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1 CHHATTISGARH STATE POWER GENERATION COMPANY LIMITEDS PETITION FOR TRUE-UP OF THERMAL PLANTS FOR FY 2011-12 AND FY 2012-13 ALONG WITH TRUE-UP OF HYDRO PLANTS AND SMALL HYDRO PLANTS FOR THE CONTROL PERIOD FY 2010-11 TO FY 2012-13 BEFORE THE HONBLE CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION, RAIPUR, CHHATTISGARH

2 True-up Petition: CSPGCL 2

3 Before The Chhattisgarh State Electricity Regulatory Commission, Raipur IN THE MATTER OF: Petition for True up of Thermal plants for FY 2011-12 and FY 2012-13 and True up of Hydro Plants including Small Hydro Plants for the Control period FY 2010- 11 to 2012-13 under the provisions of the CSERC (Terms and Conditions for determination of Tariff according to Multi-Year tariff principles) Regulations, 2010 and CSERC (Terms and conditions for determination of generation tariff and related matters for electricity generated by plants based on non- conventional sources of energy) Regulations, 2008 along with other guidelines and directions issued by CSERC from time to time and under provisions under Section 62 and 86 of the Electricity Act, 2003. Petitioner: Chhattisgarh State Power Generation Company Limited (hereinafter referred to as "CSPGCL") The Petitioner respectfully submits as hereunder:- 1. This petition has been prepared in accordance with Sections 62 of the Electricity Act, 2003 and provisions of the regulation CSERC (Terms and Conditions for determination of Tariff according to Multi-Year tariff principles) Regulations, 2010 (hereafter referred as CSERC MYT Regulations, 2010) and Chhattisgarh State Electricity Regulatory Commission (Terms and conditions for determination of generation tariff and related matters for electricity generated by plants based on non- conventional sources of energy) Regulations, 2008 (hereafter referred as CSERC (NCE) Tariff Regulations, 2008). True-up Petition: CSPGCL 3

4 2. This petition includes the True Up of Annual Revenue Requirement and revenue for the three thermal plants of CSPGCL namely KTPS Korba East, HTPS Korba West and DSPM TPS, Korba for FY 2011-12 and FY 2012-13. This petition also includes the True up for the Control period FY 2010-11 to FY 2012-13, in respect of Hasdeo Bango Hydro Power Station and the three Small Hydro Plants namely SHP Gangrel, SHP Sikasar & SHP Korba. 3. CSPGCL in this petition is submitting the information available and would make available additional data as required by the Honble Commission to the extent available with CSPGCL. Prayers to the Honble Commission CSPGCL respectfully prays that the Honble Commission may: a) Consider the submission and allow the true up of expenses and revenue for FY 2011- 12 & FY 2012-13 along with the limited submissions related to FY 2010-11 and the second Control Period as submitted by CSPGCL for its three thermal plants. b) Consider the submission and allow the true up of expenses and revenue for FY 2010- 11 to FY 2012-13 as submitted by CSPGCL for HPS Bango and three SHPs. c) Allow recovery of revenue gap that arises from aforesaid True Up along with its carrying cost. d) Allow recovery of petition filing fee and advertisement expenses in respect of the instant petition. e) Condone any inadvertent omissions/errors/shortcomings and permit CSPGCL to add/change/modify/alter this filing and make further submissions as may be required at a future date. f) Pass such further order, as the Honble Commission may deem fit and proper keeping in view the facts and circumstances of the case. Chhattisgarh State Power Generation Company Limited Raipur Dated: True-up Petition: CSPGCL 4

5 Abbreviations Acronym Definition A&G Administrative and General Expense Capex Capital Expenditure CHP Coal Handling Plant CIP Capital Investment Plan CERC Central Electricity Regulatory Commission COD Commercial Date of Operation CSERC Chhattisgarh State Electricity Regulatory Commission CSEB Chhattisgarh State Electricity Board CSPGCL Chhattisgarh State Power Generation Company Limited CSR Corporate Social Responsibility DPR Detailed Project Report DSPM TPS Dr.Shyama Prasad Mukherjee Thermal Power Station EA 2003 Electricity Act 2003 E&M Electrical & Mechanical ESP Electrostatic Precipitator FD Forced Draft FSA Fuel Supply Agreement FY Financial Year GCV Gross Calorific Value GoCG Government of Chhattisgarh GFA Gross Fixed Assets Genco Generation Company HEP Hydro Power Plant HMI Human Machine Interface HSD High Speed Diesel HTPS KW Hasdeo Thermal Power Station Korba West KTPS KEB Korba Thermal Power Station Korba East Bank ID Induced Draft kV Kilovolt LE Life Extension MoEF Ministry of Environment & Forest MYT Multi Year Tariff MW Megawatt O&M Operations and Maintenance ODS Ozone Depletion Substance PLF Plant Load Factor PFC Power Finance Corporation True-up Petition: CSPGCL 5

6 Acronym Definition R&M Renovation and Modernisation R&M Expenses Repair & Maintenance Expenses RoE Return on equity SHP Small Hydro Plant TPP Thermal Power Plant True-up Petition: CSPGCL 6

7 TABLE OF CONTENTS 1. INTRODUCTION ..................................................................................................... 14 1.1 COMPANY OVERVIEW ........................................................................................ 14 1.2 GENERATION CAPACITY .................................................................................... 14 1.3 PROCEDURAL HISTORY...................................................................................... 15 1.4 CURRENT PETITION ............................................................................................. 15 2. PRINCIPLES FOR TRUE-UP .................................................................................. 16 2.1 REGULATORY FRAMEWORK ............................................................................ 16 2.2 BASE DATA ............................................................................................................ 16 2.3 RE-CATEGORISATION IN LINE WITH REGULATORY PHILOSOPHY ........ 16 2.4 CAPITAL COST AND CAPITAL STRUCTURE: ................................................. 18 2.5 COMPONENTS OF TARIFF FOR THERMAL PLANTS: .................................... 19 2.6 METHODOLOGY FOR TRUING UP FOR SMALL HYDRO PLANTS: ............. 30 2.7 NO TRUING UP APPLICABIE FOR KAWARDHA COGEN. STATION ........... 31 3. HTPS KORBA WEST ............................................................................................ 32 3.1 CAPITAL STRUCTURE ......................................................................................... 32 3.2 RETURN ON EQUITY ............................................................................................ 32 3.3 DEPRECIATION ..................................................................................................... 33 3.4 INTEREST AND FINANCE CHARGES ................................................................ 38 3.5 OPERATION AND MAINTENANCE EXPENSE ................................................. 38 3.6 CONTRIBUTION TO PENSION AND GRATUITY FUND ................................. 39 3.7 NON-TARIFF INCOME .......................................................................................... 40 3.8 OPERATIONAL PARAMETERS OF HTPS .......................................................... 40 3.9 GENERATION ......................................................................................................... 40 1. 41 3.10 COST OF OIL........................................................................................................... 41 3.11 COST OF COAL ...................................................................................................... 41 3.12 INTEREST ON WORKING CAPITAL ................................................................... 42 True-up Petition: CSPGCL 7

8 3.13 SHARING OF GAINS AND LOSSES .................................................................... 42 3.14 ANNUAL REVENUE REQUIREMENT FOR HTPS ............................................. 42 3.15 ACTUAL ARR vis--vis RECOVERABLE ARR ................................................... 43 4. KTPS - KORBA EAST ............................................................................................. 44 4.1 CAPITAL STRUCTURE ......................................................................................... 44 4.2 RETURN ON EQUITY ............................................................................................ 44 4.3 DEPRECIATION ..................................................................................................... 44 4.4 INTEREST ON LOAN ............................................................................................. 45 4.5 OPERATION & MAINTENANCE EXPENSES ..................................................... 46 4.6 CONTRIBUTION TO PENSION AND GRATUITY FUND ................................. 47 4.7 NON TARIFF INCOME .......................................................................................... 47 4.8 OPERATIONAL PARAMETERS FOR KTPS ....................................................... 47 4.9 GENERATION ......................................................................................................... 55 4.10 COST OF OIL........................................................................................................... 56 4.11 COST OF COAL ...................................................................................................... 56 4.12 INTEREST ON WORKING CAPITAL:- ................................................................ 56 4.13 SHARING OF GAINS & LOSSES .......................................................................... 57 4.14 ANNUAL REVENUE REQUIREMENT FOR KTPS ............................................. 57 4.15 ACTUAL ARR vis--vis RECOVERABLE ARR ................................................... 57 5. DSPM TPS KORBA ............................................................................................... 58 5.1 CAPITAL STRUCTURE ......................................................................................... 58 5.2 RETURN ON EQUITY ............................................................................................ 58 5.3 DEPRECIATION ..................................................................................................... 59 5.4 INTEREST AND FINANCE CHARGES ................................................................ 59 5.5 OPERATION AND MAINTENANCE EXPENSE ................................................. 60 5.6 CONTRIBUTION TO PENSION AND GRATUITY FUND ................................. 63 5.7 NON-TARIFF INCOME .......................................................................................... 63 5.8 OPERATIONAL PARAMETERS OF DSPM ......................................................... 64 5.9 THE UNCONTROLLABLE FORCED OUTAGES AT DSPM TPS ...................... 64 True-up Petition: CSPGCL 8

9 5.10 GENERATION ......................................................................................................... 70 5.11 COST OF OIL........................................................................................................... 70 5.12 COST OF COAL ...................................................................................................... 70 5.13 INTEREST ON WORKING CAPITAL ................................................................... 71 5.14 SHARING OF GAINS AND LOSSES .................................................................... 71 5.15 ANNUAL REVENUE REQUIREMENT FOR DSPM ............................................ 71 5.16 ACTUAL ARR vis--vis RECOVERABLE ARR ................................................... 72 6. HASDEO BANGO - HPS ......................................................................................... 73 6.1 CAPITAL STRUCTURE ......................................................................................... 73 6.2 RETURN ON EQUITY ............................................................................................ 73 6.3 DEPRECIATION ..................................................................................................... 73 6.4 INTEREST AND FINANCE CHARGES ................................................................ 74 6.5 OPERATION AND MAINTENANCE EXPENSE ................................................. 75 6.6 CONTRIBUTION TO PENSION AND GRATUITY FUND ................................. 76 6.7 NON-TARIFF INCOME .......................................................................................... 76 6.8 INTEREST ON WORKING CAPITAL ................................................................... 76 6.9 ANNUAL REVENUE REQUIREMENT FOR HASDEO BANGO ....................... 77 6.10 ACTUAL ARR vis--vis RECOVERABLE ARR ................................................... 77 7. SMALL HYDRO PLANTS ....................................................................................... 78 7.1 ARR for FY 2010-11, FY 2011-12 and FY 2012-13 for SHPs ................................ 78 7.2 SHARING OF GAINS/(LOSSES) FOR HYDRO PLANTS ................................... 80 8. SHARING OF GAINS AND LOSSES ..................................................................... 81 8.1 COMBINED ARR FOR ALL PLANTS .................................................................. 81 8.2 COMPUTATION OF SHARING OF GAINS AND LOSSES ................................ 81 8.3 SURPLUS/(DEFICIT) AGAINST STATUTORY CHARGES: .............................. 85 9. NET REVENUE SURPLUS/(DEFICIT) FOR CSPGCL.......................................... 87 10. ISSUES WITH RESPECT TO THE HONBLE COMMISSIONS ORDER DATED 12 JULY, 2013 ............................................................................................ 89 True-up Petition: CSPGCL 9

10 10.1 ISSUE 1: DEPRECIATION FOR HTPS FOR FY 2010-11 .................................... 89 10.2 ISSUE 2: O&M EXPENSES FOR THE MYT CONTROL PERIOD FOR KTPS, HTPS AND HASDEO BANGO: ............................................................................. 89 10.3 ISSUE 3: EFFICIENCY GAIN/LOSSES:................................................................... 91 True-up Petition: CSPGCL 10

11 List of Tables Table 1: Generation capacity of CSPGCL ............................................................................... 14 Table 2: Principles adopted by CSPGCL for True Up ............................................................ 16 Table 3: Approved vis--vis Actual Capitalization (Rs. Crore) .............................................. 19 Table 4: Computation of Weighted Average Inflation ............................................................ 23 Table 5: Pension Fund Liability of CSPGCL .......................................................................... 24 Table 6: Break-up of Contribution to Pension and Gratuity Fund (Rs. Crore)........................ 24 Table 7: Plant-wise List of FDRs............................................................................................. 26 Table 8: Prior Period (Credits)/Charges for CSPGCL (Rs. Crore) .......................................... 28 Table 9: Capital Structure for HTPS (Rs. Crore) ..................................................................... 32 Table 10: Return on Equity for HTPS (Rs. Crore) .................................................................. 32 Table 11: Depreciation for HTPS (Rs. Crore) ......................................................................... 37 Table 12: Interest Expense for HTPS (Rs. Crore) ................................................................... 38 Table 13: Normative (Initial Norm) O&M Expense for HTPS (Rs. Crore) ............................ 38 Table 14: Normative (Revised Norm) O&M Expense for HTPS (Rs. Crore) ......................... 39 Table 15: Actual O&M Expense for HTPS (Rs. Crore) .......................................................... 39 Table 16: Contribution to Pension and Gratuity Fund for HTPS (Rs. Crore) ......................... 39 Table 17: Non-Tariff Income for HTPS (Rs. Crore) ............................................................... 40 Table 18: Actual vis-a-vis Normative Operational Parameters for HTPS (Rs. Crore) ............ 40 Table 19: Generation for HTPS (MU) ................................................................................... 41 Table 20: Oil Cost: Normative - Actual for HTPS .................................................................. 41 Table 21: Coal Cost: Normative - Actual for HTPS ................................................................ 41 Table 22: Interest on Working Capital for HTPS (Rs. Crore) ................................................. 42 Table 23: ARR for HTPS: Actual (Rs. Crore) ......................................................................... 42 Table 24: Capital Structure for KTPS (Rs. Crore) ................................................................... 44 Table 25: Return on Equity for KTPS (Rs. Crore) .................................................................. 44 Table 26: Depreciation for KTPS (Rs. Crore) ......................................................................... 45 Table 27: Interest Expense for KTPS (Rs. Crore) ................................................................... 45 Table 28: Normative (Initial Norm) O&M Expense for KTPS (Rs. Crore) ............................ 46 Table 29: Normative (Revised Norm) O&M Expense for KTPS (Rs. Crore) ......................... 46 Table 30: Actual O&M Expense for KTPS (Rs. Crore) .......................................................... 46 Table 31: Contribution to Pension and Gratuity Fund for KTPS (Rs. Crore) ......................... 47 Table 32: Non-Tariff Income for KTPS (Rs. Crore) ............................................................... 47 Table 33: Operational Parameters Target for KTPS ............................................................. 47 Table 34: Benchmark Parameters for KTPS ............................................................................ 49 Table 35: Normative vis-a-vis Actual Operational Parameters ............................................... 55 True-up Petition: CSPGCL 11

12 Table 37: Oil Cost: Normative - Actual for KTPS .................................................................. 56 Table 38: Coal Cost: Normative - Actual for KTPS ................................................................ 56 Table 39: Interest on Working Capital for KTPS (Rs. Crore) ................................................. 57 Table 40: ARR for KTPS: Actual (Rs. Crore) ......................................................................... 57 Table 41: Capital Structure for DSPM (Rs. Crore).................................................................. 58 Table 42: Return on Equity for DSPM (Rs. Crore) ................................................................. 58 Table 43: Depreciation for DSPM (Rs. Crore) ........................................................................ 59 Table 44: Interest Expense for DSPM (Rs. Crore) .................................................................. 59 Table 45 Normative (Revised Norm) O&M Expense for DSPM (Rs. Crore) ......................... 62 Table 46: Total O&M Expense for DSPM (Rs. Crore) ........................................................... 63 Table 47: Contribution to Pension and Gratuity Fund for DSPM (Rs. Crore) ........................ 63 Table 48: Non-Tariff Income for DSPM (Rs. Crore) .............................................................. 63 Table 49: Actual vis-a-vis Normative Operational Parameters for DSPM.............................. 64 Table 50: Generation Target Approved Actual for DSPM (MU) ................................... 70 Table 51: Oil Cost: Normative - Actual for DSPM ................................................................. 70 Table 52: Fuel Cost: Normative Actual for DSPM .............................................................. 71 Table 53: Interest on Working Capital for DSPM (Rs. Crore) ................................................ 71 Table 54: ARR for DSPM: Actual (Rs. Crore) ........................................................................ 72 Table 55: Capital Structure for Hasdeo Bango (Rs. Crore) ..................................................... 73 Table 56: Return on Equity for Hasdeo Bango (Rs. Crore) ..................................................... 73 Table 57: Depreciation for Hasdeo Bango (Rs. Crore)............................................................ 74 Table 58: Interest Expense for Hasdeo Bango (Rs. Crore) ...................................................... 74 Table 59: Normative (Initial Norm) O&M Expense for Hasdeo Bango (Rs. Crore) .............. 75 Table 60: Normative (Revised Norm) O&M Expense for Hasdeo Bango (Rs. Crore) ........... 75 Table 61: Actual O&M Expense for Hasdeo Bango (Rs. Crore) ............................................ 76 Table 62: Contribution to Pension and Gratuity Fund for Hasdeo Bango (Rs. Crore) ............ 76 Table 63: Interest on Working Capital for Hasdeo Bango (Rs. Crore) ................................. 77 Table 64: ARR for Hasdeo Bango HPS (Rs. Crore) ................................................................ 77 Table 65: ARR for SHPs for FY 2010-11 (Rs. Crore) ............................................................ 78 Table 66: ARR for SHPs for FY 2011-12 (Rs. Crore) ............................................................ 78 Table 67: ARR for SHPs for FY 2012-13 (Rs. Crore) ............................................................ 79 Table 68: Gains/(Losses) for Small Hydro Plants for FY 2010-11 (Rs. Crore) ...................... 80 Table 69: Gains/(Losses) for Small Hydro Plants for FY 2011-12 (Rs. Crore) ...................... 80 Table 70: Sharing of Gains/(Losses) for SHPs for FY 2012-13 (Rs. Crore) ........................... 80 Table 71: Combined ARR for all the Power Stations of CSPGCL (Rs. Crore) ...................... 81 Table 72: Actual Generation, Backing Down and Uncontrollable Forced Outages ................ 83 Table 74: Surplus/(Deficit) in Statutory Charges (Rs. Crore) ................................................. 85 Table 75: Net ARR of CSPGCL Excluding Statutory Charges (Rs. Crore) ............................ 86 True-up Petition: CSPGCL 12

13 Table 76: Difference in ARR for Hydro Plants for FY 2010-11 (Rs. Crore) .......................... 87 Table 77: Revenue from sale of Power to CSPGCL (Rs. Crore)............................................. 87 Table 78: Standalone Surplus/(Deficit) for CSPGCL (Rs. Crore) ........................................... 88 Table 79: Revenue Surplus/(Deficit) (Rs. Crore) .................................................................... 88 Table 80: Projected O&M cost for FY 2013-14 to FY 2015-16.............................................. 90 Table 81: Computation of Projected O&M Cost ..................................................................... 90 True-up Petition: CSPGCL 13

14 1. INTRODUCTION 1.1 COMPANY OVERVIEW After formation of Chhattisgarh State as per the Madhya Pradesh Reorganization Act 2000, on 1st November 2000, Chhattisgarh State Electricity Board was formed and became functional w.e.f.1st December 2000 in accordance with the notification published in the Government of Chhattisgarh gazette dated 15th November 2000. Consequent to reorganisation of Chhattisgarh State Electricity Board, the Chhattisgarh State Power Generation Company Limited became functional w.e.f., 1st January 2009. 1.2 GENERATION CAPACITY For the period under consideration for true up, CSPGCL had diversified generation capacity comprising of Thermal, Hydro and Cogeneration power plants. The details of the existing generating capacity for which true up Petitions are being filed are provided in the table 1 below. Table 1: Generation capacity of CSPGCL Sr. No. Name of the plant Unit No. & Capacity 2 KTPS -Korba Thermal Power House, Korba (East). 4x50+2x120 =440 MW 3 HTPS Hasdeo Thermal Power Station, Korba (West). 4x210 =840 MW 4 DSPM, TPS, Korba. 2X250 = 500 MW TOTAL THERMAL (CONVENTIONAL) 1780 MW HBPS - Mini Mata Hasdeo Bango Hydro Power Station 5 3X40 =120 MW Machadoli, Distt- Korba. TOTAL HYDRO (CONVENTIONAL) 120 MW 6 SHP Korba, Korba (West). 2X0.85 =1.7 MW 7 SHP Gangrel, Gangrel, Distt- Dhamtari. 4 X 2.5 MW =10 MW 8 HEP Sikasar (2x3.5) , District- Raipur (C.G.) 2X3.5 MW = 7 MW TOTAL SMALL HYDRO (NON CONVENTIONAL) 18.7 MW TOTAL ( CONVENTIONAL+ NONCONVENTIONAL) include Kawardha Co Gen. Plant of 6 MW capacity which 1924.7 MW is covered under generic triff.Hence is not included in the true up. True-up Petition: CSPGCL 14

15 1.3 PROCEDURAL HISTORY CSPGCL submitted its first Multi-Year Aggregate Revenue Requirement Petition for its plants based on Conventional and Non-Conventional energy sources for FY 2010-11 to FY 2012- 13. The Honble Commission passed the tariff order on 31st March 2011. The provisional True Up petition filed by CSPGCL for the three thermal plants i.e., KTPS Korba East, HTPS Korba West and DSPM TPS Korba for FY 2010-11 along-with Annual Performance Review for FY 2011-12 and Tariff Resetting for FY 2012-13 was disposed off by the Honble Commission vide tariff order dated 28thApril, 2012. Subsequently the provisional true up petition for FY 2011-12 for the three thermal plants was filed by CSPGCL in Feb 2013. The same was disposed off by the Commission vide its tariff order dated 12th July 2013. Further, vide its letter dated 29 August, 2013; CSPGCL prayed clarification on some issues related to the Honble Commissions Order dated 12 July, 2013. In reply to the same, the Honble Commission vide its letter dated October 23, 2013 granted leave to CSPGCL to raise the stated issues with reason and justification at the time of next tariff related filing. 1.4 CURRENT PETITION As per the CSERC MYT Regulations, 2010 issued by the Honble Commission, CSPGCL hereby files its true-up Petition for FY 2011-12 and FY 2012-13 for the kind approval of the Honble Commission. Further, Honble Commission vide its Tariff order dated 28.04.12 provided that looking to the uncertainties of rain fall, true up for hydro plants including small hydro plants, covered under non conventional category, shall be undertaken for the control period in one go. Accordingly the true up for HPS Hasdeo Bango and SHP Gangrel, SHP Sikasar and SHP Korba for the entire first control period (i.e., FY 2010-11 to FY 2012-13) is also being submitted herewith. True-up Petition: CSPGCL 15

16 2. PRINCIPLES FOR TRUE-UP 2.1 REGULATORY FRAMEWORK For the three thermal plants, for true up of FY 2011-12 and FY 2012-13, broadly the principles specified in the CSERC MYT regulations 2010 have been followed. For HPS Bango too, the principles specified in the CSERC MYT regulations 2010 have been followed. For determining the tariff of the three Small Hydro Projects covered under the Non conventional category the Honble Commission had relied on the principles specified in the CSERC (NCE) Tariff regulations 2008, accordingly for the purpose of instant true up, the same is being followed. 2.2 BASE DATA Balance sheet and Profit & Loss account form the base data and the Petitioner has relied upon them for the purpose of this Petition. For FY 2011-12, the financial statements, as certified by the statutory auditors and adopted by AGM have been relied. For FY 2012-13, the accounts considered by the statutory auditor have been relied. The Balance sheet and Profit & Loss account, relied for the purpose of this petition are appended as Annexure I & II for the FY 11-12 and FY 12-13 respectively. 2.3 RE-CATEGORISATION IN LINE WITH REGULATORY PHILOSOPHY There are certain deviations in the terminology used in the Company accounts and the terminology used in the regulations / regulatory accounts. To present a true and fair picture in accordance to spirit of the regulations, re-categorization of some of the heads is a must. The principles and procedure followed for such re-categorization is tabulated hereunder for ready reference please. Table 2: Principles adopted by CSPGCL for True Up ARR Component Accounting Head in Adjustment Considered Remarks Balance Sheet (If applicable) ROE - - Balance sheet/ Profit loss account do not provide such data as the return has to be computed on the normative basis as per applicable regulation. True-up Petition: CSPGCL 16

17 ARR Component Accounting Head in Adjustment Considered Remarks Balance Sheet (If applicable) Depreciation Depreciation Actual capitalisation There are some figures have been deviations in GFA and considered with accumulated approved opening GFA depreciation considered as per order issued by the in annual accounts and Honble Commission regulatory accounts O&M Expenses 1. Employee benefit 1. Cost incurred on 1. This O&M cost expenses O&M of Coal adjustment is transportation system attributable to coal 2. Repair & is reduced from transportation and the Maintenance Cost O&M and added to recovered as part of segregated from the P&L A/c & fuel cost. fuel cost. The 2. Cost incurred on approach has also Other Expenses capitalization been approved by the 3. A&G expenses as reduced. Commission. segregated from 3. Statutory charges 2. Other adjustment is General Administration & such as ED, Cess, made in accordance to water charges the regulatory Other Expenses reduced as applicable provisions. Interest & Finance Interest & Finance Interest on loan worked The regulations do not Charges Charges (Also out on the basis of actual recognize actual include working weighted average rate of principal repayment & capital interest) interest, normative consider depreciation as outstanding loans & repayment. Accordingly normative repayment interest is recomputed. during the year. Interest on Working Covered under Normative computation As per applicable Capital interest & Finance based on the provisions Regulations of CSERC charges of the applicable regulation. Fuel Cost Cost of Fuel 1. Costs for Ext CHP/ As per regulation, Coal Transport Landed Cost of fuel added. needs to be considered. 2. Cost of Chemicals, Therefore O&M costs Lubricants, etc (as incurred on coal applicable) reduced transportation is added from fuel and added to coal cost and reduced to O&M. from O&M. The sum total remains same. For the purpose of ready reference, the relevant provisions in the CSERC MYT Regulations, 2010, the procedure adopted in the Commissions previous orders and the approach adopted in the instant petition, is detailed hereunder: True-up Petition: CSPGCL 17

18 2.4 CAPITAL COST AND CAPITAL STRUCTURE: The capital cost and the capital structure plays a very significant role in determination of ARR and Tariff. The regulation 14 of the CSERC MYT Regulations, 2010 deals with the Capital Cost. It states that Capital cost for a project include the expenditure incurred or projected to be incurred, including interest during construction and financing charges & FERV, up to the date of commercial operation of the project. The capital cost also includes additional capital expenditures incurred. Regulation 19 deals with the Debt Equity ratio of the capital structure. The regulation provides that for Generating stations declared under commercial operation prior to 01.04.2010 (in which category all the generating stations covered in the instant petition fall), debt-equity ratio allowed by the Commission for determination of tariff for the period ending 31.3.2010 shall be considered. Further, any expenditure incurred after 0 1.04.2010 as may be admitted by the Commission as additional capital expenditure (including renovation and modernization expenditure for life extension) for determination of tariff, and shall be serviced in debt equity ratio of 70:30, with equity excess of 30% being treated as normative loan. On procedural part, it is submitted that for the purpose of this petition, CSPGCL has considered the opening Capital cost (GFA & CWIP) and Capital structure (Equity & Debt), on 01.04.2011 as has been approved by the Commission in its order dated 12.07.2013 for the closing of FY 10-11. For the control period under consideration, for approval of capital schemes the business plan petition filed by CSPGCL was registered as Petition No. 08 of 2010 (M) which was disposed off by the Commission vide order dt 01.06.2013. Subsequently an application for approval of additional business plan was filed by CSPGCL which was registered by the Commission as petition no. 01 of 2012 (M) and then disposed off vide order dated 31.03.2012. CSPGCL has generally executed the capital works in line with the approvals granted by the Commission. Prior to 01.04.2010, as per the then prevailing regulations and practice, CSERC had approved capital expenses limit instead of schemes. CSPGCL took up the Capital O&M and civil works within such limit only. Some of the capital works initiated in reference to such approved capital limit also got completed/ capitalized during the period under consideration and thus have become due for capitalization. CSPGCL also submits that Regulations allows capitalization when the asset is put to use, whereas, as per prevalent procedure of erstwhile CSEB/CSPGCL, capitalization of assets was booked in accounts only after completion of all the formalities related to contract like completion of PG test, release of retained amount or bank guarantee and thereafter preparation of completion report. The Honble Commission is requested to kindly consider the impact of the same for true-up. This methodology has been approved and adopted by the Honble Commission in its previous Orders also. True-up Petition: CSPGCL 18

19 Table 3: Approved vis--vis Actual Capitalization (Rs. Crore) Financial Year Approved Capitalization Actual Net additional Capitalization FY 2008-09 (Jan to Mar) 45.67 33.45 FY 2009-10 248.55 38.31 FY 2010-11 258 221.60 FY 2011-12 42 102.96 FY 2012-13 121 142.20 Total 715.22 538.52 NOTE : Thus the actual gross net additional capitalization over the year has been lower than the capitalization approved by the honble Commission 2.5 COMPONENTS OF TARIFF FOR THERMAL PLANTS: The Regulation 20 specifies the components of tariff as Annual Fixed Cost and energy Charge. Further the regulation 21 specifies the components of AFC. The component wise detailing is as under: 2.5.1 RETURN ON EQUITY: The regulation 22 deals with the Return on equity. It states that Return on Equity shall be computed on the equity base determined in accordance with Regulations 19, at the base rate of maximum 15.5% to be grossed up with the normal tax rate for the relevant year applicable to the concerned generating company. Provided that it shall be trued up separately for each year of the tariff period with respect to the actual tax rate applicable to the generating company in line with the provisions of the relevant Finance Act of the respective year. At present, no income tax liability for FY 11-12 and 12-13 has been computed and no income tax has been paid (except for the advance income tax paid for which refund has been claimed before the competent authority). As such in the instant petition no grossing up of tax rate has been accounted, however leave is craved that if in future Income tax authorities impose any tax for the period under consideration, the same may be allowed either on actual or RoE allowed for the said period may be grossed up by applicable tax rate. 2.5.2 INTEREST ON LOAN CAPITAL The regulation 23 deals with Interest on loan capital. It states that the loans arrived at in the manner indicated in Regulation 19 shall be considered as gross normative loan for calculation True-up Petition: CSPGCL 19

20 of interest on loan. The repayment for the year shall be deemed to be equal to the depreciation allowed for that year. The normative interest on loan shall be calculated on the normative average loan of the year by applying the weighted average rate of interest. The weighted average rate of interest shall be calculated on the basis of the actual loan portfolio at the beginning of each year applicable to the project, provided further that if the generating station does not have actual loan, then the weighted average rate of interest of the generating company as a whole shall be considered. In the MYT Petition, CSPGCL had submitted that the Corporate loan may be bifurcated to the existing plants in the ratio of their installed capacities. However, later on it has been realized that allocation of such loan to Hasdeo Bango suffers from factual error. It is submitted that the Hasdeo Bango achieved its COD in the year 1990 and from the date of commissioning unlike thermal power plant, there is hardly any significant capital expenditure carried for this station. Hence, it is submitted that all the loans which were not project specific loan could have been utilized only towards the additional capital expenditure on the existing generating stations (i.e., KTPS and HTPS) only. Hence the same shall be considered only for KTPS and HTPS. We find ourselves duty bound to bring the correct and true picture before the Honble Commission and request to consider allocation of non-project specific loans to KTPS and HTPS only. It is further submitted that due to such revision of allocation of loan, there would be only interchanging of normative loan and the borrowed loan. Thus, there will be no impact on total regulatory loan and permissible equity of KTPS, HTPS and Hasdeo Bango power stations. The Honble Commission is requested to approve the aforesaid correction in Corporate loan allocation. 2.5.3 DEPRECIATION The Regulation 24 dealing with the issue states that value base for the purpose of depreciation shall be the capital cost of the asset as admitted by the Commission. The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the capital cost of the asset. It also states that land other than the land held under lease and the land for reservoir in case of hydro generating station shall not be a depreciable asset and its cost shall be excluded from the capital cost while computing depreciable value of the asset. Regarding methodology, the regulation provides that Depreciation shall be calculated annually based on Straight Line Method and at rates specified in appendix II to the regulations with the proviso that, the remaining depreciable value as on 31st March of the year closing after a period of 12 years from date of commercial operation shall be spread over the balance useful life of the assets. It also clarifies that in case of the existing projects, the True-up Petition: CSPGCL 20

21 balance depreciable value shall be worked out by deducting the cumulative depreciation, as admitted by the Commission, till the preceding year from the gross depreciable value of the assets. Depreciation has generally been computed on the above basis, however, the project specific issues, as applicable, have been elaborated in the respective section. 2.5.4 INTEREST ON WORKING CAPITAL The Regulation 25 on the subject specifies that: The working capital for coal based thermal generating station shall cover: a) Cost of coal, for 1 months for pit- head generating stations and two months for non-pit-head generating stations, for generation corresponding to the normative annual plant availability factor; b) Cost of secondary fuel oil for two months for generation corresponding to the normative annual plant availability factor, and in case of use of more than one secondary fuel oil, cost of fuel oil stock for the main secondary fuel oil. c) Maintenance spares @ 20% of operation and maintenance expenses specified in regulation 26. d) Receivables equivalent to two months of capacity charges and energy charges for sale of electricity calculated on the normative annual plant availability factor, and e) Operation and maintenance expenses for one month. The working capital for hydro generating stations shall cover : a) Receivables equivalent to two months of fixed cost. b) Maintenance spares @ 15% of operation and maintenance expenses specified in regulation 26; c) Operation and maintenance expenses for one month. The Regulation further clarifies that the cost of coal shall be based on the landed cost incurred by taking into account normative transit and handling losses and gross calorific value of the fuel as per latest available actual data. Further, Rate of interest on working capital shall be on normative basis and shall be equal to the latest available short-term Prime Lending Rate of State Bank of India in which the generating station is declared under commercial operation. True-up Petition: CSPGCL 21

22 The Regulation also provides that the Interest on working capital shall be payable on normative basis notwithstanding that the generating company has not taken loan for working capital from any outside agency. 2.5.5 OPERATION AND MAINTENANCE EXPENSES: The Regulation 26 specifies Operation and Maintenance (O&M) expenses. The O&M Expense shall mean the total of all expenditure under the heads: Employee Expense; Repairs and Maintenance (R & M) expenses; and Administrative and General (A& G) Expense. It also provides that for the units / stations coming into commercial operation after 01.04.2005, normative O&M expenses shall be in accordance with the norms specified in the prevailing CERC (Terms and Conditions of tariff) Regulations, 2009 and for stations commissioned earlier the projections shall be based on the base year value determined by the Commission. Further, taking into account the impact of uncontrollable factors the allowable Operation and Maintenance expenses for each year of the control period was set by the Commission vide the order dt 28.04.2012 (table 14- page 56). The Order stated: Further as the CSERCs MYT Regulations 2010 allow for pass-through of any increase related to inflation, the Commission reviews the applicable inflation rate for FY 2010-11. To estimate the actual inflation rate applicable for FY 2010-11, the Commission has considered a weighted average of WPI & CPI increase during the year in the ratio of 80:20, respectively.. The Order also clarified that: 3.53 However, it should be noted that the Commission has only passed thru the actual increase in inflation in FY 2010-11, in case of FY 2011-12 & FY 2012-13; the escalation factor is assumed to be 5.72% p.a. only as approved in MYT Order. This rate would be trued up at the time of true up for respective financial years. During final true up of FY 2010-11, the Commission noted that though the regulation is clear, difference in approach adopted for computation of WPI and CPI annual variation results in different computation by different stakeholders. In order to settle the issue, Commission adopted the values published by RBI. Accordingly a minor correction in the inflation factor was adopted by the Commission for finally settling the allowable O&M expenses for all the utilities / plants. For the purpose of this petition, subject to specific pleadings CSPGCL has adopted the principles laid down by the Honble Commission. Accordingly, the annual variation in WPI True-up Petition: CSPGCL 22

23 and CPI has been considered as published by RBI on its website. Further, the actual applicable escalation factor for each year of the control period is computed as under: Table 4: Computation of Weighted Average Inflation Particulars FY 2011-12 FY 2012-13 WPI (AC) 8.9% 7.4% AICPI (IW) 8.4% 10.4% Inflation factor at WPI:CPI ratio (80:20) 8.8% 8.0% Further, as per the methodology adopted in earlier Petitions/Orders, the cost incurred on coal transport has been reduced from the O&M Expense head and added to the fuel cost head. The same has also been approved by the Commission in its MYT Order dated 12 July, 2013. Further, as per the methodology adopted by the Commission in its MYT Order dated 12.07.2013, CSPGCL has considered that for the regulatory purpose, productivity incentive is covered as a part of increase in gains/reduction in losses, as such it should not be considered as separate Employee Expense for the years under consideration. O&M Expense under Head Office, CAU and others are allocated among the four major existing power plants (i.e., HTPS, KTPS, DSPM and Hasdeo Bango) based on their installed capacities. Further, as per the methodology adopted by the Commission in its Orders, CSPGCL has deducted the donations from the actual amount of A&G Expense for the years under consideration. Another important aspect of the O&M cost is the contribution to Pension and Gratuity Trust. Though, it is covered under O&M expense under the head Employee cost, the Commission has given a different treatment. The contribution to trust has been decided by the Commission. For the purpose of this true up petition, CSPGCL has followed the methodology adopted by the Commission. Vide order Dt 31st march 2011, the Commission allowed combined pension fund contribution by all the state power companies to the tune of Rs 200 Cr for each year of the control period. Out of the same, CSPGCL share was determined as 53.31 Cr. Further, on request for clarification, Commission clarified that holding company share to pension fund would also have to be met by CSPGCL, CSPTCL and CSPDCL. CSPGCL share on this account was determined as 1.4 Cr for each year of the control period (total CSPGCL 54.71 Cr). However, as the Order was issued at the year end, by that time in pursuance of the then prevailing order companies had already made contribution to the fund (to the tune of total about Rs 300 Cr). True-up Petition: CSPGCL 23

24 Taking cognizance of the situation, the Commission vide order dt 28.04.12, allowed adjustment of excess payment in FY 2010-11 against the payment due in FY 2011-12. Same has also been acknowledged in the Order dated 12th July 2013. Accordingly, the total pension fund liability of CSPGCL for the three years of the control period has been reapportioned as under: Table 5: Pension Fund Liability of CSPGCL Year FY 2010-11 FY 2011-12 FY 2012-13 P&G Fund Contribution 77.52 31.90 54.71 CSPGCL has paid the requisite share for each of the year. For accounting purpose, in compliance of the already approved philosophy of bifurcation of the pension fund liability of CSPGCL into the plants on the basis of their installed capacity (para 11.75 of MYT order), the plant wise contribution for each of the plant for the years under consideration is tabulated as under and request the Honble Commission to consider the same for truing up purposes: Table 6: Break-up of Contribution to Pension and Gratuity Fund (Rs. Crore) Plant Capacity (MW) FY 2010-11 FY 2011-12 FY 2012-13 KTPS 440 17.952 7.39 12.67 HTPS 840 34.272 14.10 24.19 DSPM TPS 500 20.4 8.39 14.40 HPS Bango 120 4.896 2.01 3.46 Total 1900 77.52 31.90 54.71 2.5.6 EXPENSES ON SECONDARY FUEL OIL CONSUMPTION In this regard, the regulation 27 specifies that annual expenses on secondary fuel oil shall be computed based on normative secondary fuel oil consumption (SFC), Weighted Average Landed Price of Secondary Fuel (LPSF), Normative Annual Plant Availability Factor (NAPAF), Number of days in the year and installed capacity (IC) of the station, in accordance to the following formula: = SFC x LPSF x NAPAF x 24 x NDY x IC x 10 True-up Petition: CSPGCL 24

25 The regulation further specifies that initially (at the time of tariff determination), the landed cost incurred by the generating company on secondary fuel oil shall be taken based on actuals of the weighted average price of the three preceding months and after year end (at the time of true up) the secondary fuel oil expenses shall be subject to fuel price adjustment based on the actual weighted average landed price of secondary fuel oil. Computations have been made based on above. 2.5.7 VARIABLE COST ( COAL COST) The Regulation 28 specifies that energy charge shall cover the primary fuel cost, and shall be payable by every beneficiary for the total energy scheduled to be supplied to such beneficiary on ex-power plant basis. Further, the Energy Charge Rate for the coal based stations shall be determined in accordance with the following formulae: ECR = { (GHR SFC x CVSF) x LPPF / CVPF } x 100 / (100 AUX) Where, AUX = Normative auxiliary energy consumption in percentage. CVPF = Gross calorific value of primary fuel as fired, in kCal per kg,. CVSF = Calorific value of secondary fuel, in kCal per ml. GHR = Gross station heat rate, in kCal per kWh. LPPF = Weighted average landed price of primary fuel, in Rupees/kg. SFC = Specific fuel oil consumption, in ml per kWh. The Regulation further states that the landed cost of fuel shall include price of fuel corresponding to the grade and quality of fuel inclusive of royalty, taxes and duties as applicable, transportation cost by conveyer / rail / road or any other means, and shall be arrived at after considering normative transit, stacking and handling losses as percentage of the quantity of coal dispatched by the coal supply company. The regulations have also specified the normative transit losses for different power stations. 2.5.8 NON TARIFF INCOME Regulation 21 dealing with fixed cost components of tariff specifies that Non-Tariff Income shall be subtracted from the sum of above listed components of AFC. Further Regulation 64 specifies that any income being incidental to the business of the generating company derived from sources, including but not limited to the disposal of assets, income from investments, rents, open access charges, parallel operation charges penalties for over/under-utilization of True-up Petition: CSPGCL 25

26 system and any other miscellaneous receipts but other than income from sale of energy, shall constitute the non tariff income. In the books of accounts, the Non Tariff Income comprises of bookings against Interest income (FDR with bank, Interest on staff loans & advances, Interest on advance to contractors/suppliers, Interest on other loans and advances), Income from rent, hire charges (Rental from staff / contractors, Other rental incomes, Lease rentals received) Sale of tender forms, Profit on Sale of Scrap (Sale of scrap, Cost Of Scrapping - Stores/ Raw Material, Loss On Obsolescence Of Stores) and Revenue Grants and Subsidies. As per well settled principle and practice adopted by CSERC too, the Delayed payment Surcharge is not taken into account for the regulatory purpose. Non tariff income has been computed accordingly. In the MYT order Commission had allocated the NTI at HO to the three thermal plants, CSPGCL follows the same methodology for the purpose of the instant petition. Further, Project specific FDR deposited for the purpose of FSA / rail transport for that particular plant have been allocated to the respective plant, however the interest on generic FDR have been allocated to all the thermal plants on the capacity ratio basis. Interest accrued on the advance given to suppliers/ contractor, other receipts, etc have also been given similar treatment. Profit on sale of scrap made from HO has also been allocated to the three thermal plants on the capacity ratio basis. The list of FDRs and their allocation to plants is provided in the Table below: Table 7: Plant-wise List of FDRs FY 2011-12 Particulars Assigned to Plant Int. Amount in Rs. Allahabad Bank (DSPM) 137279.00 DSPM State Bank of India 4692839.97 Marwa/KW (Extn) State Bank of India 5758871.02 Marwa/KW (Extn) Bank of Baroda 5658498.00 Marwa/KW (Extn) Bank of Baroda 565850.00 Marwa/KW (Extn) Bank of Baroda 10061793.42 Marwa/KW (Extn) Bank of Baroda 2599670.00 Marwa/KW (Extn) Bank of India 8045439.74 Marwa/KW (Extn) Bank of India 4137000.00 Marwa/KW (Extn) Bank of India (DSPM) 179681.00 DSPM Bank of India 1920427.95 Marwa/KW (Extn) Total (GL Code: I150310) 43757350.10 True-up Petition: CSPGCL 26

27 FY 2012-13 Particulars Plant Amount in Rs. Allahabad Bank (DSPM) 303326.00 DSPM Bank of Baroda 21722985.45 Marwa/KW (Extn) Bank of Baroda 2172298.55 Marwa/KW (Extn) Bank of Baroda 5746759.00 Marwa/KW (Extn) Bank of Baroda 2166391.00 Marwa/KW (Extn) Bank of Baroda 5525923.00 Marwa/KW (Extn) Bank of India 1350489.76 Marwa/KW (Extn) Bank of India 2753261.89 Marwa/KW (Extn) Bank of India 3119389.06 Marwa/KW (Extn) Union Bank of India (CSPGCL) 91534.00 CSPGCL State Bank of India (CSPGCL) 47473.00 CSPGCL Total (GL Code: I150310) 44999830.71 The Commission in its last Order dated 12th July 2013, in the treatment of cumulative surplus / (gap) till FY 2012-13 has accounted for an Income Tax Refund of Rs 68.49 Cr (pertaining to FY 2007-08) out of which holding company has allocated Rs. 32.74 Cr to CSPGCL. The refund also included interest on income tax paid as per prevailing accounting practice. The balance amount of income tax refund amounting to Rs. 22.45 Crore has been considered net of advance tax paid during the year under the accounting codeA102301. The interest amount of Rs. 10.29 Crore appears in the books under the head Interest on other loans and advances with GL code I150340. As complete refund amount of Rs. 32.74 Cr (including the interest portion) is being added to HO NTI value, to avoid double accounting, its interest portion has not been considered. The refund amount of Rs. 32.74 Crore has been allocated to three thermal plants in the ratio of their installed capacity. There has been an income in FY 2011-12 on account of refund from income tax department amounting to Rs. 2.50 Crore. It is submitted that such refund of income tax pertains to the advance tax paid (FY 2008-09 onwards) based on the initial assessment. However, after the final assessment of income tax liability when it was ascertained that there is no tax liability, claim for refund of such advance tax paid was lodged. It may be noted that though CSPGCL in past has paid advance income tax, however, in the true-up, it has not claimed the same as part of ARR. Moreover, the Commission has also not considered the advance tax paid. Hence, for all practical purposes, CSPGCL submits that such income towards refund of income tax does not qualify for truing up purposes and hence the same has not been considered in the instant Petition. 2.5.9 OPERTION PARAMETERS & UNCONTROLLABLE LOSS OF GENERATION: True-up Petition: CSPGCL 27

28 The comparison of actual performance parameters vis-a-vis the normative parameters has been dealt in section related to specific power station. It is a settled regulatory principle and practice that the loss of generation due to backing down instructions from SLDC or coal shortage is taken into consideration for the purpose of recovery of fixed cost. Such backing down data has been tabulated separately for each of the power stations. Further, during the period under consideration, there have been instances of forced outages due to reasons beyond the control of CSPGCL. The Honble Commission in the Order dated 12 July, 2013 had provided ........the Commission notes that any outage or non-availability of stations due to force majeure events beyond the control of the generating company shall be considered as uncontrollable parameter in ARR. However the onus of satisfying the Commission to the effect that outage was due to such uncontrollable events is on the Generating Company......... The Commission had granted leave for submission during the final true-up of FY 2011-12. Accordingly, the issues related to forced majeure outages (including outages due to system disturbances/constraints) have been deliberated in detail in the respective sections and such outages have been considered for the purpose of allowing recovery of the fixed cost. However, true to the spirit of the regulations, no claim for sharing of gains have been made for the generation loss due to such outages. 2.5.10 Prior Period Credits/(Charges) CSPGCL has considered the prior period (credits)/charges as per annual accounts for FY 2011-12 and FY 2012-13 and as per the philosophy adopted by the Commission in its Order dated 12 July, 2013. The same has been included in the ARR of various plants. CSPGCL has not considered interest and finance charges as part of prior period (credits)/charges as the same has been allowed on normative basis. Further, the credits/(charges) under other income, has not been considered as it pertain to fuel cost for the prior periods as the same has also been approved on normative basis. For prior period Employee Expense, CSPGCL submits that in the provisional true up of employee expenses have been allowed on actual basis and not on the normative basis. Hence, the prior period adjustments need to be considered. Table 8: Prior Period (Credits)/Charges for CSPGCL (Rs. Crore) Particulars FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM Income Employee Costs - - - - - - Total income considered - - - - - - for True-up Expense True-up Petition: CSPGCL 28

29 Particulars FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM Employee Costs 0.16 0.00 - 0.04 - 0.06 Total expense considered 0.16 0.00 - 0.04 - 0.06 for True-up Allocation of Employee (0.02) (0.03) (0.02) (0.04) (0.08) (0.05) Cost of CAU and HO Net Prior Period (0.18) (0.04) (0.02) (0.08) (0.08) (0.11) Income/(Expense) Total CSPGCL (0.24) (0.26) 2.5.11 SHARING OF GAINS AND LOSSES The Regulation 5 deals with MYT approach. Among other issues, it includes the matters related to controllable and uncontrollable cost, targets, profit sharing mechanism etc. Regulation 5.7 specifies that for the purpose of sharing of gains and losses with the consumers, the aggregate net gains or losses will be considered. Regulation 5.8 provides that there shall be no cap on the profits earned from operational performance. The regulation 5.9 & 5.10 specifies that in case of aggregate net gain on account of better achievement in reference to the target, for efficiency linked controllable items, one third of such gain shall be passed on to the beneficiary / consumer(s) in the form of rebate in tariff, one third shall be credited to the tariff stabilization fund and one third shall be retained by the generating company. The regulations also provide that in case of gain / loss due to uncontrollable items the gain / loss shall be passed on to beneficiaries / consumers through the next ARR and /or credited to the tariff stabilization fund, as may be decided by the commission. In the Tariff order dt 12th July 2013, (table 112 read with para 6.3.12 ) the Commission has provided an extensive model for computation of sharing of gains and losses with detailed explanation of the philosophy and approach. CSPGCL has religiously adopted the same in the instant petition subject to specific submission in relevant paragraphs. 2.5.12 METHODOLOGY FOLLOWED IN THE PETITION: As detailed above, once the Capital cost and Capital structure is freezed, the components of tariff i.e. ROE, Depreciation and Interest on Loan Capital depend upon tax rate applicable depreciation rate and interest rate respectively. As the later three are uncontrollable factors, the actual and allowable value of ROE, Depreciation and Interest remain same. The NTI also is considered uncontrollable and hence actual and allowable NTI remain same. At the same time, the component O&M expenses (excluding the contribution to P&G trust), is generally True-up Petition: CSPGCL 29

30 considered controllable expense (except for inflationary adjustment). The Secondary Fuel Cost and Coal cost depend on various operation parameters such as PLF, Aux Consumption, SHR, etc and as such are generally considered controllable costs (with the exception of rate of oil/ coal and CV of Coal). Accordingly in the instant petition, O&M Cost, Secondary fuel cost and Coal cost have been computed on actual basis as well as normative basis both. As per regulation, the Interest on working capital is computed on the normative values only. Further, in accordance to the regulations and in adoption of methodology followed by the Commission the composite sharing of gains and losses have been worked out on the basis of the per unit gains and losses taking into account the actual vis--vis the normative expenses. 2.6 METHODOLOGY FOR TRUING UP FOR SMALL HYDRO PLANTS: Regulation 34.B of the CSERC MYT Regulation, 2010 stipulates that the norms of operation for small hydel plants shall be same as applicable to small hydel plants as per the relevant orders and regulations of the Commission. Accordingly, the Honble Commission in its MYT Order dated 31 March, 2011 had considered the principles specified in the NCE Regulations, 2008 for small hydro plants and biomass order on generic tariff for Kawardha cogeneration plant. 2.6.1 DEPRECIATION: Depreciation has been considered on the basis of principle as specified in the NCE Regulations 2008, wherein depreciation is to be charged on SLM basis on 90% of the value of assets and as per rates specified by the latest CERC Regulations for determination of Renewable Energy (RE) tariff. CERC has specified that for the first 10 years assets would be depreciated at 7% p.a. on SLM basis and the balance depreciation would be spread out in remaining useful life of plant. As all the small hydro plants of CSPGCL are less than 10 years old, rate of depreciation 7% p.a. has been considered. 2.6.2 RETURN ON EQUITY: RoE for small hydro stations has been estimated @ 16% for small hydro stations. The Honble Commission in its MYT Order dated 31 Mach, 2011 had not considered grossing-up of RoE by applicable tax rate for SHPs in accordance with the principle of CSERC (NCE Tariff) Regulations, 2008. The same has also not been considered by CSPGCL for working out the RoE for SHPs. 2.6.3 INTEREST EXPENSES: In case of small hydro generating stations, the Commission in its MYT Order dated 31 March, 2011 had approved the interest rate of 11.75% for small hydro plants. True-up Petition: CSPGCL 30

31 Considering the fact that there has been no actual loan to the Small hydro plant, accordingly, CSPGCL has adopted the interest rate of 11.75% as approved in the MYT Order dated 31 Mach, 2011. 2.6.4 O&M EXPENSE In case of small hydro generating stations, Commission vide its MYT Order dated 31 March, 2011, has considered the normative O&M expenses as 2.5% of admitted capital cost of the project with annual escalation of 5% based on the norms for small hydro projects as per its NCE Regulations 2008. For Sikasar and Gangrel SHPs, CSPGCL has considered the actual O&M expenses based on the Audited Accounts. However, for Korba West SHP, CSPGCL submits that for all practical purposes its establishment is integrated with the HTPS main Thermal Plant. As such working out the judicial segregation of all the establishment expenses seems to be infeasible. Therefore normative O&M cost has been considered for the truing up purposes and the same value has been reduced from the O&M expenses of HTPS. Thus the total value remains same. 2.6.5 INTEREST ON WORKING CAPITAL In case of small hydro generating stations, Commission in its MYT Order dated 31 March, 2011 the Commission approved the interest on working capital in accordance to NCE Regulations 2008 for small hydro stations. CSPGCL has considered the methodology adopted by the Commission. 2.7 NO TRUING UP APPLICABIE FOR KAWARDHA COGEN. STATION For Kawardha cogeneration station, generic tariff as applicable for other cogeneration power plants has been adopted. The Honble Commission has already settled that for plants covered under generic tariff, no true-up is applicable; hence no true-up is filed for the Kawardha cogeneration plant. True-up Petition: CSPGCL 31

32 3. HTPS KORBA WEST 3.1 CAPITAL STRUCTURE The salient components of the Capital Structure for HTPS Korba West based on the philosophy adopted by the Commission, in its Order dated 12 July, 2013 (table 74) are tabulated as under: Table 9: Capital Structure for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA 932.48 1,020.81 Capitalization during the Year 88.34 36.23 Closing GFA 1,020.81 1,057.04 Permissible Equity Permissible Equity in Opening GFA 308.16 334.66 Permissible Equity in Closing GFA 334.66 345.43 Average Permissible Equity during the year 321.41 340.10 Total Opening Loan (actual/ normative) in GFA 624.31 686.15 Total Closing Loan (actual/ normative) in GFA 686.15 711.51 *The detailed table on capital structure is appended as format- HTPS-F-I Note: Capitalization has generally taken place against the approved schemes. However, as explained in the previous chapter, some capitalization has taken place against the old schemes as well. 3.2 RETURN ON EQUITY Following the philosophy detailed in previous chapter on True up Principles and in accordance to methodology adopted by the Commission in the Order dt 12 July, 2013, the ROE on permissible equity as per actual GFA is tabulated as under:- Table 10: Return on Equity for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Average Gross Permissible Equity during the year 321.41 340.10 Rate of Return on Equity 15.50% 15.50% Return on Equity 49.82 52.71 True-up Petition: CSPGCL 32

33 The Honble Commission is requested to approve the return on equity as given in the above table. 3.3 DEPRECIATION The Honble Commission in its MYT Order dated July 12, 2013 had depreciated the balance depreciable value for old assets pertaining to HTPS (capitalized before March 31, 2010) equally among six years from FY 2010-11 to FY 2015-16. In addition to the depreciation on old assets, the Honble Commission provided depreciation on additional capitalization during the period and considered the average depreciation rate of 5.11% on the assets added after March 31, 2010. As regards the computation and methodology adopted by the Commission for approval of such depreciation, CSPGCL had prayed the Commission for the same. In reply to CSPGCL request, the Honble Commission vide its letter dated October 23, 2013 granted leave to CSPGCL to raise such issues with reason and justification when it approaches the Commission for next tariff related filing. CSPGCL in this Petition in subsequent paragraphs has provided the detailed explanation on the same. 3.3.1 Issue-1: Depreciation expenses of the balance depreciable value of Asset over useful life of the Assets as on 31 March, 2010 The Honble Commission in the MYT Order dated 12 July, 2013 has ruled as follows: As regards depreciation for HTPS, fully depreciable assets of Rs. 520.5 Crore as on December 31, 2008 have been identified based on scrutiny of the asset details available in the books of accounts as discussed in the earlier paragraphs of this Order, hence depreciation to that extent has been reduced. The depreciable value of asset has been considered upto 90% of the admitted capital cost of the plant. Further, cumulative depreciation as on March 31, 2010 has been deducted from the depreciable value of asset for HTPS and depreciation is estimated on the remaining depreciable value of the asset over the remaining life of the Plant. Considering the fact that the Petitioner in the Petition has submitted for operation of HTPS during the MYT Control Period, i.e., till FY 2015-16, and the fact that in the last few years the Commission has allowed specific provisions allowed in the Capital Investment plan the balance depreciable value of assets for HTPS has been equally spread over six years (till the end of second MYT Control Period, i.e., FY 2015-16). Further the CSERC MYT Regulations, 2010 depicts the useful life of the coal based thermal generating stations as follows: 3.44 Useful Life in relation to a unit of a generating station, transmission and distribution system from the COD shall mean the following, namely:- True-up Petition: CSPGCL 33

34 (a) Coal based thermal generating station 25 years ... The regulations also stipulates: 24. DEPRECIATION 24.4 Depreciation shall be calculated annually based on Straight Line Method and at rates as specified in Appendix-I to these regulations for the assets of the generating station, transmission system and distribution system: Provided that the remaining depreciable value as on 31st March of the year closing after a period of 15 years from date of commercial operation shall be spread over the balance useful life of the assets: 24.5 In case of the existing projects, the balance depreciable value as on 1.4.2013 shall be worked out by deducting the cumulative depreciation as admitted by the Commission upto 31.3.2013 from the gross depreciable value of the assets. It is submitted that the useful economic life after the package based Renovation & Modernization and Life Extension work is expected to extend the useful economic life of the Power Plant by 15 years. CSPGCL further submits that for its HTPS Power Plant, no package based Renovation & Modernization or Life extension work has been carried out and infact, the Honble Commission has specifically denied the proposal submitted by the Petitioner as part of the Capital Investment Plan Petition. It is further submitted that the Honble Supreme Court in its judgment dated 15 Feb. 07 in Civil Appeal No. 2733 of 2006 in the Case of Delhi Electricity Regulatory Commission Vs. BSES Yamuna Power Limited & Ors. has ruled that there is specific purpose for providing depreciation over the useful life of an asset and not over the actual life of assets: Before concluding we may state that basic object of providing depreciation is to allocate the amount of depreciation of an asset over its useful life and not actual life so as to exhibit a true and fair view of the financial statements of an enterprise. Useful life is a period over which a depreciable asset is expected to be used. Useful life of an asset in a capital intensive industry is generally shorter than its physical life. Useful life is pre-determined by contractual limits or by amount of extraction or consumption dependent on the extent of use and physical deterioration on account of wear and tear which depends on operational factors such as the number of shifts, True-up Petition: CSPGCL 34

35 repair and maintenance policy of the utility ad reduced by obsolescence arising fro technological changes, improvement in production methods. . With the above background, CSPGCL submits as follows: a. The CSERC MYT Regulations, 2010 has prescribed the useful life of the coal based thermal power plant as 25 years only b. Since no Renovation and Modernization has been undertaken by the Petitioner, hence, there shall be no revision in the useful life of the assets. c. Based on the Regulations, since the useful life of the assets would be completed in FY 2011-12, the balance depreciable value of assets may be allowed in the remaining useful life of the assets, i.e., two years i.e., in FY 2010-11 and FY 2011-12 d. The Honble Commission has considered the actual life of the assets rather than the useful life of the plant e. The Petitioner requests the Honble Commission to revisit the decision taken in the MYT Order dated 12 July, 2013 and allow the same to be recovered in two years i.e., during FY 2010-11 and FY 2011-12. 3.3.2 Issue 2: Depreciation on the additional capitalization during FY 2010-11 and FY 2011-12 CSPGCL submits that the Honble Commission in the MYT Order dated 12 July, 2013 has ruled as under: The Petitioner has further claimed full depreciation on the additional capitalization of Rs. 172.89 Crore for FY 2010-11 in two years. For the reasons stated above, the Commission has not accepted the methodology as huge amount of additional capitalization would have become due in just two years. Further, depreciation on additional capitalization during the period has been considered based on the average depreciation rate of 5.11% on the assets added after March 31, 2010. CSPGCL submits that nothing has been specified for depreciation on the additional capitalization in the CSERC MYT Regulations, 2010. It is further submitted that Accounting Standards (AS6) stipulates treatment of depreciation on the additional capitalization as under: True-up Petition: CSPGCL 35

36 Any addition or extension which becomes an integral part of the existing asset should be depreciated over the remaining useful life of that asset. The depreciation on such addition or extension may also be provided at the rate applied to the existing asset. Where an addition or extension retains a separate identity and is capable of being used after the existing asset is disposed of, depreciation should be provided independently on the basis of an estimate of its own useful life. CSPGCL further submits that the Central Electricity Authority, in its National Perspective Plan for Renovation and Modernization and Life Extension of Thermal Power Stations (upto 2016-17) has specifically dealt with the Life Extension and Renovation and Modernization work for the 12 Plan Period. It may be noted that the list of units programmed for life extension works during 12th Plan period as referred in the CEA Plan includes the Unit 1 & 2 of the Korba West. The table 4 (para 4.4) of the above referred plan clearly indicate that life extension has been considered by CEA as 15 years only. Hence, CSPGCL submits that even in case of renovation, expected life extension beyond the useful life of power plant would have been 15 years only. With the above background, CSPGCL submits as follows: a. It may be noted that on account of additional capitalization during FY 2010-11, FY 2011-2 and FY 2012-13, it is not envisaged that the useful life of the assets would increase, rather, these expenses are incurred which are necessary for operation of plant upto actual life. b. The increase in useful life of the Power Plant to 15 years beyond the prescribed useful life of 25 years can be considered only after the package based Renovation and Modernization and no such work has been carried out by CSPGCL. c. As regards the actual capitalization during FY 2010-11, it may be noted that major expenses were implemented pursuant to environmental statutory requirements and not for the prim purpose of life extension per se. d. CSERC MYT Regulations, 2010 does not explicitly stipulate the matter of depreciation on the additional capitalization e. Moreover, it is submitted that this addition in the Power Plant, is not capable of being used in case the existing Power Plant is disposed off, hence, in accordance with the AS6, the depreciable value needs to be spread over useful life of the Power Plant. Considering this, in ideal situation, these expenses need to be recovered in the year it has been incurred. True-up Petition: CSPGCL 36

37 f. However, even if one consider such works part of the Renovation and Modernisation package (though currently no such work has been carried out and the Commission has also dis-allowed the same), then also life extension of 15 years can only be considered and the depreciable value of additional capitalization during the extended life works out to 6%. In view of the above, even with consideration of 15 years life (which is not the case hereof), 5.11% rate (for which no computation is provided in the order) in the MYT Order dated 12 July, 2013 appears to be an arithmetical error (probably due to consideration of fully depreciated assets in old GFA, which is not the case for additional capitlization) and the computation needs rectification. Accordingly, without prejudice to the submission regarding allowing depreciation of additional capitalization over the useful life of the plant, in the instant petition, the computation has been revised to 6%. g. It is prayed that the calculations may kindly be revisited and appropriate recovery may be allowed accordingly. However, CSPGCL understands that a decision to rectify the methodology, lies in the express domain of the Honble Commission, hence for the limited purpose of computation hereunder and CSPGCL follows the same methodology as provided in the order (except for arithmetical rectification of 6% instead of 5.11%). It is prayed that Honble Commission may consider the submission regarding allowing depreciation over the useful life of the plant additionally. The computation in line with order is appended as format HTPS-F-II and summarized below: Table 11: Depreciation for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA as on 01/04/2010 759.58 759.58 Less: Value of Land Under Freehold 1.09 1.09 Opening Accumulated Depreciation 565.74 589.12 90% of Gross Block Excluding Land 682.65 682.65 Amount remaining to be depreciated 116.91 93.52 Remaining Life 5 4 Depreciation in 6 years 23.38 23.38 Additional Capitalization during the year 88.34 36.23 Cumulative Gross Block on Additional 261.23 297.46 Capitalisation from FY 2010-11 Average depreciation rate (%) 6.00% 6.00% Depreciation on additional capitalisation 13.02 16.76 Total Depreciation 36.40 40.14 True-up Petition: CSPGCL 37

38 3.4 INTEREST AND FINANCE CHARGES Vide its Order dated 12 July, 2013 (Table 104), the Honble Commission has determined the closing net loan in GFA as Rs 155.13 Crore for FY 2010-11. The same has been taken as opening net loan for FY 2011-12. The computation of weighted average interest rate is appended as format HTPS-F-III. The interest computation is summarized as under: Table 12: Interest Expense for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Opening Net Loan 155.13 180.57 Repayment during the period 36.40 40.14 Additional Loan during the year 56.94 16.08 Total Closing Net Loan 180.57 165.78 Average Loan during the year 167.85 173.17 Weighted Average Interest Rate 10.57% 10.73% Interest Expense for the Period 17.75 18.57 The Honble Commission is requested to approve the interest expense as tabulated above. 3.5 OPERATION AND MAINTENANCE EXPENSE O&M cost considered by the Honble Commission vide its Order dated 28 April, 2012 was: Table 13: Normative (Initial Norm) O&M Expense for HTPS (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Normative O&M Cost 208.14 220.04 232.64 As detailed in the chapter on True up Principles, in the Order dated 12 July, 2013 the Honble Commission adopted the WPI and CPI values as published by RBI, and a minor correction in the inflation factor (9.79% instead of 9.74%) was adopted by the Commission for finally settling the normative expenses for FY 2010-11 of all the utilities / plants. Accordingly the normative O&M cost for HTPS which was determined as 208.14 Crore in the said Order gets revised to Rs 208.23 Crore. For the purpose of this petition, CSPGCL has adopted the principles laid down by the Honble Commission. The annual escalation factor based on WPI and CPI variations published on RBI website, have been applied on the normative O&M expense value for FY 2010-11, to compute the normative value for FY 2011-12 & FY 2012-13 as under: True-up Petition: CSPGCL 38

39 Table 14: Normative (Revised Norm) O&M Expense for HTPS (Rs. Crore) Particulars Amount Normative O&M Cost for FY 10-11 as per Order dated 208.14 28.04.2012 (Rs Crore) Recomputed normative O&M Cost for FY 10-11 after applying 208.23 inflation factor of 9.79% instead of 9.74% (Rs Crore) Inflation factor for FY 11-12 8.80% Normative O&M Cost for FY 11-12 (Rs Crore) 226.56 Inflation factor for FY 12-13 8.00% Normative O&M Cost for FY 12-13 (Rs Crore) 244.68 Against the above normative values the actual O&M cost incurred as per accounts (subject to adjustments, as required under the regulations and narrated in the previous chapter) for FY 2011-12 and FY 2012-13 is tabulated as under: Table 15: Actual O&M Expense for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Employee Expense 144.69 162.19 A&G Expense 11.32 15.31 R&M Expense 76.08 84.87 Less: O&M Cost on KWMM Plant 0.34 0.35 Less: O&M Cost on External CHP/CT 31.86 39.73 Total O&M Expense 199.89 222.29 *Details are enclosed in the format- HTPS-F-IV The total O&M expense for Korba West SHP has been reduced from the audited numbers for arriving the O&M expense for HTPS. 3.6 CONTRIBUTION TO PENSION AND GRATUITY FUND As detailed in the chapter on True up Principles the contribution to Pension and Gratuity Fund to be appropriated to HTPS for FY 2011-12 and FY 2012-13 is as under :- Table 16: Contribution to Pension and Gratuity Fund for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 HTPS 14.10 24.19 CSPGCL confirms that it has paid the requisite share for each of the year. True-up Petition: CSPGCL 39

40 3.7 NON-TARIFF INCOME As detailed in the chapter on True up Principles the non-tariff income which may be allocated to HTPS for FY 2011-12 and FY 2012-13 is as under: Table 17: Non-Tariff Income for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Non-Tariff Income 9.85 24.78 The non-tariff income for FY 2012-13 has increased due to allocation of Income Tax refund of Rs. 32.75 Crore among three major thermal plants based on their installed capacities. The sub head wise details including the allocation against the NTI received at HO is appended as format HTPS-F-V. 3.8 OPERATIONAL PARAMETERS OF HTPS CSPGCL submits that except for Auxiliary Consumption, HTPS Power Plant has performed better than the norms specified by the Commission in its Orders. For auxiliary energy consumption, specific reasons for approval of the same at 9.7% instead of 9% were submitted by CSPGCL in the last Petition for provisional true-up of FY 2011-12. The technical reasons still remain valid. The Honble Commission is requested to allow the same. The actual performance parameters achieved, for the years under consideration, vis--vis the normative parameters (based on above submission) are tabulated as under: Table 18: Actual vis-a-vis Normative Operational Parameters for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual PLF (%) 82.00% 87.18% 82.00% 86.15% Auxilary Consumption (%) 9.00% 9.59% 9.00% 9.30% Sp. Oil Consumption (ml/kWh) 1.00 0.67 1.00 0.67 Station Heat Rate (kCal/kWh) 2650 2573 2650 2594 Transit Loss (%) 0.30% 0.29% 0.30% 0.29% 3.9 GENERATION The actual gross generation, auxiliary consumption and net generation based on actual PLF and auxiliary consumption along with the approved and target values of the same for FY 2011-12 and FY 2012-13 are given in the table below: True-up Petition: CSPGCL 40

41 Table 19: Generation for HTPS (MU) Particulars FY 2011-12 FY 2012-13 Target Actual Target Actual Gross Generation 6,050 6,432.81 6,034 6,340 Auxilary Consumption 544 617 543 589 Net Generation 5,506 5,816 5,491 5,750 3.10 COST OF OIL The landed cost of oil consumed is determined on the basis of weighted average rate of oil and the actual quantity of oil consumed. The detailed computation of weighted average landed rate of oil is appended in the format HTPS-F-VI. Accordingly cost of oil consumed is as tabulated as under: Table 20: Oil Cost: Normative - Actual for HTPS Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Oil Consumed (kl) 6,050.42 4,298.16 6,033.89 4,231.09 Weighted Average Rate of Oil 45,654.99 45,654.99 50,194.82 50,194.82 (Rs./kl) Cost of Oil Consumed (Rs. Crore) 27.62 19.62 30.29 21.24 3.11 COST OF COAL The landed cost of coal consumed is determined on the basis of weighted average rate of coal and the actual quantity of coal consumed. The detailed computation of weighted average landed rate of coal is appended in the format HTPS-F-VII. Accordingly cost of coal consumed is as tabulated as under: Table 21: Coal Cost: Normative - Actual for HTPS Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Coal Consumed (MT) 4,519,838 4,701,129 4,507,488 4,503,918 Weighted average rate of Coal (Rs./ MT) 935.70 935.62 1,015.62 1,015.51 Cost of Coal Consumed (Rs. Cr) 422.92 439.84 457.79 457.38 True-up Petition: CSPGCL 41

42 3.12 INTEREST ON WORKING CAPITAL As per settled position elaborated in the earlier chapter on True up principles, the interest on working capital is computed on the normative basis. The detailed computation is appended in the format HTPS-F-VIII. For FY 2011-12 and FY 2012-13, normative interest on working capital is tabulated as under: Table 22: Interest on Working Capital for HTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Working Capital Requirement 258.13 273.48 Rate of interest (SBI PLR as on 1st April 10) 11.75% 11.75% Interest on Working Capital 30.33 32.13 3.13 SHARING OF GAINS AND LOSSES As detailed earlier in the chapter True up Principles, sharing of gains and losses have been dealt in a separate chapter in comprehensive manner. 3.14 ANNUAL REVENUE REQUIREMENT FOR HTPS Based on various components of expense and income discussed above, the summary of ARR for HTPS for FY 2011-12 and FY 2012-13 is given in the table below: Table 23: ARR for HTPS: Actual (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Cost of Coal 439.84 457.38 Cost of Oil 19.62 21.24 O&M Expense 199.89 222.29 Contribution to Gratuity/Pension Fund 14.10 24.19 Depreciation 36.40 40.14 Interest & Finance Charges 17.75 18.57 Interest on Working Capital 30.33 32.13 Less: Net Prior Period Credits/(Charges) -0.04 -0.08 Total Expenditure 757.98 816.02 Return on Equity 49.82 52.71 Less: Non Tariff Income 9.85 24.78 Aggregate Revenue Requirement 797.95 843.95 True-up Petition: CSPGCL 42

43 3.15 ACTUAL ARR VIS--VIS RECOVERABLE ARR In the tariff order dated 12th July, 2013, for the final true up of FY 2010-11 and provisional true up of FY 2011-12, the Honble Commission has prescribed detailed principle and methodology for computing the recoverable ARR vis--vis the actual ARR. As already iterated in the chapter on true up principles CSPGCL has adopted the same principle. Accordingly, the issue has been dealt in the chapter on sharing of gains and losses. True-up Petition: CSPGCL 43

44 4. KTPS - KORBA EAST 4.1 CAPITAL STRUCTURE The Capital Structure for KTPS Korba East based on the philosophy adopted as considered by the Honble Commission in its Order dated 12th July, 2013 (table 74) and the actual numbers as per accounts are tabulated as under: Table 24: Capital Structure for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA 550.47 563.87 Capitalization during the Year 13.40 84.20 Closing GFA 563.87 648.08 Permissible Equity Permissible Equity in Opening GFA 171.73 175.75 Permissible Equity in Closing GFA 175.75 201.01 Average Permissible Equity during the year 173.74 188.38 Gross Opening Loan (actual/ normative) in GFA 378.74 388.12 Gross Closing Loan (actual/ normative) in GFA 388.12 447.07 The detailed capital structure table is appended as format KTPS F-I 4.2 RETURN ON EQUITY Following the philosophy detailed in previous chapter on True up Principles and in accordance to methodology adopted by the Honble Commission in its Order dated 12 July, 2013, the ROE on permissible equity as per actual GFA is tabulated as under: Table 25: Return on Equity for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Average Gross Permissible Equity during the year 173.74 188.38 Rate of Return on Equity 15.50% 15.50% Return on Equity 26.93 29.20 4.3 DEPRECIATION For final true up of FY 2010-11, the Commission in its order dt 12th July 2013 has allowed weighted average Depreciation rate of 5.59% based on asset wise depreciation. Subsequent to True-up Petition: CSPGCL 44

45 additional capitalization, the asset wise depreciation has been recalculated for FY 2011-12 and FY 2012-13 as 5.61% and 5.57% respectively. The detailed calculation is appended with the petition in format KTPS F-II. Further, Commission disallowed depreciation on fully depreciated assets of amounting to Rs 118.13 Cr. The same methodology has been adopted by CSPGCL for the purpose of final true up. Accordingly, the Depreciation is computed as under: Table 26: Depreciation for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA 550.47 563.87 Closing GFA 563.87 648.08 Average GFA 557.17 605.98 Average Depreciation Rate 5.61% 5.58% Depreciation 31.28 33.80 Fully Depreciated Assets 118.13 118.13 Less: Depreciation on fully depreciated assets 6.63 6.59 Net Depreciation 24.65 27.21 4.4 INTEREST ON LOAN Vide its Order dated 12 July, 2013 (Table 104), the Honble Commission has determined the closing net loan in GFA as Rs 156.59 Crore for FY 2010-11. The same has been considered as opening net loan for FY 2011-12. The computation of weighted interest rate is appended as format KTP F-III. The Interest computation is summarized as under: Table 27: Interest Expense for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Opening Net Loan 156.59 141.32 Repayment during the period 24.65 27.21 Additional regulatory Loan during 0.55 36.23 the year Total Closing Net Loan 141.32 173.05 Average regulatory Loan during 148.95 157.19 the year Weighted Average Interest Rate 10.43% 10.44% Interest Expense for the Period 15.53 16.42 True-up Petition: CSPGCL 45

46 4.5 OPERATION & MAINTENANCE EXPENSES The O&M cost considered by the Commission vide the Order dated 28 April, 2012 was: Table 28: Normative (Initial Norm) O&M Expense for KTPS (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Normative O&M Cost 147.40 155.84 164.75 As detailed in the chapter on True up Principles, in the Order dated 12 July, 2013 the Honble Commission adopted the WPI and CPI values as published by RBI, and a minor correction in the inflation factor (9.79% instead of 9.74%) was adopted by the Commission for finally settling the normative expenses for FY 2010-11 of all the utilities / plants. Accordingly the normative O&M cost for KTPS which was determined as 147.40 Crore in the said Order gets revised to Rs 147.47 Crore. For the purpose of this petition, CSPGCL has adopted the principles laid down by the Honble Commission. The annual escalation factor based on WPI and CPI variations published on RBI website, have been applied on the normative O&M expense value for FY 2010-11, to compute the normative value for FY 2011-12 & FY 2012-13 as under: Table 29: Normative (Revised Norm) O&M Expense for KTPS (Rs. Crore) Particulars Amount Normative O&M Cost for FY 2010-11 as per Order dt. 28.04.2012 (Rs Crore) 147.40 Recomputed normative O&M Cost for FY 10-11 after applying inflation factor 147.47 of 9.79% instead of 9.74% (Rs Crore) Inflation factor for FY 2011-12 8.80% Normative O&M Cost for FY 2011-12 (Rs Crore) 160.44 Inflation factor for FY 2012-13 8.00% Normative O&M Cost for FY 12-13 (Rs Crore) 173.28 Against the above normative values the actual O&M cost incurred as per accounts (subject to adjustments, as required under the regulations and narrated in the previous chapter) for FY 2011-12 and FY 2012-13 is tabulated as under: Table 30: Actual O&M Expense for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Employee Expense 124.40 134.08 A&G Expense 6.95 12.41 True-up Petition: CSPGCL 46

47 Particulars FY 2011-12 FY 2012-13 R&M Expense 55.84 63.19 Less: O&M Cost on Coal Transport 22.92 19.48 Total O&M Expense 164.27 190.19 The sub head wise details are enclosed in the format KTPS F-IV 4.6 CONTRIBUTION TO PENSION AND GRATUITY FUND As detailed in the chapter on True up Principles the contribution to Pension and Gratuity Fund to be appropriated to KTPS for FY 2011-12 and FY 2012-13 is as under: Table 31: Contribution to Pension and Gratuity Fund for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Contribution to Pension and Gratuity 7.39 12.67 CSPGCL confirms that it has paid the requisite share for each of the year. 4.7 NON TARIFF INCOME As detailed in the chapter on True up Principles the non Tariff income which may be allocated to KTPS for FY 11-12 and FY 12-13 is as under: Table 32: Non-Tariff Income for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Non-Tariff Income 4.17 11.51 The sub head wise details including the allocation against the NTI received at HO is appended as format KTPS-F-V. 4.8 OPERATIONAL PARAMETERS FOR KTPS For FY 11-12 and FY 12-13, The Commission in its MYT order dt 31st march 2011, relied on following operational parameters: Table 33: Operational Parameters Target for KTPS Particulars FY 2011-12 FY 2012-13 PLF (%) 78.25% 78.50% True-up Petition: CSPGCL 47

48 Particulars FY 2011-12 FY 2012-13 Auxiliary Consumption (%) 10.35% 10.30% Sp. Oil Consumption (ml/kWh) 2.15 2.00 Station Heat Rate (kCal/kWh) 2950 2925 Transit Loss (%) 1.20% 1.15% CSPGCL submits that it has been raising the concern regarding need to re-fixation of the norms of performance parameter for KTPS in its previous many Petitions. However, the relief has been granted only after the completion of the CPRI Report and that too from FY 2013-14 onwards. In this regard, CSPGCL submits following in subsequent paragraphs: At the time of true up for FY 2010-11 and APR of 11-12, CSPGCL submitted detailed reasoning regarding infeasibility of some of the above mentioned yardsticks (particularly PLF, Auxiliary Consumption, and SHR) on various grounds. Responding to the submissions made by CSPGCL, the Honble Commission stated: 3.32 The Commission had specified the norms for SHR in its MYT Regulations 2010 after taking cognizance of the past performance of the plants, design, vintage, age & other such factors affecting the determination of SHR and as such they shall not be revisited within the MYT Control Period. . Fixation of target is a matter of regulation and any review can be taken up only during revision / amendment of the same. 3.33 However, Commission finds force in the submission of utility that as there is lack of standard benchmarks for small sets and the conditions vary from plant to plant, a third party comprehensive study of the achievability of performance parameters shall be helpful in arriving at more transparent and rational targets. The Tariff policy also suggests that fixation of realistic targets is in the interest of all the stakeholders. Accordingly, Commission directs the utility to engage a neutral reputed third party agency such as CEA/ CPRI/ NTPC / an experienced IIT etc. to conduct a study within three months to assess reasonable performance parameters which such sets can be expected to achieve. The scope of work etc may be submitted to Commission for appropriate consultation. Results of such expert study may be a useful input for future fixations of targets for next MYT control period however it is made clear that in the instant control period the target set in the regulations shall have to be complied. (Emphasis supplied) True-up Petition: CSPGCL 48

49 Subsequently, after getting the scope approved from the Honble Commission, CSPGCL engaged CPRI to conduct the study. However, Due to pre-occupation of CPRI, the study got delayed. On its part CSPGCL in order to expedite the process of third party review also contacted NTPC, but NTPC too could not spare resources for such extensive study. Finally the study report was received in March 2013 and was immediately submitted to the Honble Commission. The summary is reproduced: Based on the detailed study and analysis of data it is concluded that the present achievable parameters for Unit 5 are as follows: Gross overall heat rate: 3013.78 kcal/kWh at 74.64% PLF Auxiliary power: 11.75% at 74.64% PLF Based on the detailed study and analysis of data it is concluded that the present achievable parameters for Unit 4 are as follows: Gross overall heat rate: 3209.1 kcal/kWh at 83.1% PLF Auxiliary power: 12.98% at 83.1% PLF With due deliberation and prudence check, the Honble Commission has taken cognizance of the report and in the Order considered following benchmark parameters for the second control period (i.e. from FY 2013-14 to FY 2015-16): Table 34: Benchmark Parameters for KTPS Particulars Amount PLF (%) 78.50% Auxiliary Consumption (%) 11.25% Sp. Oil Consumption (ml/kWh) 2.00 Station Heat Rate (kCal/kWh) 3110 Transit Loss (%) 1.15% *Note: CPRI has not made any recommendation on the achievable targets for specific oil consumption and transit loss However, for the purpose of provisional true up FY 11-12, the Commission refused to consider the arguments for revisiting the targets on following grounds: . PLF norms approved for CSPGCLs generating stations in the CSERCs MYT Regulations 2010 were based on the detailed deliberation and after taking cognizance of the past performance of the plants, design, vintage, age and other such factors affecting the PLF of each generating station. Thus there is no merit in reviewing the norms in the middle of the MYT control period. True-up Petition: CSPGCL 49

50 The matter of regulation cannot be reviewed through the Tariff Order. The Commission has already deliberated the issues in the previous tariff order. The arguments are not like old wine which becomes tastier when it grows old. There is nothing new in the submission. As such no review is warranted. -( para 6.3.2.2. of the order dt 12th July 2013) In view of the above, there are three basic issues which appear worthy of deliberation. The issues and CSPGCL submissions are detailed hereunder:- Issue 1: Whether or not value for performance parameters given in the Regulations can be/should be revisited ? CSPGCL Submission : 1. In the Appeal no 86 & 87 of 2007 (Maharashtra State Power Generation Company Limited v/s Maharashtra State Electricity Regulatory Commission) decided on 10th April 2008, the issue of achievable SHR, Aux. Consumption, Transit loss etc came up. On the issue of regulations not being a subject matter of review, the tribunal held :- 78. We have dealt the issues relating to transit loss of coal and station heat rate earlier in this judgment. This Tribunal has through its judgments in the past, consistently maintained that deciding about the correctness of the Regulations framed by different electricity regulatory commissions in the country is beyond the jurisdiction of the Tribunal. 79 80. However, we find that there is a substantial difference between the norms prescribed by the Commission through the Tariff Regulations and those achieved by the Appellant. We find that the Tariff Regulations give powers to the Commission to amend any provisions of the Tariff Regulations (Regulation 84) and to remove difficulties in implementation of the Tariff Regulations (Regulation 85), which we feel can be used by the Commission to take corrective measures so that the norms set are achievable under the operating environment. Hence, we direct the Commission to take into consideration the independent study which we have directed to be undertaken, and re-set the above operating parameters. This will also help the Commission to align its Regulations with the Tariff Policy issued by the Government of India advising for prescribing achievable norms and not True-up Petition: CSPGCL 50

51 merely ideal norms. At the same time, the Commission has to be cautious to ensure that deliberate inefficiency on the part of the utility is not passed on to the consumers. (Emphasis Supplied) It is submitted that CSERC regulations too have powers to remove difficulty (Regulation 70) and power to amend (Regulation 71). In addition, CSERC regulations also have regulation 68, power to relax; which is reproduced as under: 68. POWER TO RELAX: The Commission, for reasons to be recorded in writing, may relax any of the provisions of these regulations on its own motion or on an application made before it by an interested person. It is humbly submitted that in light of the circumstances, reasons and justifications submitted before the Commission, the instant case is the most fit case for genuine exercise of power to relax/ power to remove difficulty. If such power is not used in the instant case then probably no oher case may pass the test of applicability of such provision making them just an empty formality, which can never be the intent and purpose of any law. 2. In the context it may be interesting to note that Honble APTEL has in recent judgement re-affirmed the concept of need to review the normative values laid in tariff order at the time of true up. In this case (Appeal no 147 of 2007, decided on 14th November 2013), Tata Power Limited agitated the issue of transit loss. JERC regulations provided for 0.8% transit loss on all non pit head power stations. JERC had allowed the same in the Tariff order. At the time of true up, since the actual Transit Loss in coal during FY 2011-12 was coming out to be higher than the specified normative loss of 0.8%, Tata Power sought relaxation of the norms and sought higher allowance of transit loss in coal as per actual however the State Commission in its true up order refused to relax the norms and allowed only normative transit loss at 0.8% instead of actual loss at 1.8%. After going through the various contentions including the arguments such as value being normative value notified in the regulations and the tariff order having not been challenged earlier, the Honble APTEL held that the at the time of true up the transit loss (%) should be revisited by the Commission. It cannot be termed as a fixed value. Accordingly Honble APTEL allowed the appeal of Tata Power and remanded back the matter to Honble JERC for redetermination of Transit loss. True-up Petition: CSPGCL 51

52 3. It is a settled position that law has to be interpreted in a manner so as to achieve the ends of justice. Contradictory inference may not only lead to denial of justice but to travesty of justice too. It is the cardinal principle of law, that the body of civil law (Corpus Juris Civilis) relies on the Latin maxim Impossibilium nulla obligatio est i.e Nobody has any obligation to the impossible. Any law or statue cannot convert impossibility into possibility and no one should be forced to be liable to pay for not achieving that impossibility. In the instant case the merits of CSPGCL contention have not only been already subjected to intense review but have been allowed by the Commission for the future period too. The CPRI study to adjudge the achievable parameters (and not the likely parameters) was conducted in the financial year 2012-13 and as such, to meet the ends of justice, it is prayed that the study should be considered for the instant true up. Issue 2: Whether or not there is a genuine reason to revisit the operation benchmarks of KTPS for the period under review : CSPGCL humbly submits : 1. In the previous orders, no where the achievability issue had been deliberated. The prayer of CSPGCL was refuted only on the ground that the matter has been considered at the time of regulation. Interestingly even at the time of regulations no statement of reasons was issued. Thus CSPGCL, till date is unable to comprehend that on what grounds the parameters given in the regulations and relied in the tariff orders were derived. Hence as for merit of the arguments related to un-achievability is concerned, they remain answered in all the previous orders. Most importantly, the achievability issue for the first time has been addressed vide the CPRI report. 2. It may not be out of place to recollect that that whole concept of appointment of third party expert to assess the true parameters which can be judicially relied was not an innovation rather it has its genesis in a well propounded judicial precedence. In the Appeal no 86 & 87 of 2007 (Maharashtra State Power Generation Company Limited v/s Maharashtra State Electricity Regulatory Commission) decided on 10th April 2008, the issue of achievable SHR, Aux. Consumption, Transit loss etc came up. The Honble Tribunal has deliberated the issue and its findings on different aspects are reproduced for ready reference. True-up Petition: CSPGCL 52

53 On need to consider achievable parameters: The Honble APTEL held: 31. We are of the opinion that if the SHR allowed by the Commission is not achievable, then the same would not be in anybodys interest; entity would suffer by not recovering its reasonable cost of supply of the electricity and the consumers would not get the right signal about the pricing of the product they would be using. . Importantly this Honble Commission too has recognized the same when it iterated The Tariff policy also suggests that fixation of realistic targets is in the interest of all the stakeholders.. ( para 3.3. of the order dt 28.04.12). On the methodology which may be adopted for corrective action: the Tribunal in the above referred case held: 32. Under the circumstance, we feel that the Commission either on its own or through the Appellant engage appropriate independent agency(ies), who can carry out a study in a time bound (preferably within three months) manner to reasonably assess the achievable SHR of the plants owned by the Appellant. Such agency may also be asked to suggest measures to improve the SHRs over a period of time. 33. Based on the above, the Commission is directed to determine the SHRs in respect of plants owned by the Appellant. Till such time, the Appellant may continue with the pre-existing tariff subject to truing up with the revised SHRs when available. (Emphasis supplied) Importantly in the instant case too, the Commission has relied on similar methodology. The Honble Commission ordered for appointment of an independent expert agency (one out of the few suggested by Commission itself) to assess the achievable parameters. Even the scope of study was reviewed and approved by the Honble Commission. However, though the Honble Commission has accepted the report, yet for the purpose of true up, it has not considered the effect of the same. It is submitted that the Honble APTEL judgment which imposed the whole process of third party review, categorically provided for true up based on such report. Regarding the matter of lack of ingenuity in the arguments, it is humbly submitted that the issue of achievability of a performance parameters is a question of fact. The Honble APTEL observed :- True-up Petition: CSPGCL 53

54 27. The main argument of the Appellant is that station heat rate (SHR) targets given by the Commission are not achievable keeping in view the age of the machines, machine characteristics, quality of primary fuel, and operating conditions. From the impugned order of the Commission and further responses received we observe that these issues have not escaped the attention of the Commission while determining the applicable SHR. However, the question that whether the SHR targets set by the Commission are achievable under the circumstances or not, is a question of fact. Importantly in the instant case too, CSPGCL has been constrained to repeat the same arguments because a fact remains fact, irrespective of the fact that how many times it has been iterated earlier. CSPGCL humbly submits that the repeated submissions were not for sake of representation only, rather they had been a humble reflection of agony and sufferings, which have been borne when instead of one of the best performing power station in its category, KTPS could not achieve its cost of generation too. As, consideration CPRI report by Honble Commission has put to rest all the debate regarding genuineness of reasons submitted by CSPGCL in earlier petitions, hence to avoid repetition the earlier arguments are not repeated in the instant petition. Thus on all the counts, the referred APTEL deision fits perfectly in the facts and circumstances of the instant case. The Honble APTEL decision is crystal clear and squarely applicable. Issue 3: If the performance parameters as specified in the Regulations are revisited, then what should be the extent of such revision ? CSPGCL humbly submits : CSPGCL on its part is not praying for considering the actual or petitioned values as benchmark, it is just pleading for accepting the achievable values as benchmark. In fact, on one count (PLF for GY 11- 12), the revision sought may result in stiffening of the target from 78.25% to 78.50%. CSPGCL in the instant petition prays that for true up of FY 11-12 and FY 12-13, the norms set for operational parameters, (namely PLF, Auxiliary Consumption and SHR) for KTPS may please be revised in line with the achievable parameters determined by the Commission on the basis of the True-up Petition: CSPGCL 54

55 CPRI study. As CPRI study has not made any recommendation on specific oil consumption and transit loss, the same may be kept at the level already decided by the Commission. In view of the above, The actual performance parameters achieved, for the years under consideration, vis--vis the normative parameters (based on above submission) are tabulated as under: Table 35: Normative vis-a-vis Actual Operational Parameters Particulars FY 2011-12 FY 2012-13 Normative FY 2011-12 Normative FY 2012-13 (as proposed) (Actual) (as proposed) (Actual) PLF (%) 78.50% 79.14% 78.50% 60.40% Auxiliary Consumption 11.25% 10.77% 11.25% 12.57% (%) Sp. Oil Consumption 2.15 1.5 2.15 2.92 (ml/kWh) Station Heat Rate 3110 3083 3110 3279 (kCal/kWh) Transit Loss (%) 1.20% 1.19% 1.15% 1.16% 4.9 GENERATION The actual gross generation, auxiliary consumption and net generation based on actual PLF and auxiliary consumption along with the approved and target values of the same for FY 2011-12 and FY 2012-13 are given in the table below: Table 36: Generation for KTPS (MU) Particulars FY 2011-12 FY 2012-13 Target Actual Target Actual Gross Generation 3,024 3,059 3,026 2,328 Auxilary Consumption 313 329 312 293 Net Generation 2,711 2,729.33 2,714 2,036 True-up Petition: CSPGCL 55

56 4.10 COST OF OIL The landed cost of oil consumed is determined on the basis of weighted average rate of oil and the actual quantity of oil consumed. The detailed computation of weighted average landed rate of oil is appended in the format KTPS -VI. Accordingly cost of oil consumed is as tabulated as under: Table 37: Oil Cost: Normative - Actual for KTPS Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Oil Consumed (kl) 6,523.09 4,582.38 6,051.41 6,796.13 Weighted Average Rate of Oil (Rs./kl) 45,517.31 45,517.31 49,042.29 49,042.29 Cost of Oil Consumed (Rs. Crore) 29.69 20.86 29.68 33.33 4.11 COST OF COAL The landed cost of coal consumed is determined on the basis of weighted average rate of coal and the actual quantity of coal consumed. The detailed computation of weighted average landed rate of coal is appended in the format KTPS VII. Accordingly cost of coal consumed is as tabulated as under: Table 38: Coal Cost: Normative - Actual for KTPS Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Coal Consumed (MT) 2,651,525 2,791,024 2,645,565 2,341,624 Weighted average rate of Coal (Rs./ MT) 959.81 959.74 971.98 972.06 Cost of Coal Consumed (Rs. Cr) 254.50 267.86 257.14 227.62 4.12 INTEREST ON WORKING CAPITAL:- As per the settled position elaborated in the earlier chapter on True up principles, interest on working capital is computed on the normative basis. The detailed computation is appended in the format KTPS - VIII. For FY 2011-12 and on FY 2012-13, the normative Interest on working capital is tabulated as under: True-up Petition: CSPGCL 56

57 Table 39: Interest on Working Capital for KTPS (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Working Capital Requirement 171.37 181.88 Rate of interest (SBI PLR as on 1st April 10) 11.75% 11.75% Interest on Working Capital 20.14 21.37 4.13 SHARING OF GAINS & LOSSES As detailed in the chapter on True up Principles, sharing of gains and losses has been dealt in a separate chapter in comprehensive manner. 4.14 ANNUAL REVENUE REQUIREMENT FOR KTPS Based on various components of expense and income discussed above, the summary of ARR for HTPS for FY 2011-12 and FY 2012-13 is given in the table below: Table 40: ARR for KTPS: Actual (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Cost of Coal 267.86 227.62 Cost of Oil 20.86 33.33 O&M Expense 164.27 190.19 Contribution to Gratuity/Pension Fund 7.39 12.67 Depreciation 24.65 27.21 Interest & Finance Charges 15.53 16.42 Interest on Working Capital 20.14 21.37 Less: Net Prior Period Credits/(Charges) -0.18 -0.08 Total Expenditure 520.88 528.89 Return on Equity 26.93 29.20 Less: Non Tariff Income 4.17 11.51 Aggregate Revenue Requirement 543.64 546.58 4.15 ACTUAL ARR VIS--VIS RECOVERABLE ARR In the tariff order dated 12th July, 2013, for the final true up of FY 2010-11 provisional true up of FY 2011-12, the Honble Commission has prescribed and detailed principle and methodology for computing the recoverable ARR vis--vis the actual ARR. As already iterated in the chapter on true up principles CSPGCL has adopted the same principle. Accordingly, the issue has been dealt in the chapter on sharing of gains and losses. True-up Petition: CSPGCL 57

58 5. DSPM TPS KORBA 5.1 CAPITAL STRUCTURE The Capital Structure for DSPM based on the philosophy adopted by the Honble Commission, in its Order dated 12 July, 2013 (table 74) and the numbers as per accounts are tabulated as under: Table 41: Capital Structure for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA 2,227.45 2,227.61 Capitalization during the Year 0.16 21.77 Closing GFA 2,227.61 2,249.38 Permissible Equity Permissible Equity in Opening GFA 663.01 665.66 Permissible Equity in Closing GFA 665.66 674.81 Average Permissible Equity during the year 664.34 670.24 Total Opening unpaid Loan (actual/ normative) in GFA 1,564.45 1,564.45 Total Closing unpaid Loan (actual/ normative) in GFA 1,564.45 1,574.57 Average Loan during the year 1,564.45 1,569.51 The detailed computation of capital structure is appended as format DSPM- F-I. 5.2 RETURN ON EQUITY Following the philosophy detailed in previous chapter on True up Principles and in accordance to methodology adopted by the Commission in the Order dt 12 July, 2013, the ROE on permissible equity as per actual GFA is tabulated as under: Table 42: Return on Equity for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Average Gross Permissible Equity during the year 664.34 670.24 Rate of Return on Equity 15.50% 15.50% Return on Equity 102.97 103.89 True-up Petition: CSPGCL 58

59 5.3 DEPRECIATION CSPGCL has considered the methodology adopted by the Honble Commission for depreciation on DSPM assets as per its Order dated July 12, 2013. Subsequent to additional capitalization, the asset wise depreciation has been recalculated for FY 2011-12 and FY 2012-13 as 5.53% and 5.52% respectively. The revised depreciation for FY 2011-12 and FY 2012-13 for DSPM along with the approved depreciation is given in the table below: Table 43: Depreciation for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA 2,227.45 2,227.61 Closing GFA 2,227.61 2,249.38 Average Depreciation Rate 5.53% 5.52% Depreciation 123.12 123.60 The detailed computation of depreciation is appended as format DSPM- F-II. 5.4 INTEREST AND FINANCE CHARGES Vide its Order dated 12 July, 2013 (Table 104), the Honble Commission has determined the closing net loan in GFA as Rs 1307.75 Crore for FY 2010-11. The same has been taken as opening net loan for FY 2011-12. The computation of weighted average interest rate is appended as format DSPM-F-III. The interest computation is summarized as under: Table 44: Interest Expense for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Opening Net Loan 1,307.75 1,184.64 Repayment during the period 123.12 123.60 Additional Loan during the year - 4.20 Total Closing Net Loan 1,184.64 1,071.15 Average Loan during the year 1,246.20 1,127.90 Weighted Average Interest Rate 11.45% 11.47% Interest Expense for the Period 142.65 129.35 True-up Petition: CSPGCL 59

60 5.5 OPERATION AND MAINTENANCE EXPENSE The CSERC MYT regulation 26 A dealt with the fixation of Normative O&M expenses for generating stations. For ready reference the same is reproduced: 26. OPERATION AND MAINTENANCE EXPENSES: (A) Normative operation and maintenance expenses for generating stations:- (1) Operation and Maintenance (O&M) expenses shall mean the total of all expenditure under the following heads: (a) Employee costs; (b) Repairs and Maintenance (R & M) expenses; and (c) Administrative and General (A& G) costs. (2) The generating company in its filings shall submit the O&M expenses in above heads separately on the basis of available audited / un audited accounts for the previous five years preceding the base year and also for the base year. The O&M expenses for the base year will be used for projecting the expenses for each year of the control period. (3) The O&M expenses, for the units / stations coming into commercial operation after 01.04.2005, shall be in accordance with the norms specified in CERC (Terms and Conditions of tariff) Regulations, 2009 as amended from time to time. From the above, it may kindly be appreciated that regulation provide two set of norms, one for first set of the plants which came into operation prior to 01.04.2005 and the other for the second set of plants which became operational after 01.04.2005. Further for the first set of plants the Commission derived the values itself based on actual costs of previous years while for the second set of plants it has adopted the values provided in the CERC regulations. The above analysis makes it crystal clear that while the O&M norms for first set of plants have Enacted norms, the second set of plants have Adopted norms. In the MYT order, the yearly escalation of O&M expenses of both sets of plants (and to that extent, for distribution licensee too) was considered as 5.72% per annum. This 5.72% rate of inflation too was an adopted value taken from CERC Regulations. SOR issued by the CERC reveals that the 5.72% rate of inflation was derived on the basis of data of AICPI (IW) and WPI (AC). Importantly, the regulation 5.4 of CSERC MYT Regulations, 2010 categorically defines the un-controllable items for a utility. The Regulation is reproduced as under: True-up Petition: CSPGCL 60

61 5.4 Un-controllable Items - The uncontrollable items are as following (i) As per tariff policy 5.3 (h) (4) the un-controllable costs would include (but not limited to) fuel costs, costs on account of inflation, taxes and cess, variations in power purchase unit costs including on account of hydro-thermal mix in case of adverse natural events or any other items as may be considered by the Commission. Further, regulation 5.10 (b) of the said regulation provide for the treatment to be given for impact of such uncontrollable items. It states :- The aggregate net losses on account of uncontrollable items (as per tariff order) over such period shall be passed on to the beneficiaries / consumers through the next ARR and /or debited to the tariff stabilization fund, as decided by the commission. The Honble Commission, giving prudent consideration to the spirit of the Regulations, in its APR Order dated 28 April, 2012 has considered the revised applicable inflation rate for revision in the approved O&M expenses for KTPS and HTPS. The relevant portion is reproduced as under: 3.51 ......... Further as the CSERCs MYT Regulations 2010 allow for pass-through of any increase related to inflation, the Commission reviews the applicable inflation rate for FY 2010-11. To estimate the actual inflation rate applicable for FY 2010-11, the Commission has considered a weighted average of WPI & CPI increase during the year in the ratio of 80:20, respectively. Accordingly the applicable revised inflation rate for FY 2010-11 works out to be 9.74% and same has been applied on base O&M expenses for FY 2009-10. It is notable that in the initial estimation the escalation factor of 5.72% was also derived by considering 80:20 mix of WPI and CPI of the five years period for FY 2003-04 to FY 2008-09. Now with actual inflation figures for FY 2010-11, firmly in place the factor has been trued up accordingly. 3.52 .................................... 3.53 However, it should be noted that the Commission has only passed thru the actual increase in inflation in FY 2010-11, in case of FY 2011-12 & FY 2012-13; the escalation factor is assumed to be 5.72% p.a. only as approved in MYT Order. This rate would be trued up at the time of true up for respective financial years. However, due respect and in all humility at disposal, CSPGCL humbly submits that erroneously the same treatment was not considered for DSPM TPS, probably on the sole True-up Petition: CSPGCL 61

62 ground that DSPM TPS fall in the second set of plants i.e., plant for which CERC norms have been adopted. The differing treatment has created an unjust discrimination. It has caused a severe hardship to DSPM TPS just on the ground that it is covered by an adopted norm. The modern judicial theory and practice has undisputedly settled that once adoption achieves finality, the adopted child also has the same rights and privileges as that of a genetic child. The same stands true in all spheres of life. As impact of actual inflation remains same for all the plants, in accordance to the principles of equity and equality, treatment also deserves to be same. In view of the above, the submission is summarized as under:- 1. The Honble CSERC had approved the O&M expenses for all generating stations considering the escalation factor of 5.72% 2. The Honble Commission has adopted the philosophy of considering escalation factor as un-controllable parameter and had revised the normative O&M expenses approved for HTPS and KTPS (and the distribution licensee too) considering the actual inflation rate as compared to 5.72% considered in the MYT Order dated 31 March, 2011 3. Since, the Commission has already accepted inflation as un-controllable factor, it is prayed before the Honble Commission to revise the normative O&M expenses for DSPM also by considering the same escalation factor which has been considered for HTPS and KTPS. 4. For the purpose of this petition, CSPGCL has adopted the annual escalation factor based on WPI and CPI variations published on RBI website. The same have been applied on the normative O&M expense value for FY 2010-11, to compute the normative value for FY 2011-12 & FY 2012-13. The re-computed norms are as under: Table 45 Normative (Revised Norm) O&M Expense for DSPM (Rs. Crore) Particulars Amount Normative O&M Cost for FY 10-11 as per Order dated 103.67 28.04.2012 (Rs Crore) Recomputed normative O&M Cost for FY 10-11 after applying inflation factor of 9.79% instead of 5.72% (Rs 107.66 Crore) Inflation factor for FY 11-12 8.80% Normative O&M Cost for FY 11-12 (Rs Crore) 117.14 Inflation factor for FY 12-13 8.00% Normative O&M Cost for FY 12-13 (Rs Crore) 126.51 True-up Petition: CSPGCL 62

63 5.5.1 TOTAL O&M EXPENSE The total O&M Expense as per the annual accounts for FY 2011-12 and FY 2012-13 respectively is shown in the table below: Table 46: Total O&M Expense for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Employee Expense 42.29 52.07 A&G Expense 5.39 9.85 R&M Expense 68.05 54.76 Total O&M Expense 115.73 116.69 The details are appended in format DSPM-F-IV. 5.6 CONTRIBUTION TO PENSION AND GRATUITY FUND As detailed in the chapter on True up Principles the contribution to Pension and Gratuity Fund to be appropriated to DSPM for FY 2011-12 and FY 2012-13 is as under: Table 47: Contribution to Pension and Gratuity Fund for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Contribution to Pension and Gratuity Fund 8.39 14.40 Note:* Contribution to pension fund for DSPM has been included in the normative O&M expenses approved for DSPM and is not accounted for separately. CSPGCL confirms that it has paid the requisite share for each of the year. 5.7 NON-TARIFF INCOME As detailed in the chapter on True up Principles the non-tariff income which may be allocated to DSPM for FY 2011-12 and FY 2012-13 is as under: Table 48: Non-Tariff Income for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Non-Tariff Income 5.56 14.10 The sub head wise details including the allocation against the NTI received at HO is appended as format DSPM-F-V. True-up Petition: CSPGCL 63

64 5.8 OPERATIONAL PARAMETERS OF DSPM CSPGCL submits that except for PLF, DSPM Power Plant has performed better than the norms specified by the Commission in its Orders. For PLF, specific reason has been elaborated in the next sub-section of this Petition. The actual performance parameters vis-a- vis normative are given in the following table: Table 49: Actual vis-a-vis Normative Operational Parameters for DSPM Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual PLF (%) 85.00% 71.61% 85.00% 78.39% Auxiliary Consumption (%) 9.00% 7.94% 9.00% 7.88% Sp. Oil Consumption (ml/kWh) 1.00 0.36 1.00 0.32 Station Heat Rate (kCal/kWh) 2500 2489 2500 2510 Transit Loss (%) 0.75% 0.72% 0.70% 0.68% CSPGCL requests the Honble Commission to approve the actual operational parameters for DSPM as mentioned in the table above for FY 2011-12 and FY 2012-13. 5.9 THE UNCONTROLLABLE FORCED OUTAGES AT DSPM TPS The actual gross generation, auxiliary consumption and net generation based on actual PLF and auxiliary consumption along with the approved and target values of the same for FY 2011-12 and FY 2012-13 are given in the table below: The issue of two uncontrollable outages came before the Commission during provisional true up of FY 11-12. The Honble Commission decided on the same in its MYT Order dated 12 July, 2013 reproduced as under: In case of DSPM, the Commission notes that any outage or non-availability of stations due to force majeure events beyond the control of the generating company shall be considered as uncontrollable parameter in ARR. However the onus of satisfying the Commission to the effect that outage was due to such uncontrollable events is on the Generating Company. However, CSPGCL in this case, failed to provide any conclusive evidence to such effect. Thus in absence of any concrete evidence at this stage, the Commission is of the view that it is inappropriate to pass the impact to the end consumers. The Commission shall elaborate its final view in the matter while carrying out the final truing up for FY 2011-12 as and when the Petition in this regard being submitted. True-up Petition: CSPGCL 64

65 1. Failure Of 315 MVA Generator Transformer Of Unit No.2 Of DSPM TPS The Generator transformer in Power station is utilised for stepping up the voltage for evacuation of power on higher voltage through long distance transmission line and is one of the most important equipment in Power station. At DSPM TPS each of the 250 MW units has one 315 MVA three phase single unit GT. On Dt. 21.06.2011 at about 0500 hrs, Generator Transformer of unit no. 2 got tripped and fire was seen by Operation staff. The recorded sequence of events was as under:- Sr.No. Time Event Recorded I. 5.00.11:969 STG Trip Relay 186 A II 5.00.11:980 STG Trip Relay 286 A III 5.00.12 Buchholtz Trip IV 5.00.12:016 Gen. Bkr. Trip Immediately the fire fighting staff along-with fire vehicle was called. As GT has huge oil tank, to protect fire from spreading to other transformers, fire vehicles from nearby Power stations including NTPC & BALCO were also called and fire could be extinguished after 40 minutes of happening. The fire caused extensive damage to the Generator Transformer. For assessing the damage, reparability of the transformer and the reasons of accident, joint inspection were made by experts of CSPGCL and BHEL on 25th June 2011. The inference drawn by the committee is reproduced:There is no evidence of failure of HV bushings. Also no sign of arcing or any other fault inside the transformer observed. The fault is external to transformer which resulted into fire and consequent damage to transformer. Looking to the extent of damage, it is clear that the transformer is not repairable at site. Again to reassess the whole issue, Sr. specialist from BHEL Transformer Division, Bhopal was called in. The inspection was conducted on 19th July 2011. This report again affirmed the finding regarding extensive damage to the Transformer and difficulty in finding out the exact reason of initiation of fault. Further:- 1. The parameters prior to tripping as registered in log sheet is reproduced below :- HV PUMP IN OIL Time MW MVAR WTI(HV) WTI(LV) OTI FAN (A) SERVICE LEVEL 0300 250 90 680 54 66 47 10 05 5 PORT 0400 250 90 680 54 66 47 10 05 5 PORT True-up Petition: CSPGCL 65

66 2. The various electrical parameters in respect of Generator Transformer for last 24 Hrs. were also checked and no abnormality was found. 3. No fault in protections and relays was detected. The above analysis makes clear that there was no abnormality in operation and the transformer was in service with desired safeguards. Further, the fact that no sign of arcing or internal fault was witnessed, establishes that there was apparently nothing which could have been done by CSPGCL to prevent the failure. Since transformer was in badly damaged condition, the exact reason of failure could not be ascertained. However, on the basis of the protections operated and other observations, it is estimated that the fault might have initiated from Y phase of transformer 220 KV Y due to transient overvoltage passing over to bushing because of electrical failure of Y phase L.A. It is also substantiated from tripping indication of H4 - E/f , H5- Gen. Trip, H7- Y phase starter & H9- Zone I on Korba (East)- DSPM interconnector and disturbance report of BALCO-Korba Feeder no.1 at BALCO end which indicated voltage dip in Y phase from 127 KV to 31.3 KV and also current in Y phase attaining a peak value of 7.5KA, whereas other two phases were not much affected. It appears that due to catastrophic failure of bushings, the dynamic nature of pressure rise splurge of oil might have resulted in non uniform and instantaneous pressure build up, resulting in throwing oil outside the tank causing instantaneous fire. This fire might have spread to L.V. bushing, bus duct and other components like marshalling box, oil coolers, control cables etc. Fed with the quantity of oil in the conservator, fire sustained for a long time. It was also noted that the fault was cleared by the operation of protective relays of G.T. in shortest period of less than 50 milli sec. which isolated the G.T. from 220 KV side. As such no malfunctioning of the instruments/ relays observed. Order for new GT was placed on BHEL on urgent basis. However, as the delivery period of new GT is quite long (more than 9 months), to reduce the outage period, in- search of spare GT, many other utilities having 250 MW sets were contacted, however GT with matching specification could not be traced. Finally, with no other option available, a discarded GT of 210 MW HTPS unit was modified at site and retrofitted for temporary use in the 250 MW set (to be run at 200 MW capacity). Here, it is humbly submitted that retrofitting of an old GT of a different specification with a unit having different specifications was quite challenging and innovative. We have not heard of such makeovers in the past. The unparallel initiative called for ingenious thinking with precise theoretical acumen-ship and apt technical skills. The challenge ranged from similarity of voltage ratio to % impedance matching with the True-up Petition: CSPGCL 66

67 original system to ensure harmonious synchronization with protection system. During the accident, the bus duct also completely melted down. Once replacement of transformer was decided, the matching bus duct specifications order was paced and the outage was reduced to the best possible extent. The unit was resynchronized on 12.10.2011 at 20.20 hrs, however due to abovementioned technical constrained the unit could be run maximum at 200 MW . After receipt of new transformer, finally the GT was replaced and full load was restored during the next annual overhaul. CSPGCL may be immodest, if it does not mention here that such out of box innovative effort, in the larger public interest would not have succeeded had it not been driven by un-flinched deep commitment and vision of the top most management in pursuit of the greater common cause. The whole exercise has resulted in diminishing the otherwise forced outage of unit no 2 of DSPM from a likely complete outage of minimum 10-12 months to a complete outage of less than 4 months (in this period too, all annual overhaul activities were scheduled, which otherwise also would have taken about 23 days, thus net complete outage due to accident being 3 months only) and then partial outage of just 50 MW capacity (20% of the installed capacity) for the balance period. Thus with spirited vision and rigorous pursuance, the loss due to unfortunate and uncontrollable incident has been reduced from otherwise unavoidable loss of about 1211 MU to about 580 MU. In the above context, most humbly it is submitted that :- 1. The accident took place in-spite of exercise of all the prudent and reasonable safeguards by CSPGCL. To that extent the accident was undisputedly uncontrollable. 2. All possible efforts have been taken to mitigate the losses to maximum possible extent and the remaining outage has been totally uncontrollable, unavoidable and reasons may not be attributed to CSPGCL. In view of the above, most humbly it is submitted that the outage of unit no 2 may kindly be considered as forced outage due to uncontrollable factors and as such no deduction of fixed cost recovery may be enforced. 2. Failure Of Turbine Rotor blades at Unit No.1 Of DSPM TPS Another unfortunate and uncontrollable incident resulted in replacement of all the last stage blades of LP turbine of unit 1 of DSPM TPS. The unit no 1 was taken out on routine overhauling w.e.f. 7th June 2013. The AOH was awarded to BHEL which is the Original Equipment Manufacturer (OEM) for the set. During the box up of the unit (at the time when AOH activities were coming to an end), one of the LP turbine blades was True-up Petition: CSPGCL 67

68 detected with minor cracks. Immediately the same were taken for thorough inspection by BHEL (OEM) experts and subsequently few more blades were detected to be suffering from the same problem. No specific reason could be ascertained even by BHEL. However, BHEL strongly recommended that looking to the uncertainty and lack of any explicable reason for such mysterious cracks at the blade roots, that in the interest of safety of life and property, the complete set of blades should be replaced. As such large number of blades is normally not maintained in inventory, even with the best efforts to procure blades, the non-availability of blades at BHEL as well as at other power stations having similar units, resulted in the forced outage of the unit for 48 days (07/06/2013 to 25/07/2013). Before the overhaul unit was operating in perfect normal manner. No abnormal vibrations, eccentricity or axial shift was ever detected. The parameters for the period before the scheduled AOH are submitted herewith. If required, CSPGCL is also ready for review of all operational data by any expert agency as may be nominated by the Honble Commission. Further the turbine blades are not subjected to any maintenance and are inspected only at the time of AOH, hence there is no way that the failure may have arisen due any failure on part of maintenance. Thus the incident can in no way be assigned to any lapse on the part of CSPGCL to ensure standard O&M practices. In the above context, most humbly it is submitted that:- 1. The accident took place in-spite of exercise of all the prudent and reasonable safeguards by CSPGCL. To that extent the accident was undisputedly uncontrollable. 2. All possible efforts have been taken to mitigate the losses to maximum possible extent and the remaining outage (total outage of 48 days scheduled AOH outage of 23 days = 25 days) was totally uncontrollable and unavoidable. In view of the above, most humbly it is submitted that the outage of unit no 2 may kindly be considered as forced outage due to uncontrollable factor s and as such no deduction of fixed cost recovery may be enforced. 3. Busting of balancing Leak off line of Unit 1 : On dated 10.02.2013, unit no.1 was running at rated parameters. At about 23.05 hrs, the set encountered a severe and sudden accident. The balancing leak off line which takes the high pressure steam to the other side of the balancing disc and thus balances the thrust acting along the axis of the rotor, got busted. It resulted in severe damage to the High Pressure Module and Intermediate Pressure Module of the Turbine. The devastating damage to the prime-mover (turbine) resulted in total outage of unit. BHEL, which is the True-up Petition: CSPGCL 68

69 Original Equipment Manufacturer and the sole organization in India having the requisite knowhow, has been given the job of repair of the modules; however repairing of such modules is a very complicated and time consuming process. It is apprehended that even with the best efforts, the repaired modules may not be reach before March/April 2014. In view of the fact that an ideal machine has its own cost for the all the stakeholders and the units at DSPM TPS in the past have not only provided cheaper power but have maintained fair reliability too, it is in the wider interest of public in general and stakeholders in particular that the unit is restored at the earliest. Accordingly other options were also explored. In search of spare modules, many other utilities were contacted, but no matching spare module could be traced. During the process, in the month of August, CSPGCL came to know that BHEL is about to despatch new HP and IP modules of similar specification to upcoming Nabinagar project. It was also gathered that due to various reasons the differed supply to Nabinagar can be afforded. After pursuance at highest level, BHEL agreed to supply these modules to CSPGCL. Accordingly with approval of BoD, an order was placed on BHEL on urgent basis. With vigorous pursuance and untiring efforts, recently the machine has been restored to full load again. Thus, procurement of the new modules has resulted in bringing back the unit at-least 3-4 months ahead of otherwise forced outage. Regarding uncontrollable nature of accident, it is humbly submitted that CSPGCL has analysed the Sequence of Events and has reached to a well substantiated conclusion that the unfortunate accident took place due to factors which were totally out of control of the utility. For a better understanding of the circumstances which lead to the unprecedented and unfortunate accident, the line diagram of schematic arrangement of Balancing Leak off pipe and log sheet as recorded by Distributed Control System (DCS) showing the time, Load and the Cold Re-Heat(CRH) pressure has already been submitted to the Commission. Further, as has already been submitted in additional CIP petition, the sequence of events makes clear that on the unfortunate day of 10th February 2012, the whole incident from start of problem to manual Emergency Turbine Trip (HMI trip) took less than one minute. Though all automatic protection systems failed, yet operation staff took-over control of the situation and hand tripped the machine through manual interface in just 53.559 seconds. It may be useful to mention here that had there been no such exemplary prompt action; the accident might have been catastrophic involving huge loss of life and property (total loss at TG floor of both units). As far as maintenance part is considered, it may be suffice to submit that the balancing leak off pipe is a static piece of piping which is completely insulated and sealed and as per standard industry practice it is not subjected to any routine maintenance during the life of the plant. Thus True-up Petition: CSPGCL 69

70 the failure is solely attributed to an unprecedented and unforeseeable material failure, which was wholly uncontrollable for CSPGCL. In view of the above, most humbly it is submitted that the outage may kindly be considered as forced outage due to uncontrollable factors and as such no deduction of fixed cost recovery may be enforced. 5.10 GENERATION The actual gross generation, auxiliary consumption and net generation based on actual PLF and auxiliary consumption along with the approved and target values of the same for FY 2011-12 and FY 2012-13 are given in the table below: Table 50: Generation Target Approved Actual for DSPM (MU) Particulars FY 2011-12 FY 2012-13 Target Actual Target Actual Gross Generation 3,733 3,145 3,723 3,433 Auxilary Consumption 336 250 335 271 Net Generation 3,397 2,895 3,388 3,163 5.11 COST OF OIL The landed cost of oil consumed is determined on the basis of weighted average rate of oil and the actual quantity of oil consumed. The detailed computation of weighted average landed rate of oil is appended in the format DSPM-F-VI. Accordingly cost of oil consumed is as tabulated as under: Table 51: Oil Cost: Normative - Actual for DSPM Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Oil Consumed (kl) 3,733.20 1120.54 3,723.00 1,086.85 Weighted Average Rate of Oil (Rs./kl) 44,564.36 44,564.36 49,117.77 49,117.77 Cost of Oil Consumed (Rs. Crore) 16.64 4.99 18.29 5.34 5.12 COST OF COAL The landed cost of coal consumed is determined on the basis of weighted average rate of coal and the actual quantity of coal consumed. The detailed computation of weighted average True-up Petition: CSPGCL 70

71 landed rate of coal is appended in the format DSPM-F-VII. Accordingly cost of coal consumed is as tabulated as under: Table 52: Fuel Cost: Normative Actual for DSPM Particulars FY 2011-12 FY 2012-13 Normative Actual Normative Actual Quantity of Coal Consumed (MT) 2,630,353 2250077 2,623,166 2,492,927 Weighted avg. rate of Coal (Rs./ MT) 1,011.17 1,010.90 1,098.19 1,097.95 Cost of Coal Consumed (Rs. Cr) 265.97 227.46 288.07 273.71 5.13 INTEREST ON WORKING CAPITAL As per settled position elaborated in the earlier chapter on True up principles, the interest on working capital is computed on the normative basis. The detailed computation is appended in the format DSPM-F-VIII. For FY 2011-12 and on FY 2012-13, the normative interest on working capital is tabulated as under: Table 53: Interest on Working Capital for DSPM (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Total Working Capital Requirement 210.79 214.78 Rate of interest (SBI PLR as on 1st April 10) 11.75% 11.75% Interest on Working Capital 24.77 25.24 5.14 SHARING OF GAINS AND LOSSES As detailed earlier in the chapter True up Principles, sharing of gains and losses have been dealt in a separate chapter in comprehensive manner. 5.15 ANNUAL REVENUE REQUIREMENT FOR DSPM Based on various components of expense and income discussed above, the summary of ARR for DSPM for FY 2011-12 and FY 2012-13 is given in the table below: True-up Petition: CSPGCL 71

72 Table 54: ARR for DSPM: Actual (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Cost of Coal 227.46 273.71 Cost of Oil 4.99 5.34 O&M Expense 115.73 116.69 Contribution to Gratuity/Pension Fund 0.00 0.00 Depreciation 123.12 123.60 Interest & Finance Charges 142.65 129.35 Interest on Working Capital 24.77 25.24 Less: Net Prior Period Credits/(Charges) (0.02) (0.11) Total Expenditure 638.74 674.03 Return on Equity 102.97 103.89 Less: Non Tariff Income 5.56 14.10 Aggregate Revenue Requirement 736.16 763.82 5.16 ACTUAL ARR VIS--VIS RECOVERABLE ARR In the tariff order dated 12th July, 2013, for the final true up of FY 2010-11 provisional true up of FY 2011-12, the Honble Commission has prescribed and detailed principle and methodology for computing the recoverable ARR vis--vis the actual ARR. As already iterated in the chapter on true up principles CSPGCL has adopted the same principle. Accordingly, the issue has been dealt in the chapter on sharing of gains and losses. True-up Petition: CSPGCL 72

73 6. HASDEO BANGO - HPS 6.1 CAPITAL STRUCTURE The Capital Structure for Hasdeo Bango HPS based on the philosophy adopted by the Commission, in its Order dated 12 July, 2013 (table 74) and the actual numbers as per accounts are tabulated as under: Table 55: Capital Structure for Hasdeo Bango (Rs. Crore) Particulars Hasdeo Bango FY 2010-11 FY 2011-12 FY 2012-13 Opening GFA 108.54 108.54 109.60 Capitalization during the Year - 1.06 - Closing GFA 108.54 109.60 109.60 Permissible Equity Permissible Equity in Opening GFA 37.31 37.31 37.63 Permissible Equity in Closing GFA 37.31 37.63 37.63 Average Permissible Equity during the year 37.31 37.47 37.63 Total Opening Loan (actual/ normative) in GFA 71.22 71.22 71.96 Total Closing Loan (actual/ normative) in GFA 71.22 71.96 71.96 Average Loan during the year 71.22 71.59 71.96 *Detailed computation is given in the formats- HBPS-F-I 6.2 RETURN ON EQUITY Following the philosophy detailed in previous chapter on True up Principles and in accordance to methodology adopted by the Commission in the Order dt 12 July, 2013, the ROE on permissible equity as per actual GFA is tabulated as under: Table 56: Return on Equity for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Actual Actual Actual Average Permissible Equity during the year 37.31 37.47 37.63 Rate of Return on Equity 15.50% 15.50% 15.50% Return on Equity 5.78 5.81 5.83 6.3 DEPRECIATION In its MYT Order dated July 12, 2013, the Honble Commission had deducted the cumulative depreciation as on March 31, 2013 from the depreciable value of asset for Hasdeo Bango and True-up Petition: CSPGCL 73

74 depreciation is estimated on the remaining depreciable value of the asset over the remaining life of the Plant of 17 years. On similar lines, CSPGCL has identified the depreciable value of assets as on March 31, 2010 for Hasdeo Bango by deducting the same with the cumulative depreciation and estimating the depreciation on the remaining depreciable value of the assets over the remaining life of the plant of 20 years (at the beginning of FY 2010-11). For such computation, CSPGCL has considered the opening GFA for FY 2010-11 of Rs. 108.54 Crore as approved by the Commission in its MYT Order dated July 12, 2013. The depreciation computation for the Control Period from FY 2010-11 to FY 2012-13 for Hasdeo Bango is given in the table below: Table 57: Depreciation for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Opening GFA 108.54 108.54 109.60 Accumulated Depreciation 50.72 53.07 55.47 90% of GB (Excl Land) 97.68 98.64 98.64 Amount Left to be Depreciated 46.96 45.57 43.17 Remaining Life 20.00 19.00 18.00 Depreciation 2.35 2.40 2.40 Additional Capitalization - 1.06 - The depreciation detail is submitted in format HBPS-F-II. 6.4 INTEREST AND FINANCE CHARGES CSPGCL has computed the interest and finance charges based on the principles outlined by the Honble Commission in its Order dated 12 July, 2013. In the said Order the Honble Commission has determined the closing net loan for Hasdeo Bango for FY 2009-10 as Rs. 25.19 Crore. The same has been considered as opening net loan for FY 2010-11. The computation of weighted average interest rate is appended as HBPS-F-III. The interest computation is summarized as under: Table 58: Interest Expense for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Actual Actual Actual Total Opening Net Loan 25.19 22.73 21.08 Repayment during the period 2.46 2.40 2.40 Additional Loan during the year 0.11 0.00 - Total Closing Net Loan 22.73 21.08 18.68 Average Loan during the year 23.96 21.90 19.88 True-up Petition: CSPGCL 74

75 Particulars FY 2010-11 FY 2011-12 FY 2012-13 Actual Actual Actual Weighted Average Interest Rate 10.68% 11.19% 11.23% Interest Expense for the Period 2.56 2.45 2.23 In accordance with the second provision of the Regulation 23.5 of the CSERC (MYT) Regulations, 2010, for working out the interest expenses, CSPGCL has considered the weighted average interest rate of the company as whole and requests the Honble Commission to accept the same for truing up purposes. 6.5 OPERATION AND MAINTENANCE EXPENSE O&M cost considered by the Honble Commission vide its Order dated 31 March, 2011 was: Table 59: Normative (Initial Norm) O&M Expense for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Normative O&M Cost 8.0 8.5 9.0 The Honble Commission in its Order dated 31 March, 2011 approved the above normative O&M Expense by escalating the base year O&M Expense arrived at as per Regulations by 5.72%. In its Order dated 28 April, 2012, the Honble Commission mentioned that it has only passed through the actual increase in inflation in FY 2010-11 (for HTPS and DSPM; Hadsdeo Bango was not trued-up), in case of FY 2011-12 & FY 2012-13; the escalation factor was assumed to be 5.72% p.a. only as approved in MYT Order dated 31 March, 2011 and that this rate would be trued up at the time of true up for respective financial years. For the purpose of this petition, CSPGCL has adopted the principles laid down by the Honble Commission. The annual escalation factor based on WPI and CPI variations published on RBI website, have been applied on the normative O&M expense value for FY 2010-11, to compute the normative value for FY 2011-12 & FY 2012-13 as under: Table 60: Normative (Revised Norm) O&M Expense for Hasdeo Bango (Rs. Crore) Particulars Amount Normative O&M Cost for FY 10-11 as per Order 31.03.2011 (Rs Crore) 8.00 Recomputed normative O&M Cost for FY 10-11 after applying inflation 8.31 factor of 9.79% instead of 5.72% (Rs Crore) Inflation factor for FY 2011-12 8.80% Normative O&M Cost for FY 2011-12 (Rs. Crore) 9.04 Inflation factor for FY 2012-13 8.00% True-up Petition: CSPGCL 75

76 Particulars Amount Normative O&M Cost for FY 2012-13 (Rs. Crore) 9.76 Against the above normative values the actual O&M cost incurred as per accounts (subject to adjustments, as required under the regulations and narrated in the previous chapter) for FY 2011-12 and FY 2012-13 is tabulated as under: Table 61: Actual O&M Expense for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Employee Expense 5.74 5.96 6.58 A&G Expense 1.44 1.16 1.49 R&M Expense 2.24 1.80 1.17 Total O&M Expense 9.43 8.92 9.25 The details of O&M expenses are appended in form F-IV. 6.6 CONTRIBUTION TO PENSION AND GRATUITY FUND As detailed in the chapter on True up Principles the contribution to Pension and Gratuity Fund to be appropriated to HTPS for FY 2011-12 and FY 2012-13 is as under: Table 62: Contribution to Pension and Gratuity Fund for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Contribution to Pension and Gratuity Fund 4.90 2.01 3.46 CSPGCL confirms that it has paid the requisite share for each of the year. 6.7 NON-TARIFF INCOME As there has been no disposal of assets pertaining to Hasdeo Bango HPS and all other heads under non-tariff income at corporate level have been apportioned to the three thermal power plants in line with the approach adopted by the Honble Commission in its MYT Order dated March 31, 2011, hence, there is no non-tariff income for Hasdeo Bango HPS. 6.8 INTEREST ON WORKING CAPITAL As per settled position elaborated in the earlier chapter on True up principles, the interest on working capital is computed on the normative basis. The detailed computation is appended in the format HBPS-F-V. True-up Petition: CSPGCL 76

77 The normative interest on working capital for the Control Period from FY 2010-11 to FY 2012-13 is tabulated as under: Table 63: Interest on Working Capital for Hasdeo Bango (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 Total Working Capital Requirement 6.04 5.84 6.35 Rate of interest(SBI PLR as on 1st April, 2010) 11.75% 11.75% 11.75% Interest on Working Capital 0.71 0.69 0.75 CSPGCL requests the Honble Commission to approve interest on working capital for the Control Period from FY 2010-11 to FY 2012-13 for Hasdeo Bango HPS as given in the above table. 6.9 ANNUAL REVENUE REQUIREMENT FOR HASDEO BANGO Based on various components of expense and income discussed above, the summary of ARR for Hasdeo Bango for the Control Period from FY 2010-11 to FY 2012-13 is given in the table below: Table 64: ARR for Hasdeo Bango HPS (Rs. Crore) Particulars FY 2010-11 FY 2011-12 FY 2012-13 O&M Expense 9.43 8.92 9.25 Contribution to Gratuity/Pension Fund 4.90 2.01 3.46 Depreciation 2.35 2.40 2.40 Interest & Finance Charges 2.56 2.45 2.23 Interest on Working Capital 0.71 0.69 0.75 Total Expenditure 19.94 16.47 18.08 Return on Equity 5.78 5.81 5.83 Aggregate Revenue Requirement 25.72 22.28 23.91 6.10 ACTUAL ARR VIS--VIS RECOVERABLE ARR CSPGCL confirms that during the Control Period, HBPS did not face any un-toward accident or unexpected shut-down and the variation in actual generation from the normative generation is solely attributable to non-availability of water which is undisputedly an uncontrollable factor for CSPGCL. Therefore, the Operation and Maintenance Expense is the only controllable parameter for hydro plants as per Regulations. The computation of gains & losses have been made in the subseqen chapter along with the SHPs. True-up Petition: CSPGCL 77

78 7. SMALL HYDRO PLANTS 7.1 ARR FOR FY 2010-11, FY 2011-12 AND FY 2012-13 FOR SHPS As discussed in the chapter on True-up Principles, the true-up of small hydro generating stations of CSPGC is done accordingly. The annual revenue requirement for the MYT Control Period from FY 2010-11 to FY 2012-13 for small hydro plants is given as under: Table 65: ARR for SHPs for FY 2010-11 (Rs. Crore) Particulars Legend Sikasar Gangrel SHP KW Total Opening GFA A 26.18 48.24 12.14 86.55 Opening Equity B 7.85 14.47 3.64 25.97 Opening Net Loan C 13.12 29.69 7.11 49.91 Opening Grant D 3.00 - - 3.00 Closing GFA E 26.18 48.24 12.14 86.55 Closing Equity F 7.85 14.47 3.64 25.97 Closing Net Loan G 11.29 26.31 6.26 43.86 Closing Grant H 3.00 - - 3.00 Return on Equity I=Avg(B,F)*16% 1.26 2.32 0.58 4.15 Depreciation# J=Avg(A,E)*7% 1.82 3.38 0.85 6.05 Interest on Loan# K=Avg(C,G)*11.75% 1.43 3.29 0.79 5.51 Actual O&M Expense L 0.24 0.80 0.32 1.36 Normative O&M Expense M 0.77 1.50 0.32 2.59 Interest on Working Capital$ O 0.14 0.27 0.07 0.48 Actual ARR P=I+J+K+L+O 4.89 10.05 2.61 17.55 Normative ARR P=I+J+K+M+O 5.42 10.75 2.61 18.78 # As per methodology adopted in MYT Order dated 31 March, 2011 $ Rate of interest on working capital for Sikasar and Gangrel considered as 10.75% and that for Korba West SHP as 11.75% as considered in MYT Order dated 31 March, 2011 Table 66: ARR for SHPs for FY 2011-12 (Rs. Crore) Particulars Legend Sikasar Gangrel KWMM Total Opening GFA A 26.18 48.24 12.14 86.55 Opening Equity B 7.85 14.47 3.64 25.97 Opening Net Loan C 11.29 26.31 6.26 43.86 Opening Grant D 3.00 - - 3.00 Closing GFA E 26.18 48.24 12.14 86.55 Closing Equity F 7.85 14.47 3.64 25.97 Closing Net Loan G 9.46 22.93 5.41 37.80 True-up Petition: CSPGCL 78

79 Particulars Legend Sikasar Gangrel KWMM Total Closing Grant H 3.00 - - 3.00 Return on Equity I=Avg(B,F)*16% 1.26 2.32 0.58 4.15 Depreciation# J=Avg(A,E)*7% 1.83 3.38 0.85 6.06 Interest on Loan# K=Avg(C,G)*11.75% 1.22 2.89 0.69 4.80 Actual O&M Expense L 0.32 0.41 0.34 1.07 Normative O&M Expense M 0.81 1.57 0.34 2.72 Interest on Working Capital$ O 0.14 0.27 0.07 0.48 Actual ARR P=I+J+K+L+O 4.77 9.27 2.52 16.56 Normative ARR P=I+J+K+M+O 5.25 10.43 2.52 18.21 # As per the methodology adopted in MYT Order dated 31 March, 2011 $Rate of interest on working capital for Sikasar and Gangrel considered as 10.75% and that for Korba West SHP as 11.75% as considered by the Honble Commission in its MYT Order dated 31 March, 2011 Table 67: ARR for SHPs for FY 2012-13 (Rs. Crore) Particulars Legend Sikasar Gangrel KWMM Total Opening GFA A 26.18 48.24 12.14 86.55 Opening Equity B 7.85 14.47 3.64 25.97 Opening Net Loan C 9.46 22.93 5.41 37.80 Opening Grant D 3.00 - - 3.00 Closing GFA E 26.18 48.24 12.14 86.55 Closing Equity F 7.85 14.47 3.64 25.97 Closing Net Loan G 7.63 19.56 4.56 31.74 Closing Grant H 3.00 - - 3.00 Return on Equity I=Avg(B,F)*16% 1.26 2.32 0.58 4.15 Depreciation# J=Avg(A,E)*7% 1.83 3.38 0.85 6.06 Interest on Loan# K=Avg(C,G)*11.75% 1.00 2.50 0.59 4.09 Actual O&M Expense L 0.42 0.68 0.35 1.45 Normative O&M Expense M 0.85 1.65 0.35 2.85 Interest on Working Capital$ O 0.14 0.27 0.07 0.48 Actual ARR P=I+J+K+L+O 4.65 9.14 2.44 16.23 Normative ARR P=I+J+K+M+O 5.08 10.11 2.44 17.63 #As per the methodology adopted in MYT Order dated 31 March, 2011 $Rate of interest on working capital for Sikasar and Gangrel considered as 10.75% and that for Korba West SHP as 11.75% as considered by the Honble Commission in its MYT Order dated 31 March, 2011 True-up Petition: CSPGCL 79

80 7.2 SHARING OF GAINS/(LOSSES) FOR HYDRO PLANTS CSPGCL confirms that during the Control Period, its hydro machines did not face any un- toward accident or unexpected shut-down and the variation in actual generation from the normative generation is solely attributable to non-availability of water which is undisputedly an uncontrollable factor for CSPGCL. Therefore, the Operation and Maintenance Expense is the only controllable parameter for hydro plants as per Regulations. CSPGCL has therefore computed the Gains/(Losses) on O&M Expense for hydro/ small hydro plants on aggregate basis for each year of the MYT Control Period. The computation of Gains/ (Losses) is given in the following tables: Table 68: Gains/(Losses) for Small Hydro Plants for FY 2010-11 (Rs. Crore) Particulars Legend FY 2010-11 Sikasar Gangrel KWMM Bango Normative O&M A 0.77 1.50 0.32 8.31 Actual O&M B 0.24 0.80 0.32 9.43 Gain/(Loss) C=A-B 0.53 0.70 0.00 (1.12) Gain/(Loss) Total Hydro D=Sum(C.) 0.11 Table 69: Gains/(Losses) for Small Hydro Plants for FY 2011-12 (Rs. Crore) Particulars Legend FY 2011-12 Sikasar Gangrel KWMM Bango Normative O&M A 0.81 1.57 0.34 9.04 Actual O&M B 0.32 0.41 0.34 8.92 Gain/(Loss) C=A-B 0.49 1.16 0.00 0.12 Gain/(Loss) Total Hydro D=Sum(C.) 1.77 Table 70: Sharing of Gains/(Losses) for SHPs for FY 2012-13 (Rs. Crore) Particulars Legend FY 2012-13 Sikasar Gangrel KWMM Bango Normative O&M A 0.85 1.65 0.35 9.76 Actual O&M B 0.42 0.68 0.35 9.25 Gain/(Loss) C=A-B 0.43 0.97 0.00 0.51 Gain/(Loss) Total Hydro D=Sum(C.) 1.91 True-up Petition: CSPGCL 80

81 8. SHARING OF GAINS AND LOSSES 8.1 COMBINED ARR FOR ALL PLANTS The combined ARR for the conventional and non conventional power stations, covered in the instant true up is given in the following table: Table 71: Combined ARR for all the Power Stations of CSPGCL (Rs. Crore) Particulars KTPS HTPS DSPM HBPS & SHPs Total FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 Actual Cost of Coal 267.86 227.62 439.84 457.38 227.46 273.71 0.00 0.00 935.17 958.71 Actual Cost of Oil 20.86 33.33 19.62 21.24 4.99 5.34 0.00 0.00 45.47 59.91 Actual O&M Expense 164.27 190.19 199.89 222.29 115.73 116.69 9.99 10.70 489.89 539.87 Contribution to 7.39 12.67 14.10 24.19 0.00 0.00 2.01 3.46 23.51 40.31 Gratuity/Pension Fund Depreciation 24.65 27.21 36.40 40.13 123.12 123.60 8.46 8.47 192.63 199.42 Interest & Finance Charges 15.53 16.42 17.75 18.56 142.65 129.35 7.25 6.33 183.18 170.65 Interest on Working Capital 20.14 21.37 30.33 32.13 24.77 25.24 1.17 1.22 76.40 79.96 Less: Net Prior Period (0.18) (0.08) (0.04) (0.08) (0.02) (0.11) 0.00 0.00 (0.24) (0.26) Credits/(Charges) Total Expenditure 520.88 528.89 757.98 815.99 638.74 674.03 28.87 30.18 1946.48 2049.09 Return on Equity 26.93 29.20 49.82 52.71 102.97 103.89 9.96 10.00 189.68 195.79 Less: Non Tariff Income 4.17 11.51 9.85 24.78 5.56 14.10 0.00 0.00 19.58 50.40 Aggregate Revenue 543.64 546.58 797.95 843.92 736.16 763.82 38.84 40.18 2116.58 2194.48 Requirement 8.2 COMPUTATION OF SHARING OF GAINS AND LOSSES CSPGCL has followed the methodology approved by the Honble Commission for sharing of gains and losses in its Order dated 12 July, 2013. The explanation and reasoning given by the Honble Commission in the mentioned Order is reproduced hereunder for ready reference. The Commission has computed sharing of gains/ (losses) as per Regulation 5.9 and 5.10 of the CSERC (MYT) Regulations, 2010. The Commission has computed Gains/ (Losses) on Fixed Cost components (excluding O&M and Secondary Fuel), O&M expense, Coal cost and the Secondary Fuel Oil cost on the actual cost incurred viz-a- viz normative amount. The plant-wise total gain/ (loss) on each of the component are then added together to arrive at the total gain/ (loss) for the Company as a whole. As per Regulation in case of gains on account of better performance than the bench mark parameters owing to controllable factors, the utility is entitled to retain 1/3rd share from such gains, however, in case of loss due to underperformance the total loss has to be borne by the utility itself. True-up Petition: CSPGCL 81

82 For a generating station there are five different parameters on which the cost implications can be ascertained. Each of the factors makes an impact on the cost in a different way for e.g. with the increase in PLF, the per unit cost stands to come down thus there is a gain to the beneficiary, however, at the same time if the auxiliary consumption goes up then it has a negative impact. Similarly, with the PLF and the auxiliary consumption at bench mark level the SHR have an impact on the cost of generation. Even the landed cost of coal is subject to vary with the variation in transit loss which gets reflected in the normative fuel cost vis--vis actual fuel cost. Therefore, to have a fair assessment of overall gains / losses, different performance parameters have been compared on normative vis--vis actual basis and the costs have been assigned to per unit (sent out) value. In all gains and losses have been calculated in four sub component. The first component takes into account the impact of variation in net generation (taking into account combined effect of variation in PLF as well as auxiliary consumption). On the various fixed cost component excluding O&M and secondary fuel cost ( both being controllable cost) the second component relates to the impact of variation in the per unit O&M cost. A utility is allowed O&M cost either on normative basis or on the basis of historical trend. At the same time, it is expected to achieve a definite level of performance ( net generation). Thus, in ideal condition the O&M charges per unit net generation is pre-defined. With the higher level of generation or lower level of expenses there is a gain. Even if the O&M cost goes up but at the same time the sent out units rises more than the increase in cost the beneficiary get cheaper power in terms of per unit cost. The second component addresses the cost economic dynamics in this respect. The third component is related to the secondary fuel cost which has a linear relation with the generation. The fourth component is related to the primary fuel which basically reflects the impact of SHR and transit loss on the total cost. Thus it can be seen that all the cost components have been considered only once and the submission of four components gives overall picture of the gains / losses achieved / incurred by a power station on account of its over / under performance with respect to the pre- defined bench mark level. To work out the net impact for the utility as a whole the gains / losses for the three power stations have been clubbed and the resultant net gains / losses have been given appropriate treatment in accordance with the provisions of the regulations. On the net basis the total gains for FY 2010-11 was Rs. 153.97 crore and accordingly CSPGCL is allowed to retain one third share of Rs. 51.32 crore. For FY 2011-12 on the net basis the utility incurred a loss of Rs. 13.36 crore and as per regulation the whole of the loss is assigned to CSPGCL. The detailed computation on sharing of gains/(losses) is as given in the following Table: True-up Petition: CSPGCL 82

83 Following the above mentioned philosophy adopted by the Honble Commission, CSPGCL has computed the sharing of gains and losses based on actual/ numbers respectively for FY 2011-12 and FY 2012-13. In the above context, it is submitted that as elaborated in the chapter on True-up principles, the loss of generation due to backing down qualify for billing. However, for the purpose of fuel cost, the same is not considered. Further, though the outages due to uncontrollable factors (including but not limited to outages due to system jerk/disturbances) are not included in the regular billing, the same qualify for the purpose of settlement of fixed cost recovery. The actual generation, backing down and loss of generation (based on normative PLF and normative auxiliary consumption) for the three thermal plants is tabulated hereunder: Table 72: Actual Generation, Backing Down and Uncontrollable Forced Outages Particulars Units FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM Actual net generation MU 2729.33 5816.22 2895.36 2035.61 5750.18 3162.96 Backing Down MU 9.57 25.65 16.06 4.59 54.00 147.72 Generation Loss due to outages because of Uncontrollable factors A. Generation Loss due to MU 10.82 1.46 2.59 3.59 0.24 5.05 system problem B. Other outages due to unontrollable factors (as MU 0.00 0.00 697.77 0.00 0.00 235.85 detailed in write up under respective sections) Total Generation Loss due MU 10.82 1.46 698.36 3.59 0.24 240.90 to Uncontrollable factors As discussed earlier, no claim for sharing of gains have been made for the generation loss due to outages because of un-controllable factors. The computation is given in the table below: Table 73: Sharing of Gains and Losses Particulars Units Legend FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM Installed capacity MW 440 840 500 440 840 500 NPLF as per MYT Regulations % 78.50% 82.00% 85.00% 78.50% 82.00% 85.00% Actual PLF achieved % 79.14% 87.18% 71.61% 60.40% 86.15% 78.39% Gross generation at NPLF MU 3033.99 6050.42 3733.20 3025.70 6033.89 3723.00 Gross generation at actual PLF MU 3058.64 6432.81 3145.20 2328.24 6339.58 3433.49 Normative aux. consumption % 11.25% 9.00% 9.00% 11.25% 9.00% 9.00% Actual aux cons % 10.77% 9.59% 7.94% 12.57% 9.30% 7.88% True-up Petition: CSPGCL 83

84 Particulars Units Legend FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM Normative aux. consumption MU 341.32 544.54 335.99 347.96 543.05 335.07 Actual aux cons MU 329.31 616.59 249.84 292.63 589.40 270.53 Normative Net Generation MU a 2692.67 5505.88 3397.21 2677.75 5490.84 3387.93 Actual net generation MU b 2729.33 5816.22 2895.36 2035.61 5750.18 3162.96 Backing Down MU c 9.57 25.65 16.06 4.59 54.00 147.72 Net generation considered for MU d 2738.91 5841.87 2911.43 2040.20 5804.18 3310.68 billing Generation Loss due to outages MU e 10.82 1.46 698.36 3.59 0.24 240.90 because of uncontrollable factors Net Generation being considered MU f 2738.91 5841.87 3397.21 2043.79 5804.18 3387.93 for sharing of gains/ losses Fixed Cost (norm-wise) Depreciation Rs Cr A 24.65 36.40 123.12 27.21 40.13 123.60 Interest on Loan and Finance Rs Cr B 15.53 17.75 142.65 16.42 18.56 129.35 charges Return on Equity Rs Cr C 26.93 49.82 102.97 29.20 52.71 103.89 Interest on Working Capital Rs Cr D 20.14 30.33 24.77 21.37 32.13 25.24 Normative O & M Expenses Rs Cr E 160.44 226.56 117.14 173.28 244.68 126.51 Secondary fuel oil cost Rs Cr F 29.69 27.62 16.64 29.68 30.29 18.29 Contribution to Pension Fund Rs Cr G 7.39 14.10 0.00 12.67 24.19 0.00 Less - Non Tariff Income Rs Cr H 4.17 9.85 5.56 11.51 24.78 14.10 Fixed Cost allowable on I=Sum(A to Rs Cr 280.60 392.74 521.72 298.31 417.91 512.77 Normative Basis G)-H Fixed cost expenditure excluding Rs Cr J=I-E-F 90.46 138.55 387.95 95.35 142.94 367.97 O&M and Sec fuel Normative per unit Fixed Cost (Rs/kWh) excluding O&M and Rs/kWh K=J/a*10 0.34 0.25 1.14 0.36 0.26 1.09 Secondary fuel cost Net Generation being considered MU L=f 2738.91 5841.87 3397.21 2043.79 5804.18 3387.93 for sharing of gains/ losses Fixed cost recovery from Rs Cr M=K*L/10 92.02 147.01 387.95 72.78 151.13 367.97 generation as above Fixed cost gain from normative Rs Cr N=M-J 1.55 8.46 - (22.57) 8.16 - cost Total gain and loss (Fixed Cost) Rs Cr O=Sum(N) 10.01 (14.42) O & M expenses Normative O&M Cost allowed Rs Cr P=E 160.44 226.56 117.14 173.28 244.68 126.51 Normative O&M Cost derived Rs/kwh Q 0.60 0.41 0.34 0.65 0.45 0.37 from NPLF O&M recoverable against Generation being considered for Rs Cr R=Q*f/10 sharing of gains/ losses 163.20 240.39 117.14 132.26 258.65 126.51 Actual O & M cost expenditure Rs Cr S 164.27 199.89 115.73 190.19 222.29 116.69 Difference of recovery and Rs Cr T=R-S (1.07) 40.49 -* (57.94) 36.36 -* True-up Petition: CSPGCL 84

85 Particulars Units Legend FY 2011-12 FY 2012-13 KTPS HTPS DSPM KTPS HTPS DSPM expenditure Total Difference U=Sum(T) 39.42 (21.58) No gain has been accounted for outages due to uncontrollable factors. Secondary Fuel Cost Normative SFC Rs Cr V=F 29.69 27.62 16.64 29.68 30.29 18.29 Normative SFC derived from Rs/kwh W 0.11 0.05 0.05 0.11 0.06 0.05 Normative net generation Secondary fuel cost recoverable Rs Cr X=W*b/10 30.10 29.18 14.18 22.56 31.72 17.07 against actual net generation Actual SFC incurred Rs Cr Y 20.86 19.62 4.99 33.33 21.24 5.34 Savings due to performance Rs Cr Z=X-Y 9.24 9.56 9.19 (10.77) 10.48 11.73 improvement Total Impact Savings/Excess Rs Cr AA=Sum(Z) 27.98 11.44 Expenditure due to SFC Coal Cost (primary fuel) Normative fuel cost on actual Rs Cr AB 271.16 449.69 230.60 213.21 465.20 275.33 sent out Actual fuel cost Rs Cr AC 267.86 439.84 227.46 227.62 457.38 273.71 Coal Cost Surplus/(deficit) Rs Cr AD=AB-AC 3.29 9.84 3.14 (14.41) 7.82 1.62 Total Impact Savings/Excess Rs Cr AE=Sum(AD) 16.27 (4.98) Expenditure due to coal cost Gains/ Losses for HBPS and SHPs Gains/(Losses) for Bango and Rs Cr AF 1.77 1.91 SHPs Total Gains / Losses AG=Sum(O,U, Total Gains/ Losses Rs Cr 95.45 (27.61) AA,AE,AF) AH=IF(AG>0, Gain/(Loss) to Utility Rs Cr 31.82 (27.61) AG/3,AG) 8.3 SURPLUS/(DEFICIT) AGAINST STATUTORY CHARGES: The Surplus/(Deficit) due to difference in the expense and revenue realized against the pass through statutory charges is given in the following table: Table 74: Surplus/(Deficit) in Statutory Charges (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Revenue Expense Revenue Expense Water Charges 20.56 52.05 49.35 49.55 ED & Cess 40.25 41.57 66.55 66.55 SLDC Charges 5.58 5.58 7.28 7.73 Total 66.39 99.20 123.18 123.83 Surplus/(Deficit) (32.81) (0.65) True-up Petition: CSPGCL 85

86 Therefore, the net ARR for CSPGCL is as per the following table: Table 75: Net ARR of CSPGCL Excluding Statutory Charges (Rs. Crore) Particulars FY 2011-12 FY 2012-13 ARR for Thermal, Hydro and SHPs 2116.58 2194.48 Utility's share in net Gain/(Loss) 31.82 (27.61) Recoverable Statutory Charges 32.81 0.65 Net ARR for CSPGCL 2,181.21 2,167.52 True-up Petition: CSPGCL 86

87 9. NET REVENUE SURPLUS/(DEFICIT) FOR CSPGCL Revenue Surplus / (Deficit) for FY 10-11 For thermal plants final true up for FY 10-11 has been done by the Honble Commission vide order dt 12th july 2013, hence the effect of HBPS / SHP gains and losses is dealt separately in the next section. Out of the total gain of 0.11 Cr, the utility share is considered at Rs 0.04 Cr. Table 76: Difference in ARR for Hydro Plants for FY 2010-11 (Rs. Crore) Particulars FY 2010-11 ARR for Hasdeo Bango & SHPs Approved 45.98 Actual ARR for Hasdeo Bango & SHPs 43.28 Sharing of Gain/ Loss of HBPS & SHPs 0.04 Surplus / (deficit) 2.74 Revenue Surplus / (Deficit) for FY 11-12 and FY 12-13: The revenue from sale of power in the annual accounts include revenue receipts against sale of power from Kawardha Co-generation plant as well. However, as the co-generation plant is covered under generic tariff and the Honble Commission has already settled that no true-up applies for the same, neither the expenses nor the revenue from the co-generation plant has been considered for the purpose of this instant true-up. Revenue from sale of power has been considered accordingly. The revenue receipt as per accounts (excluding revenue from Kawardha Cogen plant) is shown in the table below : Table 77: Revenue from sale of Power to CSPGCL (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Revenue from Sale of Power 2,108.28 2,218.60 In the above table, revenue from sale of power includes revenue from FCA of Rs. 37.07 Crore in FY 2012-13. The mechanism has been put in place by the Honble Commission for recovery of fuel charge adjustment with effect from 07 May, 2013. True-up Petition: CSPGCL 87

88 Based on the discussion of expense and income given above, the standalone revenue (Deficit)/Surplus of CSPGCL for FY 2011-12 and FY 2012-13 is as given in the table below: Table 78: Standalone Surplus/(Deficit) for CSPGCL (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Net ARR for CSPGCL 2,181.21 2,167.52 Revenue from sale of power 2,108.28 2,218.60 Standalone Surplus/(Deficit) (72.93) 51.09 The revenue Surplus/(Deficit) along with the carrying cost is tabulated in the table below: Table 79: Revenue Surplus/(Deficit) (Rs. Crore) All Figures in Rs. Cr. Particulars FY 2010-11 FY 2011-12 FY 2012-13 Standalone Surplus/(Deficit) - Difference 2.74 (67.50) 51.09 of Approved and Actual ARR Opening Surplus/(Deficit) - 2.90 (68.22) Closing Surplus/(Deficit) 2.74 (64.60) (17.14) Interest Rate (%) 11.75% 11.75% 11.75% Holding/Carrying Interest/Cost for the year 0.16 (3.62) (5.02) Total Closing Surplus/(Deficit) 2.90 (68.22) (22.15) The standalone surplus of Rs. 2.74 Crore for FY 2010-11 is due to the difference in approved and actual ARR of Rs. 2.70 Crore for the hydro power stations taken together and the sharing of gains/losses due to hydro plants for FY 2010-11 of Rs. 0.04 Crore. The interest rate for carrying cost is considered as per the Honble Commissions Order dated 12 July, 2013. Further, in the provisional true up order dt. 12th July 2013, the Honble Commission has already considered standalone deficit of 5.43 Crore. Therefore to arrive at net impact, effective standalone deficit has been considered as 67.50 Cr. (72.93-5.43= 67.50). The Honble Commission is requested to approve the revenue surplus/(deficit) as above. True-up Petition: CSPGCL 88

89 10. ISSUES WITH RESPECT TO THE HONBLE COMMISSIONS ORDER DATED 12 JULY, 2013 CSPGCL submits that vide its letter dated 29th August, 2013 it had prayed the Honble Commission for clarification on certain issues which it felt are applicable for the review. In reply, the Honble Commission vide its letter dated October 23, 2013 granted leave to CSPGCL to raise the stated issues with reasons and justification when it approaches the Commission for next tariff related filing. Other than the specific issues, CSPGCL also craved leave for submission of issues which may involve review by the Honble Commission along with the true up for FY 11-12 & FY 12-13. Such issues are elaborated here as under: 10.1 ISSUE 1: DEPRECIATION FOR HTPS FOR FY 2010-11 CSPGCL has claimed depreciation against the additional capitalization of Rs. 172.89 Crore in the balance useful life of two years. For the reasons given in the order, the Honble Commission has not accepted the methodology relied by CSPGCL and instead has considered average depreciation at the rate of 5.11% on the assets added after March 31, 2010. It is respectfully submitted that based on the reasons submitted in this Petition under the truing up for HTPS for FY 2011-12 and FY 2012-13, depreciation on of the balance depreciable value of Asset over useful life of the Assets as on 31 March, 2010 and depreciation on the additional capitalisation during FY 2010-11 may be revisited and recovery may be allowed accordingly. 10.2 ISSUE 2: O&M EXPENSES FOR THE MYT CONTROL PERIOD FOR KTPS, HTPS AND HASDEO BANGO: Table 228 (Page 282) of the MYT Order : Based on the methodology adopted in the Order, CSPGCL has computed the projected O&M cost for FY 2013-14 to FY 2015-16 for the HTPS, KTPS & Hasdeo Bango HEP. It is respectfully submitted that results so computed are different than the ordered value, however as the order do not contain the computation sheet relied by the Honble Commission, CSPGCL is unable to identify the source of discrepancy in the two computations. It is prayed that the calculations may kindly be revisited and rectified at that end. Further, if the computations relied by the Commission are re-ascertained, then the computation sheet so relied may please be provided so that CSPGCL is able to match the same with its own computation and make further submission, if needed. True-up Petition: CSPGCL 89

90 Table 80: Projected O&M cost for FY 2013-14 to FY 2015-16 (Refer Table no. 228) Particulars FY 2013-14 FY 2014-15 FY 2015-16 Approved CSPGCL's Approved CSPGCL's Approved CSPGCL's submission submission submission 11. HTPS KW 254.36 254.51 277.79 277.96 303.38 303.56 KTPS KE 195.02 200.71 212.98 219.19 232.60 239.39 Hasdeo 12.41 12.66 13.55 13.83 14.80 15.10 Bango Table 81: Computation of Projected O&M Cost Avg. Esca- Esca Esca- KTPS 2009-10 2010-11 2011-12 2012-13 Escal 2013-14 2014-15 2015-16 lation lation lation ation 143.83 10.17% 8.60% 172.09 9.21% 187.94 2009-10 158.46 8.60% 183.55 9.21% 200.45 2010-11 169.01 2011-12 149.20 9.21% 162.94 168.28 183.78 9.21% 200.71 219.19 239.39 Avg. Esca- Esca- Esca- HTPS 2009-10 2010-11 2011-12 2012-13 Esca 2013-14 2014-15 2015-16 lation lation lation lation 197.50 10.17% 8.60% 236.30 9.21% 258.06 2009-10 217.58 8.60% 191.05 9.21% 208.65 2010-11 175.92 2011-12 212.82 9.21% 232.43 233.05 9.21% 254.51 277.96 303.56 Avg. Hasdeo Esca- Esca- Esca- 2009-10 2010-11 2011-12 2012-13 Escal 2013-14 2014-15 2015-16 Bango lation lation lation ation 10.76 10.17% 8.60% 12.87 9.21% 14.06 2009-10 11.85 8.60% 10.24 9.21% 11.18 2010-11 9.43 2011-12 8.74 9.21% 9.55 11.60 9.21% 12.66 13.83 15.10 In view of the above discussions, the Honble Commission is requested to consider the same and decide appropriately in the Order. True-up Petition: CSPGCL 90

91 10.3 ISSUE 3: EFFICIENCY GAIN/LOSSES: Table 112 (Page 144-146) of the MYT Order - In the computation of gain / loss, from the notations, it appears that Secondary fuel cost recovery from actual generation has been computed on the basis per unit normative cost multiplied by the actual generation. In relation to HTPS and KTPS the computation given in the table confirms this corollary however in case of DSPM the value indicated in the table for FY 2010-11 for DSPM is Rs. 13.61 Crore, which is same as normative SFC. Taking into account the actual net generation, this ought to be Rs. 15.71 Crore. However, as the logic followed in the computations are not very explicit, it is prayed that the either the calculations may kindly be revisited and rectified at that end or the logistics relied in the computation may please be provided so that CSPGCL is able to analyze and comprehend the same in true spirit. On its part, CSPGCL confirms that for FY 11-12 proposed corrections have already been accounted for in the instant petition. True-up Petition: CSPGCL 91

92 ANNEXURES

93 HTPS F -I -Capital Structure Particulars FY 2011-12 FY 2012-13 Opening GFA (As on 01.04.2005) 627.21 627.21 Permissible Equity (As on 01.04.2005) 216.58 216.58 % of Equity in GFA (As on 01.04.2005) 34.53% 34.53% CAPEX and GFA Opening GFA (Including Share of Holding Company GFA) 932.48 1,020.81 Opening CWIP 56.04 4.72 Opening Capex 988.51 1,025.53 Capitalization during the Year 88.34 36.23 Closing GFA 1,020.81 1,057.04 Closing CWIP 4.72 -14.94 Closing Capex 1,025.53 1,042.10 Loan Borrowed Opening Borrowed Loan 598.09 624.00 Loan Borrowed during the Year 25.91 4.20 Closing Borrowed Loan 624.00 628.20 Borrowed Loan in Opening GFA 564.19 621.13 Borrowed Loan in Closing GFA 621.13 637.21 Equity Opening Gross Equity 390.42 401.53 Equity addition during the Year 11.11 12.36 Closing Equity 401.53 413.89 Gross Equity in Opening GFA 368.29 399.68 Gross Equity in Closing GFA 399.68 419.83 Permissible Equity Permissible Equity in Opening GFA 308.16 334.66 Permissible Equity in Closing GFA 334.66 345.53 Average Gross Permissible Equity during the year 321.41 340.10 Normative Loan Opening Normative Loan 60.13 65.02 Closing Normative Loan 65.02 74.30 Net Loan (Borrowed +Normative- Repayment) Repayment till previous year (Accumulated Depreciation) 469.18 505.59 Total Opening Net Loan 155.13 180.57 Repayment during the period (Depreciation) 36.40 40.14 Total Closing Net Loan 180.57 165.78 Note - 1 - No Consumer Contribution/ Grant is applicable in case of HTPS.

94 HTPS F-II DEPRECIATION (Rs. Crore) Particulars FY 2011-12 FY 2012-13 Opening GFA as on 01/04/2010 759.58 759.58 Less: Value of Land Under Freehold 1.09 1.09 Opening Accumulated Depreciation 565.74 589.12 90% of Gross Block Excluding Land 682.65 682.65 Amount remaining to be depreciated 116.91 93.52 Remaining Life 5 4 Depreciation in 6 years 23.38 23.38 Additional Capitalization during the year 88.34 36.23 Cumulative Gross Block on Additional Capitalisation from FY 2010-11 261.23 297.46 Average depreciation rate (%) 6.00% 6.00% Depreciation on additional capitalisation 13.02 16.76 Total Depreciation 36.40 40.14

95 HTPS F -III - Weighted Average Intrest Rate HTPS Loan Details FY 2011-12 FY 2012-13 Particulars Rate (%) OB Rate (%) OB State Government Loan 9.00% 121.03 9.00% 99.03 11.50% 10.58 11.50% 9.57 PFC- 22104004 0.00% - 13.25% 10.14 11.50% 3.19 11.50% 2.91 PFC- 22104005 0.00% - 13.25% 1.13 11.50% 31.99 11.50% 29.21 PFC- 22104007 0.00% - 12.75% 2.62 PFC-22104001 11.50% 29.84 11.50% 27.60 PFC-22119001 0.00% 0.61 0.00% 0.39 11.50% 59.48 11.50% 59.48 11.25% 21.78 11.25% 21.78 PFC-C2704001 0.00% - 11.75% 4.47 0.00% - 12.25% 5.99 0.00% - 12.75% 1.56 Bonds 12.50% 22.92 12.50% 0.95 Debentures 12.50% 6.46 12.50% 6.46 Total Loan 307.88 283.30 Weighted Avg. Interest 10.57% 10.73%

96 HTPS F - IV - O&M Expenses All values in Cr Rs Employee Cost FY 11-12 FY 12-13 Salaries, allowances, bonus etc. 124.93 137.64 Staff welfare Expenses 10.29 7.99 Other Staff costs 3.38 7.00 Leave encashment scheme 2.42 2.78 Contribution to Provident and Other Funds 0.72 1.08 Less: - - Employee Capitalization - - Coal Transportation Expense for KWB & KEB - - Productivity Incentive 6.74 5.77 Employee Cost 135.00 150.72 HO & Holding Company Expense 9.69 11.47 Contribution to Pension Fund - - Total Employee Cost 144.69 162.19 A&G Expenses Insurance Charges 0.01 0.01 Rates and Taxes 1.97 2.32 Legal and Professional Charges 0.08 0.72 Auditor's Remuneration - - Other Administrative Charges 4.73 4.59 Less: - - A&G Capitalisation 0.09 - A&G on Cost of Transportation of Coal - - Donation - 0.30 A&G Cost 6.69 7.33 HO & Holding Company Cost 4.63 7.98 Total A&G Cost 11.32 15.31 R&M Expense Plant & Machinery 45.80 46.68 Building 6.94 8.57 Others 1.81 2.41 Add: - - R&M Cost of Internal/External CHP 17.25 24.90 Lubricants, Consumables stores/station 1.88 2.13 Water Charges (DSPM) - - Less: - - R&M Capitalisation - - R&M on Cost of Transportaion of Coal - - R&M Expense 73.67 84.69 HO & Holding Company Expense 2.41 0.19 Total R&M Expense 76.08 84.87 Less: O&M Cost on KWMM Plant 0.34 0.35 Less: O&M Cost on External CHP/CT 31.86 39.73 Total O&M Expense 199.89 222.29

97 HTPS F - V- Non Tariff Income Particulars FY 2011-12 FY 2012-13 Interest Income 0.18 0.12 Income from rent, hire charges etc. 0.32 0.28 Sale of tender forms 0.11 0.16 Other receipts 4.86 4.19 Sale of Scrap - - Revenue Grants/Subsidies - - Allocation of NTI of CAU, HO & Others 4.38 20.04 Total 9.85 24.78

98 HTPS F - VI- Oil Cost Secondary Fuel (HFO + HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 2,831.36 4,341.22 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel received KL 2,831.36 4,341.22 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 2,831.36 4,341.22 Amount charged by the Secondary Fuel 6 (Rs.) 127,950,641 217,906,738 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 127,950,641 217,906,738 Transportation charges by rail / ship / road (Rs.) 9 1,315,215 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 1,315,215 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 129,265,856 217,906,738 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 45,655 50,195 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

99 HTPS F - VI- Oil Cost Secondary Fuel (HFO) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 1,163.63 1,999.30 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel received (1+2) KL 1,163.63 1,999.30 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel received (3-4) KL 1,163.63 1,999.30 Amount charged by the Secondary Fuel 6 (Rs.) 53,801,328 97,988,599 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 53,801,328 97,988,599 Transportation charges by rail / ship / road ( Rs.) 9 926,493 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 926,493 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 54,727,821 97,988,599 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 47,032 49,011 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

100 HTPS F - VI- Oil Cost Secondary Fuel (HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel consumed KL 1,667.74 2,341.92 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel consumed KL 1,667.74 2,341.92 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 1,667.74 2,341.92 Amount charged by the Secondary Fuel 6 (Rs.) 74,149,313 119,918,139 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 74,149,313 119,918,139 Transportation charges by rail / ship / road ( Rs.) 9 388,722 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 388,722 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 74,538,035 119,918,139 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 44,694 51,205 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

101 HTPS F - VII - Price/Cost of Coal S. N. Particulars Unit FY 11-12 FY 12-13 Quantity of Coal / Lignite supplied by Coal/Lignite 1 (MMT) 5.0179 5.08 Company Adjustment (+/-) in quantity supplied made by 2 (MMT) - - Coal/Lignite Company 3 Coal supplied by Coal/Lignite Company (1+2) (MMT) 5.0179 5.08 4 Normative Transit & Handling Losses (MMT) 0.0151 0.0152 5 Net coal / Lignite Supplied (3-4) (MMT) 5.0028 5.0672 6 Amount charged by the Coal / Lignite Company (Rs.) 4,362,598,586 4,729,242,571 Adjustment (+/-) in amount charged made by 7 (Rs.) - 4,817,323 Coal/Lignite Company 8 Additional Claim by Coal Company as per FSA - 15,022,445 9 Total amount Charged (6+7) (Rs.) 4,362,598,586 4,749,082,338 10 Rate of Coal Chrged by Coal Company Rs./MT 872.02 11,222.98 Transportation charges by rail / ship / road ( Rs.) 11 318,556,164 397,265,347 transport Adjustment (+/-) in amount charged made by ( Rs.) 12 - - Railways/Transport Company 13 Demurrage Charges, if any ( Rs.) - - 14 Other Charges ( Rs.) - - 15 Total Transportation Charges (9+/-10-11+12) ( Rs.) 318,556,164 397,265,347 16 Transporatation Charge/MT 63.68 - Total amount Charged for coal/lignite supplied ( Rs.) 17 4,681,154,750 5,146,347,685 including Transportation (8+13) 18 Normative Rate of Coal per MT ((17/5) Rs./MT 935.70 1,015.62 19 Actual Transit Loss 0.0146 0.0147 20 Rate of Coal at actual Transit Loss per MT 935.62 1,015.51

102 HTPS F - VII - Price/Cost of Coal FY 2011-12 Units Normative Actual Particulars Capacity MW 840.00 840.00 Plant Load Factor % 82.00% 87.18% Gross Generation MUs 6,050.42 6,432.81 Auxiliary Consumption % 9.00% 9.59% Auxiliary Consumption MUs 544.54 616.59 Net Generation MUs 5,505.88 5,816.22 Station Heat Rate kcal/kWh 2,650.00 2,572.54 Sp. Oil Consumption ml/kWh 1.00 0.67 Gross Calorific Value of Coal kcal/kg 3,534.00 3,511.00 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 16,033,610.88 16,548,645.47 Heat from Oil G Cal 60,504.19 42,981.55 Heat from Coal G Cal 15,973,106.69 16,505,663.92 Actual Oil Consumption kl 6,050.419 4,298.155 Actual Coal Consumption MT 4,519,837.77 4,701,129.00 Specific Coal Consumption kg/kWh 0.75 0.73 Price of Coal Rs./MT 935.70 935.62 Price of Oil (Average) Rs/kl 45,654.99 45,654.99 Coal Cost Rs Crore 422.92 439.84 Oil Cost Rs Crore 27.62 19.62 Total Fuel Cost Rs Crore 450.54 459.47 Coal Cost/Net Generation Rs/kWh 0.77 0.76 Oil Cost/Gross Generation Rs/kWh 0.05 0.03 FY 2012-13 Units Normative Actual Particulars Capacity MW 840.00 840.00 Plant Load Factor % 82.00% 86.15% Gross Generation MUs 6,033.89 6,339.58 Auxiliary Consumption % 9.00% 9.30% Auxiliary Consumption MUs 543.05 589.40 Net Generation MUs 5,490.84 5,750.18 Station Heat Rate kcal/kWh 2,650.00 2,594.11 Sp. Oil Consumption ml/kWh 1.00 0.67 Gross Calorific Value of Coal kcal/kg 3,534.00 3,642.00 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 15,989,803.20 16,445,580.27 Heat from Oil G Cal 60,338.88 42,310.91 Heat from Coal G Cal 15,929,464.32 16,403,269.36 Actual Oil Consumption kl 6,033.89 4,231.09 Actual Coal Consumption MT 4,507,488.49 4,503,918.00 Specific Coal Consumption kg/kWh 0.75 0.71 Price of Coal Rs./MT 1,015.62 1,015.51 Price of Oil (Average) Rs/kl 50,194.82 50,194.82 Coal Cost Rs Crore 457.79 457.38 Oil Cost Rs Crore 30.29 21.24 Total Fuel Cost Rs Crore 488.08 478.62 Coal Cost/Net Generation Rs/kWh 0.83 0.80 Oil Cost/Gross Generation Rs/kWh 0.05 0.03

103 HTPS F - VIII- Interest on Working Capital HTPS Particulars FY 2011-12 FY 2012-13 Cost of Coal (1.5/2 months) 52.87 57.22 Cost of Oil (2 months) 4.74 4.93 O&M Expenses (1 months) 16.66 18.52 Maintenance spares(20% of annual O&M) 39.98 44.46 Receivables (two months) 143.89 148.34 Total Working Capital Requirement 258.13 273.48 Rate of interest(SBI PLR as on 1st April 11) 11.75% 11.75% Interest on Working Capital 30.33 32.13

104 KTPS F -I -Capital Structure Particulars FY 2011-12 FY 2012-13 Opening GFA (As on 01.04.2005) 145.42 145.42 Permissible Equity (As on 01.04.2005) 50.21 50.21 % of Equity in GFA (As on 01.04.2005) 34.53% 34.53% CAPEX and GFA Opening GFA (Including Share of Holding Company GFA) 550.47 563.87 Opening CWIP 121.79 138.16 Opening Capex 672.26 702.03 Capitalization during the Year 13.40 84.20 Closing GFA 563.87 648.08 Closing CWIP 138.16 51.59 Closing Capex 702.03 699.67 Loan Borrowed Opening Borrowed Loan 288.11 294.41 Loan Borrowed during the Year 6.30 - Closing Borrowed Loan 294.41 294.41 Borrowed Loan in Opening GFA 235.92 236.47 Borrowed Loan in Closing GFA 236.47 272.70 Equity Opening Gross Equity 384.14 407.62 Equity addition during the Year 23.48 (2.37) Closing Equity 407.62 405.26 Gross Equity in Opening GFA 314.55 327.40 Gross Equity in Closing GFA 327.40 375.38 Permissible Equity Permissible Equity in Opening GFA 171.73 175.75 Permissible Equity in Closing GFA 175.75 201.01 Average Gross Permissible Equity during the year 173.74 188.38 Normative Loan Opening Normative Loan 142.82 151.65 Closing Normative Loan 151.65 174.36 Net Loan (Borrowed +Normative- Repayment) Repayment till previous year (Accumulated Depreciation) 222.15 246.80 Total Opening Net Loan 156.59 141.32 Repayment during the period (Depreciation) 24.65 27.21 Total Closing Net Loan 141.32 173.05 Note - 1 - No Consumer Contribution/ Grant is applicable in case of KTPS.

105 KTPS F - II KTPS Dep.Rate - Sr. Gross Block as Gross Block as on Gross Block as Depreciation Depreciation Name of the Assets CERC Reg. No. on 31.03.2011 31.03.2012 on 31.03.2013 (FY 12) (FY 13) 2010 1 Gross Fixed Assets Land Cost of Land Development 3.34% 6,600,265 6,600,265 19,000,265 220449 427529 Land held under Lease 3.34% 13,632,296 13,632,296 13,632,296 455319 455319 ROADS ON MUNICIPAL LAND 3.34% - - - 0 0 2 Gross Fixed Assets Buildings Buildings Containing Thermo Elec.Gen.Plant 3.34% 102,753,935 102,753,935 102,753,935 3431981 3431981 Buildings Containing Hy.Elec.Gen.Plant 3.34% - - - 0 0 Buildings Containing Diesel Elec.Gen.Plant 3.34% 671,628 671,628 671,628 22432 22432 Building Containing transmission Installations 3.34% 95,318 95,318 95,318 3184 3184 3 Building Containing Dist.Installations Office Buildings 3.34% 366,831 366,831 366,831 12252 12252 Other Buildings 3.34% 56,091,297 56,091,297 56,091,297 1873449 1873449 Residential Colony For Staff 3.34% 6,606,588 6,606,588 6,606,588 220660 220660 4 Other Civil Works Kuchcha & Pucca Roads 3.34% 2,263,732 4,161,848 4,161,848 107307 139006 Well,Boundary Wall And Canals 3.34% 1,167,307 1,167,307 1,167,307 38988 38988 Railway Sidings 5.28% 36,026,417 36,026,417 36,026,417 1902195 1902195 5 Gross Fixed asset-Hydraulic works Hydel Works 5.28% 21,179,758 21,179,758 21,179,758 1118291 1118291 6 GrossFixed Asset-Plant & Machinery Instrumentation And Control 5.28% 502,313,631 509,729,229 509,729,229 26717931 26913703 Boiler Plant And Equipment 5.28% 3,545,593,241 3,545,712,443 4,390,444,636 187210470 209514547 7 Gas Power Plants 5.28% - - - 0 0 Locomotives And Wagons 9.50% 440,588,618 509,158,561 418,958,561 45112991 44085563 Transmission Plant-Transformers 100Kva & Above 5.28% 623,102,583 623,102,583 695,979,956 32899816 34823779 Substation Transformers & kiosks 100 Kva & Above 5.28% 5,694,528 5,694,528 5,694,528 300671 300671 Material Handling Equipment 9.50% 22,099,977 22,099,977 22,099,977 2099498 2099498 Switchgears Including Cable Connections 5.28% 46,597,304 46,597,304 47,413,304 2460338 2481880 Communication Equip-Radio & High freq.Carrier Sys. 6.33% 22,694 22,694 22,694 1437 1437 Air-Conditioning Plant 5.28% 1,132,802 1,132,802 1,132,802 59812 59812 Static Machine Tools & Equipments 5.28% 1,082,645 1,082,645 1,082,645 57164 57164 Meter Testing Laboratory Tools & Equipments 5.28% 5,438,902 59,428,637 59,428,637 1712503 3137832 8 Gross Fixed asset-Lines Overhead Lines On Steel Support 5.28% 262,595 262,595 262,595 13865 13865 Underground Cables Inclu.Jt.Boxes & Disconnect.Box 5.28% 25,392,425 25,392,425 25,392,425 1340720 1340720 Internal Wiring Including Fittings & Fixtures 6.33% 5,570,367 5,570,367 5,570,367 352604 352604 9 Gross Fixed Asset-Furniture & Fitting 0.00% - - - 0 0 Furniture & Fixtures 6.33% 3,462,970 3,784,979 4,204,632 229398 252871 10 Gross Fixed Asset-Office Equipments Office Equipments 6.33% 4,442,928 4,720,428 4,866,894 290020 303439 Computers 15.00% 10,725,740 10,783,040 10,783,040 1613158 1617456 11 Gross Fixed Asset-vehicles 0.00% - - - 0 0 Vehicles 9.50% 3,295,605 3,295,605 3,295,605 313082 313082 12 Total 5,494,274,929 5,626,924,331 6,468,116,016 312191987 337,315,210 13 Total (adjusted HO GFA)(Rs. Crore) 550.47 563.87 648.08 31.28 33.80 14 Average Rate of Depreciation 5.61% 5.58%

106 KTPS F -III - Weighted Average Intrest Rate KTPS Loan Details FY 2011-12 FY 2012-13 Particulars Rate (%) OB Rate (%) OB State Government Loan 9.00% 63.40 9.00% 51.88 11.50% 31.15 11.50% 31.15 11.25% 11.41 11.25% 11.41 PFC-C2704001 0.00% - 11.75% 2.34 0.00% - 12.25% 3.14 0.00% - 12.75% 0.82 PFC- 22104006 11.50% 14.91 11.50% 13.49 Bonds 12.50% 12.01 12.50% 3.88 Debentures 12.50% 3.38 12.50% - Total Loan 136.27 118.11 Weighted Avg. Interest 10.43% 10.44%

107 KTPS F - IV - O&M Expenses All values in Cr Rs Employee Cost FY 11-12 FY 12-13 Salaries, allowances, bonus etc. 108.92 115.91 Staff welfare Expenses 6.03 3.47 Other Staff costs 3.89 5.49 Leave encashment scheme 2.85 3.78 Contribution to Provident and Other Funds 0.68 0.95 Less: - - Employee Capitalization - - Coal Transportation Expense for KWB & KEB - - Productivity Incentive 3.03 1.52 Employee Cost 119.33 128.07 HO & Holding Company Expense 5.07 6.01 Contribution to Pension Fund - - Total Employee Cost 124.40 134.08 A&G Expenses Insurance Charges - 0.01 Rates and Taxes 1.08 0.18 Legal and Professional Charges 0.28 0.31 Auditor's Remuneration - - Other Administrative Charges 3.28 7.75 Less: - - A&G Capitalisation - - A&G on Cost of Transportation of Coal - - Donation 0.12 0.01 A&G Cost 4.52 8.23 HO & Holding Company Cost 2.42 4.18 Total A&G Cost 6.95 12.41 R&M Expense Plant & Machinery 31.10 42.86 Building 4.74 4.65 Others 1.18 1.48 Add: - - R&M Cost of Internal/External CHP 11.58 6.74 Lubricants, Consumables stores/station 5.99 7.37 Water Charges (DSPM) - - Less: - - R&M Capitalisation - - R&M on Cost of Transportaion of Coal - - R&M Expense 54.58 63.09 HO & Holding Company Expense 1.26 0.10 Total R&M Expense 55.84 63.19 Less: O&M Cost on External CHP/CT 22.92 19.48 Total O&M Expense 164.27 190.19

108 KTPS F - V- Non Tariff Income Particulars FY 2011-12 FY 2012-13 Interest Income 0.18 0.09 Income from rent, hire charges etc. 0.25 0.34 Sale of tender forms 0.08 0.11 Other receipts 1.37 0.49 Sale of Scrap - - Revenue Grants/Subsidies - - Allocation of NTI of CAU, HO & Others 2.29 10.50 Total 4.17 11.51

109 KTPS F - VI - Oil Cost Secondary Fuel (HFO + HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 3,329.98 7,396.25 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel received KL 3,329.98 7,396.25 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 3,329.98 7,396.25 Amount charged by the Secondary Fuel 6 (Rs.) 148,963,821 359,092,281 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 148,963,821 359,092,281 Transportation charges by rail / ship / road (Rs.) 9 2,608,103 3,636,500 transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 2,608,103 3,636,500 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 151,571,924 362,728,782 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 45,517 49,042 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

110 KTPS F - VI - Oil Cost Secondary Fuel (HFO) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 2,656.02 6,730.35 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel received (1+2) KL 2,656.02 6,730.35 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel received (3-4) KL 2,656.02 6,730.35 Amount charged by the Secondary Fuel 6 (Rs.) 118,882,090 325,906,416 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 118,882,090 325,906,416 Transportation charges by rail / ship / road ( Rs.) 9 2,313,077 3,514,628 transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 2,313,077 3,514,628 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 121,195,167 329,421,044 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 45,630 48,946 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

111 KTPS F - VI - Oil Cost Secondary Fuel (HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel consumed KL 673.96 665.90 Adjustment (+/-) in quantity supplied made 2 KL - - by Secondary Fuel Company 3 Quantity of Secondary Fuel consumed KL 673.96 665.90 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 673.96 665.90 Amount charged by the Secondary Fuel 6 (Rs.) 30,081,731 33,185,865 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 30,081,731 33,185,865 Transportation charges by rail / ship / road ( Rs.) 9 295,026 121,873 transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 295,026 121,873 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 30,376,757 33,307,738 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 45,072 50,020 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

112 KTPS F - VII - Price/Cost of Coal S. N. Particulars Unit FY 11-12 FY 12-13 Quantity of Coal / Lignite supplied by Coal/Lignite (MMT) 1 2.8056 2.55 Company Adjustment (+/-) in quantity supplied made by (MMT) 2 - - Coal/Lignite Company (MMT) 3 Coal supplied by Coal/Lignite Company (1+2) 2.8056 2.55 4 Normative Transit & Handling Losses (MMT) 0.0337 0.0293 5 Net coal / Lignite Supplied (3-4) (MMT) 2.7719 2.5173 6 Amount charged by the Coal / Lignite Company (Rs.) 2,439,667,513 2,359,683,243 Adjustment (+/-) in amount charged made by 7 (Rs.) 8,417,368 -107,684,573 Coal/Lignite Company 8 Additional Claim by Coal Company as per FSA - - 9 Total amount Charged (6+7) (Rs.) 2,431,250,145 2,251,998,671 10 Rate of Coal Chrged by Coal Company Rs./MT 877.11 10,726.25 Transportation charges by rail / ship / road 11 ( Rs.) 229,245,084 194,797,064 transport Adjustment (+/-) in amount charged made by 12 ( Rs.) - - Railways/Transport Company 13 Demurrage Charges, if any ( Rs.) - - 14 Other Charges ( Rs.) - - 15 Total Transportation Charges (9+/-10-11+12) ( Rs.) 229,245,084 194,797,064 16 Transporatation Charge/MT 82.70 - Total amount Charged for coal/lignite supplied 17 ( Rs.) 2,660,495,229 2,446,795,735 including Transportation (8+13) 18 Normative Rate of Coal per MT (17/5) Rs./MT 959.81 971.98 19 Actual Transit Loss 0.0334 0.0295 20 Rate of Coal at actual Transit Loss per MT 959.74 972.06

113 KTPS F - VII - Price/Cost of Coal FY 2011-12 Units Normative Actual Particulars Capacity MW 440.00 440.00 Plant Load Factor % 78.50% 79.14% Gross Generation MUs 3,033.99 3,058.64 Auxiliary Consumption % 11.25% 10.77% Auxiliary Consumption MUs 341.32 329.31 Net Generation MUs 2,692.67 2,729.33 Station Heat Rate kcal/kWh 3,110.00 3,082.83 Sp. Oil Consumption ml/kWh 2.15 1.50 Gross Calorific Value of Coal kcal/kg 3,534.00 3,362.00 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 9,435,720.10 9,429,246.44 Heat from Oil G Cal 65,230.86 45,823.75 Heat from Coal G Cal 9,370,489.23 9,383,422.69 Actual Oil Consumption kl 6,523.086 4,582.375 Actual Coal Consumption MT 2,651,524.97 2,791,024.00 Specific Coal Consumption kg/kWh 0.87 0.91 Price of Coal Rs./MT 959.81 959.74 Price of Oil (Average) Rs/kl 45,517.31 45,517.31 Coal Cost Rs Crore 254.50 267.86 Oil Cost Rs Crore 29.69 20.86 Total Fuel Cost Rs Crore 284.19 288.72 Coal Cost/Net Generation Rs/kWh 0.95 0.98 Oil Cost/Gross Generation Rs/kWh 0.10 0.07 FY 2012-13 Units Normative Actual Particulars Capacity MW 440.00 440.00 Plant Load Factor % 78.50% 60.40% Gross Generation MUs 3,025.70 2,328.24 Auxiliary Consumption % 11.50% 12.57% Auxiliary Consumption MUs 347.96 292.63 Net Generation MUs 2,677.75 2,035.61 Station Heat Rate kcal/kWh 3,110.00 3,278.76 Sp. Oil Consumption ml/kWh 2.00 2.92 Gross Calorific Value of Coal kcal/kg 3,534.00 3,231.00 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 9,409,939.44 7,633,748.39 Heat from Oil G Cal 60,514.08 67,961.25 Heat from Coal G Cal 9,349,425.36 7,565,787.14 Actual Oil Consumption kl 6,051.41 6,796.13 Actual Coal Consumption MT 2,645,564.62 2,341,624.00 Specific Coal Consumption kg/kWh 0.87 1.01 Price of Coal Rs./MT 971.98 972.06 Price of Oil (Average) Rs/kl 49,042.29 49,042.29 Coal Cost Rs Crore 257.14 227.62 Oil Cost Rs Crore 29.68 33.33 Total Fuel Cost Rs Crore 286.82 260.95 Coal Cost/Net Generation Rs/kWh 0.96 1.12 Oil Cost/Gross Generation Rs/kWh 0.10 0.14

114 KTPS F - VIII- Interest on Working Capital KTPS Particulars FY 2011-12 FY 2012-13 Cost of Coal (1.5/2 months) 31.81 32.14 Cost of Oil (2 months) 4.96 4.94 O&M Expenses (1 months) 13.69 15.85 Maintenance spares(20% of annual O&M) 32.85 38.04 Receivables (two months) 88.05 90.91 Total Working Capital Requirement 171.37 181.88 Rate of interest(SBI PLR as on 1st April 11) 11.75% 11.75% Interest on Working Capital 20.14 21.37

115 DSPM F -I -Capital Structure Particulars FY 2011-12 FY 2012-13 Opening GFA (As on 01.04.2005) 0.00 0.00 Permissible Equity (As on 01.04.2005) 0.00 0.00 % of Equity in GFA (As on 01.04.2005) 0.00% 0.00% CAPEX and GFA Opening GFA (Including Share of Holding Company GFA) 2,227.45 2,227.61 Opening CWIP 48.27 51.91 Opening Capex 2,275.72 2,279.52 Capitalization during the Year 0.16 21.77 Closing GFA 2,227.61 2,249.38 Closing CWIP 51.91 42.60 Closing Capex 2,279.52 2,291.98 Loan Borrowed Opening Borrowed Loan 1,598.35 1,598.35 Loan Borrowed during the Year 0.00 - Closing Borrowed Loan 1,598.35 1,598.35 Borrowed Loan in Opening GFA 1,564.45 1,564.45 Borrowed Loan in Closing GFA 1,564.45 1,568.64 Equity Opening Gross Equity 677.37 681.18 Equity addition during the Year 3.80 12.45 Closing Equity 681.18 693.63 Gross Equity in Opening GFA 663.01 665.66 Gross Equity in Closing GFA 665.66 680.74 Permissible Equity Permissible Equity in Opening GFA 663.01 665.66 Permissible Equity in Closing GFA 665.66 674.81 Average Gross Permissible Equity during the year 664.34 670.24 Normative Loan Opening Normative Loan - - Closing Normative Loan - 5.93 Net Loan (Borrowed +Normative- Repayment) Repayment till previous year (Accumulated Depreciation) 256.69 379.81 Total Opening Net Loan 1,307.75 1,184.64 Repayment during the period (Depreciation) 123.12 123.60 Total Closing Net Loan 1,184.64 1,071.15 Note - 1 - No Consumer Contribution/ Grant is applicable in case of DSPM.

116 DSPM F - II DSPM TPS Dep. Rate Gross Block as Gross Block as Gross Block as Depreciation Depreciation SN Name of the Assets CERC Reg. on 31.03.2011 on 31.03.2012 on 31.03.2013 (FY 11-12) (FY 12-13) 2010 1 Gross Fixed Assets Land Cost of Land Development 3.34% 13,282,380 13,282,380 13,282,380 443,631 443,631 Land held under Lease 3.34% 437,600 437,600 437,600 14,616 14,616 ROADS ON MUNICIPAL LAND 3.34% - - - - - 2 Gross Fixed Assets Buildings 0.00% - - - - - Buildings Containing Thermo Elec.Gen.Plant 3.34% 81,250,679 81,250,679 82,811,068 2,713,773 2,739,831 Buildings Containing Hy.Elec.Gen.Plant 3.34% - - - - - Buildings Containing Diesel Elec.Gen.Plant 3.34% - - - - - - Building Containing transmission Installations 3.34% - - - - 3 Building Containing Dist.Installations 3.34% - - - - - Office Buildings 3.34% 1,264,127 1,264,127 1,264,127 42,222 42,222 Other Buildings 3.34% 27,865,371 27,865,371 28,580,658 930,703 942,649 Residential Colony For Staff 3.34% 910,295 910,295 108,413,234 30,404 1,825,703 4 Other Civil Works 0.00% - - - - - Kuchcha & Pucca Roads 3.34% 4,766,488 4,766,488 4,766,488 159,201 159,201 Well,Boundary Wall And Canals 3.34% - - - - - Railway Sidings 5.28% 296,776,099 296,776,099 296,776,099 15,669,778 15,669,778 5 Gross Fixed asset-Hydraulic works 0.00% - - - - - Hydel Works 5.28% 71,025,787 71,025,787 71,025,787 3,750,162 3,750,162 6 GrossFixed Asset-Plant & Machinery 0.00% - - - - - Instrumentation And Control 5.28% 945,933,045 945,933,045 945,933,045 49,945,265 49,945,265 Boiler Plant And Equipment 5.28% 17,482,709,385 17,482,709,385 17,482,709,385 923,087,056 923,087,056 7 Gas Power Plants 5.28% - - - - - Locomotives And Wagons 9.50% 1,339,955,370 1,339,955,370 1,346,939,758 127,295,760 127,627,519 Transmission Plant-Transformers 100Kva & 5.28% 836,006,786 836,006,786 836,006,786 44,141,158 44,141,158 Substation Transformers & kiosks 100 Kva & - - 99,533,945 - 2,627,696 Above 5.28% Material Handling Equipment 9.50% 12,915 12,915 12,915 1,227 1,227 Switchgears Including Cable Connections 5.28% 236,165,389 236,165,389 236,165,389 12,469,533 12,469,533 Communication Equip-Radio & High freq.Carrier - - - - - Sys. 6.33% Air-Conditioning Plant 5.28% 179,391,990 179,391,990 179,391,990 9,471,897 9,471,897 Static Machine Tools & Equipments 5.28% - - - - - 209,168,934 Meter Testing Laboratory Tools & Equipments 5.28% 209,168,934 209,168,934 11,044,120 11,044,120 8 Gross Fixed asset-Lines 0.00% - - - - - Overhead Lines On Steel Support 5.28% - - - - - Underground Cables Inclu.Jt.Boxes & 454,183,402 454,183,402 454,183,402 23,980,884 23,980,884 Disconnect.Box 5.28% Internal Wiring Including Fittings & Fixtures 6.33% 52,504,268 52,504,268 52,504,268 3,323,520 3,323,520 9 Gross Fixed Asset-Furniture & Fitting 0.00% - - - - - Furniture & Fixtures 6.33% 2,687,358 2,687,358 2,964,236 170,110 178,873 10 Gross Fixed Asset-Office Equipments 0.00% - - - - - Office Equipments 6.33% 362,014 362,014 530,714 22,915 28,255 Computers 15.00% 3,424,033 3,424,033 3,424,033 513,605 513,605 11 Gross Fixed Asset-vehicles 0.00% - - - - - Vehicles 9.50% - - - - - 12 Total 22,240,083,717 22,240,083,717 22,456,826,242 1,231,169,540 1,236,044,885 13 Total (adjusted HO GFA)(Rs. Crore) 2,224.01 2,224.17 2,245.78 122.92 123.40 14 Average Rate of Depreciation 5.53% 5.52%

117 DSPM F-III - Weighted Average Intrest Rate Amount in Rs. FY 2011-12 FY 2012-13 SN Balance As on Balance As on Applicable Rate Applicable Rate 31.3.2011 31.3.2012 1 891,513,000 11.50% 764,154,000 11.50% 2 10,017,000 11.50% 8,586,000 11.50% 3 360,108,000 11.50% 308,664,000 11.50% 4 821,380,000 11.50% 704,040,000 11.50% 5 198,912,000 11.50% 170,496,000 11.50% 6 900,710,621 12.25% 772,037,677 12.50% 7 292,971,000 12.25% 251,118,000 12.25% 8 335,692,000 11.25% 0 0.00% 9 48,071,477 11.25% 287,736,000 11.25% 10 163,468,503 11.25% 0 0.00% 11 72,359,000 11.25% 41,204,125 11.25% 12 110,474,000 11.25% 140,115,860 11.25% 13 62,923,000 11.25% 62,022,000 11.25% 14 184,842,000 11.25% 94,692,000 11.25% 15 56,266,000 11.25% 53,934,000 11.25% 16 215,971,000 11.25% 158,436,000 11.25% 17 60,613,000 11.25% 48,228,000 11.25% 18 78,638,000 11.00% 185,118,000 11.25% 19 72,371,349 11.00% 51,954,000 11.25% 20 74,510,806 11.00% 67,404,000 11.00% 21 91,880,025 11.00% 62,032,585 11.00% 22 66,556,000 11.00% 63,866,405 11.00% 23 74,417,000 11.00% 78,754,308 11.00% 24 249,130,000 11.00% 57,048,000 11.00% 25 84,280,000 11.00% 63,786,000 11.00% 26 104,889,267 11.00% 213,540,000 11.00% 27 84,893,583 11.00% 72,240,000 11.00% 28 98,777,000 11.00% 89,905,084 11.00% 29 538,517,000 11.00% 72,765,929 11.00% 30 751,373,000 11.00% 84,666,000 11.00% 31 555,198,000 11.00% 461,586,000 11.00%

118 FY 2011-12 FY 2012-13 SN Balance As on Balance As on Applicable Rate Applicable Rate 31.3.2011 31.3.2012 32 72,401,000 11.00% 644,034,000 11.00% 33 68,789,000 11.00% 475,884,000 11.00% 34 3,738,000 11.00% 62,058,000 11.00% 35 52,835,113 11.00% 58,962,000 11.00% 36 266,525,000 11.00% 3,204,000 11.00% 37 35,525,000 11.00% 45,287,240 11.00% 38 192,493,000 11.00% 228,450,000 11.00% 39 242,893,000 11.00% 30,450,000 11.00% 40 54,495,000 11.25% 164,994,000 11.00% 41 197,197,000 11.50% 208,194,000 11.00% 42 446,670,000 11.50% 46,710,000 11.25% 43 143,122,000 11.50% 169,026,000 11.50% 44 136,675,000 11.50% 382,860,000 11.50% 45 0 0.00% 122,676,000 11.50% 46 120,582,000 11.50% 117,150,000 11.50% 47 0 0.00% 103,356,000 11.50% 48 30,128,000 12.25% 25,824,000 12.25% 49 0 0.00% 1,437,500 12.25% 50 1,667,500 12.25% 58,018,460 12.25% 51 67,688,204 11.50% 8,377,230 12.50% 52 9,773,434 13.00% 148,806,490 12.50% 53 173,607,570 13.00% 7,193,510 12.50% 54 8,392,430 12.25% 189,408,043 12.50% 55 220,976,051 12.25% 1,320,642 12.50% 56 1,614,114 12.25% 248,220,000 12.25% 57 289,590,000 12.25% 0 0.00% 58 280,770,000 12.25% 240,660,000 12.25% 59 5,350,005 11.25% 0 0.00% 60 192,467,775 11.00% 4,585,721 11.25% 61 46,271,427 11.00% 164,972,379 11.00% 62 25,794,685 11.00% 39,661,223 11.00% 63 255,290,348 11.50% 22,109,729 11.00% 64 98,560,150 11.50% 218,820,300 11.50% 84,965,646 11.50% Weighted Average 11.45% 11.47% Interest Rate

119 DSPM F- IV - O&M Expenses All values in Cr Rs Employee Cost FY 11-12 FY 12-13 Salaries, allowances, bonus etc. 26.28 29.03 Staff welfare Expenses 1.65 1.37 Other Staff costs 0.29 0.45 Leave encashment scheme 0.23 0.27 Contribution to Provident and Other Funds 0.37 0.49 Less: - - Employee Capitalization - - Coal Transportation Expense - - for KWB & KEB Productivity Incentive 0.67 0.77 Employee Cost 28.13 30.85 HO & Holding Company Expense 5.77 6.83 Contribution to Pension Fund 8.39 14.40 Total Employee Cost 42.29 52.07 A&G Cost Insurance Charges 0.00 0.02 Rates and Taxes (0.09) 0.59 Legal and Professional Charges 0.00 1.14 Auditor's Remuneration - - Other Administrative Charges 2.72 3.36 Less: - - A&G Capitalisation - - A&G on Cost of Transportation of Coal - - Donation - - A&G Cost 2.64 5.11 HO & Holding Company Cost 2.75 4.75 Total A&G Cost 5.39 9.85 R&M Expense Plant & Machinery 45.99 32.32 Building 2.92 2.33 Others 0.45 0.78 Add: - - R&M Cost of Internal/External CHP 1.39 1.17 Lubricants, Consumables stores/station 0.61 0.85 Water Charges (DSPM) 15.26 17.21 Less: - - R&M Capitalisation - - R&M on Cost of Transportaion of Coal - - R&M Expense 66.62 54.65 HO & Holding Company Expense 1.43 0.11 Total R&M Expense 68.05 54.76 Total O&M Expense 115.73 116.69

120 DSPM F - V- Non Tariff Income Particulars FY 2011-12 FY 2012-13 Interest Income 0.06 0.06 Income from rent, hire charges etc. 0.03 0.03 Sale of tender forms 0.08 0.07 Other receipts 0.85 0.36 Sale of Scrap - - Revenue Grants/Subsidies 1.93 1.64 Allocation of NTI of CAU, HO & Others 2.61 11.93 Total 5.56 14.10

121 DSPM F - VI- Oil Cost Secondary Fuel (HFO + HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 776.00 1,138.00 Adjustment (+/-) in quantity supplied 2 KL - - made by Secondary Fuel Company 3 Quantity of Secondary Fuel received KL 776.00 1,138.00 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 776.00 1,138.00 Amount charged by the Secondary Fuel 6 (Rs.) 34,129,065 55,896,023 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 34,129,065 55,896,023 Transportation charges by rail / ship / road (Rs.) 9 452,879 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 452,879 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 34,581,944 55,896,023 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 44,564 49,118 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

122 DSPM F - VI- Oil Cost Secondary Fuel (HFO) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel received KL 204.00 584.00 Adjustment (+/-) in quantity supplied 2 KL - - made by Secondary Fuel Company 3 Quantity of Secondary Fuel received (1+2) KL 204.00 584.00 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel received (3-4) KL 204.00 584.00 Amount charged by the Secondary Fuel 6 (Rs.) 8,877,459 29,163,979 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 8,877,459 29,163,979 Transportation charges by rail / ship / road ( Rs.) 9 180,297 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 180,297 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 9,057,756 29,163,979 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 44,401 49,938 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

123 DSPM F - VI- Oil Cost Secondary Fuel (HSD) S. N. Particulars Unit FY 11-12 FY 12-13 1 Quantity of Secondary Fuel consumed KL 572.00 554.00 Adjustment (+/-) in quantity supplied 2 KL - - made by Secondary Fuel Company 3 Quantity of Secondary Fuel consumed KL 572.00 554.00 4 Normative Transit & Handling Losses KL - - 5 Quantity of Secondary Fuel consumed KL 572.00 554.00 Amount charged by the Secondary Fuel 6 (Rs.) 25,251,606 26,732,044 Company Adjustment (+/-) in amount charged made by 7 (Rs.) - - Secondary Fuel Company 8 Total amount Charged (6+7) (Rs.) 25,251,606 26,732,044 Transportation charges by rail / ship / road ( Rs.) 9 272,582 - transport Adjustment (+/-) in amount charged made ( Rs.) 10 - - by Railways/Transport Company 11 Demurrage Charges, if any ( Rs.) - - Cost of diesel /fuel in transporting Secondary ( Rs.) 12 - - Fuel through MGR system, if applicable 13 Total Transportation Charges (9+/-10-11+12) ( Rs.) 272,582 - 14 Entry Tax ( Rs.) - - Total amount Charged for Secondary Fuel 15 ( Rs.) 25,524,188 26,732,044 supplied including Transportation (8+13+14) 16 Rate of Secondary Fuel per KL ((15/1) Rs./KL 44,623 48,253 Weighted average GCV of Secondary Fuel as 17 Kcal/L 10,000 10,000 fired

124 DSPM F - VII - Price/Cost of Coal S. N. Particulars Unit FY 11-12 FY 12-13 Quantity of Coal / Lignite supplied by (MMT) 1 2.3306 2.48 Coal/Lignite Company Adjustment (+/-) in quantity supplied made (MMT) 2 - - by Coal/Lignite Company 3 Coal supplied by Coal/Lignite Company (1+2) (MMT) 2.3306 2.48 4 Normative Transit & Handling Losses (MMT) 0.0175 0.0173 5 Net coal / Lignite Supplied (3-4) (MMT) 2.3131 2.4585 6 Amount charged by the Coal / Lignite Company (Rs.) 2,090,496,222 2,383,416,653 Adjustment (+/-) in amount charged made by 7 (Rs.) - -16,730,510 Coal/Lignite Company 8 Additional Claim by Coal Company as per FSA - - 9 Total amount Charged (6+7) (Rs.) 2,090,496,222 2,366,686,143 10 Rate of Coal Chrged by Coal Company Rs./MT 903.75 11,472.04 Transportation charges by rail / ship / road ( Rs.) 11 245,630,869 321,961,127 transport Adjustment (+/-) in amount charged made by ( Rs.) 12 - - Railways/Transport Company 13 Demurrage Charges, if any ( Rs.) 2,827,033 - 14 Other Charges ( Rs.) - 11,310,587.01 15 Total Transportation Charges (9+/-10-11+12) ( Rs.) 248,457,902 333,271,714 16 Transporatation Charge/MT 107.41 - Total amount Charged for coal/lignite supplied ( Rs.) 17 2,338,954,124 2,699,957,857 including Transportation (8+13) 18 Normative Rate of Coal per MT (17/5) Rs./MT 1,011.17 1,098.19 19 Actual Transit Loss 0.0169 0.0168 20 Rate of Coal at actual Transit Loss per MT 1,010.90 1,097.95

125 DSPM Format - VIII- Intrest on Working Capital DSPM TPS Particulars FY 2011-12 FY 2012-13 Cost of Coal (1.5/2 months) 44.33 48.01 Cost of Oil (2 months) 2.76 3.10 O&M Expenses (1 months) 9.64 9.72 Maintenance spares(20% of annual O&M) 23.15 23.34 Receivables (two months) 130.91 130.60 Total Working Capital Requirement 210.79 214.78 Rate of interest(SBI PLR as on 1st April 11) 11.75% 11.75% Interest on Working Capital 24.77 25.24

126 DSPM F - VII - Price/Cost of Coal FY 2011-12 Units Normative Actual Particulars Capacity MW 500.00 500.00 Plant Load Factor % 85.00% 71.61% Gross Generation MUs 3,733.20 3,145.20 Auxiliary Consumption % 9.00% 7.94% Auxiliary Consumption MUs 335.99 249.84 Net Generation MUs 3,397.21 2,895.36 Station Heat Rate kcal/kWh 2,500.00 2,488.86 Sp. Oil Consumption ml/kWh 1.00 0.36 Gross Calorific Value of Coal kcal/kg 3,534.00 3,474.00 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 9,333,000.00 7,827,972.90 Heat from Oil G Cal 37,332.00 11,205.40 Heat from Coal G Cal 9,295,668.00 7,816,767.50 Actual Oil Consumption kl 3,733.200 1,120.540 Actual Coal Consumption MT 2,630,353.14 2,250,077.00 Specific Coal Consumption kg/kWh 0.70 0.72 Price of Coal Rs./MT 1,011.17 1,010.90 Price of Oil (Average) Rs/kl 44,564.36 44,564.36 Coal Cost Rs Crore 265.97 227.46 Oil Cost Rs Crore 16.64 4.99 Total Fuel Cost Rs Crore 282.61 232.45 Coal Cost/Net Generation Rs/kWh 0.78 0.79 Oil Cost/Gross Generation Rs/kWh 0.04 0.02 FY 2012-13 Units Normative Actual Particulars Capacity MW 500.00 500.00 Plant Load Factor % 85.00% 78.39% Gross Generation MUs 3,723.00 3,433.49 Auxiliary Consumption % 9.00% 7.88% Auxiliary Consumption MUs 335.07 270.53 Net Generation MUs 3,387.93 3,162.96 Station Heat Rate kcal/kWh 2,500.00 2,509.59 Sp. Oil Consumption ml/kWh 1.00 0.32 Gross Calorific Value of Coal kcal/kg 3,534.00 3,452.08 Calorific Value of Oil kcal/l 10,000.00 10,000.00 Overall Heat G Cal 9,307,500.00 8,616,660.24 Heat from Oil G Cal 37,230.00 10,868.49 Heat from Coal G Cal 9,270,270.00 8,605,791.75 Actual Oil Consumption kl 3,723.00 1,086.85 Actual Coal Consumption MT 2,623,166.38 2,492,927.00 Specific Coal Consumption kg/kWh 0.70 0.73 Price of Coal Rs./MT 1,098.19 1,097.95 Price of Oil (Average) Rs/kl 49,117.77 49,117.77 Coal Cost Rs Crore 288.07 273.71 Oil Cost Rs Crore 18.29 5.34 Total Fuel Cost Rs Crore 306.36 279.05 Coal Cost/Net Generation Rs/kWh 0.85 0.87 Oil Cost/Gross Generation Rs/kWh 0.05 0.02

127 HBPS F-I -Capital Structure Particulars FY 2010-11 FY 2011-12 FY 2012-13 Opening GFA (As on 01.04.2005) 104.91 104.91 104.91 Permissible Equity (As on 01.04.2005) 36.23 36.23 36.23 % of Equity in GFA (As on 01.04.2005) 34.53% 34.53% 34.53% CAPEX and GFA Opening GFA (Including Share of Holding Company GFA) 108.54 108.54 109.60 Opening CWIP 1.18 1.18 - Opening Capex 109.72 109.72 109.60 Capitalization during the Year - 1.06 - Closing GFA 108.54 109.60 109.60 Closing CWIP 1.18 - - Closing Capex 109.72 109.60 109.60 Loan Borrowed Opening Borrowed Loan - 0.11 0.11 Loan Borrowed during the Year 0.11 - - Closing Borrowed Loan 0.11 0.11 0.11 Borrowed Loan in Opening GFA - 0.11 0.11 Borrowed Loan in Closing GFA 0.11 0.11 0.11 Equity Opening Gross Equity 109.72 109.61 109.49 Equity addition during the Year (0.11) (0.12) - Closing Equity 109.61 109.49 109.49 Gross Equity in Opening GFA 108.54 108.43 109.49 Gross Equity in Closing GFA 108.43 109.49 109.49 Permissible Equity Permissible Equity in Opening GFA 37.31 37.31 37.63 Permissible Equity in Closing GFA 37.31 37.63 37.63 Average Gross Permissible Equity during the year 37.31 37.47 37.63 Normative Loan - Opening Normative Loan 71.22 71.12 71.86 Closing Normative Loan 71.12 71.86 71.86 Net Loan (Borrowed +Normative- Repayment) Repayment till previous year (Accumulated Depreciation) 46.03 48.49 50.89 Total Opening Net Loan 25.19 22.73 21.08 Repayment during the period (Depreciation) 2.46 2.40 2.40 Total Closing Net Loan 22.73 21.08 18.68 Note - 1 - No Consumer Contribution/ Grant is applicable in case of HB.

128 HBPS-F-II DEPRECIATION Sr. Particulars FY 2010-11 FY 2011-12 FY 2012-13 No. 1 Opening GFA 108.54 108.54 109.6 2 Accumulated Depreciation 50.72 53.07 55.47 3 90% of GB (Excl Land) 97.68 98.64 98.64 4 Amount Left to be Depreciated 46.96 45.57 43.17 5 Remaining Life 20 19 18 6 Depreciation 2.35 2.4 2.4

129 HBPS F-III - Weighted Average Interest Rate HB/CSPGCL TPS Loan Details FY 2011-12 FY 2012-13 Particulars Rate (%) OB Rate (%) OB KTPS 10.43% 136.27 10.44% 118.11 HTPS 10.57% 307.88 10.73% 283.30 DSPM 11.45% 1,145.36 11.47% 981.78 Weighted Average 11.19% 11.23% HBPS F - IV - O&M Expenses All values in Cr Rs Particulars FY 10-11 FY 11-12 FY 12-13 Employee Expense 5.74 5.96 6.58 A&G Expense 1.44 1.16 1.49 R&M Expense 2.24 1.80 1.17 Total O&M Expense 9.43 8.92 9.25 HBPS F - V- Interest on Working Capital Hasdeo Bango HPS Particulars FY 2010-11 FY 2011-12 FY 2012-13 O&M Expenses (1 months) 0.69 0.75 0.81 Maintenance spares (15% of annual 1.25 1.36 1.46 O&M) Receivables (two months) 4.10 3.73 4.07 Total Working Capital 6.04 5.84 6.35 Requirement Rate of interest(SBI PLR as on 1st 11.75% 11.75% 11.75% April 11) Interest on Working Capital 0.71 0.69 0.75

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