Order on Generation Tariff - UERCuerc.gov.in/ordersPetitions/orders/Tariff/Tariff...

Order

On

True up for FY 2016-17,

Annual Performance Review

for FY 2017-18

&

Annual Fixed Charges

for FY 2018-19

For

UJVN Ltd.

March 21, 2018

UTTARAKHAND ELECTRICITY REGULATORY COMMISSION

Vidyut Niyamak Bhawan,

Near I.S.B.T., P.O. Majra, Dehradun–248171

(i)

Table of Contents

1 Background and Procedural History .............................................................................................. 4

2 Summary of Stakeholders’ Objections/Suggestions, Petitioner’s Responses and

Commission’s Views ......................................................................................................................... 8

2.1 Tariff Hike ................................................................................................................................................ 8

2.1.1 Stakeholder’s Comment ............................................................................................................ 8

2.1.2 Petitioner’s Reply ....................................................................................................................... 8

2.1.3 Commission’s View ................................................................................................................... 9

2.2 Capital Cost and RoE of MB-II Project................................................................................................ 9

2.2.1 Stakeholder’s Comment ............................................................................................................ 9

2.2.2 Petitioner’s Reply ....................................................................................................................... 9

2.2.3 Commission’s Views ............................................................................................................... 10

2.3 Design Energy/Actual Energy Generated ......................................................................................... 10

2.3.1 Stakeholder’s Comment .......................................................................................................... 10

2.3.2 Petitioner’s Reply ..................................................................................................................... 10


2.4 Other Cost ............................................................................................................................................... 11

2.4.1 Stakeholder’s Comments ........................................................................................................ 11



2.5 Issues Raised During Meeting of State Advisory Committee ...................................................... 12

2.5.1 Views of State Advisory Committee ..................................................................................... 12


2.5.3 Observations of Secretary, Energy, Government of Uttarakhand during SAC .............. 13

2.5.4 Commission’s View ................................................................................................................. 13

3 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on

Truing-up of 9 LHPs & MB-II for FY 2016-17 ............................................................................. 14

(ii)

3.1 Impact of Sharing of Gains and Losses on account of Controllable Factors for FY 2016-

17 ............................................................................................................................................................... 15

3.1.1 Physical Parameters ................................................................................................................. 16

3.1.2 Financial Parameters ............................................................................................................... 21

3.1.3 Summary of Net Impact on Account of Truing-up of FY 2016-17 of MB-II

including Carrying Cost .......................................................................................................... 74

4 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR

for FY 2017-18, Revised AFC & Tariff for FY 2018-19 ................................................................ 75

4.1 Annual Performance Review .............................................................................................................. 75

4.2 Physical Parameters .............................................................................................................................. 76

4.2.1 NAPAF ...................................................................................................................................... 76

4.2.2 Design Energy, Auxiliary Energy Consumption and Saleable Primary Energy ............. 79

4.3 Financial Parameters ............................................................................................................................. 82

4.3.1 Apportionment of Common Expenses ................................................................................. 82

4.3.2 Capital Cost............................................................................................................................... 83

4.3.3 Additional Capitalisation ........................................................................................................ 84

4.3.4 Depreciation .............................................................................................................................. 98

4.3.5 Return on Equity .................................................................................................................... 100

4.3.6 Interest on Loans .................................................................................................................... 103

4.3.7 Operation and Maintenance expenses ................................................................................ 105

4.3.8 Interest on Working Capital ................................................................................................. 115

4.3.9 Non-Tariff Income ................................................................................................................. 117

4.3.10 Annual Fixed Charges, Capacity Charge and Energy Charge Rate (ECR) for FY

2018-19 ..................................................................................................................................... 119

5 Directives ......................................................................................................................................... 123

5.1 Compliance to the Directives Issued in Order dated 05.04.2010................................................. 123

5.1.1 Performance Improvement Measures ................................................................................. 123

5.1.2 Transfer Scheme ..................................................................................................................... 124

(iii)

5.2 Compliance to directives issued in Order dated 10.05.2011 ........................................................ 126

5.2.1 Colony Consumption ............................................................................................................ 126

5.2.2 Income from electricity distribution to Sundry Consumers ............................................ 126

5.3 Compliance to the Directives Issued in MYT Order dated 06.05.2013 ...................................... 128

5.3.1 Design Energy ........................................................................................................................ 128

5.4 Directives specifically issued in Meeting dated 04.09.2013 ......................................................... 129

5.4.1 Status of upcoming projects ................................................................................................. 129

5.4.2 Utilisation of Expenses approved by the Commission ..................................................... 130

5.5 Compliance to the Directives Issued in Tariff Order dated 11.04.2015 ..................................... 130

5.5.1 View of State Advisory Committee ..................................................................................... 130

5.6 Compliance to the Directives Issued in Tariff Order dated 29.03.2017 ..................................... 131

5.6.1 Financial Relief towards restoration of damage caused due to Natural Calamity ....... 131

5.6.2 Details of various offices and projects of UJVN Ltd. ........................................................ 132

5.6.3 RMU works of Khatima LHP ............................................................................................... 132

5.6.4 Impact of VII Pay Commission ............................................................................................ 133

5.6.5 Non Tariff Income .................................................................................................................. 134

5.7 New Directives Issued........................................................................................................................ 135

5.7.1 Expenses claimed under Major Overhauling ..................................................................... 135

5.7.2 Balance Capital Works of MB-II HEP .................................................................................. 135

5.7.3 Observation on abnormal increase in Additional Capital Expenditure in certain

LHPs ........................................................................................................................................ 136

5.7.4 Views of State Advisory Committee ................................................................................... 136

6 Annexure .......................................................................................................................................... 138

6.1 Annexure 1: Public Notice ................................................................................................................. 138

6.2 Annexure 2: List of Respondents ...................................................................................................... 139

6.3 Annexure 3: List of Participants in Public Hearings ..................................................................... 139

6.4 Annexure 4: Breakup of works carried out under RMU in Khatima LHP as claimed by

the Petitioner for FY 2016-17 .............................................................................................................. 144

(iv)

6.5 Annexure 5: List of Items shifted from Add Cap to R&M and R&M to Add Cap for FY

2016-17 ................................................................................................................................................... 148

6.6 Annexure 6: Expenses covered under Balance Capital Petition for MB-II as claimed by

the Petitioner ........................................................................................................................................ 150

6.7 Annexure 7: Details of the Revised Additional Capitalisation claimed by the Petitioner

for MB-II for FY 2017-18 and FY 2018-19 ......................................................................................... 153

(i)

List of Tables

Table 1.1: Publication of Notice ......................................................................................................................... 5

Table 1.2: Schedule of Hearing........................................................................................................................... 5

Table 3.1: NAPAF approved vide MYT order dated 05.04.2016 for FY 2016-17 ....................................... 17

Table 3.2: Design Energy and Saleable Primary Energy Approved for FY 2016-17 ................................. 21

Table 3.3: Approved Capital Cost as on 14.01.2000 ...................................................................................... 23

Table 3.4: Approved Capital Cost for MB-II as on CoD ............................................................................... 24

Table 3.5: Financing for MB-II as on CoD ....................................................................................................... 24

Table 3.6: Additional Capitalisation already approved by the Commission from FY 2001-02 to FY

2015-16 for 9 LHPs .................................................................................................................................... 25

Table 3.7: Opening GFA for 9 LHPs as considered by the Commission for FY 2016-17 .......................... 25

Table 3.8: Additional Capitalisation for 9 LHPs claimed by the Petitioner for FY 2016-17 ..................... 26

Table 3.9: Total RMU expenses incurred on Khatima as claimed by the Petitioner ................................. 27

Table 3.10:Details of additional capital expenditure under RMU works in Khatima LHP for FY 2016-17

approved by the Commission ................................................................................................................. 30

Table 3.11:Additional Capitalisation approved for Khatima LHP for FY 2016-17 ................................... 31

Table 3.12: Expenses of Capital Nature wrongly booked under R&M Expenses for three of the 9 LHPs

during FY 2016-17 ..................................................................................................................................... 32

Table 3.13: Expenses of R&M Nature but included under Additional Capitalization for 9 LHPs during

FY 2016-17 .................................................................................................................................................. 33

Table 3.14: Quarterly Progress of Investment Approval accorded to UJVN Ltd. as on 31.12.2017 ........ 34

Table 3.15: Additional Capitalisation for 9 LHPs for FY 2016-17 approved by the Commission

including de-capitalization ...................................................................................................................... 35

Table 3.16: Year-wise Additional Capitalisation already approved by the Commission from FY 2007-

08 to FY 2015-16 for MB-II LHP .............................................................................................................. 35

Table 3.17: Opening GFA for MB-II as considered by the Commission for FY 2016-17 .......................... 36

Table 3.18: Additional Capitalisation claimed by the Petitioner for FY 2016-17 ....................................... 36

Table 3.19: Item-wise details of Additional Capitalisation approved by the Commission for MB-II FY

2016-17 ........................................................................................................................................................ 40

Table 3.20: Asset-wise Additional Capitalization approved by the Commission for FY 2016-17 .......... 41

Table 3.21: Procurements done on single quotation basis ............................................................................ 41

Table 3.22: Procurements done on proprietary basis .................................................................................... 42

Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market

rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State .......................................... 43

Table 3.24: Works with large variation in prices within HEPs of UJVN Ltd. ............................................ 44

(ii)

Table 3.25: Depreciation approved for 9 LHPs after truing-up of FY 2016-17 .......................................... 47

Table 3.26: Revised Depreciation for MB-II for FY 2016-17 ......................................................................... 48

Table 3.27: Income Tax as claimed by the Petitioner for 9 LHPs ................................................................. 49

Table 3.28: Equity and Return on Equity for Nine Old LHPs for FY 2016-17 ........................................... 50

Table 3.29: RoE approved for MB-II for FY 2016-17 ...................................................................................... 52

Table 3.30:Interest on Loan for Nine Old LHPs for FY 2016-17 .................................................................. 54

Table 3.31: Interest on Loan as approved for MB-II for FY 2016-17 ............................................................ 55

Table 3.32: Escalation Rates as considered by the Commission .................................................................. 56

Table 3.33: Growth Factor ‘Gn’ as considered by the Commission for FY 2016-17 .................................. 56

Table 3.34: Employee Expenses approved for FY 2016-17 ........................................................................... 57

Table 3.35: K-Factor as considered by the Commission ............................................................................... 58

Table 3.36: R&M Expenses approved for FY 2016-17 ................................................................................... 59

Table 3.37: A&G Expenses approved for FY 2016-17 .................................................................................... 60

Table 3.38: Normative O&M Expenses as approved for 9 LHPs for FY 2016-17 ...................................... 60

Table 3.39: Amount allowed by the Commission in this Tariff Order towards Provision amount

disallowed in Tariff Order dated 29.03.2017 ......................................................................................... 62

Table 3.40: O&M Expenses approved for FY 2016-17 ................................................................................... 63

Table 3.41: Normative O&M Expenses as approved for MB-II Station for FY 2016-17 ............................ 64

Table 3.42: O&M Expenses approved after sharing of gains and losses for FY 2016-17 .......................... 65

Table 3.43: Interest on Working Capital for Nine LHPs for FY 2016-17 ..................................................... 67

Table 3.44 Interest on Working Capital for Nine LHPs for FY 2016-17 after sharing of Gains ............... 67

Table 3.45 Interest on Working Capital as approved for FY 2016-17 ......................................................... 68

Table 3.46: Interest on Working Capital for MB-II for FY 2016-17 after sharing of gains ........................ 68

Table 3.47: Summary of AFC for FY 2016-17 ................................................................................................. 68

Table 3.48: Non-Tariff Income for 9 LHPs for FY 2016-17 ............................................................................ 71

Table 3.49: Summary of net AFC as Trued up by the Commission for 9 LHPs for FY 2016-17 to be

recovered from UPCL............................................................................................................................... 71

Table 3.50: Summary of net truing-up for FY 2016-17 for UPCL ................................................................ 72

Table 3.51: Summary of net AFC as Trued up by the Commission for 9 LHPs to be refunded to UPCL

..................................................................................................................................................................... 72

Table 3.52: Summary of net AFC as Trued-up for FY 2016-17 by the Commission for 9 LHPs to be

recovered from HPSEB ............................................................................................................................. 73

Table 3.53: Summary of net AFC as Trued up by the Commission to be refunded to HPSEB .............. 73

Table 3.54: Summary of truing-up of Net AFC of MB-II for FY 2016-17 .................................................... 74

Table 3.55: Net impact on account of truing-up of FY 2016-17 .................................................................... 74

(iii)

Table 3.56: Summary of net amount Trued up by the Commission for FY 2016-17 to be refunded to

UPCL........................................................................................................................................................... 74

Table 4.1: NAPAF as approved by the Commission for FY 2018-19 .......................................................... 79

Table 4.2: Possible Generation during June to October of 2018 for Khatima LHP as claimed by the

Petitioner .................................................................................................................................................... 80

Table 4.3: Design Energy and Saleable Primary Energy approved for FY 2018-19 .................................. 82

Table 4.4: Approved Original Cost inherited from UPJVNL ....................................................................... 83

Table 4.5: Approved Capital Cost and Financing for MB-II as on CoD ..................................................... 84

Table 4.6: GFA considered by the Commission for 9 LHPs upto 31.03.2017 ............................................. 84

Table 4.7: Additional Capitalisation projected by the Petitioner for FY 2017-18 and FY 2018-19 .......... 85

Table 4.8: Expenditure for RMU projected by the Petitioner for FY 2017-18 and FY 2018-19 for 9 LHPs

..................................................................................................................................................................... 86

Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and

FY 2018-19 .................................................................................................................................................. 88

Table 4.10: Additional Capitalization claimed under DRIP Scheme for FY 2017-18 and FY 2018-19 .... 91

Table 4.11: Additional Capitalization claimed for New Multi-Storied Residential and Office Buildings

in Dehradun for FY 2017-18 and FY 2018-19 ......................................................................................... 92

Table 4.12: Details of Office & Residential Building as claimed by the Petitioner .................................... 93

Table 4.13: Additional Capitalization claimed for works other than RMU, DRIP and Office &

Residential Building for FY 2017-18 and FY 2018-19............................................................................ 94

Table 4.14: Additional Capitalization as approved for 9 LHPs for FY 2017-18 and FY 2018-19 ............. 95

Table 4.15: Opening GFA for MB-II as considered by the Commission for FY 2017-18 .......................... 96

Table 4.16: Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and

FY 2018-19 .................................................................................................................................................. 97

Table 4.17: Depreciation Charges as approved by the Commission for 9 LHPs for FY 2018-19 ............. 99

Table 4.18: Depreciation charges as approved by the Commission for MB-II for FY 2018-19 of second

Control Period ......................................................................................................................................... 100

Table 4.19: Return on Equity for Nine Old LHPs for FY 2018-19 .............................................................. 102

Table 4.20: Return on Equity for MB-II for FY 2018-19 of second Control Period .................................. 103

Table 4.21: Interest on Loan for Nine Old LHPs for FY 2018-19 ............................................................... 104

Table 4.22: Interest on Loan for MB-II for FY 2018-19 of second Control Period .................................... 105

Table 4.23: Escalation Rate as considered by the Commission .................................................................. 108

Table 4.24: Employee expenses for 9 LHPs for FY 2018-19 ........................................................................ 110

Table 4.25: R&M Expenses for 9 LHPs for FY 2018-19 ................................................................................ 112

Table 4.26: Expenses on ERP system as claimed by the Petitioner for 9 LHPs for FY 2018-19 ............ 113

Table 4.27: A&G Expenses for 9 LHPs for FY 2018-19 ................................................................................ 114

(iv)

Table 4.28: O&M Expenses for 9 LHPs for FY 2018-19 ............................................................................... 114

Table 4.29: O&M expenses approved by the Commission for MB-II for FY 2018-19 ............................. 115

Table 4.30: Interest on Working Capital approved by the Commission for 9 LHPs for FY 2018-19 .... 116

Table 4.31: Interest on Working Capital approved by the Commission for MB-II for FY 2018-19 ....... 117

Table 4.32: Non-Tariff Income for 9 LHPs for FY 2018-19 .......................................................................... 118

Table 4.33: Non-Tariff Income for MB-II for FY 2018-19 of second Control Period ............................... 119

Table 4.34: Approved AFC of 9 LHPs of UJVN Ltd. for FY 2018-19......................................................... 121

Table 4.35: Approved Capacity Charge and Energy Charge Rate for 9 LHPs for FY 2018-19 .............. 121

Table 4.36: Approved AFC, Capacity Charge and Energy Charge Rate for MB-II for FY 2018-19....... 122

Before

UTTARAKHAND ELECTRICITY REGULATORY COMMISSION

Petition No.: 52 to 61 of 2017

In the Matter of:

Petitions filed by UJVN Limited for True up for FY 2016-17, Annual Performance Review for FY

2017-18 and Aggregate Revenue Requirement FY 2018-19 for 10 LHPs.

In the Matter of:

UJVN Ltd.

UJJWAL, Maharani Bagh, GMS Road, Dehradun. ...............Petitioner

Coram

Shri Subhash Kumar Chairman

Date of Order: March 21, 2018

Section 64(1) read with Section 61 and 62 of the Electricity Act, 2003 (hereinafter referred to

as “the Act”) requires the Generating Companies and the Licensees to file an application for

determination of tariff before the Appropriate Commission in such manner and along with such fee

as may be specified by the Appropriate Commission through Regulations.

In accordance with relevant provisions of the Act, the Commission had notified Uttarakhand

Electricity Regulatory Commission (Terms and Conditions for Determination of Multi Year Tariff)

Regulations, 2015 (hereinafter referred to as “UERC Tariff Regulations, 2015”) for the Second

Control Period from FY 2016-17 to FY 2018-19 specifying therein terms, conditions and norms of

operation for licensees, generating companies and SLDC. The Commission had issued the Order on

approval of Business Plan and Multi Year Tariff dated April 5, 2016 for the Control Period from FY

2016-17 to FY 2018-19. In accordance with the provisions of the UERC Tariff Regulations, 2015, the

2 Uttarakhand Electricity Regulatory Commission

Commission had carried out the Annual Performance Review for FY 2016-17 vide its Order dated

March 29, 2017.

As per the provisions of Regulation 12 of the UERC Tariff Regulations, 2015, UJVN Ltd.

(hereinafter referred to as “UJVN Ltd.” or “the Petitioner”) filed the Petitions (Petitions No. 52 to 61

of 2017 and hereinafter referred to as the “Petitions”), giving details of its revised projections of

Annual Fixed Charges (AFC) for FY 2018-19, based on the true-up for FY 2016-17 and Annual

Performance Review for FY 2017-18 on 30.11.2017.

The Petitions filed by UJVN Ltd. had certain infirmities/deficiencies which were informed

to UJVN Ltd. vide Commission’s letter no. UERC/6/TF/432/2017-18/1425 dated 07.12.2017 and

UJVN Ltd. was directed to rectify the said infirmities in the Petitions necessary for admission of the

Petitions and also submit certain additional information/data for further analysis of the Petitions.

UJVN Ltd. vide its letter no. 517/UJVNL/04/D(F)/UERC dated 14.12.2017 has removed the critical

deficiencies necessary for admission of the Petitions. Based on the submission dated 14.12.2017

made by UJVN Ltd., the Commission vide its Order dated 21.12.2017 provisionally admitted the

Petitions for further processing subject to the condition that UJVN Ltd. shall furnish any further

information/clarifications as deemed necessary by the Commission during the processing of the

Petitions within the time frame, as may be stipulated by the Commission, failing which the

Commission may proceed to dispose of the matter as it deems fit based on the information available

with it.

This Order, accordingly, relates to Petitions filed by UJVN Ltd. for true-up for FY 2016-17,

APR for FY 2017-18 and revised AFC for FY 2018-19 and is based on the original as well as all the

subsequent submissions made by UJVN Ltd. during the course of the proceedings and the relevant

findings contained in the MYT Order dated 05.04.2016 and Tariff Order dated 29.03.2017.

Tariff determination being one of the most vital function of the Commission, it has been the

practice of the Commission to elaborate in detail the procedure and to explain the underlying

principles in determination of tariffs. Accordingly, in the present Order also, in line with past

practices, the Commission has tried to elaborate the procedure and principles followed by it in

determining the ARR of the licensee. The Annual Fixed Charges of UJVN Ltd. are recoverable from

the beneficiaries. It has been the endeavour of the Commission in past also, to issue Tariff Orders

for UJVN Ltd. concurrently with the issue of Order on retail tariffs for UPCL, so that UPCL is able

Uttarakhand Electricity Regulatory Commission 3

to honour the payment liability towards generation charges of UJVN Ltd. For the sake of

convenience and clarity, this Order has further been divided into following Chapters:

Chapter 1 - Background and Procedural History

Chapter 2 - Stakeholders’ Objections/suggestions, Petitioner’s Responses & Commission’s

Views

Chapter 3 - Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on

Truing-up for FY 2016-17

Chapter 4 - Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on

APR for FY 2017-18 and Revised AFC & Tariff for FY 2018-19

Chapter 5 - Commission’s Directives


1 Background and Procedural History

UJVN Ltd. is a company wholly owned by the State Government and is engaged in the

business of generation of power in the State including 10 Large Hydro Power Stations to which this

Order relates. These generating stations are Dhakrani, Dhalipur, Chibro, Khodri, Kulhal,

Ramganga, Chilla, Maneri Bhali-I, Maneri Bhali-II and Khatima. Electricity generated by these

generating stations is supplied to Uttarakhand Power Corporation Ltd (UPCL), the sole distribution

licensee in the State) and Himachal Pradesh State Electricity Board (HPSEB), which, as per an old

arrangement/scheme, has share in five of these generating stations viz. Dhakrani (25%), Dhalipur

(25%), Chibro (25%), Khodri (25%) and Kulhal (20%).

The Commission vide its Order dated 05.04.2016 approved the Business Plan and Multi Year

Tariff for UJVN Ltd. for the second Control Period FY 2016-17 to FY 2018-19. The Commission, in

the approval of Business Plan, approved the Capital Expenditure Plan, Capitalisation Plan, Human

Resource Plan and Trajectory of the performance parameters and, in the approval of MYT,

approved the Aggregate Revenue Requirement for each year of the Control Period from FY 2016-17

to FY 2018-19. Further, the Commission had issued the Tariff Order for FY 2017-18 vide its Order

dated 29.03.2017. In accordance with Regulation 12 of the UERC Tariff Regulations, 2015, the

Generating Company is required to file a Petition for Annual Performance Review by November 30

of every year.

In compliance with the Regulations, UJVN Ltd. filed its Petitions for true-up for FY 2016-17,

APR for FY 2017-18 and AFC for FY 2018-19 based on the audited accounts for FY 2016-17 on

30.11.2017. The above Petitions were provisionally admitted by the Commission vide its Order

dated 21.12.2017. The Commission, through its above Admittance Order dated 21.12.2017, to

provide transparency to the process of tariff determination and give all Stakeholders an opportunity

to submit their objections/suggestions/comments on the proposals of UJVN Ltd., also directed

UJVN Ltd. to publish the salient points of its proposals in the leading newspapers. The salient

points of the proposal were published by the Petitioner in the following newspapers:

1. Background and Procedural History


Table 1.1: Publication of Notice

S. No. Newspaper Name Date Of Publication

1 Amar Ujala 27.12.2017

2 Dainik Jagran 27.12.2017

3 Times of India 28.12.2017

4 Hindustan Times 28.12.2017

Through above notice, Stakeholders were requested to submit their

objections/suggestions/comments latest by 31.01.2018 (copy of the notice is enclosed as Annexure

1). The Commission received in all 06 comments/suggestions/objections in writing on the Petition

filed by UJVN Ltd. The list of Stakeholders who have submitted their

objections/suggestions/comments in writing is enclosed as Annexure 2.

Further, for direct interaction with all the Stakeholders and public at large, the Commission

also held public hearings on the proposals filed by the Petitioner at the following places in the State

of Uttarakhand.

Table 1.2: Schedule of Hearing

S. No. Place Date

1 Bageshwar 20.02.2018

2 Rudrapur 21.02.2018

3 Rudraprayag 27.02.2018

4 Dehradun 28.02.2018

The list of participants who attended the Public Hearing is enclosed at Annexure 3.

The Commission also sent the copies of the salient features of tariff proposals to Members of

the State Advisory Committee and the State Government. The salient features of the tariff proposals

submitted by UJVN Ltd. were also made available on the website of the Commission, i.e.

www.uerc.gov.in. The Commission also held a meeting with the Members of the Advisory

Committee on 05.03.2018 wherein, detailed deliberations were held with the Members of the

Advisory Committee on the various issues linked with the Petitions filed by UJVN Ltd.

The objections/suggestions/comments, as received from the Stakeholders through

mail/post as well as during the course of public hearing were sent to the Petitioner for its response.

All the issues raised by the Stakeholders, Petitioner’s response and Commission’s views thereon are

detailed in Chapter 2 of this Order. In this context, it is also to underline that while finalizing this

Order, the Commission has, as far as possible, tried to address all the issues raised by the

Stakeholders.

Order on True-up of FY 2016-17, APR for FY 2017-18 and AFC for FY 2018-19


Meanwhile, based on the scrutiny of the Petitions submitted by UJVN Ltd., the Commission

vide its letter no. UERC/6/TF/432/2017-18/1425 dated 07.12.2017 and letter no.

UERC/6/TF/432/Pet. No. 52 to 61 of 2017/1526 dated 29.12.2017 has pointed out certain data gaps

in the Petitions and sought following additional information/clarifications from the Petitioner:

With regards to other capital expenditure:

Detailed breakup of R&M expenses.

Reconciliation of additional capitalization with audited accounts for FY 2016-17.

Details of bills of water tax paid for FY 2016-17 and FY 2017-18.

Quarter wise interest paid, refund received and repayment of actual loan for FY

2016-17

Sub-asset breakup of additional capitalization claimed during FY 2016-17.

Asset wise de-capitalization for each station.

Sub-head wise expenses incurred/proposed to be incurred on works covered under

Balance Capital Expenditure for MB-II generating station.

Monthly detailed calculation of PAFM for 10 LHPs for FY 2016-17.

Details of actual number of employees recruited/retired.

With regard to the RMU works of Khatima LHP:

The actual expenses incurred on cash basis and undischarge liabilities as on COD of

various Units.

Discharge of such liabilities post CoD of the respective units along with documentary

evidence of such payment made.

Detailed computation of IDC and the basis of allocation of such IDC on various units.

Copy of all the contracts awarded towards RMU works.

Computation of all price variation paid to contractors.

Details of Liquidated Damages levied by UJVN Ltd., if any.

1. Background and Procedural History


Appropriate justification for the funding of the project.

Year-wise de-capitalization of the assets retired.

So as to have better clarity on the data filed by the Petitioner and to remove inconsistency in

the data, a Technical Validation Session (TVS) was also held with the Petitioner’s officers on

04.01.2018, for further deliberations on certain issues related to the Petitions filed by UJVN Ltd.

Minutes of above Technical Validation Session were sent to the Petitioner vide Commission’s letter

no. UERC/6/TF/432/Pet. No. 52 to 61 of 2017/1563 dated 05.01.2018, for its response.

The Petitioner submitted the replies to Minutes of TVS vide letter no. 11/UJVNL/04/D(F)

dated 12.01.2018 and letter no. 12/UJVNL/04/D(F) dated 15.01.2018. Meetings were held between

the Officers of the Commission and field Officers of UJVN Ltd. along with Officers of UJVN Ltd.’s

Commercial wing in the Commission between 17.01.2018 to 23.01.2018 and certain queries were

observed on the submissions made to the Commission, which were communicated to the Petitioner.

In response, the Petitioner vide its letter No. 73/UJVNL/04/D (F)/ dated 02.02.2018 submitted its

reply. Further, the Commission vide its letter no. 1757 dated 08.02.2018 and letter no. 1834 dated

27.02.2018 pointed out certain additional data gaps in the Petitions. The Petitioner vide its letter no.

120/UJVNL/04/D(F) dated 23.02.2018, letter no. 137/UJVNL/04/D(F) dated 08.03.2018 & letter no.

140/UJVNL/04/D(F) dated 13.03.2018 submitted its reply.

The submissions made by UJVN Ltd. in the Petition as well as additional submissions have

been discussed by the Commission at appropriate places in the Order along with the Commission’s

views on the same.


2 Summary of Stakeholders’ Objections/Suggestions, Petitioner’s

Responses and Commission’s Views

The Commission has received 06 objections/suggestions/comments on UJVN Ltd.’s Petition

for true-up of FY 2016-17, Annual Performance Review for FY 2017-18 and determination of Annual

Fixed Charges for FY 2018-19 of 10 Large Generating Stations. List of Stakeholders who have

submitted their objections/suggestions/comments in writing is given at Annexure 2 and the list of

respondents who have raised the issues in the public hearings is enclosed at Annexure 3. The

Commission has further obtained replies from UJVN Ltd. on the objections/suggestions/comments

received from the Stakeholders. For the sake of clarity, the objections raised by the Stakeholders,

responses of the Petitioner & Commission’s view on the same have been consolidated and

summarised below. In the subsequent Chapters of this Order, the Commission has, kept in view the

objections/suggestions/comments of the Stakeholders while deciding the Annual Fixed Charges

and Tariffs for different generating stations of UJVN Ltd.

2.1 Tariff Hike

2.1.1 Stakeholder’s Comment

Shri Munish Talwar of M/s Asahi Glass India Ltd., Shri Man Singh of M/s ALPS Industries

Ltd. and Shri Pawan Agarwal of M/s Uttarakhand Steel Manufacturers Association requested the

Commission not to increase the tariff at this juncture as any tariff increase would put the industry

into further hardship.

2.1.2 Petitioner’s Reply

The Petitioner submitted that the Petitions for determination of tariff are filed in accordance

to the Regulations notified by the Commission. The tariff of upcoming years is proposed on

normative basis and truing-up for the past year is claimed based on the actual audited expenditure

and as per the provisions specified in the Regulations. The Petitioner also submitted that UJVN Ltd.

continuously makes efforts to ensure strict commercial discipline, strive to protect the public

interest and comply with the directives of Commission.

The Petitioner further submitted that it has proposed additional capitalization in various old

hydro power stations which have become necessary for efficient and safe operation of power

2. Stakeholders’ Responses & Petitioner’s Comments


stations, thus resulting in increase of proposed tariff. Further, it has requested the Commission for

revision in tariff as proposed by the Petitioner in order to ensure optimum and quality generation

for its hydro power stations.

2.1.3 Commission’s View

The Commission would like to clarify that it has been the practice of the Commission to

explain in detail its approach in every Tariff Order. Normal approach so far has been to follow the

Regulations and detail the reasons for any deviation in exceptional conditions. The Commission

before allowing any tariff increase or increase in expenses under truing-up of previous years carries

out due diligence and prudence check of all the expenses incurred by the Petitioner before

considering it as part of ARR. The Commission ascertains that no unnecessary cost attributable to

inefficiencies of the Petitioner is passed on to the consumers.

2.2 Capital Cost and RoE of MB-II Project


Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that the Commission

has given its analysis on Capital Cost of Maneri Bhali-II Project in its Order issued in previous

years. He further submitted that the Commission in its last order had fixed the Capital Cost of MB-

II as Rs. 1885.50 Crore. However, UJVN Ltd. in the current Petition has considered the Capital Cost

of Rs. 1923.60 Crore and calculated RoE on Equity amount of Rs. 654.92 Crore including investment

of Rs. 341.39 Crore made out of PDF. He further submitted that the Petitioner has filed an Appeal

before the Hon’ble Tribunal of Electricity and therefore, has considered full amount of equity

including the amount invested out of PDF as the decision of Hon’ble Tribunal is still pending.

Therefore, in line with the Tariff Order dated April 04, 2012, he further requested the Commission

to not allow any return on equity utilized for creation of assets funded out of PDF.


The Petitioner has submitted that the Tariff Petition of MB-II HEP has been prepared on the

basis of capital expenditure actually incurred. Further, with regard to equity contributed by GoU

out of withdrawal from Power Development Fund, the Petitioner has considered Return on Equity

on full equity amount including the amount invested out of PDF in view of the Appeal filed with

the Hon’ble APTEL in matter of Capital cost and RoE on PDF for MB-II.



2.2.3 Commission’s Views

The Commission had not allowed Return on Equity on funds deployed by the GoU out of

PDF fund for reasons recorded in the previous Tariff Orders. Unlike other funds, available with the

Government, collected through taxes and duties, PDF is a dedicated fund created in accordance

with the provisions of the PDF Act passed by the GoU and the amount is collected directly from the

consumers through the electricity bills as the same forms part of the power purchase cost of UPCL

which in turn is loaded on to the consumers. PDF Act and Rules made there under, further, clearly

indicate that money available in this fund has to be utilized for the purposes of development of

generation and transmission assets. Though the UJVN Limited has filed an Appeal on this issue

with Hon’ble APTEL, however, no stay has been granted by Hon’ble APTEL. Therefore, the

Commission has adopted the same approach as adopted in previous Tariff Orders while allowing

Return on Equity for MB-II project.

2.3 Design Energy/Actual Energy Generated


Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that in the previous

Orders, the Commission had taken the average of annual generation of last 15 years as projected

generation for Year 2004-05. The same analogy should not hold good for future years as the same

was acceptable as sufficient data was not available and considering the requests of UJVN Ltd. that

the plants were not kept in good conditions.

He submitted that UJVN Ltd. is claiming that it has moved a long distance in setting right its

generating stations by taking appropriate steps and hence, there is a substantial improvement in

availability. He requested the Commission to revisit the design energy and allow the benefit of

power generation to the consumers which is in line with the Tariff Policy in respect of the operating

norms as the tariff policy stipulates that the operating norms should be at normative levels and not

at lower of normative and actual.


The Petitioner submitted that it has not sought any deviation in saleable energy for its old

hydro power plants in the Petitions. The Petitioner also submitted that the Commission may revisit

the Design Energy after Renovation and Modernization of old hydro power plants.




Due to non-availability of reliable information on the design water discharges and DPRs for

nine old generating stations, the Commission in its previous Orders had considered the lower of 15

years’ average annual generation or the plant-wise Design Energy (as mutually agreed between

UPJVNL and UPPCL) as the projected primary energy generation of these generating stations for

tariff purposes. For Maneri Bhali-II, the Commission had considered the design energy as per DPR

of the Project in the previous Tariff Order. The same approach has been continued in this order also.

However, for Khatima HEP for which RMU works have been completed, the Commission has

considered revised design energy for FY 2018-19 in accordance with DPR for RMU works of the

said project.

2.4 Other Cost

2.4.1 Stakeholder’s Comments

Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that the Petitioner

has proposed very high increase in all heads of expenses for all generating stations, which is not

commensurate with the past and requested the Commission to look closely at all these costs.

Shri Vijay Singh Verma, Secretary, Kisan Club requested the Petitioner to justify about the

benefit arising out of Renovation and Modernization of the hydro power plants of UJVN Ltd. He

further submitted that the free power provided to the employees of the Electricity Department

(UJVN Ltd.) causes commercial losses and is unjustified.

Shri Rajiv Agarwal of Industries Association of Uttarakhand submitted that the Petitioner

has claimed higher rate of interest in its Petition. In this regard, he suggested that the Petitioner as a

Government entity should check for cheaper options available in the market.


The Petitioner submitted that it has proposed additional capitalization in various old hydro

power stations which have become necessary for efficient and safe operation of power stations, thus

resulting in increase of proposed AFC. The Petitioner submitted that it has prepared its Tariff

Petition on actual/normative basis in accordance to the Regulations notified by the Commission.




The Commission, in this regard, would like to clarify that the actual expenses both of

revenue and capital nature submitted by the Petitioner are examined separately, in detail while

carrying out the truing-up of expenses and revenues and only legitimate expenses are allowed in

accordance with the UERC Tariff Regulations applicable from time to time. Further, with regard to

the power being provided to the departmental employees by the Petitioner, the Commission has

already been directing the Petitioner in the previous Tariff Orders that it should ensure the meter

reading of each employee on monthly basis and keep proper record of the same and submit the

consumption alongwith the next tariff filing. Such consumption are not, however, allowed by the

Commission and shall thus, not be a pass through in the tariff.

2.5 Issues Raised During Meeting of State Advisory Committee

2.5.1 Views of State Advisory Committee

During the Advisory Committee meeting held on 05.03.2018, the Members made the

following suggestions on the Tariff Petitions for FY 2018-19.

UJVN Ltd. has again claimed Return on Equity on PDF amount, though this is settled

issue as per Commission’s Orders and is sub-judice at APTEL. As no stay has been

granted by APTEL on Commission’s Orders, RoE on PDF amount should not be

allowed.

UJVN Ltd. has proposed very high increase in all heads of expenses for all generating

stations and the same needs to be examined carefully.

Clarification regarding actual generation lower than design energy in case of MB-II

generating station.

Clarification regarding the pending expenditure on the civil works under RMU of

Khatima LHP.


The Petitioner submitted the following replies for queries raised:

a) As regards the issue of actual generation of MB-II station being lower than the Design

Energy, UJVN Ltd. submitted that the works for increasing the Dam height was



completed in FY 2016-17. However, if the water level reaches to 1105 or 1106 m, the

Petitioner has to face resistance from local population, due to which the actual

generation is lower than the Design energy.

b) With regard to pending works of Khatima RMU, UJVN Ltd. submitted that the

pending civil works like repair of power channel, tail race etc needs to be completed as

part of overall RMU. However since the water flow is under control of UPID (Uttar

Pradesh Irrigation Department), the civil works related to RMU Khatima are still

pending. UJVN Ltd. is taking up the matter with UPID for completion of these works

at the earliest.

2.5.3 Observations of Secretary, Energy, Government of Uttarakhand during SAC

Advised UJVN Ltd. to hold a meeting with DM regarding resistance from locals if the

water level reaches to 1105 or 1106 m at MB-II and sort out this issue at the earliest.

Advised UJVN Ltd. to move forward and hold meetings with Uttar Pradesh Irrigation

Department (UPID) in Lucknow in order to get pending civil works done related to

Khatima RMU.

2.5.4 Commission’s View

Based on the suggestion made by the Members of State Advisory Committee during the

meeting held on 05.03.2018, the Commission directs UJVN Ltd. to actively pursue the following

issues with Appropriate Government/Competent authorities/Hon’ble Courts and apprise the

Commission from time to time.

(i) Resolve the issue related to MB-II Generation specifically with regard to the Dam

height of 1108 m which has already been allowed by the District Administration.

(ii) Expedite the completion of Civil Works related to Khatima RMU.

(iii) Additional allocation from THDC in the Case pending before Hon’ble Supreme

Court.



3 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and

Conclusion on Truing-up of 9 LHPs & MB-II for FY 2016-17

Regulation 12 of the UERC Tariff Regulations, 2015 specifies as follows:

“12. Annual Performance Review

(1) Under the multi-year tariff framework, the performance of the Generating Company or

Transmission and Distribution Licensees or SLDC, shall be subject to an Annual Performance

Review.

(2) The Applicant shall under affidavit and as per the UERC (conduct of Business) Regulations 2014

as amended from time to time, make an application for Annual Performance Review by November

30th of every year;

…

(3) The scope of the Annual Performance Review shall be a comparison of the actual performance of

the Applicant with the approved forecast of Aggregate Revenue Requirement and expected revenue

from tariff and charges and shall comprise of following:

a) A comparison of the audited performance of the applicant for the previous financial year with

the approved forecast for such previous financial year and truing up of expenses and revenue

subject to prudence check including pass through of impact of uncontrollable factors;

b) Categorisation of variations in performance with reference to approved forecast into factors

within the control of the applicant (controllable factors) and those caused by factors beyond the

control of the applicant (un-controllable factors).

c) Revision of estimates for the ensuing financial year, if required, based on audited financial

results for the previous financial year;

d) Computation of the sharing of gains and losses on account of controllable factors for the

previous year”

In its present filings, the Petitioner has submitted the data relating to its expenses and

revenues for FY 2016-17 for nine LHPs and MB-II based on the audited accounts and has,

accordingly, requested the Commission to carry out the truing-up for FY 2016-17 along with the

3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing up for FY 2016-17


sharing of gains and losses. In addition to the above, with regard to MB-II, the Petitioner has also

requested the Commission to consider the capital cost as Rs. 1923.60 Crore as on CoD.

In the matter of truing-up of AFC of MB-II the Commission vide its Tariff Order dated

29.03.2017 has already carried out the final true-up upto FY 2015-16 considering the capital cost of

Rs. 1885.50 Crore as approved by the Commission as on CoD of the project. Hence, the Commission

in the current tariff proceedings has decided to carry out truing-up of MB-II for FY 2016-17

considering the capital cost as on CoD as approved by the Commission in the Tariff Orders dated

05.04.20016 and 29.03.2017 in accordance with the UERC Tariff Regulations, 2015.

3.1 Impact of Sharing of Gains and Losses on account of Controllable Factors for FY 2016-17

Regulation 14 of the UERC Tariff Regulations, 2015 specify as follows:

“14. Sharing of Gains and Losses on account of Controllable factors

(1) The approved aggregate gain and loss to the Applicant on account of controllable factors shall

be dealt with in the following manner:

a) 1/3rd of such gain or loss shall be passed on as a rebate or allowed to be recovered in tariffs

over such period as may be specified in the Order of the Commission;

b) The balance amount of such gain or loss may be utilized or absorbed by the Applicant.”

The UERC Tariff Regulations, 2015 requires a comparison of the audited performance of the

applicant for the previous financial year with the approved forecast for such previous financial year

and truing-up of expenses and revenues subject to prudence check including pass through of

impact of uncontrollable factors.

O&M expenses comprise of the major portion of AFC of UJVN Ltd. and are within the

control of the Petitioner and, moreover, in accordance with UERC Tariff Regulations, 2015 these are

controllable expenses. Similarly, in accordance with the UERC Tariff Regulations, 2015, the

variation in working capital requirements is also a controllable factor. Hence, the sharing of gains

and losses has been carried out for these expenses.

Accordingly, the Commission has worked out the trued-up (surplus)/gap of the Petitioner

after sharing of gains and losses as per the provisions of UERC Tariff Regulations, 2015.



3.1.1 Physical Parameters

3.1.1.1 Relaxation sought in approved NAPAF

A. Relaxation sought for 9 LHPs

The Commission vide its MYT Order dated 05.04.2016 had approved the NAPAF for hydro

generating stations of UJVN Ltd. in accordance with Regulations 47(1)(b) of UERC Tariff

Regulations, 2015. The Commission in its MYT order dated 05.04.2016 for approving the NAPAF

had stated as follows:

“As the RMU works for some of the nine old generating stations are yet to be completed, the

Commission is of the view that the NAPAF approved for the first Control Period shall continue to

be applicable for the second Control Period except for the stations for which the Petitioner has

projected higher NAPAF for the second Control Period. Accordingly, the Commission has

approved the NAPAF for each station for Second Control Period equivalent to higher of the

NAPAF approved in first Control Period or NAPAF now projected by the Petitioner. However,

the Commission shall take a fresh view on the same once the RMU works for the stations get

completed. For Khatima HEP, as the RMU works are likely to be completed, the Commission at

this stage has approved the NAPAF only for FY 2016-17. For FY 2017-18 and FY 2018-19 the

Commission will approve the NAPAF of Khatima HEP as a part of APR Petition for FY 2016-17.

With regard to MB-II,…

The Commission is of the view that it will not be appropriate to consider MB-II plant as pure RoR

plant when the plant is designed for RoR with pondage and the capital cost has been approved

which includes the cost of Pondage also. In case the plant is to be treated as RoR, then the Capital

Cost will also require adjustment accordingly. The Commission has been relaxing the NAPAF for

MB-II for previous years also. Considering the ground realities, the Commission is of the view that

the works of increasing the height of Barrage from 1104 m to 1108 m should be taken on top

priority along with other related works which are essentially to be carried out for attaining the

design generation from MB-II Plant and, therefore, the Commission directs the Petitioner to

complete all works which are causing hindrances in achieving the reservoir level upto

1108 m and other related works which restrict the generation capacity as well as the

design generation of MB-II HEP by the end of FY 2016-17. The Commission, accordingly, has

considered three months shutdown from November, 2016 to January 2017 for carrying out these



works during FY 2016-17 and has relaxed the NAPAF to 61.51% for FY 2016-17. The

Commission would also like to caution UJVN Ltd., that this is the last time, the Commission is

relaxing the NAPAF of MB-II on the issue of raising the height of the barrage. However, in case

the Petitioner fails to carry out such works during FY 2016-17 as directed by the Commission, the

NAPAF for the station shall be considered as 74% while carrying out the truing- up for FY 2016-

17. The Commission shall take a fresh view on the NAPAF for FY 2017-18 and FY 2018-19 once

the reservoir is raised to the design height.”

The Commission in its MYT order dated 05.04.2016 had fixed the NAPAF for the 10 LHPs as

follows:

Table 3.1: NAPAF approved vide MYT order dated 05.04.2016 for FY 2016-17

Sl. No. Name and Type of Plant NAPAF Approved by the Commission in

Order dt. 05.04.2016 for FY 2016-17

1 Dhakrani RoR 61.04%

2 Dhalipur RoR 57.26%

3 Chibro Pondage 65.06%

4 Khodri Pondage 57.23%

5 Kulhal RoR 65.00%

6 Ramganga Storage 19.00%

7 Chilla RoR 74.00%

8 MB-I Pondage 79.00%

9 Khatima RoR 47.21%

10 MB-II Pondage 61.51%

Now, in the current Petitions, the Petitioner has requested to relax the NAPAF norms for FY

2016-17 for its plants namely Dhakrani, Dhalipur, Ramganga and MB-I LHPs. In support of its

claim, the Petitioner has submitted the following plant-wise reasons for not being able to achieve

prescribed NAPAF and the same are discussed below:

▪ Dhakrani–The Petitioner has submitted that the station could not achieve NAPAF as the

generating plant remained closed during 16.03.2017 to 30.04.2017 on account of DRIP works

at Dakpathar barrage and the power channel. The Petitioner has requested the Commission

to approve the NAPAF for FY 2016-17 as 54.88% instead of 61.04%.

▪ Dhalipur- The Petitioner has submitted that the station could not achieve NAPAF as the

generating plant remained closed during 16.03.2017 to 30.04.2017 on account of DRIP works

at Dakpathar barrage and the power channel. The Petitioner has requested the Commission

to approve the NAPAF for FY 2016-17 as 55.02% instead of 57.26%.



▪ Ramganga–The Petitioner submitted that the water released from Ramganga Dam is purely

irrigation based and the control of which rests with Uttar Pradesh Irrigation Department

and, therefore, they have no control over the same. Therefore, the Petitioner has requested

the Commission to revise the NAPAF for FY 2016-17 as 10.81% instead of 19.00%.

▪ MB-I -The Petitioner has submitted that the Power Station is suffering from excessive silt

and aging. The Petitioner further submitted that the breakdown of the equipment and

closure of the Power Station increased unprecedentedly even after best possible maintenance

efforts by the Petitioner. The Petitioner has also submitted that due to the following reasons

the Power Station was not able to achieve the approved NAPAF:

The Power Station was under forced closure from 25.04.2016 to 30.04.2016 due to

very urgent work in cooling water system (Strainer valves of the units were replaced)

and repair of MIV bypass valve of Unit 2.

Unit 2 of the station was under forced outage from 19.07.2016 to 26.07.2016 and from

30.07.2017 to 31.07.2017 as there was excessive leakage of water from top cover.

Unit 2 of the Power Station was under forced outage from 01.05.2016 to 19.06.2016

due to fault in stator winding.

The Power Station was under monsoon closure from 07.08.2016 to 10.09.2016 for

interim repair of underwater parts.

Unit 1 of the Power Station was under outage from 13.02.2017 to 14.07.2017 for

reverse engineering works for RMU.

The Petitioner accordingly, requested the Commission to revise the NAPAF of 59.72% from

79.00% in FY 2016-17.

The Commission has gone through the submissions of the Petitioner and is of the view that

the norms for 9 LHPs have already been relaxed considering the actual conditions at the plant site

and, therefore, further relaxation of the approved norms is not justified unless under exceptional

circumstances.

With regard to Dhakrani and Dhalipur LHPs, the reasons for not achieving NAPAF as

submitted by the Petitioner is on account of closure of Power Stations for DRIP works at Dakpathar



barrage and the power channel from 16.03.17 to 30.04.17 i.e. for a period of 15 days. The

Commission in its Tariff Order dated 05.04.2016 while approving the NAPAF for FY 2016-17 has

already factored in the outage plan for the two stations which included one month shutdown for

DRIP works for Dhakrani and Dhalipur LHPs for FY 2016-17. The Commission, therefore, is of the

view that there is no case for further relaxation with regard to the NAPAF of Dhakrani and

Dhalipur stations for FY 2016-17, and, therefore, no relaxation has been allowed by the Commission.

Further, with regard to Ramganga LHP, the relaxation sought by the Petitioner was on

account of the reason that the control of water release lies with Uttar Pradesh Irrigation Department

(UPID). The Commission observes that the Petitioner itself in its MYT Petition had projected

NAPAF for the station as 17.24% after factoring in the above reason. Further, it is also observed that

the Petitioner was able to achieve PAFY of 30.07% in FY 2015-16 and had earned incentive on it.

The Commission while approving NAPAF for the second Control Period had considered the

maximum of NAPAF approved for the first Control Period and that projected by the Petitioner for

the second Control Period which already factors in the fact that the control of water release lies with

UPID. The Commission has, therefore, not allowed any relaxation with regard to NAPAF for FY

2016-17 for Ramganga LHP.

With regard to NAPAF of MB-I for FY 2016-17, the Commission in its Order dated

03.09.2013 has already considered the operating problems on account of site conditions. While

approving NAPAF of the station total of 77 days plant shutdown has already been factored

including 28 days shutdown due to abnormal conditions. The Commission is of the view that the

forced shutdown on account of replacement of strainer valves, repair of MIV bypass valve, excess

water leakage from top cover and stator winding fault are recurring and the same cannot be

attributed to unforeseen circumstances of uncontrollable nature, instead it only signals towards lack

of preventive maintenance and therefore, these reasons are untenable. Further, with regards to

forced shutdown in monsoon season due to abnormal conditions, as stated above, the Commission

has already factored in 77 days shutdown on account of planned and other maintenance activities

including 28 days shutdown on account of abnormal conditions. The Commission is, therefore, of

the view that there is no case for relaxation of NAPAF on account of the above reasons. With regard

to reverse engineering works for RMU of the MB-I station, the Commission is of the view that the

same has not been considered while approving NAPAF for the station and, hence, the Commission



has re-stated the PAFY of MB-I generating station as 61.96% for FY 2016-17 after considering the

reverse engineering works of Unit 1 of MB-I station.

B. Maneri Bhali-II

The Petitioner, in the instant Petition, has claimed NAPAF of 65.15% for FY 2016-17. The

NAPAF for MB-II was fixed as 61.51% for FY 2016-17 in the MYT Order dated 05.04.2016 issued for

the second Control Period from FY 2016-17 to FY 2018-19. The Commission, in the MYT Order

dated 05.04.2016 had considered three months shutdown from November, 2016 to January 2017 for

increasing the height of Barrage from 1104 m to 1108 m and other related works which restricts the

generating capacity of MB-II HEP. However, in accordance with the generation data as submitted

by the Petitioner, it is observed that the Petitioner did not require the prolonged shutdown to

increase the dam height as the station was generating in all the months. The Commission is,

therefore, of the view that the actual PAFY achieved by the Petitioner for FY 2016-17 is not on

account of its enhanced efficiency but is on account of prolonged shutdown considered by the

Commission while fixing NAPAF for FY 2016-17. The Commission is, therefore, of the view that the

Petitioner is not entitled to the benefit in terms of incentive recovered by the Petitioner on account

of over-achieving a relaxed NAPAF. The Commission has, therefore, re-stated actual PAFY for the

station for FY 2016-17 equal to the NAPAF of 61.51% approved by the Commission for allowing the

recovery of fixed charges.

3.1.1.2 Energy Generation and Saleable Primary Energy

The Commission in its MYT Order dated 05.04.2016 on approval of Business Plan and Multi

Year Tariff for the second Control Period from FY 2016-17 to FY 2018-19 had approved the Design

Energy equivalent to the Design Energy approved in the previous Orders. UJVN Ltd. has not

sought any deviation in the approved design energy for FY 2016-17. Accordingly, the Commission

decides to maintain the design energy and saleable primary energy as considered in the MYT Order

dated 05.04.2016 for 9 LHPs and MB-II LHP of the Petitioner. Accordingly, the Design Energy

approved is as under:



Table 3.2: Design Energy and Saleable Primary Energy Approved for FY 2016-17 (MU) Name of the

Generating Station Original

Design Energy Design Energy

Auxiliary consumption (including Transformation Loss)

Saleable Primary energy

MU MU % MU MU

Dhakrani 169.00 156.88 0.70% 1.10 155.78

Dhalipur 192.00 192.00 0.70% 1.34 190.66

Chibro 750.00 750.00 1.20% 9.00 741.00

Khodri 345.00 345.00 1.00% 3.45 341.55

Kulhal 164.00 153.91 0.70% 1.08 152.83

Ramganga 385.00 311.00 0.70% 2.18 308.82

Chilla 725.00 671.29 1.00% 6.71 664.58

MB-I 546.00 395.00 0.70% 2.77 392.24

Khatima 208.00 194.05 1.00% 1.36 192.69

MB-II 1566.10 1566.10 1.00% 15.66 1550.44

Total 5050.10 4735.23

44.65 4690.59

3.1.2 Financial Parameters

3.1.2.1 Apportionment of Common Expenses

The Petitioner in its Petition has considered the allocation for indirect expenses in the ratio

of 85:10:5 among 9 LHPs, MB-II and SHPs respectively. The Commission in its Order dated

05.04.2016 had considered the allocation for indirect expenses in the ratio of 85:10:5 among 9 LHPs,

MB-II and SHPs respectively, stated as follows:

“The Petitioner in its Petition has changed the allocation for indirect expenses from the initial ratio of

80:10:10 to 85:10:5 among 9 LHPs, MB-II and SHPs respectively. The Commission directed the

Petitioner to submit the rationale for changing the methodology for apportionment of common

expenses. The Petitioner in its reply has submitted that the ratio towards SHPs have been reduced as

22 nos. of SHPs have been transferred to UREDA which has resulted in the reduction in the existing

capacities with UJVN Ltd. to 32.70 MW from the earlier 58.10 MW and, therefore, the said expenses

have been allocated on to 9 LHPs.

The Commission has gone through the submission made by the Petitioner and observes that almost

half of the capacity of the SHPs has been transferred to UREDA and, therefore, the Commission

agrees with the methodology proposed by the Petitioner and has considered the same for allocation of

common expenses.”

Accordingly, in line with the above decision in the Order dated 05.04.2016, the Commission

has considered the ratio of 85:10:5 among 9 LHPs, MB-II and SHPs, respectively, for allocation of

common expenses. However, the Commission would like to point out that UJVN Ltd. is



diversifying its business and is also in solar generation now, accordingly, while seeking truing-up

for FY 2017-18, UJVN Ltd. would be required to review the basis for such apportionment of

common expenses.

3.1.2.2 Capital Cost

A. Old Nine Generating Stations

Pending finalization of the Transfer Scheme, for various reasons recorded in the previous

Tariff Orders, the Commission had been approving the opening GFA for the nine LHPs as on

14.01.2000 as Rs. 506.17 Crore.

The Commission directed UJVN Ltd. to submit the current status towards finalization of

transfer scheme. In response, the Petitioner has submitted that the issues regarding transfer scheme

viz. (a) liability of LIC loan of Rs. 352.59 Crore regarding MB-II LHP and (b) remittance of GPF

liabilities of Rs. 135.78 Crore are yet to be finalized. The Petitioner in compliance to the above

directive submitted that a meeting was held between Hon’ble Chief Ministers of Uttarakhand and

Uttar Pradesh on April 10, 2017 on division of assets and liabilities between the State of

Uttarakhand and Uttar Pradesh and therein matters pertaining to UJVN Ltd. and UPJVNL were

discussed. Also, further meeting is scheduled to be held between Chief Secretary of both the States

in near future. Further, the Petitioner vide letter no. 276/UJVNL/D(F)/G-4 dated 07.07.2017 has

apprised to the Secretary Energy (Govt. of Uttarakhand) for remittance of the outstanding amount

of GPF liabilities of Rs. 146.42 Crore as on 30.6.2017. The Commission has noted the submissions

of the Petitioner and directs Petitioner to closely follow up with issue and submit quarterly

status report to the Commission. However, the Commission would like to point out that there

has been an inordinate delay in the finalization of the transfer scheme which is attributable to

the Petitioner, hence, any consequential claim arising due to finalization of the transfer scheme

shall be considered on merits by the Commission without any carrying cost on the same.

Since, the Transfer Scheme is yet to be finalized, the Commission for the purposes of truing-

up for FY 2016-17 has considered the opening GFA of nine LHPs, as on 14.01.2000 as Rs. 506.17

Crore as per the details given below:



Table 3.3: Approved Capital Cost as on 14.01.2000 (Rs. Crore)

Name of the Generating Stations (9LHPs) Claimed Approved

Dhakrani 12.40 12.40

Dhalipur 20.37 20.37

Chibro 87.89 87.89

Khodri 73.97 73.97

Kulhal 17.51 17.51

Ramganga 50.02 50.02

Chilla 124.89 124.89

MB-I* 111.93 111.93

Khatima 7.19 7.19

Total 506.17 506.17 *Including DRB claim

B. Maneri Bhali-II

The Petitioner has requested the Commission to consider the capital cost of Rs. 1923.60 Crore

as on CoD, i.e. 15.03.2008 and, accordingly, allow true-up of AFC and Tariff for MB-II HEP.

With regard to fixation of the Capital Cost of MB-II on the date of its Commercial Operation

(CoD), the Commission in its Tariff Order dated 05.04.2016 had revised the Capital Cost as on CoD

to Rs. 1885.50 Crore and stated as follows:

“The Commission in the current tariff proceedings observed that the Petitioner has submitted that the

Capital Cost as on COD included provisioning towards discharge of liabilities in future amounting to

Rs. 3.72 Crore which was actually discharged in FY 2008-09 and wrongly included as R&M

expenses. In accordance with MYT Regulations, 2011, any capital expenditure after COD is to be

considered as additional capital expenditure subject to condition provided there in and also it has been

the approach of the Commission in the past to not allow tariff on the provisioned amount and,

therefore, the Commission has revised the Capital Cost of MB-II as on COD to Rs. 1885.50 Crore.

Further, the Commission has considered the aforesaid amount of Rs. 3.72 Crore as additional

capitalisation in FY 2008-09 as the same was actually discharged during FY 2008-09.”

Moreover, the Petitioner has filed an Appeal before the Hon’ble ATE agitating the issue of

Capital Cost of MB-II LHP approved by the Commission which is pending before the Hon’ble ATE.

Hence, pending disposal of the Appeal, the Commission does not find any reason to revisit the

capital cost of MB-II LHP as already approved by it in the Tariff Orders dated 05.04.2016 and

29.03.2017.



Accordingly, in line with the above decision in Tariff Order dated 05.04.2016, and 29.03.2017,

the Commission for the purposes of this Tariff Order is considering the capital cost for MB-II Power

Station, as on CoD i.e. 15.03.2008, as Rs. 1885.50 Crore as per the details given below:

Table 3.4: Approved Capital Cost for MB-II as on CoD (Rs. Crore)

Particulars Approved in Tariff Order dt.

05.04.2016 Approved

Now

Capital Expenditure 1490.98 1490.98

Add: Adjustment on Account of DRB Award 44.51 44.51

Price Variation -7.94 -7.94

Sub-total (A) 1527.55 1527.55

IDC & Other Financial Charges

Interest paid to PFC 257.41 257.41

Guarantee Fee 28.86 28.86

Intt. On GoU Loan 5.04 5.04

Intt. Repayment AGSP 66.64 66.64

Excess Guarantee Fee Payable 0.00 0.00

Sub-total (B) 357.95 357.95

Total Capital cost (A+B) 1885.50 1885.50

Further, financing of the approved capital cost of MB-II Power Station approved as on CoD

is shown in the Table below:

Table 3.5: Financing for MB-II as on CoD (Rs. Crore)

Particulars Approved in Tariff Order dt. 05.04.2016 Approved Now

Loans

PFC Loan 1200.00 1200.00

Unpaid Liability 0.00 0.00

Guarantee Fee Payable 0.00 0.00

Normative Loan 119.85 119.85

Total debts 1319.85 1319.85

Equity

PDF 326.76 326.76

GoU Budgetary support 74.89 74.89

Pre-2002 expense 164.00 164.00

Total Equity 565.65 565.65

Total Loan and Equity 1885.50 1885.50

In the above Table, the total equity, i.e. Rs. 565.65 Crore which is 30% of the total approved

Capital Cost of MB-II, has been considered to be funded by way of pre 2002 expenses of Rs. 164

Crore, actual disbursement from PDF upto CoD of Rs. 326.76 Crore and the balance amount of Rs.

74.89 Crore from the GoU budgetary support.



3.1.2.3 Additional Capitalisation


In addition to the opening GFA of Rs. 506.17 Crore as on 14.01.2000 of 9 LHP’s, the

Commission had approved the additional capitalization from FY 2001-02 to FY 2015-16 amounting

to Rs. 186.06 Crore in its previous Tariff Orders.

Accordingly, the additional capitalisation from FY 2001-02 to FY 2015-16 so far considered

by the Commission for 9 LHPs is shown in the Table below:

Table 3.6: Additional Capitalisation already approved by the Commission from FY 2001-02 to FY 2015-16 for 9 LHPs (Rs. Crore)

Name of Generating Station Amount

Dhakrani 2.81

Dhalipur 4.61

Chibro 27.03

Khodri 12.88

Kulhal 2.73

Ramganga 5.71

Chilla 38.17

MB-I 33.97

Khatima 58.15*

Total 186.06 *Excluding de-capitalisation of Rs. 2.03 Crore in FY 2014-15

Based on the approved capital cost of 9 LHPs as on 14.01.2000 and considering, the

additional capitalisation upto FY 2015-16 for these LHPs, the Commission has considered the

opening GFA for FY 2016-17 for nine LHPs as presented below:

Table 3.7: Opening GFA for 9 LHPs as considered by the Commission for FY 2016-17 (Rs. Crore)

Name of the Generating Stations Amount

Dhakrani 15.21

Dhalipur 24.98

Chibro 114.92

Khodri 86.85

Kulhal 20.24

Ramganga 55.73

Chilla 163.06

MB-I 145.90*

Khatima 63.30**

Total 690.19 * Including DRB claim

**Including de-capitalisation of Rs. 2.03 Crore in FY 2014-15



The Petitioner for its 9 LHPs has claimed the additional capitalisation for FY 2016-17 as

given in the Table below:

Table 3.8: Additional Capitalisation for 9 LHPs claimed by the Petitioner for FY 2016-17

Name of the Generating Stations

Additional Capitalisation

De-Capitalisation

Net Additional Capitalisation

Dhakrani 6.26 0.03 6.23

Dhalipur 3.98 0.05 3.93

Chibro 10.52 0.26 10.25

Khodri 7.61 0.11 7.50

Kulhal 1.75 0.03 1.72

Ramganga 1.12 0.20 0.92

Chilla 4.40 0.14 4.26

MB-I 1.67 0.03 1.64

Khatima 89.73 0.04 89.69

Total 127.03 0.89 126.14

It is observed that the Commission in its Order dated 05.04.2016 had considered the

additional capitalisation of Rs. 163.89 Crore for FY 2016-17, however, UJVN Ltd. in this instant

Petition has claimed additional capitalisation of Rs. 127.03 Crore for FY 2016-17. The Commission

however, observed that UJVN Ltd. has sought additional capitalization for almost all the LHPs

during FY 2016-17 to FY 2018-19 by just stating that the same is essential for the efficient operations

of the plant and the need of additional capitalization has not been properly justified in the Petition

as per Regulation 22(2) of the UERC Tariff Regulations, 2015. The Commission vide its letter dated

05.01.2018 directed UJVN Ltd. that as per Regulation 22(2) of the UERC Tariff Regulations, 2015 all

the additional capitalization after the cut-off date of the LHPs should be substantiated with

technical justification duly supported by documentary evidence like test results carried out by

independent agency in case of deterioration of assets, report of an independent agency in case of

damage caused by natural calamities, obsolescence of technology, up-gradation of capacity for the

technical reason such as increase in fault level, etc. and has sought detailed justification for

additional capitalisation claimed along with station-wise reconciliation with audited accounts for

FY 2016-17. In response, UJVN Ltd. submitted the station-wise reconciliation of the additional

capitalization with audited accounts for FY 2016-17 along with the necessary supporting

documents.

Further, with regards to RMU of Khatima the Commission sought unit-wise details of

expenses incurred as on CoD.



The Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner to submit

audited RMU expenses of Khatima LHP as on the date of completion of RMU works alongwith the

details of de-capitalisation and stated as follows:

“As discussed above, the Petitioner has submitted that it has incurred capitalisation of Rs. 49.77

Crore in FY 2016-17 (upto December 2016) and Rs. 49.66 Crore in January 2017 under RMU and

other civil works in case of Khatima LHP. The Commission in its investment approval dated

17.05.2015 has given in-principle approval of Rs. 256.77 Crore (including IDC) towards RMU

works subject to prudence check. The Commission is of the view that the amount so far claimed till

FY 2016-17 is well within the approval however, since the final completion cost is yet to be finalised,

the Commission shall carry out detailed prudence check of RMU expenses once audited cost is

available during the truing up of FY 2016-17. The Petitioner is directed to submit the audited

RMU expenses as on date of completion of RMU works along with details of de-

capitalisation in respect of the same as soon as the same is available including quantity.

The Petitioner is also directed to submit the details of scrap available on de-capitalisation

of old plant and machinery and expected time frame in which the same will be disposed.

In view of the above submission, the Commission has provisionally considered the capitalisation of

Rs. 99.43 Crore (i.e. Rs. 49.77 Crore + Rs. 49.66 Crore) for Khatima LHP for FY 2016-17...”

The Petitioner in current Petition did not submit the above details as sought by the

Commission in Tariff Order dated 29.03.2017. Accordingly, the Commission vide its letter dated

07.12.2017 directed the Petitioner to submit the copy of the above details. In response, the Petitioner

vide its letter dated 14.12.2017 submitted the copy of the audited RMU expenses as on the date of

completion of RMU works, i.e. 08.09.2016 along with the details of scrap available on de-

capitalisation of old plant and machinery. Also, the Petitioner has submitted the details of RMU

expenses incurred unit-wise on Khatima LHP as under:

Table 3.9: Total RMU expenses incurred on Khatima as claimed by the Petitioner (in Rs.) Particulars E&M IDC Total CoD

Machine 1 608181870.00 53662369.00 661844239.00 06-04-2015

Machine 2 403992604.00 51235270.00 455227874.00 28-04-2016

Machine 3 386187571.00 51235270.00 437422841.00 08-09-2016

Total 1398362045.00 156132909.00 1554494954.00

The Petitioner has further submitted the breakup of the works carried out and capitalised in

FY 2016-17 amounting to Rs. 89.29 Crore as given in Annexure 4 of this Order.



The Commission has gone through the submissions of the Petitioner and observes that in its

Tariff Order dated 05.04.2016 the Commission had de-capitalized assets amounting to Rs. 2.03 Crore

in FY 2014-15 pertaining to old Plant & Machinery of Khatima LHP since RMU works were being

carried out. Further, the Petitioner in its Tariff Petition for FY 2017-18 had claimed the amount of Rs.

66.56 Crore (including IDC of Rs. 5.37 Crore) in FY 2015-16. Thereafter, the Commission in its Tariff

Order dated 29.03.2017 had allowed the amount of Rs. 56.35 Crore on account of RMU works after

deducting expenses of Rs. 10.21 Crore incurred by UJVN Ltd. on restoration works due to breaching

of power channel that occurred due to the fault of UJVN Ltd.

As the RMU works pertaining to the three units of Khatima are completed, the Commission

sought copy of all the contracts awarded towards RMU works of Khatima LHP along with the

computation of all the price variations paid to the Contractor. The Petitioner in response submitted

the same. Further, the Petitioner was directed to submit the comparison of scope of works as per

DPR and that actually executed by it through various contracts. In response, the Petitioner vide its

letter dated 30.01.2018 submitted the comparison of scope of works as per DPR of RMU and works

actually executed by it through various contracts. In response, the Petitioner vide its letter dated

16.02.2018 has submitted its reply to the same.

From the above submissions of the Petitioner, the Commission observed that in its Tariff

Order dated 29.03.2017 it had already disallowed the expenses of Rs. 7.68 Crore for major civil

works and Rs. 2.53 Crore for plant & machinery totalling to Rs. 10.21 Crore for restoring the failure

in Khatima LHP on account of damages due to breaching of Power Channel that occurred due to

own fault of UJVN Ltd. However, the expenses of Rs. 89.29 Crore (including IDC of Rs. 10.25 Crore)

for FY 2016-17 claimed by the Petitioner in the instant Tariff Petition on account of works under

RMU includes the restoration work of Generator Step Up (GSU) transformer. Accordingly, the

Commission vide its letter dated 23.02.2018 directed the Petitioner to clarify about claiming such

expense in FY 2016-17 on account of restoration work of GSU transformer, inspite of the same

having been disallowed in Tariff Order dated 29.03.2017. The Commission also directed the

Petitioner to furnish the details of year-wise capitalisation of expenses amounting to Rs. 10.21 Crore

along with head-wise details. The Petitioner vide its letter dated 08.03.2018 has submitted the

details of the expenses for Plant and Machinery against Additional Capitalization disallowed in

Commission’s Order dated 29.03.2017.



The Petitioner with regard to the completion of entire scope of works of RMU submitted that

though the works pertaining to E&M have been completed for all the three units, however, the civil

works related to RMU Khatima are still pending. The Commission in this regard sought time frame

in which the above works would get completed. The Petitioner in response vide letter dated

15.01.2018 submitted that though Khatima Power house is under the possession of UJVN Ltd. but

water conductor system of this power house upstream side of the forebay tank is under possession

of Uttar Pradesh Irrigation Department (UPID). Thus, though the system is being used for power

generation for UJVN Ltd., the necessary repairs on the upstream side involving civil works are to be

done only through UPID. Further, the Petitioner has submitted that continuous effort had been

made in order to complete the work and some preliminary budgetary offer was also received from

UPID for completion of the works but detailed estimates are still awaited for which meeting is

scheduled in March 2018 and efforts are being made to streamline the issue so that all the works get

completed through UPID latest by December 2018 or January 2019. The Commission has gone

through the submissions of the Petitioner and is of the view that RMU works should be completed

as soon as possible and the same cannot be allowed to continue indefinitely. The Commission

directs the Petitioner to complete the entire works under the DPR of RMU of Khatima by FY

2018-19 as no capitalisation on account of deferred works of RMU beyond FY 2018-19 shall be

allowed.

Based on the above discussions, the Commission is of the view that the RMU expenses

claimed by the Petitioner includes the amount of Rs. 10.21 Crore disallowed by the Commission in

Tariff Order dated 29.03.2017. Accordingly, the Commission at this stage has considered the

additional capitalization excluding IDC of Rs. 78.64 Crore (i.e. Rs. 139.84 Crore as per audited

accounts for FY 2016-17- Rs. 50.98 Crore allowed in Tariff Order dated 29.03.2017-Rs. 10.21 Crore

disallowed in Tariff Order dated 29.03.2017) for Khatima LHP for FY 2016-17 on account of RMU

works as claimed by the Petitioner. The Commission will carry out the detailed prudence check of

Capital Cost of Khatima RMU once the entire works pertaining to RMU of Khatima are completed.

Further, with regard to the IDC incurred during RMU works of Khatima LHP, the

Commission vide its letter dated 05.01.2018 directed UJVN Ltd. to submit the detailed computation

of IDC corresponding to RMU works of Khatima. The Petitioner vide its letter dated 02.02.2018 has

given details of IDC corresponding to Khatima RMU, however, the Petitioner did not provide the



computation of IDC. Therefore, the Commission vide its letter dated 08.02.2016 redirected the

Petitioner to provide the detailed computation of quarter-wise IDC. In response, the Petitioner vide

its letter dated 16.02.2018 submitted the quarter-wise details of IDC till the CoD of Machine 3,

however, it did not submit the quarter-wise actual phasing of expenditure along with the funding

of such expenditure. Therefore, the Commission has computed the Base Case IDC considering the

approved hard cost of Rs. 129.63 Crore as discussed above. For computation of Base Case IDC, the

Commission has considered the debt equity ratio of 70:30 and the actual interest rate of 11.42%.

Accordingly, the Commission has derived the total IDC of Rs. 13.95 Crore incurred till 31.03.2017 on

account of works under RMU. As the Commission in its Tariff Order dated 29.03.2017 had

approved the IDC of Rs. 5.37 Crore in FY 2015-16, IDC to be allowed in FY 2016-17 works out to Rs.

8.58 Crore (i.e. Rs. 13.95 Crore – Rs. 5.37 Crore).

Accordingly, the Commission has approved the additional capitalization for Khatima LHP

for FY 2016-17 as under:

Table 3.10:Details of additional capital expenditure under RMU works in Khatima LHP for FY 2016-17 approved by the Commission (Rs. Crore)

Particulars Claimed Approved

Total RMU under Plant & Machinery 79.02 78.64

IDC capitalized 10.25 8.58

Furniture & Fixtures 0.01 0.01

Office Equipments & Others 0.01 0.01

Computer 0.01 0.01

Total 89.29 87.25

The Petitioner has further submitted that in addition to the above, some additional

capitalisation was on account of indirect expenses as shown below. The Commission has gone

through the submissions of the Petitioner and has approved the total additional capitalisation for

Khatima LHPs (net of de-cap of Rs. 0.04 Crore) as shown below:



Table 3.11:Additional Capitalisation approved for Khatima LHP for FY 2016-17(Rs. Crore)

S. No. Particulars Claimed Approved

Direct Apportioned Total Direct Apportioned Total

1 Land 0.00 0.00 0.00 0.00 0.00 0.00

2 Building 0.00 0.01 0.01 0.00 0.01 0.01

3 Hydraulic Works 0.00 0.00 0.00 0.00 0.00 0.00

4 Major civil works 0.00 (0.03) (0.03) 0.00 (0.03) (0.03)

5 Plant & Machinery 89.61 0.02 89.63 87.23 0.02 87.25

6 Vehicles 0.01 0.03 0.03 0.00 0.03 0.03

7 Furniture & Fixtures 0.00 (0.00) (0.00) 0.01 (0.00) 0.01

8 Office Equipment 0.01 0.04 0.05 0.01 0.04 0.05

Total 89.63 0.06 89.69 87.25 0.06 87.31

The Commission, with regard additional capitalisation claimed for Dhakrani HEP observed

that an amount of Rs. 0.026 Crore of expenditure was booked against Submersible Pump and an

amount of Rs. 0.026 Crore towards the same asset is also booked under R&M Expenses. The

Commission vide its letter dated 17.01.2018 directed the Petitioner to justify the same. The Petitioner

in response has submitted that one wrong booking in Dhakrani Unit in Adjustment voucher No. A-

5 dated August 2017 amounting to Rs. 2,61,050 was a repetitive entry. The Commission has,

therefore, reduced the same from the additional capitalization of Dhakrani HEP.

Further, the Commission observed that under the sub-head ‘Building’ in Dhakrani Power

Station, the Petitioner had wrongly shown the additional capitalization of Rs. 55.25 Lakh and Rs.

54.58 Lakh, however, the same was incurred as a part of R&M expenses of Kulhal Power Station

and Dhalipur Power Station, respectively. Accordingly, the amount of Rs. 55.25 Lakh and Rs. 54.58

Lakh have been reduced from the additional capital expenditure of Dhakrani and added into R&M

of Kulhal Power Station and Dhalipur Power Station.

Further, with regard to Chilla LHP, the Commission vide its letter dated 07.12.2017 directed

the Petitioner to submit the detailed breakup of claimed additional capitalisation and the same was

provided by the Petitioner vide its letter dated 22.12.2017. From the details of additional

capitalisation, the Commission observed that in case of Chilla LHP, the Petitioner has claimed de-

capitalisation of Rs. 19.30 Crore. The Commission directed the Petitioner to provide the details of

such expenses. In reply, the Petitioner vide its letter dated 02.02.2018 has submitted that such

amount of Rs. 19.30 Crore was already approved by the Commission in its Tariff Order dated

29.03.2017 in additional capitalisation of Chilla in FY 2015-16 under civil works in RMU. The

Petitioner has further submitted that now such works have been funded by DRIP scheme and,



accordingly, the Petitioner has transferred the said expenses into separate DRIP accounting unit in

FY 2016-17. In this regard, the Commission is of the view that the truing-up of FY 2015-16 has

already been done in Tariff Order dated 29.03.2017, in which a total of Rs. 23.49 Crore was

approved for additional capitalisation for Chilla LHP. Since the financing pattern of the works

covered under DRIP are still unclear and loan/grant or interest rates are not available for the same,

therefore, in the absence of firm details of funding & interest rate for the DRIP scheme and non-

capitalization of the works executed, the Commission is deducting the said amount of Rs. 19.30

Crore from the opening GFA of Chilla HEP for FY 2016-17 and this would be considered as and

when UJVN Ltd. claims for capitalisation of DRIP works with the details of funding plan.

In MB-I, the Commission observed that the Petitioner has claimed the amount of Rs. 1.33

Crore on account of protection work of Siroor Bridge alongwith river training work and asked the

Petitioner to provide the details of such expenses. In reply, the Petitioner vide its letter dated

02.02.2018 has submitted that expense of Rs. 1.33 Crore was incurred on account of protection work

of Siroor Bridge along with river training work which is covered under Special Project Assistance

Scheme works and the same has been funded by the Government of Uttarakhand. Since the work is

funded through GoU, the Commission is of the view that the additional capitalization against the

said works is to be treated as grant. Also, the Commission is of the view that in the further tariff

proceedings the Petitioner should provide the details of works undertaken by the approved grant.

The Commission further observed that the Petitioner had included some of the expenses of

capital nature under R&M expenses. The Commission has, accordingly, deducted expenses of

capital nature from R&M expenses and considered the same as additional capitalisation.

Table 3.12: Expenses of Capital Nature wrongly booked under R&M Expenses for three of the 9 LHPs during FY 2016-17 (Rs. Crore)

Name of the Generating Stations Expenses of Capital Nature

but included in R&M

Dhakrani 0.53

Chilla 0.11

MB-I 0.18

Total 0.82

Further, the Commission also observed that the Petitioner in additional capitalisation for FY

2016-17 had included some of the expenses amounting to Rs. 14.42 Crore of R&M nature, as listed in



Annexure 5 of this Order. The Commission has accordingly, deducted expenses of R&M nature

from the additional capitalization and considered the same under R&M expense.

Table 3.13: Expenses of R&M Nature but included under Additional Capitalization for 9 LHPs during FY 2016-17 (Rs. Crore)

Name of the Generating Stations Expenses of R&M Nature but included in

Additional Capitalization

Dhakrani 3.120

Dhalipur 3.202

Chibro 5.715

Khodri 0.000

Kulhal 0.865

Ramganga 0.000

Chilla 1.520

MB-I 0.000

Khatima 0.000

Total 14.42

It is observed that UJVN Ltd. is having different approach for claiming expenses under

major overhauling for different plants. In this regard, the Commission is of the view that the nature

of expense is independent of the values of expense being incurred and thus the expenses should be

booked under the respective head of ARR under which it should actually fall. Hence the

Commission has taken a view that all the works related to Major overhaul claimed under

additional capitalization is shifted to R&M expenses of UJVN Ltd. The Petitioner is further

directed to comply the same philosophy in future claims as well.

The Commission while going through the submissions of the Petitioner observed that the

Petitioner had included some of the expenses of A&G nature in the additional capitalization. The

Commission has accordingly, deducted expenses of A&G nature amounting to Rs. 0.004 Crore in

Chilla and Kulhal Power Stations from the additional capitalization and considered the same under

A&G expense.

The Commission has further observed that in case of Dhakrani LHP, the Petitioner had

wrongly shown the values of Rs. 0.12 Crore and Rs. 0.11 Crore totalling to Rs. 0.23 Crore of Plant &

Machinery into office equipment & others, and therefore, the same has been shifted from office

equipment & others to Plant & Machinery. Similarly, in case of Dhakrani LHP, the Petitioner had

wrongly shown the values of Rs. 0.018 Crore of office equipment & others into Plant & Machinery,

and, therefore, the same has been shifted from Plant & Machinery to office equipment & others.



Further, the Commission observed that UJVN Ltd. in its instant Petition for various LHPs

has claimed capital expenditure of Rs. 39.29 Lakh for FY 2016-17 on account of DRIP scheme along

with other capital expenditure. The Commission vide its letter dated 05.01.2018 directed the

Petitioner to submit the status of the Works carried out under DRIP Scheme. The Petitioner vide its

reply dated 15.01.2018 submitted the same as under:

Table 3.14: Quarterly Progress of Investment Approval accorded to UJVN Ltd. as on 31.12.2017

S. No. Works/Projects Date of

Investment Approval

Estimated Cost (Rs.

Crore)

Schedule Completion

Physical Progress (In % of

Total civil

works)

Physical Progress (In % of

Total E&M

Works)

Financial Progress

(Rs. Crore)

1 Refurbishing of Asan Barrage

29.04.2016

25.94/29.65 Jun-2018 95% 80% 13.94

2 Refurbishing of Dakpathar Barrage

27.19/30.98 Apr-2022 71% 75% 27.39

3 Refurbishing of Ichari Dam

22.18 Mar-2024 75% 27% 9.87

4 Refurbishing of Virbhadhra Barrage

Jul-2018 90% 38% 24.48

5 Refurbishing of Maneri Dam

Dec-2018 40% 0% 1.00

Total

76.68

As the works under DRIP scheme have separate financing structure, the Commission sought

station-wise works under DRIP scheme along with the financing of the scheme separately from

other capital expenditure claimed and also directed to submit the revised financing of schemes

other than DRIP. In response, UJVN Ltd. in its reply dated 23.02.2018 submitted that for DRIP

projects 80% funding will be from World Bank (50% IDA credit and 50% IBRD loan) and 20%

funding will be from State/Central Government budgetary support. Out of the total estimated cost

of Rs. 2100 Crore, the share of World Bank, DRIP States and Centre shall be Rs. 1680 Crore, 393.60

Crore and Rs. 26.40 Crore respectively. Further, the Petitioner has also submitted the Loan

agreement for DRIP works vide which the cost of borrowing to UJVN Ltd. shall be as per loan terms

and conditions to be defined by GoU at the time of sanction of such funds/loans to UJVN Ltd.

However, the details of financing cost associated with the funding is not clear in the Loan

agreement as submitted by the Petitioner.

Based on the above submissions of the Petitioner with regard to works carried out under

DRIP Scheme, the Commission is of the view that since the works under the DRIP Scheme has not



been capitalised yet, therefore, the Commission has not considered the expenses claimed by the

Petitioner for FY 2016-17 under DRIP Scheme.

The Commission, accordingly, approves an additional capitalisation for FY 2016-17 for 9

LHPs as shown below:

Table 3.15: Additional Capitalisation for 9 LHPs for FY 2016-17 approved by the Commission including de-capitalization(Rs. Crore)

Name of the Generating Station

Claimed Approved Approved including de-

capitalization

Dhakrani 6.26 3.63 3.60

Dhalipur 3.98 0.75 0.70

Chibro 10.52 4.67 4.40

Khodri 7.61 7.54 7.43

Kulhal 1.75 0.86 0.84

Ramganga 1.12 1.12 0.92

Chilla 4.40 2.91 (16.53)*

MB-I 1.67 1.80 1.77

Khatima 89.73 87.34 87.31

Total 127.03 110.62 90.43 * including the de-cap of Rs. 19.30 Crore on account of transfer by the Petitioner into DRIP accounting unit

B. Maneri Bhali-II

In addition to the Capital Cost of Rs. 1885.50 Crore as on 15.03.2008, the Commission had

approved the additional capitalization from FY 2007-08 to FY 2015-16 amounting to Rs. 259.44 Crore

in its previous Tariff Orders as shown in the Table below:

Table 3.16: Year-wise Additional Capitalisation already approved by the Commission from FY 2007-08 to FY 2015-16 for MB-II LHP (Rs. Crore)

Financial Year Approved including de-capitalization

2007-08 0.09

2008-09 10.26

2009-10 8.14

2010-11 21.70

2011-12 2.01

2012-13 17.90

2013-14 35.32

2014-15 36.77

2015-16 127.24

Total 259.44

Based on the above opening GFA approved for FY 2016-17 for MB-II LHP is presented

below:



Table 3.17: Opening GFA for MB-II as considered by the Commission for FY 2016-17 (Rs. Crore) Particulars Amount

Capital Cost 1885.50

Additional Capitalization from FY 2007-08 to FY 2015-16 259.44

Opening GFA for FY 2016-17 2144.94

The Petitioner for MB-II LHP has claimed additional capitalization for FY 2016-17 as given in

Table below:

Table 3.18: Additional Capitalisation claimed by the Petitioner for FY 2016-17 (Rs. Crore)

Components Additional

Capitalisation De-

capitalization Net Additional Capitalisation

Land 0.02 0.00 0.02

Building 2.84 0.06 2.79

Hydraulic works 46.59 0.00 46.59

Major Civil Works 0.01 0.00 0.01

Plant & Machinery 5.55 0.01 5.55

Vehicles 0.03 0.00 0.03

Furniture and Fixtures 0.10 0.05 0.05

Office Equipment & Others 0.31 0.00 0.31

Total 55.45 0.11 55.34

It is observed that the Commission in its Order dated 05.04.2016 had not considered any

additional capitalisation for FY 2016-17, stating that the same is to be considered at the time of

truing-up of tariff. However, UJVN Ltd. in this instant Petition has submitted the additional

capitalisation of Rs. 55.34 Crore for FY 2016-17. UJVN Ltd. submitted that out of the capital

expenditure of Rs. 55.34 Crore, Rs 26.99 Crore was claimed towards the balance capital works of

MB-II LHP and Rs. 17.56 Crore corresponds to the IDC of Balance capitalization works capitalized

and Rs. 10.79 Crore for other additional capitalization for MB-II LHP. UJVN Ltd. further submitted

that the capital expenditure has been incurred on the basis of actual requirement.

The Commission sought detailed breakup of the Balance capitalisation and additional

capitalisation allowed and actually incurred till date and that projected till FY 2018-19. The same

was submitted by UJVN Ltd. Further, the Commission sought sub-head-wise details of expenses

incurred or proposed to be incurred on works covered under Balance Capital Petition for MB-II. In

response, the Petitioner vide letter dated 02.02.2018 submitted the sub-head-wise details of expenses

of Rs. 26.99 Crore for FY 2016-17 and expenses for FY 2017-18 & FY 2018-19 for works covered

under Balance Capital Petition as given in Annexure 6 of this Order.



The Commission observed that UJVN Ltd. with regard to MB-II has claimed balance capital

works of Rs. 217.05 Crore till FY 2016-17 as against Rs. 211.72 Crore approved in the Tariff Order

dated 05.04.2016. The Commission directed UJVN Ltd. to submit proper justification towards

increase in the balance capital expenditure works along with the status of balance capital works

completed and submit its revised claim of add cap for FY 2016-17 onwards. In response, UJVN Ltd.

submitted that after reconciliation the expenditure incurred up to 31.03.2016 is Rs. 190.06 Crore

against balance capital works of MB-II HEP. The Petitioner in Tariff order dated 29.03.2017 has

revised the expenditure on Balance Capital work estimated to Rs. 238.62 Crore up to FY 2018-19.

The Petitioner in the instant Petition has again revised the expenditure on Balance Capital works

estimated to Rs. 252.07 Crore. The actual capital expenditure for FY 2016-17 against Balance Capital

works is Rs. 26.99 Crore.

The Commission in its Tariff Order dated 05.04.2016 had allowed expenses of Rs. 211.72

Crore, however, the Petitioner in its Tariff Petition for FY 2017-18 had revised the projection to Rs.

238.62 Crore to be incurred till FY 2018-19. The Petitioner in the current Tariff Petition has again

revised the projection to Rs. 252.07 Crore till FY 2018-19. The Commission has observed that the

Petitioner has incurred Rs. 217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016 + Rs. 26.99 Crore in

FY 2016-17) upto FY 2016-17 and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against

balance capital works of MB-II HEP. The Commission is of the view that the Petitioner is adopting a

callous approach and is deferring important works like testing of surge shaft, which is certainly not

in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of the same and

directs the Petitioner to complete all the works covered in the Petition of balance capital works

of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in this regard

would be allowed.

The Commission observed that the Petitioner has received an amount of Rs. 125.52 Cr. as

grant from GoI through GoU under disaster during 2013 for MB-II Project. In this regard, the

Commission directs the Petitioner to submit the details of Financial Year-wise expenditures

made against this amount for respective works at the time of filing of true-up/ARR for FY 2017-

18.

Further, the Commission sought detailed breakup of the additional capitalisation and R&M

expenses for FY 2016-17 for MB-II from UJVN Ltd., which was submitted by UJVN Ltd. Further, the



Commission sought details of IDC corresponding to Balance Capital Expenditure of MB-II. UJVN

Ltd. vide letter dated 15.01.2018 has given detail of IDC, however, the same does not provide

proper computation of IDC. Therefore, the Commission vide its letter dated 08.02.2018 directed the

Petitioner to provide the detail of quarter-wise IDC in MS Excel with proper links. In response, the

Petitioner has submitted the quarter-wise IDC regarding balance capital works of MB-II generating

station, however, the Petitioner did not submit the quarter-wise actual phasing of expenditure along

with the funding of such expenditure. Therefore, the Commission has provisionally considered the

IDC of Rs. 17.56 Crore as claimed by the Petitioner.

The Commission has gone through the submissions of the Petitioner. As the Balance Capital

works are under progress and yet to be finalised by FY 2018-19, the Commission has allowed the

additional capitalisation of Rs. 26.99 Crore claimed by the Petitioner for Balance Capital Works and

provisionally allows IDC corresponding to the balance capital works as Rs. 17.56 Crore.

Besides above, UJVN Ltd. has claimed an additional capitalization amounting to Rs. 6.67

Crore on account of other capital works including balance capital works for FY 2016-17.

Further, the Commission observed that the Petitioner had claimed some of the expenses

totalling to Rs. 3.96 Crore towards adjustment of debtors with the approval of its Board of Directors

(BoD) concurred in 60th BoD meeting (Agenda No. 60.16). In this regard, the Commission sought the

copy of such BoD meeting. In response, the Petitioner vide its letter dated 22.12.2017 submitted the

copy of its 60th BoD meeting dated 07.09.2011. From the said submission, the Commission further

observed that the construction of MB-II project started in 1980 and the Irrigation Department of

Uttar Pradesh had signed 4 major civil contracts with 4 contractors (viz. M/s NPCC, M/s Hydel

Construction Company, M/s Raj Kumar Construction Company and M/s Continental Construction

Company) and as per the terms of original contracts electricity to the contractors was to be made

available at the rate of 44 paise/Unit. As the project work progressed at slow pace due to lack of

financial resources, the work came to halt after 1989-90 and finally stopped in 1992. After the

creation of Uttarakhand State in 2002, the project was restarted and the old contracts were renewed.

In supplementary agreements, the rate of electricity was fixed at Rs. 1 per kWh for all the contracts

except M/s Shring Construction Company (earlier known as M/s Raj Kumar Construction

Company), in which case the original contract continued. UPJVN Ltd. raised bills at the rate of Rs.

1/kWh for all the four contractors. However, M/s Shring Construction Company paid those bills at



the rate of 0.44 paise/kWh. The old disputed electricity arrears from 1992 to July 2002 amounted to

Rs. 4.72 Crore and the same was pending with the four civil contractors engaged by Irrigation

Department in MB-II Project due to lack of decision in view of contract clause. As per the

supplementary agreement all outstanding issues/claims pertaining to the period upto 2002 were to

be solved through DRB and no recovery were to be made through RA bills of supplementary

agreement. Accordingly, Irrigation Department had not made any recovery from contractors nor

was the DRB formed to solve the dispute. After the commissioning of MB-II Project on 15.03.2008,

the four major civil contracts were handed over by Uttarakhand Irrigation Department to UJVN

Ltd. for finalisation.

The Commission has gone through the submission of the Petitioner. The Commission

observes that the Petitioner had raised the issue of above dispute in its 60th BOD meeting held on

September 07, 2011, where it was decided as under:

“In view of finalization of above contracts it is proposed that the bills in question be withdrawn and

corrected bills as per terms of contracts served to the contractors. The balance expenditure shall

automatically be absorbed by UJVN Ltd. and booked on MB-II Project Head as purchase of power.”

The Commission observes that the Petitioner in its internal audit for FY 2012-13 was able to

book the dispute of outstanding claims of Rs. 3.96 Crore from the four civil contractors pertaining to

the period upto 2002. Though the matter was raised in FY 2012-13, it is observed that said issue was

in the knowledge of the Board of the Petitioner’s company as is evident from the minutes of the

Company’s 60th Board Meeting held on 07.09.2011. Also the query in this regard was raised by the

CAG auditors in FY 2012-13. The Commission is of the view that the Petitioner could have brought

this matter at the time of truing-up of FY 2012-13 itself, while claiming the capital cost of its MB-II

project and if for any reasons was not able to claim the same at that time, then it should have

brought the same for the consideration of the Commission while claiming the amount of balance

capital works in FY 2016-17 with respect to the project. It appears that the Petitioner has shown a

very lackadaisical approach in dealing with this issue in view of the fact that it took them 5 long

years to settle the issue. However, the Commission taking into cognisance that such expenses are

legitimate and were incurred by the Petitioner during the construction of the LHP, allows the said

amount of Rs. 3.96 Crore as an additional capitalisation in FY 2016-17 for MB-II HEP of the

Petitioner as an exceptional case, however, no such expenditure shall be allowed in future. The



Petitioner is directed to take a note of the same and refrain from claiming such amounts in

future.

The Commission while going through the submissions observed that the Petitioner had

included some of the expenses of R&M nature under additional capitalization. The Commission

has, accordingly, deducted expenses of R&M nature amounting to Rs. 0.264 Crore from additional

capital expenditure and considered the same as R&M expense. Similarly some of the expenses of

A&G nature were booked under additional capital expenditure. Therefore, the Commission has

deducted the same from additional capitalization amounting to Rs. 0.004 Crore and has considered

the same in A&G expense.

The Commission has, accordingly, considered the above additional capitalisation and

approves the additional capitalisation for FY 2016-17 for MB-II LHP as submitted below:

Table 3.19: Item-wise details of Additional Capitalisation approved by the Commission for MB-II FY 2016-17 (Rs. Crore)

Particulars

Additional Capital

Expenditure Claimed

Additional Capital

Expenditure Approved

Remarks

Balance capital works 26.99 26.99 Allowed after prudence check

IDC of Balance capitalization works capitalized

17.56 17.56 Provisionally allowed.

Other capital works 6.67 6.67 Allowed after prudence check

Adjustment of debtors with the approval of 60th BoD meeting (Agenda No. 60.16)

3.96 3.96 Allowed after prudence check

Expenses of R&M nature 0.26 0.00 Shifted such expenses from additional capital expenditure to R&M expenses

Expenses of A&G nature 0.004 0.00 Shifted such expenses from additional capital expenditure to A&G expenses

Less: De-capitalization (0.11) (0.11) Allowed after prudence check

Total 55.34 55.08



Table 3.20: Asset-wise Additional Capitalization approved by the Commission for FY 2016-17 (Rs. Crore)

Particulars of Assets

Approved in Order dated

29.03.2017 for FY 2016-17

Approved now after Truing-up for FY 2016-17


De-capitalization

Net Additional Capitalization

Land 0.02 0.02 0.00 0.02

Building 2.18 2.84 (0.06) 2.79

Hydraulic works 0.00 46.59 0.00 46.59

Major Civil Works 14.29 0.01 0.00 0.01

Plant & Machinery 5.70 5.31 (0.01) 5.31

Vehicles 0.15 0.03 0.00 0.03

Furniture and Fixtures 0.04 0.09 (0.05) 0.05

Office Equipment & Other Items

0.23 0.29 0.00 0.29

Total 22.62 55.19 (0.11) 55.08

C. Observation on abnormal increase in Additional Capital Expenditure in certain LHPs

While examining the additional capitalization details for FY 2016-17, it is observed that there

has been a substantial increase in the expenditures claimed by the Petitioner against additional

capitalization w.r.t. the claims made during previous years specifically, in the additional

capitalization claims of the LHPs of Yamuna Valley, where out of 5 plants, RMU in two plants

namely Dhalipur & Dhakrani has already been proposed. Accordingly, the Commission decided to

scrutinize the expenditures and also conducted a ‘Sample Study’ of procurement process being

followed by the respective cost centres namely Chibro, Khodri & PDD-Dakpathar for FY 2016-17. In

this regard, based on the submission made by the Petitioner vide letter no. 654 dated 09.02.2018,

following has been observed:

Generally procurement has been done on single quotation basis defeating the basic purpose

of discovering the competitive prices for the items/works being procured viz.

Illustration:

Table 3.21: Procurements done on single quotation basis (In Rs. Lakh) S.

No. HEP Work Supplier/Contractor Amount

1 Chibro Rehabilitation & Retrofitting of FDA system of fire protection system of Cable Gallery of Chibro Power Station

M/s Tri-parulex fire protection system, Ghaziabad

68.52

2 Chibro Electrical Panels retrofitting M/s Keymech Technologies, Haridwar

49.29

3 Chibro Procurement of Alfa Laval make centrifuging machine, Model -MAB103 (1300 LPH)

M/s Multi Industrial Product, Kashipur

16.62



Table 3.21: Procurements done on single quotation basis (In Rs. Lakh) S.

No. HEP Work Supplier/Contractor Amount

4 Chibro Supply installation, Testing and Commissioning of General Purpose Air Compressor

M/s Shree Services, Nashik 24.10

5 Dakpathar Supply & Retrofitting of C&S make AH/AHA type of ACB's with micropro 4.1 series in LT panel of substation no. 1 & Lakhwar Pump House

M/s Mittal Machines (P) Ltd., Saharanpur

55.00

6 Dakpathar Supply & Retrofitting of C&S make AH/AHA type ACB's with micropro 4.1 series in LT panel of substation no. 3


33.00

7 Dakpathar Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro


215.00

8 Khodri Supply and retrofitting of existing Seimens make LVACB panels of Unit Auxiliary Board and station Board at Khodri Power Station

M/s Keymech Technologies, Haridwar

53.18

9 Khodri Water Mist Fire Extinguisher M/s Cease Fire, Ddun 14.28

10 Khodri Retrofitting and re-instrumentation of Co2 flooding system for generators of Khodri Power Station

M/s Tri-parulex, Ghaziabad 57.91

Procurement of various items/works has been done on proprietary basis claiming the

works/items as that of proprietary nature even when the items/works do not qualify for the

proprietary nature in accordance with the procurement rules of GoU, due to which competitive

bidding for such procurements could not take place and the procurement was done on the

monopoly prices offered by the firms/channel partners viz.

Illustration:

Table 3.22: Procurements done on proprietary basis S.

No. HEP Work Supplier/Contractor

Amount(in Rs. Lakh)

Remarks

1 Chibro

Rehabilitation & Retrofitting of FDA system of fire protection system of Cable Gallery of Chibro Power Station

M/s Tri-parulex fire protection system, Ghaziabad

68.52

Since in the order/agreement the word ‘Equivalent’ has been mentioned in the Make column which contradicts the proprietary nature of the items/works.

2 Dakpathar

Supply & Retrofitting of C&S make AH/AHA type of ACB's with micropro 4.1 series in LT panel of substation no. 1 & Lakhwar Pump House


55.00

Retrofitting Order was issued straight away on budgetary offer, generally the prices offered in budgetary proposal remain much higher than the actual prices/market rates.

3 Dakpathar

Supply & Retrofitting of C&S make AH/AHA type ACB's with micropro 4.1 series in LT panel of substation no. 3


33.00

Retrofitting

Procurement done on single quotation basis considering proprietary nature item of C&S make.



Table 3.22: Procurements done on proprietary basis S.

No. HEP Work Supplier/Contractor

Amount(in Rs. Lakh)

Remarks

4 Dakpathar

Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro


215.00

Retrofitting

Procurement done on single quotation basis considering proprietary nature item of Biecco Lawrie make VCB's.

5 Khodri

Supply and retrofitting of existing Seimens make LVACB panels of Unit Auxiliary Board and station Board at Khodri Power Station

M/s Keymech Technologies, Haridwar

53.18

Retrofitting Offer was taken from M/s Siemens. Order on single quotation and proprietary basis.

6 Khodri

Retrofitting and re-instrumentation of Co2 flooding system for generators of Khodri Power Station

M/s Tri-parulex, Ghaziabad

57.91

Retrofitting

Offer was taken from M/s Surex authorised dealer is M/s Tri-parulex on single quotation, on proprietary basis. As per commercial terms 100% advance for supply with taxes of amount Rs 53 Lakhs was given.

Besides above, in certain cases the estimates framed in the cost centers for supply/works

appears to be exorbitantly higher than the prevailing market rates/Schedule of Rates (SoR) of other

power sector utilities of the State and bids were invited on such exaggerated estimates resulting in

over pricing by the bidders.

Illustration:

Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State

S. No.

HEP Work Contractor Amount(in Rs. Lakh)

Remarks

1 Dakpathar Renovation & Modernization of 33/11 kV substation & DPH Khodri

M/s Social Mindlabs, New Delhi

588.00

The prices offered in the order appear to be on very higher side specially for breakers, DG sets, 11 kV & 33 kV Cables in comparison to the similar items procured in UPCL.

2 Dakpathar

Supply & Retrofitting of BIECCO LAWRIE make VCB's with all accessories for 33/11 kV substation at Chibro


215.00

1. Cost of work appears to be on a very higher side as it is renovation work done at 33/11 kV S/s only comprising of replacement of breakers, Cables, cable tray etc. 2. Cost of breakers, cables appears to be on a very higher side. 3. Total work of proprietary nature of procurement of 11 kV breakers is approx. 1 Cr. which is on a very higher side.



Table 3.23: Works where procurement done on exorbitantly higher rates than the prevailing market rates/Schedule of Rates (SoR) of the Power Sector Utilities in the State

S. No.

HEP Work Contractor Amount(in Rs. Lakh)

Remarks

3 Dakpathar

Additional Qty. in agreement no. 18 dt. 21.12.2016 for Renovation &Modernization of 33/11 kV substation & DPH Khodri


60.00

Repeat Order in continuation to order at S. No. 1 above. Procurement was done by UJVN Ltd. on 3 times higher prices than that of the prices of SoR of UPCL.

It has also been observed that there is a huge variation in prices in similar items of capital

nature procured at different HEPs during the same Financial Year.

Illustration:

Table 3.24: Works with large variation in prices within HEPs of UJVN Ltd. S.

No. HEP Work

Supplier/ Contractor

Amount (in Rs. Lakh)

Remarks

1 Chibro

Supply, installation, testing and commissioning of 500 kVA, Silent DG set for Chibro Power Station

M/s Shree Services, Nashik

51.04 (the hard cost of DG set without tax in this case is Rs. 35.75 Lakh)

It is observed that DG set of similar rating was purchased at a cost of approx. Rs. 62 Lakh without taxes and duties in Dakpathar (mentioned at S. No. 2 below)

2 Dakpathar Renovation & Modernization of 33/11 kV substation & DPH Khodri


588.00 (the hard cost (without taxes & duties of DG set is approx. Rs. 62 Lakh)

As discussed in S. No. 1 above, the prices offered in the order appear to be on a very higher side specially the prices of breakers, DG sets, 11 kV & 33 kV Cables.

Based on the observations made above, the Commission is of the view that such practices

prevailing in UJVN Ltd. are responsible for the substantial increase in expenditures incurred against

the additional capitalization. As the prices so discovered are on the higher side as that of the

prevailing market rates/schedule of rates of power sector utilities in the State (UPCL & PTCUL). It

is known that any additional loading due to such irregularities ultimately leads to increase in

consumer tariff, hence, immediate corrective actions are required for streamlining the procurement

process being practised in the respective cost centres of the Petitioner to make it economical.

In this regard, the Commission directs the Petitioner to:

(i) Frame its Schedule of Rates (SoR) for common capital items inline with the SoR of

other power utilities in the State.



(ii) Procure the common items of capital nature through Centralised Procurement

System and strictly adhere to the procurement Rules of the GoU/ Rules framed by

the Petitioner (if any).

(iii) Review the working of its internal audit system specifically for checking the

anomalies in procurements and take corrective action for strengthening the internal

audit wing.

An action taken report on the above is required to be submitted to the Commission latest

by 30.06.2018.

3.1.2.4 Depreciation

A. Old Nine Large Generating Stations


“28. Depreciation

(1)The value base for the purpose of depreciation shall be the capital cost of the asset admitted by the

Commission.

Provided that depreciation shall not be allowed on assets funded through Consumer Contribution and

Capital Subsidies/Grants.

(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to

maximum of 90% of the capital cost of the asset.

...

(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in

Appendix - II to these Regulations.

...”

The Petitioner has submitted that while computing the depreciation, it has considered 90%

of the opening GFA as the permissible limit. Accordingly, for the plants where accumulated

depreciation on the approved opening GFA has already reached 90%, such as Khatima, Dhakrani,

Dhalipur, Ramganga, Kulhal, Chilla and Chibro, the Petitioner has not claimed any depreciation.

The Petitioner has claimed depreciation on the opening GFA only for the remaining two plants, i.e.

Khodri and Maneri Bhali-I.



The Petitioner submitted that it has computed depreciation on the basis of rates considered

by the Commission in its previous Tariff Orders. UJVN Ltd. submitted that it has considered

depreciation till FY 2012-13 at the rate of 2.38% on the opening GFA. Thereafter, the Petitioner has

spread the remaining depreciable value over the balance useful life. With regard to the depreciation

on additional capitalization, the Petitioner has computed depreciation for different class of assets in

accordance with the rates specified in UERC Tariff Regulations, 2004 till FY 2012-13, UERC Tariff

Regulations, 2011 from 01.04.2013 till 31.3.2016 and UERC Tariff Regulations, 2015 from 1.4.2016.

With regard to the opening GFA as on January, 2000, the Commission has computed

depreciation in accordance with the UERC Tariff Regulations, 2015. All the 9 LHPs are over 12 years

old and 7 out of 9 stations have depreciated by 90% of the original cost. Depreciation allowed for

Khodri and MB-I LHPs have not reached 90% till FY 2016-17, and hence, the Commission has

computed the accumulated depreciation on opening GFA till 01.04.2016 to determine the remaining

depreciable value for each LHP. The Commission for computing the accumulated depreciation till

31.03.2013 has considered the depreciation rate of 2.38% as considered in previous Tariff Orders.

Further, in accordance with UERC Tariff Regulations, 2011 & UERC Tariff Regulations, 2015 and

considering the life of 35 years from the CoD, the Commission has equally divided the remaining

depreciable value as on 01.04.2016 on the remaining useful life of each LHP.

As regards the depreciation computation on the asset added during the period from FY

2001-02 to FY 2015-16, the Commission has computed the depreciation in accordance with the

provisions of UERC Tariff Regulations, 2011. The Commission has computed the balance

depreciable value for assets added in each year after January, 2000 by deducting the cumulative

depreciation as admitted by the Commission upto 31.03.2016 from the gross depreciable value of

the assets. The Commission, further, computed the difference between the cumulative depreciation

as on 31.03.2016 and the depreciation so arrived at by applying the depreciation rates as specified in

UERC Tariff Regulations, 2015 corresponding to 12 years. The Commission has spread over the

above difference in the remaining period upto 12 years of such asset addition. Further, in case

where asset life has crossed 12 years from the year of addition, the remaining depreciable value as

on 31st March of the year closing has been spread over the balance life.

As regards the depreciation computation on assets added during FY 2016-17, the

Commission has computed the depreciation by applying the depreciation rates as specified in



UERC Tariff Regulations, 2015. Based on the above discussed approach, the summary of

depreciation as approved in Order dated 05.04.2016 and as approved now by the Commission for

FY 2016-17 after truing-up is shown in the Table given below:

Table 3.25: Depreciation approved for 9 LHPs after truing-up of FY 2016-17 (Rs. Crore)

Name of the Generating

Stations

On Opening GFA as on 14.01.2000

On Additional Capitalisation upto FY 2015-16

Total Depreciation

Approved in Tariff Order dt. 05.04.2016 for

FY 2016-17

Approved now after



FY 2016-17

Approved now after



FY 2016-17

Claimed by the Petitioner in FY 2016-17

Approved now after


Dhakrani 0.00 0.00 0.19 0.19 0.19 0.18 0.19

Dhalipur 0.00 0.00 0.29 0.30 0.29 0.30 0.30

Chibro 0.00 0.00 1.27 1.44 1.27 1.46 1.44

Khodri 0.59 0.59 0.73 0.76 1.32 1.36 1.35

Kulhal 0.00 0.00 0.17 0.17 0.17 0.17 0.17

Ramganga 0.00 0.00 0.31 0.31 0.31 0.32 0.31

Chilla 0.00 0.00 0.93 1.13 0.93 2.17 1.13

MB-I 2.53 2.58 1.70 1.57 4.23 4.55 4.15

Khatima 0.00 0.00 2.35 2.95 2.35 2.97 2.95

Total 3.12 3.17 7.94 8.81 11.05 13.47 11.98

B. Maneri Bhali-II

As discussed earlier, the Commission has worked out the additional capitalization for FY

2016-17 for MB-II Plant. Accordingly, the Commission has computed the depreciation considering

the Capital Cost approved as on CoD of the Project and year-wise additional capitalisation

approved by the Commission upto FY 2015-16.

The Commission for computing the depreciation for FY 2016-17 in accordance with the

UERC Tariff Regulations, 2015 has computed the balance depreciable value for MB-II by deducting

the cumulative depreciation as admitted by the Commission upto 31.03.2016 from the gross

depreciable value of the assets. The Commission, further, computed the difference between the

cumulative depreciation as on 31.03.2016 and the depreciation so arrived at by applying the

depreciation rates as specified in UERC Tariff Regulations, 2015 corresponding to 12 years. The

Commission has spread the above difference in the remaining period upto 12 years from CoD of

MB-II.

In line with the above approach, the Commission has computed the depreciation for FY

2016-17 for MB-II on the approved capital cost as on CoD of Rs. 1885.50 Crore along with additional

capitalisation approved upto FY 2015-16. Accordingly, the Commission in this Order has trued-up

the depreciation for FY 2016-17 as follows:



Table 3.26: Revised Depreciation for MB-II for FY 2016-17 (Rs. Crore)

Particulars Approved in Tariff Order

dated 05.04.2016 for FY 2016-17 Claimed

Approved after truing-up

FY 2016-17 58.81 67.85 60.13

3.1.2.5 Return on Equity (RoE)


“26. Return on Equity

(1) Return on equity shall be computed on the equity base determined in accordance with

Regulation 24.

Provided that, Return on Equity shall be allowed on amount of allowed equity capital for the

assets put to use at the commencement of each financial year.

(2) Return on equity shall be computed on at the base rate of 15.5% for thermal generating

stations, Transmission Licensee, SLDC and run of the river hydro generating station and at the

base rate of 16.50% for the storage type hydro generating stations and run of river generating

station with pondage and Distribution Licensee on a post-tax basis.

...”

In the previous Tariff Orders, pending finalisation of the Transfer Scheme of the Petitioner,

the Commission had allowed RoE on the provisional value of the opening equity of Rs. 151.19 Crore

in accordance with the directions of the Hon’ble Appellate Tribunal for Electricity issued in the

Order dated 14.09.2006 (Appeal No. 189 of 2005), and detailed in the Commission’s Order dated

14.03.2007. As regards RoE on additional Capitalisation, the Commission has considered a

normative equity of 30% where entire financing has been done through internal resources and on

actual basis in other cases subject to a ceiling of 30% as specified in the UERC Tariff Regulations,

2015.

Further, a de-capitalisation of Rs. 2.03 Crore in the year FY 2014- 15 in Khatima LHP was

considered, accordingly, the same was deducted from the original GFA resulting in reduction in the

Original capital cost as on 01.04.2015. Due to de-capitalisation, the Commission has reduced the

30% of equity of the de-capitalised amount from the equity infused in the original capital cost and

has thus computed RoE on Rs. 150.58 Crore instead of the earlier amount of Rs. 151.19 Crore.



The Petitioner has submitted that it has claimed RoE in accordance with the aforesaid UERC

Tariff Regulations, 2015 at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate

of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima on post tax basis. The Petitioner further

submitted that it may be allowed to recover Income Tax of Rs. 7.92 Crore as per Regulations 34 of

UERC Tariff Regulations, 2015 which stipulates as follows:

“34. Tax on Income

Income Tax, if any, on the income stream of the regulated business of Generating Companies,

Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the Generating

Companies, Transmission Licensees, Distribution Licensees and SLDC as per actual income tax paid,

based on the documentary evidence submitted at the time of truing up of each year of the Control Period,

subject to the prudence check.”

In this regard, the Petitioner has submitted the copy of certificates issued by the Chartered

Accountant, M/s DSM & Associates certifying that the Petitioner has paid Rs. 7.92 Crore as income

tax in respect of sale of energy to Uttarakhand Power Corporation Ltd. and Himachal Pradesh State

Electricity Board as given below:

Table 3.27: Income Tax as claimed by the Petitioner for 9 LHPs (Rs. Crore) Name of the

Generating Stations Income Tax in respect of sale

of energy to UPCL Income Tax in respect of sale of

energy to HPSEB Total Income

Tax

Dhakrani 0.21 0.07 0.28

Dhalipur 0.32 0.11 0.43

Chibro 1.50 0.50 2.00

Khodri 0.75 0.25 1.00

Kulhal 0.20 0.05 0.25

Ramganga 1.65 - 1.65

Chilla 1.20 - 1.20

MB-I 0.75 - 0.75

Khatima 0.35 - 0.35

Total 6.94 0.98 7.92

The Commission has allowed RoE at the rate of 16.50% for Chibro, Khodri, Ramganga &

MB-I and at the rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima as per Regulation

26 of UERC Tariff Regulations, 2015. Further, with regard to recovery of income tax paid, the

Commission is of the view that the Regulation 34 of UERC Tariff Regulations, 2015 allows recovery

of actual tax paid subject to submission of documentary proof. Therefore, the Commission has



allowed the Petitioner to recover actual paid income tax separately from its beneficiaries in

accordance with the Regulation 34 of the UERC Tariff Regulations, 2015.

As the Transfer Scheme is yet to be finalized, the Commission is provisionally allowing a

return on normative equity at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the

rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima in accordance with the provisions

of UERC Tariff Regulations, 2015. The summary of the Return on Equity approved for 9 LHPs for

FY 2016-17 is shown in the Table given below:

Table 3.28: Equity and Return on Equity for Nine Old LHPs for FY 2016-17 (Rs. Crore)


Station

RoE approved in Tariff Order dated 05.04.2016 for FY 2016-17

Claimed by the Petitioner

Approved after Truing-up for FY 2016-17

On Transferred

Asset

On Additional Capitalisation

RoE Opening

Equity RoE

On Transferred Asset as on Jan 14, 2000

On Additional Capitalisation upto

FY 2015-16 Total RoE

Normative Equity

RoE Opening

Equity RoE

Dhakrani 0.58 0.13 0.71 4.56 0.71 3.72 0.58 0.84 0.13 0.71

Dhalipur 0.95 0.21 1.16 7.49 1.16 6.11 0.95 1.38 0.21 1.16

Chibro 4.35 1.14 5.49 34.48 5.69 26.37 4.35 7.93 1.31 5.66

Khodri 3.66 0.60 4.26 26.05 4.30 22.19 3.66 3.80 0.63 4.29

Kulhal 0.81 0.12 0.94 6.07 0.94 5.25 0.81 0.82 0.13 0.94

Ramganga 2.48 0.28 2.76 16.72 2.76 15.01 2.48 1.71 0.28 2.76

Chilla 5.81 0.68 6.48 48.92 7.58 37.47 5.81 11.35 1.76 7.57

MB-I 5.43 1.76 7.19 43.77 7.22 32.92 5.43 10.19 1.68 7.11

Khatima 0.33 1.80 2.13 18.99 2.94 1.55 0.24 17.44 2.70 2.94

Total 24.40 6.72 31.12 207.05 33.30 150.58 24.30 55.47 8.83 33.14

B. Maneri Bhali-II

As discussed earlier, the Commission has considered the Capital cost of MB-II project as on

CoD as Rs. 1885.50 Crore as approved by the Commission in Order dated 05.04.2016 and 29.03.2017

and, accordingly, the financing of the project. The relevant para of the Tariff Order dated 05.04.2016

with respect to financing of the capital cost is as extracted below:

“As discussed earlier, the Commission has approved the Capital cost of MB-II project as on COD and,

accordingly, the financing of the project. The Commission has reworked the total equity component as

on COD to Rs. 685.50 Crore. In accordance with the Tariff Regulations, equity in excess of 30% has

to be treated as normative loan. Accordingly, the equity for MB-II LHP as on COD works out to Rs.

565.65 Crore which includes pre-2002 expenses of Rs. 164 Crore, power development fund of Rs.

326.76 Crore and GoU budgetary support of Rs. 74.89 Crore and the balance amount of Rs. 119.85

Crore has been considered as normative loan.”



Further, as discussed in Tariff Order dated 29.03.2017, the Commission has considered the

funding of the additional capitalisation of Rs. 40.37 Crore for FY 2015-16 as grants and the same has

been continued in FY 2016-17 as the Petitioner has already recovered some amount in this regard

from GoU. Further, the Commission is of the view that in the further tariff proceedings the

Petitioner should provide the details of works undertaken by the approved grant.

Further, as decided in the Tariff Orders dated 05.04.2016 and 29.03.2017, the Commission

has considered equity infusion from FY 2013-14 onwards subject to ceiling limit of 30% towards

funding of additional capitalisation as extracted below:

“With regards to funding of additional capitalisation, the Commission directed the Petitioner to

submit the proof of actual equity infused towards additional capitalisation. The Petitioner in its reply

submitted that it received GoU budgetary support of Rs. 25.56 Crore in FY 2013-14 through three

separate sanctions. The Petitioner submitted the required documentary proof for the same. The

Commission has, accordingly, considered equity infusion from FY 2013-14 subject to ceiling limit of

30% towards funding of additional capitalisation.”

The Commission has not been allowing Return on Equity on funds deployed by the GoU out

of PDF fund for reasons recorded in the previous Tariff Orders. In line with the approach

considered in previous Tariff Orders, the Commission is of the view that unlike other funds,

available with the Government collected, through taxes and duties, PDF is a dedicated fund created

in accordance with the provisions of the PDF Act passed by the GoU and the amount is collected

directly from the consumers through the electricity bills as the same forms part of the power

purchase cost of UPCL which in turn is loaded on to the consumers. PDF Act and Rules made

thereunder, further, clearly indicate that money available in this fund has to be utilized for the

purposes of development of generation and transmission assets.

Thus, the Commission has not deviated from its earlier approach and is of the view that the

money for the purpose of this fund is collected by the State Government through cess imposed on

the electricity generated from old hydro generating stations which are more than 10 years old. The

cost of such cess is further passed on to UPCL which in turn recovers the same from ultimate

consumers of electricity through tariffs. Further, as the Petitioner in this regard has preferred an

Appeal before the Hon’ble APTEL, the Commission is not deviating from its approach as the matter

is sub-judice.



The Petitioner has further submitted that it may be allowed to recover Income Tax of Rs. 2.54

Crore as per Regulations 34 of UERC Tariff Regulations, 2015. It has submitted the copy of

certificate issued by the Chartered Accountant, M/s DSM & Associates certifying that the Petitioner

has paid the Rs. 2.54 Crore as income tax in respect of sale of energy to Uttarakhand Power

Corporation Ltd. As discussed above in this regard, the Commission has allowed the Petitioner to

recover actual paid income tax separately from its beneficiaries in accordance with the Regulation

34 of the UERC Tariff Regulations, 2015.

The Commission on account of the financing of the project additional capitalisation for FY

2016-17 has revised the RoE allowed for FY 2016-17 as shown below:

Table 3.29: RoE approved for MB-II for FY 2016-17 (Rs. Crore)

Particulars Approved in MYT Order

for FY 2016-17 dated 05.04.2016

Claimed Approved after truing-up

FY 2016-17 43.63 108.06 46.20

3.1.2.6 Interest on Loans



“27. Interest and finance charges on loan capital and on Security Deposit

(1) The loans arrived at in the manner indicated in Regulation 24 shall be considered as gross

normative loan for calculation of interest on loan.

(2) The normative loan outstanding as on 1.4.2016 shall be worked out by deducting the cumulative

repayment as admitted by the Commission up to 31.3.2016 from the gross normative loan.

(3) The repayment for each year of the Control Period shall be deemed to be equal to the depreciation

allowed for that year

...

(5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the

actual loan portfolio of the previous year after providing appropriate accounting adjustment for

interest capitalised:

Provided that if there is no actual loan for a particular year but normative loan is still outstanding,

the last available weighted average rate of interest shall be considered.



Provided further that if the generating station or the transmission system or the distribution system

or SLDC, as the case may be, does not have actual loan, then the weighted average rate of interest of

the generating company or the Transmission Licensee or the Distribution Licensee or SLDC as a

whole shall be considered.

(6) The interest on loan shall be calculated on the normative average loan of the year by applying the

weighted average rate of interest.

…”

The Petitioner submitted that as per the provisions of Regulation 24 of UERC Tariff

Regulations, 2015, interest on normative debt has been considered on the value equivalent to 70% of

additional capitalisation only.

Further, the Petitioner submitted that the rate of interest has been considered as the

weighted average rate of interest for FY 2016-17 and the repayment has been considered as equal to

the depreciation claimed for the year. Further, the Commission sought details of quarter-wise actual

loan repayment, interest paid towards existing loans along with interest refund received for FY

2016-17 for the 10 LHPs and the same was submitted by the Petitioner.

For the purpose of truing-up and computing the interest expenses for FY 2016-17, the

Commission has determined the normative loan in accordance with the UERC Tariff Regulations,

2015. The Commission, in accordance with UERC Tariff Regulations, 2015 has computed the

weighted average interest rate based on the outstanding loans for UJVN Ltd. except for loans taken

for new projects that are yet to achieve CoD. The interest rate based on the above works out to

11.42% in case of Khatima LHP and 10.07% for other 8 LHPs. The Commission has, accordingly,

considered the above mentioned interest rates for computing the interest expenses for 9 LHPs.

Based on the above considerations, the Commission has approved interest on loan based on

the average of opening and closing loans for 9 LHPs for FY 2016-17 after excluding the loan

corresponding to Additional Capitalisation during the year as the practice of the Petitioner is to

capitalise the assets at the end of the year. The same is shown in Table below:



Table 3.30:Interest on Loan for Nine Old LHPs for FY 2016-17 (Rs. Crore)


Approved in MYT Order dt. 05.04.2016

Interest Claimed

Approved after Truing-up

Opening Loan

Closing Loan

Interest

Dhakrani 0.05 0.31 0.53 0.34 0.04

Dhalipur 0.06 0.26 0.94 0.00 0.05

Chibro 1.20 1.85 12.81 11.37 1.22

Khodri 0.10 0.46 1.95 0.60 0.13

Kulhal 0.06 0.14 0.66 0.49 0.06

Ramganga 0.16 0.19 1.47 1.16 0.13

Chilla 0.01 1.99 16.44 15.31 1.60

MB-I 0.84 0.75 8.06 3.71 0.59

Khatima 3.45 8.21 39.45 36.50 4.34

Total 5.91 14.15 82.31 69.48 8.16

B. Maneri Bhali-II

The Commission has considered the Capital Cost of Maneri Bhali-II as on CoD and the

financing thereof as approved in Tariff Orders dated 05.04.2016 and 29.03.2017. The Commission

has considered the equity in excess of 30% of the capital cost of MB-II as normative loan which

works out to Rs. 119.85 Crore in addition to PFC loan of Rs. 1200 Crore.

Further, the Commission sought details of interest refund/rebate received on loans

pertaining to MB-II LHP for FY 2016-17 and the same was submitted by UJVN Ltd.

In case of MB-II station as the actual loan has been availed for the project, therefore, the

interest has been computed on the basis of these loans availed for the project. For calculating the

interest expense for FY 2016-17, the Commission has considered the interest rate of 10.98% for MB-II

LHP. The Commission has adjusted the yearly interest refunds received by the Petitioner as done

previously in the Orders dated 05.04.2016 and 29.03.2017. As discussed above, the Commission has

computed the weighted average interest rate of 10.98% based on the outstanding PFC loans and

GoU loans. The Commission for computing interest for MB-II station for FY 2016-17 has considered

the above mentioned interest rate.

The Commission based on the approved capital cost and the opening and closing loan

including the normative loan for MB-II as on 31.03.2017 has computed the interest expenses for FY

2016-17 after excluding the loan corresponding to the additional capitalisation during the year as

the practice of the Petitioner is to capitalise the asset at the end of the year. The Commission, in



accordance with Regulation 27(3) of UERC Tariff Regulations, 2015 has considered the repayment

for FY 2016-17 equal to the depreciation allowed for that year.

Further, the Commission in its Order dated 22.01.2016 in Misc. Appeal No. 58 of 2015 stated

that the guarantee fee calculation on the basis of opening loan as against closing loan shall be

considered at the time of MYT Petition. The Commission has, therefore, for computing guarantee

fee on PFC loan has considered opening value of loan as against the previous approach of closing

value.

Based on the above considerations and the UERC Tariff Regulations, 2015, the Commission

has calculated the interest expenses for MB-II for FY 2016-17 as shown in the Table below:

Table 3.31: Interest on Loan as approved for MB-II for FY 2016-17 (Rs. Crore)

Particulars Approved in MYT

Order for FY 2016-17 dated 05.04.2016

Claimed Approved after

truing-up

FY 2016-17 86.80 87.88 80.05

3.1.2.7 Operation & Maintenance (O&M) Expenses

3.1.2.7.1 Truing-up of O&M Expenses for FY 2016-17 (Nine Large Generating Stations)

The Petitioner submitted that O&M expenses for FY 2016-17 have been considered as per the

audited accounts. The components of total O&M expenses have been bifurcated into direct and

indirect expenses. Direct expenses have been allocated to respective hydro power project for which

corresponding expenses have been incurred. The Petitioner has allocated indirect expenses as

already detailed earlier in this Order. The Commission, in this regard, has also taken a similar view

on the approach of allocating indirect expenses.

The Petitioner has submitted the actual O&M expenses on the basis of audited accounts for

FY 2016-17. Further, the Petitioner has submitted the separate details of employee, R&M and A&G

expenses.

The Commission has considered the revision in CPI Inflation and WPI Inflation on the basis

of actual data and has computed the O&M expenses on the basis of Regulation 48(2) of UERC Tariff

Regulations, 2015. Accordingly, for arriving at the normative O&M expenses for FY 2016-17, the

Commission has escalated the expenses of FY 2015-16. The Commission for the purpose of

escalation has considered following escalation rates.



Table 3.32: Escalation Rates as considered by the Commission

Particulars FY 2016-17

CPI Inflation 7.21%

WPI Inflation 1.83%

Further, for the purpose of arriving at employee expenses for FY 2016-17, the Commission

has considered the value of Growth Factor ‘Gn’ on the basis of actual details of recruitment

provided by UJVN Ltd. Further, the Commission has considered the K factor as approved in the

Order dated 29.03.2017.

3.1.2.7.2 Employee Cost

The Commission has considered the same approach for computation of employee expenses

for FY 2016-17 as considered by it in Tariff Order dated 29.03.2017. The Commission sought for

actual number of employees recruited/retired in FY 2016-17 and the same was submitted by the

Petitioner. Growth Factor ‘Gn’ has been considered as given below:

Table 3.33: Growth Factor ‘Gn’ as considered by the Commission for FY 2016-17

Particulars FY 2016-17

Gn 2.16%

In its MYT Order dated 05.04.2016, the Commission had considered the impact of VII Pay

Commission at the rate of 20% of the approved net employee expenses and had allowed certain

provision to the Petitioner for FY 2016-17 to FY 2018-19. Thereafter, on the basis of the details of the

impact of VII Pay Commission submitted by the Petitioner, the Commission in its Tariff Order

dated 29.03.2017 had revised the impact of pay revision to 15% as against 20% approved by the

Commission in its MYT Order dated 05.04.2016 and directed the Petitioner to maintain separate

details of the amount paid as arrears to its employees on account of implementation of the

recommendations of VII Pay Commission.

The Petitioner in this Tariff Petition has submitted that GoU has not issued the Orders for

implementation of recommendations of VII Pay Commission in FY 2016-17. The Petitioner has

further submitted that the GoU has agreed for implementation of recommendation of seventh Pay

Commission to UJVNL employees, w.e.f. 01.01.2016. Therefore, the Petitioner has made a provision

for such expenses of Rs. 27.06 Crore for 10 LHPs (including SHPs) in its audited accounts for all its



employees for FY 2016-17 and has considered the impact of Seventh Pay Commission in projections

of the employee expenses for FY 2017-18 and FY 2018-19.

In this regard, the Commission in TVS meeting held on 04.01.2018 asked the Petitioner to

submit the computation for impact of VII Pay Commission. In response, the Petitioner vide its letter

dated 15.01.2018 submitted that the total tentative liability of salary on account of implementation

of VII Pay Commission for FY 2016-17 is Rs. 22.75 Crore and the tentative liability for 15 months

starting from 01.01.2016 to 31.03.2017 is Rs. 27.52 Crore. The Petitioner further submitted that the

amount of other tentative establishment cost like Gratuity etc. is considered as Rs. 4.48 Crore for FY

2016-17 and total tentative liability of salary which has been capitalized for the project under

construction is considered as Rs. 4.93 Crore. Therefore, the Petitioner had made a provision of Rs.

27.06 Crore toward impact of VII Pay Commission for 10 LHPs (including SHPs) in its audited

accounts for all its employees for FY 2016-17. Further, the Commission has observed that generation

incentive has not been claimed by the Petitioner.

From the above submissions, it is observed that as the State Government has not issued the

orders for implementation of the recommendations of VII Pay Commission in FY 2016-17, UJVN

Ltd. has not paid the corresponding amount as arrears to its employees in FY 2016-17. Accordingly,

the Commission in this Tariff Order has not considered any impact of pay revision for FY 2016-17.

The Commission would provide the impact of pay revision on the basis of the actual payments

made.

In view of above, the Commission has approved the employee expenses for FY 2016-17 as

shown in the Table below:

Table 3.34: Employee Expenses approved for FY 2016-17 (Rs. Crore)


Approved in Tariff Order dated 05.04.2016


Truing-up as per norms

Dhakrani 11.36 12.30 8.29

Dhalipur 12.73 10.12 12.51

Chibro 40.22 39.99 34.58

Khodri 21.22 19.66 19.10

Kulhal 8.31 6.67 7.37

Ramganga 26.80 27.83 23.20

Chilla 32.91 29.74 25.27

MB-I 25.32 21.91 18.47

Khatima 14.03 11.68 10.27

Total 192.90 179.91 159.07



The employee expenses approved by the Commission for 9 LHPs in this Tariff Order is less

than that approved in the MYT Order on account of non-consideration of VII Pay Commission

arrear and change in Growth Factor and CPI escalation indices.

3.1.2.7.3 Repairs and Maintenance Expenses

The Commission in its MYT Order dated 05.04.2016 has computed the percentage of actual

R&M expenses vis-a-vis actual opening GFA for each year of FY 2012-13 to FY 2014-15 as

considered in its Order dated 29.03.2017. Thereafter, the Commission has considered the average of

such percentages as K factor. The Commission has considered the constant factor ‘K’ as follows:

Table 3.35: K-Factor as considered by the Commission

Station Average of 3 years

Dhakrani 30.84%

Dhalipur 16.06%

Chibro 8.12%

Khodri 3.65%

Kulhal 10.47%

Ramganga 2.70%

Chilla 7.74%

MB-I 7.84%

Khatima 21.75%

Total 8.00%

For computing the R&M expenses for FY 2016-17, the Commission has multiplied the K

Factor as given above with the opening GFA approved for FY 2016-17. The Commission has

considered the average increase in WPI for last three years from FY 2013-14 to FY 2015-16 as 1.83%.

With regards to the generating station undergoing RMU works or planned for RMU works

in the second Control Period the Commission in its Regulation 48(2) of UERC Tariff Regulations,

2015 had stated that for projects whose Renovation and Modernisation works has been carried out,

the R&M expenses for the nth year shall not exceed 2% of the capital cost admitted by the

Commission. Accordingly, as the RMU works for Khatima LHP has been completed in FY 2016-17,

the Commission has considered allowable R&M Expenses for FY 2016-17 equal to 2% of the opening

GFA of FY 2016-17.

Accordingly, the Commission has approved the R&M expenses for FY 2016-17 as shown in

the Table below:



Table 3.36: R&M Expenses approved for FY 2016-17 (Rs. Crore)


Tariff Order dated 05.04.2016 for FY 2016-17

Claimed Approved after Truing-up as per

norms for FY 2016-17

Dhakrani 4.91 6.45 4.78

Dhalipur 4.21 5.49 4.09

Chibro 9.53 6.95 9.50

Khodri 3.31 4.51 3.23

Kulhal 2.22 3.38 2.16

Ramganga 1.58 2.59 1.53

Chilla 11.38 12.08 12.86

MB-I 12.15 10.98 11.65

Khatima 0.98 0.92 1.27

Total 50.27 53.35 51.06

The R&M expenses approved by the Commission for 9 LHPs in this Tariff Order has

increased due to increase in additional capital expenditure from Rs. 47.57 Crore considered in MYT

Order dated 05.04.2016 to Rs. 87.62 Crore for FY 20115-16 approved in Tariff Order dated 29.03.2017

and adjustment on account of decrease in WPI indices from 5.11% considered in MYT Order dated

05.04.2016 to 1.83% approved on actual WPI indices in Tariff Order dated 29.03.2017.

3.1.2.7.4 Administrative & General Expenses

The Commission in its Tariff Order dated 29.03.2017 on approval of APR for FY 2016-17

approved the A&G expenses in accordance with the UERC Tariff Regulations, 2015. The

Commission is considering the same approach for determining the A&G expenses for FY 2016-17.

The Commission observed that there are number of discrepancies in the insurance premium

claimed and the supporting document submitted by UJVN Ltd. for example, at page 34 of reply

dated 22.12.2017 in one of the insurance receipt, UJVN Ltd. has paid an amount of Rs. 2677 for

insuring “Furniture/Fixture/ Fittings /Utensils and machine for ULTRASOUND, Rs. 12,75,000 and

Rs. 1822500 at Clinic used at diagnostic centre” which does not pertain to UJVN Ltd. Further, at

some places there is error in the totalling of the premium amount and it is also observed that

premium amounts for SHPs and other projects (e.g. Asiganga Valley) has been claimed. UJVN Ltd.

in response submitted that this is error apparent and they have informed to the insurance company

regarding the same. Further, the Commission directed UJVN Ltd. to re-verify all the insurance

receipts vis-à-vis its claim and re-submit the same for 9 LHPs & MB-II. The Petitioner in response

has submitted the same. The Petitioner has further submitted that as such insurance receipt was



related to Pathri Power House (solar plant), it has not claimed the above mentioned amounts in this

Tariff Petition. In this regard, the Commission cautions the Petitioner that it should take utmost care

in the matter of insurances as in case of any eventuality, the Petitioner may face difficulties in

insurance claims. Besides this, the Petitioner is also cautioned that it should properly check the

documents prior to submission of the same before the Commission.

The Commission is considering the same approach for determining the A&G expenses for

FY 2016-17. The WPI escalation rate is revised to 1.83% based on the actual values. Accordingly, the

Commission has approved the A&G expenses as shown in the Table below:

Table 3.37: A&G Expenses approved for FY 2016-17 (Rs. Crore)


Tariff Order dated 05.04.2016 for FY 2016-17

Claimed Approved after Truing-up as per


Dhakrani 1.21 1.85 0.49

Dhalipur 1.44 2.01 0.84

Chibro 4.69 7.47 3.28

Khodri 2.35 4.73 1.47

Kulhal 0.85 1.66 0.41

Ramganga 3.14 5.38 2.30

Chilla 3.65 5.08 2.42

MB-I 2.64 3.26 1.38

Khatima 1.13 1.66 0.43

Total 21.10 33.10 13.03

The A&G expenses approved by the Commission for 9 LHPs in this Tariff Order is lower

than the A&G expenses in MYT Order due to decrease in WPI escalation rate during FY 2016-17

from 5.11% considered in MYT Order dated 05.04.2016 to 1.83% approved on actual WPI indices in

Tariff Order dated 29.03.2017. Further, reduction in A&G expenses is due to change in the base year

for computing A&G expenses from FY 2013-14 (computed as the average of FY 2012-13 to FY 2014-

15) adopted in MYT Order dated 5.04.2016 to FY 2015-16 as considered in Order dated 29.03.2017.

Table 3.38: Normative O&M Expenses as approved for 9 LHPs for FY 2016-17 (Rs. Crore)

Particulars Approved in Tariff Order dated

05.04.2016 Claimed

Normative O&M Expenses

Employee Expenses 192.90 179.91 159.07

R&M Expenses 50.27 53.35 51.06

A&G Expenses 21.10 33.10 13.03

Total O&M 264.27 266.36 223.15



As per the UERC Tariff Regulations, 2015, O&M Expenses are controllable expenses and

accordingly, the sharing of gains and losses have been carried out for O&M expenses and Interest

on Working Capital.

Further, as discussed in additional capitalisation, the Commission has included the amount

of Rs. 55.25 Lakh towards actual R&M expenses of Kulhal LHP and Rs. 54.58 Lakh towards actual

R&M expenses of Dhalipur LHP. Further, the Commission has transferred some of the expenses

booked as capital expenses to R&M expenses for 9 LHPs amounting to Rs. 14.42 Crore.

Further with regard to the details of R&M expenses for Kulhal LHP submitted by the

Petitioner, the Commission, while checking the vouchers, has observed that there is a double entry

of Rs. 2619123/- in R&M expenses towards Plant & Machinery for re-instrumentation of CO2

Flooding System. In reply, the Petitioner vide its letter dated 02.02.2018 confirmed about such

double entry. Therefore, the Commission has deducted the amount of Rs. 0.26 Crore from R&M

expenses of Kulhal LHP on account of double entry.

Further, the Commission in its Tariff Order dated 29.03.2017, while truing-up for FY 2015-16

had disallowed the provision made by the Petitioner in its books amounting to Rs. 3.21 Crore in

R&M expenses as under:

“... In case of R&M expenses, the Commission from the details submitted by the Petitioner observed

that some entries pertained to provision made by the Petitioner in its books amounting to Rs. 3.21

Crore which is not allowable as per the UERC Tariff Regulations, 2011. The Commission has,

therefore, not considered these amounts as R&M expenses as the same had not been actually paid in

FY 2015-16. The Station wise detail of provisioning amount not considered for 9 LHP is as shown in

Table below and detailed in Annexure-4. The Petitioner may claim the same in FY 2016-17 subject to

discharge of such liability and also providing the reconciliation for the same before the Commission in

its tariff filings.

Table 3.25: Amount Towards Provision Claimed in R&M Expenses for 9 LHPs

Name of Station Amount (In Rs.)

Chilla 1.75

Ramganga 0.03

Khatima 0.02

Chibro 0.02

Dhakrani 0.54



Table 3.25: Amount Towards Provision Claimed in R&M Expenses for 9 LHPs

Name of Station Amount (In Rs.)

Dhalipur 0.48

Kulhal 0.37

Total 3.21

”

With regard to the above provisional amount of R&M disallowed in Tariff Order dated

29.03.2017, the Petitioner vide its letter dated 16.02.2018 submitted the details along with invoices of

Rs. 2.84 Crore for the above amount as under:

Table 3.39: Amount allowed by the Commission in this Tariff Order towards Provision amount disallowed in Tariff Order dated 29.03.2017

Name of Station Amount (In Rs.) Chilla 1.40

Ramganga 0.03

Khatima 0.02

Chibro 0.02

Dhakrani 0.52

Dhalipur 0.48

Kulhal 0.37

Total 2.84

Accordingly, after prudence check of the invoices submitted by the Petitioner, the

Commission has allowed the above expenses of Rs. 2.84 Crore in R&M expenses for FY 2016-17.

The Petitioner has submitted the actual O&M expenses of Rs. 266.36 Crore including interest

on GPF trust and provision for VII Pay Commission arrear. As discussed above, the Commission

has deducted the duplicate entry of 0.26 Crore from R&M expenses of Kulhal Station. Further, as

discussed in additional capitalisation, the Commission has observed the amount of Rs. 0.82 Crore

towards expenses of capital nature wrongly booked under R&M, details of the same are annexed as

Annexure 5. For computing net gain or loss, the Commission has considered actual O&M expenses

excluding interest on GPF trust of Rs. 5.66 Crore, provision for VII Pay Commission arrear of Rs.

23.01 Crore and expenses of capital nature wrongly booked under R&M expenses for FY 2016-17.

Further, the Commission has included amount of Rs. 2.84 Crore regarding provisions (disallowed in

Tariff Order dated 29.03.2017), R&M expenses of Rs 14.42 Crore and A&G expenses of Rs. 0.004

Crore wrongly booked in capital expenses for 9 LHPs.



Accordingly, the Commission has approved the total O&M expenses for FY 2016-17 after

sharing of gains and losses as shown in the Table below:

Table 3.40: O&M Expenses approved for FY 2016-17 (Rs. Crore)


Stations

Approved in Tariff Order dt. 05.04.2016 for FY

2016-17

Claim based on

actual

Adjusted claim

Approved after Truing -up as per


Efficiency gain/(loss)

Net Entitlement

(A) (B) (C)=(B)-(A) (D)=(B)+1/3 of

(-C)

Dhakrani 17.48 20.59 21.58 13.56 (8.03) 16.23

Dhalipur 18.38 17.62 20.31 17.43 (2.87) 18.39

Chibro 54.43 54.40 52.88 47.36 (5.52) 49.20

Khodri 26.88 28.91 25.28 23.80 (1.47) 24.29

Kulhal 11.37 11.71 12.33 9.94 (2.39) 10.74

Ramganga 31.52 35.81 29.84 27.03 (2.81) 27.97

Chilla 47.94 46.90 45.36 40.55 (4.81) 42.15

MB-I 40.12 36.15 33.25 31.51 (1.75) 32.09

Khatima 16.14 14.27 13.04 11.97 (1.07) 12.33

Total 264.27 266.36 253.88 223.15 (30.73) 233.39

3.1.2.8 O&M Expenses for Maneri Bhali-II

In accordance with Regulation 48(2) of the UERC Tariff Regulations, 2015, the O&M

expenses for the first year of the Control Period shall be determined by the Commission taking into

account actual O&M expenses of the previous years and any other factors considered appropriate

by the Commission. The escalation rates have been computed on the basis of revised CPI Inflation

and WPI Inflation. The Commission has considered the revision in CPI Inflation and WPI Inflation

on the basis of actual data and has computed the O&M expenses on the basis of Regulation 48(2) of

UERC Tariff Regulations, 2015.

For computing the normative O&M expenses for FY 2016-17, the Commission has

considered the actual employee expenses for FY 2015-16. Further, for the purpose of arriving at the

employee expenses for FY 2016-17, the Commission has considered the value of Growth Factor ‘Gn’

on the basis of actual details of recruitment provided by UJVN Ltd. The Commission has considered

the average increase in CPI for last three years from FY 2013-14 to FY 2015-16 as 7.21%.

For computing the normative R&M expenses for FY 2016-17, the Commission has multiplied

the K Factor (average of FY 2012-13 to FY 2014-15) with the opening GFA approved for FY 2016-17.

The Commission has considered the average increase in WPI for last three years from FY 2013-14 to

FY 2015-16 as 1.83%.



For computing the normative A&G Expenses for FY 2016-17, the Commission has

considered the actual A&G expenses for FY 2015-16 and escalated the same with the revised WPI

escalation rate of 1.83%. The Commission, accordingly, approves O&M expenses for MB-II as


Table 3.41: Normative O&M Expenses as approved for MB-II Station for FY 2016-17 (Rs. Crore)

Particulars Approved in Tariff Order dated

05.04.2016 Claimed

Normative O&M Expenses


R&M Expenses 26.76 18.05 26.08

A&G Expenses 4.95 5.21 5.29

Total O&M 55.53 45.27 50.77

The Commission in its Tariff Order dated 29.03.2017 had disallowed the provisional amount

of Rs. 1.22 Crore from actual R&M expenses for FY 2015-16 for MB-II. In this regard, the Petitioner

vide its letter dated 16.02.2018 has submitted the details along with invoices of such amount.

Accordingly, the Commission has allowed the provisional amount of Rs. 1.22 Crore in R&M

expenses of the Petitioner for FY 2016-17.

The employee expenses approved now is less than that approved in the MYT Order due to

non consideration of VII Pay Commission impact and change in Growth Factor and CPI escalation

indices. Further, decrease in R&M expenses is on account of decrease in WPI escalation rate during

FY 2016-17 from 5.11% considered in MYT Order dated 05.04.2016 to 1.83% approved on actual WPI

indices in Tariff Order dated 29.03.2017.

Further, the UERC Tariff Regulations, 2015 specify for sharing of gains/losses due to

controllable factors. For computing net gain or loss, the Commission has considered actual O&M

expenses excluding interest on GPF trust and VII Pay Commission arrear and including amount of

Rs. 1.22 Crore regarding provisions (disallowed in Tariff Order dated 29.03.2017), expenses of 0.264

Crore of R&M nature and Rs. 0.004 Crore of A&G nature wrongly booked under additional

capitalization. Thus, the Commission has worked out the actual O&M expenses of Rs. 43.39 Crore

for tariff purposes. As already discussed above, O&M expenses have been considered as

controllable factor, accordingly, the gains/losses for FY 2016-17 will have to be shared in the

manner given in the Table below:



Table 3.42: O&M Expenses approved after sharing of gains and losses for FY 2016-17 (Rs. Crore)

Particulars Claimed based on

actual

Adjusted claim considered for Tariff Purpose

Approved after Truing -up as per



Generator Share

Net Entitlement

(A) (B) (C)=(B)-(A) (D)=2/3 of (C) (E)=(A)+(D)

O&M Expenses of

MB-II 45.27 43.39 50.77 7.38 4.92 48.31

3.1.2.9 Interest on Working Capital

A. Old Nine Medium and Large Generating Stations

The Petitioner has claimed that it has computed the working capital for each plant in

accordance with the provisions of the UERC Tariff Regulations, 2015, on normative basis. The rate

of interest considered by the Petitioner for computing interest on working capital for FY 2016-17 has

been considered as 14.05% on the basis of the PLR of State Bank of India. Further, the Commission

has observed that the SBAR of State Bank of India as on date of filing of Tariff Petition is 13.70%.

The Commission has considered the same for calculating the interest on working capital.

The components of working capital as per Regulation 33(b)(i) of UERC Tariff Regulations,

2015 are as follows:

“In case of hydro power generating stations and transmission system and SLDC, the working capital

shall cover:

(i) Operation and maintenance expenses for one month

(ii) Maintenance spares @ 15% of operation and maintenance expenses; and

(iii) Receivables equivalent to two months of the annual fixed charges”

With respect to the interest on working capital Regulation 33 of the UERC Tariff

Regulations, 2015 specifies as under:

“Rate of interest on working capital shall be on normative basis and shall be equal to the State Bank

Advance Rate (SBAR) of State Bank of India as on the date on which the application for

determination of tariff is made.

....”



3.1.2.9.1 One Month O&M Expenses

The Commission has trued-up the annual O&M expense plant-wise for FY 2016-17. Based on

the approved O&M expenses, one month’s O&M expenses has been worked out plant-wise for

determining the working capital requirement.

3.1.2.9.2 Maintenance Spares

The Commission has considered the maintenance spares in accordance with UERC Tariff

Regulations, 2015. The Commission has determined the plant-wise maintenance spares requirement

at the rate of 15% of the trued-up O&M Expenses for FY 2016-17.

3.1.2.9.3 Receivables

The UERC Tariff Regulations, 2015 envisages receivables equivalent to two months of fixed

charges for sale of electricity as an allowable component of working capital. Plant-wise Annual

Fixed Charges (AFC) for the Petitioner includes O&M expenses, depreciation, interest on loan,

return on equity and interest on working capital. The Commission has considered the receivables

for two months based on the trued-up plant-wise AFC for FY 2016-17.

As regards the interest on working capital, Regulation 33 of the UERC Tariff Regulations,

2015 specifies rate of interest on working capital to be taken equal to the State Bank Advance Rate

(SBAR) of State Bank of India as on the date on which the application for determination of tariff is

made. As the Tariff Petition for FY 2016-17 was filed on 30.11.2017, the Commission has considered

the prevailing State Bank Advance Rate (SBAR) of State Bank of India for computing the Interest on

Working Capital.

Accordingly, the normative Interest on Working Capital for FY 2016-17 as approved by the

Commission is as shown in the Table below:



Table 3.43: Interest on Working Capital for Nine LHPs for FY 2016-17 (Rs. Crore)

Plant

Approved Working Capital after Truing-up Interest on Working Capital

1 month O&M

Expenses

Maintenance Spares @15%

of O&M

2 months Receivables

Total Working Capital

Approved in MYT

Order dt. 05.04.2016

Claimed

Normative Approved

after Truing-up

Dhakrani 1.35 2.43 2.91 6.69 1.01 1.21 0.92

Dhalipur 1.53 2.76 3.35 7.64 1.07 1.05 1.05

Chibro 4.10 7.38 8.96 20.44 3.22 3.35 2.80

Khodri 2.02 3.64 4.99 10.66 1.63 1.81 1.46

Kulhal 0.89 1.61 2.01 4.51 0.67 0.70 0.62

Ramganga 2.33 4.20 5.07 11.60 1.80 2.14 1.59

Chilla 3.51 6.32 8.83 18.67 2.88 2.98 2.56

MB-I 2.67 4.81 7.38 14.87 2.46 2.38 2.04

Khatima 1.03 1.85 3.17 6.04 1.09 1.16 0.83

Total 19.45 35.01 46.67 101.12 15.83 16.79 13.85

Further, the UERC Tariff Regulations, 2015 specify for sharing of gains/losses due to

controllable factors and as per UERC Tariff Regulations, 2015, variation in working capital

requirements is a controllable factor. The actual interest on working capital for UJVNL as per

audited accounts is NIL. As the actual interest on working capital incurred by the Petitioner is less

than the normative interest on working capital, the Commission has shared the gain in interest on

working capital in accordance with the provisions of UERC Tariff Regulations, 2015.

The interest on working capital for nine LHPs after sharing the gains is as given in Table

below:

Table 3.44 Interest on Working Capital for Nine LHPs for FY 2016-17 after sharing of Gains (Rs. Crore)

Particulars Actual

Normative as Trued up


Rebate in Tariff

Net Entitlement

(A) (B) (C)=(B)-(A) (D)=1/3x (C) (E)=(B)-(D)

Interest on Working Capital

0.00 13.85 13.85 4.62 9.24

B. Maneri Bhali-II

As discussed earlier, the Commission has approved the Capital Cost of MB-II as on CoD and

has considered additional capitalisation, and has reviewed all the components of AFC. As a result of

which the Interest on Working Capital has been revised in accordance with UERC Tariff

Regulations, 2015 as shown in the Table below:



Table 3.45: Interest on Working Capital as approved for FY 2016-17 (Rs. Crore)

Particulars Approved in MYT

Order for FY 2016-17 dated 05.04.2016


truing-up

FY 2016-17 7.67 8.93 6.96

As discussed above, as the actual interest on working capital incurred by the Petitioner for

FY 2016-17 is less than the normative interest on working capital, the Commission has shared the

gain in interest on working capital in accordance with the provisions of UERC Tariff Regulations,

2015.

The interest on working capital for MB-II after sharing the gains for FY 2016-17 is as given in

Table below:

Table 3.46: Interest on Working Capital for MB-II for FY 2016-17 after sharing of gains (Rs. Crore) Particulars Actual Normative as

Trued up Efficiency gain/(loss)

Rebate in Tariff

Net Entitlement


(A) (B) (C)=(B)-(A) (D)=1/3x(C) (E)=(B)-(D)

FY 2016-17 0.00 6.96 6.96 2.32 4.64

3.1.2.10 Annual Fixed Charges for Nine LHPs for FY 2016-17

Based on the above analysis, the Commission has worked out the approved figures of Gross

AFC for FY 2016-17 after truing-up. The summary of Gross AFC for FY 2016-17 is as shown in the

Table below:

Table 3.47: Summary of AFC for FY 2016-17 (Rs. Crore)

Name of Generating

Stations

Approved in Tariff Order dt. 05.04.2016 for FY 2016-17

AFC

Claimed

AFC Approved after truing-up of FY 2016-17

Depreciation Interest on loan

Interest on Working Capital after sharing of

gains

O&M expenses

RoE Gross

Annual Fixed Cost

Dhakrani 19.44 20.93 0.19 0.04 0.61 16.23 0.71 17.78

Dhalipur 20.96 20.89 0.30 0.05 0.70 18.39 1.16 20.59

Chibro 65.62 66.76 1.44 1.22 1.87 49.20 5.66 59.39

Khodri 34.20 35.48 1.35 0.13 0.97 24.29 4.29 31.03

Kulhal 13.21 13.44 0.17 0.06 0.41 10.74 0.94 12.32

Ramganga 36.54 38.35 0.31 0.13 1.06 27.97 2.76 32.23

Chilla 58.23 62.31 1.13 1.60 1.70 42.15 7.57 54.15

MB-I 54.84 53.70 4.15 0.59 1.36 32.09 7.11 45.30

Khatima 25.15 30.81 2.95 4.34 0.55 12.33 2.94 23.11

Total 328.19 342.69 11.98 8.16 9.24 233.39 33.14 295.91

3.1.2.11 Non Tariff Income

A. Old Nine Large Hydro Generating Stations




“46. Non Tariff Income

The amount of non-tariff income relating to the Generation Business as approved by the

Commission shall be deducted from the Annual Fixed Charges in determining the Net Annual

Fixed Charges of the Generation Company.

Provided that the Generation Company shall submit full details of its forecast of non tariff income

to the Commission in such form as may be stipulated by the Commission from time to time.

The indicative list of various heads to be considered for non tariff income shall be as under:

a) Income from rent of land or buildings;

b) Income from sale of scrap;

c) Income from statutory investments;

d) Interest on delayed or deferred payment on bills;

e) Interest on advances to suppliers/contractors;

f) Rental from staff quarters;

g) Rental from contractors;

h) Income from hire charges from contactors and others;

i) Income from advertisements, etc.;

j) Any other non- tariff income.

Provided that the interest earned from investments made out of Return on Equity corresponding to

the regulated business of the Generating Company shall not be included in Non-Tariff Income.”

The Petitioner has submitted the details of actual Non-Tariff Income for 9 old large hydro

generating stations as well as for MB-II LHP for FY 2016-17 in accordance with the audited

accounts. The Petitioner has further submitted that Non-Tariff income for FY 2016-17 has been

claimed in accordance with the following exception provided in Regulation 46 of UERC Tariff

Regulations, 2015.



“…Provided that the interest earned from investments made out of Return on Equity corresponding

to the regulated business of the Generating Company shall not be included in Non-Tariff Income. “

The Commission observed that Petitioner has not considered interest on fixed deposit as a

part of Non Tariff Income stating that the interest amount is out of Return on Equity for 9 LHPs and

MB-II.

The Commission vide its letter dated 05.01.2018 directed the Petitioner to substantiate its

claim towards “other income” from fixed deposits which has been through Return on Equity earned

by the Petitioner. In response the Petitioner vide its letter dated 08.03.2018 submitted its justification

for the same. The Commission examined the matter and has considered the plant-wise non-tariff

income for truing-up purposes as proposed by the Petitioner.

Further, with regard to RMU works of Khatima LHP, the Commission in its Tariff Order

dated 29.03.2017 had directed the Petitioner to submit the details of old plant and machinery

received back for disposal after RMU of Khatima LHP as given below:

“...Accordingly, the Commission directs the Petitioner to submit the audited RMU expenses as on

date of completion of RMU works along with details of de-capitalisation in respect of the same as soon

as the same is available including quantity. The Petitioner is also directed to submit the details of

scrap available on de-capitalisation of old plant and machinery and expected time frame in which

same will be disposed.”

In compliance to the above direction, the Petitioner in letter dated 14.12.2017 has submitted

that it has given an order to M/s N.A. Steel, Saharanpur amounting to Rs. 3.35 Crore for sale of

scrap material lying at Sharda Power House, Lohiahead (Khatima) of UJVN Ltd. Accordingly, the

Commission has considered an additional non-tariff income of Rs. 3.35 Crore in case of Khatima

LHP.

Further, as discussed in Commission’s Order dated 21.10.2009, that the provision of the

UERC Tariff Regulations permitting adjustment of non-tariff income from AFC is not in consonance

with the 1972 Agreement with HP as the components of cost of generation specified in Schedule-

VIII of The Electricity (Supply) Act, 1948 considers only the cost components and does not provide

for adjustment of any kind of revenue. Therefore, in order to have conformity with the provisions of

the said agreement, the Commission has not considered any adjustment of proportion of non-tariff



income for HPSEB and has considered the entire amount of the above said non-tariff income for

adjustment in truing-up of UPCL’s share of AFC.

The Non-Tariff income as approved by the Commission for FY 2016-17 is shown in the Table

below:

Table 3.48: Non-Tariff Income for 9 LHPs for FY 2016-17 (Rs. Crore) Name of the Generating

Stations Approved in Tariff Order dated

05.04.2016 for FY 2016-17 Claimed

Approved after Truing-Up for FY 2016-17

Dhakrani 0.62 0.35 0.35

Dhalipur 0.91 0.47 0.47

Chibro 4.20 5.64 5.64

Khodri 2.01 1.11 1.11

Kulhal 0.50 0.29 0.29

Ramganga 3.96 1.79 1.79

Chilla 2.47 1.17 1.17

MB-I 5.96 1.00 1.00

Khatima 1.40 0.76 4.10

Total 22.03 12.56 15.91

In case of MB-II, the Non Tariff income approved vide MYT order dated 05.04.2016 for FY

2016-17 is Rs. 2.73 Crore, the Petitioner has now claimed Rs. 1.98 Crore. Therefore, for MB-II LHP,

the Commission has considered the Non Tariff Income as claimed by the Petitioner.

3.1.2.12 Truing-up for Nine LHPs for FY 2016-17 and its net impact on UPCL

The Commission has Trued-up the (Surplus)/Gap for 9 LHPs pertaining to FY 2016-17 to be

recovered by UJVN Ltd. from UPCL and HPSEB. Based on the above, the total amount recoverable

by UJVN Ltd. from UPCL and HPSEB excluding the carrying cost is as summarized in the Table

below:

Table 3.49: Summary of net AFC as Trued up by the Commission for 9 LHPs for FY 2016-17 to be recovered from UPCL (Rs. Crore)

Power Stations Approved Net AFC in Tariff Order dated 05.04.2016 for FY

2016-17 Total AFC to be

recovered


Dhalipur 14.81 14.97

Chibro 45.01 38.90

Khodri 23.64 22.17

Kulhal 10.07 9.57


Chilla 55.76 52.98

MB-I 48.88 44.30

Khatima 23.75 19.00

Total 268.46 245.33



The summary of truing-up for FY 2016-17 for UPCL after considering the actual

performance parameter achieved in FY 2016-17 is shown in the Table below:

Table 3.50: Summary of net truing-up for FY 2016-17 for UPCL (Rs. Crore)

Nam

e o

f th

e S

tati

on

AF

C t

o b

e re

cov

ere

d f

rom

U

PC

L (

Rs

Cro

re)

Ca

pac

ity

Ch

arg

es (

Rs

Cro

re)

NA

PA

F (

%)

Act

ua

l /

Re

-sta

ted

PA

FY

(%

)

Ca

pac

ity

ch

arg

es

all

ow

ab

le

(Rs

Cro

re)

Ca

pac

ity

ch

arg

es

aft

er

sha

rin

g

Act

ua

l E

ne

rgy

Co

nsi

de

red

(M

U)

Pe

r u

nit

ra

te a

pp

rov

ed

(Rs/

kW

h)

All

ow

ab

le E

C (

Rs

Cro

re)

Se

con

dar

y e

ne

rgy

(M

U)

Se

c E

ne

rgy

Ra

te

(Rs/

kW

h)

To

tal

Se

c. E

ne

rgy

ch

arg

es

(Rs

Cro

re)

To

tal

all

ow

able

(EC

+C

C)

(R

s C

rore

)

To

tal

reco

ve

red

fro

m U

PC

L

Tru

ing

-up

-im

pac

t

Dhakrani 12.99 6.49 61.04% 54.88% 5.84 6.06 66.35 0.56 3.69 0.00 0.52 0.00 9.75 10.24 (0.49)

Dhalipur 14.97 7.49 57.26% 55.02% 7.19 7.29 142.59 0.52 7.47 0.00 0.52 0.00 14.76 14.51 0.25

Chibro 38.90 19.45 65.06% 66.75% 19.96 19.79 532.64 0.35 18.64 0.00 0.35 0.00 38.43 44.70 (6.27)

Khodri 22.17 11.08 57.23% 58.96% 11.42 11.31 248.00 0.43 10.73 0.00 0.43 0.00 22.04 23.63 (1.59)

Kulhal 9.57 4.79 65.00% 71.61% 5.27 5.11 95.16 0.39 3.73 0.00 0.37 0.00 8.84 9.46 (0.63)

Ramganga 30.44 15.22 19.00% 10.81% 8.66 10.85 178.97 0.49 8.82 0.00 0.40 0.00 19.67 18.69 0.97

Chilla 52.98 26.49 74.00% 73.83% 26.43 26.45 753.66 0.40 26.49 35.91 0.37 1.33 54.26 59.49 (5.22)

MB-I 44.30 22.15 79.00% 61.96% 17.37 18.97 339.83 0.56 19.19 0.00 0.41 0.00 38.16 39.64 (1.48)

Khatima 19.00 9.50 47.21% 55.73% 11.22 10.64 173.59 0.49 8.56 0.00 0.46 0.00 19.20 24.73 (5.53)

Total 245.33 122.66 113.36 116.46 2530.78 107.31 35.91 1.33 225.10 245.09 (19.99)

Thus, for 9 LHPs, the Commission has computed the net surplus of Rs. 19.99 Crore for FY

2016-17 on account of sharing of gains and losses and considering the actual performance

parameters.

The Commission has Trued-up the (Surplus)/Gap for 9 LHPs pertaining to FY 2016-17 to be

recovered by UJVN Ltd. from UPCL. Based on the above, the total amount refundable by UJVN

Ltd. from UPCL along with the carrying cost is as summarized in the Table below:

Table 3.51: Summary of net AFC as Trued up by the Commission for 9 LHPs to be refunded to UPCL (Rs. Crore)

Particulars FY 2016-17 FY 2017-18

Opening Balance - (21.36)

True Up Amount Gap/(Surplus) (19.99) -

Carrying Cost (1.37) (2.93)

Closing Balance (21.36) (24.29)

Interest Rate 13.70% 13.70%

The Commission directs UJVN Ltd. to refund Rs. 24.29 Crore to UPCL in accordance with

the provisions of UERC Tariff Regulations, 2015 in twelve equal monthly instalments starting from

April 2018 to March 2019.



3.1.2.13 Truing-up of 5 LHPs of UJVN Ltd. for FY 2016-17 for HPSEB

The Commission has determined the Plant-wise total truing-up to be recovered from HPSEB

as follows:

Table 3.52: Summary of net AFC as Trued-up for FY 2016-17 by the Commission for 9 LHPs to be recovered from HPSEB (Rs. Crore)

Power Stations

Approved Net AFC in APR Order dated 05.04.2016

Total AFC to be Recovered

Dhakrani 4.86 4.45

Dhalipur 5.24 5.15

Chibro 16.40 14.85

Khodri 8.55 7.76

Kulhal 2.64 2.46

Ramganga - -

Chilla - -

MB-I - -

Khatima - -

Total 37.70 34.66

Based on the above, the total amount refunded by UJVN Ltd. to HPSEB alongwith carrying

cost is as summarised in the Table below:

Table 3.53: Summary of net AFC as Trued up by the Commission to be refunded to HPSEB (Rs. Crore)

Particulars FY 2016-17 FY 2017-18

Opening Balance - (3.24)

True Up Amount Gap/(Surplus) (3.03) -


Closing Balance (3.24) (3.68)


The Commission directs UJVN Ltd. to refund Rs. 3.68 Crore to HPSEB on the basis of actual

PAFY and energy billed in accordance with the provisions of UERC Tariff Regulations, 2015 in

equal twelve equal monthly instalments starting from April, 2017 to March, 2018.

3.1.2.14 Net Annual Fixed Charges for MB-II from FY 2016-17

Based on the approved capital cost of MB-II and the approved additional capitalisation and

O&M expenses in accordance with MYT Regulations 2015, the net truing-up of AFC for FY 2016-17

is as shown in the Table below:



Table 3.54: Summary of truing-up of Net AFC of MB-II for FY 2016-17 (Rs. Crore)

Particulars Approved in Tariff Order for FY

2016-17 dated 05.04.2016 Claimed

Approved after truing-up

Depreciation 58.81 67.85 60.13

Interest on loan 86.80 87.88 80.05

Interest on Working Capital 7.67 8.93 4.64

O&M expenses 55.53 52.11 48.31

RoE 43.63 108.06 46.20

Total Annual Fixed Costs 252.44 324.83 239.33

NTI 2.73 1.98 1.98

Net AFC 249.71 322.85 237.35

The summary of truing-up of MB-II with regard to the Net AFC approved for FY 2016-17 in

the Order dated 05.04.2016 is as shown in the Table below:

3.1.2.15 Net impact on account of Truing-up of FY 2016-17 of MB-II

Table 3.55: Net impact on account of truing-up of FY 2016-17

AFC to be recovered

from UPCL (Rs

Crore)

Capacity Charges

(Rs Crore)

NAPAF (%)

Actual/ Re-

stated PAFY

(%)

Capacity charges

allowable (Rs Crore)

Capacity charges

after sharing

Actual Energy

Considered (MU)

Actual Billed Energy (MU)

Allowable EC (Rs Crore)

Total allowable (EC+CC)

(Rs Crore)

Total recovered

from UPCL

Truing- up

impact

237.35 118.68 65.15% 65.15% 118.68 118.68 1550.44 1245.10 95.31 213.98 232.75 (18.77)

3.1.3 Summary of Net Impact on Account of Truing-up of FY 2016-17 of MB-II including Carrying

Cost

The Commission has Trued-up the (Surplus)/Gap for MB-II pertaining to FY 2016-17 to be

recovered by UJVN Ltd. from UPCL. Based on the above, the total amount refundable by UJVN

Ltd. to UPCL along with the carrying cost is summarized in the Table below:

Table 3.56: Summary of net amount Trued up by the Commission for FY 2016-17 to be refunded to UPCL (Rs. Crore)

Particulars 2016-17 2017-18

Opening (Surplus)/Gap 0.00 (20.06)

True Up Amount (18.77) 0.00


Closing (Surplus)/Gap (20.06) (22.80)


The Commission directs UJVN Ltd. to refund the above approved amount of Rs. 22.80 Crore

on account of truing-up of MB-II for FY 2016-17 to UPCL in accordance with the provisions of

UERC Tariff Regulations, 2015 in twelve equal monthly instalments starting from April 2018 to

March 2019.


4 Petitioner’s Submissions, Commission’s Analysis, Scrutiny and

Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19

4.1 Annual Performance Review

The Commission, vide its Order dated 05.04.2016, approved the Multi Year Tariff for the

Petitioner for the Control Period FY 2016-17 to FY 2018-19. Further, the Commission vide its Order

dated 29.03.2017, approved the Tariff for FY 2017-18. Regulation 12(3) of the UERC (Terms and

Conditions for Determination of Multi Year Tariff) Regulations, 2015 stipulate that under the MYT

framework, the performance of the generating company shall be subject to Annual Performance

Review.

Regulation 12(3) of the UERC (Terms and Conditions for Determination of Multi Year Tariff)

Regulations, 2015 specify as under:

“The scope of Annual Performance Review shall be a comparison of the performance of the Applicant

with the approved forecast of Aggregate Revenue Requirement and expected revenue from tariff and

charges and shall comprise the following:-

a) A comparison of the audited performance of the applicant for the previous financial year with

the approved forecast for such previous financial year and truing up of expenses and revenue

subject to prudence check including pass through of impact of uncontrollable factors;

b) Categorisation of variations in performance with reference to approved forecast into factors

within the control of the applicant (controllable factor) and those caused by factors beyond the

control of the applicant (un-controllable factors);

c) Revision of estimates for the ensuing financial year, if required, based on audited financial

results for the previous financial year;

d) Computation of sharing of gains and losses on account of controllable factors for the previous

year.”

The Commission, vide its Order dated 05.04.2016, on approval of Business Plan and MYT

Petition for the Control Period from FY 2016-17 to FY 2018-19 approved the AFC for the Control

Period based on the audited accounts till FY 2014-15. Further, the Commission vide its Order dated

29.03.2017, approved the AFC for FY 2017-18 based on the Audited accounts till FY 2015-16. The



Petitioner, in this Petition, has proposed revision of estimates for FY 2018-19 based on the audited

accounts for FY 2016-17 and revised estimates for FY 2017-18.

The Commission, in this Order, has carried out the Truing-up of 9 LHPs and MB-II for FY

2016-17 in accordance with the UERC (Terms and Conditions for Determination of Tariff)

Regulations, 2015. In accordance with Regulation 12(3) of the UERC Tariff Regulations, 2015 the

scope of annual performance review is limited to the revision of estimates for the ensuing year, if

required, based on the audited financial results for the previous year and does not provide for the

revision of estimates for the current year and give effect on this account in the estimates of the

ensuing year. The Commission shall carry out the truing-up of FY 2017-18 based on the audited

accounts for that year and give effect on this account in the AFC of FY 2019-20. The Commission, as

discussed earlier, has revised additional capitalisation and R&M expenses for FY 2016-17 for 9 LHPs

and MB-II. Hence, the Commission, under the provisions of Regulation 12(3) of the UERC Tariff

Regulations, 2015, has revised the AFC for FY 2018-19 based on the revised additional capitalization

and O&M expenses for 9 LHPs and MB-II for FY 2016-17 and FY 2017-18. The approach adopted by

the Commission in the approval of each element of ARR for FY 2018-19 is elaborated in the

subsequent paragraphs.

4.2 Physical Parameters

4.2.1 NAPAF

Regulation 47(1)(b) of UERC Tariff Regulations, 2015 specifies as under:

“(b) For existing hydro generating stations:

The trajectory for NAPAF fixed by the Commission in case of existing hydro generating stations, in

the preceding Control Period would continue to be applicable. However, the NAPAF of the stations

undergone RMU would be adjusted accordingly, considering the impact of RMU.”

The Commission in its MYT Order dated 05.04.2016 had approved NAPAF for its LHPs

except Khatima and MB-II for FY 2017-18 & FY 2018-19. With regard to Khatima and MB-II LHPs,

the Commission in its Order dated 29.03.2017 had approved the NAPAF of Khatima and MB-II for

FY 2017-18 & FY 2018-19 as under:

“...Therefore, considering the generator efficiency of 97% and turbine efficiency of 93%, the

achievable PAFY for Khatima LHP works out to 69.30%. Accordingly, the Commission has revised

4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on APR for FY 2017-18, Revised AFC & Tariff for FY 2018-19


the NAPAF for Khatima LHP to 69.30% post RMU works for the rest of the Control Period, i.e. FY

2017-18 and FY 2018-19 for recovery of capacity charges.

...

The Commission in its MYT Order dated 06.05.2013 for the First Control Period had approved a

NAPAF of 85% for MB-II.

…

As discussed above, the dam height issue is now resolved and further TRC modification works have

now been completed, therefore, the Commission has not reduced availability on account of the same.

With regard to impact of shutdown on account of overhauling as given in (iii) above, the Commission

has considered factor of 97% towards machine availability as approved for FY 2015-16. Hence,

NAPAF stands revised to 82.00% (i.e. 85% x 97%) for rest of the Control Period, i.e. FY 2017-18

and FY 2018-19. “

The Commission observed that the Petitioner has sought relaxation of NAPAF in FY 2018-19

for Ramganga, MB-I and MB-II HEP’s. In support of its claim, the Petitioner has submitted the

following plant-wise reasons for not being able to achieve the stipulated NAPAF and the same are

discussed below:

▪ Ramganga–The Petitioner submitted that the water released from Ramganga Dam is purely

irrigation based and the control of which rests with Uttar Pradesh Irrigation Department

and, therefore, they have no control over the same. The Petitioner further submitted that

based on water released from the dam during FY 2016-17, PAFM of 13.20% during FY 2017-

18 & FY 2018-19 is expected to be achieved with best efforts. Therefore, the Petitioner has

requested the Commission to revise the NAPAF for FY 2018-19 as 13.20% instead of 19.00%.

▪ MB-I -The Petitioner has submitted that the power station is suffering from excessive silt

and aging. The Petitioner further submitted that the breakdown of the equipment and

closure of the power station increased unprecedentedly even after best possible maintenance

efforts by the Petitioner. The Petitioner further submitted the details of the major closure and

forced outages in FY 2017-18. The Petitioner further submitted that Unit 1 of the power

station was under outage from 13.02.2017 to 14.07.2017 for reverse engineering works for

RMU. Further Unit 3 had been under forced outage from 01.07.2017 to 04.07.2017 due to



heavy water leakage from penstock drain valve. Also, the power station had been under

monsoon closure from 24.07.2017 to 23.08.2017 for interim repair of underwater parts. The

Petitioner further submitted that the power station achieved 56.97% PAFM till September

2017 due to the above mentioned reasons, and, accordingly, the power station is expected to

achieve 64.60% of PAFM for FY 2017-18 and FY 2018-19 instead of 79.00% with best possible

efforts.

▪ MB-II: The Commission in its Order dated 29.03.2017 had fixed the NAPAF for MB-II as

82% for FY 2017-18 and FY 2018-19. The Petitioner submitted that it is unable to achieve the

approved NAPAF due to the excessive silt in river Bhagirathi. The Petitioner also submitted

that the underwater parts have eroded badly resulting in prolong maintenance period.

Further, the Petitioner submitted that due to excessive PPM in River Bhagirathi during

Monsoon period, machine shaft seal and other parts were damaged many times resulting in

355 hours of forced outage of machine in the month of July, August and September 2017.

Further, due to stator fault in Machine No. 4, it was under breakdown for 536 hours from

23.08.2017 to 14.09.2017. The Petitioner has further submitted that it has been able to achieve

PAFM of 77.77% by September 2017 due to better utilization of capacity and availability of

water. However, the Petitioner has requested the Commission to revise the NAPAF for FY

2017-18 and FY 2018-19 as 65.75% instead of 82.00%.

The Commission observes that initially in the tariff determination Petitions of previous

years, the Petitioner used to seek relaxation in NAPAF for MB-II stating that it was unable to reach

1108 m head as dam height raising works were pending. In the previous tariff Petitions, the

Petitioner had claimed relaxation in NAPAF in order to raise the dam height which was allowed by

the Commission in FY 2016-17 in MYT Order dated 05.04.2016. Now after incurring all the cost

towards raising the dam height, it is still seeking further relaxation on the basis of plant conditions.

The Commission while approving the NAPAF in MYT Order and APR Order for FY 2016-17

for various stations has already factored in plant operating conditions and past performances.

Therefore, the Commission has not allowed any relaxation in NAPAF for any station for FY 2018-19.

The Commission has, therefore, approved NAPAF for FY 2018-19 same as approved in MYT

Order dated 05.04.2016 for 10 LHPs except Khatima and MB-II stations. Further, for Khatima and

MB-II LHPs, the Commission has approved NAPAF for FY 2018-19 same as approved in Tariff



Order dated 29.03.2017 as under:

Table 4.1: NAPAF as approved by the Commission for FY 2018-19

Station Approved in Tariff Order dated 29.03.2017 for

Khatima & MB-II stations and MYT Order dated 05.04.2016 for other 8 LHPs

Approved

Dhakrani 60.94% 60.94%

Dhalipur 58.62% 58.62%

Chibro 65.06% 65.06%

Khodri 57.23% 57.23%

Kulhal 67.14% 67.14%

Ramganga 19.00% 19.00%

Chilla 74.00% 74.00%

MB-I 79.00% 79.00%

Khatima 69.30% 69.30%

MB-II 82.00% 82.00%

4.2.2 Design Energy, Auxiliary Energy Consumption and Saleable Primary Energy

A. Old Nine Large Generating Station

The Commission in its MYT Order dated 05.04.2016 with regard to design energy of 9 LHPs

had stated as follows:

“..., the Commission provisionally approves the earlier approved primary energy as design energy for

the Control Period. However, the same is subject to revision as and when RMU works for generating

stations are completed. Thereafter, for ascertaining the saleable primary energy, normative auxiliary

consumption including transformation losses as specified in the UERC Tariff Regulations, 2015 is

deducted from the Design Energy to arrive at the saleable primary energy for the second Control

Period.”

Accordingly, the Commission in line with the MYT Order dated 05.04.2016 approves the

earlier approved primary energy as design energy for FY 2018-19 for all the 9 LHPs except Khatima

hydro power station.

The Petitioner for Khatima LHP has claimed Design Energy same as approved by the

Commission in its Order dated 29.03.2017. The Petitioner with regard to Design Energy for Khatima

LHP submitted that Khatima LHP cannot generate its full design energy in the Month of June, July,

August, September and October. In this regard, the Petitioner submitted that discharge in Sharda

Canal is controlled by U.P. Irrigation Department from Banbasa barrage and TRC level goes high in

case of increased discharge which is pre-dominant if the Nagla Escape channel is closed. This



decreases the head thereby decreasing the generation and power house runs at around 40 MW

during high discharge period. The Petitioner has further submitted that daily generation of 960

MWh is possible without considering any outage. Considering 95% availability (allowing 5% forced

outage), the daily generation figure works out to 912 MWh, so, generation of approximately 27.36

MU is achievable in the month of June, July, August and September provided there is no flood. The

Petitioner has further submitted that UPID normally undergo canal closure in the months of

October, November or December for about 20 days, and therefore, it will be appropriate to consider

the generation of October as 10 MUs projected as under:

Table 4.2: Possible Generation during June to October of 2018 for Khatima LHP as claimed by the Petitioner (MU)

Month Generation Projections as per DPR (MU) Possible Generation (MU)

June 30.00 27.36

July 30.00 27.36

August 30.00 27.36

September 30.00 27.36

October 30.00 10.00

In view of the above, the Petitioner requested the Commission to revise the Design Energy

for Khatima LHP.

With regard to the Design Energy of Khatima LHP, the Commission in its Order dated

29.03.2017 had stated as follows:

“Since the RMU works for Khatima LHP have been completed in FY 2016-17, the Commission is

revising the design energy for the LHP. It is observed that the Petitioner in its Petition dated

06.09.2013 for Investment Approval had submitted that after execution of the RMU works as per the

revised DPR the LHP is expected to generate 41.4 MW with average generation of 235.59 MU in

90% dependable year. The Commission taking cognisance of the submissions made by the Petitioner

and the revised DPR gave in-principle approval of RMU works in its Order dated 07.05.2015. The

Petitioner has, however, now submitted that the station shall only be able to generate 207 MU as

compared to earlier projected generation of 235.59 MU. The Commission, in this regard, is of the view

that the projected generation of 235.59 MU submitted by the Petitioner was based on revised DPR

while the current projection of the Petitioner does not have any basis or grounds for refuting the

projection made in its revised DPR. Further, the Petitioner cannot have separate set of performance

parameters for getting investment approval and for claiming tariff which only results in unjust

financial burden on to the consumers. The Commission, therefore, finds no merit in considering the



design energy projected by the Petitioner.

Hence, the Commission in line with the order dated 07.05.2015 for approval of “Capital Investment

for Renovation & Modernization” of Khatima (3x13.8 MW) HEP has revised the design energy of

Khatima LHP to 235.59 MU.”

As discussed in above paras of the Tariff Order dated 29.03.2017, the Commission had

already revised the design energy for Khatima LHP in view of the completion of RMU works. It has

been observed that UJVN Ltd. is seeking further relaxation in design energy on the basis of Plant

conditions, whereas, based on the data available with the Commission, in a post RMU scenario

(generator efficiency of 97%, Turbine efficiency of 93%, auxiliary consumption of 1%) considering

overall generation loss due to uncontrollable situations of 4.7%, the computed Saleable Primary

Energy works out to be 237.54 MUs which itself is higher than the approved Saleable Primary

Energy of 233.23 MUs.

Thus, the Commission hereby reiterates that the Petitioner cannot have separate set of

performance parameters for getting investment approval and for claiming tariff which only results

in unjust financial burden on the consumers. The Commission in line with the Order dated

29.03.2017 approves the design energy for FY 2018-19 for Khatima hydro power station as 235.59

MU as submitted by the Petitioner in the DPR for obtaining the investment approval for RMU of

Khatima.

Further, with regard to Auxiliary energy consumption for Khatima LHP, the Commission in

its Order dated 29.03.2017 had approved auxiliary energy consumption for the station as 1% after

RMU works as the station has static excitation system. With regard to other LHPs auxiliary

consumption was considered same as that approved in MYT Order dated 05.04.2016. The

Commission in this Order has also approved same auxiliary consumption for FY 2018-19 as

approved for FY 2017-18 in its Order dated 29.03.2017.

Accordingly, the design energy and saleable primary energy approved by the Commission

is shown in the Table below:



Table 4.3: Design Energy and Saleable Primary Energy approved for FY 2018-19 (MU)


Original Design Energy

Design Energy

Auxiliary consumption (including Transformation Loss)

Saleable Primary energy

MU MU % MU MU

Dhakrani 169.00 156.88 0.70% 1.10 155.78

Dhalipur 192.00 192.00 0.70% 1.34 190.66

Chibro 750.00 750.00 1.20% 9.00 741.00

Khodri 345.00 345.00 1.00% 3.45 341.55

Kulhal 164.00 153.91 0.70% 1.08 152.83

Ramganga 385.00 311.00 0.70% 2.18 308.82

Chilla 725.00 671.29 1.00% 6.71 664.58

MB-I 546.00 395.00 0.70% 2.77 392.24

Khatima* 235.59 235.59 1.00% 2.36 233.23

Total 3511.59 3210.67 29.98 3180.69 *Post RMU

For, other LHPs, the Commission in the past had not considered the Original Design Energy

for some of the LHPs for calculation of energy charge rate (ECR) as it would have resulted in under-

recovery of the AFC of the Petitioner on account of old hydro stations. The Commission in line with

its previous approach for the calculation of ECR has approved design energy of 8 LHPs (other than

Khatima LHP) as approved in MYT Order dated 05.04.2016 and for Khatima LHP in Tariff Order

dated 29.03.2017. The ECR will be calculated based on the approved saleable primary energy as

specified above. However, secondary energy will be calculated only in case the actual energy

generation exceeds the Original Design Energy and any energy generated in excess of design

energy (approved in this Tariff Order) upto the original design energy shall not be considered as

secondary energy.

B. Maneri Bhali-II

With regard to the design energy and saleable primary energy, UJVN Ltd. submitted that it

has considered the design energy as approved in the previous Control Period.

The Commission approves the original design energy as 1566.10 MU as per the DPR of the

station and saleable primary energy after deducting the normative auxiliary consumption

(including transformation losses) of 1%, as 1550.44 MU.

4.3 Financial Parameters

4.3.1 Apportionment of Common Expenses

As discussed in detail in Chapter 3 of this Order, the Commission has considered the ratio of

85:10:5 among 9 LHPs, MB-II and SHPs, respectively, for allocation of common expenses, as



proposed by the Petitioner. However, the Commission would like to point out that UJVN Ltd. is

diversifying its business and is also in solar generation now, accordingly, while seeking truing-up

for FY 2017-18, UJVN Ltd. would be required to review the basis for such apportionment of

common expenses.

4.3.2 Capital Cost


As detailed earlier in Truing-up section, pending finalization of the Transfer Scheme, for

various reasons recorded in the previous Tariff Orders, the Commission had been approving

opening GFA for the nine old LHPs as on 14.01.2000, as Rs. 506.17 Crore. Since, the Transfer Scheme

is yet to be finalized, the Commission for the purpose of determination of ARR for FY 2018-19 is

considering the opening GFA of nine old LHPs, as on 14.01.2000, as Rs. 506.17 Crore only. Further,

as discussed in the Chapter 3 of this Order, the Commission has revised the Original Cost of

Khatima LHP as on 1.4.2015 on account of de-capitalisation of Rs. 2.03 Crore carried out in FY 2014-

15. The GFA considered are as per the details given below:

Table 4.4: Approved Original Cost inherited from UPJVNL (Rs. Crore)


Claimed Approved as on

14.01.2000 Approved as on

01.04.2016

Dhakrani 12.40 12.40 12.40

Dhalipur 20.37 20.37 20.37

Chibro 87.89 87.89 87.89

Khodri 73.97 73.97 73.97

Kulhal 17.51 17.51 17.51

Ramganga 50.02 50.02 50.02

Chilla 124.89 124.89 124.89

MB-I* 111.93 111.93 111.93

Khatima 7.19 7.19 5.16**

Total 506.17 506.17 504.14 *Including DRB

**Excluding de-capitalisation of Rs. 2.03 Crore in FY 2014-15

B. Maneri Bhali-II

As detailed earlier in Chapter 3, the Commission has considered the capital cost as on CoD

of Rs. 1885.50 Crore in accordance with the Orders dated 05.04.2016 and 29.03.2017. The financing

for the project has been considered same as approved in MYT Order dated 05.04.2016 as shown in

the Table below:



Table 4.5: Approved Capital Cost and Financing for MB-II as on CoD (Rs. Crore)

Particulars Approved in Order dated 05.04.2016 Approved Now

Loans

PFC Loan 1200.00 1200.00

Unpaid Liability 0.00 0.00

Guarantee Fee Payable 0.00 0.00

Normative Loan 119.85 119.85

Total debts 1319.85 1319.85

Equity

PDF 326.76 326.76

GoU Budgetary support 74.89 74.89

Pre-2002 expense 164.00 164.00

Total Equity 565.65 565.65

Total Loan and Equity 1885.50 1885.50

4.3.3 Additional Capitalisation


The Commission in addition to the opening GFA of Rs. 506.17 Crore as on 14.01.2000, has

also approved additional capitalisation of Rs. 276.48 Crore for the period 01.04.2001 to 31.03.2017 in

Chapter 3 of this Order and de-capitalisation of Rs. 2.03 Crore in FY 2014-15 as approved in its MYT

Order dated 05.04.2016 as shown in Table below:

Table 4.6: GFA considered by the Commission for 9 LHPs upto 31.03.2017 (Rs. Crore)


Stations

Opening GFA

claimed as on

14.01.2000

Opening GFA

Approved as on

14.01.2000

Additional Capitalization Claimed from 01.04.2001 to

31.03.2017


Approved from 01.04.2001 to

31.03.2017

Total GFA claimed

upto 31.03.2017

Total GFA approved

upto 31.03.2017

Dhakrani 12.40 12.40 9.04 6.41 21.44 18.81

Dhalipur 20.37 20.37 8.54 5.31 28.91 25.68

Chibro 87.89 87.89 37.28 31.43 125.17 119.32

Khodri 73.97 73.97 20.37 20.31 94.34 94.28

Kulhal 17.51 17.51 4.44 3.57 21.95 21.08

Ramganga 50.02 50.02 6.62 6.63 56.64 56.65

Chilla 124.89 124.89 42.43 21.64 167.32 146.53

MB-I 111.93 111.93 35.61 35.74 147.54 147.67

Khatima 7.19 7.19 145.79 143.42** 152.98 150.61**

Total 506.17 506.17 310.12 274.46 816.29 780.63 **Including de-capitalisation of Rs. 2.03 Crore in FY 2014-15

UJVN Ltd. in its current Petition submitted the projected additional capitalization details for

FY 2017-18 and FY 2018-19 as shown in the Table below:



Table 4.7: Additional Capitalisation projected by the Petitioner for FY 2017-18 and FY 2018-19 (Rs. Crore)

Name of the Generating Stations FY 2017-18 FY 2018-19


Dhalipur 9.57 28.54

Chibro 50.59 50.23

Khodri 34.94 56.61

Kulhal 16.93 22.25


Chilla 24.74 37.54

Maneri Bhali-I 7.38 37.81

Khatima 44.36 53.56

Total 235.01 334.91

The Commission observed that, as compared to previous years, the Petitioner has projected

exorbitantly high amount of capitalization in FY 2017-18 and FY 2018-19 and the same is much

higher than the additional capitalisation approved by the Commission in Order dated 29.03.2017

and 05.04.2016 respectively. The Commission directed UJVN Ltd. to submit the reasons for the

same. In response, UJVN Ltd. vide its letter dated 22.12.2017 submitted that the Commission in its

previous orders has approved additional capitalization only for RMU and DRIP works. However,

in the instant Petition, the Petitioner has projected the additional capitalization which also include

other works, not covered in RMU or DRIP works, but are necessary for the safe and efficient

operations of the Power Stations.

4.3.3.1 RMU Works and DRIP

4.3.3.1.1 RMU Works

The Petitioner in the instant Petition has projected an amount of Rs. 30.00 Crore in case of

MB-I HEP, Rs. 23.00 Crore in case of Dhakrani HEP and Rs. 25.00 Crore in case of Dhalipur HEP

towards the RMU works for FY 2017-18 and FY 2018-19 as shown in Table below:



Table 4.8: Expenditure for RMU projected by the Petitioner for FY 2017-18 and FY 2018-19 for 9 LHPs (Rs. Crore)


Stations

FY 2017-18 FY 2018-19 Approved

in MYT Order dated

05.04.2016

Projected by the

Petitioner

Approved in Order dated 29.03.2017

Projected by the

Petitioner for FY 2018-19

Dhakrani 0.00 0.00 0.00 23.00

Dhalipur 32.60 0.00 36.38 25.00

Chibro 0.00 0.00 0.00 0.00

Khodri 0.00 0.00 0.00 0.00

Kulhal 0.00 0.00 0.00 0.00

Ramganga 0.00 0.00 0.00 0.00

Chilla 47.43 0.00 51.53 0.00

Maneri Bhali-I 0.00 0.00 0.00 30.00

Khatima 12.00 41.46 0.00 0.00

Total 92.03 41.46 87.91 78.00

With regards to the expenses of Rs. 30.00 Crore claimed under RMU for MB-I HEP, the

Commission vide its letter dated 23.01.2018 directed the Petitioner to submit the details of Rs. 30

Crore along with supporting documents, i.e. Agreement Copy and L1 Schedule. The Petitioner in

response submitted the copy of the Contract Agreement No. 02, 03 and 04/DGM (M&U-

GV)/Tiloth-RMU/2016-17 dated 14.12.2015 for comprehensive RMU of MB-I HEP and the

associated L1 Schedule. The Petitioner further submitted that in accordance with the contract

Agreement and L1 Schedule of the MB-I station, 10% of the supply portion of the contract, i.e. 10%

of Rs. 99.92 Crore amounting to around Rs. 10 Crore shall be paid to the Contractor on fulfilment of

following 5 Conditions:

a) Completion of site measurements of the existing hydro generating unit and related

cavity/space dimensioning for new design and engineering and handing back the

completely re-assembled unit in Working Conditions.

b) Submission of Model testing or CFD based model testing and analysis report whichever

is applicable as per the tender conditions and acceptance of the same by UJVN Ltd.

c) Submission of complete design analysis of Turbine, Generator and Associated

Auxiliaries.

d) Submission of complete sets of drawings of major design works of Turbine and

generator and acceptance of the same by UJVN Ltd.



e) Submission of documentary evidence regarding purchase of major raw material for

manufacturing of generating plants.

The Petitioner further submitted that the above conditions in case of RMU works of MB-I

LHP are expected to be fulfilled in FY 2018-19 and, therefore, amount is to be paid to the Contractor.

The Petitioner further submitted that as per L1 Schedule, first unit of MB-I LHP is to be handed over

to the contractor for Comprehensive RMU in December, 2018 which means all the supplies related

to one unit shall be delivered within FY 2018-19. It further submitted that considering the values of

supply pertaining to one unit to be around Rs. 30 Crore, 70% of the said amount, i.e. Rs. 21 Crore is

to be paid to the Contractor towards the supply of material. Accordingly, the Petitioner has

proposed the expenditure of Rs. 30 crore on RMU of MB-I.

The Commission has gone through the submissions of the Petitioner and has observed that

the RMU works of MB-I LHP are expected to start by December 2018 and with scheduled time of

completion of 1st Unit as per the past record of UJVN Ltd., the probability of capitalization of the

RMU expenses in FY 2018-19 is very less. Even going by the Petitioner’s submission, it has claimed

Rs. 30 Crore towards expenditure/advances to be paid to the supplier/contractor which will not be

capitalised till RMU of Unit-I is complete & will be treated as CWIP or advance. Therefore, the

Commission in this Order has not considered the additional capital expenditure of Rs. 30 Crore for

MB-I generating station for FY 2018-19.

Further, with regard to RMU works of Dhakrani generating station, the Commission vide its

letter dated 17.01.2018 directed the Petitioner to submit the unit-wise schedule of RMU to be

undertaken. The Petitioner in response vide its letter dated 02.02.2018 has submitted the Schedule of

RMU according to which it has planned to undertake Unit B under RMU by November 2018. Based

on the above submission, the Commission observes that tendering process for Dhakrani generating

station is yet to be finalized and Unit-B is expected to be taken under reverse engineering by end of

December, 2018 i.e. in the lean discharge period. The Commission is of the view that as the RMU

work of Unit B of the Dhakrani generating station is in the process of award, the expected

capitalisation of Rs. 23 Crore which can only be done once the RMU works gets completed may not

get completed in FY 2018-19. Therefore, the Commission in this Tariff Order has not considered the

additional capital expenditure of Rs. 23 Crore for Dhakrani LHP for FY 2018-19.



In case of RMU of Dhalipur station, the Commission vide its letter dated 17.01.2018 directed

the Petitioner to submit the unit-wise schedule of RMU to be undertaken. The Petitioner in response

vide its letter dated 02.02.2018 has submitted the Schedule of RMU as under:

Unit A: November 2020 to May 2021

Unit B: November 2018 to May 2019

Unit C: November 2019 to May 2020

In view of the above submission of the Petitioner, the Commission observes that in case of

Dhalipur HEP, the Petitioner has projected the time schedule of November 2018 to May 2021 for

completion of RMU works. The Commission in its MYT Order dated 05.04.2016 had already

approved additional capitalisation of Rs. 32.60 Crore for FY 2017-18 and Rs. 36.38 Crore for FY 2018-

19 for RMU works, subject to truing-up as under:-

“...Additional capitalisation for Second Control Period for Dhalipur HEP has also been provisionally

allowed since the Petition for the same has been submitted before the Commission subject to the

detailed scrutiny of the Petition at the Commission’s end...”

As there is nothing new and substantial in the Petitioner’s claim for additional capitalisation

for Dhalipur LHP, the Commission has provisionally approved the additional capitalization for

Dhalipur LHP same as that approved in MYT Order dated 05.04.2016.

In case of RMU of Khatima LHP, the Petitioner vide its letter dated 02.02.2018 has claimed

the additional capitalisation of Rs. 10.99 Crore for FY 2017-18 and Rs. 16.86 Crore for FY 2018-19

towards works under RMU as under:

Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and FY 2018-19 (Rs. Crore)

Sl. No.

Particulars FY

2017-18 FY

2018-19

A E&M

Turbine and Generator

1 Turbine and associated equipment(new item- Misc. item and Instruments for Turbine Guide Bearing

1.27 -

2 Plant SCADA (Centralised control, outlet works control, data acquisition & local communication)

0.43 -

Services and Spares

1 Freight, insurance, taxes on Plant & Equipment - -

2 Refurbishment of Stator and services 5.93 -



Table 4.9: Additional Capitalization claimed under RMU works for Khatima LHP for FY 2017-18 and FY 2018-19 (Rs. Crore)

Sl. No.

Particulars FY

2017-18 FY

2018-19

Total E&M 7.63 0.00

B Hydro-Mechanical Works

1 Intake gates dogging/storage arrangement, replacement wheel assslly. 0.10 -

2 Draft tube gate &hoist:-New two sets of gates, renovation of existing 1 set gate, provision for holding gates in open condition. Gates are in 2 tier. Lower tier gate 16 ft high &17 ft wide, upper tier gate 24 ft high & 17 ft wide

0.26 -

Total Hydro-Mechanical 0.36 0.00

C Additional Works (after dismantling/reverse engineering), other than RMU contract agreement

1 Additional Order of E&M equipment- Sole plate of Lower Brackets 0.00 -

2 Supply and Installation of new Diffusers - 16.86

3 New Lower Bracket of machine no. 3 0.85 -

4 Supply and Fixing of 2 numbers 50 kL MS Water Tanks along with accessories for Shaft Seal System

0.74 -

5 Supply and Installation of New LED Lighting System 1.40 -

Total additional works 3.00 16.86

Total expenses claimed under R&M 10.99 16.86

From the above table, the Commission observes that the above works claimed under RMU

pertains to the deferred works as the CoD, i.e. 06.04.2015 for Machine-1, 28.04.2016 for Machine-2

and 08.09.2016 for Machine-3 installed under RMU of Khatima LHP. It is also observed that the

Petitioner has claimed the above works upto the cut-off date, i.e. 31.03.2019 of the RMU works

under Khatima LHP. Therefore, the Commission has taken a serious note of the same and directs

the Petitioner to complete all the works covered under RMU of Khatima LHP latest by the cut-off

date, i.e. 31.03.2019, beyond which no expense (including IDC) in this regard would be allowed.

Further with regard to the above submission of the Petitioner regarding the RMU works for

Khatima LHP, the Commission observes that the Petitioner has claimed the expenditure towards

the repair and procurement of new Diffuser for Rs. 16.86 Crore in FY 2018-19. Further, the Petitioner

vide its letter dated 22.12.2017 has also proposed cost of Rs. 40.91 Crore towards construction of a

Bypass channel stating that the diffuser in not fully reliable. The Commission vide its letter dated

05.01.2018 directed UJVN Ltd. to submit proper justification for first incurring cost towards repair

of damaged diffusers and then incurring cost towards procuring new diffusers and the current

proposal for construction of Bypass Channel. The Petitioner in response vide letter dated 15.01.2018

submitted that originally diffusers were installed in 1955-56 and were under water operation since

62 years. Therefore, these originally installed diffusers have outlived their useful life and are in the



process of replacement with newly procured diffusers to ensure the safety of the Plant. The

Petitioner has further submitted that such newly installed diffuser are reliable and capable of

performing its function but these are of the category of Electro mechanical items of the power plant

which have their own limitations of operation and there is always a possibility of occurrence of

various faults in the underwater E&M equipment like blockage due to wooden piece, debris,

pebbles or any other material like silts etc., non development of desired pressure due to power

failure or any leakage of oil or any sudden incidents. For avoiding such catastrophe which may

possibly occur in the absence of the backing up E&M equipment by the provision of civil structure,

construction of Bypass channel is proposed in accordance with Regulation 23 of the UERC Tariff

Regulation, 2015, under Renovation and Modernization of Khatima HEP.

With regard to the expenditure towards the repair and replacement of diffuser, the

Commission observed that the original diffusers were installed in 1955-56 and were working

smoothly until one set of original diffusers got damaged due to negligence of UJVN Ltd. in FY 2014-

15. The Commission further, observed that no such untoward incident had happened from the year

1955-56, i.e. from the CoD of the Plant and in FY 2014-15 the incident took place due to the

carelessness of the Petitioner’s Plant Staff. Thereafter, UJVN Ltd. proposed replacement of all the

original diffusers under the RMU works which was agreed by the Commission vide its Order dated

07.05.2015.

Therefore, regarding the expenditures claimed towards the Bypass channel of Khatima LHP

as alternate of diffusers in case of any exigency, the Commission is of the view that this would

certainly lead to double loading of expenses on the consumers of the State. Hence, the Commission

is not approving the proposed expenditure towards Bypass channel. The Commission has,

however, not revised the additional capitalisation for FY 2018-19 and has considered the additional

capitalisation approved by it in its MYT Order. The Commission shall consider the actual expenses

once the audited cost is available at the time of truing-up of FY 2018-19.

4.3.3.1.2 DRIP Works

The Petitioner in the instant Petition has projected the expenditure of Rs. 57.44 Crore for FY

2017-18 and Rs. 33.88 Crore for FY 2018-19 under DRIP Scheme as under:



Table 4.10: Additional Capitalization claimed under DRIP Scheme for FY 2017-18 and FY 2018-19 (Rs. Crore)


Dhakrani 7.54 0.00

Dhalipur 2.09 0.00

Chibro 17.45 14.97

Khodri 4.93 0.00

Kulhal 8.14 3.72

Chilla 17.29 14.49


Total 57.44 33.88

With regard to the additional capitalisation for DRIP Scheme, the Commission vide its Order

dated 29.04.2016 had given approval for only 1 TRCM (Trash Rack Cleaning Machine), i.e. for Asan

Barrage. However, UJVN Ltd. in its claim has proposed 3 TRCM Machines for Assan Barrage, Ichari

Dam and Dakpathar Barrage. The Commission vide its letter dated 19.01.2018 directed the

Petitioner to justify the same. The Petitioner vide its reply dated 02.02.2018 submitted that the

capacity of TRCM installed at Ichari Dam for Chibro Power House is degraded and also the spare

parts for the same are not available due to its old design and technology. Further, the Petitioner

submitted that the said work and the related bid document have been accepted by World Bank

India under DRIP Scheme as the budget for the same will be acquired from World Bank India.

As already discussed in Chapter 3 with regard to works carried out under DRIP Scheme, the

Commission based on the submissions of the Petitioner in its MYT Order has already approved

DRIP works for the second Control Period. The Commission observed that since the works under

the DRIP Scheme has not been capitalised yet, therefore, the capitalisation proposed by Petitioner

under DRIP Scheme has not been allowed. The Commission shall carry out detailed prudence check

of the expenses capitalised under DRIP scheme once audited cost is available.

4.3.3.2 Construction of New Multi-Storied Residential and Office Buildings in Dehradun

With regard to construction of New Multi-Storied Residential and Office Buildings in

Dehradun the Petitioner has claimed expenditure for FY 2017-18 and 2018-19 as given in Table

below:



Table 4.11: Additional Capitalization claimed for New Multi-Storied Residential and Office Buildings in Dehradun for FY 2017-18 and FY 2018-19 (Rs. Crore)


Dhakrani 0.78 1.66

Dhalipur 1.18 2.51

Chibro 5.53 11.81

Khodri 2.77 5.90

Kulhal 0.69 1.48

Ramganga 4.56 9.74

Chilla 3.32 7.09


Khatima 0.95 2.04

Total for 9 LHPs 21.85 46.66

MB-II 2.57 5.49

SHPs 1.29 2.74

Grand Total for 10 LHPs & SHPs 25.71 54.89

Further, with regard to construction of new multi-storied residential and office building in

Dehradun, the Petitioner has submitted that UJVN Ltd. in its last APR Petition for FY 2016-17 had

proposed construction of new multi-storied residential buildings in Yamuna Colony Dehradun and

Office building in Ujjwal premises, Dehradun. The Petitioner proposed three multi storied

buildings, 01 tower (type-IV, 3+1 BHK, super area for each unit of 224.48 Sq.m.) for senior officers

with designation DGM and above, 01 tower (type-III, 3 BHK, super area for each unit 170.20 Sq.m.)

for officers of EE/AE level and 01 tower (type-II, 2 BHK, super area for each unit=115.05 Sq.m.) for

staff class-III, in order to meet the short fall of residences for Nigam employees posted in Dehradun.

The Petitioner further submitted that each tower shall consist of 9+ stilt (10 floors) with each tower

having total 36 units (04 units on each floor).

The Petitioner has further submitted that the Commission in Tariff Order dated March 29,

2017 had not denied approval for residential building but directed to work out the Cost benefit

analysis for the same after getting the approval from BoD. Further, the Petitioner also submitted

that most of the residences of Yamuna Colony are worn out due to aging and are in a very bad

condition, which are prone to possibilities of occurrence of accidents. The Petitioner submitted that

considering the limited availability and huge cost of land these residential buildings are proposed

to be multi storied and involve the latest state of art of structural engineering. Thus, an independent

consultant was involved in study and preparation of DPR. Further, the Training Centre Cum Sports

Complex would comprise of a Training Centre form which will be a major part as it will be helpful

in providing in-house training as well as lectures which in turn will convert into efficient working



of the organization. Further, sports and gym section shall be helpful in creating healthy

environment. The Petitioner further stated that there is no need of prior approval for the additional

capital expenditure proposed for Training Centre Cum Sports complex as well as Multi storied

building which is the need of time and should be allowed in view of necessities as mentioned

above. The Petitioner further requested the Commission to consider the need for Training Centre

Cum Sports complex as well as Multi storied building and allow the proposed expenditure under

additional Capitalization.

The Commission in its Tariff Order dated 29.03.2017 had granted in-principle approval for

works pertaining to the office building excluding the cost of sports complex. However, the

Commission had not approved the expenditure towards multi storied residential buildings as the

same was not approved by the BoD of the Petitioner. The year-wise expenses claimed by the

Petitioner for office & residential building is shown in the Table given below:

Table 4.12: Details of Office & Residential Building as claimed by the Petitioner (Rs. Crore)

Particulars Estimated/agreement cost

(Crore)+GST

FY 2016-17 (Rs. In Crore)



Remarks

Construction of Office Building

29.37 - 10.00 19.37 GST have not been included

Training Centre cum Sports Complex

2.70 - 0.50 2.21

Residential buildings (3+1 BHK / 3 BHK / 2BHK)

55.50 - - 5.00

Total 87.57 - 10.5 26.58

It is observed that the Petitioner has claimed the proposed expenses towards construction of

new multi-storied residential and office building in Dehradun stating that more residential

accommodation is required for its employees as staff strength is increasing day by day in order to

meet the growing challenges of the Company. In this regard, the Commission observed from the

historical data that the number of employees of UJVN Ltd. were 2289 as on 31.3.2013. However, as

submitted by the Petitioner in its letter dated 22.12.2017, the projected number of employees

claimed by the Petitioner works out to 2157 as on 31.03.2019. From the above data, it is observed

that the number of employees of UJVN Ltd. has decreased from FY 2012-13 to FY 2018-19, however,

the Petitioner has still claimed three towers consisting of 9+ stilt (10 floors) with each tower having

total 36 units (04 units on each floor). It emerges from the above data that the Petitioner was able to



manage accommodation to its employees in FY 2012-13, when the number of employees were even

more than that proposed in FY 2018-19. Further, the residential building would not cater to all the

employees of UJVN Ltd & some employees will have to manage their own accommodation.

Further, as of now since the employees of the Petitioner’s Company are managing without the

employer provided accommodations, they can also do so in future also. It would be clear that any

expenses towards employee benefits like accommodation elsewhere other than Plant colonies,

sports complex, etc. will have to be borne by the Company out of its own resources & will not be

passed on to the consumers. Regulations clearly stipulates that Additional Capitalization for the

generating station and not for expenses towards the pooled colonies outside the generating stations.

Accordingly, the Commission is of the view that the rationale provided by the Petitioner for

claiming the above proposed expenses is not justifiable, and therefore the same has not been

approved.

4.3.3.3 Other Additional Capital Works

Details of the expenditures projected for additional capital works other than RMU, DRIP

and Office & Residential Building for FY 2017-18 and FY 2018-19 are shown in Table below:

Table 4.13: Additional Capitalization claimed for works other than RMU, DRIP and Office & Residential Building for FY 2017-18 and FY 2018-19 (Rs. Crore)


Dhakrani 4.93 9.59

Dhalipur 6.30 1.03

Chibro 27.61 23.45

Khodri 27.25 50.70

Kulhal 8.10 17.05

Ramganga 28.69 4.39

Chilla 4.13 15.96


Khatima 1.95 51.52

Total 114.27 176.37

With regard to the additional capitalization claimed for Khodri LHP, the Commission

observed that the Petitioner in its claim for additional capitalization for FY 2018-19 has submitted an

expenditure of Rs. 20.00 Crore for Construction of 1 no. 220 kV feeder Bay at Switch yard Khodri

Power Station for Barnigad SHP. The said expenditure has been proposed in order to evacuate

power from Barnigad SHP. In this regard, as per UERC (Tariff and other terms of supply of

electricity from renewable energy sources and non-fossil fuel based co-generating stations)



Regulations, 2013, it is the duty of the licensee to provide connectivity to the RE based generating

station. However, the generator has an option to construct the evacuation system wherein the cost

has to be borne by it. Therefore, such works should not be carried out by UJVN Ltd. and should be

carried out by the licensee or the RE generator. Accordingly, the Commission has not considered

the said expenditure as the same doesn’t form part of Khodri LHP.

The Commission has gone through the submissions of the Petitioner with regards to other

additional capital expenditure claimed now in the instant tariff Petition and is of the view that since

no major works have been proposed by the Petitioner, the Commission finds no reason to deviate

from the earlier approved additional capitalisation in MYT Order dated 05.04.2016.

In view of the above, the Commission has approved the additional capitalization for FY

2017-18 and FY 2018-19 same as that approved in its Order dated 29.03.2017 and MYT Order dated

05.04.2016 respectively. In case of any variations in actual capitalisation with respect to the

approved capitalisation for the approved works, the Commission shall consider the same on actual

basis subject to prudence check at the time of truing-up in accordance with the UERC Tariff

Regulations, 2015.

In view of the above submissions, the Commission has considered the capitalisation of Rs.

92.03 Crore for FY 2017-18 and Rs. 87.91 Crore for FY 2018-19. Accordingly, additional capitalisation

approved for FY 2017-18 and FY 2018-19 is as follows:

Table 4.14: Additional Capitalization as approved for 9 LHPs for FY 2017-18 and FY 2018-19 (Rs. Crore)

Particulars

FY 2017-18 FY 2018-19

Approved in Order dated

29.03.2017 Claimed

Approved Now

Approved in MYT Order dated

05.04.2016 Claimed

Approved Now

Dhakrani 0.00 13.24 0.00 0.00 34.25 0.00

Dhalipur 32.60 9.57 32.60 36.38 28.54 36.38

Chibro 0.00 50.59 0.00 0.00 50.23 0.00

Khodri 0.00 34.94 0.00 0.00 56.61 0.00

Kulhal 0.00 16.93 0.00 0.00 22.25 0.00

Ramganga 0.00 33.25 0.00 0.00 14.13 0.00

Chilla 47.43 24.74 47.43 51.53 37.54 51.53

MB-I 0.00 7.38 0.00 0.00 37.81 0.00

Khatima 12.00 44.36 12.00 0.00 53.56 0.00

Total 92.03 235.01 92.03 87.91 334.91 87.91



With regards to funding of works to be done by the Petitioner, the Commission vide its

letter dated 05.01.2018 sought details of funding of additional capitalization claimed by UJVN Ltd.

for FY 2017-18 and FY 2018-19 along with the documentary evidence of any budgetary support

received from GoU or relevant management approval. The Petitioner in response vide its letter

dated 15.01.2018 submitted that GoU has already committed equity support for Vyasi (120

MW)/RMU projects / SHP Projects. The Petitioner further submitted that in FY 2018-19 final

Investment clearance of GoI for Lakhwar Project (300 MW) is expected and GoU will provide equity

for the same, therefore, funding for additional capitalization from GoU is not possible. Therefore,

funding of additional capitalization claimed is being planned through internal accruals of UJVN

Ltd. The Petitioner further submitted that for capital expenditure to be incurred in FY 2017-18 and

FY 2018-19, the possibilities of debt funding is being explored by the Petitioner.

The Commission has examined the matter and as the funding pattern is yet to be finalised

by UJVN Ltd., the Commission at this stage has considered the approved additional capitalization

to be funded through normative debt equity ratio of 70:30. The Commission will consider the actual

funding at the time of truing-up based on the prudence check.

B. Maneri Bhali-II

The Commission, as discussed earlier has approved that additional capitalisation since CoD

of the project and has approved additional capitalisation of Rs. 314.51 Crore till 31.03.2017.

Table 4.15: Opening GFA for MB-II as considered by the Commission for FY 2017-18 (Rs. Crore) Particulars Amount

Capital Cost 1885.50

Additional Capitalization from FY 2007-08 to FY 2015-16 259.44

Additional Capitalization during FY 2016-17 55.07

Opening GFA for FY 2017-18 2200.01

The Petitioner submitted the likely additional capitalisation to be incurred in FY 2017-18 and

FY 2018-19 as Rs. 41.64 Crore and Rs. 31.10 Crore, respectively.

As discussed in Chapter 3 of this Order, the Commission directed UJVN Ltd. to submit

proper justification towards increase in the balance capital expenditure works along with the status

of balance capital works completed and projected to be completed in FY 2017-18 and FY 2018-19

and submit its revised claim of additional capitalisation for FY 2017-18 and FY 2018-19. In response,

UJVN Ltd. vide letter dated 02.02.2018 has submitted the details of revised claim of actual and



projected additional capitalisation of MB-II LHP for FY 2017-18 and FY 2018-19 along with the

details of Balance Capital Works and additional capitalisation (Civil works) for FY 2017-18 and FY

2018-19. The revised additional capitalisation claimed by the Petitioner for FY 2017-18 and FY 2018-

19 for MB-II is as follows:

Table 4.16: Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)

S. No. Particulars FY 2017-18 FY 2018-19

1 Works covered under Balance Capital Works Petition (details enclosed in Annexure 7 of this Order)

21.56 13.46

2 Other works (works not covered under Balance Capital Works) 31.04 28.39

Total 52.60 41.85

Further, the detail of the Revised Additional Capitalisation claimed by the Petitioner for MB-

II for FY 2017-18 and FY 2018-19 is annexed as Annexure 7.

With regard to the additional capitalization, the Commission in its Tariff Order dated

05.04.2016 had allowed additional capitalisation of Rs. 211.72 Crore, however, the Petitioner in its

Tariff Petition for FY 2017-18 had revised the projection to Rs. 238.62 Crore to be incurred till FY

2018-19. Further, the Petitioner in the current Tariff Petition has again revised the projection to Rs.

252.07 Crore till FY 2018-19. The Commission has observed that the Petitioner has incurred Rs.

217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016+ Rs. 26.99 Crore in FY 2016-17) upto FY 2016-17

and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against balance capital works of MB-II

HEP.

Based on the above observations, the Commission is of the view that the Petitioner is

adopting a callous approach and is deferring important works like testing of surge shaft, which is

certainly not in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of

the same and directs the Petitioner to complete all the works covered in the Petition of balance

capital works of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in

this regard would be allowed.

As there is nothing new and substantial in the claim for additional capitalisation proposed in

FY 2017-18 and FY 2018-19 for MB-II generating station, the Commission at this stage doesn’t find

any reason to approve any additional capitalisation for FY 2017-18 and FY 2018-19 in line with the

approach adopted in MYT Order dated 05.04.2016 and Tariff Order dated 29.03.2017. Additional

capitalisation, if any, shall be considered on actual basis subject to prudence check.



4.3.4 Depreciation



“28. Depreciation

(1) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by

the Commission.

Provided that depreciation shall not be allowed on assets funded through Consumer Contribution

and Capital Subsidies/Grants.

(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up

to maximum of 90% of the capital cost of the asset.

...

(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified

in Appendix - II to these Regulations.

...”

The Petitioner submitted that UERC Tariff Regulations, 2015 are applicable from 01.04.2016.

Further, UERC Tariff Regulations, 2011, is applicable for the period 01.04.2013 to 31.03.2016. Hence,

till FY 2012-13, the Petitioner calculated depreciation based on Tariff Regulations 2004. The

Petitioner has claimed depreciation considering the applicable Regulations.

The Commission in accordance with Regulation 28 of UERC Tariff Regulations, 2015 has

computed the depreciation for FY 2018-19 of the second Control Period as detailed below:

(i) Depreciation on Opening GFA as on 14.01.2000: All the 9 LHPs are over 12 years old

and 7 out of 9 stations have already depreciated by 90% of the original cost. Depreciation

allowed till date for Khodri, and MB-I LHPs have not reached 90%, the Commission has

computed the accumulated depreciation till 31.03.2017 to determine the remaining

depreciable value for each LHP. The Commission for computing the accumulated

depreciation till 31.03.2013 has considered the depreciation rate of 2.38% as considered in

previous Tariff Orders. Further, in accordance with UERC Tariff Regulations, 2011 and

UERC Tariff Regulations, 2015 and considering the life of 35 years from the CoD, the



Commission has equally divided the remaining depreciable value as on 01.04.2016 on the

remaining useful life of each LHP.

(ii) Depreciation on additional capitalisation: For the asset added during the period from

FY 2001-02 to FY 2015-16, the Commission has computed the depreciation in accordance

with the provisions of UERC Tariff Regulations, 2004 and UERC Tariff Regulations, 2011.

In accordance with the UERC Tariff Regulations, 2015 the Commission has computed the

balance depreciable value for assets added in each year after January 2000 by deducting

the cumulative depreciation as admitted by the Commission upto 31.03.2016 from the

gross depreciable value of the assets. The Commission further, computed the difference

between the cumulative depreciation as on 31.03.2016 and the depreciation so arrived at

by applying the depreciation rates as specified in UERC Tariff Regulations, 2015

corresponding to 12 years. The Commission has spread over the above difference in the

remaining period upto 12 years of such asset addition. Further, in case where the asset

life has crossed 12 years from the year of addition, the remaining depreciable value as on

31st March of the year closing has been spread over the balance life.

In line with the above approach, the Commission has computed the depreciation for 9 LHPs

for FY 2018-19 based on closing GFA for FY 2017-18 and without considering the asset addition

during FY 2018-19 since the Petitioner capitalises the assets at the end of the Financial Year. The

summary of Depreciation Charges for FY 2018-19 as approved by the Commission is shown in the

Table below:

Table 4.17: Depreciation Charges as approved by the Commission for 9 LHPs for FY 2018-19 (Rs. Crore)


Stations


Claimed

Approved in this Order

On opening GFA as on 14.01.2000

On Additional Capitalization

Total On opening GFA as on 14.01.2000

On Additional Capitalization

upto FY 2017-18 Total

Dhakrani 0.00 0.59 0.59 1.17 0.00 0.38 0.38

Dhalipur 0.00 3.01 3.01 0.99 0.00 2.04 2.04

Chibro 0.00 1.46 1.46 4.53 0.00 1.66 1.66

Khodri 0.59 0.81 1.40 3.49 0.59 1.13 1.72

Kulhal 0.00 0.66 0.66 1.14 0.00 0.21 0.21

Ramganga 0.00 0.27 0.27 2.03 0.00 0.33 0.33

Chilla 0.00 3.24 3.24 3.02 0.00 3.37 3.37

MB-I 2.53 3.87 6.40 5.00 2.58 1.59 4.16

Khatima 0.00 5.05 5.05 10.03 0.00 8.17 8.17

Total 3.12 18.96 22.08 31.39 3.17 18.87 22.04



B. Maneri Bhali-II

As regards the depreciation for MB-II for FY 2018-19 of the second Control Period, the

Commission in accordance with the UERC Tariff Regulations, 2015 has computed the balance

depreciable value for MB-II by deducting the cumulative depreciation as admitted by the

Commission upto 31.03.2016 from the gross depreciable value of the assets. The Commission

further, computed the difference between the cumulative depreciation as on 31.03.2016 and the

depreciation so arrived at by applying the depreciation rates as specified in UERC Tariff

Regulations, 2015 corresponding to 12 years. The Commission has spread over the above difference

in the remaining period upto 12 years from the CoD of MB-II.

In line with the above approach, the Commission has computed the depreciation for MB-II

for FY 2018-19. The total depreciation for MB-II for FY 2018-19, accordingly, works out as shown in

the Table below:

Table 4.18: Depreciation charges as approved by the Commission for MB-II for FY 2018-19 of second Control Period (Rs. Crore)

Particular Approved in MYT Order dated

05.04.2016 Claimed Approved in this Order

Depreciation 58.81 72.84 63.00

4.3.5 Return on Equity



“26. Return on Equity

(1) Return on equity shall be computed on the equity base determined in accordance with Regulation

24.

Provided that, Return on Equity shall be allowed on account of allowed equity capital for the assets

put to use at the commencement of each financial year.

(2) Return on equity shall be computed on at the base rate of 15.50% for thermal generating stations,

transmission licensee, SLDC and run of the river hydro generating station and at the base rate of

16.50% for the storage type hydro generating stations and run of river generating station with

pondage and distribution licensee on a post-tax basis.”



The Petitioner has submitted that it has claimed RoE in accordance with the aforesaid

Regulations at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate of 15.50% for

Dhakrani, Dhalipur, Kulhal, Chilla & Khatima on post tax basis. The Petitioner further submitted

that it may be allowed to recover Income Tax as per Regulations 34 of UERC Tariff Regulations,

2015 which stipulates as follows:

“Income Tax, if any, on the income stream of the regulated business of Generating Companies,

Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the Generating

Companies, Transmission Licensees, Distribution Licensees and SLDC as per actual income tax paid,

based on the documentary evidence submitted at the time of truing up of each year of the Control Period,

subject to the prudence check.”

The Commission has allowed RoE at the rate of 16.50% for Chibro, Khodri, Ramganga &

MB-I and at the rate of 15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima as per Regulation

26 of UERC Tariff Regulations, 2015. Further, pending finalisation of the Transfer Scheme and in

view of equity erosion due to de-capitalisation of Rs. 2.03 Crore in FY 2014-15 in Khatima LHP of

the Petitioner, the Commission had allowed RoE on the provisional value of the opening equity of

Rs. 150.58 Crore in accordance with the directions of the Hon’ble Appellate Tribunal for Electricity

issued in the Order dated 14.09.2006 (Appeal No. 189 of 2005), and detailed in the Commission’s

Order dated 14.03.2007. As regard RoE on additional Capitalisation, the Commission has

considered a normative equity of 30% where entire financing has been done through internal

resources and on actual basis in other cases subject to a ceiling of 30% as specified in the

Regulations. Further, with regard to recovery of income tax paid the Commission is of the view that

Regulation 34 of UERC Tariff Regulations, 2015 allows recovery of actual tax paid, subject to

submission of documentary proof. Therefore, the Petitioner is entitled to claim the same at the time

of truing-up as per the actuals in accordance with the Regulations 34 of UERC Tariff Regulations,

2015.

As Transfer Scheme is yet to be finalized, the Commission is provisionally allowing a return

on normative equity at the rate of 16.50% for Chibro, Khodri, Ramganga & MB-I and at the rate of

15.50% for Dhakrani, Dhalipur, Kulhal, Chilla & Khatima in accordance with the provisions of

UERC Tariff Regulations, 2015. The summary of the Return on Equity approved for 9 LHPs for FY

2018-19 of second Control Period is shown in the Table given below:



Table 4.19: Return on Equity for Nine Old LHPs for FY 2018-19 (Rs. Crore)


Stations


Claimed


On Transferred Asset as on 14.01.2000


Total

On Transferred Asset as on 14.01.2000


Total

Dhakrani 0.58 0.59 1.16 1.61 0.58 0.30 0.87

Dhalipur 0.95 3.04 3.99 1.79 0.95 1.76 2.71

Chibro 4.35 1.40 5.75 8.70 4.35 1.53 5.88

Khodri 3.66 0.73 4.39 6.40 3.66 0.99 4.66

Kulhal 0.81 0.69 1.50 1.81 0.81 0.17 0.98

Ramganga 2.48 0.28 2.76 4.45 2.48 0.33 2.80

Chilla 5.81 3.00 8.81 8.93 5.81 1.40 7.21

Maneri Bhali-I 5.43 4.39 9.82 7.67 5.43 1.70 7.13

Khatima 0.33 4.68 5.02 9.18 0.24 8.83 9.07

Total 24.40 18.80 43.20 50.54 24.30 17.01 41.31

B. Maneri Bhali-II

As discussed above, the Commission has considered the Capital Cost as on CoD of Rs.

1885.50 Crore as approved by the Commission in its Order dated 05.04.2016 and in Order dated

29.03.2017. As per the financing considered by the Commission of the total approved Capital Cost

of Rs. 1885.50 Crore and additional capitalisation of Rs. 314.51 Crore till FY 2016-17, Rs. 647.89 Crore

[30% of (Rs. 1885.40 + Rs. 314.51 - Rs. 40.37)] have been funded through equity as already discussed

in Chapter 3 of this Order.

As discussed in above paras, the Commission has not allowed any additional capitalisation

in FY 2017-18, the total equity, thus, infused at the beginning of FY 2018-19 works out to Rs. 647.89

Crore. Out of it, Rs. 351.39 Crore had come through PDF. The Commission has not allowed the

Return on Equity on the contribution from PDF while approving AFC of the station for the

Petitioner for FY 2018-19 for reasons recorded in the respective Orders of the Commission. UJVN

Ltd. in its Petition submitted that it has considered Return on Equity on full equity including the

amount invested out of PDF in view of the Appeal filed with the Hon’ble APTEL in matter of RoE

on PDF for MB-II.

The Commission had not allowed Return on Equity on funds deployed by the GoU out of

PDF fund for reasons recorded in the previous Tariff Orders. Unlike other funds, available with the

Government, collected through taxes and duties, PDF is a dedicated fund created in accordance

with the provisions of the PDF Act passed by the GoU and the amount is collected directly from the

consumers through the electricity bills as the same forms part of the power purchase cost of UPCL



which in turn is loaded on to the consumers. PDF Act and Rules made there under, further, clearly

indicate that money available in this fund has to be utilized for the purposes of development of

generation and transmission assets in the State. Though UJVN Limited has filed an Appeal on this

issue before Hon’ble APTEL, however, no stay has been granted by Hon’ble APTEL. Therefore, the

Commission has adopted the same approach as adopted in previous Tariff Orders while allowing

Return on Equity for MB-II project.

The Commission has, therefore, considered the equity of Rs. 296.50 Crore eligible for return.

The Commission has computed the RoE at the rate of 16.50% as specified in UERC Tariff

Regulations, 2015. The summary of the Return on Equity approved for MB-II for FY 2018-19 is

shown in the Table given below:

Table 4.20: Return on Equity for MB-II for FY 2018-19 of second Control Period (Rs. Crore)

Particular Approved in MYT Order

dated 05.04.2016 Claimed Approved in this Order

Return on Equity 43.63 112.86 48.92

4.3.6 Interest on Loans



“27. Interest and finance charges on loan capital and on Security Deposit

(1) The loans arrived at in the manner indicated in Regulation 24 shall be considered as gross

normative loan for calculation of interest on loan.

(2) The normative loan outstanding as on 1.4.2016 shall be worked out by deducting the

cumulative repayment as admitted by the Commission up to 31.3.2016 from the gross normative

loan.

(3) The repayment for each year of the Control Period shall be deemed to be equal to the

depreciation allowed for that year

...

(5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the

actual loan portfolio of the previous year after providing appropriate accounting adjustment for

interest capitalised:



Provided that if there is no actual loan for a particular year but normative loan is still outstanding,

the last available weighted average rate of interest shall be considered.

Provided further that if the generating station or the transmission system or the distribution

system or SLDC, as the case may be, does not have actual loan, then the weighted average rate of

interest of the generating company or the Transmission Licensee or the Distribution Licensee or

SLDC as a whole shall be considered.

(6) The interest on loan shall be calculated on the normative average loan of the year by applying

the weighted average rate of interest.

…”

As discussed in Chapter 3 of this Order, the Commission has computed the weighted

average interest rate based on the outstanding loans for UJVN Ltd. except for loans taken for new

projects that are yet to achieve CoD. The interest rate based on the above works out to 11.42% in

case of Khatima LHP and 10.07% for other 8 LHPs. Thus, the Commission has considered the

interest rate of 11.42% in case of Khatima LHP and 10.07% for other 8 LHPs for computing the

interest expenses. In case of MB-II station as the actual loan has been availed for the project,

therefore, the interest has been computed on the basis of actual loans availed for the project. For

repayment purpose, the Commission has considered repayment equal to depreciation in accordance

with the UERC Tariff Regulations, 2015, while loan addition during the year is not considered since

the Petitioner capitalise the assets at the end of the Financial Year.

Based on the above considerations and the UERC Tariff Regulations, 2015 the Commission

has calculated the interest expense for 9 LHPs for FY 2018-19 of second Control Period as shown in

the Table below:

Table 4.21: Interest on Loan for Nine Old LHPs for FY 2018-19 (Rs. Crore) Name of the Generating

Stations

Approved in MYT Order

Revised Projections


Opening Loan

Loan Addition

Repayment Closing

Loan Interest

Dhakrani 0.77 2.94 2.48 0.00 0.38 2.11 0.23

Dhalipur 4.33 2.25 22.82 25.47 8.17 40.12 1.89

Chibro 1.29 7.93 12.79 0.00 1.66 11.13 1.20

Khodri 0.04 5.50 4.07 0.00 1.72 2.35 0.32

Kulhal 0.96 2.42 0.86 0.00 0.21 0.64 0.08

Ramganga 0.09 3.38 1.47 0.00 0.33 1.14 0.13

Chilla 3.96 5.19 47.47 36.07 3.37 80.18 4.61

Maneri Bhali-I 3.92 1.88 0.00 0.00 0.00 0.00 0.00

Khatima 7.73 16.15 98.47 0.00 8.17 90.30 10.78

Total 23.09 47.63 190.43 61.54 24.01 227.96 19.25



B. Maneri Bhali-II

As discussed in the preceding para, the Commission has computed the weighted average

interest rate of 10.98% based on the outstanding loans for the project up to 31.03.2017. The

Commission for computing interest for MB-II station for FY 2018-19 has considered the above

mentioned interest rate.

The Commission based on the closing loan for MB-II as on 31.03.2017 has computed the

interest expenses for FY 2018-19. The Commission in accordance with UERC Tariff Regulations,

2015 has considered the repayment for each year of the Control Period equal to the depreciation

allowed for that year.

Based on the above considerations and the UERC Tariff Regulations, 2015, the Commission

has calculated the interest expense for MB-II for FY 2018-19 of the second Control Period as shown

in the Table below:

Table 4.22: Interest on Loan for MB-II for FY 2018-19 of second Control Period (Rs. Crore)

Particular Approved in MYT Order dated 05.04.2016 Claimed Approved in this Order

Interest on Loan 71.97 78.25 65.21

4.3.7 Operation and Maintenance expenses

Regarding the Operation and Maintenance expenses, Regulation 48(2) of the UERC Tariff

Regulations, 2015 specifies as follows:

“48 Operation and Maintenance Expenses

(2) For Hydro Generating Stations

(a) For Generating Stations in operation for more than five years preceding the Base

Year

The operation and maintenance expenses for the first year of the control period will be

approved by the Commission taking in to account the actual O&M expenses for last five

years till base year, based on the audited balance sheets, excluding abnormal operation and

maintenance expenses, if any, subject to prudence check and any other factors considered

appropriate by the Commission.

(b) For Generating Stations in operation for less than 5 years preceding the base year:



In case of the hydro electric generating stations, which have not been in existence for a period

of five years preceding the base year, i.e. FY 2014-15, the operation and maintenance expenses

for the base year of FY 2014-15 shall be fixed at 2.0% of the capital cost as admitted by the

Commission for the first year of operation and shall be escalated from the subsequent year in

accordance with the escalation principles specified in clause (e) below.

(c) For Generating Stations declared under commercial operation on or after 1.4.2016.

In case of new hydro electric generating stations, i.e. the hydro electric generating stations

declared under commercial operation on or after 1.4.2016, the base operation and

maintenance expenses for the year of commissioning shall be fixed at 4% and 2.5% of the

actual capital cost (excluding cost of rehabilitation & resettlement works) as admitted by the

Commission, for stations less than 200 MW projects and for stations more than 200 MW

respectively.

(d) Post determination of base O&M Expenses for the base year, i.e. FY 2014-15, the O&M

expenses for the nth year and also for the year immediately preceding the Control Period, i.e.

2015-16 shall be approved based on the formula given below:-

O&Mn = R&Mn + EMPn + A&Gn

Where –

O&Mn – Operation and Maintenance expenses for the nth year;

EMPn – Employee Costs for the nth year;

R&Mn – Repair and Maintenance Costs for the nth year;

A&Gn – Administrative and General Costs for the nth year;

The above components shall be computed in the manner specified below:

EMPn = (EMPn-1) x (1+Gn) x (1+CPIinflation)

R&Mn = K x (GFA n-1 ) x (1+WPIinflation) and

A&Gn = (A&Gn-1) x (1+WPIinflation)+ Provision

Where -

EMPn-1 – Employee Costs for the (n-1)th year;

A&G n-1 – Administrative and General Costs for the (n-1)th year;



Provision: Cost for initiatives or other one-time expenses as proposed by the

Generating Company and approved by the Commission after prudence check.

‘K’ is a constant to be specified by the Commission %. Value of K for each year of the

control period shall be determined by the Commission in the MYT Tariff order based on

Generating Company’s filing, benchmarking of repair and maintenance expenses,

approved repair and maintenance expenses vis-à-vis GFA approved by the Commission

in past and any other factor considered appropriate by the Commission;

Provided that for the projects whose Renovation and Modernisation has been carried out,


Commission.

CPI inflation – is the average increase in the Consumer Price Index (CPI) for

immediately preceding three years;

WPI inflation – is the average increase in the Wholesale Price Index (CPI) for

immediately preceding three years;

GFAn-1 – Gross Fixed Asset of the Generating Company for the n-1th year;

Gn is a growth factor for the nth year. Value of Gn shall be determined by the

Commission in the MYT tariff order for meeting the additional manpower requirement

based on Generating Company’s filings, benchmarking and any other factor that the

Commission feels appropriate

Provided that in case of a existing generating station governed by Government pay

structure, the Commission may consider allowing a separate provision in Employee

expenses towards the impact of VIIth Pay Commission.

Provided that repair and maintenance expenses determined shall be utilised towards

repair and maintenance works only.

(e) O&M expenses determined in sub-Regulation 2(b) & 2(c) above, shall be escalated for

subsequent years to arrive at the O&M expenses for the control period by applying the

Escalation factor (EFk) for a particular year (Kth year) which shall be calculated using the

following formula:

EFk = 0.55xWPIInflation + 0.45xCPIInflation



(f) In case of multi-purpose hydroelectric stations, with irrigation, flood control and power

components, the O&M expenses chargeable to power component of the station only shall be

considered for determination of tariff.”

The O&M expenses include Employee expenses, R&M expenses and A&G expenses. In

accordance with Regulation 48(2) of the UERC Tariff Regulations, 2015, the O&M expenses for FY

2018-19 shall be determined by the Commission taking into account actual O&M expenses of the

previous years and any other factors considered appropriate by the Commission.

The Commission has calculated the annual growth in values of CPI (overall) for Industrial

Workers and WPI (overall) based on the average of preceding three years for the corresponding

years and has considered the same for determination of indices during the base year and the second

Control Period. The summary of the same is provided in the Table below:

Table 4.23: Escalation Rate as considered by the Commission Particulars FY 2016-17 FY 2017-18 FY 2018-19

CPI Inflation 7.21% 5.35% 5.35%

WPI Inflation 1.83% 1.07% 1.07%

Inflation (Average 55: 45) 4.25% 2.99% 2.99%

The submissions of the Petitioner and the Commission’s analysis for approving the various

components of the O&M expenses for FY 2018-19 are detailed below:


4.3.7.1 Employee expenses

The Commission had approved the employee expenses of Rs. 228.36 Crore for FY 2018-19 in

its MYT Order dated 05.04.2016. The Petitioner, in its Petition, has proposed the employee expenses

for FY 2018-19 as Rs. 201.87 Crore as per the UERC Tariff Regulations, 2015 considering the actual

employee expenses for FY 2016-17.

The Commission has computed the employee expenses in accordance with the UERC Tariff

Regulations, 2015. In accordance with the UERC Tariff Regulations, 2015, the Gn (growth factor) is

to be considered in the computation of employee expenses. The Commission, in its Order dated

29.03.2017 computed the Gn factor of 0.00% for FY 2016-17 and 1.09% for FY 2017-18. Further, the

Commission in MYT Order dated 05.04.2016 in the approval of the Business Plan for the second

Control Period from FY 2016-17 to FY 2018-19, based on the approved HR Plan computed the Gn



factors of 0.00% for FY 2018-19 respectively. In line with the same, the Petitioner has proposed the

Gn factors of 1.09% and 0.00% for FY 2017-18 and FY 2018-19 respectively. The Commission has

considered the closing no. of employees for FY 2016-17 as the opening no. of employees for FY 2017-

18. The Commission sought for actual number of employees recruited/retired in FY 2017-18 till

November 2017 and projections for employees to be recruited/retired during December, 2017 to

March, 2018 and in FY 2018-19. In response, the Petitioner vide its letter dated 22.12.2017 has

submitted the recruitment of 27 no. of employees in FY 2017-18 till November 2017, 9 no. of

employees during December, 2017 to March, 2018 and 139 no. of employees during FY 2018-19.

Further, the Petitioner submitted the details of retirement as 89 no. of employees in FY 2017-18 till

November 2016, 26 no. of employees during December, 2016 to March, 2017 and 78 no. of

employees during FY 2018-19. The Commission has considered the recruitment details as submitted

by the Petitioner for FY 2017-18 and FY 2018-19. Accordingly, the Commission has approved the Gn

factors of 0.00% for FY 2017-18 and 1.46% for FY 2018-19. However, if the actual addition to number

of employees is lower than the number of employees addition considered in this Order, the impact

of the same shall be adjusted while carrying out the truing-up and will not be considered as

reduction in Employee expenses on account of controllable factors. Further, the Petitioner is

directed to give the details of total recruitment carried out during the year, project-wise during the

truing-up proceedings.

In accordance with UERC Tariff Regulations, 2015, CPI inflation which is the average

increase in the Consumer Price Index (CPI) for the preceding three years is to be considered. The

Commission has calculated the annual growth in values of CPI (overall) based on the average of

preceding three full years upto FY 2016-17 as 5.35%.

The Commission has considered the normative employee expenses approved in the true-up

for FY 2016-17 for projecting the employee expense for FY 2017-18 and FY 2018-19 in accordance

with the UERC Tariff Regulations, 2015. The normative employee expenses have been projected for

truing-up of FY 2016-17 under the MYT framework, accordingly, to bring efficiency in controllable

expenses, norms should be followed unless sufficient reasons warrant any deviations in the same.

Accordingly, the Commission has considered the normative expenses worked out for FY 2016-17 for

projecting the employee expenses for subsequent years.

With regard to impact of VII Pay Commission, it has been observed that the Petitioner has



considered the impact of VII Pay Commission in projection of the employee expenses for FY 2017-18

& FY 2018-19. In this regard the Commission in the minutes of meeting of TVS held on 04.01.2018

had directed the Petitioner to furnish the computation for impact on account of implementation of

VII Pay Commission, subsequently, the Commission vide its letter no. 1834 dated 27.02.2018

directed the Petitioner to furnish status of implementation of VII Pay Commission alongwith the

details of payment of arrears in FY 2017-18 and balance arrear to be paid in FY 2018-19 and was also

directed to submit the impact of VII Pay Commission on current salaries. In compliance to the same

the Commission vide its letter no. 140 /UJVNL/04/D(F)/UERC dated 13.03.2018 submitted its

reply, however, it has been observed that the Petitioner has not furnished the requisite information

including plant-wise breakup of such arrears. Accordingly, the Commission has decided not to

consider the impact of VII Pay Commission in APR of FY 2017-18 and in revised AFC for FY 2018-19

and the same shall be considered at the time of truing-up. However, the Petitioner is directed to

maintain Plant-wise separate details of the amount paid as arrears to its employees on account of

implementation of the recommendations of VII Pay Commission. The Commission would carry

out the truing-up for FY 2017-18 and FY 2018-19 based on the actual impact of VII Pay Commission

including arrears and no sharing of gains and losses on this account would be allowed.

The normative employee expenses approved by the Commission for FY 2018-19 are as


Table 4.24: Employee expenses for 9 LHPs for FY 2018-19 (Rs. Crore)



Revised Projections


Dhakrani 13.44 13.80 9.50

Dhalipur 15.07 11.36 14.33

Chibro 47.61 44.87 39.63

Khodri 25.12 22.06 21.88

Kulhal 9.84 7.48 8.44

Ramganga 31.73 31.23 26.59

Chilla 38.96 33.37 28.96

Maneri Bhali-I 29.98 24.59 21.17

Khatima 16.61 13.11 11.77

Total 228.36 201.87 182.27

4.3.7.2 R&M expenses

The Petitioner in its APR Petition has projected Repairs and Maintenance Expenses for FY

2018-19 based on the K factor and revised Opening GFA for FY 2018-19 in accordance with the



UERC Tariff Regulations, 2015. The Petitioner has computed the R&M expenses by multiplying K

factor with revised Opening GFA of FY 2018-19 and has escalated the same with WPI inflation of

1.07%. Accordingly, the Petitioner has proposed the R&M expenses of Rs. 82.88 Crore for FY 2018-

19.

The Commission in its MYT Order dated 05.04.2016 had approved the R&M expenses of Rs.

75.33 Crore for FY 2018-19. As against the same, the Petitioner has proposed R&M expenses of Rs.

82.88 Crore.

As discussed in Chapter 3 of this Order, the Commission has considered the Constant Factor

‘K’ same as determined by the Commission in the Tariff Order dated 29.03.2017. For projecting the

R&M Expenses for FY 2018-19, the Commission has multiplied the K Factor as approved in the

Tariff Order dated 29.03.2017 with the opening GFA approved for FY 2018-19. The Petitioner is

undertaking the additional capitalization proposed by it in FY 2017-18 and FY 2018-19, however, the

Commission has considered the capitalization for FY 2017-18 as approved in Tariff Order dated

29.03.2017 while determining the opening GFA for FY 2018-19.

Further, the Commission has considered the WPI inflation of 1.07% which is the average

increase in the Wholesale Price Index (WPI) for FY 2014-15 to FY 2016-17. The Commission has

computed R&M Expenses for FY 2018-19 as per the methodology as stated above using the

following formulae.

R&Mn = K x (GFA n-1 ) x (1+WPIinflation)

With regards to the generating station undergoing RMU works or planned for RMU works

in the second Control Period the Commission in its Regulation 48(2) of UERC Tariff Regulations,

2015 had stated that for projects whose Renovation and Modernisation works has been carried out,


Commission. The Commission further observes that as per the details submitted by the Petitioner

only RMU of Khatima is completed in FY 2016-17. Further with regard to Dhakrani, Dhalipur,

Chilla and MB-I, the RMU works are projected to be carried out in FY 2018-19. With regard to

Khatima, the Commission has considered allowable R&M Expenses for FY 2018-19 equal to 2% of

the opening GFA of that year. With regard to other Stations, wherein the RMU works shall be

completed in FY 2018-19, the Commission on the provisional basis has considered R&M expenses



for FY 2018-19 based on the methodology provided in the Regulations. However, the Commission

shall determine the same during the APR/truing-up Review and sharing of any gain or loss on

account of such re-consideration shall not be allowed.

Based on above, the R&M expenses approved by the Commission for FY 2018-19 is as shown

in the Table below:

Table 4.25: R&M Expenses for 9 LHPs for FY 2018-19 (Rs. Crore)



Revised Projections


Dhakrani 8.12 14.25 5.86

Dhalipur 14.49 7.93 9.46

Chibro 9.97 13.73 9.79

Khodri 3.41 4.84 3.48

Kulhal 3.55 5.02 2.23

Ramganga 1.58 4.28 1.54

Chilla 15.45 16.74 15.18

Maneri Bhali-I 16.54 12.06 11.71

Khatima 2.22 4.03 3.25

Total 75.33 82.88 62.50

4.3.7.3 A&G expenses

The Petitioner in its APR Petition has revised A&G expenses on the basis of actual A&G

expenses for FY 2016-17. The Petitioner has computed the A&G expenses for FY 2018-19 by

escalating the actual A&G expenses for FY 2016-17 by WPI escalation rate of 1.07% per annum.

Accordingly, the Petitioner has proposed the A&G expenses of Rs. 33.82 Crore for FY 2018-19.

The Commission in its TVS meeting held on 04.01.2018 directed the Petitioner to provide the

status of implementation of ERP works along with details of expenditure for FY 2017-18 and FY

2018-19. In response, the Petitioner vide its letter dated 15.01.2018 submitted that the Contract

Agreement with M/s Accenture Solutions Pvt. Ltd. (The System Integrator) has been signed on

29.04.2017 and thereafter, Inception report for implementation of ERP system has been submitted

on 12.05.2017. The Petitioner further submitted that ERP licences have been installed on the

Development server on 09.08.2017 and thereafter, Business Blue Prints (BBPs) have been finalized

on 25.08.2017, based on which the ERP system is being developed by M/s Accenture. Further, the

Petitioner submitted that User Acceptance Test (UAT) is planned to be started in January, 2018 and

expected implementation date of the ERP system is April 1, 2018. Further, the Petitioner has

submitted the details of expected expenditure on ERP system as under:



Table 4.26: Expenses on ERP system as claimed by the Petitioner for 9 LHPs for FY 2018-19

S. No.

Details of Work

Capex. (in Rs. Crore) OPEX (in Rs. Crore)

Year 2017-18 Year

2018-19 Year

2018-19 Year

2019-20 Year

2020-21 Actual Upto

31.12.2017 1.1.18 to 31.3.18

1 Implementation of ERP system 11.291 7.63 3.81 3.48 3.68 3.78

2 Network Cost (MPLS VPN) 0.00 0.97 0.00 1.01 1.31 1.31

3 Internet Connectivity - - - 0.20 0.20 0.20

4 Data Centre/ Data Recovery Centre Cost

- - - 1.25 1.25 1.25

Total 11.29 8.60 3.81 5.94 6.44 6.53

In this regard, the Commission in its Tariff Order dated 29.03.2017 had stated as under:

“The Regulations provide for Provision in A&G expenses towards cost for initiatives or other one-

time expenses. The Petitioner has proposed ERP implementation in the second Control Period. The

Commission is of the view that Capital Cost of such initiatives doesn’t fall under A&G expenses

and should be capitalised as such works are of capital nature which are to be incurred as onetime

expenses. The Commission taking cognisance of the need of such system grants in-principle

approval for the scheme. The expenses on account of the same shall be considered on the basis of

actual subject to prudence check.”

As discussed in Chapter 3, the Commission has approved the revision in A&G expenses for

FY 2016-17, on account of revised WPI Indices in accordance with the UERC Tariff Regulations,

2015. Thereafter, in accordance with the UERC Tariff Regulations, 2015, the gross A&G expenses

thus arrived for FY 2016-17 has been escalated by appropriate WPI inflation to arrive at A&G

expenses for FY 2017-18 and FY 2018-19.

The Regulations provide for Provision in A&G expenses towards cost for initiatives or other

one-time expenses. The Petitioner has proposed ERP implementation from FY 2018-19. The

Commission is of the view that such initiatives doesn’t fall under A&G expenses and should be

capitalised as such works are of capital nature which are to be incurred as one-time expenses. The

Commission has, therefore, not considered the provisions made towards ERP implementation as

A&G expenses. However, the same shall be considered as additional capitalisation once

implemented and after carrying out due prudence check at the time of Annual Performance

Review/true-up.

The A&G expenses approved by the Commission for FY 2018-19 is as shown in the Table

below:



Table 4.27: A&G Expenses for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating

Stations Approved in MYT

Order Revised

Projections Approved in this

Order

Dhakrani 1.34 1.89 0.50

Dhalipur 1.59 2.05 0.86

Chibro 5.18 7.63 3.34

Khodri 2.60 4.83 1.50

Kulhal 0.94 1.70 0.42

Ramganga 3.47 5.50 2.35

Chilla 4.03 5.19 2.47

Maneri Bhali-I 2.92 3.33 1.41

Khatima 1.25 1.70 0.44

Total 23.31 33.82 13.29

In addition to the above, the Commission shall allow UJVN Ltd. to recover Petition filing

fees on the basis of actual at the time of truing-up.

4.3.7.4 O&M expenses

Based on the above discussions, the O&M expenses approved by the Commission for FY

2018-19 is as shown in the Table below:

Table 4.28: O&M Expenses for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating


Order Revised


Order

Dhakrani 22.90 29.94 15.86

Dhalipur 31.16 21.34 24.65

Chibro 62.76 66.22 52.76

Khodri 31.12 31.73 26.87

Kulhal 14.33 14.20 11.10

Ramganga 36.78 41.00 30.48

Chilla 58.44 55.30 46.60

Maneri Bhali-I 49.44 39.98 34.28

Khatima 20.07 18.84 15.46

Total 327.00 318.56 258.06

B. Maneri Bhali-II

The Petitioner in its instant Petition for projecting the O&M Expenses for MB-II for FY 2018-

19 has considered actual O&M expenses of FY 2016-17 based on the audited accounts and escalated

the same with appropriate CPI and WPI Indices, K-Factor and Gn to derive at the O&M expenses

for FY 2018-19 as discussed in the above paras for 9 LHPs.

The Commission has adopted the same approach as discussed above in case of 9 LHPs and

has, accordingly, approved the O&M expenses for MB-II for FY 2018-19 as shown below:



Table 4.29: O&M expenses approved by the Commission for MB-II for FY 2018-19 (Rs. Crore)

Particulars Approved in MYT Order dated

05.04.2016 Claimed



R&M Expenses 26.76 20.07 26.55

A&G Expenses 5.47 5.32 5.40

Total 60.43 50.09 53.79

4.3.8 Interest on Working Capital


The Petitioner has submitted that the interest on working capital for FY 2018-19 has been

proposed in accordance with Regulation 33 of UERC Tariff Regulations, 2015.

Regulation 33 of UERC Tariff Regulations, 2015 specifies as follows:

“Rate of interest on working capital shall be on normative basis and shall be equal to the State

Bank Advance Rate (SBAR) of State Bank of India as on the date on which the application for

determination of tariff is made.

...

In case of hydro power generating stations and transmission system and SLDC, the working

capital shall cover:

(i) Operation and maintenance expenses for one month

(ii) Maintenance spares @ 15% of operation and maintenance expenses

(iii) Receivables equivalent to two months of the annual fixed charges”

The Petitioner has further submitted that it has considered the rate of interest on working

capital equal to SBI PLR of 14.05% in accordance with the Regulations. The Petitioner further

submitted documentary proof towards rate of interest on working capital considered.

The Commission has determined the interest on working capital for FY 2018-19 in

accordance with the aforesaid Regulations and is as discussed below.

4.3.8.1 One Month O&M Expenses

The annual O&M expense approved by the Commission is Rs. 258.06 Crore for FY 2018-19.

Based on the approved O&M expenses, one month’s O&M expenses work out to Rs. 21.51 Crore for

FY 2018-19.



4.3.8.2 Maintenance Spares

The Commission has considered the maintenance spares as 15% of O&M expenses in

accordance with UERC Tariff Regulations, 2015, which work out to Rs. 38.71 Crore for FY 2018-19.

4.3.8.3 Receivables

The Commission has approved the receivables for two months based on the approved ARR

of Rs. 334.52 Crore for FY 2018-19, which works out to Rs. 55.75 Crore for FY 2018-19.

Based on the above, the total working capital requirement of the Petitioner for FY 2018-19

works out to Rs. 115.97 Crore. The Commission has considered the rate of interest on working

capital as 13.70% equal to State Bank Advance Rate (SBAR) as prevalent on the date of filing of this

Petition, and, accordingly, the interest on working capital works out to Rs. 15.89 Crore for FY 2018-

19. The interest on working capital approved by the Commission for FY 2018-19 is as shown in the

Table below:

Table 4.30: Interest on Working Capital approved by the Commission for 9 LHPs for FY 2018-19 (Rs. Crore)

Generating Stations

1 month O&M

Expenses

Maintenance Spares @15%

of O&M





Claimed Approved

Dhakrani 1.32 2.38 2.94 6.64 1.36 1.86 0.91

Dhalipur 2.05 3.70 5.32 11.07 2.04 1.35 1.52

Chibro 4.40 7.91 10.06 22.37 3.71 4.32 3.07

Khodri 2.24 4.03 5.53 11.80 1.88 2.20 1.62

Kulhal 0.92 1.66 2.08 4.67 0.89 0.95 0.64

Ramganga 2.54 4.57 5.25 12.36 2.10 2.60 1.69

Chilla 3.88 6.99 10.37 21.25 3.69 3.59 2.91

MB-I 2.86 5.14 6.94 14.94 3.18 2.65 2.05

Khatima 1.29 2.32 7.26 10.87 1.55 1.93 1.49

Total 21.51 38.71 55.75 115.97 20.41 21.44 15.89

B. Maneri Bhali-II

As regards the interest on working capital for MB-II, the Commission has computed the

same based on the UERC Tariff Regulations, 2015 and considering the prevailing State Bank

Advance Rate (SBAR) of 13.70% as on the date of filing of this Petition. The summary of the interest

on working capital for MB-II for FY 2018-19 is shown in the Table below:



Table 4.31: Interest on Working Capital approved by the Commission for MB-II for FY 2018-19 (Rs. Crore)

Generating Stations

1 month O&M

Expenses

Maintenance Spares @15% of

O&M





Claimed Approved

MB-II 4.48 8.07 39.21 51.77 7.59 9.21 7.09

4.3.9 Non-Tariff Income

A. Old Nine Generating Station

Regulation 46 of UERC Tariff Regulations, 2015 specifies as follows:

“46. Non Tariff Income

The amount of non-tariff income relating to the Generation Business as approved by the Commission

shall be deducted from the Annual Fixed Charges in determining the Net Annual Fixed Charges of the

Generating Company.

Provided that the Generating Company shall submit full details of its forecast of non tariff income to

the Commission in such form as may be stipulated by the Commission from time to time.

The indicative list of various heads to be considered for non tariff income shall be as under: a) Income

from rent of land or buildings;

b) Income from sale of scrap;

c) Income from statutory investments;

d) Interest on delayed or deferred payment on bills;

e) Interest on advances to suppliers/contractors;

f) Rental from staff quarters;

g) Rental from contractors;

h) Income from hire charges from contactors and others;

i) Income from advertisements, etc.;

j) Any other non- tariff income.

Provided that the interest earned from investments made out of Return on Equity corresponding to

the regulated business of the Generating Company shall not be included in Non-Tariff Income.”



The Petitioner has proposed a non-tariff income of Rs. 22.03 Crore for FY 2018-19 as

approved by the Commission in MYT Order dated 05.04.2016. The Commission in this regard

observes that most of the 9 LHPs are under RMU which involves replacement of old and obsolete

equipment which will be eventually disposed off as it gets de-capitalised. The Petitioner in this

regard is directed to ensure proper accounting with regard to disposal of such assets including

sale of scrap and submit the same separately along with subsequent tariff filings.

The Commission provisionally accepts the Non Tariff Income projected by the Petitioner for

FY 2018-19. The same shall, however, be trued-up based on the actual audited accounts for the year.

Table 4.32: Non-Tariff Income for 9 LHPs for FY 2018-19 (Rs. Crore) Name of the Generating


Order Revised


Order

Dhakrani 0.62 0.62 0.62

Dhalipur 0.91 0.91 0.91

Chibro 4.20 4.20 4.20

Khodri 2.01 2.01 2.01

Kulhal 0.50 0.50 0.50

Ramganga 3.96 3.96 3.96

Chilla 2.47 2.47 2.47

M Bhali I 5.96 5.96 5.96

Khatima 1.40 1.40 1.40

Total 22.03 22.03 22.03

Further, as discussed in Truing-Up section and the Commission’s Order dated 21.10.2009,

the provision of the Regulations permitting adjustment of non-tariff income from AFC is not in

consonance with the 1972 Agreement with HP as the components of cost of generation specified in

Schedule-VIII of The Electricity (Supply) Act, 1948 considers only the cost components and does not

provide for adjustment of any kind of revenue. Therefore, in order to have conformity with the

provisions of the said agreement, the Commission has not considered any adjustment of proportion

of non-tariff income for HPSEB share of AFC based on its share of generation in LHPs namely

Chibro, Khatima, Dhalipur, Dhakrani & Kulhal and has considered the entire amount of the above

said non tariff income for adjustment in UPCL’s share of AFC.

B. Maneri Bhali-II

The Petitioner has proposed a non-tariff income of Rs. 2.73 Crore for FY 2018-19 as approved

in the MYT Order dated 05.04.2016. The Commission provisionally accepts the same for FY 2018-19.

The same shall, however, be trued-up based on the actual audited accounts for the year.



Table 4.33: Non-Tariff Income for MB-II for FY 2018-19 of second Control Period (Rs. Crore)


Approved in MYT Order dated 05.04.2016

Claimed Approved in this

Order

MB-II 2.73 2.73 2.73

4.3.10 Annual Fixed Charges, Capacity Charge and Energy Charge Rate (ECR) for FY 2018-19

A. Old nine Generating Stations

Based on the above analysis for all the heads of expenses of AFC, the Commission has

approved the Annual Fixed Charges (AFC) of UJVN Ltd. for FY 2018-19 attributable to its two

beneficiaries. The Commission has allocated the AFC among the two beneficiaries of the Petitioner,

viz. UPCL and HPSEB, based on their share in Dhakrani, Dhalipur, Chibro, Khodri and Kulhal and

100% on UPCL for other plants. Further, as discussed above, the Commission has adjusted the

entire Non-Tariff Income in the AFC of UPCL.

Regulation 50 of UERC Tariff Regulations, 2015 specify as follows:

“50. Computation and Payment of Capacity Charges and Energy Charges for Hydro Generating

Stations

(1) The Annual Fixed Charges of Hydro Generating Station shall be computed on annual basis,

based on norms specified under these Regulations, and recovered on monthly basis under

capacity charge (inclusive of incentive) and Energy Charge, which shall be payable by the

beneficiaries in proportion to their respective percentage share/allocation in the saleable capacity

of the generating station, i.e. in the capacity excluding the free power to the home State.

(2) The capacity charge (inclusive of incentive) payable to a hydro generating station for a calendar

month shall be:

AFC x 0.5 x NDM / NDY x (PAFM / NAPAF) (in Rupees)

Where,

AFC = Annual fixed cost specified for the year, in Rupees.

NAPAF = Normative plant availability factor in percentage

NDM = Number of days in the month

NDY = Number of days in the year

PAFM = Plant availability factor achieved during the month, in Percentage



(3) The PAFM shall be computed in accordance with the following formula:

PAFM

Where,

AUX = Normative auxiliary energy consumption in percentage

DCi = Declared capacity (in ex-bus MW) for the ith day of the month which the station can deliver

for at least three (3) hours, as certified by the Uttarakhand State Load Despatch Centre after the day

is over.

IC = Installed capacity (in MW) of the complete generating station

N = Number of days in the month

(4) The Energy Charge shall be payable by every beneficiary for the total energy supplied to the

beneficiary, during the calendar month, on ex-power plant basis, at the computed Energy Charge rate.

Total Energy Charge payable to the Generating Company for a month shall be:

(Energy Charge Rate in Rs. / kWh) x {Energy supplied (ex-bus)} for the month in kWh} x

(100- FEHS)/100

(5) Energy Charge Rate (ECR) in Rupees per kWh on ex-power plant basis, for a Hydro Generating

Station, shall be determined up to three decimal places based on the following formula, subject to the

provisions of sub-Regulation (7):

ECR = AFC x 0.5 x 10 / {DE x (100 – AUX) x (100 –FEHS)}

Where,

DE = Annual Design Energy specified for the hydro generating station, in MWh.

FEHS = Free Energy for home State, in percent, as applicable”

In accordance with the above Regulations, the Annual Fixed Charge (AFC) for FY 2018-19

for 9 LHPs as approved by the Commission is shown in the Table below:



Table 4.34: Approved AFC of 9 LHPs of UJVN Ltd. for FY 2018-19 Name of

the Generating

Station

Depreciation (Rs.Cr.)

Interest on Loan (Rs. Cr)

Interest on working Capital (Rs. Cr.)

O&M Expenses (Rs. Cr.)

RoE (Rs. Cr.)

Gross Annual

Fixed Cost (Rs. Cr.)

Gross AFC (UPCL) (Rs.

Cr.)

Non-Tariff Income (Rs. Cr.)

Net AFC (UPCL) (Rs. Cr.)

Gross/Net AFC

(HPSEB) (Rs. Cr.)

Dhakrani 0.38 0.23 0.91 15.86 0.87 18.25 13.69 0.62 13.07 4.56

Dhalipur 2.04 1.89 1.52 24.65 2.71 32.81 24.60 0.91 23.69 8.20

Chibro 1.66 1.20 3.07 52.76 5.88 64.57 48.43 4.20 44.23 16.14

Khodri 1.72 0.32 1.62 26.87 4.66 35.18 26.39 2.01 24.38 8.80

Kulhal 0.21 0.08 0.64 11.10 0.98 13.01 10.41 0.50 9.91 2.60

Ramganga 0.33 0.13 1.69 30.48 2.80 35.43 35.43 3.96 31.47 0.00

Chilla 3.37 4.61 2.91 46.60 7.21 64.70 64.70 2.47 62.23 0.00

MB-I 4.16 0.00 2.05 34.28 7.13 47.63 47.63 5.96 41.67 0.00

Khatima 8.17 10.78 1.49 15.46 9.07 44.97 44.97 1.40 43.57 0.00

Total 22.04 19.25 15.89 258.06 41.31 356.55 316.25 22.03 294.22 40.30

The summary of Capacity Charge and Energy Charge Rate (ECR) for 9 LHPs for FY 2018-19

is as given in the Table below:

Table 4.35: Approved Capacity Charge and Energy Charge Rate for 9 LHPs for FY 2018-19


Station

Net AFC

(UPCL) (Rs. Cr.)

Capacity Charge (UPCL) (Rs.Cr.)

Saleable Primary Energy

(UPCL)(MU)

Energy Charge Rate

(UPCL) (Rs./kWh)

Gross/Net AFC (HPSEB)

(Rs. Cr.)

Capacity Charge

(HPSEB) (Rs. Cr.)

Saleable Primary Energy

(HPSEB)(MU)

Energy Charge Rate

(HPSEB) (Rs./kWh)

Dhakrani 13.07 6.53 116.84 0.559 4.56 2.28 38.95 0.586

Dhalipur 23.69 11.85 143.00 0.829 8.20 4.10 47.67 0.860

Chibro 44.23 22.11 555.75 0.398 16.14 8.07 185.25 0.436

Khodri 24.38 12.19 256.16 0.476 8.80 4.40 85.39 0.515

Kulhal 9.91 4.95 122.26 0.405 2.60 1.30 30.57 0.426

Ramganga 31.47 15.74 308.82 0.510 0.00 0.00 0.00 0.000

Chilla 62.23 31.12 664.57 0.468 0.00 0.00 0.00 0.000

MB-I 41.67 20.83 392.23 0.531 0.00 0.00 0.00 0.000

Khatima 43.57 21.78 233.23 0.934 0.00 0.00 0.00 0.000

Total 294.22 147.11 2792.86 0.568 40.30 20.15 387.81 0.314

B. Maneri Bhali-II

Based on the analysis of all the heads of expenses of AFC, the Commission has approved the

Annual Fixed Charges (AFC) for MB-II for FY 2018-19. The Commission to arrive at the Net AFC for

MB-II has adjusted the Non-Tariff Income in the AFC of MB-II. The summary of Annual Fixed

Charge, Capacity Charge and Energy Charge rate for MB-II for FY 2018-19 of the second Control

Period is given in the Table below:



Table 4.36: Approved AFC, Capacity Charge and Energy Charge Rate for MB-II for FY 2018-19

Ye

ar

De

pre

cia

tio

n

Inte

rest

on

Lo

an (

Rs.

Cr.

)

Inte

rest

on

wo

rkin

g

Ca

pit

al

(R

s. C

r.)

O&

M E

xp

en

ses

(Rs.

Cr.

)

Ro

E (

Rs.

Cr.

)

Gro

ss A

nn

ua

l F

ixe

d

Co

st (

Rs.

Cr.

)

No

n-T

ari

ff I

nco

me

(R

s. C

r.)

Ne

t A

FC

(R

s. C

r.)

Ca

pa

city

Ch

arg

e

(Rs.

Cr.

)

Sa

lea

ble

Pri

ma

ry

En

erg

y (

MU

)

En

erg

y C

ha

rge

Ra

te

(Rs.

/kW

h)

FY 2018-19 63.00 65.21 7.09 53.79 48.92 238.02 2.73 235.29 117.64 1550.44 0.76

Subject to the provisions of the Regulations, the secondary energy rate shall be equal to rate

derived based on the original design energy and shall be applicable when the Saleable Primary

Energy exceeds the Original Design Energy. In case the rate exceeds Rs. 0.90/kWh, the secondary

energy rate shall be equal to Rs. 0.90/kWh.


5 Directives

5.1 Compliance to the Directives Issued in Order dated 05.04.2010.

5.1.1 Performance Improvement Measures

The Commission in its Tariff Order dated 21.10.2009 and in its subsequent Orders gave

directions to the Petitioner on the performance improvement measures by conducting a

benchmarking study of its plants with other utilities like NHPC, SJVNL, etc. and explore further

scope of improvement in technical losses and manpower rationalisation including incentive

mechanism.

In compliance to the above direction, the Petitioner had submitted the benchmarking study

Report and had also submitted the action taken as well as action plan on the basis of benchmarking

study specifically with regard to manpower deployment & rationalization and reduction in planned

maintenance days. Accordingly, the Commission in its MYT Order dated 05.04.2016 had directed

the Petitioner to submit details of the measures taken towards manpower deployment,

rationalization and data to support reduction in planned maintenance days and the same was

submitted by the Petitioner within directed timeframe.

Further, during the tariff proceedings of APR Order for FY 2016-17 the Petitioner had

submitted that it has already reduced downtime from annual maintenance from 60 days to 45 days

and is further planning to reduce it below 35 days by maintaining proper spares inventory in order

to reduce the downtime. The Commission on perusal of the planned outages/maintenance days

proposed by the Petitioner for FY 2017-18, had observed that the planned outages/maintenance

days for various LHPs for FY 2017-18 had not reduced to the optimum levels. In this regard, the

Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner to submit details of the

measures to support reduction in planned maintenance days as under:

“The Commission is of the view that UJVN Ltd. being a commercial entity should focus on reducing

its down-time by reducing its planned maintenance periods by adopting best practices of other generating

companies such as NHPC, SJVNL etc. Therefore, the Commission again directs the Petitioner to submit

details of the measures to support reduction in planned maintenance days within 3 months from date of this

Order.”



In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 submitted

that all the power plants of UJVN Ltd. have become very old and efforts are being made to reduce

the maintenance period. Further, the Petitioner submitted that it is undertaking RMU of the old

power plants in sequential manner, and after completion of RMU, the maintenance period is likely

to be reduced. The Commission has taken note of the Petitioner’s reply.

5.1.2 Transfer Scheme

The Commission in its Tariff Order dated 05.04.2010 and in its subsequent Orders gave

suitable directions to expedite finalisation of transfer scheme. In compliance, the Petitioner in its

APR Petition for FY 2014-15 submitted the initiatives taken by it to finalize the transfer scheme.

Accordingly, the Commission in its APR Order dated 10.04.2014 had directed the Petitioner as

under:

“The Commission directs UJVN Ltd. that till the time transfer scheme is finalised it should submit

the quarterly progress report to the Commission”

In compliance to the above direction, the Petitioner had submitted the Quarterly Progress

Report vide letter dated 04.08.2015 stating that a Consultant was appointed to determine the value

of assets and liabilities proposed to be transferred from UPJVNL to UJVN Ltd. and also to finalise

the transfer scheme with UPJVNL, the final outcome of the same has not been brought before the

Commission. Therefore, the Commission in its MYT Order dated 05.04.2016 had directed the

Petitioner as under:

“...the Commission again directs UJVN Ltd. that till the time transfer scheme is finalised it should

continue to submit the updated quarterly progress report to the Commission.”

In compliance to the above direction, the Petitioner had submitted that there is no

disagreement on the value of current assets and current liabilities but UPJVNL emphasized mainly

on acceptance of LIC Loan of Rs. 352.59 Crore, GPF trust liabilities of Rs. 42.63 Crore and CWIP of

Rs. 128.55 Crore on account of Interest of Loan etc. which has already been disagreed by UJVNL

and informed to them. Further, with regard to LIC loan of Rs 352.59 Crore, the Petitioner had

submitted that since the amount of loan transferred to the State of Uttarakhand was not utilized for

MB-II HEP, as such GoU had not consented to accept the said liability and decided to contest the

transfer of the said loan to GoU in the APEX Court. The Petitioner further submitted that

5. Directives


simultaneously the matter was taken up by Govt. of Uttarakhand with Central Govt. for review of

LIC loan allocation. Moreover, with regard to Remittances of GPF liabilities of Rs. 135.78 Crore, the

Petitioner had submitted that approval for filing the writ Petition had been granted by UJVNL

Employee Trust (GPF) and drafting of the writ Petition was under process.

In this regard, the Commission in its Tariff Order dated 29.03.2017 had directed the

Petitioner as follows:

“...the Commission directs the Petitioner to rigorously follow-up with the concerned authorities for

finalization of transfer scheme alongwith issues of GPF trust and LIC loan and submit updated

quarterly progress report to the Commission.”

In compliance of the above direction, the Petitioner has submitted the Quarterly Progress

Report for the first quarter vide its letter dated 10.08.2017 and second quarter vide its letter dated

27.10.2017, wherein, the Petitioner has submitted that the issues regarding transfer scheme viz. (a)

liability of LIC loan of Rs. 352.59 Crore regarding MB-II LHP and (b) remittance of GPF liabilities of

Rs. 135.78 Crore are yet to be finalized. The Petitioner in compliance to the above directive

submitted that a meeting was held between Hon’ble Chief Ministers of Uttarakhand and Uttar

Pradesh on April 10, 2017 on division of assets and liabilities between State of Uttarakhand and

Uttar Pradesh and therein matters pertaining to UJVN Ltd. and UPJVNL were discussed. Also,

further meeting is scheduled to be held between Chief Secretary of both the States in near future.

Further, the Petitioner vide letter no. 276/UJVNL/D(F)/G-4 dated 07.07.2017 has apprised to the

Secretary Energy (Govt. of Uttarakhand) for remittance of the outstanding amount of GPF liabilities

of Rs. 146.42 Crore as on 30.6.2017. The Commission has noted the submissions of the Petitioner

and directs Petitioner to closely follow up with issue and submit quarterly status report to the

Commission. However, the Commission would like to point out that there has been an

inordinate delay in the finalization of the transfer scheme which is attributable to the Petitioner,

hence, any consequential claim arising due to finalization of the transfer scheme shall be

considered on merits by the Commission without any carrying cost on the same.



5.2 Compliance to directives issued in Order dated 10.05.2011

5.2.1 Colony Consumption

In compliance of the directions issued in the previous Tariff Orders, the Petitioner vide letter

dated 29.07.2015 submitted that energy meters have been installed for all the connections to the

respective colonies and thus 100% metering has been ensured.

Accordingly, the Commission in its MYT Order dated 05.04.2016 directed the Petitioner as

follows:

“The Commission has taken note of the same and directs the Petitioner to ensure proper accounting of

the energy consumed by the employees and furnish the annual details alongwith the tariff Petition.”

In response, the Petitioner vide its reply letter dated 07.12.2016 had submitted the energy

account statement for all the 10 LHPs and DDD Dakpathar. Accordingly, the Commission in its

Tariff Order dated 29.03.2017 had directed the Petitioner as under:

“Since, 100% metering of its employees has been done, therefore, the Petitioner is directed to ensure

the meter reading of each employee on monthly basis and keep proper record of the same and submit

the colony-wise consumption of the employees alongwith the next tariff filing.”

In compliance to the above direction, the Petitioner has submitted the actual energy accounts

for FY 2016-17 and FY 2017-18 (from April, 2017 to September, 2017) of each Power House. In this

regard, the Commission directs the Petitioner to submit the colony-wise consumption of the

employees on monthly basis along with the next tariff filing.

5.2.2 Income from electricity distribution to Sundry Consumers

The Commission in its Tariff Order dated 10.05.2011 observed that the Petitioner is

maintaining distribution system in three of its Plant colonies and supplying power to sundry

consumers in these colonies. Since, sale of power to other consumers by a generating company is

not permissible under the Act, therefore, the Commission in its subsequent Tariff Orders directed

the Petitioner to handover the distribution of other consumers to UPCL. In absence of any progress

in the matter, the issue was taken up during the 6th Co-ordination Forum Meeting held on

06.01.2015, in which the Commission directed both the Managing Directors to resolve the matter on

top priority and asked Secretary, Energy, GoU to monitor the progress of the same. The

5. Directives


Commission accordingly in its APR Order dated 11.04.2015 directed the Petitioner as follows:

“In this regard, the Commission further directs the Petitioner to submit a quarterly status of the

progress till the entire handing over of distribution business is completed.”

The Commission had further reviewed the issue during a joint meeting held with UPCL and

UJVN Ltd. on 28.10.2015, wherein the Commission had directed that:

“... UJVN Ltd. and UPCL to nominate atleast 02 Officers not below the rank of DGM/SE from their

Organization & submit their joint report for ensuring the compliance of the Commission’s directions

latest by 30.11.2015”

Thereafter, both the utilities i.e. the Petitioner and UPCL nominated its Officers for ensuring

the compliance, however, despite the above steps of the utilities it was observed that entire handing

over/taking over of distribution business had not taken place, even after sufficient time was

provided to both the utilities. Further, UPCL in its submission had stated that UJVN Ltd. did not

provide the documents pertaining to the sundry consumer’s viz. Application form, Security deposit,

verification details etc. while, the Petitioner in its submission had stated that UPCL had never

informed for providing such documents. Accordingly, the Commission in its MYT Order dated

05.04.2016 had directed the Petitioner as follows:

“In this regard, the Commission is of the view that sufficient time has already been provided to both

the utilities, therefore, directs the Petitioner and UPCL to comply with the directions of the

Commission in all respect by 30.05.2016 and submit compliance report in the matter by 15.06.2016,

failing which appropriate action shall be initiated against both the utilities in accordance with the

provisions of the Act/Regulations.

In compliance to this the Petitioner vide its letter dated 26.07.2016 submitted the status

report which was not found satisfactory by the Commission.

The Commission further observed that despite several directions in this regard, the

Petitioner and UPCL have failed to comply with the provisions of the Act and also failed to comply

with the directions of the Commission issued from time to time in the matter. However, the

Commission took a lenient view and gave final opportunity to the Petitioner and UPCL directing

both the Utilities in its Tariff Order 29.03.2017 to:

“… complete the handing over/taking over of distribution business in all respect by 30.06.2017 and



submit compliance report in the matter by 15.07.2017, failing which the appropriate action shall be initiated

against the Managing Directors and concerned Nodal Officers responsible for the same in accordance with the

provisions of the Act/Regulations.”

However, despite the aforesaid direction and the Commission’s considerate & lenient view

in the matter both the Petitioner and UPCL have failed to ensure compliances and had taken wrong

advantage of Commission’s considerate view in the matter. Taking cognizance of the non-

compliance by the Utilities and its Nodal Officers, the Commission initiated suo-moto proceedings

against the Managing Directors and the Nodal Officers of both the Utilities and issued Show Cause

Notices. The replies to the Show Cause Notices have been received to the Commission and are

being examined.

Since Suo-Moto proceeding in the matter has been initiated, therefore, further necessary

directions would be issued by the Commission through a separate Order after completion of the

proceedings.

5.3 Compliance to the Directives Issued in MYT Order dated 06.05.2013

5.3.1 Design Energy

With respect to the design energy of 9 LHPs, earlier the Petitioner in its first MYT Petition

submitted that the DPRs for existing 9 LHPs were not available with it and therefore, expressed its

inability to submit the same. The Commission, accordingly, directed the Petitioner in its MYT Order

dated 06.05.2013 as follows:

“...the Commission directs UJVN Ltd. to arrange the Detailed Project Report for each of its hydro

generating stations and submit the same to the Commission along with first Annual Performance

Review (APR) Petition for the Control Period.“

In response, the Petitioner submitted that since the DPRs of the 9 LHPs were not available

with UJVN Ltd., it had requested the Head of Department, Irrigation Department, Uttarakhand

vide letter No. 1240 & 1906 dated 10.06.2013 & 26.08.2013 respectively and Engineer-in-Chief &

Head of Department, Irrigation Department–Uttar Pradesh vide letter no. 1247/UJVNL/D(O)/Q-5

dated 11.06.2013, to provide copies of original DPRs of the Power Stations of UJVN Ltd., however,

no response was received. In this regard, the Commission in its APR Orders dated 10.04.2014 and

11.04.2015, accordingly, directed as follows:

5. Directives


“The Commission ...directs the Petitioner to pursue the above matter with appropriate authorities to

arrange the DPRs for each of its hydro generating stations and submit the quarterly progress report

to the Commission.”

As the Petitioner had not submitted any status report for the same, the Commission in its

MYT Order dated 05.04.2016 had directed the Petitioner as follows:

“The Commission in this regard, again directs the Petitioner to nominate/depute senior officers to

pursue the above matter personally with appropriate authorities to arrange the DPR for each of its 9

Large Hydro Generating Stations by August, 2016 positively.”

In compliance to this the Petitioner vide its letter no. 4087 dated 27.08.2016 had submitted

the DPRs for two of its Hydro Power Stations, namely Chibro and Khodri LHPs with the comment

that “...we are not certain whether the DPRs are final editions or not…”.Accordingly, the Commission

vide its Tariff Order dated 29.03.2017 had directed the Petitioner as follows:

“In this regard, the Commission again directs the Petitioner to nominate/depute senior officers to

pursue the above matter personally with appropriate authorities to arrange the DPR for each of its 9

Large Hydro Generating Stations by 30.09.2017 positively.

In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 has

submitted that efforts are being made to trace out the original DPRs of old LHPs of UJVN Ltd.

However, no DPR except Chibro and Khodri could be found which have already been submitted to

the Commission. The Petitioner further submitted that in case the DPR of any of the other plants

becomes available the same shall be submitted with the Commission. On examination of the

aforesaid submission of the Petitioner, the Commission re-directs the Petitioner to

nominate/depute senior officers to pursue the above matter personally with appropriate

authorities to arrange the DPR for each of its 9 Large Hydro Generating Stations along with the

next Tariff Petition.

5.4 Directives specifically issued in Meeting dated 04.09.2013

5.4.1 Status of upcoming projects

The Commission in its previous Tariff Orders had been directing the Petitioner to submit

quarterly progress report of the upcoming projects, without fail.



In compliance to the above, the Petitioner submitted the quarterly progress report from time

to time. In line with the same the Petitioner is directed to submit the quarterly progress report on

status of all upcoming projects without fail.

5.4.2 Utilisation of Expenses approved by the Commission

As per directions issued by the Commission in the previous Tariff Orders, UJVN Ltd. has

been submitting the Annual Budget for the ensuing year for each and every Plant. In line with the

same the Commission further directs the Petitioner to submit annual budget for future financial

years by 31st May of the respective financial year.

5.5 Compliance to the Directives Issued in Tariff Order dated 11.04.2015

5.5.1 View of State Advisory Committee

The Commission in APR Order dated 11.04.2015 had stated that it agrees with the views of

State Advisory Committee members that UJVN Ltd. has been continuously raising same issues in its

ARR and Tariff Petitions on which the Commission has already made its decision and given its

ruling in the previous Tariff Orders. The Commission had accordingly directed the Petitioner that:

“...not to raise such issues again in the subsequent ARR and Tariff Petitions on which the

Commission has already taken the decision and given its ruling in the previous Tariff Orders, failing

which, the Commission may reject the Petition upfront.”

The Petitioner in its Petition for tariff determination for the Control Period FY 2016-17 to FY

2018-19 had again claimed return on PDF amount despite the above directions. Since the

Commission had already given its ruling in previous Tariff Orders and had not considered the

same. Accordingly, the Commission in its MYT Order dated 05.04.2016 had re-directed the

Petitioner as follows:

“Hence the Commission again directs the Petitioner not to raise such issues again in the subsequent

ARR and Tariff Petitions on which the Commission has already taken the decision and given its

ruling in the previous Tariff Orders.”

In compliance to the above directive, the Petitioner has submitted that it had filed review

Petition on 09.09.2015 against the Tariff Order dated 11.04.2015 before the Commission on several

issues including disallowance of Return on Equity (RoE) on the amount invested out of Power

5. Directives


Development Fund (PDF) for construction of MB-II HEP along with all necessary documentary

support. In this regard, the Commission vide its Order 22.01.2016 had rejected the issue of RoE on

investments made out of PDF. Subsequently, the Petitioner has filed appeals before the Hon’ble

Appellate Tribunal for Electricity (APTEL), however, no stay has been granted by Hon’ble APTEL.

Despite the repeated directions issued in the matter in the Commission’s previous Tariff Orders,

and pending decision of the Hon’ble APTEL on the Petitioner’s Appeal, raising the issue in the

instant Petition is not appropriate. Accordingly, the Commission in its Tariff Order dated 29.03.2017

had directed the Petitioner as follows:

“Hence the Commission further directs the Petitioner not to raise such issues again and again in the

subsequent ARR and Tariff Petitions on which the Commission has already taken the decision and

given its ruling in the previous Tariff Orders, till final decision of the Hon’ble APTEL in the matter.”

However, the Petitioner has again claimed RoE on investments made out of Power

Development Fund (PDF). Accordingly, as discussed in Chapter 3, the Commission in line with its

approach in previous orders disallows Return on Equity (RoE) on the amount invested out of PDF

for construction of MB-II HEP. Further, the Commission re-directs the Petitioner not to raise such

issues again and again in the subsequent ARR and Tariff Petitions on which the Commission

has already taken the decision and given its ruling in the previous Tariff Orders, till final

decision of the Hon’ble APTEL in the matter.

5.6 Compliance to the Directives Issued in Tariff Order dated 29.03.2017

5.6.1 Financial Relief towards restoration of damage caused due to Natural Calamity

The Commission in its Tariff Order dated 29.03.2017 had considered the funding of

additional capitalisation of around Rs. 40.37 Crore as grants as the same was used to restore the

damage caused due to natural calamity which occurred in FY 2013-14. In this regard, the

Commission had directed the Petitioner as follows:

“... The Commission has therefore considered the funding of the said additional capitalisation for FY

2015-16 as grants and directs the Petitioner to pursue the matter with the GoU and submit the

quarterly status report to the Commission.”

In this regard, no reply was received from the Petitioner, and therefore, the Commission in

TVS held on 04.01.2018 directed the Petitioner to submit the details of the amount received by GoU



on account of disaster relief for MB-II. In reply, the Petitioner in its letter dated 15.01.2018 submitted

that it has received Rs. 125.52 Crore on account of disaster relief of MB-II and the utilisation

certificates for Rs. 67.82 Crore has been given to Government of Uttarakhand.

On analysis of the above submissions, the Commission directed the Petitioner to provide

year-wise details of works executed from the aforesaid grant amount of Rs. 125.52 Crore with

details of amount capitalised /proposed to be capitalized in each financial year and also submit the

copies of the said utilization certificates. In reply, the Petitioner in its letter dated 08.03.2018 has

submitted the copies of the said utilisation certificates of Rs. 67.82 Crore and further submitted that

it has not claimed the amount of Rs. 67.82 Crore in this Petition as the same was used under disaster

for river training works of MB-I Station. The Petitioner further submitted that the grant amount of

Rs. 40.37 Crore was used for construction of protection wall around reservoir rim of Joshiyara

Barrage from 08.02.2014 to 31.07.2017 under balance capital works of MB-II Station. Also, the

Petitioner submitted that it has the balance available grant of Rs. 17.78 Crore for which the works

are in tendering stage. In this regard, the Commission further directs the Petitioner to submit the

details of financial year-wise expenditures made against the grant amount received from

GoU/GoI for respective works at the time of filing of true-up of FY 2017-18 and FY 2018-19.

5.6.2 Details of various offices and projects of UJVN Ltd.

The Commission vide its Tariff Order dated 29.03.2017 had directed the Petitioner as

follows:

“1) Detail of various offices of UJVN Ltd. and activities being run by them and number of staff in

each office.

2) Details of various projects being run/taken up by UJVN Ltd. and number of employees in each

such projects.”

In compliance to the direction, the Petitioner vide its letter dated 15.05.2017 has submitted

the staff strength of all its existing and new projects as on 31.03.2017.

5.6.3 RMU works of Khatima LHP

The Petitioner in its Petition for APR for FY 2016-17 had submitted that it had incurred

capitalisation of Rs. 49.77 Crore in FY 2016-17 (upto December 2016) and Rs. 49.66 Crore in January

5. Directives


2017 under RMU and other civil works in case of Khatima LHP. The Commission in its investment

approval dated 17.05.2015 has given in-principle approval of Rs. 256 Crore towards RMU works

subject to prudence check. In this regard, the Commission in its Tariff Order dated 29.03.2017 had

directed the Petitioner as follows:

“The Commission is of the view that the amount so far claimed till FY 2016-17 is well within the

approval however, since the final completion cost is yet to be finalised, the Commission shall carry out

detailed prudence check of RMU expenses once audited cost is available during the truing up of FY

2016-17. Accordingly, the Commission directs the Petitioner to submit the audited RMU expenses as

on date of completion of RMU works along with details of de-capitalisation in respect of the same as

soon as the same is available including quantity. The Petitioner is also directed to submit the details of

scrap available on de-capitalisation of old plant and machinery and expected time frame in which same

will be disposed.”

In compliance to the above direction, the Petitioner in its letter dated 14.12.2017 has

submitted the copy of the Order dated 24.06.2017 placed by UJVN Ltd. to M/s N. A. Steel,

Saharanpur for sale of 1260 items of old plant and machinery scrap amounting to Rs. 3.35 Crore

received for disposal after RMU of Khatima LHP. The copy of the order provides the details of such

1260 items with the clause of expected time frame for disposal of scrap within 90 days from the date

of order. Accordingly, as discussed in Chapter 3 of this Order, the Commission has considered an

additional non-tariff income of Rs. 3.35 Crore in case of Khatima LHP in FY 2016-17.

Further, as discussed in Chapter 3 and Chapter 4 of this Order, with regard to completion of

entire scope of works of Khatima RMU, the Commission is of the view that RMU works should be

completed as soon as possible and the same cannot be allowed to continue indefinitely.

Therefore, the Commission has taken a serious note of the same and directs the Petitioner

to complete all the works covered under RMU of Khatima LHP latest by the cut-off date, i.e.

31.03.2019, beyond which no expense (including IDC) in this regard would be allowed.

5.6.4 Impact of VII Pay Commission

The Commission in its Tariff Order dated 29.03.2017 had considered 15% towards the impact

of the VII Pay Commission for FY 2016-17 as submitted by UJVN Ltd. to estimate the net salary for

FY 2016-17 and the same was escalated in accordance with the Regulations considering the growth



factor and CPI inflation to arrive at the employee expenses for FY 2017-18. In this regard, the

Commission in its Tariff Order dated 29.03.2017 had directed the Petitioner as follows:

“...the Commission directs the Petitioner to maintain separate details of the amount paid as arrears to

its employees on account of implementation of the recommendations of VII Pay Commission”

In compliance to the above direction, the Petitioner vide its letter dated 17.11.2017 has

submitted the status/compliance report in which it had submitted that the GoU had issued orders

for VII Pay Commission, however, the same are yet to be issued by UJVN Ltd and therefore, no

payment made. Further, the Petitioner vide its letter dated 09.03.2018 has submitted that the arrears

of VII Pay Commission is Rs. 42.80 Crore till 31.12.2017, out of which Rs. 12.50 Crore arrears has

been paid during FY 2017-18 and Rs. 30.30 Crore are yet to be paid in FY 2018-19. In view of the

above, the Commission observes that the Petitioner has not submitted the detailed station wise

breakup of such arrears. Accordingly, the Commission in this Tariff Order has not considered the

impact of arrears of VII Pay Commission and directs the Petitioner to maintain Plant-wise

separate details of the amount paid as arrears to its employees on account of implementation of

the recommendations of VII Pay Commission.

5.6.5 Non Tariff Income

The Commission in its Tariff Order dated 29.03.2017 observed that most of the 9 LHPs are

under RMU which involves replacement of old and obsolete equipment which will be eventually

disposed off as it gets de-capitalised. In this regard, the Commission in its Tariff Order dated

29.03.2017 had directed the Petitioner as follows:

“In this regard, the Commission directs the Petitioner to maintain proper accounting with regard to

disposal of such assets including sale of scrap and submit the same separately along with subsequent

tariff filings.”

In compliance to the above direction, the Petitioner in its letter dated 14.12.2017 has

submitted that it has given an order to M/s N.A. Steel, Saharanpur amounting to Rs. 3.35 Crore for

sale of 1260 items of scrap material lying at Sharda Power House, Lohiahead (Khatima) of UJVN

Ltd. Further, the Petitioner has submitted that it shall maintain proper accounting with regard to

disposal of old plant and machinery scrap including sale of scrap and the same shall be informed

accordingly. As already discussed in Chapter 3 of this Order, the Commission has considered an

5. Directives


additional non-tariff income of Rs. 3.35 Crore in case of Khatima LHP. Further, the Commission re-

directs the Petitioner to maintain proper accounting with regard to disposal of such assets

including sale of scrap and submit the same separately along with subsequent tariff filings.

5.7 New Directives Issued

5.7.1 Expenses claimed under Major Overhauling

As discussed in Chapter 3 of this Order, it is observed that UJVN Ltd. is having different

approach for claiming expenses under major overhauling for different plants. In this regard, the

Commission is of the view that the nature of expense is independent of the values of expense being

incurred and thus the expenses should be booked under the respective head of ARR under which it

should actually fall. Hence the Commission has taken a view that all the works related to Major

overhaul claimed under additional capitalization be shifted to R&M expenses of UJVN Ltd. In

this regard, the Petitioner is directed to comply with the same philosophy in future claims as

well.

5.7.2 Balance Capital Works of MB-II HEP

The Commission in its Tariff Order dated 05.04.2016 had allowed expenses of Rs. 211.72

Crore, however, the Petitioner in its Tariff Petition for FY 2017-18 had revised the projection to Rs.

238.62 Crore to be incurred till FY 2018-19. The Petitioner in the current Tariff Petition has again

revised the projection to Rs. 252.07 Crore till FY 2018-19. The Commission has observed that the

Petitioner has incurred Rs. 217.05 Crore (i.e. Rs. 190.06 Crore upto 31.03.2016+Rs. 26.99 Crore in FY

2016-17) upto FY 2016-17 and is projecting to incur total Rs. 252.07 Crore by FY 2018-19 against

balance capital works of MB-II HEP. The Commission is of the view that the Petitioner is adopting a

callous approach and is deferring important works like testing of surge shaft, which is certainly not

in the interest of UJVN Ltd. Therefore, the Commission has taken a serious note of the same and

directs the Petitioner to complete all the works covered in the Petition of balance capital works

of MB-II HEP latest by 31.03.2019, beyond which no expense (including IDC) in this regard

would be allowed.

The Commission observed that the Petitioner has received an amount of Rs. 125.52 Cr. as

grant from GoI through GoU under disaster during 2013 for MB-II Project. In this regard, the

Commission directs the Petitioner to submit the details of Financial Year-wise expenditures



made against this amount for respective works at the time of filing of true-up/ARR for FY 2017-

18.

5.7.3 Observation on abnormal increase in Additional Capital Expenditure in certain LHPs

While examining the additional capitalization details for FY 2016-17, it is observed that there

has been a substantial increase in the expenditures claimed by the Petitioner against additional

capitalization w.r.t. the claims made during previous years specifically, in the additional

capitalization claims of the LHPs of Yamuna Valley, where out of 5 plants, RMU in two plants

namely Dhalipur & Dhakrani has already been proposed. Therefore, as discussed in Chapter 3 of

this Order, the Commission scrutinized the expenditures in detail and also conducted a ‘Sample

Study’ of procurement process being followed by the respective cost centres namely Chibro, Khodri

& PDD-Dakpathar for FY 2016-17. Accordingly, on the basis of the analysis, the Commission

observes that the prices claimed by the Petitioner in its additional capitalisation are on the higher

side as that of the prevailing market rates/schedule of rates of power sector utilities of the State

(UPCL & PTCUL), and therefore, the Commission directs the Petitioner to:-.

(i) Frame its Schedule of Rates (SoR) for common capital items inline with the SoR of

other power utilities in the State.

(ii) Procure the common items of capital nature through Centralised Procurement

System and strictly adhere to the procurement Rules of the GoU/ Rules framed by

the Petitioner (if any).

(iii) Review the working of its internal audit system specifically for checking the

anomalies in procurements and take corrective action for strengthening the internal

audit wing.

An action taken report on the above is required to be submitted to the Commission latest

by 30.06.2018.

5.7.4 Views of State Advisory Committee

Based on the suggestion made by the Members of State Advisory Committee during the

meeting held on 05.03.2018, the Commission directs UJVN Ltd. to actively pursue the following

issues with Appropriate Government/Competent authorities/Hon’ble Courts and apprise the

Commission from time to time.

5. Directives


(i) Resolve the issue related to MB-II Generation specifically with regard to the Dam

height of 1108 m which has already been allowed by the District Administration.

(ii) Expedite the completion of Civil Works related to Khatima RMU.

(iii) Additional allocation from THDC in the Case pending before Hon’ble Supreme

Court.

The approved revised AFC for FY 2018-19 shall be deemed to be recoverable in accordance

with the mechanism specified in UERC Tariff Regulations, 2015. The Tariffs approved in this Order

shall be applicable from 01.04.2018 and shall continue to apply till further Orders of the

Commission.

(Subhash Kumar) Chairman


6 Annexure

6.1 Annexure 1: Public Notice

6. Annexure


6.2 Annexure 2: List of Respondents

Sl. No.

Name Designation Organization Address

1 Sh. Man Singh General Manager (Engg.)

M/s Alps Industries Ltd.

Plot No. 1A, Sector-10, Integrated Industrial Estate, SIDCUL,

Roshnabad Road, Distt. Haridwar-249403

2 Sh. Pawan Agarwal Vice-President

M/s Uttarakhand Steel

Manufacturers Association

C/o Shree Sidhbali Industries Ltd., Kandi Road, Kotdwar, Uttarakhand

3 Sh. Munish Talwar - M/s Asahi India

Glass Ltd.

Integrated Glass Plant, Village-Latherdeva Hoon, Manglaur-

Jhabrera Road, P.O. Jhabrera, Tehsil Roorkee, Distt. Haridwar,

Uttarakhand

4 Sh. Pankaj Gupta President M/s Industries Association of Uttarakhand

Mohabewala Industrial Area, Dehradun-248110

5 Sh. Vijay Singh Verma Secretary Kisan Club Village-Delna, P.O. Jhabrera,

Haridwar-247665, Uttarakhand

6 Sh. Rajiv Agarwal Sr. Vice-

President

M/s Industries Association of Uttarakhand

C/o Satya Industries, Mohabbewala Industrial Area, Dehradun

6.3 Annexure 3: List of Participants in Public Hearings

List of Participants in Hearing at Bageshwar on 20.02.2018

Sl. No.


1. Sh. Deewan Singh Danu

Chairman Daanpur Sewa

Samiti Danu Niwas, Village-Mandal Sera, Near Peepal Chowk, Distt. Bageshwar-263642

2. Heera Singh

Takuli Secretary

Daanpur Sewa Samiti

Village-Mandal Sera, Jeetnagar, Near Peepal Chowk, Distt. Bageshwar-263642

3. Sh. Joga Singh

Mehta Member

Chetra Panchayat, Jakhadi

Village &Post-Jakhadi, Distt. Bageshwar-263640

4. Sh. Hoshiyar Singh Mehra

- - Village-Lamjhigara, Post-Mahroori, Tehsil-

Kanda, Distt. Bageshwar

5. - Convenor Jan Kalyan Samiti Mandalsera, Near Peepal Chowk, Distt.

Bageshwar

6. Sh. Pratap Singh

Garia - -

Maziakhet, Tehsil Road, P.O.-Bageshwar, Distt. Bageshwar



List of Participants in Hearing at Rudrapur on 21.02.2018 Sl. No.


1. Sh. R.S. Yadav Vice President (HR & Admn.)

M/s India Glycols Ltd.

A-1, Industrial Area, Bazpur Road, Kashipur-244713, Distt. Udham Singh

Nagar.

2. Sh. B.S.

Sehrawat -

M/s ACME Cleantech Solutions

Ltd.

Plot 3-8, 29-34, Sector-5, Integrated Industrial Estate Sidcul, Rudrapur,

Distt. Udham Singh Nagar.

3. Sh. Shakeel A.

Siddiqui

Sr. General Manager

(Commercial)

M/s Kashi Vishwanath Textile

Mill (P) Ltd.

5th KM Stone, Ramnagar Road, Kashipur-244713, Distt. Udham Singh

Nagar.

4. Sh. Pankaj Bora - M/s Galwalia Ispat

Udyog Ltd.

Narain Nagar Industrial Estate, Bazpur Road, Kashipur-244713, Distt. Udham

Singh Nagar.

5. Sh. Pradeep

Semwal -

M/s Kashi Vishwanath Textile

Mill (P) Ltd.

5th KM Stone, Ramnagar Road, Kashipur-244713, Distt. Udham Singh

Nagar.

6. Sh. S.K. Garg - M/s BST Textile Mills Pvt. Ltd.

Plot 9, Sector 9, IIE, SIDCUL, Pantnagar, Distt. Udham Singh Nagar

7. Sh. P.K. Mishra - M/s BST Textile Mills Pvt. Ltd.

Plot 9, Sector 9, IIE, SIDCUL, Pantnagar, Distt. Udham Singh Nagar

8. Sh. Sanjay

Kumar -

M/s Perfect Dynamics Auto Pvt.

Ltd.

Sector 9, Sidcul, Rudrapur, Distt. Udham Singh Nagar

9. Sh. Jagdish

Singh - -

Village-Dharampur, P.O. Chattarpur, Distt. Udham Singh Nagar

10. Sh. Akash Jain - M/s Roop Polymers

Ltd.

Plot No. 19, Sector-9, IIE SIDCUL, Pantnagar, Distt. Udham

Singh Nagar

11. Sh. G.S. Sandhu Managing Director

M/s Tarai Foods Ltd.

Sandhu Farms, P.O. Box No. 18, Rudrapur-263153, Distt. Udham Singh

Nagar.

12. Sh. R.P. Singh Executive Director M/s Tarai Foods

Ltd.

Sandhu Farms, P.O. Box No. 18, Rudrapur-263153, Distt. Udham Singh

Nagar.

13. Sh. Gurdayal

Singh - -

Village-Dharampur, P.O. Chattarpur, Distt. Udham Singh Nagar

14. Sh. A.K. Singh - - Village Fulsunga, Post Off.-Transit

Camp, Rudrapur-263153, Distt. Udhamsingh Nagar.

15. Sh. Prem Maurya

- - Village & P.O. Chattarpur, Rudrapur,

Distt. Udham Singh Nagar-263153

16. Sh. Harendra

Singh - -

Fauji Matkota, Bhurarani, Rudrapur, Distt. Udham Singh Nagar

17. Sh. Kunwar Pal

Singh - -

Fauji Matkota, Bhurarani, Rudrapur, Distt. Udham Singh Nagar

18. Sh. Deepak

Kumar -

M/s Nestle India Ltd.

Pantnagar, SIDCUL Industrial Area Road, Distt. Udham Singh Nagar-263153

19. Sh. Umesh - M/s Voltas Ltd. Plot No. 2-5, Sector-8, IIE, Pantnagar

6. Annexure


List of Participants in Hearing at Rudrapur on 21.02.2018 Sl. No.


Sharma Industrial Area, Rudrapur, Distt. Udhamsingh Nagar-263153

20. Sh. Sukha Singh - - Village & P.O. Chattarpur, Distt.

Udham Singh Nagar

21. Sh. Harpal

Singh - -

Village & P.O. Chattarpur, Distt. Udham Singh Nagar

22. Sh. Rohit Chopra

- - Village-Beria Daulat, Bazpur, Distt.

Udhamsingh Nagar

23. Sh. Bhaskar

Joshi -

M/s Titan Company Ltd.

Sector-2, Plot No. 10 A, Sidcul, Pantnagar, Rudrapur-263154, Distt.

Udhamsingh Nagar

24. Sh. Sanjay Adlakha

- M/s Ambashakti

Glass India Pvt. Ltd. Plot. No. 41, Sector-3, SIDCUL,

Pantnagar, Distt. Udham Singh Nagar

25. Sh. Rajendra

Singh Makkar Block President

Bhartiya Kisan Union

Village-Alakhdeva, P.O.-Premnagar, Tehsil-Gadarpur, Distt. Udham Singh

Nagar

26. Sh. Lakhvinder

Singh Mehta - -

Village-Beria Daulat, Bazpur, Distt. Udham Singh Nagar

27. Col. Jitender Pal - M/s SETCO

Automotive Ltd.

Plot No.-196A, Phase-I, Eldeco Sidcul Industrial Park, Village Lalarpatti,

Sitarganj, Distt. Udham Singh Nagar

28. Sh. Kuldeep

Singh -

Bhartiya Kisan Union

Village-Dakiya Kalan, Post Off.-Dakiya No.-I, Tehsil-Kashipur, Distt. Udhamsingh Nagar-244713

29. Sh. Teeka Singh

Saini Former State

General Secretary Kisan Congress

33, Katoratal, Kashipur, Distt. Udham Singh Nagar

30. Sh. R.B. Biradar Sr. General Manager

M/s Radico Khaitan Ltd.

A-1, A-2, B-3, Industrial Area, Bazpur, Distt. Udham Singh Nagar

31. Sh. Parmeshwar

Sharma -

M/s Parle Biscuits Pvt. Ltd.

Plot No. D-10, Eldeco Sidcul Industrial Area, Sitarganj-262405, Distt. Udham

Singh Nagar

32. Sh. R.K.

Maheshwari -

M/s Mantri Metallics Ltd.

Plot No. 31, Sector-11, Sidcul, Pantnagar, Distt. Udham Singh Nagar

33. Sh. Rajesh

Kumar Mishra -

M/s Sidcul Entrepreneur

Welfare Society

Plot No. 1, Sector-9, IIE, SIDCUL Pantnagar, Distt. Udham Singh Nagar

34. Sh. Harbhajan

Singh - -

Bajar Patti, Gadarpur, Distt. Udham Singh Nagar

35. Sh. Shyam Chandra Kamboj

- - Roshanpur, Totawala, P.O. Gularbhoj,

Distt. Udham Singh Nagar

36. Sh. Ashok

Kumar - -

Mahaveer Nagar, Dr. Adarsh Nagar, Gadarpur, Distt. Udham Singh Nagar

37. Sh. Tushar Agarwal

- M/s BTC Industries

Ltd. Village-Kishanpur, P.O. Deooria, Tehsil-

Kichha, Distt. Udhamsingh Nagar



List of Participants in Hearing at Rudraprayag on 27.02.2018

Sl. No.


1. Sh. Harshwardhan

Benjwal Former

Sarpanch -

Village & Post-Nakot, Nagar Panchayat-Augustmuni, Distt.

Rudraprayag

2. Sh. Balbeer Lal Former

Pradhan -

Village & Post-Nakot, Nagar Panchayat-Augustmuni, Distt.

Rudraprayag

List of Participants in Hearing at Dehradun on 28.02.2018 Sl. No.


1 Sh. Devesh Pant - M/s Tata Motors

Ltd.

Plot No. 1, Sector 11, Integrated Industrial Estate, SIDCUL,

Pantnagar-263153, Distt. Udham Singh Nagar

2 Sh. Pankaj Gupta President M/s Industries Association of Uttarakhand


3 Sh. Rajiv Agarwal Sr. Vice-

President

M/s Industries Association of Uttarakhand


4 Sh. Katar Singh President Kisan Club Village-Sultanpur Sabatwali, P.O.

Jhabrera-247667, Haridwar

5 Sh. Vijay Singh Verma Secretary Kisan Club Village-Delna, P.O. Jhabrera,

Haridwar-247665, Uttarakhand

6 Sh. Munish Talwar - M/s Asahi India

Glass Ltd.

Integrated Glass Plant, Village-Latherdeva Hoon, Manglaur-

Jhabrera Road, P.O. Jhabrera, Tehsil Roorkee, Haridwar

7 Sh. Arvind Jain Member Tarun Kranti

Manch (Regd.) 6-Ramleela Bazaar, Dehradun

8 Sh. Gulshan Rai

Khanduja -

Sh. Ganesh Roller Floor Mills

Mohabbewala Industrial Area, Subhash Nagar, Dehradun-248001

9 Sh. K.L. Sundriyal General

Secretary

M/s Prantiya Electrical

Contractors Association, Uttarakhand

4(4/3), New Road, Near Hotel Relax, (Amrit Kauri Road),

Dehradun

10 Sh. Naval Duseja DGM (Finance & Accounts)

M/s Flex Foods Ltd.

Lal Tappar Industrial Area, P.O. Resham Majri, Haridwar Road,

Dehradun-248140

11 Sh. S.C. Mittal Director M/s Instruments &

System 30, Mohabbewala Industrial Area,

Dehradun-248002

12 Sh. P.K. Rajput Executive Director

M/s Vista Alps Industries Ltd.

Plot No. 1 B, Sector-10, Integrated Industrial Estate, SIDCUL, Distt.

6. Annexure


List of Participants in Hearing at Dehradun on 28.02.2018 Sl. No.


Haridwar

13 Sh. Chandra Mohan

Goyal -

M/s Manoj Floor Mill

Near Sahastradhara Bus Stand, Sahastradhara, Dehradun

14 Sh. Sunil Gupta Editor Teesri Aankh ka

Tehalka 16, Chakrata Road (Tiptop Gali),

Dehradun-248001

15 Sh. Man Singh General Manager (Engg.)

M/s Alps Industries Ltd.

Plot No. 1A, Sector-10, Integrated Industrial Estate, SIDCUL,

Roshnabad Road, Distt. Haridwar-249403

16 Sh. Vijay Verma - M/s Shiv Shakti

Electricals Sarrafa Bazaar, Kankhal, Distt.

Haridwar, Uttarakhand

17 Sh. Viru Bisht - Mohanpur, Post Off.-Premnagar,

Dehradun-248007

18 Sh. G.D. Madhok - - 146/1, Rajendra Nagar, Street No. 9,

Kaulagarh Road, Dehradun

19 Sh. Subodh Kumar - - Village-Harbanswala, Near

Seemadwar, Dehradun

20 Dr. H.S. Rawat President

M/s Progressive Dairy Farmers

Association Uttarakhand

S-1, D-6, Defence Colony, Dehradun.

21 Sh. Arvind Jain Member Tarun Kranti

Manch (Regd.) 6-Ramleela Bazaar, Dehradun

22 Sh. Kamaldeep Kamboj - Parvatiya Saaptahik G-3, Janpad Shopping Complex,

Chakrata Road, Dehradun

23 Sh. Parshuram - - Jagjeetpur, Haridwar

24 Ms. Rubi Goyal - - Chaman Vihar, Phase-II, ITBP Road,

Dehradun

25 Sh. Sudhir Goyal - - Lane No. 11, Chaman Vihar, P.O.

Majra, Dehradun.

26 Sh. Surya Prakash - - 153, 2nd Block, Dharampur, Dehradun

27 Sh. S.K. Yadav - - Lane No. 11, Chaman Vihar, Near

Niranjanpur, Dehradun

28 Sh. Deshraj - - Sohta House, Lane No. 11, Chaman Vihar, Near Niranjanpur, Dehradun



6.4 Annexure 4: Breakup of works carried out under RMU in Khatima LHP as claimed by the

Petitioner for FY 2016-17

Breakup of works carried out under RMU in Khatima LHP as claimed by the Petitioner for FY 2016-17 (in Rs.)

Particulars Name of Supplier /

Contractor Amount

Capitalized

1. Plant & Machinery

Power & Control Cable Lot-2 Alstom India Ltd. 9296816

Rotor Rim lamination Unit-III Alstom India Ltd. 15418245

Rotor Rim lamination Unit-II Alstom India Ltd. 3262674

Rotor Handling tools, Hydraulic Stud Tensioners, Turbine guide bearing & instrument , guide bearing and turbine, Water level measurement, Handling tools of turbine & distributor handling tools, Regulating ring, Refurbishment of Stator. Generator shaft transportation fixtures, Runner transportation fixtures

Alstom India Ltd. 7622153

Generator online monitoring Alstom India Ltd. 5916309

Generator on line monitoring ( Freight & Insurance) Alstom India Ltd. 329526

Pole wedges, Generator PRT ( RTD Spares) Stator windings, thrust bearing pads, upper guide bearings), Generator Spare , upper guide bearing, and other items


- Freight & Insurance on above items Alstom India Ltd. 22217211

Rotor Spider with Unit-II Alstom India Ltd. 3769613

Cable Gland &Accessories( Freight & Insurance) Alstom India Ltd. 7540775

Rotor spider with hub for Unit-II & III, Inner Head Cover Unit-II, Rotor spider with hub, Rotor rim lamination, Generator rotor handling tools, Hydraulic stud tensioners, Generator online monitoring,


Runner Chamber Unit-II. ( 2646 454 )& Air valves all 3 Units ( 4452951) Alstom India Ltd. 7987257

-Freight & Insurance on above item Alstom India Ltd. 165836

Stator lamination Unit-II Alstom India Ltd. 10125540


Shutter vanes Unit-II Alstom India Ltd. 8326412


Control metering protection & SCADA Alstom India Ltd. 6414541

-Freight & Insurance on above items Alstom India Ltd. 355274

Rotor, CC leads, fabricated shaft, slip ring Unit- 2,3 Alstom India Ltd. 9329891


Stator, Core, Stator lamination Unit-III Alstom India Ltd. 10327500


Shutter vanes Unit-III Alstom India Ltd. 8336787


Guide vanes Unit-II Alstom India Ltd. 20106825


Guide vane Unit-III Alstom India Ltd. 23266436


Inner Head Cover Unit-III Alstom India Ltd. 17174503


Bottom Ring Unit-II Alstom India Ltd. 14226158


Inner Head Cover Unit-II Alstom India Ltd. 17174503


Stator handling tools, stator core stacking, hydraulic tensioners for stator core bolt, stator winding tools, stator lamination



Stator coil Alstom India Ltd. 6279724

6. Annexure




Contractor Amount

Capitalized


Restoration invoice Alstom India Ltd. 606098

Bottom Ring Unit-III Alstom India Ltd. 14226158


Outer head cover Unit-III Alstom India Ltd. 22082833


Outer Head Cover Unit-II Alstom India Ltd. 21840719


Runner Unit-II Alstom India Ltd. 15527206


Runner Unit-III Alstom India Ltd. 16921556


Guide bearing shaft seal assembly. Unit-II Alstom India Ltd. 9416088


Scaffolding pipes , clamps, Lowering of rotor, Run out machine, Installation testing & commissioning of DT liner cone & liner


Guide vanes Alstom India Ltd. 7057125

Price Variation: Alstom India Ltd. 80204299

Supply of DT liner, DT cone & door, Service invoice soak pit for GSU construction Cooling water pump-,erection of runner chamber, removal of existing liner, cone& door & concrete), Intake gates, dogging /storage replacement of wheel asslly.ss plates, GM bushes, Replacement of 22 No New trash racks, 11 KV switchgear ,surge protection for generator, NGT (Freight & Insurance) and Supply of AC system, Cooling water header pipeline

PES. Engg. Pvt. Ltd. 12293424

Service of Turbine top cover and regulating ring Unit-III ,replacement of stator coils wedges, filler Unit-III, Replacement of stator windings Unit-III, HV testing Unit-III, pole welding Unit-III,HV test Unit-III, break ring Unit-III, Erection of runner, turbine shaft, Testing & commissioning Unit-III, Power House Aux, Unit-II Hydro Mechanical Equipment Unit-II, commissioning of unit-II

PES Engg. Pvt. Ltd. 2878943

Replacement of EPS trash racks PES Engg. Pvt. Ltd. 11802260

Supply of fittings, bushing etc. & dismantling of GT and installation of New GT


Air/Oil accumulator PES Engg. Pvt. Ltd. 4905155

-Freight & Insurance on above item PES Engg. Pvt. Ltd. 281986

Runner Chamber Handling tools PES Engg. Pvt. Ltd. 514715


Rotor pole complete unit-II PES Engg. Pvt. Ltd. 16212245


Rotor spider with Hub PES Engg. Pvt. Ltd. 3695896

Rotor Rim lamination PES Engg. Pvt. Ltd. 16392244

-Service of rotor Unit-I Lower Bracket, Generator shaft & dummy shaft. Unit-I , -Service for crane, electrical equipment, erection runner, turbine shaft, pump motor set Manual operated duplex filter, compressed air system ventilation system, installation & testing of rotor assembly,


OPU Portable, Completer cooling water system, Structure frame for side bypass channel gate, Draft tube drain valve, Hydrant system. Fire alarm, portable fire extinguisher, 11/132 KV,12/20 MVA T/F ,Current transformer, Neutral CT,


Manually operated gate and super structure frame for side bypass channel PES Engg. Pvt. Ltd. 4135538





Contractor Amount

Capitalized

gate

Hardware and accessories, piping, fittings, bore well including piping, pipings valves, seals gasket etc.


Four core ratio 150-100/0.5 A ( Step up T/F circuit), one core ratrio 150/1A(132 KV transformer neutral )


Cleaning of aite Unit III & Unit-II, Inspection of T/F Oil drain out form T/F, Dismantling of Power cable strengthening of T.F area, shifting of T/F Tests, testing of all power cable laying of Lugs, Glands, ferrules, oil filtration centrifuging machine in the scope of contractor.,


Motor, gear boxes, steel & cable, hoisting including structural platform PES Engg. Pvt. Ltd. 25023114

Intake gate, New Supply of dogging/storing arrangement, Replacement of wheel asslly.


By pass gate EPS, By pass channel gate, Rubberseals, guide shoe, limits witch, chain breaks, wheel asslly, guide roller, wire rope, fuses, relays contacts, push button, lugs, pins., pivot, pins & bushes.


Motors, Gear Boxes, steel and hardware etc. hoist manually operated gate and super structure frame for side bypass channel gate.


Constt of all cable trench for T/F, shifting of T/F, erection of T/F laying all cables constt of earthing and pits, laying of inter connection piping, Replacement of EPS trash racks


Draft tube liner Unit-I and Oil filtration for T/F with centrifuging machine. required tests for T/F , oil filtration T/F Testing &commissioning of T/F


Dismantling of existing valve, overhauling nit -II repair of stator frame unit-II ,stator coils air duct soacer finger plate Un it-II , Pole welding nit-II, generator equipment , turbine equipment Unit-II Electrical equipment Unit-II Removal runner chamber-Unit-II, commissioning of Power House Aux. Unit-I Hydro mechanical equipment-Unit-I, Commissioning of Unit-I commissioning of draft tube liner cone door Unit-I


Repair of stator frame Unit-II, lower Braket Unit-II, erection bottom ring, removal of mud layer, Unit-II Trash rack machine, taking our replaceable gate EPS, Replaceable intake gates, Unit-II replaceable steel parts Unit-II Erection EPS of Unit-II


Restoration invoice PES Engg. Pvt. Ltd. 4278703

Set of tools for repair of all gates, Additional order 50 ton crane, 10 ton capacity truck, concrete breaker, exhaust blower, gratings, polyweb slings, chainpully block, EHS, generator working platform, Supply of RCC M20 dowels and misc. works


Dismantling Stay ring, stay vanes plates, removal of mud layers, reboring of bottom bush, installation of regulating ring, & servomotor., installation of link & liver, dismantling of pole welding, &turbine equipment, Re assembly and erection of runner Unit-II erection of turbine shaft, erection of guide apparatus.


Draft tube Unit-III, Installation of regulating ring, link & liver, new pole welding, breaking upper and lower fan, alignment of rotor lowering generator shaft coupling turbine shaft, Lowering dummy shaft, coupling generator shaft, Additional order compressor 288 m 3 Hrs., Hydra 14 ton Capacity, welding machines


dismantling old hydraulic & mechanical equipment Unit -III replacement of stator coil ,wedges, fillers etc Unit-II replacement of stator welding Unit-II HV testing Unit-II Generator equipment Unit-III, Electrical equipment Unit-II, Taking out EPS Vent -22 taking out trash racks 22 no


- Refurbishment oil Existing main door & replacement of Drainage valve. PES Engg. Pvt. Ltd. 5737939

6. Annexure




Contractor Amount

Capitalized

Unit-II, lowering, leveling &centering of upper bracket Unit-II, Lower Bracket and pit cover Unit 0-II, Pit cover & nut guard Unit-II, Bearing box up Unit-II, installation of sensors Unit-II, removal of runner chamber & discharge ring Unit-III, Erection of runner chamber Unit-III, Erection runner servo motor & oil header Unit-II, Erection of Turbine guide bearing & shaft seal Unit-II -Dismantling of Air valve unit-II, Piping work Unit-II, erection of discharge ring Unit-III, piping work Unit-II, erection of bottom ring Unit-III,, Governor & OPU Unit-III, Fitting for OPU Unit-III,CW system Unit-III, cooling water system Unit-II,NGT panel Unit-II - Service refurbishment man door, replacement of drainage valve Unit-III, Air valve, diffuser valve Unit-II, Drainage & dewatering system Unit-III, laying of dedicated water header pipe line

CW system Unit-II cooling water system Unit-III, A/C driven pump Unit-I,II,III, pump motor-Unit-I,II,III Piping valve instruments control panel, NGT panel Unit-III, Talking out EPS Unit-III ,taking out steel-Unit-III, Taking our rail, erection of EPS Unit-III, Refurbishment of Intake gate Unit-III, Erection Unit-III


Removal Installation of DT liner, cone door, drum hoisting, Refurbishment of intake gates erection of intake gates, reboring of bottom bush, erection of discharge ring, erection of runner chamber, Governor & OPU station T/.F Unit-II


Service of Turbine top cover & regulating ring Unit-III, Diffuser valve Unit-III, Lowering of rotor Unit-III, lowering leveling & centering of upper bracket Unit-III, Lower bracket & pit cover Unit-III, Bearing housing and collar Unit-III, Generator shaft & dummy shaft Unit-III, Reassembly & erection of Turbine Unit-III, constt of various foundation


Trash rack cleaning rails, Trash disposal system & RCC deck slab. PES Engg. Pvt. Ltd. 30615458

Price Variation PES Engg. Pvt. Ltd. 25959488

Total RMU under Plant & Machinery 790180680

2. Furniture & Fixtures 66000

3. Office Equipments & Others 91825

4. Computer 57946.35

5. IDC capitalized 102470540

Grand Total 892866991.4



6.5 Annexure 5: List of Items shifted from Add Cap to R&M and R&M to Add Cap for FY 2016-

17

List of Items shifted from Add Cap to R&M for FY 2016-17

S. No. Voucher No. Asset Name Amount in Rs.

Chilla Power House

1 A-13 Capital Maintenance of Machine No. 1 at Chilla power House. 15200000.00

Total amount transferred to R&M 15200000.00

MB-I Power House

1 A-3 of 12/16 Barrel Pump (01 no) 4960.00


Chibro Power House

1 OE-15,05/2016 Capital Maintenance of Machine No. 4 3965400.00

2 O-3,O-4,O-6 and O-7, 07/2016

Capital Maintenance of Machine No. 4 23583115.00



5 A-27,03/2017 Capital Maintenance of Machine No. 4 13645685.00

6 A-13 ,03/2017 Adjustment of T&P receipt a/c of C/S, Chibro, for the M/o of 03/17 & 02/17

262702.00

Total amount transferred to R&M 57154549.00 Dhakrani Power House

1 A-50 Expenditure on Residential building (ATD 21/DGM(civil)/2016-17) 10224390.00

2 A-54 Renovation & Modernisation of Type-II & Type-III Type-IV Residence of Dhakrani P.H. Colony

6597278.00

3 A-18 125 MM Angle Grinder 5448.00

4 A-47 Major overhauling and painting of Unit A,B&C 2956780.00

5 A-5 4 step multipurpose alum ladder with one platform 4900.00

6 A-5 Multimeter (0-600) make Motwane 5612.00

7 A-35 M.S. Tray 6'x4'x4', thickness of sheet 1.5mm 5210.00

8 A-35 Heat Gun, tem 100-500 deg C, Airflow 240-450 L/min 4575.00

9 A-23 Wheel spanner, size 19 mm 272.00

10 A-23 Cutter 450.00

11 A-4 Gum boot good quality 5394.00

12 A-4 Rain Coat with Hood 5440.00

13 A-19 Drill Machine 10 FF GBS Heavy duty Make Bosch 5448.00

14 A-23 Screw Driver (Set) with magnet 5448.00

15 A-23 Tester 168.00

16 A-23 Slide Wrench size 9" 1200.00

17 A-23 Combination Pliers 650.00

18 A-23 Nose Pliers 640.00

19 A-23 Hammer Small size 500.00

20 A-23 Paint Brush 600.00

21 A-23 Multi Meter (0-600 V) Motwane make 5662.00

22 A-23 Hydraulic jack capacity 6 ton with Rod 4256.00

23 A-23 Taparia cutting Pliers, size 210 mm 1136.00

24 A-23 Bamboo ladder length 24 feet with 19 step 4654.00

25 A-18 Tyre and tube size 185/85/R 16 17364.00

26 A-19 Tyre Size 215/75/R-15 42130.00

27 A-19 Tube Size 215/75/R-15 4470.00

28 A-19 Tyre Size 10.00-20 (16PR) Rib 33102.00

29 A-19 Tyre Size 10.00-20 (16PR) Lug 45944.00

30 A-19 Tube Size 10.00-20 (16PR) 8701.00

31 A-19 Flap Size 10.00-20 2898.00

6. Annexure


List of Items shifted from Add Cap to R&M for FY 2016-17


32 A-12 Clamp Meter Make 164935.00

33 A-12 Multimeter Make Megger 48450.00

34 A-12 Gum boot (good quality rubber) 4875.00

35 A-86 Screw Driver (Set) with magnet. (correction entry) -4998.00

36 A-86 Multi Meter (0-600 V) Motwane make(correction entry) -100.00


Dhalipur Power House

1 A-54 Renovation & Modernisation of Type-II & Type-III Type-IV Residence of Dhalipur P.H. Colony

5457705.00

2 A-16 Expenditure on Residential building (ATD No. 22/DGM(Civil)/2016-17)

5410183.00

3 A-15 Major Over hauling of Unit-C 24763000.00

4 A-12 Master Level 10000.00

5 A-12 Gaitty Set with radenet 8 mm to 32 mm 10000.00

6 A-12 Ring spanner 50 mm 15000.00

7 A-12 Box Spanner 40000.00

8 A-13 Rebabbitting of UGB, Thrust bearing & lower guide bearing 1768000.00


Kulhal power House

1 A-54 Renovation & Modernisation of Type-1 & Type-II Residence of Kulhal

5524756.00

2 A-12 Major Overhaul of Machine 8654700.00


MB-II Power House

1 O-25 Tools & tackles 1768680.00

2 O-6 Tools & tackles 638141.00

3 A-24 Tools & tackles 31698.00

4 A-22 Tools & tackles -104740.00




Grand Total of expenses transferred to R&M from Add-Cap 146867903.00

List of Items shifted from R&M to Add-Cap for FY 2016-17

List of Items shifted from R&M to Add-Cap for FY 2016-17


Chilla Power House

1 A-7 HT Isolator without switch complete, Etc misc items 1105131.77

Total 1105131.77

Tiloth Power House

1 A-9 L&T make MCCB 250A/3P, LNT make ACB 1250A/3P 1783428.00

Total 1783428.00

Dhakrani Power House

1 A-5 Stock Issue Account for the for M/o 03/17 Centre Store Dhakrani 3966732.50

2 A-35 Stock Issue Account for the for M/o 02/17 Centre Store Dhakrani 1340000.00

Total 5306732.50 Grand Total 8195292.27



6.6 Annexure 6: Expenses covered under Balance Capital Petition for MB-II as claimed by the

Petitioner

Expenses covered under Balance Capital Petition for MB-II as claimed by the Petitioner

Sl. No.

Description of claimed item

Estimated amount as per DPR.

Revised estimated

cost (Approved)

Reason for Diff Expenditure

upto FY 2015-16

2016-17

2017-18

2018-19

Total

1 Rehabilitation. 15.56 27.32 Due to variation in plinth area rate.

13.62 5.7251 2.82 5.16 27.32

2

Construction of school building for Saraswati Shishu Mandir School in Shaktipuram Colony Chinyalisaur.

2.00 2.72 Due to Variation in work as per site requirement.

1.32 0.72 0.00 0.00 2.03

3 Modification of tail race channel.


27.30 0.00 0.00 0.00 27.30

4 Compensation for the affected people.

1.14 1.14 0.20 0.00 0.93 0.00 1.14

5

Payments to M/s NPCC against claims of Principle Agreement in accordance to the decision of High Power Committee.

12.86 12.19 5.67 6.527 0.00 0.00 12.19

6

Construction of Cement Concrete Protection wall around Joshiyara barrage reservoir.

83.08 75.87

Due to site condition and geological constraint the quantity of works has increased at some locations. Also on demand of local affected people the Ghat was constructed at some locations alongwith the protection wall near Bhagirathi River. This increases the cost of works and involved extra time.

75.87 9.43 6.92 0.00 92.22

7 Construction of Office Building at Joshiyara.


1.06 0.00 0.00 1.06

8 Construction of officer’s residence at Joshiyara colony. (Annexure-CE-8)


1.15 0.00 0.00 0.00 1.15

9

Construction of 04 Nos. Type-IV Residences and 01 Nos. Type-V Residence in Shaktipuram Colony, Chinyalisaur.


0.68 0.00 0.00 0.00 0.68

10

Strengthening of water distribution system of Shaktipuram colony, Chinyalisaur.

0.89 0.84 0.84 0.00 0.00 0.00 0.84

11

Construction of workshop building at Dharasu power house of MB-II project.

1.69 1.60

0.75 0.00 0.24 0.00 0.99

12 Protection work on hill slope behind Dharasu

2.57 3.12 Due to increase in scope and quantity of work after

1.48 0.93 0.67 0.00 3.08

6. Annexure



Sl. No.



Revised estimated

cost (Approved)


upto FY 2015-16

2016-17

2017-18

2018-19

Total

power house. damages due to Calamity/flood held on FY 16-17 June 2013.

13

Construction of Road from Joshiyara Bridge to Flushing conduit on left Bank (1.2 km) and from Barrage to NH-108 on Right Bank (0.4 Km).


0.32 1.01 1.23 0.00 2.55

14

Construction of Infrastructure works for affected villagers from Joshiyara, Gyansu and Kansain village as per their demands.

9.50 9.50 0.19 1.31 5.02 3.00 9.52

15

Construction of boundary wall, security fencing and gate for Shaktipuram colony and Shifting of existing boundary wall of Shaktipuram colony and provide the separate way for villagers behind Shaktipuram colony.


0.72 0.25 0.00 0.00 0.97

16 Testing of surge shaft gate.

5.00 5.00 0.00 0.00 0.00 5.00 5.00

17

River training works from Dharasu Steel bridge to Dharasu Power house up to TRC.

2.00 3.63

Due to increase in scope and quantity of work after damages due to calamity/flood occurred on FY 16-17 of June 2013.

2.29 0.38 0.96 0.00 3.63

18 Slope protection work on uphill side of Surge shaft.


0.00 0.3818 0.92 0.00 1.30

19

Consultancy expenditure on TRC works & other works except for Joshiyara Barrage.


0.66 0.00 1.86 0.30 2.82

20 Liabilities against major civil contract of MB-II Project.

0.00 0.00 0.00 0 0.00 0.00 0.00

a Reimbursement of Sales Tax.

8.15 19.24

Awarded Amount with Interest of Rs. 1924.47 Lakh has been deposited in Hon’ble High court As per decision of Hon’ble High court.

19.24 0.00 0.00 0.00 19.24

b Reimbursement of royalty.

0.45 0.45 0.00 0.00 0.00 0.00 0.00

c

Award given by the arbitrator in favour of M/s Hydel Construction (P) Ltd against dispute

30.73 35.30

Awarded Amount with Interest of Rs. 3529.76 Lakh has been deposited in Hon’ble High court As per

35.30 0.00 0 0.00 35.30




Sl. No.



Revised estimated

cost (Approved)


upto FY 2015-16

2016-17

2017-18

2018-19

Total

related to swellex Rock Bolt, Steel Fibre as Extra Item and loss due to flood along with interest of Rs 95424/- per month.

decision of Hon’ble High court.

d Payment against misc. Works.

0.26 0.26 0.00 0.20 0.00 0.00 0.20

e Security. 0.35 0.35 0.26 0.11 0.00 0.00 0.36

f Pending payment of GSI. 0.95 0.95 0.00 0.00 0.00 0.00

g Expenditure incurred for arbitration.

1.00 2.00

The Arbitration & Court cases of M/s Hydel Construction. & M/s Shring Construction are in process.

1.15 0.02 0.00 0.00 1.17

Total 211.73 238.62 Total (in Rs. Cr.) 190.06 26.99 21.56 13.46 252.07

6. Annexure


6.7 Annexure 7: Details of the Revised Additional Capitalisation claimed by the Petitioner for

MB-II for FY 2017-18 and FY 2018-19

Details of the Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)

Sl. No. Description of claimed item 2017-18 2018-19

Work under Balance Capital

1 Rehabilitation. 2.82 5.16

2 Compensation for the affected people. 0.93 0.00

3 Construction of Cement Concrete Protection wall around Joshiyara barrage reservoir. 6.92 0.00

4 Construction of workshop building at Dharasu power house of MB-II project. 0.24 0.00

5 Protection work on hill slope behind Dharasu power house. 0.67 0.00

6 Construction of Road from Joshiyara Bridge to Flushing conduit on left Bank (1.2 km) and from Barrage to NH-108 on Right Bank (0.4 Km).

1.23 0.00

7 Construction of Infrastructure works for affected villagers from Joshiyara, Gyansu and Kansain village as per their demands.

5.02 3.00

8 Testing of surge shaft gate. 0.00 5.00

9 River training works from Dharasu Steel bridge to Dharasu Power house up to TRC. 0.96 0.00

10 Slope protection work on uphill side of Surge shaft. 0.92 0.00

11 Consultancy expenditure on TRC works & other works except for Joshiyara Barrage. 1.86 0.30

Total Works under Balance Capital 21.56 13.46

Other works (works not covered under Balance Capital Works)

1 Construction of multipurpose hall (Badminton court, Gym, Table Tennis etc) at Shaktipuram Colony, Chinyalisaur.

0.70 0.50

2 Construction of Security hut and its associate work at Dharasu Power house Complex at Dharasu, Uttarkashi.

0.31 0.00

3 Renovation and modernization of officers field hostel at Shaktipuram colony Chinyalisaur, Uttarkashi.

0.40 0.00

4 Construction of security hut & fencing at Dhanari Gad Adit of MB-II Project at Dhanari, Uttarkashi.

0.40 0.00

5 Construction of garage & vehicle shed at Shaktipuram colony Chinyalisaur, Uttarkashi.

0.70 0.00

6 Renovation and modernization of BP type Quarters at Shaktipuram colony Chinyalisaur, Uttarkashi.

0.45 0.00

7 Renovation and modernization of CP type Quarters upper side near vidya Mandir School at Shaktipuram colony Chinyalisaur, Uttarkashi.

0.75 0.00

8 Renovation and modernization of Type –III Club near Shiv Mandir at Shaktipuram colony Chinyalisaur, Uttarkashi

0.35 -

9 Renovation and Modification of Roller Bucket, Guide Wall and Piers of Joshiyara Barrage MB-II, Uttarkashi

0.83 3.00



Details of the Revised Additional Capitalisation claimed by the Petitioner for MB-II for FY 2017-18 and FY 2018-19 (Rs. Crore)

Sl. No. Description of claimed item 2017-18 2018-19

10 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer lineat Dharasu PH MB-II

0.21 -

11 Reconstruction and laying of Semi Dense Bituminous Concrete (SDBC) of Roads from Switchyard to Surge shaft at Dharasu Power House of MB-II Project.

0.91 -

12 Reconstruction and laying of Semi Dense Bituminous Concrete (SDBC) of Roads of Shaktipuram colony, Chinyalisaur of MB-II Project.

1.26 -

13 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer line in Joshiyara colony ,Uttarkashi.

- 0.90

14 Fencing and CC road work of Office and Residential colony of Joshiyara Uttarkashi. 0.70 -

15 CC Road and Fencing work from Police line to sadhubela Gyansu at right side Uttarkashi.

0.45 1.00

16 Renovation of water treatment plant in Joshiyara Uttarkashi. - 0.30

17 Shotcrete/Concrete canvas in hill slope from steel bridge Dharasu to Power house Chainage 30.00 to 100.00

- 0.70

18 Security Fencing and misc. civil work around Shring Camp and NPCC campus area 0.65

19 Design, Supply, Erection, Commissioning & Testing of Sewer Treatment Plant with (STP) with BIO-DIGESTER, REED BED & ETP and Laying of sewer line in Shaktipuram Colony, Chinyalisaur, Uttarkashi

- 2.50

20 Renovatio of Spillway gate no. 1.2 &3 of Joshiara barrage 2.96 -

21 Flood protection works right bank of Bhagirathi river in front of Tail Race Channel at Dharasu power house near Hitara village, Dharasu, Uttarkashi.

1.00 1.97

22 Balance work of slope protection on hill slope behind Surge Shaft Tank of Maneri Bhali Project stage -II at Dharasu Uttarkashi.

- 0.92

23 Award given by Arbitrator in favour of M/s Hydel construction Pvt. Ltd. for Claim due to Idle Charges and Incentives. The awarded amount with interest has been deposited in Hon’ble High Court as per order of Hon'ble High Court.

18.01 -

24 Re-construction of left wing wall at downstream of Joshiyara barrage - 16.6

Other works (works not covered under Balance Capital Works) 31.04 28.39

Total additional capital expenditure claimed for MB-II Station 52.60 41.85

Order on Generation Tariff - UERCuerc.gov.in/ordersPetitions/orders/Tariff/Tariff...

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Transcript of Order on Generation Tariff - UERCuerc.gov.in/ordersPetitions/orders/Tariff/Tariff...