ORDER
1. This petition has been filed for approval of tariff for (i) 400 kV D/C Gorakhpur-Lucknow transmission line (Asset-I ) and (ii) 400 kV D/C Bareilly Mandola transmission line (Asset-II) (the transmission lines) in Northern Region associated with Tala HEP, East-North Inter-connector and Northern Region Transmission system (collectively referred to as the “transmission system”) for the period from the date of commercial operation of respective transmission line to 31.3.2009 based on the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 (hereinafter referred to as “the 2004 regulations”) after accounting for additional capitalization during 2006-07 and up to 30.9.2007. The petitioner has also claimed reimbursement of insurance expenses, licence fee and higher O & M charges. The petitioner has further prayed for the reimbursement of expenditure from the beneficiaries incurred towards publishing of notices in newspapers and the petition filing fee.
2. The administrative approval and expenditure sanction for the transmission system was accorded by Ministry of Power under letter dated 2.7.2003 at an estimated cost of Rs. 198070 lakh, which included IDC of Rs. 21792 lakh. Subsequently, the revised cost estimate for the transmission system was approved by Ministry of Power under letter dated 29.9.2005, at an estimated cost of Rs. 161178 lakh, which included IDC of Rs. 12170 lakh, for the petitioner’s scope of work. The apportioned approved cost of the Asset-I and Asset-II is stated to be Rs. 21557 lakh and Rs. 21943 lakh, respectively.
3. The provisional transmission charges for the both assets covered in the present petition were approved by the Commission in its order dated 21.12.2006 in Petition No. 111/2006 and order dated 18.8.2006 in petition No. 33.2006 respectively. The dates of commercial operation of the two assets are stated as under:
S. No.
Name of the assets
Date of
commercial operation
1.
Asset-I
1.8.2006
2.
Asset-II
1.5.2006
4. The petitioner has claimed the charges as under:
(Rs.in lakh)
Asset-I
Asset-II
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Depreciation
335.36
511.97
520.91
448.78
509.00
519.35
Interest on
Loan
795.76
1270.34
1180.40
1025.19
1230.37
1176.81
Return on
Equity
549.06
838.94
854.29
739.85
829.38
851.65
Advance
against Depreciation
0.00
400.96
665.61
0.00
286.64
663.49
Interest on
Working Capital
48.59
83.90
89.21
60.92
80.51
88.82
O & M
Expenses
80.69
125.46
130.87
106.94
120.93
126.15
Total transmission
1809.45
3231.57
3441.30
2381.68
3056.83
3426.27
charges
Transmission
Majoration Factor @ 10% of the transmission charges
180.95
323.16
344.13
238.17
305.68
342.63
Grand Total
1990.40
3554.73
3785.43
2619.85
3362.51
3768.89
5. The details submitted by the petitioner in support of its claim for interest on working capital are given hereunder:
(Rs.in lakh)
Asset-I
Asset-II
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Maintenance
Spares
203.40
215.61
228.54
202.77
214.94
227.84
O & M
expenses
10.09
10.46
10.91
8.91
10.08
10.51
Receivables
497.60
592.45
630.90
436.64
560.42
628.15
Total
711.09
818.52
870.35
648.33
785.43
866.50
Rate of
Interest
10.25%
10.25%
10.25%
10.25%
10.25%
10.25%
Interest
48.59
83.90
89.21
60.92
80.51
88.82
6. The petitioner has claimed the following in addition to the transmission charges:
(Rs. in lakh)
Asset-I
Asset-II
2006-07
2007-08
2008-09
2006-07
2007-08
2008-09
Insurance
Expenses
42.20
42.20
42.20
40.67
40.67
40.67
Licence fee
5.27
5.27
5.27
5.09
5.09
5.09
Total
47.47
47.47
47.47
45.76
45.76
45.76
7. The reply to the petition has been filed by Uttar Pradesh Power Corporation Limited. In response to the public notices published by the petitioner in accordance with the procedure specified by the Commission, no comments have been received from the general public.
CAPITAL COST
8. As per Clause (1) of Regulation 52 of the 2004 regulations, subject to prudence check, the actual expenditure incurred on completion of the project shall form the basis for determination of final tariff. The final tariff shall be determined based on the admitted capital expenditure actually incurred up to the date of commercial operation of the transmission system and shall include capitalised initial spares subject to a ceiling norm as 1.5% of original project cost. The regulation is applicable in case of the transmission system declared under commercial operation on or after 1.4.2004.
9. The petitioner has claimed additional capitalization of Rs. 1462.30 lakh and Rs. 2120.82 lakh on works for the period from 1.8.2006 to 30.9.2007, including an expenditure of Rs. 765.55 lakh and Rs. 1233.16 lakh from the date of commercial operation to 31.3.2007, over the capital expenditure of Rs. 18878.01 lakh and Rs. 18156.46 lakh for Asset-I and Asset-II, respectively as on the date of commercial operation.
10. The Commission vide its order dated 14.1.2008 had inter alia directed the petitioner to submit auditor’s certificate giving break-up of cost of land, transmission line, PLCC etc. The certificate was submitted by the petitioner vide affidavit dated 6.2.2008. Consequently, the petitioner has submitted auditor’s certificate giving details of additional capitalisation from the date of commercial operation and up to 31.3.2007 vide affidavit dated 19.3.2008, as given hereunder:
Asset-I
Asset-II
Nature of expenditure
Nature of expenditure
Colony & office building = Rs. 199.52 lakh
Transmission line = Rs. 565.70 lakh
Total = Rs. 765.22 lakh
Colony & office building = Rs. 39.00 lakh
Transmission line = Rs. 1002.96 lakh
Total = Rs. 1233.16 lakh
ADDITIONAL CAPITALIZATION 2006-07
11. Clause (1) of Regulation 53 of the 2004 regulations provides-
(1) The following capital expenditure within the original scope of work actually incurred after the date of commercial operation and up to the cut off date may be admitted by the Commission, subject to prudence check:
(i) Deferred liabilities;
(ii) Works deferred for execution;
(iii) Procurement of initial capital spares in the original scope of works subject to the ceiling norm specified in regulation 52;
(iv) Liabilities to meet award of arbitration or compliance of the order or decree of a court; and
(v) On account of change in law:
Provided that original scope of work along with estimates of expenditure shall be submitted along with the application for provisional tariff: Provided further that a list of the deferred liabilities and works deferred for execution shall be submitted along with the application for final tariff after the date of commercial operation of the transmission system.
12. The additional capital expenditure claimed for the year 2006-07 is within the original scope of work and is found to be in order as it was against the committed liability. Accordingly, the additional capital expenditure of Rs. 765.22 lakh and Rs. 1233.16 lakh has been allowed. Regulation 53 (4) of the 2004 regulations allows for two revisions in the tariff period on account of impact of additional capitalisation. This additional capitalisation shall be treated as the first revision of tariff and the petitioner is at liberty to approach the Commission for second revision in accordance with the 2004 regulations.
Time Over-run
13. As per the original approval, the transmission assets were scheduled to be commissioned by June 2006. Asset-I was declared under commercial operation on 1.8.2006. Therefore, there was a time delay of about one month in the commissioning of the transmission line. The petitioner has explained that the delay was due to charging, without any fault in complex network and involving physical readiness of other utilities and system accessibility.
14. In view of above, it has been submitted that delay in completion of the project was beyond the control of the petitioner.
15. We have considered the matter very carefully. There is satisfactory explanation from the petitioner for the entire delay in completion of the transmission line. It needs to be pointed out that the petitioner does not gain anything by delaying the commissioning of its transmission assets. Therefore, the delay in commissioning of line is considered to be beyond the control of the petitioner.
COST VARIATION
16. As against the apportioned approved cost of Rs. 21557.00 lakh and Rs. 21943.00 lakh, the actual expenditure of the transmission assets is Rs. 19643.23 lakh and Rs. 19389.62 lakh, respectively as on 31.3.2007. Therefore, there is no cost over-run for the purpose of the present petition.
TOTAL CAPITAL COST
17. Based on the above, gross block as given below has been considered for the purpose of tariff for both the transmission assets, after allowing additional capitalization on woks as claimed by the petitioner:
(Rs. in lakh)
Expenditure up
on date of commercial operation
Additional
expenditure 31.3.2007 capital up to
Total capital
expenditure
Asset-I
18878.01
765.22
19643.23
Asset-II
18156.46
1233.16
19389.62
Total
37034.47
1998.38
39032.85
DEBT- EQUITY RATIO
18. Clause (1) of Regulation 54 of the 2004 regulations inter alia provides that,-
(1) In case of the existing projects, debt-equity ratio Considered by the Commission for fixation of tariff for the period ending 31.3.2004 shall be considered for determination of tariff with effect from 01.04.2004: Provided that in cases where the tariff for the period ending 31.3.2004 has not been determined by the Commission, debt-equity ratio shall be as may be decided by the Commission:
Provided further that in case of the existing projects where additional capitalisation has been completed on or after 1.4.2004 and admitted by the Commission under Regulation 53, equity in the additional capitalisation to be considered shall be:
(a) 30% of the additional capital expenditure admitted by the Commission, or
(b) equity approved by the competent authority in the financial package, for additional capitalisation, or
(c) actual equity employed, whichever is the least:
Provided further that in case of additional expenditure admitted under the second proviso, the Commission may considered equity of more than 30% if the transmission licensee is able to satisfy the Commission that deployment of such equity of more than 30% was in the interest of general public.
19. The Note 1 below Regulations 53 lays down that any expenditure on account of committed liabilities with the original scope of work is to be serviced in the normative debt-equity ratio specified in Regulation 54.
20. The petitioner has considered debt-equity ratio of 70:30 for the transmission assets, as actually deployed on the date of commercial operation. The petitioner has further considered the amount of additional capitalization in the debt-equity ratio of 70:30. We have considered the debt-equity ratio on the date of commercial operation and for the additional capitalisation on works of Rs. 765.22 lakh and Rs. 1233.16 lakh for both the assets as considered by the petitioner. Accordingly, for the purpose of tariff, equity considered for two assets as under:
(Rs. in lakh)
Capital cost as on date of commercial
operation
Equity on the
date of commercial operation
Additional
capital expenditure during 200607
Capital cost
as on 1.4.2007
Equity
considered as on 1.4.2007
Asset- I
18878.01
5663.40
765.22
19643.23
5892.97
Asset-II
18156.46
5446.94
1233.16
19389.62
5816.89
Total
37034.47
11110.34
1998.38
39032.85
11709.86
RETURN ON EQUITY
21. As per Clause (iii) of Regulation 56 of the 2004 regulations, return on equity shall be computed on the equity base determined in accordance with regulation 54 @ 14% per annum. Equity invested in foreign currency is to be allowed a return in the same currency and the payment on this account is made in Indian Rupees based on the exchange rate prevailing on the due date of billing.
22. Equity has been considered as on the date of commercial operation and as on 1.4.2007 and 1.4.2007 onwards as given in the table below para 20 above. However, tariff for the period from date of commercial operation to 31.3.2007 has been allowed on average equity. Accordingly, the petitioner shall be entitled to return on equity as under:
(Rs. in lakh)
Name of
the assets
Equity as
on the date of commercial operation
Equity on
account of additional capitalization
Total equity
Average equity for 2006-07
Return on equity
2006-07 (Pro rata)
2007-08
2008-09
Asset- I
5663.40
229.57
5892.97
5778.18
539.30
825.02
825.02
Asset- II
5446.94
369.95
5816.89
5631.91
722.76
814.36
814.36
INTEREST ON LOAN
23. Clause (i) of regulation 56 of the 2004 regulations inter alia provides that,-
(a) Interest on loan capital shall be computed loan wise on the loans arrived at in the manner indicated in regulation 54.
(b) The loan outstanding as on 1.4.2004 shall be worked out as the gross loan in accordance with Regulation 54 minus cumulative repayment as admitted by the Commission or any other authority having power to do so, up to 31.3.2004. The repayment for the period 2004-09 shall be worked out on a normative basis.
(c) The transmission licensee shall make every effort to re-finance the loan as long as it results in net benefit to the beneficiaries. The costs associated with such re-financing shall be borne by the beneficiaries.
(d) The changes to the loan terms and conditions shall be reflected from the date of such re-financing and benefit passed on to the beneficiaries.
(e) In case of dispute, any of the parties may approach the Commission with proper application. However, the beneficiaries shall not withhold any payment ordered by the Commission to the transmission licensee during pendency of any dispute relating to re-financing of loan;
(f) In case any moratorium period is availed of by the transmission licensee, depreciation provided for in the tariff during the years of moratorium shall be treated as repayment during those years and interest on loan capital shall be calculated accordingly.
(g) The transmission licensee shall not make any profit on account of re-financing of loan and interest on loan;
(h) The transmission licensee may, at its discretion, swap loans having floating rate of interest with loans having fixed rate of interest, or vice versa, at its own cost and gains or losses as a result of such swapping shall accrue to the transmission licensee:
Provided that the beneficiaries shall be liable to pay interest for the loans initially contracted, whether on floating or fixed rate of interest.
24. The petitioner has claimed interest on loan in the following manner:
(i) IFC, ADB, IDFC and SBI loans have been utilised and gross loan opening has been considered from 2006-07. These loans have also been used for additional capitalization purpose. Repayment of loan during the year has been considered as per the loan schedule.
(ii) On the basis of actual rate of interest on actual average loan, the weighted average rate of interest on loan is worked out for various years.
(iii) Total of the gross loan up to 30.9.2007 including the loan amount corresponding to additional capital expenditure has been considered and the interest on loan has been calculated.
25. In our calculation, the interest on loan has been worked out as detailed below:
(i) Gross amount of loan, repayment of instalments and rate of interest submitted and the loan documents with the lenders have been used to work out weighted average rate of interest on actual loan.
(ii) Notional loan arising out of additional capitalization from date of commercial operation to 31.3.2007 has been added in loan amount as on date of commercial operation to arrive at total notional loan. This adjusted gross loan has been considered as normative loan for tariff calculations
(iii) Tariff has been worked out considering normative loan and normative repayments. Once the normative loan has been arrived at, it has been considered for all purposes in the tariff. Normative repayment has been worked out by the following formula:
Actual repayment of actual loan during the year
————————————————X Opening balance of normative
Opening balance of actual loan during the year loan during the year
(iv) Moratorium in repayment of loan has been considered with reference to normative loan and if the normative repayment of loan during the year is less than the depreciation during the year, it has been considered as moratorium and depreciation during the year has been deemed as normative repayment of loan during the year.
(v) Weighted average rate of interest on actual loan worked out as per (i) above has been applied on the average loan during the year to arrive at the interest on loan.
(vi) IDFC and SBI loans have floating rate of interest and rates of interest as applicable on date of commercial operation have been considered in the calculation, subject to mutual settlement between the parties in case of any change/resetting of the interest rate during the tariff period.
26. Based on the above, the year-wise details of interest worked out are given hereunder:
(Rs. in lakh)
Asset-I
Asset-II
Details of
loan
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Opening Gross
Loan
13214.61
13750.26
13750.26
12709.52
13572.73
13572.73
Cumulative
Repayment
0.00
329.49
1452.76
0.00
441.45
1563.79
Net
Loan-Opening
13214.61
13420.78
12297.51
12709.52
13131.28
12008.94
Additions due
to Additional Capitalisation
535.65
863.21
Repayment
during the year
329.49
1123.27
1123.27
441.45
1122.34
1124.52
Net
Loan-Closing
13420.78
12297.51
11174.23
13131.28
12008.94
10884.42
Average Loan
13317.69
12859.14
11735.87
12920.40
12570.11
11446.68
Weighted
Average Rate of Interest on Loan
8.49%
9.40%
9.52%
8.48%
9.41%
9.53%
Interest
753.35
1208.73
1117.52
1004.70
1182.84
1091.41
27. The detailed calculations in support of the weighted average rate of interest are contained in Annexure attached.
DEPRECIATION
28. Sub-clause (a) of Clause (ii) of Regulation 56 of the 2004 regulations provides for computation of depreciation in the following manner, namely:
(i) The value base for the purpose of depreciation shall be the historical cost of the asset.
(ii) Depreciation shall be calculated annually based on straight line method over the useful life of the asset and at the rates prescribed in Appendix II to these regulations. The residual value of the asset shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the historical capital cost of the asset. Land is not a depreciable asset and its cost shall be excluded from the capital cost while computing 90% of the historical cost of the asset. The historical capital cost of the asset shall include additional capitalisation on account of Foreign Exchange Rate Variation up to 31.3.2004 already allowed by the Central Government/Commission.
(iii) On repayment of entire loan, the remaining depreciable value shall be spread over the balance useful life of the asset.
(iv) Depreciation shall be chargeable from the first year of operation. In case of operation of the asset for part of the year, depreciation shall be charged on pro rata basis.
29. Depreciation allowed has been worked out as calculated below:
(Rs.in lakh)
Asset-I
Asset-II
Details of Depreciation
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Gross block as
on the date of
18878.01
19643.23
19643.23
18156.46
19389.62
19389.62
commercial
operation
Additional
Capitalisation during the period
765.22
–
–
1233.16
–
–
Gross Block at
the end of the
19643.23
19643.23
19643.23
19389.62
19389.62
19389.62
period
Rate of
Depreciation
2.5660%
2.5622%
2.5622%
2.5653%
2.5609%
2.5609%
Depreciable
Value (90%)
17334.56
17678.91
17678.91
16895.74
17450.66
17450.66
Depreciation
329.49
503.29
503.29
441.45
496.54
496.54
ADVANCE AGAINST DEPRECIATION
30. As per Sub-clause (b) of Clause (ii) of Regulation 56 of the 2004 regulations, in addition to allowable depreciation, the transmission licensee is entitled to Advance Against Depreciation, computed in the manner given hereunder:
AAD = Loan repayment amount as per regulation 56 (i) subject to a ceiling of 1/10th of loan amount as per regulation 54 minus depreciation as per schedule
31. It is provided that Advance Against Depreciation shall be permitted only if the cumulative repayment up to a particular year exceeds the cumulative depreciation up to that year. It is further provided that Advance Against Depreciation in a year shall be restricted to the extent of difference between cumulative repayment and cumulative depreciation up to that year.
32. The petitioner has claimed Advance Against Depreciation in the following manner:
(i) 1/10th of gross loan considered for tariff;
(ii) Cumulative loan as well as repayment of notional loan considered during the year;
(iii) Depreciation as claimed in the petition.
33. In our calculation, the Advance Against Depreciation has been worked as under:
(i) 1/10th of gross loan has been worked out from the gross notional loan as per para 26 above;
(ii) Repayment of notional loan during the year has been considered as per para 26 above;
(iii) Depreciation as worked out as per para 29 has been taken into account.
34. The details of Advance Against Depreciation allowed for the transmission assets, is given hereunder:
(Rs. in lakh)
Advance against Depreciation
Asset-I
Asset-II
2006-07
2007-08
2008-09
2006-07
2007-08
2008-09
(Pro rata)
(Pro rata)
1/10th of
Gross Loan(s)
1321.46
1375.03
1375.03
1270.95
1357.27
1357.27
Repayment of
the Loan
329.49
1123.27
1123.27
441.45
1122.34
1124.52
Minimum of the
above
329.49
1123.27
1123.27
441.45
1122.34
1124.52
Depreciation
during the year
329.49
503.29
503.29
441.45
496.54
496.54
(A) Difference
0.00
619.98
619.98
0.00
625.80
627.98
Cumulative
Repayment of the Loan
329.49
1452.76
2576.03
441.45
1563.79
2688.31
Cumulative
Depreciation/ Advance against Depreciation
329.49
832.78
1956.05
441.45
937.99
2060.33
(B) Difference
0.00
619.98
619.98
0.00
625.80
627.98
Advance
against Depreciation Minimum of (A) and (B)
0.00
619.98
619.98
0.00
625.80
627.98
OPERATION & MAINTENANCE EXPENSES
35. In accordance with Clause (iv) of Regulation 56 the 2004 regulations, the following norms are prescribed for O & M expenses:
Year
2004-05
2005-06
2006-07
2007-08
2008-09
O&M
expenses (Rs in lakh per ckt-km)
0.227
0.236
0.246
0.255
0.266
O&M
expenses (Rs in lakh per bay)
28.12
29.25
30.42
31.63
32.90
36. The petitioner has claimed O & M expenses for 492 ckt-km for the Asset-I and 474 ckt-km for Asset -II, which has been allowed. Accordingly, the petitioner’s entitlement to O & M expenses has been worked out as given hereunder:
Asset-I
Asset-II
2006-07 (Pro rata)
2007-08
2007-08
2006-07 (Pro rata)
2007-08
2008-09
O & M
expenses 492 ckt-km line length
80.69
125.46
130.87
O & M
expenses 474 ckt-km line length
106.89
120.87
126.08
TOTAL
80.69
125.46
130.87
TOTAL
106.89
120.87
126.08
37. The petitioner has claimed certain additional expenses on account of insurance and the licence fee. These claims have been considered in our order dated 28.4.2008 in Petition No. 147/2007. For the reasons recoded in the said order dated 28.4.2008, the petitioner is not entitled to any additional O & M expenses under the heads `insurance` and `licence fee`.
38. The petitioner has submitted that the wage revision of its employees is due with effect from 1.1.2007. Therefore, according to the petitioner, O & M expenses should be subject to revision on account of revision of employee cost from that date. In the alternative, it has been prayed that the increase in employee cost due to wage revision be allowed as per actuals for extra cost to be incurred consequent to wage revision. We are not expressing any view, as this issue does not arise for consideration at this stage. The petitioner may approach for a relief in this regard at an appropriate stage in accordance with law.
INTEREST ON WORKING CAPITAL
39. The components of the working capital and the interest thereon are discussed hereunder:
(i) Maintenance spares
Regulation 56(v) (1) (b) of the 2004 regulations provides for maintenance spares @ 1% of the historical cost escalated @ 6% per annum from the date of commercial operation. In the present case, element wise capital expenditure on the date of commercial operation which has been considered as the historical cost for the purpose of the present petition and maintenance spares have been worked out accordingly by escalating 1% of the historical cost @ 6% per annum. In this manner, the value of maintenance spares works out to Rs. 188.78 lakh and Rs. 181.56 lakh for Asset-I and Asset-II as on 1.8.2006 and 1.5.2006, respectively. The necessary details are given hereunder:
Transmission assets
Date of Commercial Operation
Capital Expenditure
(Rs. in lakh) on the date of commercial operation
Escalated spares Cost as on 1.4.2004 (Rs. in lakh)
Asset- I
1.8.2006
18878.01
188.78
Asset-II
1.5.2006
18156.46
181.56
(ii) O & M expenses
Regulation 56(v)(1)(a) of the 2004 regulations provides for operation and maintenance expenses for one month as a component of working capital. The petitioner has claimed O&M expenses for 1 month of O&M expenses of the respective year as claimed in the petition. This has been considered in the working capital.
(iii) Receivables
As per Regulation 56(v)(1)(c) of the 2004 regulations, receivables will be equivalent to two months average billing calculated on target availability level. The petitioner has claimed the receivables on the basis 2 months’ transmission charges claimed in the petition. In the tariff being allowed, receivables have been worked out on the basis 2 months’ transmission charges.
(iv) Rate of interest on working capital
As per Regulation 56(v) (2) of the 2004 regulations, rate of interest on working capital shall be on normative basis and shall be equal to the short-term Prime Lending Rate of State Bank of India as on 1.4.2004 or on 1st April of the year in which the project or part thereof (as the case may be) is declared under commercial operation, whichever is later. The interest on working capital is payable on normative basis notwithstanding that the transmission licensee has not taken working capital loan from any outside agency. The petitioner has claimed interest on working capital @ 10.25% based on SBI PLR as on 1.4.2006, which is in accordance with the 2004 regulations and has been allowed.
40. The necessary computations in support of interest on working capital are appended herein below:
(Rs. in lakh)
Asset-I
Asset-II
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Maintenance
Spares
188.78
196.33
208.11
181.56
191.55
203.04
O & M
expenses
10.09
10.46
10.91
9.72
10.07
10.51
Receivables
436.56
560.18
545.85
424.30
552.96
538.92
Total
635.43
766.97
764.86
615.58
754.58
752.47
Rate of
Interest
10.25%
10.25%
10.25%
10.25%
10.25%
10.25%
Interest
43.42
78.61
78.40
57.84
77.34
77.13
TRANSMISSION CHARGES
41. The transmission charges being allowed for the two transmission assets are summarised below:
(Rs. in lakh)
Asset-I
Asset-II
2006-07 (Pro rata)
2007-08
2008-09
2006-07 (Pro rata)
2007-08
2008-09
Depreciation
329.49
503.29
503.29
441.45
496.54
496.54
Interest on
Loan
753.35
1208.73
1117.52
1004.70
1182.84
1091.41
Return on
Equity
539.30
825.02
825.02
722.76
814.36
814.36
Advance
against Depreciation
0.00
619.98
619.98
0.00
625.80
627.98
Interest on
Working Capital
43.42
78.61
78.40
57.84
77.34
77.13
O & M
Expenses
80.69
125.46
130.87
106.89
120.87
126.08
Total
1746.24
3361.09
3275.08
2333.64
3317.76
3233.50
TRANSMISSION MAJORATION FACTOR
42. The petitioner has claimed the Transmission Majoration Factor (TMF) @ 10% of the transmission charges. This has been opposed by some of the respondents. This aspect has already been considered in Petition No. 147/2007 and the Commission by its order dated 28.4.2008 has upheld the entitlement of the petitioner to TMF. For the reasons recorded in the said order dated 28.4.2008, we are of the view that 10% mark up (pre-tax) on transmission charges shall be allowed as the Transmission Majoration Factor in the present petition also.
GENERAL
43. In addition to the charges approved above, the petitioner shall be entitled to other charges like income-tax, incentive, surcharge and other cess and taxes in accordance with the 2004 regulations.
44. In view of Transmission Service Agreement entered into between the petitioner and respondent No. 1, the petition shall claim all the charges from respondent No. 1. It is noted also that BPTAs have been entered into between respondent No. 1 and the beneficiaries, respondents No. 2 to 17. Accordingly, respondent No. 1 shall raise bills for the charges, including the Transmission Majoration Factor approved in this order. These charges shall be shared by the beneficiaries in Northern Region respondent Nos. 2 to 17, in accordance with the 2004 regulations.
45. The petitioner has sought approval for the reimbursement of expenditure of Rs. 108,666/- incurred on publication of notices in the newspapers. The petitioner shall claim reimbursement of the said expenditure directly from the respondents in one installment in the ratio applicable for sharing of transmission charges. The petitioner has also sought reimbursement of filing fee of Rs. 5 lakh paid. A final view on reimbursement of filing fee is yet to be taken by the Commission for which views of the stakeholder have been called for. The view taken on consideration of the comments received shall apply in the present case as regards reimbursement of filing fee.
46. The petitioner is already billing the respondents on provisional basis in accordance with the Commission’s interim direction. The provisional billing of tariff shall be adjusted in the light of final tariff now approved by us.
47. This order disposes of Petition No. 149/2007.