaints:

The directive was as under:

“The BESCOM is directed to put in place a 24x7 fully equipped

Centralized Consumer Service Center at its Headquarters with a state

of the art facility/system for receiving consumer complaints and

monitoring their redressal so that electricity consumers in its area of

supply are able to seek and obtain timely and efficient services in the

matter of their grievances. Such a Service Center shall have adequate

desk operators in each shift so that the consumers across the

jurisdiction of the BESCOM are able to lodge their complaints to this

Centre.

Every complaint shall be received on helpline telephone number by

the desk operator and registered with a number which shall be

cciii

intimated to the Consumer. In turn, the complaints shall be transferred

online to the concerned field staff for resolving the same. The

concerned O&M/local service station staff shall visit the complainant’s

premises at the earliest to attend to the complaints and then inform

the Centralized Service Centre that the complaint is attended. Then,

the desk operator shall also call the complainant and confirm with him

whether the complaint has been attended. The complaints shall be

closed only after receiving consumer’s confirmation. Such a system

should also generate daily reports indicating the number/nature of

complaints received, complaints attended, complaints pending and

reasons for not attending to the complaints along with the names of

the officers responsible with remarks be placed before the Managing

Director on the following day for his attention who would review and

take corrective action in case of any pendency/delay in attending to

the complaints.

The BESCOM shall publish the details of complaint handling

procedure/Mechanism with contact numbers in the local media or in

any other form periodically for the information of the consumers. The

compliance of the action taken in the matter shall be submitted to the

Commission within two months from the date of this Order.

Further, the Commission directs the BESCOM to establish/strengthen

24x7 service stations, equipping them with separate vehicles &

adequate line crew, safety kits and maintenance materials at all its

sub-divisions including the rural areas for effective redressal of

consumer complaints”.


To facilitate the consumers, the BESCOM has established a well-

integrated 24 X 7 Customer Help Line with latest technology and

software along with in-built automatic call transfer system. Consumers

can call on the Customer Help Line Number “1912” which has 45

concurrent lines with Multi Channel Complaint Registration Facility

(Phone, SMS, Online, E-mail and Facebook).

cciv

As per the directions of the Commission, the BESCOM has published

the contact number (1912) of the Centralized Consumer Service

Centre initially through all Newspapers, Radio and Television. In

addition to this, 24X7 Helpline contact number 1912 is being publicized

regularly through pamphlets, hoardings, advertisements, Facebook,

Twitter, BESCOM’s service station vehicles, display on linemen’s

uniforms and notifications.

All the consumer complaints are being registered in the Web enabled

PGRS (Public Grievance Redressal System) application. Whenever any

consumer registers complaint, he will be provided with a Docket

Number, using which he can track his complaint’s status through the

BESCOM Website. For the speedy redressal of complaints, the BESCOM

has established Circle control rooms in all the 8 Circles. In the Circle

Control rooms, the executives do follow up of complaints pertaining to

their Circle till resolution.

Further, as per the directive of the Commission, the BESCOM had

initiated Consumer Interaction Meetings from the year 2012. The

Consumer Interaction Meetings are being conducted in all the sub-

divisions as per the monthly schedule specified by the BESCOM,

regularly.

The Zone-wise details of the Consumer Interaction Meetings chaired by

the respective Superintending Engineers from April to November, 2016

are as follows:

Bangalore Metropolitan Area Zone (BMAZ)

Circle Division Sub-

division Date

No. of

consumers

attended

No. of

complaint

s lodged

No. of

complaints

attended North Peenya N4 16.11.16 60 5 5

East Indiranagar E3 05.08.16 7 0 0

East Indiranagar E10 25.10.16 5 5 5

East Shivajinagar E2 07.09.16 17 2 2

East Vidhanasoud

ha W5 23.11.16 1 1 1

South Jayanagar S6 18.11.16 14 6 6

South Jayanagar S1 07.11.16 3 3 3

South HSR S11 23.11.16 5 5 5

West Rajajinagar N1 14.11.16 10 9 9

West R.R.Nagar W7 18.11.16 4 3 3

ccv

Bangalore Rural Area Zone (BRAZ)

Circle Division Sub-

division Date

No. of

consumers

attended

No. of

complai

nts

lodged

No. of

complaints

attended

BRC Hosakote HK1 19.10.16 0 0 0

BRC Nelamangala TV1 11.11.16 3 2 2

BRC Hoskote DH1 28.11.16 8 6 6

Ramanagara Ramanagara CP2 06.09.16 3 2 2

Ramanagara Kanakpura SA1 17.10.16 4 2 2

Kolar KGF KG1 30.11.16 1 4 4

Kolar Bangarpet BG1 25.11.16 6 8 8

Chitradurga Area Zone (CTAZ):

Circle Division

Sub

-

division

Date

No. of

consumers

attended

No. of

complai

nts

lodged

No. of

complaints

attended

Tumkuru Tipturu CN1 24.11.16 9 5 5

Davanagere Harihara HN1 05.12.16 11 10 10

Davanagere Davanagere DV1 07.11.16 7 3 3

Commission’s Views

The BESCOM should continue its efforts in improving the delivery of

consumer services to reduce the consumer complaint downtime so as

to ensure delivery of prompt services to them. The BESCOM should

develop necessary capacity and infrastructure for prompt and

effective response to consumer complaints on breakdown of

lines/equipment, failure of transformers etc., resulting in interruptions in

power supply. In addition to this, BESCOM should take up steps to

continuously sensitize its field staff that they need to discharge their

work efficiently.

The Commission reiterates its directive to the BESCOM to publish the

complaint handling procedures / contact number of the Centralized

Consumer Service Centre in the local media, host it on its website and

also publish it through other modes periodically for the information of

public and ensure that all the complaints of consumers are registered

only through the Centralized Consumer Service Centre for proper

monitoring of disposal of complaints registered. The compliance in this

ccvi

regard shall be furnished once in a quarter regularly, to the

Commission.

vii. Directive on Energy Audit

The Commission had directed the BESCOM to prepare a metering plan

for energy audit to measure the energy received in each of the

Interface Points and to account for the energy sales. The Commission

had also directed the BESCOM to conduct energy audit and chalk out

an action plan to reduce distribution losses to a maximum of 15

percent wherever it was above this level in the towns/ cities having a

population of over 50,000.

The Commission had earlier directed all the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this regard

the ESCOMs were required to furnish to the Commission the following

information on a monthly basis:

a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.

c) Number of DTCs yet to be metered.

d) Time bound monthly programme for completion of the work.


DTC metering status as on October 2016 is as below:

Number of DTCs existing : 2,48,253

Number of DTC already metered : 1,10,965

Percentage of DTCs metered : 44.70

Number of DTCs yet to be metered : 1,37,288

As metering of DTCs under agricultural feeders and single water supply

installations are exempted, the balance DTCs metering to be carried

out is approximately 25,000 to 30,000, for which tender is proposed.

Further, for carrying out energy audit of metered DTCs, the BESCOM

has taken all measures to resolve the issues and the same is under

progress.

As on

October,

2016

No.of DTCs

existing

No. of

DTCs

metered

Balance

to be

metered

No. of DTCs

with

modems

Balance

DTCs to be

fixed with

ccvii

modems/

Legacy

meters

RAPDRP 54,384 53,517 867 52979 538

Non-RAPDRP 1,93,869 57,448 1,36,421 45,000 12,448

Total 2,48,253 1,10,965 1,37,288 97,979 12,986

In RAPDRP area, DTC-wise energy audit reports require fine-tuning of the

incremental data, GIS updation and integration with RAPDRP system and

once it is integrated, DTC- wise system generated energy audit reports will

be submitted regularly to the Commission.

In Non-RAPDRP area due to software integration issues between the meter

manufacturer (M/s AFTL and M/s Genus) and the billing agency (M/s N-

soft) DTC-wise energy audit reports are not generated. About 12,287 DTCs’

energy audit reports are generated in Tumakuru circle, but due to

improper tagging most of the DTCs are showing abnormal losses.

Action is being taken to set right the same. For remaining DTCs

repeated letters have been addressed to the Meter manufacturers to

resolve the software issues, at the earliest.

Further, to furnish energy audit report in the prescribed format as per

the Commission’s letter dated 20.04.2015, energy audit reports at DTC

level are not being generated due to issues mentioned earlier.

However, town/division/feeder-wise energy audit reports are furnished

regularly to the Commission in the prescribed PQM format for quarterly

review meetings. PQM format 3a (division-wise), 3b (feeder-wise) and

3c (town-wise) from April to June16 are enclosed for further needful.


It is observed that the monthly energy audit reports of cities/towns with

detailed analysis are not being submitted by the BESCOM regularly to

the Commission. The Commission directs the BESCOM to conduct

energy audit of identified cities/towns and initiate necessary measures

on the basis of energy audit results to reduce the technical losses and

improving collection efficiency to achieve the mandated A T & C loss

of less than 15 per cent. The BESCOM is directed to submit compliance

thereon regularly to the Commission.

ccviii

The Commission further notes that, of the total 2,48,253 DTCs in

BESCOM’S jurisdiction, 1,10,965 (45%) DTCs are provided with meters,

but, despite completing 45 per cent of the metering of the DTCs, the

BESCOM has failed to take up DTC-wise energy audit, citing non-

completion of tagging of consumer installations with the concerned

feeders/DTCs and also software integration issues. The stand

repeatedly taken by the BESCOM for the last three years that tagging

of consumer details with the concerned feeders/DTCs is in progress,

does not augur well for the Company which wants to run its business on

commercial principles. This shows that the BESCOM is not serious about

conducting energy audit and run its business efficiently. The

Commission views with displeasure, the delay in completing the

tagging work and taking up the energy audit, on the part of the

BESCOM.

The BESCOM is directed to take up energy audit of DTCs where meters

have already been installed and to initiate remedial measures for

reducing energy losses in the distribution system. The compliance in

respect of DTC-wise energy audit conducted with analysis and the

remedial action initiated to reduce loss levels shall be regularly

submitted to the Commission on a quarterly bais.

Further, the BESCOM is directed to submit to the Commission the

consolidated energy audit report for the FY17, as per the formats

prescribed by the Commission, vide its letter No. KERC/D/137/14/91

dated 20.04.2015, before 15th May, 2017.

viii. Directive on Implementation of HVDS:

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

distribution losses, the Commission had directed the BESCOM to

implement High Voltage Distribution System (HVDS) in at least one

O&M division in a rural area in its jurisdiction by utilizing the capex

provision allowed in the ARR for the year.


ccix

The HVDS work in respect of balance 28 (out of total 68) feeders in

Tumkuru, Chikkaballapura and Nelamangala divisions was completed

and the feeders were also commissioned during the December, 2015.

The evaluation of pre and post analysis of all the 68 feeders was

entrusted to TPIA (Third Party Inspection Agency) M/s N Arc Consulting,

New Delhi, vide DWA No. DGM/HVDS/TPIA/16-17/03/ 04/05, dated

10.11.2016. Two months’ time has been given to the Agency for

submission of analysis report and on receipt of the reports, the same

will be submitted to the Commission.

Further, the BESCOM has taken action to identify the feeders having

highest distribution losses for implementing HVDS scheme at a

reasonable cost duly following the guidelines issued by the

Commission. The BESCOM has taken all the necessary measures and

the overall DPR cost of implementation of HVDS scheme in

Kanakapura taluk has been reduced from Rs 174 crore to Rs 136.88

crore and cost of thr projects in Huliyurdurga O&M section & Tumakuru

taluk has been reduced from Rs. 32.25 crore to Rs 25.90 crore. In this

regard, a reply on the discrepancies noted by the Commission will be

submitted to the Commission shortly.

Tenders are invited for implementation of HVDS in Ramanagara rural,

Channapatna urban and Bidadi sub-divisions in Ramanagara circle,

already evaluation is completed and awarding is yet to be finalized.

Tender has been re-invited for Channapatna Rural sub-division and NIT

was issued on 17.12.2016.


The Commission notes that implementation of HVDS involving 68

feeders in Tumakuru RSD1&2, Chikkaballapura and Doddaballapura

sub-divisions has been completed. The BESCOM is directed to expedite

analysis of the feeders commissioned in order to evaluate the benefits

accrued to the system post implementation vis-à-vis the objectives set

out in the DPR. Further, the BESCOM needs to expedite

implementation of HVDS in its Ramanagara circle by drawing up an

ccx

action plan for timely completion so as to derive the envisaged

benefits on implementation of the scheme.

The Commission with a view to minimize the cost had issued revised

guidelines for implementation of HVDS in sub-divisions/feeders having

highest distribution losses, so that a higher loss reduction could be

achieved on implementation of HVDS at a reasonable cost. The

BESCOM is directed to follow these guidelines to reduce the cost of

implementation of HVDS in Ramanagara circle.

As regards the implementation of HVDS in Kanakapura sub-division, the

Commission vide its letter No. KERC/D/75/2016-17/2603, dated

14.2.2107 has asked the BESCOM to attend to the observations noted

by the Commission and submit the revised report of the project as per

actuals. The BESCOM was also directed to make a presentation before

the Commission outlining the benefits accrued to the system post

implementation of the HVDS project in Kanakapura sub-division. The

Commission directs the BESCOM to comply with these instructions at

the earliest.

The Commission reiterates its directive that the BESCOM shall follow the

revised guidelines issued by the Commission on this issue and

implement the HVDS programme in Ramanagara circle and submit the

progress/compliance thereon once in a quarter, to the Commission

regularly.

ix. Directive on Niranthara Jyothi – Feeder Separation:

The ESCOMs were directed to furnish to the Commission the

programme of implementing 11 KV taluk-wise feeders’ segregation

with the following details:

a) Number of 11 KV feeders considered for segregation.

b) Month-wise time schedule for completion of envisaged work.

c) Improvement achieved in supply after segregation of feeders.


BESCOM has reported that, out of the 271 feeders taken up under

ccxi

phase-1, all the feeders have been commissioned and out of the 281

feeders proposed under phase-2, 280 feeders have also been

commissioned. The project was scheduled for completion in all respect

by January, 2016. Further, a total of 380 feeders are proposed under

phase-3 of Niranthara Jyothi extending the scheme to the left out

villages and the areas earlier covered under RLMS scheme, at a total

cost of Rs 703 crore. Out of 380 feeders proposed under phase-3,

already 156 feeders have been commissioned. The project is

scheduled for a total completion by March, 2017. It is submitted that

for Niranthara Jyothi feeders, 20-22 hours of three phase power supply

is being arranged as envisaged. Limited number of hours of power

supply to IP-sets i.e., for agriculture feeders is 7 hours at three phases as

per the decision of GoK.

Further, M/s MECON Limited, a Government of India undertaking has

been entrusted with pre and post analysis of feeders commissioned

under Niranthara Jyothi phase-1 and concurrent analysis of feeders

commissioned under phase-2, as follows:

1. Bengaluru Rural : 24 feeders

2. Kolar : 08 feeders

3. Tumakuru : 40 feeders

4. Davanagere : 28 feeders

M/s MECON has submitted a report in respect of feeders identified in

Davangere and Kolar circles and which is validated by the concerned

superintending engineers (Ele.,). Further, M/s PRDCL has also evaluated

the pre and post analysis of feeders commissioned under Niranthara

Jyothi phase-1 in Harpanahalli Taluk, in Davanagere circle.

The agencies have submitted a detailed report separately for each of

the feeders on which the analysis was carried out. The reports show

that the NJY has benefited the rural population to a considerable

extent through better quality of power supply and in providing 24 x7

power to the rural non-agricultural loads. The consumers are satisfied

with the better power supply conditions prevailing after the

implementation of NJY.

ccxii

The benefits derived from NJY scheme is noted below:

24x7 power supply to villages:

The main purpose envisaged in the implementation of NJY is to

arrange 24x7 uninterrupted power supply to the villages. As seen

from the vital statistics of the sub-stations feeding the area, these

villages which were having intermittent power supply earlier, are

now having continuous 3-phase power supply and the BESCOM is

not resorting to load shedding, which was the case earlier. But, in a

few cases there have been continued interruptions due to system

constraints, line clear issues and unforeseen faults. But, now after

implementation of NJY, the BESCOM is able to supply continuous

uninterrupted quality power supply for longer duration during

morning and evening peak hours.

E

nergy input from sub-stations:

There is increase in consumption of both the metered category

installations and IP-sets. However, the increase in IP-consumption is

attributed to the increase in number of IP-sets due to regularization

of unauthorized IP-sets.

I

ncrease in metered consumption:

The energy consumption of metered category installations has

shown an increase of about 25 to 30 per cent after the

implementation of NJY. In some of the cases, where the exact

feeder-wise metered consumption was not furnished due to

change in billing software and non-availability of previous data, a

sample of energy consumption of a few installations selected at

random in various villages fed from the feeder over a period of 6

months before and after the implementation of NJY, as extracted

from the sub-divisional DCB was analyzed. This also indicates the

increasing trend of consumption of metered installations. However,

it can be safely assessed that there is an increase of 25% to 30% in

ccxiii

metered energy consumption.

Unmetered consumption:

As compared to the earlier scenario, there is a considerable

increase in the IP consumption post-implementation of NJY. The

total unmetered consumption of IP sets in respect of the combined

IP feeders has shown an increasing trend as compared with the IP

set consumption before implementation of NJY. This is due to

increase in number of IP sets serviced under regularization and also

due to mix-up of feeder loads during re-arrangement of feeders

envisaged in the project. However, IP consumption, which was

hitherto being assessed based on assumptions, can now be

measured more accurately, as there is a total exclusive feeder with

metering facilities at sub-station end, for calculating feeder-wise

total daily and monthly IP-consumption.

Rate of failure of transformers:

After the implementation of NJY, the failure rate of transformers in

the IP feeders as well as NJY feeders has reduced significantly as

compared to the failure rate of transformers before implementation

of NJY.

Better consumer satisfaction:

As per the opinion obtained from the consumers, in different

villages fed by NJY feeders, it is evident that the consumers are

happier with the better power supply conditions after

implementation of NJY.

R

esults of the socio-economic survey carried out for the

beneficiaries of the NJY Project:

A survey was conducted on the effectiveness of the project by

obtaining opinion from a cross section of people in different

villages fed by NJY feeders, the results are as follows:

o I

mprovement in quality of power supply viz., less voltage

ccxiv

fluctuations, reduction in interruptions/better tail-end voltages.

o I

mproved standards of living.

o I

ncrease in level of literacy/education.

o I

mprovement in basic amenities such as drinking water supply,

improved services in Primary Health Centers.

o D

evelopment of small scale industries leading to local

employment and increased job opportunities.

Further, the BESCOM has ensured that the illegal tapping of NJY

feeders is curbed and wide publicity has been given through media,

highlighting the punishments laid down under the law for power theft

or illegal hooking.

The BESCOM will furnish the total IP-set consumption monthly to the

Commission on the basis of data obtained from agricultural feeders’

energy meters.

Following are the observations pertaining to 36 NJY feeders covering

Davanagere and Kolar Circles:

Sl

No Parameter Before bifurcation

After

bifurcation

NJY non-agri

feeder

After

bifurcation

agri feeder

Conclusion

1 Total No. of

installations

Domestic lighting

and water supply –

48,720 numbers &IP

Sets – 9,340

numbers

Domestic

lighting and

water supply –

52,445

numbers

IP Sets –

11,150

numbers

Increase in installations

after bifurcation is

about 9.6%

2

Total

connected

load

12,60,500 KW

(Domestic and IP

load cannot be

segregated since

the connected

load is based on

installed

transformer

capacity)

Domestic

Lighting and

Water Supply

2,36,000 kW

IP Sets

11,85,000 kW

Increase in connected

load after bifurcation is

about 12.2%

3

Total energy

sent out

from

substation

(kWh)

Domestic lighting

and water supply -

38,28,650 kWh&

IP Sets -

1,39,45,000kWh

Domestic

lighting and

water supply

56,57,600 kWh

IP Sets

92,65,500 kWh

Decrease in energy sent

out from the substations

after bifurcation is

about 16%

ccxv

4

Total

metered

energy

consumption

(kWh)

Domestic lighting

and water supply -

31,57,600 kWh&

IP Sets -Realized

about 88,30,000

kWh

50,06,300 kWh

It is assumed

that the entire

energy

consumed by

the

bifurcated

Agri feeders is

assessed and

will be

realized from

the Govt. at a

later date

Increase in metered

energy consumption after

bifurcation is

about 19%

5

Average

technical

loss

17.5% 11.5% Not possible

to evaluate

AT&C for a

pure

Agricultural

feeder since

the realization

is an assumed

value of 100%

Reduction in technical loss

is

about 5.5%

6

Average

Commercial

loss

6% 5.5%

Reduction in commercial

loss is

about 0.5%

7

Aggregate

Technical

and

commercial

loss

23.50% 17% Reduction in AT&C loss is

about 6.5%

8 Transformer

Failure rate 14% 16% 17.5%

Even though the number

of failure of transformers

has reduced, the

percentage failure rate for

the bifurcated non-Agri

NJY feeder has increased

marginally by about 2%.

This may be attributable to

high service period of

about 20 to 22 hours a day

as compared to earlier 8

to 10 hours a day

9

Voltage

Regulation

(HT)

7% 4.50% 9.50%

Even with this

improvement for the non-

Agricultural NJY feeder,

the regulation is above the

acceptable range of +

2.5% (up to transformer) as

per REC guidelines. This

may be attributable to

higher line lengths

10 Peak Load 140A to 200A about 45 A 120 to 135 A

This has led to improved

quality of power supply

viz., good tail end voltage

at the consumer end. This

is evident from the survey

carried out of the

consumers.

The following are the observations pertaining to Socio-Economic

Survey carried out for the Beneficiaries of NJY scheme (36 NJY feeders)

of Davanagere and Kolar Circles of BESCOM. A survey was carried out

covering 5 villages per feeder and 6 respondents per village:

ccxvi

Circle Davangere

No of sub-divisions 8

No of feeders for evaluation 28

Circle Kolar

No of sub-divisions 2

No of feeders for evaluation 8

Sl No Parameter Response

1 Voltage Measured at consumer

premises

Within acceptable

value

2 Is the respondent aware of NJY scheme

(Yes/ No)

No (80%)

However the surveyor

has appraised the

respondent about the

scheme

3 Availability of power 24x7 after NJY

(Yes/ No)

Yes (93%)

> 20 Hrs a Day

4 Improvement in quality of power viz. less

voltage fluctuations after NJY (Yes / No)

Yes (86%)

5 Reduction in power Interruptions after

NJY (Yes / No)

Yes (73%)

6

Whether satisfied with quality and

duration of power supply for IP sets

(Yes/ No) if applicable

No (73%)

7

Respondents perception(Yes/No) on

whether implementation of NJY has led

to

a) Improvement in standard of living Yes (87%)

b) Increase in level of literacy/

education levels Yes (97%)

c) Improvement in basic amenities such

as drinking water supply, improved

services in Primary Health Centers

Yes (83%)

d) Development of Small Scale

Industries leading to local

employment and increased job

opportunities

Yes (77%)

e) Reduction in migrant population to

urban areas No (87%)

8

Overall satisfaction level about the

project

(Good/ Average/Needs further

improvement)

Average


ccxvii

The Commission notes that the BESCOM has commissioned all the

feeders under NJY phase 1&2 and achieved significant progress under

phase 3 also. But, there has been an inordinate delay in completion of

the NJY works across its jurisdiction which has resulted in non-realization

of envisaged benefits set out in the DPR when the project was initiated.

The BESCOM is hereby directed to commission the remaining feeders

taken up under phase-3 expediously and thereafter to carry out the

feeder-wise analysis so as to ensure that the objectives set out as per

DPR are accomplished. Further, the BESCOM shall ensure that NJY

feeders are not tapped illegally for running IP-sets which would defeat

the very purpose of feeder segregation scheme undertaken at huge

cost. The Consumers who are found to be tapping the NJY feeders

need to be dealt with seriously for theft of energy. The field officers/

officials who fail to note and curb illegal tapping shall be personally

held responsible for these irregulariites.

The Commission notes that, the BESCOM has carried out the analysis of

feeders commissioned under NJY indicating the benefits accrued to

the system in terms of reduction in failures of distribution transformers;

improvement in tail-end voltage; improvement in supply/reduction in

interruptions and increase in metered consumption. The analysis

reveals that there is an overall improvement in supply condition after

implementation of NJY besides benefiting the consumers in rural area,

resulting in a positive socio-economic impact. The analysis also reveals

that the consumers are satisfied as the number of hours of quality

power availability has increased, post implementation of NJY.

Further, it is noted that the BESCOM has already segregated significant

number of feeders under phase1, 2 and 3 works and consequently the

agricultural feeders are exclusively used to supply power to rural IP set

loads and the energy consumed by the IP sets could be more

accurately measured at the 11 KV feeders at the sub-stations, duly

considering the distribution losses in 11 KV lines, distribution transformers

and LT lines. The BESCOM is directed to report every month, the

ccxviii

specific consumption and the overall IP set consumption, only on the

basis of the data from energy meters installed to the agricultural

feeder, as per the formats prescribed by the Commission.

The Commission reiterates its directive to the BESCOM to continue to

furnish feeder-wise IP set consumption based on energy meter data in

respect of agriculture feeders segregated under NJY, to the

Commission every month.

x. Directive on Demand Side Management in Agriculture:

In view of the urgent need for conserving energy for the benefit of the

consumers in the State, the Commission had directed the BESCOM to

take up replacement of inefficient Irrigation Pumps with energy

efficient Pumps approved by the Bureau of Energy Efficiency, at least

in one sub-division, in its jurisdiction and report compliance thereon.


A brief note on solar water pumping system “Surya Raitha Scheme” is

as under:

Introduction: In September 2014, the GoK had envisaged a sustainable

solution to the problem of agricultural power by way of the Surya

Raitha scheme. This scheme proposes to provide net metered solar

water pumps and earn a tariff for net energy exported thereby

completely eliminating energy usage for agriculture in the converted

pumps.

Surya Raitha, pilot project:

The BESCOM has initiated action to arrange power supply to 310 IP-sets

on Harobele 11kV feeder of Kanakapura sub-division on a pilot basis.

The project provides for energizing the IP-sets with solar power by

replacing existing inefficient pump sets with efficient pump sets and

feed in excess energy to the grid on net-metering basis. The excess

energy fed into the grid will be paid back to the farmers as per the

ccxix

tariff fixed by the Commission resulting in additional income to the

farmers apart from the income earned through crops.

The scheme will be financed by a combination of farmer’s investment,

GoK subsidy, MNRE subsidy and BESCOM’s investment through soft

loans that will be repaid by the farmer through his net metering tariff

revenues in the initial years. The net meeting revenues will be

deposited into an Escrow account and will be diverted first to service

the loan corpus fund as per the tariff of Rs 7.20 fixed by the KERC for

SRTPV / small solar projects, out of which Rs1/- will be paid as

generation based incentive to farmers through farmers’ Co-operative

Society and Rs 0.20 will be paid to the Co-operative Society for its

maintenance. Payback period is estimated at 10-12 years based on

the solar generation and utilization factor of the pump set.

To enable a self-sufficient system and to recover the loan at the

earliest, the PV panel is oversized by 50 per cent, so that the additional

power will always feed power to the grid even while the solar water

pumps are in use. The feeder will be kept on from 6 am to 6 pm during

day time for injecting excess energy to the grid. Typically, 66 per cent

of energy is fed to the pump and 33 per cent to the grid.

The breakup of cost of the project is as below:

Particulars

5 HP

capacity

per IP-

set

7.5 HP

capacity

per IP-

set

Total

Total cost of system, Rs. 6,78,342 9,08,342

Number of pumps installed, Nos 223 87 310.00

GoK contribution, Rs.Crs. 58,000 1,69,000 2.76

MNRE contribution, Rs. Crs. 1,62,000 1,62,000 5.02

Interest free loan from BESCOM,

Rs.Crs.

4,08,342 5,02,342 14.43

Upfront payment by farmer, Rs.

Crs.

50,000 75,000 1.77

Total cost of the project Rs. Crs. 23.98

ccxx

Benefits from the net-metering programme for GoK:

Permanent stoppage of subsidized energy to agricultural

customers with an opportunity to deploy the same energy in other

revenue generating segments.

Energy saved from agricultural customers and delivered from net-

metering can be used to bridge energy deficit in the State.

Improved ground water ecology and agricultural output.

Benefits to the BESCOM:

Reduction in peak load and energy consumption.

Reduction of T &D losses.

Save on infrastructure cost.

Improvement in fiscal deficits.

Reduction in failure of DTCs.

Save on high cost energy.

Benefits to farmers:

Increased agricultural productivity.

Improvement of water table.

Enhanced quality of irrigation.

Assured day time power supply.

Steady income from solar generation.

Source of income during drought years.

Progress of the Project:

The Work award was issued on 07.09.2015 to M/s Sun Edison Solar

Power India Pvt., Ltd., at a cost of Rs.19.5 crore for design, supply,

testing, installation, commissioning, repair and maintenance for a

period of 10 years for 250 numbers of grid connected Solar PV

based irrigation pump sets on net metering basis under “Surya

Raitha Scheme” on 11 kV Haroblele F2 feeder in Kanakapura Taluk.

ccxxi

The BESCOM Board has approved the scheme to cover 310 IP-sets

at a cost of Rs.23,98,25,112/-.

The Govt. has released subsidy to an extent of Rs. 2.2 crore for 250

IP sets. The GoK will be requested for additional subsidy for 60 IP sets

and MNRE for sanctioning subsidy.

Co-operative Society in the name of “Surya Raitha Krushi Vidyuth

Balekedarara Sahakara Sangha Niyamitha” at Harobele is

registered on 19.08.2015.

Detailed survey has been conducted and work is in progress.

A demo PV panel has been installed at Harobele on 24th

September, 2015, and it is running successfully.

Street plays are conducted to create awareness among the

farmers about the scheme.

The work is expected to complete by 28.02.2016.

The latest progress is that around 69 number of solar IP-sets have been

commissioned as on 31.05.2016. Based on the request of M/s Sun

Edison, the project work is assigned to M/s Ishaan Solar, duly obtaining

BESCOM’s Board approval. The firm has committed to commission all

the 310 number of IP-sets by the end of January 2017.


The Commission notes that the BESCOM is implementing Surya-Raitha

scheme in Kanakapura taluk as a part of DSM initiatives. But, there is

delay in implementation of this scheme. It is important to see that all

the pending works relating to this project are expedited by the

BESCOM, so as to complete the work at the earliest and the farmers

are able to avail the benefits of this scheme. Further, it is seen that the

BESCOM has not initiated any steps for implementation of DSM

measures in the other parts of BESCOM area, in order to conserve

energy and also precious water, for the benefit of farmers. The

BESCOM should focus its attention on implementation of DSM

measures and initiate steps to scale up this programme in its entire

jurisdiction.

ccxxii

The BESCOM is directed to expedite the implementation of DSM

measures in 11kV Harobele feeder in Kanakapura taluk and report

compliance thereon to the Commission within three months from the

date of this Order.

xi. Directive on Lifeline Supply to Un-Electrified households:

The Commission had directed the ESCOMs to prepare a detailed

and time bound action plan to provide electricity to all the un-

electrified villages, Hamlets and Habitations in every taluk and to

every household therein. The action plan was required to spell

out the details of additional requirement of power, infrastructure

and manpower along with the shortest possible time frame (not

exceeding three years) for achieving the target in every taluk

and district. The Commission had directed that the data of un-

electrified households could be obtained from the concerned

Gram Panchayaths and the action plan be prepared based on

the data of un-electrified households.


The physical progress of electrification of BPL households under RGGVY

XII plan is as follows:

Sl.

No.

Name of

district

No. of BPL

households

identified

for

electrificati

on as per

DWA

No. of BPL

househol

ds

identified

for

electrifica

tion as

per

survey

Progress as on

Cumula-

tive

progress

Progress

in % w.r.t.

Survey July’16 Aug’16 Sep’16 Oct’16

1 Bangalor

e Rural 6,167 8,410 7,790 256 0 2 8,048 95.70%

2 Davanag

ere 21,294 25,652 17,202 1,801 836 1,014 20,853 81.29%

3 Kolar 13,041 21,312 13,004 1,202 1,473 1,689 17,368 81.49%

4 Chikkaba

llapura 15,460 24,696 18,819 2,060 1,443 1,085 23,407 94.78%

5 Ramana

gara 4,569 19,601 6,980 236 0 0 7,216 36.81%

Total 60,531 99,671 63,795 5,555 3,752 3,790 76,892 77.15%

As per REC guidelines, the work shall be completed within 24 months

from the date of issue of work award to the Agency. The BESCOM is

ccxxiii

committed to complete the project in all aspects within the stipulated

time fixed by the REC.

Further, for electrification of BPL households as per the guidelines of

REC 1,19,659 BPL households are identified in 08 districts of BESCOM

under Dena Dayal Upadhyaya Grama Jyothi Yojana (DDUGJY).

The district-wise BPL households identified for electrification under the

scheme are as follows:

Sl.

No. Name of the district

No. of BPL households

identified for

electrification under

DDUGJY

1 Bengaluru Rural 4,315

2 Davangere 5,885

3 Kolar 4,563

4 Chikkaballapura 4,173

5 Ramanagara 7,689

6 Anekal taluk of

Bengaluru Urban 5,523

7 Chitradurga 36,817

8 Tumakuru 50,694

Total 1,19,659

For implementation of the same, the tenders have been floated and

the works have to be awarded to the qualified bidder after

completion of the evaluation process. The time schedule fixed for

implementation of DDUGJY scheme is 24 months from the date of

issue of Detailed Work Award (DWA).

Initially the DPRs under the RGGVY XII Plan (as per the guidelines of

REC the population of the selected village shall be more than 100)

were prepared for 5 Districts namely Bengaluru Rural, Kolar,

Ramanagara, Chikkaballapura and Davanagere districts. The same

has been approved by the REC and the detailed work awards have

been issued to the successful bidder during the month of January,

2015. As per the detailed work award issued, the time schedule for

completion of the work is 31st December, 2016.

For the remaining three districts, namely, Chitradurga, Tumakuru &

Bengaluru Urban (Anekal taluk), the DPRs for electrification of BPL

households were prepared under RGGVY XII Plan and submitted to

REC for sanctioning. Meantime, Government of India has introduced

new scheme called “Deena Dayal Upadyaya Grama Jyothi Yojana

ccxxiv

(DDUGJY)” in which all the villages having a population less than 100

shall also be covered under the scheme. In view of this, proposal for

electrification of BPL households in RGGVY XII plan has been dropped

in respect of Chitradurga, Tumakuru & Bengaluru Urban (Anekal taluk)

districts and proposed to include the same under DDUGJY scheme.

Under DDUGJY scheme, DPRs for all the 08 districts have been

prepared as per REC guidelines and submitted to REC for

acceptance. The monitoring committee of MoP and in turn Additional

Chief Secretary, Energy department, GoK has allocated Rs.235.36

crore to the BESCOM under DDUGJY scheme. The tenders for the

works have been floated and the detailed work awards have to be

issued to the successful bidders.

The timeline fixed for completion of works in all aspects is 24 months

from the date of issue of detailed work award, to the Agencies. The

BESCOM is committed to complete the project in all aspects within the

stipulated time fixed by REC and will be completed by the end of

January, 2019.

The project-wise coverage of un-electrified BPL households and

progress achieved as at the end of November, 2016 under RGGVY XII

Plan scheme is as under:

Sl.

No.

Name of the

District

RGGVY XII Plan DDUGJY Total

Coverage

(as per

survey)

Achieved

as on Nov’

2016

Coverage

(As per

survey)

Achieved

as on Nov’

2016

Coverage

Achieved

as on Nov’

2016

1 Bengaluru Rural 8,410 8,048 4,315 0 12,725 8,048

2 Davanagere 25,652 22,515 5,885 0 31,537 22,515

3 Kolar 21,312 20,159 4,563 0 25,875 20,159

4 Chikkaballapura 24,696 23,674 4,173 0 28,869 23,674

5 Ramanagara 19,601 7,216 7,689 0 27,290 7,216

6 Chitradurga 0 0 36,817 0 36,817 0

7 Tumakuru 0 0 50,694 0 50,694 0

8 Bengaluru Urban

(Anekal Taluk) 0 0 5,523 0 5,,523 0

Total 99,671 81,612 1,19,659 0 2,19,330 81,612


The Commission notes with displeasure that only 77 per cent progress

has been achieved by the BESCOM, in electrification of the households

ccxxv

under RGGVY XII Plan. The BESCOM needs to expedite electrification

of un-electrified households so as to complete the same at the earliest.

It is noted that the electrification of households has not progressed as

targeted for the last many years resulting in large number of

households in the State remaining without electricity. The Commission

expresses its displeasure over the BESCOM’s tardy progress and

apparent lack of seriousness in electrification of un-electrified

households in its jurisdiction. The BESCOM must implement the

programme within in a time bound period to ensure that the people

without electricity are provided with the basic need of electricity.

Further, the Commission concerned with the slow pace of progress of

this programme, in its previous Tariff Orders had directed the BESCOM

to cover electrification of 5 per cent of the total identified un-

electrified households every month beginning from April, 2015, so as to

complete this programme in about twenty months. However, the

progress achieved in electrification of households so far by the

BESCOM is disappointing.

The Commission directs the BESCOM to expedite action to provide

electricity to the un-electrified households and cover all the remaining

households at the earliest and report compliance thereon to the

Commission regarding the monthly progress achieved from May, 2017

onwards. The Commission as already indicated in the earlier Tariff

Orders would be constrained to initiate penalty proceedings under

section 142 of the Electricity Act, 2003, against BESCOM in the event of

non-compliance in the matter.

xii. Directive on Implementation of Financial Management Framework:

The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented towards maintenance of power supply

without a corresponding emphasis on realization of revenue. This has

resulted in a serious mismatch between the power supplied,

expenditure incurred and the revenue realized in many cases. The

continued inability of ESCOMs to effectively account the input energy

and its sale in different sub-divisions of the ESCOM in line with the

ccxxvi

revenue realization rate fixed by the Commission, urgently calls for a

change of approach by the ESCOMs, so that the field level

functionaries are made accountable for ensuring realization of

revenues vis-à-vis the input energy supplied to the jurisdiction of sub-

division/ division.

The Commission had therefore directed the BESCOM to introduce a

system of Cost-Revenue Centre Oriented sub-divisions at least in two

divisions, on a pilot basis, in its operational area and report the results of

the experiment to the Commission.


The Commission has principally agreed to dispense with the

implementation of SBU concept, instead has suggested to implement

Financial Management Framework in line with a report prepared by

M/S PWC on pilot basis in selected divisions in BESCOM. Based on the

Commission’s direction, the division-wise draft financial evaluation was

done based on the actuals of FY16. The Draft results are tabulated

below:

ccxxvii

The BESCOM has fixed division-wise targets for FY17 as under:

Divisions Contribution

factor

Approved

by KERC for

FY17

Targeted

ARR For

FY17 Chandapura 1.29 5.96 7.67

Chikballapura 0.74 5.96 4.42

Chintamani 0.62 5.96 3.69 Chitradurga 0.70 5.96 4.17

Davanagere 0.91 5.96 5.42

Harihara 0.65 5.96 3.86 Hebbala 1.19 5.96 7.07

Hiriyuru 0.68 5.96 4.04

HSR 1.34 5.96 8.00 Indiranagara 1.40 5.96 8.34

Jayanagara 1.28 5.96 7.60

K.G.F 0.76 5.96 4.55 Kanakpura 0.80 5.96 4.79

Kengeri 1.06 5.96 6.30

Kolara 0.82 5.96 4.88 Koramangala 1.42 5.96 8.44

Madhugiri 0.61 5.96 3.64

Malleswaram 1.38 5.96 8.23 Nelamangala 1.06 5.96 6.30

Divisions Net

Consumption

PP

Cost

Other

Cost

Total

Cost

Demand

Total

Collecting

Total

ARR

Demand

ARR

Collection

Cost

per

unit

Profit/

loss

Demand

basis

Profit /

loss

Collection

basis

Chandapura 1309.85 4.37 0.37 4.74 937.41 876.51 7.16 6.69 4.74 317 256

Chikballapura 538.34 4.37 1.07 5.44 221.88 212.88 4.12 3.95 5.44 -71 -80

Chintamani 465.43 4.37 0.63 5.00 160.32 152.19 3.44 3.27 5.00 -72 -81

Chitradurga 510.21 4.37 1.10 5.47 198.47 192.20 3.89 3.77 5.47 -81 -87

Davanagere 789.16 4.37 0.85 5.22 399.15 314.21 5.06 3.98 5.22 -13 -98

Harihara 512.11 4.37 0.68 5.05 184.39 176.08 3.60 3.44 5.05 -74 -83

Hebbala 985.49 4.37 0.64 5.01 649.97 634.19 6.60 6.44 5.01 156 140

Hiriyuru 522.88 4.37 1.00 5.37 197.07 181.32 3.77 3.47 5.37 -84 -99

HSR 1346.47 4.37 0.54 4.91 1004.69 961.50 7.46 7.14 4.91 344 300

Indiranagar 1952.73 4.37 0.48 4.85 1519.25 1466.00 7.78 7.51 4.85 572 519

Jayanagar 1410.10 4.37 0.66 5.03 1000.01 981.78 7.09 6.96 5.03 291 273

K.G.F 984.96 4.37 0.47 4.84 418.04 385.85 4.24 3.92 4.84 -59 -91

Kanakpura 619.73 4.37 0.42 4.79 277.10 254.60 4.47 4.11 4.79 -20 -42

Kengeri 734.55 4.37 0.42 4.79 431.72 417.37 5.88 5.68 4.79 80 66

Kolara 456.87 4.37 0.94 5.31 207.88 185.06 4.55 4.05 5.31 -35 -58

Koramangala 1860.13 4.37 0.40 4.77 1464.99 1400.13 7.88 7.53 4.77 578 513

Madhugiri 664.46 4.37 0.82 5.19 225.78 197.57 3.40 2.97 5.19 -119 -147

Malleswaram 641.39 4.37 1.66 6.03 492.50 478.33 7.68 7.46 6.03 106 92

Nelmangala 1036.19 4.37 0.59 4.96 608.53 537.95 5.87 5.19 4.96 95 24

Peenya 989.84 4.37 0.69 5.06 681.53 660.04 6.89 6.67 5.06 181 159

Rajajeshwarinagar 537.35 4.37 0.90 5.27 356.85 347.03 6.64 6.46 5.27 74 64

Rajajinagara 762.03 4.37 0.89 5.26 499.27 490.43 6.55 6.44 5.26 98 90

Ramnagara 543.09 4.37 0.77 5.14 294.57 290.00 5.42 5.34 5.14 15 11

Shivajinagara 1011.70 4.37 0.70 5.07 730.22 707.71 7.22 7.00 5.07 217 195

Tipturu 516.00 4.37 0.76 5.13 188.23 170.07 3.65 3.30 5.13 -76 -95

Tumkuru 1342.36 4.37 0.75 5.12 567.48 536.32 4.23 4.00 5.12 -120 -151

Vidhanasouda 457.66 4.37 1.12 5.49 346.72 340.81 7.58 7.45 5.49 95 90

Yelahanka 1037.08 4.37 0.45 4.82 527.17 489.81 5.08 4.72 4.82 27 -10

24538

ccxxviii

Peenya 1.24 5.96 7.38

Rajajeshwarinagar 1.19 5.96 7.12 Rajajinagar 1.18 5.96 7.02

Ramanagara 0.98 5.96 5.81

Shivajinagar 1.30 5.96 7.74 Tipturu 0.66 5.96 3.91

Tumkuru 0.76 5.96 4.53

Vidhanasouda 1.36 5.96 8.12 Yelahanka 0.91 5.96 5.45

Draft evaluation and targets are set and regarding setting up of

targets to distribution loss, action will be initiated.

Further, as recommended by the Consultant, M/s PWC, financial

evaluation can be done in two steps. Revenue and Cost Management

as indicated in stage II implementation is tabulated at page 111 of the

BESCOM’s Tariff application. By considering average power purchase

cost of BESCOM to all divisions, the cost component of each division

varies. This has resulted in a loss in majority of the rural divisions and

profit in case of divisions under BMAZ. Further, financial evaluation on

Revenue Management as indicated in Stage-I implementation is

tabulated below:

Evaluation of results – April to Oct’16 – Performance against ARR targets

Divisions Sales in

Mu

Demand Collection ARR-D ARR-C ARR- Taret Margin Profit/(loss)

Demand Collection Demand Collection

2 3 4 5=3/2 6=4/2 7 8=5-7 9=6-7 10=2*8 11=2*9

Chandapura 828.33 597.78 587.08 7.22 7.09 6.62 0.60 0.47 49.43 38.73

Chikballapura 341.33 149.08 141.17 4.37 4.14 6.1 (1.73) (1.96) (59.13) (67.04)

Chintamani 274.72 104.95 94.1 3.82 3.43 5.84 (2.02) (2.41) (55.49) (66.34)

Chitradurga 341.28 140.48 134.61 4.12 3.94 6.14 (2.02) (2.20) (69.07) (74.94)

Davanagere 435.13 202.92 197.94 4.66 4.55 6.05 (1.39) (1.50) (60.33) (65.31)

Harihara 288.9 122.15 121.09 4.23 4.19 5.92 (1.69) (1.73) (48.88) (49.94)

Hebbala 593.2 418.57 422.5 7.06 7.12 6.41 0.65 0.71 38.33 42.26

Hiriyuru 329.11 130.51 124.76 3.97 3.79 5.98 (2.01) (2.19) (66.30) (72.05)

HSR 864.61 683.04 672.83 7.9 7.78 6.68 1.22 1.10 105.48 95.27

Indiranagara 1187.6 989.35 1000.1 8.33 8.42 6.66 1.67 1.76 198.43 209.19

Jayanagara 842.15 636.54 644.78 7.56 7.66 6.62 0.94 1.04 79.04 87.28

K.G.F 546.08 261.82 243.21 4.79 4.45 6 (1.21) (1.55) (65.83) (84.44)

Kanakpura 378.48 187.25 181.46 4.95 4.79 5.88 (0.93) (1.09) (35.30) (41.09)

Kengeri 461.34 291.5 288.37 6.32 6.25 6.08 0.24 0.17 11.01 7.88

Kolara 315.99 147.52 136.58 4.67 4.32 5.95 (1.28) (1.63) (40.49) (51.43)

Koramangala 1106.8 942.61 938.82 8.52 8.48 6.67 1.85 1.81 204.37 200.58

Madhugiri 492.77 179.63 166.82 3.65 3.39 5.98 (2.33) (2.59) (115.05) (127.86)

Malleswaram 385.15 281.75 283.16 7.32 7.35 6.5 0.82 0.85 31.40 32.81

Nelmangala 671.85 403.43 385.12 6 5.73 6.16 (0.16) (0.43) (10.43) (28.74)

Peenya 613.08 446.07 451.89 7.28 7.37 6.19 1.09 1.18 66.57 72.39

Rajajeshwarinagara 331.72 233.76 237.97 7.05 7.17 6.35 0.70 0.82 23.12 27.33

Rajajinagara 471.03 325.85 330.95 6.92 7.03 6.25 0.67 0.78 31.46 36.56

Ramnagara 318.83 199.78 198.59 6.27 6.23 6.7 (0.43) (0.47) (13.84) (15.03)

Shivajinagara 648.99 491.49 492.97 7.57 7.6 6.44 1.13 1.16 73.54 75.02

Tipturu 374.37 142.97 135.71 3.82 3.63 6.18 (2.36) (2.55) (88.39) (95.65)

Tumkuru 826.07 381.39 369.18 4.62 4.47 6.14 (1.52) (1.67) (125.82) (138.03)

Vidhanasouda 273.46 217.94 217.78 7.97 7.96 6.33 1.64 1.63 44.84 44.68

ccxxix

Yelahanka 544 333.33 319.89 6.13 5.88 6.27 (0.14) (0.39) (7.76) (21.20)

In Step-I also, majority of the rural divisions are under loss, since, same

yardstick is used to measure urban and rural divisions, negative results

are obtained. Hence, evaluation should not be based on the results

but based on the targets.


The Commission has forwarded a report prepared by the Consultants,

M/s PWC regarding implementation on Financial Management

Framework to bring in accountability on the performance of the

divisions / sub-divisions by analyzing the quantum of energy received,

sold and cost thereon so that the ESCOMs conduct their business on

commercial principles.

The BESCOM has not submitted the compliance in respect of

implementation of Financial Management Framework, on quarterly

basis to the Commission. In the details furnished to the Commission for

FY16, it is observed that huge variation in the figures under column

Profit/Loss in respect of many O&M divisions which needs to be verified

and corrective action initiated.

The BESCOM is directed to review the performance of the divisions &

sub-divisions in respect of energy received, sold, average revenue

realization and average cost of supply using the financial framework

Model. Further, the BESCOM is directed to analyze the following

parameters each month to monitor the performance of the

divisions/sub-divisions at corporate level:

a) Target losses fixed and the achievement at each stage.

b) Target revenue to be billed and achievement against each

category of consumers.

c) Target revenue to be collected and achievement under all

categories.

d) Targeted distribution loss reduction when compared to previous

years’ losses.

e) Comparison of high performaning divisions in sales with low

performaning divisions.

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Based on the analysis, the BESCOM needs to take corrective measures

to ensure100 per cent meter reading, billing, and collection; analysis of

sub-normal consumption; replacement of non-recording meters; etc.

The Commission reiterates its directive that the BESCOM shall

implement the financial management framework model and report

compliance thereon on a quarterly basis to the Commission.

xiii. Directive on Prevention of Electrical Accidents:

The directive was as follows:

“The Commission has reviewed the electrical accidents that

have taken place in the State during the year 2015-16 and with

regret noted that as many as 430 people and 520 animals have

died due to these accidents.

From the analysis, it is seen that the major causes of the

accidents are due to snapping of LT/HT lines, accidental contact

with live LT/HT/EHT lines, hanging live wires around the electric

poles /transformers etc., in the streets posing great danger to

human lives.

Consideing the above facts, the Commission hereby directs the

BESCOM to prepare an action plan to effect improvements in its

distribution network and implement safety measures to prevent

electrical accidents. A detailed division-wise action plan shall be

submitted by the BESCOM to the Commission”.


i. Instructions have been issued from Corporate Office to rectify

the identified hazardous installations, on top priority.

ii. Third Saturday of every month is conducted as “safety day” and

instructions are issued from Corporate Office to the field staff to

conduct safety day, every month, wherein the officers have to

educate the field staff regarding safety and to take at least one

feeder maintenance work every month in each division.

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iii. LoI is issued for fixing the name plate for every DTC to indicate

the details of incoming & outgoing cables and change over

points.

iv. Several circulars have been issued from the Corporate Office

regarding safety to staff and public.

v. Instructions have been issued from Corporate Office to attend

to the observations in respect of DTCs and lines suggested by

the Electrical Inspectorate, GoK.

vi. Safety pamphlets, Book markers and safety game boards have

been distributed during ELECRAMA-2016.

vii. LT spacers are being installed whereever required.

viii. LTD boxes are being installed where ever required.

ix. Instructions have been issued to all the field staff to immediately

rectify the dangling wires on transformers/poles, raise the aerial

fuse boards to safety height, prune the trees along the HT/LT

lines, clean the transformer/ RMU surroundings, maintain feeder

pillar boxes and LTD boxes etc.

x. Modification of 11KV GoS in all the DTCs in BMAZ area has been

carried out.

Further, the number of hazardous locations/installations identified in

BESCOM network for FY16 were 4,095 and the number of such

installations rectified in FY16 were 4,837. The number of hazardous

locations/installations identified in BESCOM network for the FY17 were

4,172 and the number of such installations rectified up to November

2016 are 2,740.

The following is the action plan to reduce the accidents:

a. Instructions have been issued from Corporate Office to conduct

Safety Day to educate staff & public regarding safety and also to

discuss the system improvement of at least one feeder (end to

end) at a time. The progress of the same is being reviewed by the

Corporate Office during monthly accident review meeting.

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b. In the meeting held on 21.12.2016, it was decided to provide a set

of safety equipment to the linemen like life-time items and regular

items so that each set of materials is provided to the linemen.

Tenders will be called for procuring set of life-time items and

regular items (based on the guarantee period) separately.

c. By organizing a function at BESCOM, the set of items procured

shall be distributed among all the linemen.

d. By 1st of March, 2017, the safety equipment will be procured and

distributed. For other regular safety equipment; the tenders will be

called for every six months / one year, based on their guarantee

period.


The Commission notes that the BESCOM has taken various remedial

measures including rectification of hazardous installations and carried

out improvements to its distribution network. However, despite taking

these measures by the BESCOM, the number of fatal electrical

accidents involving both human and livestock has increased, which is

a matter of serious concern. The increase in the number of electrical

accidents indicates that identification and rectification of hazardous

installations, which is a continuous process, should be regularly done

without any let up. Therefore, the BESCOM should make more

concerted efforts for countinuous identification and rectification of all

the hazardous installations, including streetlight installations / other

electrical works under the control of local bodies to prevent electrical

accidents. In addition, it is also important that the BESCOM takes up

awareness campaign through visual/print media continuously about

safety aspects among public.

During the ESCOMs’ Review meetings held, the Commission has been

emphasizing that the ESCOMs should take up periodical preventive

maintenance works, install LT protection to distribution transformers,

conduct regular awareness programme for public on electrical safety

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aspects in use of electricity and also ensure use of safety tools &tackles

by the field staff besides imparting necessary training to the field staff

at regular intervals.

Further, the Commission is of the view that the hazardous installations in

the distribution network is the result of works carried out shabbily

without adhering to the best construction practices as per the

standards, while taking up construction/expansion of the distribution

network. Therefore, the BESCOM shall take adequate and effective

steps to ensure that distribution network is hazardous free. In addition to

this, the BESCOM also needs to conduct regular safety audit of its

distribution system and to carryout preventive maintenance works as

per schedule in order to keep the network equipment in healthy

condition.

The Commission has already forwarded the Safety Technical Manual to

the ESCOMs, which prescribes detailed steps to be taken on each of

the elements of the distribution system, which would help the engineers

in the field to identify and attend to the defects. In this context, it is

necessary that the ESCOMs are required to continuously monitor the

implementation of the suggestions / recommendations contained in

the Safety Technical Manual to ensure that distribution network is

maintained properly.

The Commission, therefore, reiterates its directive that the BESCOM shall

continue to take adequate measures to identify & rectify all the

hazardous locations/installations existing in its distribution system under

an action plan to prevent and reduce the number of electrical

accidents occurring in its distribution system. The compliance thereon

shall be submitted to the Commission every month, regularly.

APPENDIX – 1

Statement showing the objections of the Stakeholders/Public,

BESCOM’s Response and the Commission’s Views thereon

Objections on Tariff Issues:

Objections Replies by BESCOM

1. As per Clause 2.7.1 of the MYT BESCOM has filed Truing up application

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Regulations 2006, an application for

determination of tariff for any

financial year, should be made not

less than 120 days before the

commencement of such financial

year and hence, this application is

not maintainable.

for FY16, and Annual Revenue

Requirement for FY18 and Tariff revision for

FY18 on 30.11.2016 within the time limit as

per regulation of 2.7.1 of the MYT

Regulations.

Commission's Views: The reply furnished by BESCOM is acceptable.

2. BESCOM should have clearly

indicated the steps taken for

improvement of efficiency after the

issue of the latest order by Hon’ble

Commission and also the efficiency

gains as per the earlier orders issued,

which could be ultimately

transferred to the consumers

proportionately. In the absence of

any specific gains the application is

not maintainable.

BESCOM has filed the Truing up of FY16

based on Audited Accounts for FY16. The

Annual Revenue Requirement for FY18

and Tariff revision for FY18 is sought based

on the projections of sales and power

purchase with respect to historical data.

Truing up for FY16 is placed before the

Commission with comparison of

Commission’s approved figures versus

actual figures for FY16 along with the

explanation. Efficiency gains will be

measured by the Commission and the

Commission will decide about sharing of

gains duly considering the approved

targets.

Commission's Views: The reply furnished by the BESCOM is noted and the APR is

carried out as per the MYT Regulations.

3. Regulatory asset of Rs.305.50 Crores

pertaining to FY13 mentioned in the

truing up of FY16 sought to be

recovered in FY18 after a lapse of 4

years, is supposed to be recovered

from the Government. Hence the

petition is not maintainable.

While approving the APR for FY 15, an

amount of Rs. 611.00 Crores was set aside

as regulatory asset to be recovered in the

tariff over the next two years (FY 16 and FY

17) and also the Commission had decided

to allow carrying cost at 12% on the

regulatory asset to be assessed at the time

of Annual Performance Review for FY15

and FY16. Hence, an amount of Rs.305.50

Cr. is considered for FY18.

The State commission should have

allowed the carrying cost at the

prevailing market lending rate for the

carrying cost so that the efficiency of the

distribution company is not affected.

A regulatory asset is a deferred

expenditure to be recovered from the

future consumers. In order to avoid tariff

shock to its consumers, the revenue

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recovery although recognized, is

deferred for the future.

The Regulators do permit carrying costs

of Regulatory Assets to the distribution

utilities to manage their cash-flow

requirements. However, interest cost

allowed for short term borrowing costs, to

meet the shortfall in revenue is not

sufficient.

This affects the ability of BESCOM to raise

commercial debt in the market, as the

Company’s balance sheets get

compromised on account of building up

of its Regulatory Assets.

Commission's Views: The Commission, duly taking note of the reply by BESCOM, has

dealt with the matter suitably in the relevant chapter of this Tariff Order.

4. Truing up arrears of Rs.367.33 Crs.

pertaining to FY14 considered for

recovery in FY18, will be a burden on

the consumers. Normally, truing up

exercise results in reduction of the

revenue gap rather than increase

the same.

BESCOM’s ERC filing considers 12% as

carrying cost on the deficits of FY-13 and

FY14 and not Rs.305.5 Crs, as stated by

the objector.

The Commission, which allows working

capital on normative basis in line with the

MYT regulations, cleared the deficit of

Rs.367.33 Crs. for FY14 as it was found to

be complying with MYT regulations.

BESCOM normally projects both actual

and approved realizations in the true up

exercise to work out the actual deficit

and seeks approval for the expenditure

incurred over and above the realization

duly allowing a carrying cost limited to

12%.

A CRISIL study states that the realized tariff

as a percentage of cost is 74% in India

compared to 115-120 percent in

developed countries.

Commission's Views: The Commission has dealt with this matter in the appropriate

chapter of this Tariff Order.

5. Truing up arrears of Rs. 2096.34 Crs

pertaining to FY16, as against the

approved gap of 700.28 Crs,

considered for recovery in FY18,

after a lapse of 2 years, will burden

Any proposal from BESCOM and the

approval of KERC are subject to truing up

based on the actual transactions. All

power purchases made with the approval

of the Commission, accounts for 86% of

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the consumers. As a matter of fact,

truing up exercise should result in

reduction of the revenue gap rather

than increase the same and the

deficit due to the inefficiency of

BESCOM should not be loaded on to

the consumers.

the expenditure and a minor variation in

the cost of power purchase will have a

huge impact on cash analysis. As against

the approved average power purchase

cost of Rs.3.89/unit, BESCOM has incurred

a cost of Rs.4.32/unit for FY16.

Commission's Views: The Commission has dealt with this matter suitably in the

relevant chapter of this Tariff Order.

6. As per the National Tariff Policy, the

cross subsidy should be within ± 20%

of the cost of supply and the Tariff

determination should be based on

the cost of supply. The IP sets are

subsidized by the other categories of

consumers mainly the Industrial

sector and the cross subsidy

payable by Industrial consumers

should be reduced.

Cost to serve is a process-driven

accountancy tool to calculate the

profitability of a customer, based on the

actual business activities and costs

incurred to serve the customer. In the

context of supply chain management, it

can be used to analyze how costs are

consumed throughout the supply chain.

But it is not applicable to BESCOM.

The cross subsidy for a consumer

category is the difference between cost

to serve that category of consumers and

average tariff realization of that

category of consumers. While the cross-

subsidies have to be reduced

progressively and gradually to avoid

tariff shock to the subsidized categories,

the cross subsidies cannot be eliminated.

The tariff for different categories of

consumers may progressively reflect the

cost of electricity to the consumer

category but may not be a mirror image

of cost to supply to the respective

consumer categories.

Tariff for consumers below the poverty

line will be at least 50% of the average

cost of supply.

Further, the Commission is

governed by the National Tariff Policy in

fixation of tariff.

Commission's Views: The Commission has dealt with this matter in the appropriately

in the relevant chapter of the Tariff Order. The Commission’s endeavor is to reduce

the cross subsidies gradually.

ccxxxvii

7. Though the average cost of supply is

Rs.5.69 per unit, IP Sets are charged

at Rs.2.38 per unit and the

difference is passed on to the other

consumers through cross subsidy.

The Tariff design of the National Tariff

policy is reiterated “…..Consumers

below poverty line who consume below

a specified level, as prescribed in the

National Electricity Policy may receive a

special support through cross subsidy.

Tariffs for such designated group of

consumers will be at least 50% of the

average cost of supply……..”

The tariff subsidy is aimed at providing

concessional rates to farmers, with IP sets

of 10HP and below, who are considered

as small farmers and classified under LT4a

tariff. Hence, a special support, as per the

National Tariff Policy, is extended by the

Commission. An arrangement is made to

supply 3 phase power for a period of

seven hours only for farm sector which

requires about 30% of the BESCOM’s

consumption. Further, Government of

Karnataka has initiated Suryaraitha

scheme, on a pilot basis, to harness Solar

Energy for the benefit of the farmers, who

can sell excess power, if any, to the

Government.

Commission's Views: The reply by BESCOM is noted.

8. Actual ARR of Rs.15917.96 Crs for

FY16 is Rs.1499.23 Crs. more than the

approved ARR and additional

outlay sought in the petition should

not be approved. A large number of

HT consumers going out of BESCOM

grid is a matter of concern and

needs corrective action.

As requisite quantum of power had not

been allotted from KPCL, CGS and major

IPPs, BESCOM purchased power, on short

term basis to meet the demand of the

consumers. Therefore, the contention of

objector for non-admission of the

additional expenditure incurred for

purchase of power during FY16 is not

justifiable.

Commission had approved HT2a sales of

5804.9 MU for FY16 in an optimistic way,

whereas, the actual sales of 4593.21 MU

was marginally lower by 157 MU in

comparison with FY15 sales of 4750.15 MU.

This clearly indicates that HT consumers

have not left Karnataka but opt for open

access.

Commission's Views: The reply furnished by the BESCOM is found to be reasonable.

ccxxxviii

9. BESCOM purchased 1257.419 MU

lesser than the approved quantum

of energy for FY16 with a resultant

saving of Rs.489.16 Crs and the same

should not be included in the

revised ARR.

The tariff revision is proposed with certain

assumptions and normative principles,

which alter year on year due to various

reasons. Final Accounts of FY16 with

actual figures indicate a revenue gap of

Rs.1424.40 Crs. in comparison with outlay

approved by the Commission. Further,

the average power purchase cost

calculated with all inputs works out to be

Rs.4.32, as against the approved cost of

Rs.3.89 per unit. The above aspects

explain the reasons for mismatch

between the receipts and expenditure for

the year FY16.

Commission's Views: The reply furnished by the BESCOM is noted. The Commission

has dealt with this matter appropriately, in the relevant chapter of this Tariff Order.

10. Additional capital expenditure

incurred by BESCOM for FY 16, i.e.

Rs.1374.31 Crs. as against the

approved outlay of Rs.627 Crs,

should not be approved in the

absence of appropriate justification

Commission in its Tariff Order dated

02.03.2015, approved Rs.627 Crs. as a

capital outlay for FY 16, though BESCOM

had sought a Capex of Rs.2050 Crs.

Commission's Views: The aspect has been dealt with suitably in the relevant chapter

of this Order.

11. Excess expenditure of Rs.216.96 Crs.

incurred by BESCOM for O & M

activities should not be approved by

the Commission.

In obedience to the Commission’s

directive, action initiated to recruit ground

level staff and the additional cost on

account of new recruitment for the year

FY16 is one of the reasons for increase in

Employee cost. Further, BESCOM is

requesting the Commission to allow Rs.

1219.34 Crs. as O&M expenditure and not

Rs.1421.97 Crs. as stated by the objector.

Commission's Views: The reply furnished by BESCOM is noted and the Commission

has dealt with the matter appropriately in the relevant chapters of this Tariff Order.

12. BESCOM has not indicated the

benefits of ToD metering like

reduction in the peak load etc. In

case, no tangible reduction is

noticed in the peak load ToD

metering/billing should be made

optional. Morning peak is contributed

by the domestic consumers and

industries.

Time of Day tariff is a demand side

management measure to reduce the

peak (morning or evening). As per the

existing ToD tariff structure, penalty at

Rs.1.25 per unit is levied for the

consumption during evening peak hours

i.e. 6PM to 10PM and an incentive at the

rate of Rs.1.00 per unit extended to the

off peak consumption during 10PM to 6

AM. Since the time slots for rewarding

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and penalizing are divided unequally the

HT consumers stand to gain.

Consumers, who neither reduce the load

during the peak hour nor shift the load to

the off peak hours, stand to lose owing

to the imposition of penalty and their

failure to be rewarded with incentive.

Further, BESCOM welcomes the proposal

of the objector to make TOD optional

with the revised proposal submitted to

the Commission’s decision.

HT consumers and domestic consumers

respectively consume 50% and 25% of

the total energy consumption of

BESCOM. Installation of solar water

heater is mandatory for all new domestic

consumers. Hence, the perception of

the objector that the morning peak is

due to domestic consumers is not

justified.

Commission's Views: The Commission notes the reply furnished by BESCOM and the

Commission’s decision on modification in the ToD scheme is dealt with in relevant


13. BESCOM has not produced subsidy

letter for allocation of subsidy.

The details of subsidy claimed and

released in respect of BJ/KJ and IP set

below 10 HP are furnished in BESCOM’s

replies to KERC’s preliminary observations.

Commission's Views: Reply furnished by BESCOM is acceptable.

14. BESCOM is yet to achieve the

segregation of technical and

commercial losses mandated in the

Tariff Policy - 2006.

AT&C losses for FY16 computed as 12.77%

can be reduced further if the dues of

urban and rural local bodies are cleared.

BESCOM is also taking necessary action

for reduction of distribution losses as per

directives of the Commission.

Commission's Views: The reply furnished by the BESCOM is noted. However, the

Commission emphasizes that, conducting energy audit is the only way for plugging

leakage and to make the BESCOM viable both technically and financially.

15. The amount of interest paid by

BESCOM to the generators, for the

delayed clearance of their dues,

should not be passed on to the

Consumers.

Commission is not passing the interest on

belated payment made to the generators

and BESCOM does not include the same

in tariff filing.

Commission's Views: The reply furnished by BESCOM is noted. The Commission has

dealt with the matter appropriately in the relevant chapter of this Tariff Order.

16. Average cost of hydel and thermal BESCOM, on a yearly basis procures

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power are 84.31 and 435.51 paise

per unit respectively and BESCOM

should utilize Hydel Power to the

extent possible.

approximately 35% of the total energy

input from Hydel and thermal sources of

KPCL and utilizes the hydel power to the

extent of allocation by GOK. The

escalation in power purchase cost during

FY16 is owing to increase in KPCL’s thermal

average power purchase cost from

Rs.3.90 to Rs.4.26/unit.

Commission's Views: The reply by BESCOM is noted and the Commission has dealt

with the matter suitably in the relevant chapter of the Tariff Order.

17. Functioning of Small Scale Industries

is far from satisfactory owing to

financial problems and a few have

already closed their operation. The

power consumption of this category

is quite low and a separate Tariff,

Re.1.0 lower than the other Tariff, for

small scale industries can be

considered.

As BESCOM is already reeling under

financial crunch, a reduction of Re.1 in

the tariff for small scale industries cannot

be considered.

Commission's Views: The retail tariff to the consumers is being fixed keeping in view

the recovery of average cost of supply and the cross subsidy levels with reference to

the average cost of supply. Fixing a tariff below the cost of supply would entail

meeting the balance cost either by government subsidy or through cross

subsidization. In the absence of subsidy from the Government to MSMEs, extending

concessions to this category would result in increase in cross subsidy levels of other

categories of consumers, which is not permissible under the Tariff Policy.

18. 0.66% of consumers coming under

HT category contribute revenue of

45%. But, the unscheduled load

shedding and frequent interruptions

cause the industries an unbearable

loss; many of them have already

been closed due to unreliable

power supply.

Gap between demand and supply is

increasing year on year. As huge

investments are required in power

generation, Peenya Industries Association,

an association of small scale industries,

may consider an investment in power

sector to help their own members.

BESCOM on its part, is striving hard to

provide 24X7 supply to industries.

Generation from BTPS unit 3 and

Yeramarus would give the industries the

required relief.


19. High energy intensive units such as

Foundries, Forging Shops, Heat

treatment shops, Blow Molding

units, steel Mills etc. in Karnataka,

which are under serious threat of

closure, due to high power cost and

Tariff of other states cannot be compared

with that of Karnataka, as the state has its

own profile of energy sources and energy

consumption and adopt different

method of charging. Some states levy

Fuel escalation charges, Reliability

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competition from neighboring

states, require a substantial

reduction in tariff for their survival.

charges beside energy charges and

impose restriction on power usage etc.

Commission's Views: BESCOM’s reply is acceptable.

20. BESCOM has not commented on the

provision: ‘Subsidy should be paid by

the Govt. to the ESCOMS before the

commencement of the quarter. If not

paid, it should be loaded on to the

subsidized consumers’.

The details of subsidy claimed and

released are illustrated at page 49 of

BESCOM replies to Commission’s

preliminary observation.

Commission's Views: Reply furnished by BESCOM is noted. However, BESCOM

should ensure that its claims are met fully on time.

21. Industrial consumption in respect of

HT-2(a) has been steadily declining,

whereas, the requirement of IP sets

is increasing indicating higher

requirement for the farm sector. it is

also estimated that about 4682.91

MU are generated by captive

generation and it is likely that

industrial consumers will further

move away from the grid. At

present only about 35% of the

consumers are meeting the entire

tariff requirements. There is a huge

difference in distribution cost

among ESCOMs and surprisingly all

of them are proposing for a uniform

hike. Therefore, the authenticity of

ERC figures is suspected. Allocation

of high cost energy to BESCOM is

not in accordance with the

national electricity policy and

consumers of this company are

discriminated.

The remarks of the objector that “most of

the time any residual energy that needs to

be accounted will be booked under IP

consumption, similarly T&D losses are also

booked under IP set consumption” is

wrong. In fact, if BESCOM shows loss level

more and IP consumption level less, it is

advantageous to BESCOM. By lowering

the sales, the average cost of supply will

increase. Likewise, the cost of supply will

also increase, which can be passed

through in tariff. (Commission will disallow

the Power purchase cost to that extent, still

it is advantageous). Whereas, if sales are

shown on a higher side, Average cost of

supply will decrease. If cost of supply

decreases, pass through in tariff is not

permissible, as the consumers would have

reached the average cost of supply.

In fact, Commission approved the

industrial rate within the bracket of +20%

of average cost of supply and the actual

contribution is still less than the approved

level. However, Commission would take

care of the cross subsidy portion.

Tariff revision proposal is to be allowed for

the energy sector to sustain as otherwise

the sector will collapse. If not the sector

will suffer a lot. Approximately 8 lakhs of

Irrigation consumers seek cross subsidy

and almost 92% of the consumers are

paying the cost. Actual realization of cross

subsidy from the Industrial sector is

ccxlii

between 11 to 13%. The relevant data

seeking tariff revision is tabled before the

Commission, and Commission will take

care of authenticity of the documents.


with the matter suitably in the relevant chapter of the Tariff Order.

22. Sharavathi and Nagajari hydro

stations have been fully

depreciated and KPC should bring

down the cost of energy

generated by them. The cost of

energy from KPC Thermal Plants is

much higher than the cost at

which Central generating stations

supply and the same should also

be reduced. Open access may

be extended to the consumers

drawing power even below 1 MW.

Commission should publish the

annual reports of ESCOMs

mentioning the breakup of

accumulated losses, efficiency,

improvements etc. for the

information of public.

Fixation of tariff is guided by National Tariff

policy and other policy guidelines issued

by the Central/Stage Governments.

Natural resources of the State i.e., Hydel

and Thermal power are allocated based

on the paying capacity. At present

allocation of power from State resources

are done by State Government and

accepted by the Commission. The

relevant data seeking tariff revision is

tabled before the Commission.


with the matter of power purchase suitably in the relevant chapter of the Tariff

Order.

23. Tariff in Karnataka should be lower

than the prevailing tariff of other

States since major source of

generation in Karnataka is Hydel,

which is much cheaper than power

sources like thermal / Nuclear / RE.

On the contrary, the tariff in

Karnataka is higher than the tariff in

many other states

Tariff of other states cannot be compared

with that of Karnataka. Each state has its

own profile of energy and energy

consumption. Different states adopt

different methods of charging. Some

states are levying Fuel escalation charges

beside energy charges, Reliability

charges, Restriction on power usage etc.

However, it is mandatory to all the

DISCOMs to file their ARR before KERC

every year as per the decision of ATE vide

suo-motu appeal No. OP 01/2011.

Commission's Views: The reply by BESCOM is acceptable.

24. Diagnostic centres currently billed

under higher HT 2 (b) tariff should be

brought HT2(c) (ii) as applicable to

hospitals for the following reasons:

Services provided by diagnostic

centres are in the nature of

The request is not justifiable for the

following reasons:

A hospital is a medical institution

where sick and injured people are

given medical or surgical care with

required infrastructure and

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medical services and use of

electricity as similar to use by

diagnostic section of any

hospital.

The National Tariff Policy provides

flexibility to the licensees to

charge lower tariff than

approved by the State

Commission if competitive

conditions require so without

having a claim on additional

revenue requirement on this

account.

Lower tariff should make the

preventive care services

affordable to the lower middle

class and poor families.

Diagnostic centre is an extended

hospital literally as they work on

referral by doctors and the test

results are referred by them to

take appropriate medical

corrective decision.

Diagnostic centres extend

internal health care by medical

doctors and attendants to the

patients coming for

investigation/ procedures.

As per the provisions of the

Electricity Act, similarly placed

consumers cannot be

discriminated in determination

of tariff applicable to them.

Central Ministry of Power and ATE

have always held that medical

hospital and diagnostic centres

have common functions.

Hospitals which were under

higher tariff were reclassified

under lower tariff.

specialized medical and nursing

staff and medical equipment. A

diagnostic centre does not have all

these facilities or functions.

BESCOM can classify its consumers

within the Commission’s approved

tariff and not create an additional

category

Hospitals were reclassified under

lower HT2C tariff to make

available health care services at

economical price. Diagnostic

centres are doing business and

not service. Hence diagnostic

centres are classified under

commercial tariff.

Commission's Views: The Commission has dealt this issue appropriately in the

relevant chapter of this Order.

25. Under the new proposals ESCOM

has sought an increase in fixed

charges. The demand related,

BESCOM has proposed for increase in the

Fixed charges as the Revenue

expenditure incurred by BESCOM in

ccxliv

energy related and consumer

related factors are vital for

determination of fixed charges.

BESCOM, without any record to

show that the additional assets

have been employed, may service

a particular class of consumer and

generate additional revenue.

procurement of energy is divided into two

parts: a) Fixed expenditure and b)

Variable expenditure; likewise, the

charges levied on the consumers by

BESCOM under Average Realization Rate

(ARR) are divided into fixed/demand

charges and variable/energy charges.

The cost of procurement of energy from

the private generators for BESCOM stands

divided in the ratio of 33:67 towards fixed

charges and the energy charges

respectively. However, BESCOM is

obligated to bifurcate its receipts (ARR)

into Fixed Charges and Energy Charges in

the ratio of 11:89 respectively. All other

State Distribution licensees are recovering

the costs in the same ratio of fixed

charges and variables charges in which

they procure energy from generators.

Commission's Views: This issue has been suitably dealt with in the Tariff Order.

26. BESCOM proposal for introduction of

morning peak will cause lot of

hardship to the manufacturing

industries, especially MSMEs, and

force them to operate in only one or

two shifts.

The initiative to introduce Morning Peak is

a Demand Side Management measure for

flattening the load curve to clip off the

morning peaks. BESCOM also intends to

reduce the penalty levied in ToD tariff.

Hence, the interest of manufacturing and

MSME’s are safeguarded.

Commission's Views: This issue has been suitably dealt with in the Tariff Order.

27. Banking facility: BESCOM’s proposal

to limit the period for utilizing

banked energy to 3 months is not

practicable for the reason that the

energy requirement of a

manufacturing unit depends on the

market demands. Further, use of

banked energy without any

payment after 3 months is against

the fair trade practices.

In the existing system, power is produced

by the Wind Generators, normally from

May to September, irrespective of the

system demand, banked and made

available to the Open Access

Consumers as per their demand. The

Open Access Consumers generally draw

power during the months, when demand

for power is high, and BESCOM would be

obligated to procure power from other

sources at high rates and supply the same

to the Open Access Customers without

levying any extra charge. This aspect of

power transfer is causing financial loss to

BESCOM.

ccxlv

In the above context, BESCOM has

proposed banking facility for 3 months

instead of a year.

Commission's Views: The reply by BESCOM is noted and the Commission will be

passing a separate Order on this issue, as ESCOMs have filed separate petitions in

the matter.

28. In earlier tariff orders,

Commission had allowed for

increase of maximum demand

by 20% of contract demand

during non-peak hours without

any penalty. This provision

should be restored in the

present tariff order.

The request to allow maximum demand of

120% of contract demand during non-peak

hours cannot be considered as the MD

recorded in the billing parameters cannot be

differentiated as peak hour MD or non-peak

hour MD.

Commission's Views: The Commission in the Tariff Order dated 30.03.2016 has

amended the earlier provision to bring in conformity with the provisions of the EA,

2003.

29. Categorization of ready mix

concrete (RMC) plant has been

inadvertently left out in tariff order

2015 and 2016.

As per section 3.03 of Conditions of Supply

of Electricity in the State of Karnataka

“Licensee may classify or reclassify a

Consumer into various Tariff categories

from time to time as may be approved by

the Commission. No additional category

other than those approved by the

Commission shall be created by the

Licensee’’. If this concrete mix is

purchased by a retailer and then sold to

the end user, then the activity is

commercial in nature.

Commission's Views: The Commission, noting the reply has dealt with this issue in

relevant portion of the Tariff Order.

ccxlvi

30. Form No D-18, which should provide

details of Demand, Collection and

Balance, is blank and the details

should be made available by

BESCOM.

Format D-18 and D-18A provide enormous

statistics and are not easily printable.

However, the soft copy of these forms is

available on BESCOM website and also

submitted to the Commission.

Comparison of Sales, Revenue Demand

and Revenue Realization are published in

BESCOM’s application.


31. Annual banking facility should be

retained and the banking charges

should be considered @ 2% for the

actual power banked at the end of

month as provided in the PPA.

Banking charges are determined in

general by the State Commission.

Commission's Views: This issue will be dealt with in a separate Order being issued by

the Commission.

32. ESCOMs levy a penalty for fall in

power factor below 0.9 at the rate

of Rs.0.03 per unit for every fall of

power factor by 0.01. It would rather

be fair to introduce incentive

scheme for maintaining PF above

0.90.

Tariff, duly authorized by the regulatory

authority, for most of the utilities, is based

on the active energy measured at the

consumer’s premises. Power factor is

normally maintained within the prescribed

limits by installing Static capacitors,

wherever, loads are more inductive in

nature. Power factor penalty is imposed

on HT/EHT consumers, who fail to maintain

the average power factor within specified

limits. In the tariff system based on kWh

metering, consumers would maintain the

power factor within approved limits, only if

imposition of penalty is imbibed in the

tariff. BESCOM imposes a measly

surcharge of 3 paise, if the PF falls by 0.01.

The consumers can assist to maintain the

network in accordance with the Grid

Code, if the power factor of their

installation lies within the limits approved.

Commission's Views: The maintenance of proper PF is in the interest of consumer

only. PF above the threshold levels would improve the voltage of the supply to the

consumers and also enable optimizing their power consumption.

ccxlvii

33. Railways carry bulk quantum of

coal, crude oil etc. at a subsidized

cost, which is relatively cheaper

than all other modes of transport.

The power charges crunch the

economic operation of the Railways

and a single part Tariff based on

consumption alone may give

certain financial relief.

As per the National Tariff Policy 2016, the

tariff comprises of two parts - fixed and

variable charges with time differentiation.

Fixed cost normally constitutes 29% of

total power purchase and any dip in

power consumption may result in revenue

loss to ESCOM and can be set off partly

by collection of fixed charges.

Commission's Views: The reply furnished by BESCOM is noted.

34. Proposed Cross Subsidy Surcharge

(CSS) substantially increases the cost

of energy rather than reduce the

same in violation of the principles set

out by KERC in its tariff Order for FY16

and FY17.

The cross subsidy surcharge is calculated

as per the guidelines framed in the

National Tariff Policy. Open Access

Consumers, who use the transmission and

distribution network of state utilities, should

bear both the cost of network and losses,

besides paying cross subsidy surcharge.

The cross subsidy surcharge is levied only

to the open access consumers and not

the Generators.

Commission's Views: The reply furnished by BESCOM is noted and the determination

of cross subsidy surcharge is appropriately dealt in the relevant chapter of this Order.

35. Request of BESCOM for true up

revenues should not be accepted

based on the performance and

approved numbers, as evident in

the audited accounts, actual

revenue should be taken at Rs

14857 Crore.

The expenditure alone is not the cause for

increased deficit year on year, but, also

the poor revenue receipts. Hence, the

Commission should consider the revenue

receipts from sale of power for the

purpose of truing up of respective years.

The Commission should consider Rs.

13821.61Cr. (Rs.13712Cr. +Rs.47.46Cr.

+Rs.62.16 Crs. (Misc. Revenue)) as

revenue from sale of power.

Commission's Views: The Commission in accordance with the MYT Regulations has

to consider the other income of Rs.167.21 Crores by deduction from the revenue

expenditure. The truing up subsidy of Rs.541.97 Crores booked in the audited

accounts of BESCOM which is a notional income recognized for the closure of the

accounts is not acceptable under the provision of MYT Regulations.

36. The Commission has approved a

purchase of 30419 MU at an

average cost of Rs.3.89 per unit,

whereas the actual purchase is

lower at 29161.6 MU, almost a drop

of 4%. But, power purchase cost

has increased by Rs.760 Crs.

Prices of each and every commodity in

the market have increased over the

years. Electricity is generated from hydel

and thermal sources on a large scale.

Due to failure of the monsoons during

FY16, hydel generation was low and the

ESCOMs have procured power from other

ccxlviii

because of significantly high cost of

purchase at Rs.4.32 per unit

sources which has increased the cost of

purchase for FY16.

Commission's Views: The reply furnished by BESCOM is noted and issue of power

purchase is appropriately dealt in the relevant Chapter of this Tariff Order.

37. The Distribution loss declared at

12.03% for FY16, to claim Rs.190.92

Crs. as incentive by BESCOM should

not be allowed since utilization of

SCADA in a better way could have

reduced the distribution losses to 9%.

Distribution loss of BESCOM is within the

band width of KERC target.

BESCOM, with 41092 sq. kM of area,

comprises more of rural areas than urban

which also includes Bangalore

Metropolitan area. Distribution losses of

Bangalore Metropolitan is merely 8%,

whereas, the same is reduced from 20% in

FY08 to 12.03% in FY16.


38. The cost of the power for BWSSB, at

the prevailing tariff, represents about

64% of its gross revenue and the

single largest item of expenditure.

The Commission has rejected the

proposal of BESCOM for increase in

tariff for HT-1 on this ground in its

tariff Order 2011 and 2012.

BWSSB already faces an increase of

50% in the cost of energy since the

year 2000. BESCOM’s proposal to

further enhance cost of energy from

Rs.4.50 to Rs.5.98 per unit and

demand charge from Rs.180.0 to

Rs.190.0 per KVA will adversely affect

the operation of BWSSB.

Electricity being the only consumable

component for BWSSB, it happens to be

the single largest Item covering its

revenue. Similarly, Power procurement, a

major input item for BESCOM, also

constitutes approximately 86% of its

expenditure.

Energy and Demand charges are

proposed at Rs.5.98 per unit and Rs.190.0

per KVA respectively for FY18. But, in the

revised proposal, Energy and Demand

charges proposed at Rs.5.47 per unit and

Rs. 250/- per KVA respectively, will

substantially reduce the power charges of

BWSSB.

Commission's Views: This issue of revision of tariff has been dealt in the relevant

portion of this Tariff Order.

39. BESCOM has filed the present

application under clause 2.8 and 2.9

of the KERC Regulations, 2006, which

requires filing of annual

performance review application

every year and an application for

determination of tariff for any

financial year. But, no such details

are provided by BESCOM to

facilitate either consideration or

review.

BESCOM has filed an application for

annual performance review, (for truing up

of annual revenue and actual expenses)

based on the audited accounts.

BESCOM has also filed an application for

approval of Annual Revenue

Requirement and Determination of Tariff

for FY18.

Commission's Views: The reply furnished by BESCOM is acceptable. It is noted that

BESCOM has filed the application in accordance the provisions of the MYT

ccxlix

Regulations.

40. In terms of section 27 (5) (a) of the

Karnataka Electricity Reform Act,

1999, the nature and purpose for

which the electricity supply is

required is a relevant factor for the

purpose of fixing the tariff. Therefore,

(BWSSB) is eminently eligible for a

special treatment in order to extend

the benefit to the consumers of the

objector.

As per section 61 of the Electricity Act, the

‘tariff progressively reflects the cost of

supply of electricity and also, reduces

cross-subsidies within the period to be

specified by the Appropriate

Commission”. The Tariff fixed for HT-1

Category is 82% of the average Cost of

Supply. This tariff requires 18% cross

subsidy from the other consumers. As a

consequence to increase in the cost of

procurement, tariff revision to this

category is also necessary to maintain the

cross subsidy at the same level, or

otherwise, the burden owing to the cross

subsidy will increase on consumers of

other categories.


41. BESCOM opposes implementation

of Commission’s Order of

reduction of Tariff and appeals

against the same and continues to

file Tariff Revision petitions for the

last 9 years, Hence, its Tariff

application should rejected.

It can be seen from Tariff revision for the

last 9 years that the revision allowed by the

Commission is much less than the increase

sought, which is necessitated by

considerable increase in power purchase

and other associated costs.

Commission’s Views: The Commission, after looking into the facts and figures, allows

the ARR and the tariff increase in terms of the MYT Regulations. The Commission is

also undertaking the Annual Performance Review, to true up the actual expenditure,

as per the audited accounts. BESCOM has a legal right to prefer appeal before the

Hon’ble Appellate Tribunal for Electricity, as per the provisions of the Electricity Act,

2003, if it is aggrieved of the Commission’s Order and such an action cannot be held

against it in subsequent tariff revision.

42. Though, adequate increase is

allowed in the tariff for FY17 to carry

on the business without any loss,

BESCOM has reported a loss of Rs

1425.4 Crs. and seeks an increase in

the tariff of Rs 1.48 per unit, across

all categories for the year FY 2018.

Tariff order dated 30-03-2016 by the

Commission has fixed an average power

purchase cost of Rs 3.94, Rs 3.97 and Rs

4.10 per unit for FY-2017, FY-2018 and FY-

2019 respectively. But, the actual power

purchase cost has been Rs 3.92, Rs 4.32

and Rs 4.62 per unit for FY-2015, FY-2016

and FY-2017 (till September) respectively.

Commission’s Views: Though, the BESCOM has indicated a loss in its tariff filing, the

Commission would allow the expenses as per the MYT norms while making any

revision in tariff.

ccl

43. The Losses shown as Rs 1424.4 Crs.

and Rs 3902.86 Crs. for FY 2016 and

2018 by BESCOM is highest for all

ESCOMs.

Details of various expenses approved by

the Commission, as well as actuals are

shown in Tariff proposals and additional

expenditure of Rs 1424.42 Crs. for FY16, is

proposed to be recovered during FY18 by

revision of Tariff.

Commission’s Views: Though, the BESCOM has indicated an additional expenditure

of Rs.1424.42 Crores, the Commission would examine the correctness of the same

and allow it, as per the MYT norms.

44. Considerable payment made by

BESCOM for power purchases made

by other ESCOMs right from FY06

along with interest accrued

thereon, has not yet been paid

back. The blockage of funds has

caused a delay in payment for

power purchase and consequential

accrual of interest thereon.

Payments due from other ESCOMs is

shown as outstanding / receivables, not to

be treated as expenditure in the ARR or

considered for Tariff revision, Hence, the

consumers will not be overburdened on

the count of receivables from other

ESCOMs.

Commission’s Views: Reply furnished by the BESCOM is acceptable.

45. Expenditure estimated for the

coming year is abnormally high as

compared with previous year.

A comparative statement of item-wise

expenditure of BESCOM, between FY16

and FY18, shows the variation in the range

of 10.19% to 28.82%, with an overall

increase of 11.99% and well within the

approved limit of 12%.


46. BESCOM has claimed a higher

amount of subsidy from the

Government as compensation for

consumptions of Bhagya jyothi

installations. The consumption

assumed is much more than the

actuals, since these installations are

not metered.

All Bhagya Jyothi installations are metered.

Installations with monthly consumption of

more than 18 units are classified under LT-2

and energy charges are collected from

respective consumers. The subsidy from

GOK is claimed only for such installations

whose consumption is less than 18 units per

month.

Commission’s Views: Reply furnished by the BESCOM is noted.

ccli

47. Tariff for the coming year shall be

based on the Commission’s Tariff

Order for 2015 and not Tariff Order

2013.

As per MYT Regulations, the expenses for

three consecutive years have to be

estimated considering 1 year’s actuals

prior to this period as base year.

Accordingly, FY13, with audited Accounts

of earlier two years, is considered as base

year for estimating the expenditure for

FY14, 15 and 16 and hence the tariff

proposals are in order.

Commission’s Views: Reply furnished by the BESCOM is noted and the Commission

has carried out APR has per the MYT Regulations.

48.Allotment of high cost energy to

BESCOM is relatively high in

comparison with other ESCOMs

which results in an increase in the

cost of power purchase

BESCOM consumes more than 50% of the

energy in the state and energy of different

costs is allotted commensurate to their

consumption and the cost of power

purchase is passed on to the consumers.

Commission's views: The reply of BESCOM is noted and the Commission also notes

that the allocation of power purchase is done by GoK.

49. Failures of meters are not attended

to immediately, thereby causing

loss of revenue.

Specific instances with details of delay in

replacement of meters may be furnished

to BESCOM/CGRF.

Commission’s Views: The reply furnished by BESCOM is reasonable.

50.In view of signing PPA for SRTPV

agreeing to pay Rs.9.56 per unit,

there shall not be any change in

billing of demand charges. And

hence, the request of BESCOM for

increase in demand charges be

rejected.

BESCOM has not proposed change in

billing demand but, has only proposed

increase in demand charges.


51. All the ESCOMs to consider

Telecommunication Industry under the

Industrial Tariff HT-2(a) and not the

Commercial Tariff i.e. HT-2(b) in the

interest of justice and equity.

The Telecom industry is a service provider

like TV stations, All India Radio, etc., in the

present Tariff Order, almost all service

providing sector are considered under

HT-2(b) i.e., commercial Tariff.

Hence, it is appropriate to consider

Telecom/BPO/KPO/ under HT-2(b)Tariff


Objections relating to Quality of Power Supply and Service;

cclii

52. BESCOM is resorting to untimely load

shedding without advance

publication causing lot of hardship

to the consumers. Action for

procurement of adequate quantum

of power from other sources can

possibly avoid untimely load

shedding

Notification of scheduled load shedding is

published in advance in the daily

newspapers.

PCKL, a special purpose vehicle setup by

GOK, carries out power procurement on

behalf of all ESCOMs to ensure

procurement of adequate power.


53.ERC and Tariff Revision filing of

BESCOM are liable to be termed as

defective and dismissed as

BESCOM has failed to implement the

directives of the Commission, take

action to improve the operations

and curb the deteriorating power

supply situation in rural areas.

Objectors have to point out the specific

inefficiency factors of BESCOM and seek

Commission’s intervention. The quality of

power supply in rural areas has very much

improved with the implementation of NJY

and three phase power supply is arranged

to the farming sector, by and large, for

seven hours.

Commission's Views: The reply furnished by the BESCOM is noted.

54. BESCOM has failed to implement

Demand Side Management by not

providing timer switches for 75% of

street light installations numbering to

40,181, which adds to the peak

load.

The timer switches have to be provided by

the BBMP. The BESCOM’s receivables

from BBMP and local bodies are to the

tune of Rs.1635 Crs. as on Mar-2016.

BESCOM cannot further burden itself by

providing timer switches to street lights at

its cost. BESCOM has taken up the issue

with BBMP and is in the process of

educating them with the benefits of timer

switches in street lights installations. For the

last 3 years, the load curve of BESCOM

shows a higher peak load during morning

peak hour as compared with evening

peak hours. So the objector’s claim of

peak load due to street light is incorrect.

Commission's Views: The BESCOM shall continue to persuade BBMP and other local

bodies to install timer switches for street lights.

55.BESCOM is yet to provide

independent feeders for

Industries to reduce the interruptions

due to load shedding etc.,

Independent industrial feeders do exist in

the BESCOM network and the petitioner

should furnish the specific area, where

independent feeders are to be provided

for industries. BESCOM on its part is striving

hard to provide uninterrupted power

supply to all categories of consumers with

immediate redressal of customers’

complaints.

ccliii


56. Prevailing Solar rebate should be

continued since Solar Heating

greatly helps in bringing down the

morning peak load. BESCOM has

not furnished the details of

installations yet to be serviced with

Solar water heaters.

Solar rebate should be discontinued since

installation of solar water heaters has been

made mandatory for new connections

since 2007.

Commission's Views: The reply furnished by BESCOM is noted. The Commission has

dealt with the matter suitably in the relevant chapter of this Tariff Order.

57. Nirantara Jyothi Scheme (NJY)

BESCOM has not quantified the

improvement in quality of supply

and reduction in losses after

implementation of NJY Scheme in

117 feeders. It has also not clarified

large variations in IP Set

consumption based on the

segregated feeders.

NJY phase 3 works planned for 380 feeders

with completion of work for 267 feeders

and commissioning of 156 feeders. The

Socio-Economic Survey has been carried

out among the Beneficiaries of 36 feeders

under NJY scheme (6 Respondents from

each of 5 villages covered per feeder) of

Davanagere and Kolar Circle.

Commission's Views: The Commission notes the reply furnished by BESCOM and

directs BESCOM to complete the analysis and report the findings. The analysis should

be done on a perpetual basis in order to know the benefits over a period of time.

The Commission has dealt with the issue of IP set consumption in the relevant

chapter of this Order.

58. HVDS works completed only in 28

feeders and evaluation entrusted to

a 3rd party during July, 2016. But, no

report is obtained even after 5

months indicating BESCOM’s

casualness in implementing HVDS to

bring down the losses.

Implementation of HVDS with facts and

figures have been provided in the ERC

filing.


59. Replacement of 100403 pump sets

with more efficient ones, proposed

during FY 2013, is yet to be taken up.

Further, 69 IP Sets only are provided

with Solar power as against a target

of 310 IP Sets. Owing to the above

shortcomings, BESCOM is unlikely to

succeed in management of

demand in Agriculture.

69 No of solar IP sets have already been

commissioned out of an allotment of 310.

The work is now reassigned to M/s. Ishaan

Solar, who have committed to energize all

IP Sets by January, 2018, in consultation

with prime vendor, M/S Sun Edison.

Commission's Views: The Commission takes note of the reply by BESCOM and would

review the progress of this work at an appropriate time.

60. Metering of DTC: Out of 246419

DTCs, only 110965 are metered, a

BESCOM is providing the details of Energy

Audit of Divisions, Towns, Cities & DTCs to

ccliv

mere 44.70%, during the last 5 years.

BESCOM has failed to compute

losses for even such DTCs which are

metered.

the Commission in the prescribed format.

The details of energy audit for the 2nd and

3rd quarter of FY17 are furnished to the

Commission.

Commission's Views: The reply given by BESCOM is noted. The Commission directs

BESOM to complete DTC metering and conduct energy audit within a definite

timeframe and take corrective measures wherever required. The details of energy

audit of DTCs and the steps taken to reduce losses shall be regularly reported to the

Commission.

61. Accidents: 278 accidents in FY16 is

the highest during the last 9 years

with reckonable rise in the number

of accidents with every passing

year. Therefore, all proposals made

by BESCOM in respect of safety

need to be explained.

BESCOM is making an earnest and

conscientious effort to reduce accidents

and has spent Rs.15.24 Crs. towards safety

measures for FY16. Hazardous locations are

identified and targeted for rectification

with provision of spacers, AB Cables etc.

BESCOM officers have been directed to

conduct regular inspection of such sites

which pose danger to the public and

operating personnel.

Commission's Views: The reply furnished by BESCOM is noted. The Commission directs

BESCOM to take all precautionary and safety measures and also take up periodical

maintenance to reduce the accidents.

cclv

62. Prevailing HT/LT ratio is 1:1.79 in

BESCOM, which was committed to

be brought down to 1:1.63 in the

Tariff petition of FY17, needs an

explanation since higher ratio of HT /

LT results in increased distribution

losses.

BESCOM plans to achieve HT:LT ratio of 1:1

with NJY works underway and HVDS

projects envisaged. Details of the

proposals have been furnished in the ERC

filing.

Commission's Views: The reply given by BESCOM is noted.

63. BESCOM mentions that 86237 DTCs

were feeding the IP loads during

the previous year without furnishing

the number of DTCs feeding the IP

loads during the year. Metering of

only 44 DTCs is carried out so far and

IP consumption is computed on the

basis of sample metering leading to

give erroneous results.

There are 99750 No of DTCs feeding IP sets

as at the end of December, 2016 and IP

sets energy assessment is based on NJY

agricultural feeder consumptions.

Commission's Views: The Commission takes note of the reply by BESCOM. Further,

the Commission has dealt with the matter of IP set consumption appropriately in the

relevant chapter of this Tariff Order.

64. BESCOM is putting up a wrong claim

on improvement of Reliability Index

without providing proper work sheets

for the feeders with an

improvement in the index and

furnishing the number of feeders

within / beyond the permissible

limits

Monthly reliability index is being submitted

to the Commission and is also available in

BESCOM website (www.bescom.org).

Commission's Views: The reply furnished by the BESCOM is acceptable.

65. BESCOM had regularized 24874

unauthorized IP Sets during the

previous year, but, neither the

number of unauthorized IP sets nor

the plan for regularization of the

same during FY18 is not indicated in

the ERC filing.

BESCOM is complying with latest directive

of the Commission and carrying out GPS

survey of IP sets. Further, all IP sets are

being regularized as a normal service

connection with payment of Rs.10,000 by

each consumer, as per the GoK Order.


66. Metering of IP Sets: Installation of

meters for IP Sets is not progressing

satisfactorily and the Commission

should order for completion of the

same in a time-bound manner.

Due to vehement protest by the IP set

consumers, BESCOM is unable to meter IP

installations. However, consumption

recorded at the meters installed at the

NJY Agri feeders, exclusively feeding

agricultural loads, is being considered for

http://www.bescom.org/

cclvi

assessment of IP sales.


67.IP Set Consumption: BESCOM has

considered the consumption of IP

Sets as 6837.80 MU, which excludes

the consumption of 24874

unauthorized IP Sets.

BESCOM is considering the

consumption of both authorized and

unauthorized IP sets for assessing the IP

sales.

Commission's Views: The reply furnished by BESCOM is noted and the IP set

consumption is dealt in the relevant Chapter of this Tariff Order.

68.Failure of distribution transformers at

a rate of more than 8% per annum is

not furnished by BESCOM in ERC

filing and an appropriate action

should be taken to bring down the

rate of failure as well as the

expenditure incurred on this count

Rate of failure of transformers, expenditure

for repairs and other details are furnished

in BESCOM’s replies to Commission’s

preliminary observations.

Commission's Views: The Commission takes note of the reply by BESCOM.

Further, the Commission has dealt with the matter appropriately in the relevant


69.The interest on deposits, being

calculated at the rate of 9% per

annum, should be calculated at the

rate notified by the Reserve Bank

and paid to the consumers every

quarter.

Interest on security deposit of consumers is

paid as per KERC Security Deposit

Regulations.


70. Details of load shedding and likely

time of restoration of power are not

being informed to the Consumers.

BESCOM also does not put up the

following information on its website:

1. Demand and availability,

2.Quantum of Spot purchase of

Power,

3.Monthly statement of

interruptions in respect of

Substations and feeders.

‘SCADA Data Reporting and Analysis

(SDRA)’ software being put up by BESCOM

to enable communicating with consumers

through SMS regarding power interruptions

and restoration. Day ahead projections,

daily interruption details, Daily load curve

etc. are being displayed on BESCOM

website.

Substation-wise and feeder-wise details of

interruptions are furnished to the

Commission in the prescribed format. Grid

discipline is ensured by SLDC while

allotting power to the ESCOMs.


71. BESCOM should implement The Standards of Performance parameters

cclvii

Standard of performance with the

involvement of all its subordinate

offices.

are displayed in all the sub-divisions of

BESCOM, as reported to the Commission.


72. Distribution Automation in Peenya,

taken up as a time bound

programme, is yet to be completed

even after a lapse of 5 years from

the date of commencement.

Automation project is scheduled for

completion during June 2017. The details

are available in BESCOM’s replies to

Commission’s preliminary observations.


73. In the absence of Compliance of

Directives of the Commission, the

exercise of filing ERC would be futile

with petition liable for rejection.

BESCOM has complied with all the

directives of the Commission.

Commission's Views: The reply furnished by the BESCOM is noted. Also, the

Commission reviews the compliance of its directives by BESCOM in ESCOM’s review

meetings, duly directing all the ESCOMs including BESCOM to strictly adhere to the

same.

74. The average duration of

interruptions with number of

interruptions has not been furnished

by BESCOM.

BESCOM submits the statistics pertaining to

average number of interruptions per

consumer and average duration of

interruptions per feeder per day to the

Commission on a quarterly basis.


75.Consumer indexing started by

BESCOM long back is yet to be

completed.

Consumer indexing is not a one-time task,

but, a continuous phenomenon with

addition of incremental data to the

network on regularly basis.

Commission's Views: The reply furnished by BESCOM is noted. The Commission

directs BESCOM to update the data of consumers as and when it gets modified.

76.The delay in System demarcation

with GPS, though started long back,

reflects the inefficiency of BESCOM.

Geographical positioning of assets

carried out under the DAS projects in

BMAZ area and IP sets in rural areas are

being surveyed with GPS as indicated in

para 4.13 of filing.


77.Revenue realization from enormous

vigilance cases, booked during FY

2012 to FY 2014, are not included in

the Tariff petition and the

Commission may kindly consider the

same

The cases are in the course of

adjudication and the revenue is not

normally realized in the same year.

Commission's Views: The reply by BESCOM is acceptable.

cclviii

78.Plan for the introduction of Pre-paid

meters, as per section 47(5) of EA

2003, has not been disclosed by

BESCOM. The consumers, who are

provided with Pre-paid meters need

not pay any security deposit and

the deposit made also would be

refunded.

BESCOM is installing 3525 no of Prepaid

meters (Card Technology), with costing as

under, on pilot basis for temporary

installations in Indiranagara Division:

Single Phase Rs. 10,732.00

Three Phase Rs. 13,532.00

Commission's Views: The reply furnished by BESCOM is noted The consumers should

note that due to huge cost of supply of pre-paid meters, it has to be introduced in

phased manner.

79.Universal Metering: Section 55 of EA

2003 stipulates that no installation

should be serviced without metering

after 10th June 2005. ESCOMs, which

service installations without meters,

clearly violate the Act and directive

of the Commission. Hence,

Commission should not allow any

tariff revision in respect of

unmetered category.

Metering to Irrigation pump sets is not

achieved due to protest from the farmers.

However, the energy supplied to the

farming sector is quantified under the NJY

scheme.

Commission's Views: The reply by BESCOM is noted. The Commission is of the view

that for proper measurement of IP set consumption, the data from the meters fixed

to the bifurcated feeders be used. This would largely address the issue of non-

metering of IP sets.

80.The power supply situation and

quality of power supply in rural areas

have deteriorated further during the

current year. The compliance of

other directives is also very poor and

tangible results have not come out

so for. On these aspects also the

ERC and tariff filings are defective

and liable to be dismissed as not

maintainable.

BESCOM has been implementing Nirantara

Jyothi Yojane for providing better power

supply to rural areas. M/s. MECON,

engaged by BESCOM to evaluate the

benefits of NJY phase-1 & 2 with Pre and

post analysis, benefits accrued etc. has

reported as under:

24x7 power supply to Non-

agricultural loads in rural areas.

Increase in metered consumption in

rural areas to an extent of 25%.

Reduction in failure of distribution

transformers.

Improvement in consumer satisfaction.

Improvement in quality of power supply

and living standards

Encouragement for rural industries.

cclix


81.Unscheduled interruptions in power

supply affect the services provided

by BWSSB in disrupting water supply

to Bangalore city apart from

causing damages to the system.

The objector is requested to be more

specific on the unscheduled interruptions

and the affected area. A new toll-free

telephone no 1912 is established at

BESCOM to lodge complaints in respect of

failure of transformers, interruption in

power supply, snapping of conductors,

falling of poles, fuse off call etc.,


82.Proposal to hike the tariff without any

value addition to the service from

BESCOM, may adversely impact the

operation of BWSSB, which is already

in financial doldrums since 2005-06.

Every business has a challenge for its

survival and neither BWSSB nor BESCOM

are exceptions.


83 Officials and line staff do not

perform their legitimate duties

Private contractors, deployed by

BESCOM, carry out the work

assigned to the departmental

personnel. Further, the contractors

utilize the departmental tools and

materials to carry out the work

assigned under contract and cause

a considerable loss.

The strength of working staff is 14189 only

as against the sanctioned staff of 21819,

forcing BESCOM to engage part time

employees, in case of emergencies.

Stringent action will be taken against erring

staff, if specific instances are brought to its

notice.


84.Officials attend the meetings in

different offices for almost 10 days

in a month and considerable

expenditure incurred for payment

of allowances and meeting

expenses, which can be curtailed

with the use of latest

communication facility like walkie-

Talkie, Mobile phones, internet

facilities etc.

It is essential to provide walkie-Talkie,

mobiles etc., to officials for effective

discharge of their duties and to attend to

the cases of break-down for restoration of

power supply. A few important meetings

have to be conducted for deliberation

and understand the effective

implementation of the policies.


85.In the absence of preventive action

by BESCOM to curb the theft

substantial amount of energy is lost.

Energy loss in BESCOM is within the limits

prescribed by KERC.

Commission’s Views: Reply furnished by the BESCOM is noted and the issue of losses

cclx

is dealt in the relevant Chapter of this Order.

86.Losses sustained due to delay in

execution of works is passed on to

the consumers.


work execution may be furnished to clarify

the query.


87.Financial loss sustained due to

execution of unwanted projects.

purchase of Walkie-Talkie, uniforms

etc., in piecemeal to be avoided

and procurement from reputed

companies on long term basis

should be adopted.


work execution may be furnished to clarify

the query.


88.Loss Incurred due to theft of

conductors and Transformers are

passed on to the consumers.


work execution be furnished to clarify the

query.

Commission’s Views: Reply furnished by the BESCOM is noted..

89.Additional expenditure is incurred

for procurement of furniture and

arranging accommodation for

unreasonably created new Sub-

divisions / Units at Attibele,

Veerasandra, Sarjapura,

Mayasandra, Nalluru etc.

New subdivisions and O & M units are

created considering the local requirements

and to provide better service to

consumers.


cclxi

90.A number of JEEs / AEEs working in

Chandapura, Attibele, Jigani etc.

are not adequately qualified even

to prepare the estimates and are

as a burden for the BESCOM.

Severe shortage of staff has compelled

judicious deployment of employees with a

few of them holding additional charge.

Most of the vacancies will be filled up with

the Recruitment process underway. The

estimates, prepared in standard formats,

are scrutinized and certified by technical

staff at the sub-division offices.


91.Infosys software used by BESCOM is

defective with improper and slow

functioning.

Consumer friendly software has been

developed and it is quite natural that

certain initial implementation problems will

always be there.


92.Unnecessary projects taken up

under schemes like NJY, RGGY,

DDVY etc., are inordinately

delayed due to severe field

problems, which escalate the cost

as well as cause financial loss.

Most of the BESCOM’s programmes are

framed by the GOI & GOK, for improving

service to consumers.


93.Arranging power supply on

temporary basis for religious

functions and other installations

should be simplified with a single

window agency for sanction /

renewal of power supply, allotment

of meter etc. Further, consumers

hesitate to avail temporary power

supply owing to exorbitantly high

cost.

Temporary power supply is being arranged

as per the prescribed regulations and

improvements can be suggested by the

objector, wherever necessary.


94.Majority of Line Staff, without

adequate knowledge of the work,

cause loss to BESCOM.

BESCOM is planning to impart training to all

its staff.


Other Issues:

95.A few Consumers such as Software

Companies etc., have a good

paying capacity and BESCOM

should consider bringing them

Software companies are presently

classified under commercial tariff i.e.

HT2b.

cclxii

under commercial tariff.


96.Commissioning of Bidadi Gas Power

plant, proposed about 15 years

back, would have averted short

term purchase.

Purchase of Short term power is done with

the approval of KERC, by calling for

competitive bids to discover the price.


with the matter relating to power purchases suitably in the relevant chapter of the

Tariff Order.

97.Peenya Industries suffer due to

unscheduled interruptions and can

hope for improved power supply in

case 220 KV SRS and 66 KV

Brindavan Stations are upgraded.

BESCOM has not made any

proposals in this regard.

The up-gradation of 220kV SRS and 66kV

Brindavan stations coming under the

purview of KPTCL would be pursued by

BESCOM.


98. 3000 MW of power had been

procured at a very high cost 3 years

back because of severe shortage.

Considering an increase in the

demand for power by 500 MW per

annum, because of new consumers

in the State, the gap between the

demand and the supply goes up

regularly. In order to meet the

increasing demand for power, open

market procurement will be resorted

to at a huge cost and an increase in

Tariff would be sought to bridge the

revenue gap.

Power purchase requires a major chunk of

the revenue, approximately 86%, and the

rest goes for maintaining the system. In

addition to this, the State and Central

Governments issue regulations, such as as

open access to consumers above 1MW,

RPO of 11% for non-solar and 0.75% for

solar, supplying at least 50% of energy at

the Average cost of purchase,

introduction of group captive (beneficial

scheme for HT consumers) etc. BESCOM

also has to cope with the social obligation

of supplying power to IP sets below 10HP.

Commission's Views: The reply furnished by BESCOM is noted and the cost of power

purchase is appropriately dealt in the relevant Chapter of this Order.

99.As per the provision in EA 2003, the

distribution company can have its

own generation to supply power

exclusively to its consumers. Under

advisory functions of the

Commission, the Government may

be advised suitably

No comments.

cclxiii

Commission's Views: The Electricity Act aims at unbundling of all the functions in the

electricity sector in order to serve the consumers in a better way and accordingly

the sector has been un-bundled. With the commissioning of the new generating

stations, the deficit conditions may not prevail in the State, and the need for

ESCOMs to have its own generation may not arise.

100.The Commission may direct

BESCOM to plan its own generation

to an extent of 2000 MW, to supply

power to Bangalore City, an

important area of BESCOM, by

inviting competitive tariff bidding

instead of funding as stated in the

tariff order FY16.

BESCOM is incurring loss in running the

distribution business and as such cannot

afford to fund for generation. The

objector wants the power to be

purchased from a private agency and

BESCOM is doing it for long (procuring

power from M/s. UPCL).

Commission's Views: The Commission takes note of the suggestion.

101.Energy audit at inter-face points is

not being done. Energy audit report

of 15 towns as well as 8 towns

included in the scope of CPRI are

not furnished.

BESCOM is providing the details of Energy

Audit of Divisions, Towns, Cities & DTCs to

the Commission in the prescribed format.

Commission's Views: The reply furnished by the BESCOM is acceptable. However,

the Commission strongly emphasizes the need to effectively conduct the energy

audit for plugging leakage and to make the company viable both technically and

financially.

102.What is the necessity of forming a

technology innovation center,

proposed to reduce the energy

wastage, inventory control etc.

when the same tasks are being

carried out by the research wing?

A Technology Innovation Centre (TIC) is

created in the absence of a research

wing in BESCOM.


103. Why BESCOM is not participating in

debt restructuring Scheme called

Ujwal Discoms Assurance Yojana

(UDAY), introduced by Govt. of India

BESCOM is participating in UDAY scheme.


104.Replacement of a mere 16% of the

existing bulbs by LED lamps,

proposed for energy conservation,

has been accomplished so far and

is there any time schedule for

completion of work?

BESCOM has encouraged consumers to

install energy efficient LED lamps. The

consumer must also proactively

participate in replacing the existing bulbs

with LED lamps. This is a continuous

phenomenon and there cannot be any

time limit.


105.Bachat lamp Yojana, started with a Bachat lamp Yojana is not continued

cclxiv

great fanfare for energy saving, has

achieved 10% progress only and

BESCOM to indicate a schedule for

completing balance work

due to non-participation of CFL firms. It is

a Government of India project, where

BESCOM has least scope.


106.The cross subsidy surcharge should

be levied in appropriate proportion

both for the fixed cost and energy

cost instead of levying it only on

energy charges

The cross subsidy surcharge has been

calculated as per the formula given in

National Tariff Policy. Open Access

Consumers, who use the transmission and

distribution network, should bear the cost

of network (FC) plus losses besides paying

cross subsidy surcharge.

Commission's Views: This issue has been suitably dealt in relevant portion of this Tariff

Order.

107.Different form of RE like wind and

solar are not treated on par. At

present, solar power is exempted

from cross subsidy and wheeling &

banking charges for 10 years.

In order to encourage solar generation

which is green, clean and renewable, the

Commission has exempted solar projects

from wheeling, banking and cross subsidy

charges.

Commission's Views: The reply furnished by BESCOM is noted. The Wheeling and

Banking charges and the cross subsidy surcharge as determined by the Commission

from time to time by the Commission is applicable.

108.BESCOM has not submitted the

perspective plan as required under

the KERC Regulations.

Perspective Plan of BESCOM, as per KERC

regulation, has been filed.


109.BESCOM has stated that there has

been a steady reduction in HT sales

with actual sales being 5069 MU for

FY 2014, 4750 for FY15 and 4593 MU

for FY16, indicating that the drop in

sales accounts to 9.4%

approximately, over a 3 years’

period. The proposed increase in

tariff might further burden the

consumers and curtail the sale of

energy.

The fact that a steady reduction in the HT

sales, does not mean that industrial

activities are not growing in the State.

The consumers opting for open access,

group captive, captive trading etc., has

reduced HT sales of BESCOM, but, overall

the drawal from the grid is going up on a

regular basis.


cclxv

110.All meters installed in the name of

the same consumer for a Building

used for Paying Guest should be

clubbed.

Meters are installed to paying guest

accommodations at the behest of the

consumer. As per clause 9.09 (c) of

Conditions of Supply of Electricity in the

State of Karnataka sub meter can be

extended to each individual installations.


111.Proper maintenance of HT

installations, replacement of faulty

metering equipment with least

delay etc can minimize power

interruptions for the consumer and

curtail loss of Revue for BESCOM

The suggestions are well taken.


112.Tariff proposal for payment of

Bonus /PF to employees, donations,

advertisements etc, which have

already been disallowed by the

Commission, is objectionable.

Commission allows expenditure towards

Establishment, O & M, General

Administration etc., based on Consumer

Price index, Whole sale Price index. Hence,

contention of the objector that all such

expenditure is allowed by the Commission

is not correct.


113. Without calling for competitive

tenders, BESCOM awards the works

in the form of Packages at rates

much higher than the prevailing

Scheduled Rate.

The processing of Tenders of Packages are

as per the provision of the K.T.P.P Act.


114.Free power supply is provided to

employees of BESCOM,

Government & Quasi Government

offices, residences of MPs and MLAs

etc.,

Conditional Free Power supply is provided

only to those BESCOM employees who are

recruited earlier to 1991 and no other

employees are provided with free lighting,

as claimed in the objection.


115.Additional expenditure entailed by

awarding works at a cost higher

than SR is being transferred on to

the consumers.

Project Tenders are processed as per the

provisions of the K.T.P.P Act.


116.Waiving of revenue arrears of

industries, in case of long pending

Long pending revenue arrears of Industries

are not waived without any reasons.

cclxvi

disputes, burdens the consumers. Specific instances of waiver of arrears may

be furnished for a scrutiny and to take

further action.


117.Interest on loans availed for capital

works and additional outlay

required to offset the delay in

execution of works is passed on to

the consumers.

Time limits for competition of works and

commissioning schedules are fixed, for

execution of all long term works.


118.BESCOM neither conducts proper

Energy Audit nor accounts for the

energy received and sold and thus

sustains considerable loss in the

form of energy loss.

Energy Audit is being conducted as

prescribed by the Commission and the

reports pertaining to 2nd& 3rd quarter of

FY17 for Towns and cities are furnished.


119.Failure to return released steel

poles and other articles to the

stores, improper maintenance of

account, non-auctioning

unserviceable goods is causing

loss to BESCOM.

Specific instances with details of

unaccounted materials may be furnished,

to clarify the query.


120.Materials released, while carrying

out system improvement work

under self-execution basis, are not

returned to the stores and misused,

which is evident from the works

executed at Suryanagar phases 1

to 3, Attibele, Chandapura etc.

Further, laying of 11kV UG cable

between Suryanagar Phase-1 and

Chandapura could have been

avoided since a 66/11 kV

substation is located in Suryanagar

Ph-1 itself

Allegations of misuse of materials at

Suryanagar Phase 1 to 3 will be referred

to the concerned officials for examination.

Commission’s Views: Reply furnished by the BESCOM is acceptable. BESCOM shall

take follow up action on this without expecting the consumers to pursue it.

121.A huge amount is spent for repairs

to transformers and a performance

Guarantee for a period of one year

Specific instances with details may be

furnished to clarify the query.

cclxvii

may be obtained even for repaired

transformers, as per the provisions of

KTPP Act 1999 / 2015, in order to get

the transformers failing within the

guarantee period, repaired without

any cost.


122.System losses as well as failure of

Transformers can be reduced by

providing small capacity S-Ph

transformers in NJY Feeders for

extending power supply to

residential and commercial

installations in rural area as being

done in Andhra Pradesh.

The valuable suggestion of objector is

noted.


123.Collection of rental charges to fix

hoardings and lay Dish TV Cable on

the electrical poles, will generate

enough revenue and frequent tariff

hike can be avoided.

Opinion of the Chief Electrical inspector

GoK will be obtained in this regard.

Commission’s Views: Reply furnished by the BESCOM is in order.

124.Reference made for unmetered

consumption of IP Sets in the

petition seeking Tariff revision, is not

correct. BESCOM, without precisely

assessing the agricultural

consumption by providing meters at

least for all DTCs catering to IP

loads, attributes the unaccounted

energy as the consumption by I.P

Sets, street light, public water

supply installations etc.

The Commission has accepted the

procedure adopted for assessing I.P Set

consumption as well as accounting and

a statement pertaining to IP loads is

furnished in the tariff filing application.

Commission’s Views: Reply furnished by the BESCOM is noted and issue of IP set

consumption is dealt in the relevant chapter of this Order.

125. Electro-mechanical meters

provided for consumer installations

are being replaced with digital

meters, costing Rs 3000/-each.

Deployment of BESCOM

employees, rather than contract

agencies, would have considerably

The old meters are replaced by static

meters and released meters will not be

used elsewhere.

cclxviii

reduced expenditure. Further, the

released meters can be used for

street light and other installations.


126. People living in rural areas are

already in distress because of

severe drought (more than 170

talukas affected) and

demonetization and any tariff hike

would further burden them.

Therefore, Tariff revision petition of

BESCOM should not be considered

till they furnish an Account / Audit

statement for energy.

The financial deficit of BESCOM has to be

borne by its consumers and Tariff revisions

cannot linked to natural calamities.

BESCOM has submitted the audited

accounts along with the tariff filing.


127. Transmission charges being paid to

KPTCL for maintaining the system

can be reduced.

BESCOM pays the Transmission charges to

KPTCL & PGCIL as per the Tariff determined

by KERC and CERC.


128. If the proposal to increase the

demand charges and decrease in

energy charges, is considered by the

Commission, it is requested to

remove the Cross Subsidy Surcharge,

Cross Subsidy Surcharge is claimed only

on energy charges and not on fixed

charges.

Commission's Views: The CSS is computed as per the formula specified in the Tariff

Policy of the Government of India.

128. Cross subsidy surcharge is to be

levied only on the energy charges

and the ESCOMs are not losing any

revenue on fixed cost which is

collected in monthly bills of the HT

consumers. At present the cost of

power at IEX is very low as compare

to the cost of Wind Power. Therefore,

there should be a separate cross

subsidy surcharge for wind power and

it should not on par with power

purchased from IEX.

The Consumer would avail the open

access only if there is savings in cost of

power as compared to the cost of

power payable to the ESCOMs. At the

same time the interest of the distribution

licensee has to be protected, in case the

existing consumers avails open access.

Therefore, the CSS and wheeling and

banking charges are being calculated

as per the formula provided in the

National Tariff Policy. If the wind

generators are aggrieved by the CSS

formula, they can supply power directly

to ESCOMs.

Commission's Views: The matter has been repeatedly raised by the objector in

different fora. The petition filed by him has also been dismissed by the Commission.

cclxix

Hence the issue has reached finality.

129. The group captive generators are

permitted to supply power for

consumers of contract demand

below 1 MVA whereas, for supply of

wind energy through open access

Non-Captive mode is that the

contract demand of the HT

Consumers should be above 1 MVA.

Therefore, same provision has to be

extended to open access Non-

Captive Generators as majority of HT

consumers with contract demand of

above 1MVA are purchasing power

through IEX and OA Non-Captive

Wind Generators cannot supply

power to the consumer with contract

demand below 1 MVA. This results in

destroying the growth of investments

in wind power projects, making the

existing the wind power projects

unviable and sick.

For group captive, the captive user(s)

shall hold not less than 26% of the

ownership of the plant in aggregate and

such captive user(s) shall consume not

less than 51% of the Electricity

Generated, determined on an annual

basis, in proportion to their shares in

ownerships of the power plants with in a

variation not exceeding 10%. This

condition does not apply to open

access Non-Captive mode. The entities

consume at least 51% of the power

generated and owns at least 26% of the

equity are permitted to supply power for

consumers are contract demand below

1 MVA.

Commission's Views: The reply furnished by BESCOM is noted. As per prevailing

Regulations for consumers opting for Open Access, 1MW contract demand is

mandated.

cclxx

ESCOM's Total Approved Power Purchase For FY18

NAME OF THE GENERATING STATION

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER

STATION_RTPS 1-7 (7x210) 7850.68 792.92 3.34 2622.13 3415.05 4.35


STATION_RTPS 8 (1x250) 1269.00 227.15 2.88 365.47 592.62 4.67

BELLARY THERMAL POWER

STATIONS_BTPS-1 (1x500) 2516.00 274.36 3.52 885.63 1159.99 4.61


STATIONS_BTPS-2 (1x500) 2516.00 470.49 3.06 769.90 1240.39 4.93


STATIONS_BTPS-3 (1x700) 960.00 0.00 2.87 275.52 275.52 2.87

YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92

TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II

(3X200MW+3X500MW) 3214.00 198.82 2.29 735.65 934.48 2.91

N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36

NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47

Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43

NTPC Tamilnadu Energy

Company Ltd (NTECL)_Vallur TPS

Stage I &2 &3 (3X500MW)

702.21 125.25 2.64 185.34 310.60 4.42

Neyveli Lignite Corporation_NLC

TPS-II STAGE I (3X210MW) 710.08 82.73 2.82 200.24 282.97 3.99


TPS-II STAGE 2 (4X210MW) 1126.00 135.83 2.82 317.53 453.36 4.03


TPS I EXP (2X210MW) 698.00 98.92 2.61 182.07 281.00 4.03


TPS2 EXP (2X250MW) 520.98 111.33 2.55 132.67 244.00 4.68

NLC TAMINADU POWER LIMITED

(NTPL) (TUTICORIN) (2X500MW) 1153.11 216.03 2.50 288.28 504.30 4.37

MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15

Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19

Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP U1 (1X1000MW)

1511.00 0.00 623.16 623.16 4.12

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP) U2(1X1000MW)

345.77 0.00 142.60 142.60

4.12


ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

cclxxi

DVC-Unit-1 &2 Meja TPS

(2x500MW) 1402.48 208.22 2.38 333.59 541.82 3.86

DVC-Unit-7 & 8-KODERMA TPS

(2x500MW) 1753.58 321.82 2.19 383.48 705.30 4.02

Kudgi 750.04 0.00 3.02 226.51 226.51 3.02

TOTAL CGS Energy @ KPTCL

periphery 20542.92 1963.88 5319.80 7283.68 3.55

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION

LIMITED_UPCL (2x600) 6712.00 1141.04 3.20 2147.84 3288.88 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY

PROJECT_SVP (10x103.5+2x27.5) 4914.10 21.27 0.35 173.40 194.67 0.40

MAHATMA GANDHI HYDRO

ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2)

279.58 2.32 0.45 12.60 14.92 0.53

GERUSOPPA_GPH (SHARAVATHI

TAIL RACE_STR) (4x60) 521.59 24.43 1.11 57.94 82.37 1.58

KALI VALLEY PROJECT_KVP

(2x50+6x150) 3172.76 21.36 0.55 174.31 195.67 0.62

VARAHI VALLEY PROJECT_VVP

(4x115+2x4.5) 1068.73 40.64 1.18 125.65 166.29 1.56

ALMATTI DAM POWER

HOUSE_ADPH (1x15+5x55) 481.63 31.50 0.97 46.73 78.23 1.62

BHADRA HYDRO ELECTRIC

POWER HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6))

60.65 1.50 3.36 20.39 21.89 3.61

KADRA POWER HOUSE_KPH

(3x50) 362.80 19.38 1.46 53.13 72.51 2.00

KODASALLI DAM POWER

HOUSE_KDPH (3x40) 340.17 12.01 1.14 38.86 50.87 1.50

GHATAPRABHA DAM POWER

HOUSE_GDPH (2x16) 82.75 2.18 1.68 13.92 16.10 1.95

SHIVASAMUDRAM (4x4+6x3) &

SHIMSHAPURA (2x8.6) HYDRO

STATIONS.

292.24 3.54 0.80 23.52 27.06 0.93

MUNIRABAD POWER HOUSE

(2x9+1x10) 91.46 0.43 0.58 5.32 5.75 0.63

TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79

OTHER HYDRO

PRIYADARSHINI JURALA HYDRO

ESLECTRIC STATION (6x39) 110.00 4.35 47.82 47.82 4.35

TUNGABHADRA DAM POWER

HOUSE_TBPH (4x9+4x9) 9.37 1.83 1.72 1.72 1.83

TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15

RENEWABLE ENERGY SOURCES

WIND-IPPS 3704.87 1343.76 1343.76 3.63

KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71

MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29

CO-GEN 160.01 74.30 74.30

4.64


ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh)

CAPPTIVE 13.17 3.74 3.74 2.84

BIOMASS 119.71 59.23 59.23 4.95

SOLAR-existing (anticipated as

on 31.03.2017) 932.00 618.10 618.10 6.63

cclxxii

Solar-New Park 535.96 187.59 187.59 3.50

Solar-KREDL 672.16 353.29 353.29 5.26

SOLAR-KPCL

(YELESANDRA,ITNAL,YAPALDINNI,

SHIMSHA) (3x1+3x1+1x3x1x5)

10.61 6.37 6.37 6.00

TOTAL RE 7165.41 2980.86 2980.86 4.16

NTPC Bundled power 582.21 258.46 258.46 4.44

Power purchase from Co gen 1300.00 451.10 451.10 3.47

Short term power purchase 1120.00 467.04 467.04 4.17

Short term Purchase from

MSEDCL 294.00 106.43 106.43 3.62

TRANSMISSION CHARGES 0.00

PGCIL CHARGES 1066.00 1066.00

KPTCL CHARGES 2753.70 2753.70

SLDC 24.77 24.77

POSOCO CHARGES 3.48 3.48

TOTAL INCLUDING

TRANSMISSION & SLDC CHARGES 65576.04 8898.35 17725.80 26624.15 4.06

cclxxiii

BESCOM’s Approved Power Purchase for FY18


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

h)

KPCL THERMAL STATIONS


STATION_RTPS 1-7 (7x210) 67.500 5299.21 535.22 3.34 1769.94 2305.16 4.35


STATION_RTPS 8 (1x250) 47.210 599.09 107.24 2.88 172.54 279.78 4.67


STATIONS_BTPS-1 (1x500) 47.210 1187.80 129.53 3.52 418.11 547.63 4.61


STATIONS_BTPS-2 (1x500) 47.210 1187.80 222.12 3.06 363.47 585.59 4.93


STATIONS_BTPS-3 (1x700) 47.210 453.22 0.00 2.87 130.07 130.07 2.87

YTPS (1x 800) 47.210 453.22 0.00 2.92 132.34 132.34 2.92

TOTAL KPCL THERMAL

9180.34 994.10 3.25 2986.46 3980.56 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II

(3X200MW+3X500MW) 47.210 1517.33 93.87 2.29 347.30 441.17 2.91

N.T.P.C-RSTP-III (1X500MW) 47.210 373.90 35.85 2.40 89.74 125.59 3.36

NTPC-Talcher (4X500MW) 47.210 1343.12 106.63 1.68 225.72 332.35 2.47

Simhadri Unit -1 &2 (2X500MW) 47.210 466.28 77.01 2.77 129.36 206.36 4.43

NTPC Tamilnadu Energy Company

Ltd (NTECL)_Vallur TPS Stage I &2

&3 (3X500MW)

47.210 331.51 59.13 2.64 87.50 146.63 4.42


TPS-II STAGE I (3X210MW) 47.210 335.23 39.06 2.82 94.53 133.59 3.99


TPS-II STAGE 2 (4X210MW) 47.210 531.58 64.13 2.82 149.91 214.03 4.03


TPS I EXP (2X210MW) 47.210 329.53 46.70 2.61 85.96 132.66 4.03


TPS2 EXP (2X250MW) 47.210 245.95 52.56 2.55 62.64 115.19 4.68

NLC TAMINADU POWER LIMITED

(NTPL) (TUTICORIN) (2X500MW) 47.210 544.38 101.99 2.50 136.10 238.08 4.37

MAPS (2X220MW) 47.210 93.95 2.15 20.21 20.21 2.15

Kaiga Unit 1&2 (2X220MW) 47.210 434.33 3.19 138.37 138.37 3.19

Kaiga Unit 3 &4 (2X220MW) 47.210 430.56 3.19 137.17 137.17 3.19

NPCIL-KudanKulam Atomic Power

Generating Station (KKNPP U1

(1X1000MW)

47.210 713.34 4.12 294.19 294.19 4.12

NPCIL-KudanKulam Atomic Power

Generating Station (KKNPP)

U2(1X1000MW)

47.210 163.24 4.12 67.32 67.32 4.12

DVC-Unit-1 &2 Meja TPS

(2x500MW) 47.210 662.11 98.30 2.38 157.49 255.79

3.86


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

cclxxiv

(RS/Kwh) h)

DVC-Unit-7 & 8-KODERMA TPS

(2x500MW) 47.210 827.86 151.93 2.19 181.04 332.97 4.02

Kudgi 47.210 354.10 0.00 3.02 106.94 106.94 3.02

TOTAL CGS Energy @ KPTCl

periphery 9698.31 927.15 2.59 2511.48 3438.63 3.55

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION

LIMITED_UPCL (2x600) 57.446 3855.76 655.48 3.20 1233.84 1889.32 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP

(10x103.5+2x27.5) 6.391 314.04 1.36 0.35 11.08 12.44 0.40

MAHATMA GANDHI HYDRO

ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2)

47.210 131.99 1.10 0.45 5.95 7.04 0.53

GERUSOPPA_GPH (SHARAVATHI

TAIL RACE_STR) (4x60) 47.210 246.24 11.53 1.11 27.35 38.89 1.58

KALI VALLEY PROJECT_KVP

(2x50+6x150) 26.110 828.40 5.58 0.55 45.51 51.09 0.62

VARAHI VALLEY PROJECT_VVP

(4x115+2x4.5) 47.210 504.55 19.19 1.18 59.32 78.51 1.56

ALMATTI DAM POWER

HOUSE_ADPH (1x15+5x55) 47.210 227.38 14.87 0.97 22.06 36.93 1.62

BHADRA HYDRO ELECTRIC POWER

HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6))

47.210 28.63 0.71 3.36 9.63 10.33 3.61

KADRA POWER HOUSE_KPH (3x50) 47.210 171.28 9.15 1.46 25.08 34.23 2.00

KODASALLI DAM POWER

HOUSE_KDPH (3x40) 47.210 160.60 5.67 1.14 18.35 24.02 1.50

GHATAPRABHA DAM POWER

HOUSE_GDPH (2x16) 47.210 39.07 1.03 1.68 6.57 7.60 1.95

SHIVASAMUDRAM (4x4+6x3) &

SHIMSHAPURA (2x8.6) HYDRO

STATIONS.

47.210 137.97 1.67 0.80 11.10 12.78 0.93

MUNIRABAD POWER HOUSE

(2x9+1x10) 47.210 43.18 0.20 0.58 2.51 2.71 0.63

TOTAL KPCL HYDRO

2833.31 72.05 0.86 244.52 316.57 1.12

OTHER HYDRO

PRIYADARSHINI JURALA HYDRO

ESLECTRIC STATION (6x39) 47.210 51.93 4.35 22.58 22.58 4.35

TUNGABHADRA DAM POWER

HOUSE_TBPH (4x9+4x9) 47.210 4.42 1.83 0.81 0.81 1.83

TOTAL OTHER HYDRO 47.210 56.35 4.15 23.39 23.39 4.15

RENEWABLE ENERGY SOURCES

WIND-IPPS 2216.70 804.00 804.00 3.63

KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71

MINI HYDEL-IPPS 454.46 149.34 149.34 3.29

CO-GEN 0.00 0.00 0.00 4.64


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

h)

CAPPTIVE 0.00 0.00 0.00 2.84

BIOMASS 39.36 19.48 19.48 4.95

SOLAR-existing (anticipated as on 362.18 240.20 240.20 6.63

cclxxv

31.03.2017)

Solar-New Park 47.787 256.12 89.64 89.64 3.50

Solar-KREDL 288.51 151.64 151.64 5.26

SOLAR-KPCL

(YELESANDRA,ITNAL,YAPALDINNI,S

HIMSHA) (3x1+3x1+1x3x1x5)

4.07 2.44 2.44 6.00

TOTAL RE 3629.20 1459.62 1459.62

NTPC Bundled power 52.332 304.68 135.26 135.26 4.44

Power purchase from Co gen 47.788 621.24 215.57 215.57 3.47

Short term power purchase 50.000 560.00 233.52 233.52 4.17

Short term Purchase from MSEDCL 47.788 140.497 50.86 50.86 3.62

TRANSMISSION CHARGES

PGCIL CHARGES 520.23 520.23

KPTCL CHARGES 1347.80 1347.80

SLDC 11.33 11.33

POSOCO CHARGES 1.66 1.66

TOTAL INCLUDING TRANSMISSION

& SLDC CHARGES 30879.69 4529.80 9094.51 13624.31 4.41

cclxxvi

Annexure- III

PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF BESCOM

With ref. to ACS

With ref. to voltage wise COS*

Sl No

Category Description

Proposed by BESCOM

Approved as per RST

Average Realisation in Rs. Per Kwh

Level of Cross

Subsidy in %

Level of Cross

Subsidy in %

(LT&HT)

Level of Cross

Subsidy in %

(EHT)

Sales-MU

Revenue Rs.

crores

Sales-MU

Revenue Rs.

crores

1

LT-1[fully subsidised by GoK]*

Bhagya Jyothi/Kutir Jyothi

68.87 51.26 130.37 84.48 6.48 0.00 -4.14

2 LT-2(a)(i)

Dom. / AEH - Applicable to Bruhat Bangalore Mahanagara Palike(BBMP), Municipal Corporations & all areas under Urban Local Bodies . 6316.69 4440.96 6322.69 3552.69 5.62 -13.29 -16.88

3 LT-2(a)(ii)

Dom. / AEH - Applicable to areas coming under Village Panchayats 702.73 410.85 643.69 307.12 4.77 -26.37 -29.42

4 LT-2(b)(i)

Pvt. Educational Institutions Bruhat Bangalore Mahanagara Palike(BBMP), Municipal Corporations & all areas under Urban Local Bodies . 41.01 37.37 43.88 34.00 7.75 19.57 14.62

5 LT-2(b)(ii)

Pvt. Educational Institutions Applicable to areas coming under Village Panchayats 5.95 6.06 5.19 3.44 6.63 2.16 -2.07

6 LT-3(i)

Commercial - Application to Bruhat Bangalore Mahanagara Palike(BBMP), Municipal Corporations & all areas under Urban Local Bodies . 1846.78 1857.98 1848.59 1618.14 8.75 35.08 29.49

7 LT-3(ii)

Commercial - Applicable to areas coming under Village Panchayats 152.16 140.16 152.26 125.54 8.25 27.24 21.97

8 LT-4(a)(i)*

IP<=10HP

6837.80 2970.34 6157.95 2056.76 3.34 -48.46 -50.59

10 LT-4(b) IP>10HP

2.36 1.39 4.60 1.92 4.17 -35.55 -38.22

11 LT-4 (c) (i)

Pvt Nurseries, Coffee&Tea Plantations of sanctioned load of 10 HP& below 4.90 2.37 3.50 1.33 3.80 -41.50 -43.92

12 LT-4 (c) (ii)

Pvt Nurseries, Coffee&Tea Plantations of sanctioned load above 10 HP. 0.00 0.00 1.40 0.69 0.00 -23.47 -26.64

13 LT-5(a)

Industrial - Applicable to Bruhat Bangalore Mahanagara Palike(BBMP), Municipal Corporations 799.38 651.80 799.37 623.61 7.80 20.39 15.40

14 LT-5(b)

Industrial - Applicable to all areas other than those covered under LT5(a) 387.86 299.59 387.87 300.56 7.75 19.58 14.63

15 LT-6 Water supply 448.19 287.02 453.97 261.79 5.77 -11.01 -14.69

16 LT-6 Public lighting 353.24 282.73 391.17 273.67 7.00 7.96 3.49

17 LT-7(a) Temporary supply 158.63 183.96 157.30 302.76 19.25 197.03 184.72

18 LT-7(b) Permanent Supply to Adversiting & Holding 0.00 0.00 1.33 1.41 10.60 63.82 57.04

LT - TOTAL 18126.5

5 11623.84 17505.1

3 9549.91 5.46 -15.81 -19.03

1 HT-1 Water supply & sewerage 738.04 420.80 738.04 401.11 5.43 -16.13 -8.35 -12.23

2 HT-2(a)(i)

Industrial - Applicable to Bangalore Mahanagara Palike(BBMP) and Municipall Corporation. 2243.13 1840.05 2372.65 1885.05 7.94 22.61 33.98 30.63

cclxxvii

3 HT-2(a)(ii)

Industrial - Applicable to areas other than those under HT2(a) (i) 2165.91 1868.86 2290.58 1721.17 7.51 15.96 26.71 23.26

4 HT-2(b)(i)

Commercial - Applicable to areas under Bangalore Mahanagara Palike Municipal Corporation. 2411.84 2456.74 2474.84 2363.90 9.55 47.40 61.08 57.76

5 HT-2(b)(ii)

Commercial - Applicable to areas other than those covered under HT2(b) (i) 201.21 194.31 192.01 197.24 10.27 58.52 73.22 69.11

6 HT-2( c) (i)

Govt./ Aided Hospitals & Educational Institutions

130.57 108.48 134.10 98.02 7.31 12.79 23.26 19.22

7 HT-2( c) (ii)

Hospitals and Educational Institutions other than covered under HT-2( c) (i) 141.44 133.21 137.91 113.08 8.20 26.53 38.37 34.51

8 HT-3(a)(i)

Lift Irrigation - Applicable to Lift Irrigation Schemes under Govt. Depts/ Govt. owned Corporations. 9.77 3.40 65.92 14.83 2.25 -65.28 -62.06 -65.28

9 HT-3(a)(ii)

Lift Irrigation - Applicable to Lift Irrigation schemes Lift Irrigation Societies connected to Urban/Express feeders. 0.00 0.00 2.08 0.49 2.36 -63.25 -59.84 -63.45

10 HT-3(a)(iii)

Lift Irrigation - Applicable to Private lift irrigation schemes & L I societies other than those covered under HT-3(a) (ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

11 HT - 3b

Irrigation & Agriculture Farms,Govt. Horticultural Farms, Pvt.Horticulture Nurseries, Coffee, Tea,Cocanut & Arecanut Plantations 0.69 0.48 4.84 2.06 4.26 -34.41 -28.33 -30.56

12 HT-4(a) Residential Apartments - Colonies 118.91 86.09 114.70 75.56 6.59 1.66 11.09 7.73

13 HT-5 Temporary supply 76.36 91.85 76.36 147.23 19.28 197.55 225.14 212.63

HT - TOTAL 8237.87 7204.27 8604.03 7019.74 8.16 25.91 37.58 34.06

TOTAL 26364.4

0 18828.11 26109.1

6 16569.65 6.35

Misc. Revenue 87.84 344.54

Grand Total 26364.4

0 18915.95 26109.1

6 16914.19 6.48 0.00

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance,BESCOM

shall raise demand & collect CDT of Rs.6.48/unit by BJ/KJ & Rs.3.34 /unit from IP set Consumers. * Voltage wise cost of supply per unit to: LT Rs: 6.76, HT Rs.5.93

& EHT- Rs.5.76

Page - 266

cclxxviii

ANNEXURE - IV

ELECTRICITY TARIFF - 2018

K.E.R.C. ORDER DATED: 11th April, 2017

Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2017

Bangalore

Electricity Supply Company Ltd.,

cclxxix

ELECTRICITY TARIFF-2018

GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)

1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed

deposits and compliance of terms and conditions as stipulated

in the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka and Regulations issued

under the Electricity Act, 2003 at the time of supply and

continuation of power supply is subject to compliance of the

said Conditions of Supply / Regulations as amended from time

to time.

2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.

3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The

minimum charge is the power supply charges in accordance

with the tariff in force from time to time. This shall be payable by

the Consumer until power supply agreement is terminated,

irrespective of the installation being in service or under

disconnection.

4. The tariffs in the schedule are applicable to power supply within

the area of operation of the licensee.

5. The tariffs are subject to levy of Tax and Surcharges thereon

as may be decided by the State Government from time to time.

cclxxx

6. For the purpose of these tariffs, the following conversion table would

be used:

1 HP=0.746 KW. 1HP=0.878 KVA.

7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill

amount of 50 Paise and above will be rounded off to the next higher

Rupee and the amount less than 50 Paise will be ignored.

8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales

promotions etc., is limited to sanctioned load at the applicable

permanent power supply tariff rates. Temporary tariff rates will be

applicable in case the load exceeds sanctioned load as per the

Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka.

9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations

serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for

supply of Electricity) Regulations, 2004 and its amendments from time

to time. The applicant is however at liberty to avail HT supply for lesser

loads. The minimum contract demand for HT supply shall be 25 KVA or

as amended from time to time by the Licensee with the approval of

KERC.

10. The Consumer shall not resell electricity purchased from the Licensee

to a third party except –

(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,

(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.

11. Non-receipt of the bill by the Consumer is not a valid reason for non-

payment. The Consumer shall notify the office of issue of the bill, if the

same is not received within 7 days from the meter reading date.

Otherwise, it will be deemed that the bills have reached the Consumer

in due time.

cclxxxi

12. The Licensee will levy the following charges for non-realization of

each Cheque.

1 Cheque amount upto

Rs. 10,000/-

5% of the amount subject to a

minimum of Rs.100/-

2 Cheque amount of

Rs. 10,001/- and upto

Rs. 1,00,000/-


minimum of Rs.500/-

3 Cheque amount above

Rs. 1 Lakh:


minimum of Rs3000/-

13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the

Consumer has to collect the same.

14. In case of any belated payment, simple interest at the rate of 1 % per

month will be levied on the actual No. of days of delay subject to a

minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No

interest is however levied for arrears of Rs.10/- and less.

15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall

provide current limiter/Circuit Breakers of capacity prescribed by the

Licensee depending upon the sanctioned load.

16. All payments made by the Consumer will be adjusted in the following

order of priority: -

(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax

(c) Arrears of Interest on Electricity charges

(d) Arrears of Electricity charges

(e) Current month’s dues

17. For the purpose of billing,

(i) the higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector

meter,

(ii) sanctioned load or MD recorded, whichever is higher, in respect

of installations provided with static meter or Electronic Tri-Vector

meter or static meter, will be considered.

cclxxxii

Penalty and other clauses shall apply if sanctioned load is

exceeded.

18. The bill amount shall be paid within 15 days from the date of

presentation of the bill failing which the interest becomes payable.

19. For individual installations, more than one meter shall not be provided

under the same tariff. Wherever two or more meters are existing for

individual installation, the sum of the consumption recorded by the

meters shall be taken for billing, till they are merged.

20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.

21. Reconnection charges: The following reconnection charges shall be

levied in case of disconnection and included in the monthly bill.

For reconnection of:

a Single Phase Domestic installations

under Tariff schedule LT 1 & LT2 (a)

Rs.20/-per Installation.

b Three Phase Domestic installations

under Tariff schedule LT2 (a) and

Single Phase Commercial & Power

installations.

Rs.50/-per Installation.

c All LT installations with 3 Phase supply

other than LT2 (a)

Rs.100/- per

Installation.

d All HT& EHT installations Rs. 500/-per

Installation.

22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by

cash or cheque or D.D and payments above Rs.10, 000/- shall be

made by cheque or D.D only. Payments under other heads of

account shall be made by cash or D.D up to and inclusive of

Rs.10,000/- and payment aboveRs.10, 000/-shall be by D.D only.

Note: The Consumers can avail the facility of payment of monthly power

supply bill through Electronic clearing system (ECS)/ Credit cards /

RTGS/ NEFT/ on-line E-Payment / Digital mode of payments as per

the guidelines issued by the RBI wherever such facility is provided

by the Licensee in respect of revenue payments up to the limit

prescribed by the RBI.

cclxxxiii

23. For the types of installations not covered under any Tariff schedules,

the Licensee is permitted to classify such installations under

appropriate Tariff schedule under intimation to the K.E.R.C.

24. Seasonal Industries

Applicable to all Seasonal Industries.

i) The industries that intend to avail this benefit shall have Electronic Tri-

Vector Meter installed to their installations.

ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the

concerned O&M Division of the Licensee as per the request of the

Consumer and will continue from year to year unless otherwise

altered. The Consumer shall give a clear one month’s notice in case

he intends to change his ‘working season’.

iii) The consumption during any month of the declared off-season shall

not be more than 25% of the average consumption of the previous

working season.

iv) The ‘Working season’ months and ‘off-season’ months shall be full–

calendar months. If the power availed during a month exceeds the

allotment for the ‘off-season’ month, it shall be taken for calculating

the billing demand as if the month is the ‘working season’ month.

v) The Consumer can avail the facility of ‘off-season’ up to six months

in a calendar year not exceeding in two spells in that year. During

the ‘off-season’ period, the Consumer may use power for

administrative offices etc., and for overhauling and repairing plant

and machinery.

25. Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the

production of certificate Form-12 A from the Income Tax

department.

cclxxxiv

26 Time of the Tariff (ToD)

The Commission as decided in the earlier tariff orders, decides to

continue compulsory Time of Day Tariff for HT2 (a) , HT2 (b) and HT2(c)

consumers with a contract demand of 500 KVA and above. Further,

the optional ToD will continue as existing for HT2 (a),HT2 (b) and HT 2(C)

consumers with contract demand of less than 500 KVA. Also the ToD for

HT1 consumers on optional basis would continue as existing earlier.

Details of ToD tariff are indicated under the respective tariff category.

27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis ofthe orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

28. Incentive for Prompt Payment / Advance Payment: An incentive at the

rate of 0.25% of such bill shall be given to the following Consumers by

way of adjustment in the subsequent month’s bill:

(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/- (Rs. one

lakh), if the payment is made 10 days in advance of the due

date.

(iii) Advance Payment exceeding Rs 1000/-made by the Consumers

towards monthly bills.

cclxxxv

29. Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka and amendments issued thereon from time to time

and Regulations issued under the Electricity Act, 2003 will prevail over

the extract given in this tariff book in the event of any discrepancy.

30. Self-Reading of Meters:

The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the

Licensee shall take the reading at least once in six months and

reconcile the difference, if any and raise the bills accordingly. This

procedure may be implemented by the Licensee as stipulated under

Section 26.01 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

cclxxxvi

ELECTRICITY TARIFF - 2018

PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply of

Voltages at 11KV (including 2.3/4.6

KV) and above at Standard High

Voltage or Extra High Voltages when

the Contract Demand is 50 KW / 67

HP and above.

cclxxxvii

ELECTRICITY TARIFF –2018

PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply at Voltages of 11KV (including 2.3/4.6

KV) and above at Standard High Voltage or Extra High Voltages when

the Contract Demand is 50 KW / 67 HP and above.

cclxxxviii

CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:

1. Billing Demand

A) The billing demand during unrestricted period shall be the maximum

demand recorded during the month or 75% of the CD, whichever is

higher.

B) When the Licensee has imposed demand cut of 25% or less, the

conditions stipulated in (A) shall apply.

C) When the demand cut is in excess of 25%, the billing demand shall be

the maximum demand recorded or 75% of the restricted demand,

whichever is higher.

D) If at any time the maximum demand recorded exceeds the CD or the

demand entitlement, or opted demand entitlement during the period

of restrictions, if any, the Consumer shall pay for the quantum of excess

demand at two times the normal rate per KVA per month as deterrent

charges as per Section 126(6) of the Electricity Act, 2003. For over-

drawal during the billing period, the penalty shall be two times the

normal rate.

E) During the periods of disconnection, the billing demand shall be 75% of

CD, or 75% of the demand entitlement that would have been

applicable, had the installation been in service, whichever is less. This

provision is applicable only, if the installation is under disconnection for

the entire billing month.

F) During the period of energy cut, the Consumer may get his demand

entitlement lowered, but not below the percentage of energy

entitlement, (For example, in case the energy entitlement is 40% and

the demand entitlement is 80%, the re-fixation of demand entitlement

cannot be lower than 40% of the CD). The benefit of lower demand

cclxxxix

entitlement will be given effect to from the meter reading date of the

same month, if the option is exercised on or before 15th of the month. If

the option is exercised on or after 16th of the month, the benefit will be

given effect to from the next meter reading date. The Consumer shall

register such option by paying a processing fee of Rs.100/- at the

Jurisdictional sub-division office.

(i) The billing demand in such cases, shall be the “Revised (Opted)

Demand Entitlement” or, the recorded demand, whichever is

higher. Such option for reduction of demand entitlement, is allowed

only once during the entire span of that particular “Energy Cut

Period”. The Consumer, can however, opt for a higher demand

entitlement upto the level permissible under the demand cut

notification, and the benefit will be given effect to from the next

meter reading date. Once the Consumer opts for enhancement of

demand, which has been reduced under Clause (F), no further

revision is permitted during that particular energy cut period.

(ii) The opted reduced demand entitlement will automatically cease

to be effective, when the energy cut is revised. The facility for

reduction and enhancement can however be exercised afresh by

the Consumer as indicated in the previous paras.

G) For the purpose of billing, the billing demand of 0.5 KVA and above will

be rounded off to the next higher KVA, and billing demand of less

than 0.5 KVA shall be ignored.

2. Power factor (PF)

It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF of

not less than 0.90.

(i) The specified P.F. is 0.90. If the power factor goes below 0.90

Lag, a surcharge of 3 Paise per unit consumed will be levied for

every reduction of P.F. by 0.01 below 0.90 Lag.

ccxc

(ii) The power factor when computed as the ratio of KWh / KVAh

will be determined upto 3 decimals (ignoring figures in the other

decimal places), and then rounded off to the nearest second

decimal as illustrated below:

(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90

In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the

same is not available, the ratio of KWh to KVAh consumed in the billing

month shall be considered.

3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will

be entitled to a rebate as indicated below:

Supply Voltage: Rebate

A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed

C) 220 KV 5 Paise/unit of energy consumed

The above rebate will be allowed in respect of all the installations of

the above voltage class, including the existing installations, and also

for installations converted from 13.2 KV and below to 33 KV and above

and also for installations converted from 33/66 KV to 110/220 KV, from

the next meter reading date after conversion / service / date of

notification of this Tariff order, as the case may be. The above rebate is

applicable only on the normal energy consumed by the Consumer

including the consumption under TOD Tariff, and is not applicable on

any other energy allotted and consumed, if any, viz.,

i) Wheeled Energy.

ii) Any energy, including the special energy allotted over and

above normal entitlement.

iii) Energy drawal under special incentive scheme, if any.

The above rebate is not applicable for Railway Traction.

ccxci

4. In respect of Residential Quarters / Colonies availing Bulk power supply

by tapping the main HT supply, the energy consumed by such Colony

loads, metered at single point, shall be billed under HT-4 tariff schedule.

No reduction in demand recorded in the main HT meter will be

allowed.

5. Energy supplied may be utilized for all purposes associated with the

working of the installations, such as, Office, Stores, Canteens, Yard

Lighting, Water Supply and Advertisements within the premises.

6. Energy can also be used for construction, modification and expansion

purposes within the premises.

7. Power supply under HT-4 tariff schedule may be used for Commercial

and other purposes inside the colony for installations such as Canteen,

Club, Shop, Auditorium etc., provided, this load is less than 10% of the

CD.

8. In respect of Residential Apartments, availing HT Power supply under

HT-4 tariff schedule, the supply availed for Commercial and other

purposes like Shops, Hotels, etc., will be billed under appropriate tariff

schedule (Only Energy charges) duly deducting such consumption in

the main HT supply bill. No reduction in the recorded demand of the

main HT meter is allowed. Common areas shall be billed at Tariff

applicable to that of the predominant Consumer category.

9. Seasonal Industries

a. The industries, which intend to utilize seasonal industry benefit, shall

conform to the conditionalities under Para no. 24 of the General

terms and conditions of tariff (applicable to both HT & LT).

b. The industries that intend to avail this benefit shall have Electronic

Tri-Vector Meter fitted to the installation.

c. Monthly charges during the working season, shall be the demand

charges on 75% of the contract demand, or the recorded

maximum demand during the month, whichever is higher, plus the

energy charges

ccxcii

d. Monthly charges during the off season shall be demand charges on

the maximum demand recorded during the month or 50% of the CD

whichever is higher plus the energy charges.

[

ccxciii


Applicable to Water Supply, Drainage / Sewerage water treatment plant and

Sewerage Pumping installations, belonging to Bangalore Water Supply and

Sewerage Board, Karnataka Urban Water Supply and Sewerage Board, other

local bodies, State and Central Government.

[

RATE SCHEDULE

Demand charges Rs.200 /kVA of billing demand/month

Energy charges 485 paise/unit [

TOD Tariff at the option of the Consumer

Time of Day Increase (+) / reduction (-) in energy



10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs

next day

(-) 100 paise per unit

Note: Energy supplied to residential quarters availing bulk supply by

the above category of Consumer, shall be metered separately

at a single point, and the energy consumed shall be billed at HT-

4 Tariff. No reduction in the demand recorded in the main HT

meter will be allowed.

TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research &

Development Centres, Industrial Estates, Milk dairies, Rice Mills, Phova

Mills, Roller Flour Mills, News Papers, Printing Press, Railway

Workshops/KSRTC Workshops/ Depots, Crematoriums, Cold Storage,

Ice & Ice-cream mfg. Units, Swimming Pools of local bodies, Water

Supply Installations of KIADB and other industries, all Defence

Establishments. Hatcheries, Poultry Farm, Museum, Floriculture, Green

House, Bio Technical Laboratory, Hybrid Seeds processing Units, Stone

Crushers, Stone cutting, Bakery Product Manufacturing Units, Mysore

Palace illumination, Film Studios, Dubbing Theatres, Processing, Printing,

Developing and Recording Theaters, Tissue Culture, Aqua Culture,

Prawn Culture, Information Technology Industries engaged in

ccxciv

development of Hardware & Software, Information Technology (IT)

enabled Services / Start-ups(As defined in GOI notification dated

17.04.2015)/ Animation / Gaming / Computer Graphics as certified by

the IT & BT Department of GOK/GOI, Drug Mfg. Units, Garment Mfg.

Units, Tyre retreading units, Nuclear Power Projects, Stadiums

maintained by Government and local bodies, also Railway Traction,

Effluent treatment plants and Drainage water treatment plants owned

other than by the local bodies, LPG bottling plants, petroleum pipeline

projects, Piggery farms, Analytical Lab for analysis of ore metals, Saw

Mills, Toy/wood industries, Satellite communication centres, and

Mineral water processing plants / drinking water bottling plants.

RATE SCHEDULE

HT-2(a)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations

Demand charges Rs.210 /kVA of billing demand/month

Energy charges

For the first one lakh units 665 paise per unit

For the balance units 695 paise per unit

Railway Traction and Effluent Treatment Plants

Demand charges Rs.210/kVA of billing demand/month

Energy Charges 620 paise per unit for all the units

Tariff applicable to Bangalore Metropolitan Railway Corporations

Ltd., (BMRCL)



HT-2(a)(ii): Applicable to Areas other than those covered under HT-2(a)(i)


Energy charges



Railway Traction and Effluent Treatment Plants

ccxcv



ARIFF SCHEDULE HT-2(b)

Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,

Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V.

Station, All India Radio, Railway Stations, Air Port, BMTC,KSRTC bus

stations, All offices, Banks, Commercial Multi-storied buildings, APMC Yards,

Stadiums other than those maintained by Government and Local Bodies,

Construction power for irrigation, Power Projects and Konkan Railway

Project, Petrol / Diesel and Oil storage plants, I.T. based medical transcription

centers, telecom, call centers / BPO / KPO, Diagnostic centres, concrete

mixture (Ready Mix Concrete) units.

RATE SCHEDULE

HT-2 (b)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations.

Energy charges

For the first two lakh units 845 paise per unit


HT-2(b)(ii): Applicable to all areas other than those covered under HT-2(b)(i)

Energy charges

For the first two lakh units 825 paise per unit


TARIFF SCHEDULE HT-2(c)

RATE SCHEDULE

HT-2 (c) (i) - Applicable to Government Hospitals, Hospitals run by

Charitable Institutions, ESI hospitals, Universities and Educational

Institutions belonging to Government and Local bodies, Aided

Educational Institutions and Hostels of all Educational Institutions.


Energy charges





ccxcvi

RATE SCHEDULE

HT-2 (c) (ii) -Applicable to Hospitals and Educational Institutions other than

those covered under HT-2 (c) (i).


Energy charges

For the first one lakh units 740 paise per unit.

For the balance units 780 paise per unit.

Note: Applicable to HT-2 (a), HT-2 (b)& HT-2(c) Tariff Schedule.

1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,

canteens, yard lighting, water pumping and

advertisement within the premises.

2. Energy can be used for construction, modification and

expansion purposes within the premises.

3. In respect of industries availing HT power supply under HT2

(a) tariff schedule, the supply availed for Effluent

Treatment Plant situated within the premises by fixing the

separate sub-meter, a rebate of 50 paise per unit of

electricity consumed by such Effluent Treatment Plant shall

be given to the applicable tariff schedule. No reduction in

the recorded demand of the main HT supply is allowed.

TOD Tariff applicable to HT 2(a), HT2 (b) and HT2(c) category.




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs

next day


ccxcvii

TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,

RATE SCHEDULE

HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/

Govt. owned Corporations.

Energy charges/ Minimum Charges 225 paiseper unit subject to an annual

minimum of Rs.1240 per HP/Annum.

HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies fed

through express/ Urban feeders

Fixed Charges Rs.50 /HP/ per month of sanctioned

load


HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies

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

Fixed Charges Rs.30 /HP/ per month of sanctioned

load


TARIFF SCHEDULE HT-3 (b)

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,

Rubber, Coconut & Arecanut Plantations.

RATE SCHEDULE

Energy charges / Minimum Charges 425 paise Per unit subject to an

annual minimum of Rs.1240/- per HP

of sanctioned load.

Note: These installations are to be billed on quarter yearly basis.

ccxcviii


Applicable to Residential apartments and colonies (whether situated outside

or inside the premises of the main HT Installation) availing power supply

independently or by tapping the main H.T. line. Power supply can be used for

residences, theatres, shopping facility, club, hospital, guest house, yard/street

lighting, canteen located within the colony.

RATE SCHEDULE

Applicable to all areas.

Demand charges Rs.120/- per kVA of billing demand/

month


NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads

metered at a single point, is to be billed at the above energy

rate. No reduction in the recorded demand of the main H.T.

supply is allowed.

(2) Energy under this tariff may be used for commercial and other

purposes inside the colonies, for installations such as, Canteens,

Clubs, Shops, Auditorium etc., provided, this commercial load is

less than 10% of the Contract demand.

(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and

other purposes like Shops, Hotels, etc., will be billed under

appropriate tariff schedule (Only Energy charges), duly deducting

such consumption in the main HT supply bill. No reduction in the

recorded demand of the main HT meter is allowed. Common

areas shall be billed at Tariff applicable to the predominant

Consumer category.


ccxcix

Tariff applicable to sanctioned load of 67 HP and above for hoardings

and advertisement boards and construction power for industries

excluding those category of consumers covered under HT2(b) Tariff

schedule availing power supply for construction power for irrigation

and power projects and also applicable to power supply availed on

temporary basis with the contract demand of 67 HP and above of all

categories.

[

HT – 5 – Temporary supply

RATE SCHEDULE

67 HP and above:

Fixed charges /

Demand Charges

Rs.240/HP/month for the entire sanction load /

contract demand

Energy Charge 1000 paise / unit

HT-5 (a)- Temporary Supply

Applicable to power supply availed on temporary basis with the

contract demand of 67 HP and above by Bangalore International

Exhibition Centre.

RATE SCHEDULE


Fixed Charges /

Demand Charges

Not Applicable


Note:

1. Temporary power supply with or without extension of distribution main

shall be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having licence for a

duration of less than one year.

ccc

3. All the conditions regarding temporary power supply as stipulated in

Clause 12 of the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka shall be complied with before

service.

---0---


PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

ccci


PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

cccii

CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:

1. In the case of LT Industrial / Commercial Consumers, Demand based

Tariff at the option of the Consumer, can be adopted. The Consumer

is permitted to have more connected load than the sanctioned load.

The billing demand will be the sanctioned load, or Maximum Demand

recorded in the Tri-Vector Meter during the month, whichever is higher.

If the Maximum Demand recorded is more than the sanctioned load,

penal charges at two times the normal rate shall apply.

2. Use of power within the Consumer premises for bonafide temporary

purpose is permitted, subject to the conditions that, total load of the

installation on the system does not exceed the sanctioned load.

3. Where it is intended to use power supply temporarily, for floor polishing

and such other portable equipment’s, in a premises having permanent

power supply, such equipment’s shall be provided with earth leakage

circuit breakers of adequate capacity.

4. The laboratory installations in educational institutions are allowed to

install connected machineries up to 4 times the sanctioned load. The

fixed charges shall however be on the basis of sanctioned load.

5. Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,

Refrigerators and other household appliances, including domestic

water pumps and air conditioners, provided, they are under single

meter connection. If a separate meter is provided for Air-conditioner

load, the Consumer shall be served with a notice to merge this load,

and to have a single meter for the entire load. Till such time, the air

conditioner load will be billed under Commercial Tariff.

6. Bulk LT supply:

If power supply for lighting / combined lighting & heating {LT 2(a)}, is

availed through a bulk Meter for group of houses belonging to one

Consumer, (ie, Where bulk LT supply is availed), the billing for energy

ccciii

shall be done at the slab rate for energy charges matching the

consumption obtained, by dividing the bulk consumption by number

of houses. In addition, fixed charges for the entire sanctioned load shall

be charged as per Tariff schedule.

7. A rebate of 25 Paise per unit will be given for the House/ School/Hostels

meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation

Centres under Tariff schedule LT 2(a).

8. SOLAR REBATE: A rebate of 50 Paise per unit of electricity consumed

subject to a maximum of Rs. 50/- per installation per month will be

allowed to Tariff schedule LT 2(a), if solar water heaters are installed

and used. Where Bulk Solar Water Heater System is installed, Solar

Water Heater rebate shall be allowed to each of the individual

installations, provided that, the capacity of Solar Water Heater in such

apartment / group housing shall be a minimum capacity of 100 Ltr. per

household.

9. A rebate of 20% on fixed charges and energy charges will be allowed

in the monthly bill in respect of public Telephone booths having

STD/ISD/ FAX facility run by handicapped people, under Tariff schedule

LT 3.

10. A rebate of 2 paise per unit will be allowed if capacitors are installed

as per Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka in respect of all metered IP Set

Installations.

11. Power Factor (PF):

Capacitors of appropriate capacity shall be installed in accordance

with Clause 23 of Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka, in the case of installations covered

under Tariff category LT 3, LT4, LT 5, & LT 6, where motive power is

involved.

ccciv

(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a

surcharge of 2 Paise per unit consumed will be levied for every

reduction of P.F. by 0.01 below 0.85 Lag. In respect of LT installations,

however, this is subject to a maximum surcharge of 30 Paise per unit.

(ii) The power factor when computed as the ratio of KWh/KVA will be

determined up to 3 decimals (ignoring figures in the other decimal

places) and then rounded off to the nearest second decimal as

illustrated below:

(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85

(iii) In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes.

(iv) During inspection, if the capacity of capacitors provided is found to be

less than what is stipulated in Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka, a surcharge of 30

Paise/unit will be levied in the case of installations covered under Tariff

categories LT 3, LT 5, & LT 6 where motive power is involved.

[

(v) In the case of installations without electronic Tri-vector meters even

after providing capacitors as recommended in Clause 23.01 and 23.03

of Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka, if during any periodical or other testing / rating of

the installation by the Licensee, the PF of the installation is found to be

lesser than 0.85, a surcharge determined as above shall be levied from

the billing month following the expiry of Three months’ notice given by

the Licensee, till such time, the additional capacitors are installed and

informed to the Licensee in writing by the Consumer. This is also

applicable for LT installations provided with electronic Tri-vector meters.

12. All new IP set applicants shall fix capacitors of adequate capacity in

accordance with Clause 23 of Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka before taking service.

cccv

13. All the existing IP set Consumers shall also fix capacitors of adequate

capacity in accordance with Clause 23 of Conditions of Supply of

Electricity of the Distribution Licensees in the State of Karnataka, failing

which, PF surcharge at the rate of Rs.60/-per HP/ year shall be levied. If

the capacitors are found to be removed / not installed, a penalty at

the same rate as above (Rs. 60/-per HP / Year) shall be levied.

14. The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and licence of not less than one year, will be billed

under commercial tariff schedule i.e., LT 3.

15. Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of

cinematography films and also outdoor shooting units, will be billed

under Temporary Tariff schedule i.e., LT 7.

16. The Consumers under IP set tariff schedule, shall use the energy only for

pumping water to irrigate their own land as stated in the IP set

application / water right certificate and for bonafide agriculture use.

Otherwise, such installations shall be billed under appropriate Industrial

/ Commercial tariff, based on the recorded consumption if available,

or on the consumption computed as per the Table given under Clause

42.06 of the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

17. The water pumped for agricultural purposes may also be used by the

Consumer for his bonafide drinking purposes and for supplying water to

animals, birds, Poultry farms, Dairy farms and fish farms maintained by

the Consumer in addition to agriculture.

18. The motor of IP set installations can be used with an alternative drive

for other agricultural operations like sugar cane crusher, coffee

pulping, arecanut cutting etc., with the approval of the Licensee. The

energy used for such operation shall be metered separately by

providing alternate switch and charged at LT Industrial Tariff (Only

Energy charges) during the period of alternative use. However, if the

cccvi

energy used both for IP Set and alternative operation, is measured

together by one energy meter, the energy used for alternate drive

shall be estimated by deducting the average IP Set consumption for

that month, as per the IP sample meter readings for the sub division, as

certified by the sub-divisional Officer.

19. The IP Consumer is permitted to use energy for lighting the pump house

and well limited to two lighting points of 40 Watts each.

20. Billing shall be made at least once in a quarter year for all IP sets.

21. In the case of welding transformers, the connected load shall be

taken as:

a) Half the maximum capacity in KVA as per the nameplate specified

under IS: 1851

OR

b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.

22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating

and Air-conditioning, Yard-Lighting, water supply in the respective of

premises of Commercial / Industrial Units.

23. Fluorescent fittings shall be provided by the Licensee for the Streetlights

in the case of villages covered under the Licensee’s electrification

programme for initial installation.

In all other cases, the entire cost of fittings including Brackets, Clamps,

etc., and labour for replacement, additions and modifications shall be met

by the organizations making such a request. Labour charges shall be paid

at the standard rates fixed by the Licensee for each type of fitting.

24. Lamps, fittings and replacements for defective components of fittings

shall be supplied by the concerned Village Panchayaths, Town

Panchayaths or Municipalities for replacement.

25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP

for purpose of billing and the minimum billing being for 1 KW / 1HP in

respect of all categories of LT installations including I.P. sets. In the case

cccvii

of street lighting installations, fraction of KW shall be rounded off to

nearest quarter KW for the purpose of billing and the minimum billing

shall be quarter KW.

26. Seasonal Industries.

a) The industries which intend to utilize seasonal industry benefit, shall

comply with the conditionalities specified under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT & LT).

b) The industries that intend to avail this benefit shall have Electronic

Tri-Vector Meter fitted to their installation.

c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal

months shall be the energy charges plus 50% of the fixed charges.

TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya jyothi and Kutira jyothi

(BJ/KJ) schemes.

RATE SCHEDULE

Energy charges

(including recovery towards

service main charges)

Nil*

Fully subsidized by the GOK

Commission Determined Tariff (CDT) for the above category i.e., LT-1 is Rs.6.48

per unit.

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by

these Consumers is shown as Nil. However, if the GOK does not release the

subsidy in advance, CDT of Rs.6.48 per unit subject to monthly minimum of Rs.30/-

per installation per month shall be demanded and collected from these

consumers.

cccviii

Note: If the consumption exceeds 40 units per month or any BJ/KJ installation

is found to have more than one out let, it shall be billed as per Tariff

Schedule LT 2(a).

cccix


Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a

portion is used by the occupant for (a) Handloom weaving (b) Silk

rearing and reeling and artisans using motors up to 200 watts (c)

Consultancy in, (i) Engineering (ii) Architecture (iii) Medicine (iv)

Astrology (v) Legal matters (vi) Income Tax (vii) Chartered Accountants

(d) Job typing (e) Tailoring (f) Post Office (g) Gold smithy (h)

Chawki rearing (i) Paying guests/Home stay guests (j) personal

Computers (k) Dhobis (l) Hand operated printing press (m) Beauty

Parlours (n) Water Supply installations, Lift which is independently

serviced for bonafide use of residential complexes/residence, (o) Farm

Houses and yard lighting limiting to 120 Watts, (p) Fodder Choppers &

Milking Machines with a connected load upto 1 HP.

Also applicable to the installations of (i) Hospitals, Dispensaries, Health

Centres run by State/Central Govt. and local bodies; (ii) Houses,

schools and Hostels meant for handicapped, aged, destitute and

orphans; (iii) Rehabilitation Centres run by charitable institutions, AIDS

and drug addicts Rehabilitation Centres; (iv) Railway staff Quarters with

single meter (v) fire service stations.

It is also applicable to the installations of (a) Temples, Mosques,

Churches, Gurudwaras, Ashrams, Mutts and religious/Charitable

institutions; (b) Hospitals, Dispensaries and Health Centres run by

Charitable institutions including X-ray units; (c) Jails and Prisons (d)

Schools, Colleges, Educational institutions run by State/Central

Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the Government,

Educational Institutions, Cultural, Scientific and Charitable Institutions(g)

Guest Houses/Travellers Bungalows run in Government buildings or by

State/Central Govt./Religious/Charitable institutions; (h) Public libraries;

(i) Silk rearing; (j) Museums; (k) Installations of Historical Monuments of

cccx

Archaeology Departments;(l) Public Telephone Booths without

STD/ISD/FAX facility run by handicapped people; (m) Sulabh / Nirmal

Souchalayas; (n) Viswa Sheds having Lighting Loads only.

RATE SCHEDULE

LT-2(a)(i) : Applicable to areas coming under Bruhat Bangalore

Mahanagara Palike (BBMP), Municipal Corporations and

all other Urban Local Bodies.

Fixed charges per

month

For the first KW Rs.40/- per KW

For every additional KW Rs.50/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

325 paise/unit

31 to 100 units 470paise/unit

101 to 200 units 625 paise /unit



Above 400 units 740 paise /unit

LT-2(a)(ii): Applicable to Areas under Village Panchayats

Fixed charges per

month

For the first KW Rs.25/- per KW

For every additional KW Rs.40/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

315 paise/unit

31 to 100 units 440 paise/unit



Above 300 units 685 paise /unit


Applicable to the installations of Private Professional and other Private

Educational Institutions including aided, unaided institutions, Nursing

Homes and Private Hospitals having only lighting or combined lighting

& heating, and motive power.

cccxi

RATE SCHEDULE

LT-2(b)(i): Applicable to Areas under Bruhat Bangalore Mahangara Palike

(BBMP) and Municipal Corporations and all other urban Local

Bodies.

Fixed charges Rs.55 per KW subject to a minimum of Rs.85 per

month

Energy charges


Above 200 units 775paise/unit

LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.45 per KW subject to a minimum of Rs.70per

month

Energy charges


Above 200 units 720 paise/unit

Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.

1 A rebate of 25 paise per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,

Rehabilitation Centres run by Charitable Institutions.

2 (a) Use of power within the consumer’s premises for temporary purposes

for bonafide use is permitted subject to the condition that, the total

load of the installation on the system does not exceed the

sanctioned load.

(b) Where it is intended to use floor polishing and such other portable

equipment temporarily, in the premises having permanent supply,

such equipment shall be provided with an earth leakage circuit

breaker of adequate capacity.

3 The laboratory installations in educational institutions are allowed to

install connected machinery up to 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

cccxii

4. Besides lighting and heating, electricity supply under this schedule can be

used for fans, Televisions, Radios, Refrigerators and other house-hold

appliances including domestic water pump and air conditioners,

provided, they are under single meter connection. If a separate meter is

provided for Air conditioner Load, the consumption shall be under

commercial tariff till it is merged with the main meter.

5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a

maximum of Rs.50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the

capacity of Solar Water Heater in such apartment / group housing shall

be a minimum capacity of 100 Ltr, per household.


Applicable to Commercial Lighting, Heating and Motive Power

installations of Clinics, Diagnostic Centres, X-Ray units, Shops, Stores,

Hotels / Restaurants / Boarding and Lodging Homes, Bars, Private guest

Houses, Mess, Clubs, Kalyan Mantaps / Choultry, permanent Cinemas/

Semi Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil

Storage Plants, Service Stations/ Garages, Banks, Telephone

Exchanges. T.V. Stations, Microwave Stations, All India Radio, Dish

Antenna, Public Telephone Booths/ STD, ISD, FAX Communication

Centers, Stud Farms, Race Course, Ice Cream Parlours, Computer

Centres, Photo Studio / colour Laboratory, Photo Copiers, Railway

Installation excepting Railway workshop, BMTC / KSRTC Bus Stations

excepting Workshop, All offices, Police Stations, Commercial

Complexes, Lifts of Commercial Complexes, Battery Charging units,

Tyre Vulcanizing Centres, Post Offices, Bakery shops, Beauty Parlours,

Stadiums other than those maintained by Govt. and Local Bodies. It is

also applicable to water supply pumps and street lights not covered

under LT 6, Cyber cafés, Internet surfing cafés, Call centres, BPO / KPO,

Telecom, I.T. based medical transcription centres, Private Hostels not

cccxiii

covered under LT -2 (a), Paying guests accommodation provided in an

independent / exclusive premises, concrete mixtures (Ready Mix

Concrete) units.

cccxiv

RATE SCHEDULE

LT-3 (i): Applicable in areas coming under Bruhat Bangalore Mahanagara

Palike(BBMP), Municipal Corporations and other urban local bodies

Fixed charges Rs.60 per KW

Energy charges

For 0 - 50 units 750 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.75 per KW

Energy charges As above

RATE SCHEDULE

LT-3 (ii):Applicable in Areas under Village Panchayats

Fixed charges Rs.50 per KW per month

Energy charges For 0 - 50 units 700 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.65 per KW per month

Energy charges As above

Note: 1. Besides Lighting, Heating and Motive power, electricity supply under

this Tariff can also be used for Yard lighting/ air Conditioning/water

supply in the premises.

2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for duration of not less

than one year.

3. Touring Cinemas having an outfit comprising Cinema apparatus

and accessories taken from place to place for exhibition of

cinematography film and also outdoor shooting units shall be billed

under LT- 7 Tariff.

4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths having

STD / ISD/FAX facility run by handicapped people.

5. Demand based Tariff at the option of the consumer can be adopted

as per Para 1 of the conditions applicable to LT installations.

cccxv

TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets

used in; (i) Nurseries of forest and Horticultural Departments; (ii) Grass Farms

and Gardens; (iii) Plantations other than Coffee, Tea, Rubber and Private

Horticulture Nurseries.

TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets up to and inclusive of 10 HP

RATE SCHEDULE

Fixed charges Free

Energy charges

Commission Determined Tariff (CDT) for LT4 (a) category is 334 paise per unit

In case the GOK does not release the subsidy in advance in the manner

specified by the Commission in K.E.R.C. (Manner of Payment of subsidy)

Regulations, 2008, CDT of 334 paise per unit shall be demanded and collected

from these consumers.

Note: This Tariff is applicable for Coconut and Arecanut plantations also.

TARIFF SCHEDULE LT-4 (b):

Applicable to IP sets above 10 HP

RATE SCHEDULE

Fixed charges Rs.50 per HP per month.

Energy charges 300 paise per unit

TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load upto and inclusive of 10 HP.

RATE SCHEDULE



cccxvi

TARIFF SCHEDULE LT-4 (c) (ii):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load above 10 HP.

RATE SCHEDULE



Note:

1) The energy supplied under this tariff shall be used by the consumers only for pumping water to irrigate their own

land as stated in the I.P. Set application / water right certificate and for bonafide agriculture use. Otherwise, such installations shall be billed under the appropriate Tariff (LT-3/ LT-5) based on the recorded consumption if available, or on the consumption computed as per the Table given under Clause 42.06 of the Conditions of Supply of Electricity of the Distribution Licensees in the State of Karnataka.

2) The motor of IP set installations can be used with an alternative drive for other agricultural operations like sugar cane crusher, coffee pulping, arecanut cutting etc., with the approval of the Licensee. The energy used for such operation shall be metered separately by providing alternate switch and charged at LT Industrial Tariff (Only Energy charges) during the period of alternative use. If the energy used both for IP Set and alternative operation, is however measured together by one energy meter, the energy used for alternate drive shall be estimated by deducting the average IP Set consumption for that month as per the IP sample meter readings for the sub division as certified by the sub-divisional Officer.

3) The Consumer is permitted to use the energy for lighting the pump house and well limited to 2 lighting points of 40 W each.

4) The water pumped for agricultural purposes may also be used by the Consumer for his bonafide drinking purposes and for supplying water to animals, birds, Poultry farms, Dairy farms and fish farms maintained by the Consumer in addition to agriculture.

5) Billing shall be made at least once in a quarter year for all IP sets.

6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in the State of Karnataka in respect of all metered IP Set Installations.

7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and LT 4(c) categories irrespective of whether the IP Sets are provided with Meters or not.


Applicable to Heating & Motive power (including lighting) installations

of industrial Units, Workshops, Poultry Farms, Sugarcane Crushers,

Coffee Pulping, Cardamom drying, Mushroom raising installations,

Flour, Huller & Rice Mills, Wet Grinders, Milk dairies, Ironing, Dry Cleaners

and Laundries having washing, Drying, Ironing etc., Tailoring shop, Bulk

Ice Cream and Ice manufacturing Units, Coffee Roasting and Grinding

cccxvii

Works, Cold Storage Plants, Bakery Product Mfg. Units, BMTC/ KSRTC

workshops/Depots, Railway workshops, Drug manufacturing units and

Testing laboratories, Printing Presses, Garment manufacturing units, Bulk

Milk vending Booths, Swimming Pools of local Bodies, Tyre retreading

units, Stone crushers, Stone cutting, Chilly Grinders, Phova Mills,

pulverizing Mills, Decorticators, Iron & Red-Oxide crushing units,

crematoriums, hatcheries, Tissue culture, Saw Mills, Toy/wood industries,

Viswa Sheds with mixed load sanctioned under Viswa Scheme,

Cinematic activities such as Processing, Printing, Developing,

Recording theatres, Dubbing Theatres and film studios, Agarbathi

manufacturing unit., Water supply installations of KIADB & industrial

units, Gem & Diamond cutting Units, Floriculture, Green House, Biotech

Labs., Hybrid seed processing units. Information Technology industries

engaged in development of hardware & Software, Information

Technology (IT) enabled Services / Start-ups(As defined in GOI

notification dated 17.04.2015)/ Animation / Gaming / Computer

Graphics as certified by the IT & BT Department of GOK/GOI, Silk

filature units, Aqua Culture, Prawn Culture, Brick manufacturing units,

Silk / Cotton colour dying, Stadiums maintained by Govt. and local

bodies, Fire service stations, Gold / Silver ornament manufacturing

units, Effluent treatment plants, Drainage water treatment plants, LPG

bottling plants and petroleum pipeline projects, Piggery farms,

Analytical Lab. for analysis of ore metals, Satellite communication

centres, Mineral water processing plants / drinking water bottling plants

and soda fountain units.

cccxviii

RATE SCHEDULE

LT-5 (a): Applicable to Bruhat Bangalore MahanagaraPalikeand other

Municipal Corporation.

i.Fixed charges

Fixed charges per

month



iii)Rs.60 per HP for 40 HP & above but below 67 HP

iv)Rs.120 per HP for 67 HP & above

ii. Demand based Tariff (optional)

Fixed

charges

per month

Above 5 HP and less than 40 HP Rs.65 per KW of billing demand

40 HP and above but less than

67 HP

Rs.90 per KW of billing demand


demand

iii. Energy Charges



RATE SCHEDULE

LT-5 (b): Applicable to all Areas other than those covered under LT-5(a).

i. Fixed charges

Fixed Charges

per Month

i) Rs.35 per HP for 5 HP & below.

ii) Rs.40 per HP for above 5 HP & below 40 HP.

iii) Rs.55 per HP for 40 HP & above but below 67 HP.

iv)Rs.110 per HP for 67 HP & above.

ii. Demand based Tariff (optional)

Fixed

Charges

per

Month

Above 5 HP and less than 40 HP Rs.55 per KW of billing demand

40 HP and above but less than 67

HP

Rs.80 per KW of billing demand


demand

cccxix

iii. Energy Charges




TOD Tariff applicable to LT5 (a) & (b):At the option of the Consumer




10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs

next day


NOTE:

1. DEMAND BASED TARIFF

In the case of LT Industrial Consumers, Demand based Tariff at the option of

the Consumer can be adopted. The Consumer is permitted to have more

connected load than the sanctioned load. The billing demand will be the

sanctioned load or Maximum Demand recorded in the Tri-Vector Meter

during the month whichever is higher. If the Maximum Demand recorded is

more than the sanctioned load, penal charges at two times the normal rate

shall apply.

2. Seasonal Industries: The industries which intend to utilize seasonal industry

benefit shall comply with the conditionalities under para no. 24 of general

terms and conditions applicable to LT.

3. Electricity can also be used for lighting, heating, and air-conditioning in the

premises.

4. In the case of welding transformers, the connected load shall be taken as,

(a) Half the maximum capacity in KVA as per the name plate specified

under-IS1851, or (b) Half the maximum capacity in KVA as recorded

during rating by the Licensee, whichever is higher.


Applicable to water supply and sewerage pumping installations and

also applicable to water purifying plants maintained by Government

and Urban Local Bodies/ Grama Panchayats for supplying pure

drinking water to residential areas Public Street lights/Park lights of

village Panchayat, Town Panchayat, Town Municipalities, City

cccxx

Municipalities / Corporations / State and Central Govt. / APMC, Traffic

signals, Survelliance Cameras at traffic locations belonging to

Government Department, subways, water fountains of local bodies.

Also applicable to Streetlights of residential Campus of universities,

other educational institutions, housing colonies approved by local

bodies/development authority, religious institutions, organizations run

on charitable basis, industrial area / estate and notified areas, also

applicable to water supply installations in residential Layouts, Street

lights along with signal lights including the gateman’s shed with

associated equipment provided at the Railway level crossing, high

mast street lights, Lifts/ Escalators installed in pedestrian road crossing

maintained by Government and Urban local bodies/ Grama

Panchayats independently serviced .

RATE SCHEDULE

Water Supply- LT-6 (a)

Fixed charges Rs.55/HP/month

Energy charges 425 Paise/unit

Public lighting- LT-6 (b)

Fixed charges Rs.70/KW/month

Energy charges 585 Paise/unit

Energy Charges for LED/ Induction

Lighting

485 paise/unit


Temporary Supply and Permanent Supply to Advertising Hoardings


Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charge at 1000 paise / unit

subject to a weekly minimum of Rs.190

per KW of the sanctioned load.


Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the

interest of public such as Police Canopy Direction boards, and other

cccxxi

sign boards sponsored by Private Advertising Agencies / firms on

permanent connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW / month


Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the

provisions of Clause 12 of the Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having licence for duration

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 of the Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka shall be complied with before service.

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Transcript of BESCOM - karnataka.gov.in Orders/Tariff 2017/BESCOM... · 4.4 Gap in Revenue for FY16 71 ... 4.5...