BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
CHAPTER – 3
TRUING UP FOR FY15
Karnataka Electricity Regulatory Commission (KERC) approved the Annual Revenue Requirement
(ARR) of BESCOM for FY15 in its Tariff Order dated 12thMay 2014.
Annual Accounts for FY-15 is finalized, audited by the Statutory Auditors and certified by Accountant
General of India. BESCOM is submitting Truing up of FY-15 before the Commission based on this
audited accounts.
1. Approved V/s Actuals:
The comparison of approved Annual Revenue Requirement to the actuals of FY15are
deliberated in the below paras:
Energy Requirement:
Table Number: 3.1
PARTICULARS
Estimated sales in MU
Percentage distribution losses in %
Energy at interface point in MU
Percentage transmission losses in %
Total energy requirement in MU
Approved
25395.08
13.6
29392.45
3.81
30556.66
Actuals
24436.05
13.53
28261.00
3.95
29423.03
Variation
-959.03
-0.07
-1131.45
0.14
-1133.63
From the above table, it can be seen that BESCOM has purchased 29,423 MU, which is less by
1134 MU compared to the approved quantum of power purchase i.e., 30, 556.66 MU as per
the annual accounts. BESCOM attained the targeted distribution loss for FY-15. Details
regarding Power purchase for FY-15 are available in D1 statement.
Power Purchase Cost:
Comparison of actual Power purchase with respect to Commission approved in the Tariff
Order dated 12.05.2014 is shown below:
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 19
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.2
Particulars
Name of the
Generating
Station
KPCL HYDEL
JURALA HYDEL
KPCL THERMAL
CGS SUPPLY
IPPS
NCE
Short Term/
KPTCL
Transmission
Charges
SLDC charges
PGCIL charges
POSOCO charges
Energy Balance
TOTAL
Approved
Cost of
Energy
RsCrs
Energy in
MU
3646.01
103.66
8091.69
7945.5
5503.08
3323.87
1942.85
30556.66
207.72
33.01
3081.57
2590.73
2512.46
1226.61
1013.41
Actuals
Unit
Cost of
Energy
Rs/Kwh
0.57
3.18
3.81
3.26
4.57
3.69
5.22
Energy in
MU
3682.15
64.35
7787.52
7606.53
4550.28
3041.09
3466.40
Cost of
Energy
RsCrs
210.79
26.30
3037.29
2360.13
2117.90
1133.26
1753.01
Variation
Unit
Cost of
Energy
Rs/Kwh
0.57
4.09
3.90
3.10
4.65
3.73
5.06
Energy in
MU
36.14
-39.31
-304.17
-338.97
-952.80
-282.78
1523.55
Cost of
Energy
RsCrs
3.07
-6.71
-44.28
-230.60
-394.56
-93.35
739.60
1022.49
1032.54
10.05
11.89
220.67
1.53
17.16
234.56
1.67
-235.05
11689.55
5.27
13.89
0.14
-235.05
-232.54
11922.09
3.90
-775.28
29423.03
3.97
-775.28
-1133.63
Unit
Cost of
Energy
Rs/Kwh
0.00
0.91
0.09
-0.16
0.08
0.04
-0.16
0.07
Approved source wise energy and cost (in percentage) is compared with the actual power
purchase:
Table Number: 3.3
Name of the Generating
Station
Energy
Variance
Approved
11.93%
12.19%
0.26%
1.95%
1.98%
0.03%
JURALA HYDEL
0.34%
0.21%
-0.13%
0.31%
0.25%
-0.06%
KPCL THERMAL
26.48%
25.79%
-0.69%
28.89%
28.55%
-0.34%
CGS SUPPLY
26.00%
25.19%
-0.81%
24.29%
22.18%
-2.11%
IPPS
18.01%
15.07%
-2.94%
23.56%
19.91%
-3.65%
NCE
10.88%
10.07%
-0.81%
11.50%
10.65%
-0.85%
6.36%
11.48%
5.12%
9.50%
16.48%
6.98%
100.00%
100.00%
100.00%
100.00%
KPCL HYDEL
Short Term/Medium Term
TOTAL
Approved
Actuals
Cost
Actuals
Variance
From the above table it can be seen that there is an energy shortage of -0.13%, -0.69%, 0.81%, -2.94% and -0.81% in Juralahydel, KPCL thermal, CGS supply, IPPs and NCE
respectively. This energy shortage is made good by 5.12% through short term. Likewise, the
power purchase cost has reduced by -0.06%, -0.34%, -2.11%, -3.65%, and -0.85% in
Juralahydel, KPCL thermal, CGS supply, IPPs and NCE respectively. Power purchase
increased by 6.98% in short term.
The Commission approved the power procurement of 30,556.66 MU which includes
3,323.87 MU of energy from NCE sources for FY 15 to BESCOM. The actual percentage of
NCE to the total purchase is 11.45 % and solar energy is 362.33 MU which works out to
1.23% of the actual l power purchase. Details are as under.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 20
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.4
Particulars
Energy Sales from Apr-14 to Mar-15
Solar RPO as per RPO Regulations
Energy to be purchased through solar during FY 15
RE RPO as per RPO Regulations
Total RE to be purchased during FY 15
Purchased through Solar
Actual total RE purchase
Shortfall/Excess – Solar
Shortfall/Excess – RE
UoM
MU
%
MU
%
MU
MU
MU
MU
MU
Reference
A
B
C=AXB
D
E=AXD
F
G
H=C-F
I=E-G
Quantum
29423.03
0.25
73.56
10
2942.3
362.33
3369.60
-288.77
-427.3
Power purchase cost has increased by7paise above the approved cost. Commission is
requested to true up actual power purchase cost of Rs.11, 689.55Cr.
Transmission Charge:
As shown in table 1.2, State Transmission charges was increased by Rs.10.05 Cr., SLDC
charges by Rs. 5.27 Crs and Central transmission charges was increase by Rs. 14.03 Cr. Thus
total transmission charges increased by Rs.29.35Cr. Commission is requested to true up the
net increase in transmission charge of Rs. 29.35Crs. above the approved cost.
Capital Expenditure for FY-15:
The capital expenditure for FY15 is depicted in the table below:
Table Number: 3.5
Sl.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Total
Nomenclature of work
E & I Works(11kV link lines)
E & I Works(Additional DTC's)
Expenditure incurred under E& I Works(HT and LT reconductoring,
Providing AB cable, Spill over, Urgent works, Emergency and T&P etc.,)
Local Planning
Ganga Kalyana
Service Connection & Drinking water supply
Meter Programming
Replacement of Faulty transformers by new Transformers
Providing infrastructure to Unauthorized IP sets
RGGVY 12th plan
Niranthara Jyothi Yojane
R-APDRP Part-A(IT implementation)
DAS
R-APDRP Part-B
HVDS
Civil Eng works and DSM
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
FY 2014-15 (Rs. In Lakhs)
Sanctioned Expenditure
Budget
Incurred
5000
5458.033
4000
5412.64
15300
19575.31
2000
3130.06
3475.97
8534.77
19316.06
10154.48
16677.58
14.993
22105.67
-2700.47
5052.55
3418.25
24896.09
2936.20
147458
4500
9500
1500
6000
0
0
14000
12000
2500
76300
Page 21
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Operation and Maintenance Expenses:
Operation and Maintenance Expenses (O&M Expenses) includes, Repair and Maintenance
expenses, Employee cost and Administrative and General Expenditure. Commission is
approving O&M Expenses through formula on normative basis. Factors contributing for
increase in O&M expenses are Inflation index and consumer growth rate. Increases in cost
by these indices are reduced to an extent of predetermined BESCOM’s efficiency factor of
1%.
For-15, to arrive at normative O&M expenses, Commission considered previous 12 years
Consumer Price Index (CPI-IW) and Whole sale Price Index (WPI) (i.e., 2002 to 2013) at the
ratio of 80:20 and weighted inflation index was arrived through statistical formula.
Computed weighted inflation index was6.89%. Consumer growth rate at 5.37% was
considered by taking 3 years CAGR upto FY-13. Approved O&M expenses is compared with
the actual as under.
Approved O&M expenses for FY-15 is per Tariff Order dated 12.05.2014 is shown below:
Table Number: 3.6
Particulars
No. of Installations
Weighted Inflation Index (WII)
Consumer Growth Index (CGI) based on 3 Year CAGR
Actual O & M expenses for FY13 in Rs. Crs
O&M expenses in Rs. Crs
FY15
9260781
6.89%
5.37%
901.15
1110.95
As per accounts of FY-15, O&M expenses are as follows:
Table Number: 3.7
Particulars
Other operating (Repair & Maintenance) expenses
Employee Benefits Expense
Other expenses
Total
Actual
54.94
802.35
397.07
1254.36
It is noticed that due to adoption of amendments for reporting accounts as per Company’s
Act, some expenses which are separately approved as per regulatory formats such as finance
charges and other Debts are added to A&G expenses (other expenses as per audited
accounts).Details are as follows:
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 22
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.8
SL No.
1
2
3
PARTICULARS
Rent
Postage stamps & Telephone charges
Remuneration to contract agencies
Current Year 2014-15
13.82
7.22
109.61
4
Professional, legal and consultancy
5
6
Conveyance & Travel expenses
Vehicle running expenses
7
Fees & Subscriptions
3.92
8
Printing & Stationery
6.20
9
Advertisement Expenses
2.77
10
Computer stationary and floppies
0.55
11
Contributions
0.30
12
Electricity Charges
2.33
13
Freight & other material related expenses
1.12
14
Miscellaneous including provisions
0.00
Rates & Taxes
0.68
Insurance/fee
0.05
Security Charges
0.00
Water Charges
0.36
DSM Expenses
License Fees
Miscellaneous expenses
4.77
0.00
4.50
Details of Payments to Auditors (including legal & Professional charges)
0.00
a) Audit Fees
0.00
15
3.54
38.72
3.10
- Statutory Audit Fees
0.08
- Tax Audit Fees
0.02
b) For Re-imbursement of expenses
0.00
c) For Service Tax
0.01
16
Expenses towards CSR- (Corporate Social Responsibilities)
0.00
17
Other Expenses charged to capital works (Credit Account)
-6.37
197.31
OTHER DEBITS
18
Small & Low value items Written off
19
Asset decommissioning cost
Material cost variance
0.27
-0.04
-15.09
Miscellaneous losses and Write offs including provisions
5.03
Bad Debts written off
0.01
Loss of materials by pilferage, etc.,
0.00
Provision for Loss on obsolescence of stores, etc in stock
FINANCE CHARGES
20
Bank charges
21
Interest to Consumers
22
Stamp duty
TOTAL
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
0.23
-10.98
-21.05
10.19
210.38
0.00
220.57
397.07
Page 23
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Items added to the other expenses are removed and added to the respective heads for the
purpose of Regulatory computation.
Corrected Administrative and General Expenditure after removing
finance and other debits is as under:
Table Number: 3.9
Sl No.
1
2
3
4
PARTICULARS
Rent
Postage stamps & Telephone charges
Remuneration to contract agencies
Professional, legal and consultancy
Current Year 2014-15
13.82
7.22
109.61
3.54
5
6
Conveyance & Travel expenses
Vehicle running expenses
7
Fees & Subscriptions
3.92
8
Printing & Stationery
6.20
9
Advertisement Expenses
2.77
10
Computer stationary and floppies
0.55
11
Contributions
0.30
12
Electricity Charges
2.33
13
Freight & other material related expenses
1.12
14
Miscellaneous including provisions
0.00
Rates & Taxes
0.68
Insurance/fee
0.05
Security Charges
0.00
Water Charges
0.36
DSM Expenses
License Fees
Miscellaneous expenses
4.77
0.00
4.50
Details of Payments to Auditors (including legal & Professional charges)
0.00
a) Audit Fees
0.00
15
38.72
3.10
- Statutory Audit Fees
0.08
- Tax Audit Fees
0.02
b) For Re-imbursement of expenses
0.00
c) For Service Tax
0.01
16
Expenses towards CSR- (Corporate Social Responsibilities)
0.00
17
Other Expenses charged to capital works (Credit Account)
-6.37
197.31
By considering Rs 197.31 Cr. as Administrative & General Expenditure, revised O&M
expenses are tabulated as follows:
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 24
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.10
FY - 15
Particulars
Other operating (Repair & Maintenance) expenses
Employee Benefits Expense
Other expenses
Total
Actual as per Accounts
54.94
802.35
197.31
1054.60
Commission is approving the O&M expenses on normative basis by considering weighted
inflation index of composite series of CPI and WPI and consumer growth rate. Actual
inflation rate and consumer growth rate for FY-15 is now available. Considering the actual
data, normative O&M expenses is computed as under.
The Commission in its Tariff Order 2008 issued on 11.01.2008, vide page No.141 ruled that
‘For fixing the inflation indices, the Commission has considered the weighted average rate of Consumer
Price Index (CPI) of Industrial Workers (IW) & Wholesale Price Index (WPI) to compute average inflation
rate. CPI (IW) represents the inflationary increase for employee expenses and WPI represents the
inflationary increase for A&G and R&M expenses. The Commission has therefore considered the
weightage of employee expense as a percentage of total O&M cost for CPI (IW) [70%] and the weightage
of R&M and A&G as a percentage of total O&M cost for WPI [30%] to determine the weighted average
rate for inflation’
Hence for the purpose of computation of composite series, weightage of employee expense
as percentage of total O&M cost for CPI (WI) and the weightage of R&M and A&G as a
percentage of total O&M cost for WPI is to be considered to determine the weighted average
rate of inflation.
Actual percentage of employee cost, R&M cost and A&G cost over total O&M cost for FY-15
are as follows:
Table Number: 3.11
Particulars
Other operating (Repair &Maintenance)
expenses
Employee Benefits Expense
Other expenses
Total
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
FY - 15
Actual as per Accounts
% of cost over total cost
54.94
5%
802.35
197.31
1054.60
76%
19%
100%
Page 25
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Central Electricity Regulatory Commission (CERC) vide notification dated 31.03.2015
notified the escalation rates 2015 for Inflation rate, escapable transmission charges for
payment by arriving composite series of CPI at 55% and WPI at 45%.
CERC work sheet is as follows:
Table Number: 3.12
ANNUAL INFLATION RATE FOR Escapable for Transmission charges for payment
Period
WPI
CPI
Composite Series
Jan-14
179
237
210.9
Feb-14
179.5
238
211.7
Mar-14
180.3
239
212.6
Apr-14
180.8
242
214.5
May-14
182
244
216.1
Jun-14
183
246
217.7
Jul-14
185
252
221.9
Aug-14
185.9
253
222.8
Sep-14
185
253
222.4
Oct-14
183.7
253
221.8
Nov-14
181.2
253
220.7
253
219.6
Dec-14
178.7
Average Index (Jan 14-Jun-14)
213.9
Average Index (July 14-Dec-14)
221.52
Half-Yearly Inflation
3.57%
Annual Inflation
7.13%
Recomposing the above table by considering CPI at 76% and WPI at 24% being the
weightage of employee expense as percentage of total O&M cost for CPI (WI) and the
weightage of R&M and A&G as a percentage of total O&M cost for WPI respectively. Actual
weighted inflation is as follows.
Table Number: 3.13
Period
WPI
CPI
Composite series (WPI24% CPI76%
Jan-14
179
237
223.08
Feb-14
179.5
238
223.96
Mar-14
180.3
239
224.91
Apr-14
180.8
242
227.31
May-14
182
244
229.12
Jun-14
183
246
230.88
Jul-14
185
252
235.92
Aug-14
185.9
253
236.90
Sep-14
185
253
236.68
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 26
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Oct-14
183.7
253
236.37
Nov-14
181.2
253
235.77
Dec-14
178.7
253
235.17
Average Index (Jan 14-Jun-14)
226.54
Average Index (July 14-Dec-14)
236.13
Half-Yearly Inflation %
Annual Inflation %
4.23%
8.47%
Weighted inflation rate to be considered for FY-15 is 8.47%
Consumer Growth rate:
For the purpose of computation of normative O&M expenses, Commission in its Tariff Order 2008 dated 11.01.2008 stated that
‘‘In addition to the inflationary increase, there is a need to factor in the business growth as well, which is
also an important cost driver. . In this regard, the Commission has considered the increase in number of
consumers …….”
Actual Consumer growth rate for FY-15 is tabulated as under:
Table Number: 3.14
Particulars
Numbers
Consumers as on 31.03.2014 (As per Accounts)
8924652
Consumer as on 31.03.2015 (As per Accounts)
9444518
Annual Growth rate
5.83%
Based on the above inputs, O&M cost for FY-15 on normative basis is tabulated as under.
Formula for working out the O&M expenses on normative basis as prescribed by the
Commission in its Tariff Order-2008 dated 11.1.2008 is as follows:
O&M Cost t = O&M Cost t-1 * (1 + WII + CGI – X)
Where,
‘O&M Cost t’ is the normative O&M cost approved by the Commission for the financial year t
‘WII’ is the weighted inflation index of CPI and WPI based on the contribution of employee cost, R&M and
A&G towards the total O&M cost
‘CGI’ is the Consumer growth index, which is linked to increase (CAGR) in no of consumers from FY03 to
FY07 which is 5.47%
‘X’ is the efficiency factor. For BESCOM the Commission fixes the same as 1%
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 27
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Here t year = FY-15, t-1= FY-14, WII= 8.47%, CGI=5.83%, X=1%
Table Number: 3.15
Particulars
FY15
Weighted Inflation Index (WII)
Consumer Growth Index (CGI) based on 3 Year CAGR
True up O & M expenses for FY14 in Rs. Crs
8.47
5.83
957.46
O&M expenses in Rs. Crs = t-1 cost * (1+WII+CGI-X)
1084.80
Note:
1.
BESCOM has filed an appeal petition before Hon’ble Appellate Tribunal for Electricity regarding true
up of expenses for FY- 14 including O&M expenses. However, for the purpose of computation
Commission approved O&M cost for FY-14 is considered.
2.
Tabulation of approved O&M cost for FY-15 vide table5.10 of T.O 2014, dated 12.05.2014 needs to be
relooked as computation of O&M cost as per the formula works out Rs.1002.62Crs.as against
1110.95Crs.
3.
Commission in its Tariff Order -2013, for computation of FY-15 O&M expenses, FY-13 figures were
considered instead of FY-14.
Comparison of approved, actual and proposed for truing up for FY15 is depicted below:
Table Number: 3.16
Sl.No.
PARTICULARS
Approved by the
Commission for FY-15
Actuals as per
Accounts
Proposed for Truing up
on normative basis
1
O&M Expenses
1110.95
1054.60
1084.80
Commission is requested to true up the O&M expenses of Rs.1084.80 Cr. on normative basis.
Depreciation:
Depreciation amount of Rs. 310.28Crs is worked out as per annual accounts for FY-15. After
deducting an amount of Rs. 110.50 Crs. as per Accounting Standard (AS) – 12, the net
depreciation works out to Rs. 199.78Crs.
Computation of Depreciation as per audited accounts for FY-15 is shown below:
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 28
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.17
PARTICULARS
Gross fixed asset at the beginning of the year
Additions
Deductions
Gross fixed asset at the end of the year
Depreciation provided
Average rate of Depreciation ( on 90% gross fixed asset)
Assets created on Contributions, subsides and grant at the beginning of the year
Additions
Deductions
Gross fixed asset created on contributions, subsidies and grants at the end of the year
Depreciation with drawn as per AS-12
Average rate of depreciation with drawn as per AS-12
Amount in Rs. Crs.
5605.28
1645.01
175.93
7074.36
310.28
4.87%
1426.28
396.12
110.49
1711.89
110.49
6.45%
The average rate of depreciation works out to 4.87%, which is comparable with the KERC
prescribed rate of depreciation at 5.04%. Depreciation rate for the assets created under
contribution, subsidy and grants is at the rate of 6.45%.
It is ascertained that the average depreciation rate of depreciation for the assets held works
out to 4.87% and average depreciation withdrawn as per AS-12 works out 6.45%. The
difference is only by 1.58%. The error occurred in the previous years is rectified duly
considering the average life of all the assets.
Commission is requested to true up the depreciation of Rs.199.78 Cr. as per actual.
Interest and Finance Charges:
As per MYT regulations, Commission is allowing actual interest incurred on the loans
borrowed towards creation of Capital Assets, interest paid towards consumer deposit and
interest on working capital on normative basis.
Breakups of interest and finance charges are as under:
Long term loan
As per the final Accounts, an amount of Rs.1763.87 Crore of long term borrowings are
existing as at the end of FY-15. Details of loans outstanding and interest paid are shown
below:
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 29
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.18
Amount in Crs.
Sl.No.
PARTICULARS
A
Loan
outstanding
as on
31.03.2014
Loan
outstanding as
on 31.03.2015
Interest
paid for FY15
Secured loans
1
Bank of India
142.8
114. 18
16.62
2
Canara Bank
699.99
659. 99
78.51
3
Bank of Maharashtra
362.48
305. 32
40.59
4
REC- APDRP counterpart funding
56.48
22. 08
14.89
5
PFC- R-APDRP (Part A)
146.65
146. 65
0
6
PFC- R-APDRP (Part B)
197.45
194. 5
0
7
PFC-DRUM project
6.16
4. 11
1.63
8
Japan International co-operative-Agency
Total
B
214.75
276. 97
1826.76
1723. 8
152.25
Un-Secured loans
1
Loan from GOK-PMGY
0.77
0.66
0.11
2
Loan from GOK-APDRP
18.62
29.20
4.06
3
GOK-Interest free loan
0.94
0.94
4
Loan from GOK through REC-RGGY
10.63
8.98
5
REC- NJY
166.33
166.33
6
REC-DTC metering
118.19
118.19
7
Loan from GOK-Bangalore automation
0.44
0.29
8
Loan from Gok- Ganga kalyana
0.54
9
Term loan on PFC- Loan accounted as per
advice of KPTCL
181.28
0
4.96
Total
497.74
40.07
65.44
2324.51
1763.87
217.69
A+B
Total long term borrowings
1.37
54.77
0.05
0.12
Interest paid on Long Term borrowings for the year FY-15 is Rs.217.69. Weighted Average
interest rate works out at 10.65%
Long term borrowing for the year FY-15 is Rs.1763.87Crs. Out of which Rs.341.15 Cr is
drawn from PFC towards R-APDRP part A and Part B works, which will be converted as
grants, if the projects conditions are fulfilled.
BESCOM request the Commission to consider Rs217.69Cr as interest on Long term loans.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
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BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Short term loan and Over drafts.
To meet the day to day expenditure ie., for working capital, BESCOM borrowed short term
loan and over drafts. As per the final Accounts, an amount of Rs.2493.81 Crore of short term
and over draft borrowings are existing as at the end of the year FY-15. Details of loans
outstanding and interest paid are shown below:
Table Number: 3.19
Amount in Crs.
Sl.
No.
1
2
3
4
5
6
7
a
b
c
d
e
Total
PARTICULARS
Loan outstanding as
on 31.03.2014
South Indian Bank
Vijaya Bank
Corporation Bank
State Bank of Mysore
Bank of Maharashtra
Loan from REC
Syndicate Bank
PFC
Over Drafts
Bank of Baroda
Vijaya Bank
Canara Bank
Syndicate Bank
Bank of India
Loan outstanding
as on 31.03.2015
200
149.99
125
100
6.12
49.99
250
0
500.00
350.00
100.00
140.53
196.05
503.01
101.18
203.09
2018.84
75.24
299.38
743.40
99.79
194.76
2493.81
Interest paid
for FY-15
7.90
21.43
25.15
10.66
6.12
13.72
18.40
5.65
0.00
131.25
138.69
247.73
Interest on working capital paid for FY-15 was Rs.247.73Crs. The weighted average interest
on working capital works out at 10.98 % per annum.
Interest on working capital:
Short term borrowing and over drafts for the year FY-15 is Rs.2493.81Crs. BESCOM has
incurred an amount of Rs247.73 Crores towards interest on short term loans and bank
overdrafts. Details are shown below:
As per the provisions of MYT Regulations, interest on working capital is as under:
“Interest on Working Capital
3.11.1
Working capital shall cover:
Operation and maintenance expenses for one month;
Maintenance spares @ 1% of the historical cost of assets at the beginning of the year
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
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BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
and
Receivables equivalent to two month’s average revenue.
3.11.2 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 1st April of the year. The interest on
working capital shall be payable on normative basis notwithstanding that the Distribution
Licensee has not taken working capital loan from any outside agency
As per the amended version dated 01.02.2012,
3.11.2 The Commission shall considered the allowable interest on working capital calculated on
normative basis limited to actual expenditure plus fifty percent of the difference between the
actual expenditure and the amount calculated on normative basis. 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 1st April of the year.
As per the data available from the SBI, prime lending rate of interest is as under:
BENCHMARK PRIME LENDING RATE (HISTORICAL DATA)
Table Number: 3.20
Effective Date
07.11.2013
19.09.2013
04.02.2013
27.09.2012
13.08.2011
11.07.2011
12.05.2011
25.04.2011
14.02.2011
03.01.2011
Interest Rate (%)
14.75
14.55
14.45
14.50
14.75
14.25
14.00
13.25
13.00
12.75
Commission notes that Banks have departed from prime lending rates and are now adopting
base rate for lending loans w.e.f.01.07.2010..
The actual lending rates charged to borrowers would be the Base Rate plus borrowerspecific charges, which will include product-specific operating costs, credit risk
premium and tenure premium. SBI lending rates are as under.
Table Number: 3.21
Facility
Interest Rate for period upto 3 years
Working capital and term loan
Base Rate + 2.50% to Base Rate + 5.00%
Note: Appropriate tenure premium will be added for term loans above 3 years
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
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BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.22
Facility
Term Loan (Based on Credit Risk Assessment Model)
Interest Rate for period upto 3 years
Base Rate + 2.50% to Base Rate + 7.00%
Note: Appropriate tenure premium will be added for term loans above 3 years.
SBI is adding 2.5% to base rate plus 5% to 7% for the base rate to arrive at actual lending rate for
Small and Medium Entrepreneurs for a period upto 3 years.
Details obtained from the SBI website is reproduced as under:
INTEREST RATES
State Bank of India provides information on the various Interest rates offered by it on various
loans and deposit schemes.
Details of Up-to-date interest rates scheme-wise is given in the sections one could click on to.
"Please call SBI's 24X7 helpline through Toll free 1800 11 2211, 1800 425 3800 or Toll
number080-26599990 these are accessible from all landlines and mobile phones in the country"
INTEREST RATES ON FCNB LOANS TO EXPORTERS / CORPORATES
FCNB LOANS- PRICING WITH EFFECT FROM 26.02.2013
Table Number: 3.23
External Credit Rating
AAA
AA+, AA, AAA+, A, ABBB+, BBB, BBBBB+ and below (Only Roll Overs)
i)
Interest Rates w.e.f. 26.02.2013
Libor + 3.00%
Libor + 3.00%
Libor + 3.25%
Libor + 4.00%
Libor + 4.25%
The existing separate rates for Demand Loans and Term Loans are dispensed with and uniform
rates are quoted based on External Credit Rating, subject to reset every 6 months @ 6 month's
LIBOR.
ii) The FCNB Loans shall continue to be made available for a period up to 12 months only. The loan
shall be rolled over at the end of 12 months subject to availability of funds for a further period of 12
months at interest rate prevailing at the time of roll-over.

Domestic deposits (Below Rs one crore) interest rates revised w.e.f. 19.08.2015.

Domestic deposits (Rs one crore & above) interest rates revised w.e.f. 17.07.2015.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
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BANGALORE ELECRTICTY SUPPLY COMPANY

TRUING UP FOR FY-15
Benchmark Prime Lending Rate (BPLR) reduced from 14.60% p.a. to 14.45% p.a.
w.e.f.08.06.2015.

Base Rate reduced from 09.85% p.a. to 9.70% p.a. w.e.f. 08.06.2015.
Hon’ble Commission in its earlier Tariff Orders considered only 11.75% as rate of interest on
working capital.
Commission continued the same in Tariff Order dated 02.03.2015, had considered 11.75% as the
rate of interest for the computation of working capital without looking into the short-term prime
lending Rate of State Bank of India as on 1st April of the year.
As per the notified MYT regulations, Interest and finance charges are termed as controllable
expenditure. Commission approves the expenditure based on the normative basis. Expenditure
over and above the normative level shall be charged to the Licensee and any gain on this count shall
be allowed to be retained by the Licensee.
Commission by amending the regulation 3.11.2 opted to charge the Licensee for over and above the
cost on normative basis but chose to limit the gains on this count by 50%.
This amendment will not encourage competition and will not support the improvement in the
efficiency of the Licensee which is against the core objective of the Electricity Act-2003. Electricity
Act 2003 is enacted with an ambition to encourage competition and for improvement in the
efficiency of the electrical industry.
It is submitted to the Commission that any regulations which are not in line with the Electricity Act2003 will become null and void.
Hon’ble Appellate Tribunal for Electricity in its judgment dated 2nd January 2013, vide appeal
No.108/2010, FKCCI V/s KERC and other ruled vide para 39 that :“The Commission has no power to
deviate from its own MYT Regulations and ………without amending the MYT Regulations”
Hon’ble Commission is requested to adhere to the regulations prevailing for the computation of
working capital.
Rate of interest on working capital existed as on 1st of April 2014 is 14.60% as per SBI web site.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
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BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Computed interest on working capital on normative basis is as under:
Table Number: 3.24
Sl.No
1
2
3
4
Particulars
2 months Receivables (Rs.13479.60/6M)
One month O&M expenses (Rs.1054.60/12 M)
1% of Gross fixed Assets as on 01.04.2014 (Rs.5605.27)
Total
Allowable Interest on working capital at 14.60%
5
Actual interest incurred for working capital
6
Savings to the Normative cost
7
Allowable interest on working capital (50% of savings+ actual cost) ( As
per amended version)
Amount
13479.60
1084.80
5605.27
Amount
2246.60
90.40
56.05
2393.05
349.38
247.73
101.65
298.35
It is submitted before the Commission that, Hon’ble Appellate Tribunal in OP 01/2011 has ruled
that, interest on working capital cannot be comparable with the actual cost or normative
expenditure cannot be shared to the consumers. It should be fully passed to the Licensee. The
extract of the judgment of the Hon’ble ATE of OP01/2011 dated 5th January 2012 is reiterated for
kind reference:
4.6.5.2 Rate of interest on working capital so assessed on normative basis, shall be equal to the
short-term prime lending rate of State Bank of India as on the 1st April of the year preceding the
year for which tariff is proposed to be determined or at the actual rate of borrowing whichever is
less”.
The Regulations provide that the working capital will be assessed on normative basis but the
interest rate on working capital shall be the short term prime lending rate of SBI as on 1stApril of
the preceding year or the actual rate of borrowing, whichever is less.
8.4. This issue has already been decided by this Tribunal in the case of Reliance Infrastructure Ltd.
vs. Maharashtra Electricity Regulatory Commission &Ors. Reported as 2009 ELR (APTEL) 0672.
The relevant extracts of the judgment are reproduced below:
“11. The Commission has directed that the interest on working capital be treated as efficiency gain
and is required to be shared as per Regulation No. 19. The treatment given to the interest on
working capital is as under:
“Interest on Working Capital
As discussed in the above paragraphs, the actual interest on working capital incurred by REL
during FY 2006-07 is nil and the normative interest on working capital approved by the
Commission considering other elements of expenses as approved after truing up, works out to
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 35
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Rs.0.60 Crore. As the actual expenditure under this head is zero, the Commission has considered the
entire normative interest on working capital as efficiency gains and has considered sharing of the
same with the distribution licensees in the appropriate ratio, as discussed while sharing efficiency
gains due to reduction in R&M expenses.
12) It is submitted on behalf of the appellant that when working capital is funded through internal
sources of the appellant, the internal funds also carry cost. It is further submitted that such funds
employed elsewhere would have carried interest income.
13) The Commission observed that in actual fact no amount has been paid towards interest.
Therefore, the entire interest on working capital granted as pass through in tariff has been treated
as efficiency gain. It is true that internal funds also deserve interest in as much as the internal fund
when employed as working capital loses the interest it could have earned by investment elsewhere.
Further the licensee can never have any funds which has no cost. The internal accruals are not like
some reserve which does not carry any cost. Internal accruals could have been inter corporate
deposits, as suggested on behalf of the appellant. In that case the same would also carry the cost of
interest. When the Commission observed that the REL had actually not incurred any expenditure
towards interest on working capital it should have also considered if the internal accruals had to
bear some costs themselves. The Commission could have looked into the source of such internal
accruals and the cost of generating such accruals. The cost of such accruals or funds could be less
or more than the normative interest. In arriving at whether there was a gain or loss the
Commission was required to take the total picture into consideration which the Commission has
not done. It cannot be said that simply because internal accruals were used and there was no
outflow of funds by way of interest on working capital and hence the entire interest on working
capital was gain which could be shared as per Regulation No. 19. Accordingly, the claim of the
appellant that it has wrongly been made to share the interest on working capital as per Regulation
19 has merit”.
In the above judgment the Tribunal has held that the working capital funded through internal
sources also carry cost. Such funds employed elsewhere would have carried interest income.
8.5. The above issue has also been dealt with in this Tribunal’s judgment dated 28.8.2009 in Appeal
No. 117 of 2008 in the matter of Reliance Infrastructure Ltd. vs. Maharashtra Electricity
Regulatory Commission &Ors. The relevant extract is reproduced below:
“15. In Appeal No.111/08, in the matter of Reliance Infrastructure v/s MERC and Ors., this Tribunal
has dealt the same issue of full admissibility of the normative interest on Working Capital when the
Working Capital has been deployed from the internal accruals. Our decision is set out in the
following paras of our judgment dated May 28, 2008 in Appeal No. 111 of 2008.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 36
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
“7) The Commission observed that in actual fact no amount has been paid towards interest.
Therefore, the entire interest on Working Capital granted as pass through in tariff has been treated
as efficiency gain. It is true that internal funds also deserve interest in as much as the internal fund
when employed as Working Capital loses the interest it could have earned by investment elsewhere.
Further the licensee can never have any funds which has no cost. The internal accruals are not like
some reserve which does not carry any cost. Internal accruals could have been inter corporate
deposits, as suggested on behalf of the appellant. In that case the same would also carry the cost of
interest. When the Commission observed that the REL had actually not incurred any expenditure
towards interest on Working Capital it should have also considered if the internal accruals had to
bear some costs themselves. The Commission could have looked into the source of such internal
accruals or funds could be less or more than the normative interest. In arriving at whether there
was a gain or loss the Commission was required to take the total picture into consideration which
the Commission has not done. It cannot be said that simply because internal accruals were used
and there was no outflow of funds by way of interest on Working Capital and hence the entire
interest on working capital was gain which could be shared as per Regulation No. 19. Accordingly,
the claim of the appellant that it has wrongly been made to share the interest on Working Capital
as per Regulation 19 has merit.
15. b): The interest on Working Capital, for the year in question, shall not be treated as efficiency
gain.
16. In view of our earlier decision on the same issue we allow the appeal in this view of
the matter and hold that the entire interest on normative interest rate basis is payable
to the appellant”.
From the above judgment, interest on working capital is to be allowed on normative basis and it
cannot be considered as efficiency gain and entire interest on normative interest rate basis is
payable to the Licensee. Hence it is requested to allow interest on working capital on normative
basis which works out to Rs.348.98 Crs.
Interest on consumer Security Deposit:
As per Section 47(4) of the Electricity Act 2003 and KERC Regulations on interest on
security deposits, the ESCOMs have to pay interest on consumer deposits at prevailing bank
rate.
Reserve Bank of India vide letter No. RPCD.CO.RRB.RCB.BC. No. 82 /03.05.33/2013-14
January 29, 2014, revised the Bank rate from 8.75 to 9 percent from 28 January 2014.
Hence, 9 percent Bank rate is paid to the consumer deposit.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 37
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
As per the final accounts, Consumer deposit held as on 31.03.2015 is Rs.
2831.86Crs.Applying bank rate of interest at 9% on consumer deposit, interest component
works out to Rs.254.86Crs.
As per accounts, BESCOM has incurred Rs.210.37 Crores towards payment of interest on
consumer security deposit for the year FY-15. Interest incurred is within the Bank rate of
RBI. Calculations are as follows:
Interest on consumer deposits for FY15
Table Number: 3.25
Particulars
Rs. in Crore
FY15
Opening balance of consumer deposit
2453.79
Outstanding balance of consumer deposits.
2831.86
Interest on consumer deposits
210.37
Weighted average Rate of Interest
7.96%
BESCOM requests the Commission to allow the amount of Rs. 210.37Crs for FY-15 towards
interest on security deposit which is within the Bank rate of 9%.
Other finance charges: As per accounts of BESCOM, Rs. 10.19 Cr. is incurred towards other
finance charges.
Table Number: 3.26
Finance charges
Bank charges
10.19
Interest and Finance Charges approved actual and proposed for truing up
for FY-15 is tabulated as under:
Table Number: 3.27
Sl.
No
PARTICULARS
1
Interest on Loan Capital
2
Interest on Working Capital
3
Interest on Consumers Deposit
4
Other Interest & Finance Charges
Total
Approved by the
Commission for
FY-15
160.92
265.15
214.74
7.63
648.44
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Actuals as per
Accounts
217.69
247.73
210.37
10.19
685.98
Proposed for
Truing up on
normative basis
217.69
348.98
210.37
10.19
787.23
Page 38
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
The Commission is requested to approve the interest and finance charges of Rs.787.23Crs.
For FY-15
Expenses capitalized.
As per the audited accounts following are the expenses capitalized.
Table Number: 3.28
SL. NO
1
PARTICULARS
Interest and finance charges
Current Year 2014-15
67.75
2
Employee cost
4.75
3
Administrative and General expenses
6.37
Total
78.87
Commission requested to allow 78.87 Cr to capitalize for FY-15
Other Debits:
Commission is approving the other debits based on actuals. As per accounts other debits are as
under:
Table Number: 3.29
SL. NO
1
2
3
4
5
6
7
8
Total
PARTICULARS
OTHER DEBITS
Small & Low value items Written off
Asset decommissioning cost
Material cost variance
Miscellaneous losses and Write offs including provisions
Bad Debts written off
Loss of materials by pilferage, etc.,
Provision for Loss on obsolescence of stores, etc. in stock
Losses/gain relating to Fixed Assets
Current Year 2014-15
0.27
-0.04
-15.09
5.03
0.01
-10.98
14.10
-6.70
Commission is not considering the provisions for bad debts provided in the accounts. Hence,
Rs.8.75Crs. provided as Provision for Bad & doubtful debts is not proposed for truing up.
Commission is requested to consider Rs. (-) 6.70Crs. As other debits for FY-15
Prior period charges/credits:
Commission is approving the prior period charges/credits based on actuals. As per accounts
prior period charges/credits are as under.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 39
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Table Number: 3.30
SL. NO
1
2
Total
3
4
5
PARTICULARS
Other Debits
Short provision prior period – Depreciation
Short provision -Other expenses
Current Year 2014-15
9.66
4.93
14.59
Less:
Excess provision prior period- Int. finance charges
Excess provisions related prior periods
Total
Net prior period credit
8.66
19.97
28.63
14.04
Commission is requested to consider Rs.14.04Crs. Of prior period credit for FY-15.
Return on Equity:
RoE computed as per norms is shown in the table below:
Table Number: 3.31
Rs. in Crs
Particulars
FY14
Paid Up Share Capital
546.91
Add: Net profit for FY-15
113.44
Total Share capital
660.35
Reserves & Surplus
-589.20
Equity for FY15
71.15
BESCOM carried accumulated loss to an extent of Rs.589.20Cr as against the share capital of
Rs.660.35Cr. Thus resulting in net share capital of Rs.71.15Crs.
As per MYT regulations Return on equity means:
“Return on equity shall be computed on the equity base determined in accordance with
clause 3.7 above and shall be @ 14% per annum.
For the purpose of return on equity, any cash resources available to the licensee from its share
premium account or from its internal resources that are used to fund the equity commitments
of the project under consideration shall be treated as equity subject to limitation contained in
clause 3.6 above. “
As per the MYT regulations, for the purpose of computation of return on equity any cash
resources available to the licensee from its share premium amount and from internal
resources that are used to fund the equity commitments of the project under consideration
shall be treated as equity.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 40
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Now, Electricity Distribution business is regulated business. Income and Expenditure of
Distribution Company is approved by KERC and latter it will be trued up based on the
actuals. Hence, the difference in the expenditure and the receipts will be validated in truing
up exercise and any excess or shortage will be carried to the next tariff revision along with
the carrying cost. Hence, any loss in the distribution business will be compensated in the
future years which restore the equity.
For an investor, Return on Equity is computed based on the amount of Capital; he has
invested into the Business. Total investment is considered as Capital (either as equity or as
debt). Investment by way of debt will reduce only when the repayment is done towards the
principal amount of debt. Likewise, reduction in equity happens only when Capital is
withdrawn from the business by the investor. Loss in business never results in withdrawal
of Capital. However, profit or surplus belongs to the investor and investor re-invests the
surplus in business until it is withdrawn as dividend/reduction in Capital. That is the reason,
surplus should be added while computing the Return on Equity and loss “should not be”
deducted, while computing the Return on Equity. Share Capital is distinctly shown in
Balance Sheet to identify the amount of direct investment by the investor.
It can be understood easily as per below example:
Table Number: 3.32
Particulars
Capital
Surplus/Loss
Total
RoE
Other Costs
RoE
Total Cost
Total units
Per unit cost
Sitation-1
A
100
B
200
A+B=C
300
D
15%
Tariff Computation
E
1000
F=D*C
45
G=E+F
1045
H
1000
I=G/H
1.05
Situation-2
100
-200
-100
15%
1000
-15
985
1000
0.99
From the above table it can be seen that the other cost is Rs.1000 and the total number of units
is 1000, the minimum tariff in all circumstances should be Rs.1. However, if RoE is computed
by reducing loss from the Capital, in the above situation-2 the tariff falls below the minimum
mark of Rs.1 and leads to increase in losses. In situation -2, the RoE must be taken as Rs. 15 by
which the total cost works out to 1015. The tariff will then be 1.015 ideally.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 41
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Further, Commission is allowing ROE on the equity held at the beginning of the year. Equity
induced in the middle of the year or Incremental internal resources accrued in the months and
invested during the year should also earn the returns. If the RoE allowed for the equity held at
the beginning of the year, it will not give any returns on the equity induced during the year.
Consumers pay additional security deposit (2MMD) in the middle of the year for which interest
for that portion of the year is paid. The same analogy is also applicable to the equity
investments which are induced during the year. Hence it is requested to allow the Return on
equity for the share capital held by BESCOM at the end of year ie., 31.03.2015.
Table Number: 3.33
Rs. in Crs
Particulars
Amount
Equity held as on 31.03.2015
546.91
Return on Equity
15.5 %
Total
84.77
The Commission is requested to allow Rs 84.77Crs. as RoE.
1.13
Income Tax
As per the Annual Accounts, an amount of Rs.25.75 Crores is paid towards Income tax. The
Commission is requested to allow the same.
1.14 Other income:
Commission had approved other income to an extent of Rs. 225 Crs. As per the final
accounts for FY-15 other income is tabulated as under:
Table Number: 3.34
SL. NO
1
2
3
4
5
6
7
8
Total
PARTICULARS
Interest on Bank Fixed Deposits
Profit on sale of stores
Rent
Incentives received
Excess provision made in prior period which is no longer required
Value of materials found excess during physical verification
Miscellaneous
Rebate at 0.5% for collection of Electricity Duty
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Current Year 201415
10.72
0.98
1.90
141.39
0.01
0.03
47.13
2.97
205.13
Page 42
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Major portion of other income is from incentives received ie., Rs.141.39 Crs.
Commission in its tariff Order -2014 issued on 12th May 2014 notes that:
‘The Commission notes that timely payment to Generators is as agreed in the power purchase
agreements. The incentive earned for such timely payments is further translated as savings in the
cost of power purchase. However, providing incentives on such financial prudence is required, to
encourage ESCOMs to be disciplined in payments to generators without incurring costs of interest
on belated payment as being reported in their accounts.
It is pertinent to focus on the Tariff Policy wherein it states that,
“…….Making the distribution segment of the industry efficient and solvent is the key to success
of power sector reforms and provision of services of specified standards. Therefore, the
Regulatory Commissions need to strike the right balance between the requirements of the
commercial viability of distribution licensees and consumer interests. Loss making utilities need
to be transformed into profitable ventures which can raise necessary resources from the capital
markets to provide services of international standards to enable India to achieve its full growth
potential. Efficiency in operations should be encouraged. Gains of efficient operations with
reference to normative parameters should be appropriately shared between consumers and
licensees…………….”
The Commission is therefore of the view that BESCOM’s efforts in making timely payments to
generators and earning incentives in the form of rebate under the terms of PPA need to be
encouraged even though BESCOM is bound to endeavor to make prompt payments as a normal
prudence in financial management. Hence, the Commission decides to allow10% of the total
incentive“
It is brought to the kind notice of the Commission that as per the MYT regulations gains of efficient
operations with reference to normative parameters should be appropriately shared between
consumers and licensees. Hence, Commission is requested to share the efficiency gain by at least
50%.
It is submitted before the Commission, that as per the corporate cash book, closing balance on each
day is negative. This means to say always there is an overdraft. Maximum overdraft stood at 2100 Cr.
and minimum overdraft is at Rs. 700 Crs. Such being the case, earning of interest on security deposit
does not arise. It is learnt that the amount received from the Central Government towards R-APDRP
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 43
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
is kept as deposit in the banks for disbursement as per Schedule. Interest earned on this deposit is
considered as receipts as per final accounts.
For the purpose of truing up, this cannot be termed as Revenue receipts. If the amount released by
the Central Govt. is converted into grants, then the interest earned on this amount is also termed as
grant by the Central Govt. If it is termed as loan, then the loan amount will be reduced to the extent
of interest. On both the counts, interest earned will be a capital receipt and not the revenue receipt.
Hence, this cannot be considered as income for the purpose of truing up exercise.
As per the judgment of Hon’ble Appellate Tribunal for Electricity vide Appeal No.46/2014 dated
17.09.2014,
“The State Commission is not bound to follow the audited accounts and the State Commission can
scrutinize the same and allow the expenditure only after prudence check”
Hence, for the purpose of truing up, interest earned on bank fixed deposits may not be considered.
Revised other income is tabulated as under:
Table Number: 3.35
SL. NO
1
PARTICULARS
Profit on sale of stores
Current Year 2014-15
0.98
2
Rent
3
Incentives received (50% of Rs.141.39 Cr.)
4
Excess provision made in prior period which is no longer required
0.01
5
Value of materials found excess during physical verification
0.41
6
Miscellaneous
7
Rebate at 0.5% for collection of Electricity Duty
Total
1.9
70.695
47.49
2.97
124.44
Commission is requested to consider Rs.124.44Crs. As other Income for FY-15.
1.15 Regulatory Asset:
The Commission in its Order dated 12.05.2014, trued up the Annual Revenue Requirement
(ARR) of FY-13 and approved the deficit of Rs. 1,151.65 Cr. ( A Review petition was filed
before the Commission vide RP-06/2014 and is pending) and approved the estimates of
ARR for FY-15 as Rs.13,586.06 Crs.
Commission wrapped up truing up of FY-13 by stating that,
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 44
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
“Average cost of supply per unit sold works out to Rs.5.24 per unit, as against this revenue
realized during FY13 is Rs.4.73 per unit including government subsidy. Thus, there is a deficit of
1151.65 Crores which also includes the cost of providing supply of 1002 MU in excess of the
quantity included in the ARR to IP Sets and BJ/KJ consumers during the year beyond the
quantum approved in the ARR for FY13.No subsidy had been determined by the Commission
from the Government of Karnataka. The sales under metered category of consumers achieved is
lower than that factored in the approved ARR forFY13, due to which there is no additional cross
subsidy available to cover the cost for excess supply to IP Sets and BJ/KJ consumers. Therefore,
the entire cost of supply of this additional quantity of power supplied to IP Sets and BJ/KJ
Consumers has to be recovered from the State Government at Rs.5.24 (ACS) per unit as
additional subsidy. This amounts to Rs.524.53 Crores. With this additional subsidy from the
Government of Karnataka, the unfilled gap for FY13 will be reduced from Rs.1151.65 Crores to
Rs.627.13 Crores”.
Commission had carried Rs.627.13 Crs. of deficit of FY-13, for determination of Tariff for FY-15.
The calculated table of the Commission is as follows.
Revenue gap for FY15
Table Number: 3.36
Particulars
Net ARR including carry forward gap of FY13 (in Rs. Crores)
Approved sales (in MU)
Average cost of supply for FY15 (in Rs./unit)
Revenue at existing tariff (in Rs. Crores)
Gap in revenue for FY15 (in Rs. Crores)
FY15
14213.19
25395.07
5.60
12653.88
1559.31
Regulatory asset to be recovered over next two years (in Rs.Crores)
611.00
Balance revenue gap to be collected by revision of tariff forFY15 (in Rs. Crores)
948.31
In the above table, Commission carried the deficit of Rs.627.13 Cr. trued up gap of FY-13 to FY15.
The Commission approved annual revenue requirement of FY-15 at Rs.13, 586.06 Cr. to sum up net
ARR of Rs.14, 213.19 Cr.(13,586.06+627.13). Of which Rs.611.00 Cr. was set aside as regulatory
asset. Thus absorbing Rs. 16.13 Cr of trued up deficit of FY-13 in the ARR of FY-15. (Rs.627.13Rs.611 =Rs.16.13) Hence, Commission is requested to consider Rs.16.13 Crs for the purpose of
truing up of FY-15.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 45
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Carrying cost of regulatory asset:
Commission apportioned the trued up gap of FY-13, Rs.1151.65 into two parts.

Rs. 524.53 Cr. payable by Government of Karnataka and

Rs. 627.13 Cr. recoverable from tariff in the next two years. Ie., FY-16 and FY-17.
A claim for payment of Rs.524.53 Crs. was made to the Government and the said amount is not yet
considered by the government for payment. Rs.627.13 Cr apportioned to be recoverable from tariff
is deferred for the next two years ie., FY-16 and FY-17. Hence, BESCOM is eligible for carrying cost at
the rate of 12% p.a. on Rs.1151.65 Crs. Hence, Commission is requested to allow Rs.138.198 Cr as
carrying cost on Rs.1151.65 Crs.at 12% p.a.
Table Number: 3.37
SL. NO
1
2
PARTICULARS
Regulatory asset ( trued up gap of FY-13) absorbed in FY-15 ARR
Carrying cost at 12% on Rs.1151.65 Crs.
Current Year 2014-15
16.130
138.198
1.16 Revenue from sale of power:
Revenue from sale of power is one of the topics which is not dealt by the Commission for the
purpose of truing up exercise in the previous years.
Of late, it is noticed over the years, that the expenditure is not the main cause for increase in
the deficit year on year, but it is the receipts. Hence, it is submitted before the Commission to
consider the revenue receipts from sale of power for the purpose of truing up of respective
years. This may show the path for corrective measures.
Demand, Collection and Balance (DCB) for FY-15 as per accounts are as follows:
Table Number: 3.38
DESCRIPTIO
N
TARIF
F
No of
Consum
UNITS
SOLD
% of
unit
Average
Realization
Rate per
unit(in)
Opening
Balance
Revenue
Demand
5
6=(8/4)*100
7
8
Revenue
Collection
HO Adjust
&
withdrawal
Collection
including
Adjustments
Closing
Balance
9
10
10a
11
CB to
mont
hly
Dema
nd
Ratio
Units
( in
KWH)
1
BJ/KJ ( Upto
18 Units )
BJ/KJ ( Above
2
LT 1
0
3
4
764865
83.98
0%
4.93
20.96
41.4
90.33
-100.7
-10.37
72.74
21
4288
51.87
0%
0
109.59
23.17
0
87.39
87.39
45.37
24
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 46
BANGALORE ELECRTICTY SUPPLY COMPANY
18 Units )
Lighting and
AEH
Commercial
Lighting
IPSets (10HP
& BELOW)
FREE
LIGHTING
From 01-082008
(Subsidy Due
for GOK)
IPSets (10HP
& BELOW)
FREEZED
BALANCE
Upto 31-072008
I.P.Sets
(10HP &
Above )
Pvt. HortI,
Nuris, Coffee
& Tea Plant
LT Industires
Water Supply
Street lights
Pending for
reconcillation
of Sundry
debtors Revenue &
tax
LT TOTAL
Water Supply
& Sewerage
Pumping
HT Industires
HT
Commercial
HT Hospitals
HT Lift
IrrgtnSocities
HT Lift Irrig
Schemes
&Govt Hort.
HT
Residential
Apartment
HT TOTAL
IP SET
DEFUNT
INSTALLATI
ONS
LT + HT
Temporary
Supply (LT +
HT)
GRAND
TOTAL (LT +
HT+
temporary)
Miscellaneo
us Income &
Withdrawals
GRAND
TOTAL
TRUING UP FOR FY-15
LT 2
6389122
5719
23%
4.75
228.88
2715.12
2737.08
88.87
2825.95
118.06
1
LT 3
864600
1663
7%
8.22
57.13
1368.04
1371.57
41.81
1413.39
11.79
0
LT 4A
768516
5939
24%
2.29
434.51
1358.83
1087.61
57.58
1145.19
648.15
6
0
0
0%
0
1261.09
0
0
98.08
98.08
1163.01
LT 4B
638
0
0%
0
6.57
6
0.29
-4.2
-3.91
16.48
33
LT 4C
1315
0
0%
0
1.84
10.93
1.23
-0.13
1.1
11.67
13
LT 5
LT 6 A
LT 6 B
175326
58116
57373
1134
431.1
388.9
5%
2%
2%
6.37
8.34
7.58
72.48
1226.99
708.04
722.5
359.36
294.75
738.72
312.44
125.02
46.23
-232.5
53.42
784.95
79.94
178.44
10.03
1506.4
824.35
0
50
34
0
0
0
0%
0
0
0
0
-127.14
-127.14
127.14
I
9084159
15411
63%
4.48
4128.1
6900.1
6464.28
8.72
6473
4555.2
8
186
664.2
3%
4.33
39.95
287.49
283.23
-6.45
276.78
50.66
2
HT 2A
5414
4750
19%
6.97
44.61
3313.01
3284.73
71.26
3355.99
1.63
0
HT 2B
4893
2796
11%
8.35
14.98
2335.44
2356.63
16.27
2372.91
-22.49
0
HT 2C
380
189.3
1%
7.23
3.64
136.86
135.69
1.53
137.22
3.28
0
HT 3A
20
17.68
0%
2.21
0.98
3.91
1.82
0.23
2.05
2.84
9
HT 3B
9
0.61
0%
4.5
-0.01
0.27
0.27
-0.07
0.2
0.07
3
217
127.3
1%
8.52
-9.22
108.41
70.93
32.04
102.98
-3.79
0
II
11119
8545
35%
7.24
94.91
6185.4
6133.31
114.81
6248.12
32.19
0
0
0
0
0%
0
0
0
0
0
0
0
III
9095278
23956
98%
5.46
4223
13085
12597.6
123.52
12721.11
4587.4
4
0
349240
480
2%
6.25
-66.97
299.98
286.45
-18.26
268.19
-35.19
-1
0
9444518
24436
100%
5.48
4156
13385
12884.1
105.26
12989.31
4552.2
4
0
0
0
0%
0
-5.29
94.15
102.33
-9.18
93.16
-4.3
-1
0
9444518
24436
100%
0
4150.7
13480
12986.4
96.08
13082.46
4547.9
4
0
HT 1
HT 4
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 47
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
From the above table, the total Closing balance is 4 times the average monthly demand. Major dues
are from street light and water supply dues which are 34 times and 50 times of their monthly
average demand respectively. Subsidy receivable from IP (after 01.08.2008 ie., free supply) is due by
6 times the monthly demand. BESCOM cannot enforce disconnection of the installations to recover
the dues as these services are essential to the public.
The average realization as per the above table works out to Rs.5.48 per unit as against the
Commission approved tariff of Rs.5.36 per unit. Since, Commission approved tariff is Rs. 5.36 per
unit, there is no possibility of realization of Rs.5.48 per unit. Hence, the said DCB is further analyzed
as under:
For Analysis, a breakup detail of Consumption and Demand figures of DCB of FY-15 is obtained from
the concerned section.

Consumption has two components. 1. Consumption for the period from 01.04.2014 to
31.03.2015 and 2. Unbilled consumption of 353.14MUprovision made for the year.

Revenue Demand is split into Revenue earned from sale of power (Demand), Interest earned
on belated payment (int) and Headquarters adjustment towards unbilled revenue (HQ
adjustment).
Table Number: 3.39
Tariff
No of
Installati
on Billed
Con. on
for FY
2014-15
HT-1
HT-2A I
HT-2A II
HT-2B I
HT-2B II
HT-2C I
HT-2C II
HT-3A I
HT-3A II
HT-3B
HT-4A
HT-4B
HT-5
HT Total
162
3668
1403
4478
275
231
171
15
4
2
176
6
230
10821
656.09
2372.87
2242.22
2542.15
195.49
73.31
110.74
15.23
0.52
0.31
123.91
1.74
280.17
8614.74
8.15
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5.42
215.98
664.24
2372.87
2242.22
2542.15
195.49
73.31
110.74
15.23
0.52
0.31
123.91
1.74
285.59
8830.72
283.61
2336.10
953.02
2218.26
135.01
81.57
50.92
3.06
0.37
0.19
76.45
0.59
-145.03
5993.99
5.94
6.18
1.59
3.54
0.10
1.94
0.07
0.05
0.06
0.00
0.25
0.01
0.03
19.75
HQ
adjust
ment
billed
-2.05
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.08
0.00
0.00
219.79
246.44
401079
53.03
0.42
53.45
36.29
1.16
2
180861
4451787
1289234
5394
6517
1676
656707
105295
0.00
82.40
5087.33
527.43
13.00
33.63
7.19
1496.24
150.53
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
82.40
5087.33
527.43
13.00
33.63
7.19
1496.24
150.53
0.00
23.77
2433.99
199.69
6.47
25.01
2.92
1226.95
119.37
0.00
3.13
9.37
3.26
0.02
0.07
0.01
4.40
0.53
LT-1 I
LT-1 II
LT-1 II
LT-2AI
LT-2A II
LT-2A FL
LT-2B I
LT-2B II
LT-3 I
LT-3 II
Un
billed
added
NET CON
-ARR
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Demand
Int.
Total
Demand
Pure
ARR
ARR
Includ
ing Int
NET
ARR
287.49
2342.28
954.62
2221.81
135.11
83.51
50.99
3.11
0.42
0.27
76.70
0.61
74.79
6260.18
4.32
9.85
4.25
8.73
6.91
11.13
4.60
2.01
7.04
6.21
6.17
3.41
-5.18
6.96
4.41
9.87
4.26
8.74
6.91
11.39
4.60
2.04
8.11
6.21
6.19
3.48
-5.18
6.98
4.33
9.87
4.26
8.74
6.91
11.39
4.60
2.04
8.11
8.89
6.19
3.48
2.62
7.09
3.96
41.40
6.84
7.06
7.75
0.00
-3.74
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
23.17
2443.37
202.94
6.49
25.08
2.93
1231.35
119.90
47.21
2.88
4.78
3.79
4.98
7.44
4.06
8.20
7.93
47.57
3.27
4.80
3.85
4.99
7.46
4.08
8.23
7.97
47.57
2.81
4.80
3.85
4.99
7.46
4.08
8.23
7.97
Page 48
BANGALORE ELECRTICTY SUPPLY COMPANY
LT-3 OL
LT-4A I
LT-4A II
LT-4A III
LT-4B
LT-4C
LT-5A I
LT-5 A II
LT-5 A III
LT-5 A IV
LT-5B I
LT-5B III
LT-5B III
LT-5B IV
LT-6A [WS]
LT-6B [SL]
LT-7
TOTAL
LT Total
LT+HT
TOTAL
TRUING UP FOR FY-15
569
711573
403
0
501
984
33508
37714
11747
779
22915
24918
3102
648
48979
50218
2.05
5864.25
4.38
0.17
1.87
6.58
112.66
421.46
278.61
48.88
34.54
126.47
91.88
15.01
435.66
390.32
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-4.61
-1.38
2.05
5864.25
4.38
0.17
1.87
6.58
112.66
421.46
278.61
48.88
34.54
126.47
91.88
15.01
431.06
388.94
1.83
1304.31
3.16
0.04
1.25
1.68
66.61
191.82
233.79
56.90
28.22
70.66
59.77
7.75
259.03
227.68
0.00
94.37
-0.19
0.00
2.65
9.30
0.71
0.73
0.60
0.09
0.06
0.48
0.14
0.05
99.97
71.35
0.00
0.00
0.00
0.00
2.10
-0.05
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.35
-4.29
1.84
1398.68
2.97
0.04
6.00
10.93
67.32
192.55
234.38
56.99
28.27
71.14
59.92
7.80
359.36
294.75
8.96
2.22
7.23
2.14
6.68
2.55
5.91
4.55
8.39
11.64
8.17
5.59
6.51
5.16
5.95
5.83
8.96
2.39
6.79
2.14
20.86
16.68
5.98
4.57
8.41
11.66
8.19
5.63
6.52
5.20
8.24
7.66
8.96
2.39
6.79
2.14
32.07
16.61
5.98
4.57
8.41
11.66
8.19
5.63
6.52
5.20
8.34
7.58
53817
182.67
11.78
194.45
210.53
0.63
14.03
225.18
11.52
11.56
11.58
8100927
15468.23
137.15
15605.38
6799.48
302.90
22.90
7125.28
4.40
4.59
4.57
8111748
24082.97
353.13
24436.10
12793.47
322.65
269.34
13385.46
5.31
5.45
5.48
From the above table, following major errors are noticed.
1. Commission determined tariff for BJ/KJ installations for the consumption of 18 units and
below is Rs.5.36 per unit but demanded is Rs.6.96 per unit. For 10 HP and below Irrigation
pump sets, Commission determined tariff is Rs.2.03 per unit but demanded at Rs.2.22 per
unit.
2. Interest is charged to BJ/KJ installations and also IP sets to an extent of Rs.1.96Crs. and 94.36
Cr. respectively though the GoK is releasing subsidy on timely basis.
3. Rs.14.03 Cr. adjustment was made in HQ which is not warranted as the billing is done on
weekly basis. Hence no need to make provision for UN billed energy for this tariff.
4. Boosting of Average revenue realization in respect of LT-6, water supply and Streetlights due
to charging of interest.-On enquiry, it is learnt that the computation is based on the data
obtained from MIS report. MIS report is considered for uniformity and to avoid comments
from the statutory/ AG’s audit.
Interest on BJ/KJ installations and IP sets levied at the Sub-division may be due to:

Government directly releases the funds to M/s KPCL on behalf of Power purchase bills
payable by BESCOM and directs BESCOM to set off the same towards the amount payable by
Government towards supply of power to BJ/KJ installations and IP consumers.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 49
BANGALORE ELECRTICTY SUPPLY COMPANY

TRUING UP FOR FY-15
Electricity tax collected from the consumers of BESCOM on behalf of Government will be
adjusted to BJ/KJ and IP dues.

Amount directly released to BESCOM head office towards amount payable for supply of
Power to BJ/KJ and IP consumers.
Amount received from the Government at the head office, later will be transferred to subdivisions
and then to individual consumers. The lag in communication may have resulted in demanding the
interest to the respective consumers. The error areas are noticed and corrective measures are
initiated to rectify the same.
Revenue realization from local bodies towards street lights and water supply dues is becoming a
challenge to BESCOM, that too collection of due from Village panchayat is not forthcoming.
Commission is allowing interest on working capital which equals to 2 months receivables, over and
above 2 months receivables Company has to bear the cost. Hence, Interest earned on Streetlight and
Water supply dues is necessary to suffice the borrowings of the Company to that extent. Thus, it is
submitted before the Commission that it is not appropriate to recognize the interest earned from
Street light and water supply dues as revenue for purpose of tariff determination.
This contention is supported by the Hon’ble Appellate Tribunal for Electricity. The verbatim of
Hon’ble Appellate Tribunal for Electricity vide appeal No. 42/2014 is quoted for kind reference of
the Commission.
“47. ……………the State Commission is not bound to follow the audited accounts and the State
Commission can scrutinize the same and allow the expenditure only after prudence check”
Portraying of higher tariff to LT4 (a) and BJ/KJ installations in demand is a mistake and the same
needs to be corrected.
By incorporating the corrections which are commented supra, demands of the respective categories
are modified as under:
Correction in Revenue Receipts
Table Number: 3.40
Tariff
Total No of
Installation
1
LT-1 I
LT-4A I
2
558910
766654
NET
CONSUMPTION
-ARR
3
53.45
5930.30
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Demand
revenue total ARR
4
36.29
1304.31
Demanded
corrected
5
41.40
1203.85
Difference
6
5.11
-100.46
Page 50
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
Correction in interest Receipts
Table Number: 3.41
Tariff
1
LT-1 I
LT-4A I
LT-6A [WS]
LT-6B [SL]
Interest Demanded
2
1.16
94.37
99.97
71.35
Interest Corrected
3
0.00
0.00
0.00
0.00
Difference
4
-1.16
-94.37
-99.97
-71.35
After considering the corrections, a Revenue receipt to be considered for truing up is corrected as
follows:
Table Number: 3.42
Tariff
HT-1
HT-2A I
HT-2A II
HT-2B I
HT-2B II
HT-2C I
HT-2C II
HT-3A I
HT-3A II
HT-3B
HT-4A
HT-4B
HT-5
HT Total
LT-1 I
LT-1 II
LT-1 II
LT-2AI
LT-2A II
LT-2A FL
LT-2B I
LT-2B II
LT-3 I
LT-3 II
LT-3 OL
LT-4A I
LT-4A II
LT-4A III
LT-4B
LT-4C
LT-5A I
LT-5 A II
LT-5 A III
LT-5 A IV
LT-5B I
LT-5B III
Net Con.
on for FY
2014-15
Un
billed
added
656.09
2372.87
2242.22
2542.15
195.49
73.31
110.74
15.23
0.52
0.31
123.91
1.74
280.17
8614.75
53.03
0
82.4
5087.33
527.43
13
33.63
7.19
1496.24
150.53
2.05
5864.25
4.38
0.17
1.87
6.58
112.66
421.46
278.61
48.88
34.54
126.47
8.15
0
0
0
0
0
0
0
0
0
0
0
8.15
215.98
0.42
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
NET CON ARR
Demand
Int.
664.24
2372.87
2242.22
2542.15
195.49
73.31
110.74
15.23
0.52
0.31
123.91
1.74
285.59
8628.32
53.45
0
82.4
5087.33
527.43
13
33.63
7.19
1496.24
150.53
2.05
5864.25
4.38
0.17
1.87
6.58
112.66
421.46
278.61
48.88
34.54
126.47
283.61
2336.1
953.02
2218.26
135.01
81.57
50.92
3.06
0.37
0.19
76.45
0.59
-145.03
5994.12
28.65
0
23.77
2433.99
199.69
6.47
25.01
2.92
1226.95
119.37
1.83
1190.44
3.16
0.04
1.25
1.68
66.61
191.82
233.79
56.9
28.22
70.66
5.94
6.18
1.59
3.54
0.1
1.94
0.07
0.05
0.06
0
0.25
0.01
0.03
19.76
0
0
3.13
9.37
3.26
0.02
0.07
0.01
4.4
0.53
0
0
-0.19
0
2.65
9.3
0.71
0.73
0.6
0.09
0.06
0.48
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
HQ
adjust
ment
billed
-2.05
0
0
0
0
0
0
0
0
0.08
0
0
219.79
217.82
3.96
0
-3.74
0
0
0
0
0
0
0
0
0
0
0
2.1
-0.05
0
0
0
0
0
0
Total
Demand
287.49
2342.28
954.62
2221.81
135.11
83.51
50.99
3.11
0.42
0.27
76.7
0.61
74.79
6231.71
28.42
0
23.17
2443.37
202.94
6.49
25.08
2.93
1231.35
119.9
1.84
1190.44
2.97
0.04
6
10.93
67.32
192.55
234.38
56.99
28.27
71.14
4.27
9.85
4.25
8.73
6.91
11.13
4.6
2.01
7.12
6.13
6.17
3.39
-5.08
6.95
5.36
ARR
Includ
ing
Int
4.36
9.87
4.26
8.74
6.91
11.39
4.6
2.04
8.27
6.13
6.19
3.45
-5.08
6.97
5.36
2.88
4.78
3.79
4.98
7.44
4.06
8.2
7.93
8.93
2.03
7.21
2.35
6.68
2.55
5.91
4.55
8.39
11.64
8.17
5.59
3.26
4.8
3.85
4.99
7.46
4.08
8.23
7.97
8.93
2.03
6.78
2.35
20.86
16.69
5.98
4.57
8.41
11.66
8.19
5.63
Pure
ARR
NET
ARR
4.33
9.87
4.26
8.74
6.91
11.39
4.6
2.04
8.08
8.71
6.19
3.51
2.62
7.22
5.32
2.81
4.8
3.85
4.99
7.46
4.08
8.23
7.97
8.98
2.03
6.78
2.35
32.09
16.61
5.98
4.57
8.41
11.66
8.18
5.63
Page 51
BANGALORE ELECRTICTY SUPPLY COMPANY
LT-5B III
LT-5B IV
LT-6A
[WS]
LT-6B
[SL]
LT-7
TOTAL
LT Total
LT+HT
TOTAL
TRUING UP FOR FY-15
91.88
15.01
0
0
91.88
15.01
59.77
7.75
435.66
0
431.06
390.32
-4.61
182.67
0.14
0.05
0
0
59.92
7.8
6.51
5.16
6.52
5.2
6.52
5.2
259.03
0.35
359.36
6.01
6.01
8.34
388.94
227.68
-4.29
294.75
5.85
5.85
7.58
-1.38
194.45
210.53
0.63
14.03
225.18
10.83
10.86
11.58
15468.24
210.41
15474.46
6677.98
36.04
12.36
6893.53
4.32
4.34
4.45
24082.99
218.56
24102.78
12672.1
55.8
230.18
13125.24
5.26
5.28
5.45
Commission approved sales and actuals are compared and tabulated below:
Table Number: 3.43
Sl
No
Approved
Category
LT-1[fully
subsidized
2
LT-2(a)(i)
3
LT-2(a)(ii)
4
LT-2(b)(i)
5
LT-2(b)(ii)
6
LT-3(i)
7
LT-3(ii)
8
LT-4(a)(i)*
10
LT-4(b)
11
LT-4 (c) (i)
13
LT-5(a)
14
LT-5(b)
15
LT-6
16
LT-6
17
LT-7
LT - TOTAL
1
HT-1
2
HT-2(a)(i)
3
HT-2(a)(ii)
4
HT-2(b)(i)
5
HT-2(b)(ii)
6
HT2©(I)
7
HT2©(ii)
8
HT-3(a)(i)
9
HT-3(a)(ii)
11
HT - 3b
12
HT-4(a)
13
HT-5
HT - TOTAL
TOTAL
Misc. Revenue
Grand Total
1
Actuals
Consumption
Revenue
Rate of
Realization
Consumption
Revenue
62.44
33.45
5.36
53.45
41.40
5.36
5138.53
565.24
33.36
5.59
1578.24
141.72
5712.98
8.47
4.71
890.4
387.07
534.59
432.62
150.37
15646.33
629.29
2634.33
2930.38
3124.02
213.61
1.48
8
6.93
1.04
11.99
128.65
59.06
9748.78
25395.11
2466.41
218.2
23.97
3.31
1285.64
105.73
1159.47
2
1.31
542.51
225.8
222.4
236.47
168.4
6695.07
278
1723.84
1841.21
2515.58
171.85
1.33
5.85
1.04
0.19
4.2
75.79
58.95
6677.83
13372.9
229.3
13602.2
4.80
3.86
7.19
5.92
8.15
7.46
2.03
2.36
2.78
6.09
5.83
4.16
5.47
11.20
4.28
4.42
6.54
6.28
8.05
8.05
8.99
7.31
1.50
1.83
3.50
5.89
9.98
6.85
5.27
0.09
5.36
5228.16
532.14
33.63
7.19
1511.47
151.85
5930.30
1.87
6.58
863.89
270.39
431.06
388.94
194.45
15605.37
664.24
2441.34
2308.81
2594.57
201.32
75.40
113.91
17.43
0.52
0.31
127.25
285.59
8830.68
24436.05
2464.23
199.69
25.01
2.92
1228.78
119.37
1206.13
1.25
1.68
549.11
166.40
259.03
227.68
210.53
6700.94
283.61
2336.10
953.02
2218.26
135.01
81.57
50.92
3.06
0.37
0.19
77.04
-145.03
5994.12
12695.1
149.95
12845.05
4.71
3.75
7.44
4.06
8.13
7.86
2.03
6.68
2.55
6.36
6.15
6.01
5.85
10.83
4.29
4.27
9.57
4.13
8.55
6.71
10.82
4.47
1.75
7.04
6.21
6.05
-5.08
6.79
5.19
0.06
5.25
25395.11
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
24436.05
Rate of
Realization
Page 52
BANGALORE ELECRTICTY SUPPLY COMPANY
TRUING UP FOR FY-15
It could be seen from the above table, as against average tariff realized is Rs.5.25 per unit as against
approved tariff of Rs.5.36 per unit. Consumption and realization rate in LT category are more or less
equal to Commission approved sales and the revenue, but HT sales are reduced by 918 Mu and
revenue lost is Rs.683.71Crs. The effect of cross subsidy level is tabulated as below.
Table Number: 3.44
Approved
Sl No
LT - TOTAL
HT - TOTAL
TOTAL
Misc.
Revenue
Grand Total
Actuals
Sales
Reven
15646.3
9748.8
25395.1
6695.1
6677.8
13372.9
Rat
e of
Real
4.3
6.9
5.3
229.3
0.1
13602.2
5.4
25395.1
Consumption
App
Act Dif
d.
ual
f
level
0.6 0.6 0.0
0.4 0.4 0.0
1.0 1.0 0.0
Sales
Reven
15605.4
8830.7
24436.1
6700.9
5994.1
12695.1
Rate
of
Real
4.3
6.8
5.2
150.0
0.1
0.0
0.0
12834.5
5.3
1.0
1.0
24436.1
Cross subsidy level
Appr
level
Actua
Diff
1691.4
-1452.5
238.9
1663.5
-1260.9
402.7
-27.8
191.6
163.8
0.0
229.3
150.0
79.4
0.0
9.6
263.2
253.6
For the above table. Actual cross subsidy level is calculated taking approved level of Average cost of
Supply i.e., Rs.5.36 per unit.
Reduction of 2.25% of HT sales resulted in Rs.191.61 Cr for FY-15 cross subsidy level being lost.
Misc. Revenue approved by the Commission is on higher sides which further worsen the cross
subsidy level.
ABSTRACT of Truing up of FY-15:
Table Number: 3.45
Sl.No
Particulars
1
Revenue from tariff and Misc. Charges
2
3
4
Tariff Subsidy
Total Revenue
Expenditure
Power Purchase Cost
5
Transmission charges of KPTCL
6
7
8
9
10
11
12
13
14
15
15
SLDC Charges
Total PP.cost
O&M Expenses
Depreciation
Interest on Loans
Interest on Working capital
Interest on consumer deposits
Other Interest & Finance charges
Less interest & other expenses capitalized
Funds towards Consumer
Relations/Consumer
Other debits
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Appd
Actual
12407.51
11,829.9
1194.68
13602.19
1,245.3
13,075.2
10887.71
10630.84
1022.49
1037.02
11.89
11922.09
1110.95
168.58
160.92
265.15
214.74
7.63
39.99
17.16
11685.02
1,084.83
199.78
217.68
348.98
210.38
10.19
78.87
1
(6.70)
Page 53
BANGALORE ELECRTICTY SUPPLY COMPANY
16
17
18
16
17
18
19
20
Prior period credits
ROE
Income tax
Other Income
Regulatory asset
Carrying cost
ARR
GAP
Sales
Average cost of supply
TRUING UP FOR FY-15
225
16.12
13602.19
0
25395.07
5.36
(14.04)
84.77
25.75
124.44
16.13
138.19
13797.65
722.47
24436.08
5.65
As per proposed trued up figures, average cost of supply shoots up to Rs. 5.65 per unit as against
approved average cost of Supply of Rs. 5.36 per unit. Commission is requested to approve the above
trued up figures for FY15.
MYT 4TH CONTROL PERIOD FOR FY-17 TO FY-19
Page 54