2nd Regulatory Research Camp

Regulatory Framework for Distribution ARR and Tariff

Determination

Date: June 26th – 30th, 2019

Evolution of Distribution Tariff across Different

Indian States

Palaniappan M.
Director
ABPS Infrastructure Advisory Private Ltd.
 States considered for comparison
1. Maharashtra
2. Gujarat
3. Andhra Pradesh
4. Kerala
5. Rajasthan
6. Uttarakhand
7. Uttar Pradesh
8. Punjab
9. Assam
10. Chhattisgarh
11. Delhi
© ABPS 2019
27-June-2019
Page 2
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 3
 Multi-Year Tariff – Legal Provisions

 S 61. of the EA 2003 stipulates as under:

 “61. The Appropriate Commission shall, subject to the provisions of this Act, specify the
terms and conditions for the determination of tariff, and in doing so, shall be guided by the
following, namely:-
 …;
 (f) Multi year tariff principles;…”

 The Tariff Policy notified on January 28, 2016 stipulates as under:

 “h) Multi Year Tariff
 1) Section 61 of the Act states that the Appropriate Commission for determining the terms
and conditions for the determination of tariff shall be guided, inter-alia, by Multi-Year
Tariff (MYT) principles. The framework should feature a five-year control period.
The initial control period may, however, be of 3 year duration for transmission
and distribution if deemed necessary by the Regulatory Commission on account
of data uncertainties and other practical considerations…”
© ABPS 2019
27-June-2019
Page 4
 Multi-Year Tariff – Objectives

(a) Provide regulatory certainty to the Utilities, investors and consumers by

promoting transparency, consistency and predictability of regulatory approach,
thereby minimizing the perception of regulatory risk;
(b) Address the risk sharing mechanism between Utilities and consumers based on
controllable and uncontrollable factors;
(c) Ensure financial viability of the sector to attract investment, ensure growth and
safeguard the interest of the consumers;
(d) Establish operational norms for Generation, Transmission, and Distribution
businesses;
(e) Promote operational efficiency.

© ABPS 2019
27-June-2019
Page 5
 Control Period for MYT

1 Maharashtra FY 2006-2011 (5), FY 2011-2016 (5), FY 2016-2020 (4)

2 Gujarat FY 2008-2011 (3), FY 2011-2016 (5), FY 2016-2021 (5)
3 Andhra Pradesh FY 2009-2014 (5), FY 2014-2019(5), FY 2019-2024 (5)
4 Kerala FY 2015-2018(3), FY 2018-2022(4)
5 Rajasthan FY 2009-2014 (5), FY 20014-2019(5)
6 Uttarakhand FY 2013-2016(3), FY 2016-2019(3), FY 2019-2022(3)
7 Uttar Pradesh FY 2015-2020(5)
8 Punjab FY 2017-2020(3)
9 Assam FY 2013-2016(3), FY 2016-2019(3), FY 2019-2022(3)
10 Chhattisgarh FY 2010-2013(3), FY 2013-2016(5), FY 2016-2021(5)
11 Delhi FY 2007-2012(5), FY 2012-2017(4), FY2017-2020(3)

Most SERCs have adopted 3 or 5-year Control Period

© ABPS 2019
27-June-2019
Page 6
 Requirement to File Business Plan
2011 MYT Regulations mandated filing of Business Plan. This requirement has been
1 Maharashtra
removed in subsequent Regulations.
2011 MYT Regulations mandated filing of Business Plan. This requirement has been
2 Gujarat
removed in subsequent Regulations.
Resource Plan and Business Plan is to be filed with the first year MYT filing of ARR
3 Andhra Pradesh
in 2019 Regulations
4 Kerala Business Plan is optional in the latest Regulations
5 Rajasthan Business plan is optional in the latest Regulations
6 Uttarakhand 2018 Regulations mandates submission of Business Plan.
In 2006 Regulations Business Plan is optional, 2014 Regulations mandate the
7 Uttar Pradesh
submission of Business Plan.
8 Punjab 2014 Regulations mandates Business Plan submission.
2015 Regulations mandated Business Plan for entire control period; No mention in
9 Assam
the subsequent Regulations
10 Chhattisgarh Business Plan is not mentioned.
2017 Regulations mandates Business Plan for each Control Period, same as 2012
11 Delhi
Regulations.

Most SERCs have deleted the requirement for filing of Business Plan
before/along with MYT Petition © ABPS 2019
27-June-2019
Page 7
 Annual ARR vs. Multi-Year ARR/Tariff

1 Maharashtra Multi-Year ARR & Tariff for Control Period

2 Gujarat Multi-Year ARR for Control Period
3 Andhra Pradesh Multi-Year ARR for Control Period
4 Kerala Multi-Year ARR for Control Period
5 Rajasthan Multi-Year ARR for Control Period, excluding power purchase expenses
6 Uttarakhand Multi-Year ARR for Control Period, excluding Power Purchase expenses
7 Uttar Pradesh Multi-Year ARR for Control Period
8 Punjab Multi-Year ARR for Control Period
9 Assam Multi-Year ARR for Control Period
10 Chhattisgarh Multi-Year ARR for Control Period
11 Delhi Multi-Year ARR for Control Period

1. Some SERCs are revising the ARR while approving the tariff
2. Apart from MERC, all SERCs are determining Retail Tariff annually
© ABPS 2019
27-June-2019
Page 8
 Mid-Term Review
Along with process for 3rd year of Control Period; ARR and Tariff for remaining 2
1 Maharashtra
years of Control Period revised
Along with tariff determination for 4th year of Control Period; ARR for remaining 2
2 Gujarat
years of Control Period may be revised depending on option exercised by Utility
3 Andhra Pradesh Not Applicable
Along with process for 3rd year of Control Period; ARR and Tariff for remaining 2
4 Kerala
years of Control Period may be revised depending on DISCOM Petition
5 Rajasthan Not Applicable
6 Uttarakhand Not Applicable
7 Uttar Pradesh Not Applicable
8 Punjab Not Applicable
9 Assam Not Applicable
Provision for review of operational parameters, before tariff determination for 4th
10 Chhattisgarh
year of Control Period – not exercised
11 Delhi Not Applicable

1. MTR is required in the specific cases because the ARR is not revised
annually
© ABPS 2019
27-June-2019
Page 9
 Suo-Motu Tariff Revision

1 Maharashtra Not done till date

2 Gujarat Not done till date
3 Andhra Pradesh Not done till date
Done - combined for FY 2016-17 & FY 2017-18; provision removed from latest MYT
4 Kerala
Regulations
5 Rajasthan Not done till date for DISCOMs
6 Uttarakhand Not done till date
7 Uttar Pradesh Done - FY 2018-19
8 Punjab Not done till date
9 Assam Not done till date
10 Chhattisgarh Not done till date
11 Delhi Not done till date

© ABPS 2019
27-June-2019
Page 10
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 11
 Cost of Supply - Options

1. Average Cost of Supply - total cost divided by total

units
2. Voltage-wise Cost of Supply - at each voltage level
3. Category-wise cost to serve - cost incurred to serve each
consumer category - used in AP, Telangana & Haryana
 demand related costs
 energy related costs
 consumer related costs

© ABPS 2019
27-June-2019
Page 12
 Cost to Serve - Methodology…1/2

All expenses are classified under:

 Demand Related Cost
 Fixed charges in power purchase cost and substantial portion of
interest, depreciation and employee expenses
 allocated to different consumer categories on the basis of share in
total coincident demand

 Energy Related Cost

 variable cost of power purchase
 allocated on the basis of share in total energy input

 Consumer Related Cost

 Remaining portion of employee, depreciation and interest expenses
 allocated on the basis of share of number of consumers.

© ABPS 2019
27-June-2019
Page 13
 Cost to Serve - Methodology..2/2

 Apportionment of Distribution losses

 classified under demand related losses and energy related losses.
 Demand Related losses (coincident & non-coincident demand
losses) allocated to consumer categories on the basis of their
coincident demand.
 Total coincident demand is summation of demand with allocated
demand losses.
 Energy Related Losses allocated to various consumer categories on
the basis of share in energy input.
 Total category-wise energy input is summation of energy input plus
allocated energy losses.

© ABPS 2019
27-June-2019
Page 14
 Cost of Supply considered for
Tariff determination

Cost of Supply
1 Andhra Pradesh Category wise Cost of supply approach since beginning
2 Gujarat Average cost of supply approach since beginning
3 Kerala Average cost of supply approach since beginning
4 Rajasthan Average cost of supply approach since beginning
5 Uttar Pradesh Average cost of supply approach since beginning
6 Maharashtra Average cost of supply approach since beginning
7 Assam Average cost of supply approach since beginning
8 Chhattisgarh Average cost of supply approach since beginning
9 Uttarakhand Average cost of supply approach since beginning
10 Punjab Average cost of supply approach since beginning
11 Delhi-TPDDL Average cost of supply approach since beginning

Some SERCs are calculating VCOS but determining tariffs and cross-
subsidy w.r.t. ACOS
Some SERCs have specified in MYT Regulations accordingly © ABPS 2019
27-June-2019
Page 15
 Average Cost of Supply

ACoS (based on latest Tariff Orders)

8 7.34
7.02 7.05
7 6.61 6.62 6.73
5.94 6.06 6.07
6 5.26 5.28
5
Rs/unit

4
3
2
1
0

© ABPS 2019
27-June-2019
Page 16
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 17
 Cross Subsidy Methodology

Cross Subsidy
1 Andhra Pradesh Ratio of ABR to ACoS (in %)
2 Gujarat Cross subsidy level is not given in the Tariff Order
3 Kerala Cross subsidy level is not given in the Tariff Order (except 1 year)
4 Rajasthan Ratio of ABR to ACoS (for each Discom) (in %)
5 Uttar Pradesh Ratio of ABR to ACoS (consolidated) (in %)
6 Maharashtra Ratio of ABR to ACoS (in %)
7 Assam Ratio of ABR to ACoS (in %)
8 Chhattisgarh Ratio of ABR to ACoS (in %)
9 Uttarakhand Ratio of ABR to ACoS (in %)
10 Punjab Ratio of ABR to ACoS (in %)
11 Delhi-TPDDL Ratio of ABR to ACoS (for each Discom) (in %)

© ABPS 2019
27-June-2019
Page 18
 Cross Subsidy Trajectory…1/7
Rajasthan JVVNL
160%
140% LT Residential
120%
LT Commercial
100%
80% Agriculture(M)
60% Agriculture (Flat)
40%
LT Industrial
20%
0% HT Industrial
FY 13 FY 14 FY 15 FY 16 FY 18 FY 19

Rajasthan- AVVNL
160%
140%
LT Residential
120%
100% LT Commercial
80% Agriculture(M)
60% Agriculture (Flat)
40% LT Industrial
20%
HT Industrial
0%
FY 13 FY 14 FY 15 FY 16 FY 18 FY 19
© ABPS 2019
27-June-2019
Page 19
 Cross Subsidy Trajectory…2/7

Rajasthan- JDVNL
160%

140%

120%
LT Residential
100% LT Commercial
80% Agriculture(M)
Agriculture (Flat)
60%
LT Industrial
40%
HT Industrial
20%

0%
FY 13 FY 14 FY 15 FY 16 FY 18 FY 19

© ABPS 2019
27-June-2019
Page 20
 Cross Subsidy Trajectory…3/7

Maharashtra- MSEDCL
200%
180%
160%
140%
LT Residential
120%
LT Commercial
100%
Agriculture*
80%
LT Industrial
60%
HT Industrial*
40%
20%
0%
FY 10* FY 11* FY 13* FY 16 FY 17* FY 18* FY 19* FY 20*
* Minimum cross subsidy considered among Agri-Metered and Flat; Industry- Express, Non-Express, Seasonal

© ABPS 2019
27-June-2019
Page 21
 Cross Subsidy Trajectory…4/7

Delhi- TPDDL
160%
140%
120%
LT Residential
100%
LT Commercial*
80%
Agriculture
60% LT Industrial*
40% HT Industrial
20%
0%
FY 13 FY14 FY 15 FY 16 FY 18* FY 19*
* For Commercial and Industrial, separate cross subsidy not given for HT and LT in FY 18 and FY 19; For LT
Commercial and Industry minimum cross subsidy considered among subcategories since average is not available

© ABPS 2019
27-June-2019
Page 22
 Cross Subsidy Trajectory…5/7

Chhattisgarh
160%
140%
120%
Domestic
100%
Non-Domestic-LT
80%
Non-Domestic-HT*
60% LT Industry
40% HT Industry

20% Agriculture

0%
FY 12 FY 13 FY14 FY FY FY FY FY FY
15* 16* 17* 18* 19* 20*
* From FY 15, HT Non domestic represent mines and cement industries apart from non-industrial loads

© ABPS 2019
27-June-2019
Page 23
 Cross Subsidy Trajectory…6/7

Assam
140%

120%

100% Domestic*
Commercial-LT
80%
Commercial-HT
60% Industry-LT*
40% Industry-HT*
Agriculture
20%

0%
FY 13 FY14 FY 15 FY 16 FY 18 FY 20
* Minimum value of subcategories taken since average not available

© ABPS 2019
27-June-2019
Page 24
 Cross Subsidy Trajectory…7/7
Uttarakhand
140%

120%

100%
Domestic
80% Non-Domestic
PTW
60%
Industry-LT
40% Industry-HT

20%

0%
FY 11 FY 12 FY 13 FY14 FY 16 FY 17 FY 18 FY 19 FY 20

© ABPS 2019
27-June-2019
Page 25
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 26
 ARR of Wires Business

ARR Segregation
Andhra
1 ARR determined separately for Wheeling and Retail Supply
Pradesh
ARR segregated into wires and supply as per Allocation Matrix specified in
2 Gujarat Regulations
3 Uttar Pradesh ARR segregated into wires and supply based on Allocation Matrix
ARR segregated into wires and supply as per Allocation Matrix specified in
4 Maharashtra Regulations
5 Assam ARR segregated into wires and supply based on Allocation Matrix
6 Delhi-TPDDL ARR segregated into wheeling and Retail supply as per Allocation ratio (Regulations)
7 Punjab ARR not Segregated
8 Kerala ARR not Segregated
9 Rajasthan ARR not Segregated
10 Chhattisgarh ARR not Segregated
11 Uttarakhand ARR not Segregated

Allocation Matrix

© ABPS 2019
27-June-2019
Page 27
 Wheeling Charge computation approach

Wheeling Charges
Dividing wires ARR apportioned at voltage level by the contract demand at the respective
Andhra Pradesh voltage level; in Rs/kVA/month; Voltage wise wheeling charge- 33 kV, 11 kV, LT (FY 20)
Dividing wires ARR apportioned at voltage level by energy input at the respective voltage
Gujarat
level; in Rs/unit Voltage wise wheeling charges- 11 kV(HT) & 400V(LT) (FY 20)
Dividing ARR at HT level (25% of distribution ARR) by energy handled at HT level; in
Kerala Rs/unit (FY 18)
Dividing Operational cost by notional energy input at appropriate voltage level; in
Rajasthan
Rs/unit; Voltage wise wheeling charges- 33 kV, 11 kV & LT (FY19)
Dividing the Wires ARR by Retail sales; in Rs/unit; Voltage wise wheeling charges- 11kV
Uttar Pradesh
and above 11 kV (FY 20)
Dividing Network cost apportioned at voltage level by Average CPD and NCPD at
Maharashtra respective voltage level (in Rs/kW/month) and @66% Load factor (in Rs/kWh); Voltage
wise (33kV/22kV/11kV/LT) and Category wise (FY 20)
Assam Dividing ARR at 33kV level (35% of wires ARR) by energy input; in Rs/unit (FY 18)
Dividing 35% of the total ARR (excluding the power purchase expenses and the interest on
Chhattisgarh
security deposit) by energy input at 33 kV level; in Rs/unit
Dividing ARR (excluding the power purchase expenses and transmission charge) by total peak
Uttarakhand
load served in previous year; in Rs./ MW/Day
Dividing ARR (excluding Power purchase cost and transmission charge) by i)distribution
Punjab
capacity (in Rs/MW/month) ii) Input energy at distribution periphery (Rs/unit)
Dividing wires ARR apportioned at voltage level by energy sales at the respective voltage
Delhi- TPDDL level; Rs/unit; Voltage wise wheeling charge; Above 66kV, 33/66 kV, 11 kV, LT level © ABPS 2019
27-June-2019
(FY19) Page 28
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 29
 Category & Slab Rationalization

 Section 62 (3) of EA 2003 allows tariff to be differentiated on following

parameters
 load factor
 power factor
 total consumption of energy during any period
 time of supply
 geographical position in any area
 nature of supply
 purpose of supply
 Historically, categories/sub-categories have been created based on
specific requests from time to time
 The rationalization of the tariff structure is very important - however,
one should ensure that there is no tariff shock to any consumer category
© ABPS 2019
27-June-2019
Page 30
 TARIFF CATEGORISATION
Years
Sl no Category
2009 10 11 12 13 14 15 16 17 18 2019
1 Domestic/ Residential RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
2 Non-Domestic/ Commercial RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
3 Public Street Light RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
4 Agriculture Metered / Flat RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
5 Industrial Small/Medium/ Large RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
6 PWW & S. Pumping-Small/Medium/Large RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL
7 Mixed Load/Bulk Supply RJ, MH, AP, KL, UK, AS, PB, CG, UP RJ, MH, KL, UK, AS, PB, CG, UP
8 Electric Traction/ Rail/ Metro RJ, GJ, MH, AP, KL, UK, AS, PB, CG, UP, DL RJ, GJ, MH, KL, UK, AS, PB, CG, UP, DL
9 Educational GJ, AS, DL
10 Temporary MH, AP, AS, DL
11 Port / Aviation / EV MH, AP, DL
12 RESCO AP
13 Tea Cofee AS
14 Mines AS,CG
RJ= Rajasthan, GJ= Gujarat, MH= Maharashtra, AP= Andhra Pradesh, KL= Kerala, UK= Uttarakhand, AS= Assam, PB= Punjab, CG= Chattisgarh, UP= Uttar
Pradesh, DL= Delhi
• 1) Domestic, 2) Non-Domestic, 3) Public Lighting, 4) Agricultural, 5) Industrial both HT and LT, 6) Public water works along
with irrigation are categories that are present in all the States from 2009-2019.
• 7) Mixed load or bulk supply category is not available in the tariff categorization for Gujarat and Delhi for 2009-19, while for
Andhra Pradesh it is not available only for 2015-19
• 8) Electrical traction / Rail / Metro is not available for Andhra Pradesh from 2015-19 and is available for the all other states over
2009-19.
• 9) Educational category is only in Delhi, Assam and Gujarat tariff over the years. 10) RESCO category is only available in Andhra
Pradesh and 11) Tea coffee category is in Assam, 12) Mines is only present in Assam and Chhattisgarh.
• 13) Port/ Aviation is only present in Delhi, Andhra Pradesh and Maharashtra over the years, 14) Temporary Supply category is
present in Maharashtra, Andhra Pradesh, Assam and Delhi
© ABPS 2019
27-June-2019
Page 31
 Tariff for Electric Vehicles
Years States Tariff (Rs./KWh) Type
States
17-18 18-19 19-20
Maharashtra 6 Two Part Tariff
Maharashtra
Gujarat 4 Two Part Tariff
Gujarat Andhra Pradesh 5 Flat Rate Single part Tariff
Andhra Pradesh Two Part Tariff (Similar as domestic
Rajasthan 6.04
Rajasthan tariff)
Uttar Pradesh Flat Rate Single part Tariff for public
Uttar Pradesh 7.7
charging
Punjab Punjab 5 Flat Rate Single part Tariff
Assam Assam 5.4 Two Part Tariff
Chhattisgarh Chhattisgarh 5 Flat Rate Single part Tariff
Delhi Delhi 5.5 Flat Rate Single part Tariff

9
Tariff for Electric Vehicles
8 7.7

7
6 6.04
6 5.4 5.5
5 5 5
5
4
4

© ABPS 2019
27-June-2019
Page 32
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 33
 DOMESTIC TARIFF

Years 13-14 14-15 to 18-19

State Telescopic Telescopic
09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20
0-40 units 0-50 units
Maharashtra Telescopic --
41-80 units 51-100 units
Gujarat Telescopic -- 81-120 units --

Andhra Pradesh Telescopic -- 121-150 units 101-150 units

151-200 units 151-200 units

Kerala -- -- Telescopic Telescopic & Non -Telescopic -- --
201-300 units 201-250 units
Rajasthan -- Telescopic
Non-Telescopic Non-Telescopic
Uttarakhand -- Telescopic -- 0-300 units

Uttar Pradesh -- Telescopic 0-350 units 0-350 units

0-400 units 0-400 units

Punjab -- Telescopic
0-500 units 0-500 units
Assam -- Telescopic
Above 500 units Above 500 units
Chhattisgarh -- Non -Telescopic Telescopic

Delhi -- Non -Telescopic Telescopic --

© ABPS 2019
Telescopic tariff for domestic category - tariff increases as consumption increases, 27-June-2019
Page 34
but all consumers benefit from lower tariffs for the lower consumption slabs
 Number of Consumption Slabs in
Residential Category
Uttarakhand Assam Punjab Chattisgarh Uttar Pradesh Delhi Rajasthan Gujarat Maharashtra Andhra Pradesh Kerala
SLABS/
FY 10- 13- 15- 18- 10- 17- 10- 15- 10- 14- 17- 10- 14- 10- 13- 10- 15- 9- 11- 13- 16- 14-
10-19 13 14 13 13 9 9 9 10-18 12 13
12 14 17 19 16 19 12 19 12 16 19 12 18 12 18 14 18 10 12 15 18 17
0-50 1 1 1 1 1 1 1 1 1 1 1 1 1 1
1 1 1 1 1 1 1 1 1 1 1
50-100 1 2 2 2 2 2 2 2 2 2 2
1 1 1 1 1 1 1 2 2
100-150 2 2 3 3 3 3
2 2 2 2 2 3 3 3 3 3
150-200 2 3 4 4 4 4
2 2 2 2
200-250 2 3 3 3 4 5 5
3 4 4 4 4 5 5
250-300 3 3 2 2 2 6 6
2 2
300-400 4 3 2 3 7 5 6 7
3 3 4 4 3 3 5 6
400-500 5 8 6 7 8
2
500-600
3 3 3
600-700 3 2
3 4 5
700-800 3 4 5 4 5
4 4 3
800-900 6 4 3 4 5 5 4 6 9 7 7 8 9
4 3 4
900-100 4 4
4
1000-1200
5
>1200 5

• Uttarakhand and Gujarat in the middle years increased • Chhattisgarh kept the number of slabs constant but
the number of slabs but again decreased to the previous varied the ceilings
level • Rajasthan increased the slabs gradually over the years
• Assam and Maharashtra did not change the slabs over (2 to 5)
the years • Andhra Pradesh and Kerala changed the slabs
• Punjab, Delhi and Uttar Pradesh increased the number drastically, keeping the first 3 slabs constant
of slabs in the recent years
© ABPS 2019
27-June-2019
Page 35
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 36
 Regulatory Asset…1/2

• A mechanism to carry forward that portion of the revenue

requirement for a year that have, voluntarily or otherwise, not been
included and effectively removed from the tariff request for the year.
• Instances when Regulatory Asset is created
• Natural Calamity
• Funding terminal liabilities
• Delayed implementation of tariff revision
• Contractual Obligations
• To avoid tariff shock to consumers when revenue gap is too high
• Regulatory Asset is to be amortized along with interest in future years

© ABPS 2019
27-June-2019
Page 37
 Regulatory Asset…2/2

• • Amount of RA amortised each year and interest on outstanding

amount should be added to revenue requirement
• Period of Amortisation and amount to be amortised is contingent
upon the revenue gap for the year including the ensuing year
• Period for Amortisation of RA should not exceed 3-5 years depending
upon the revenue gap during each year

© ABPS 2019
27-June-2019
Page 38
 Regulatory Asset

Regulatory Asset
1 Andhra Pradesh Not created till date
2 Gujarat Not created till date
Unmet Revenue Gap of Rs. 5,200 crore approved; recovery of
3 Kerala
balance revenue gap to be considered in subsequent years
Unfunded Revenue Gap approved is Rs. 39,573 Crs after loans
4 Rajasthan taken over under UDAY in FY 2016-17; Interest liability on
unfunded gap allowed as part of ARR
Outstanding RA is around Rs. 40,500 crore; Regulatory Surcharge
5 Uttar Pradesh allowed @4.28% of Fixed Charges plus Energy Charges; Plans for
amortisation of RA in future years
Created last year to avoid tariff shock; balance amount of Rs.
6 Maharashtra 12,000 crore to be recovered from FY 2019-20 onwards;
Mechanism to recover Regulatory asset not specified
7 Assam Created in past to avoid tariff shock; amortised fully now
8 Chhattisgarh Created in past to avoid tariff shock; amortised fully now
9 Uttarakhand Not created till date
10 Punjab Created in past to avoid tariff shock and amortised in three years
Outstanding RA is around Rs. 4,200 crore; Regulatory surcharge
11 Delhi-TPDDL
allowed @8% over revised tariff for liquidating RA in 6-8 years©27-June-2019
ABPS 2019

Page 39
 Agenda

1. MYT Framework

2. Cost of Supply

3. Cross-subsidy Reduction

4. Determination of Wheeling Charges

5. Tariff Categories

6. Residential Tariff Slabs

7. Regulatory Asset

8. Cross-Subsidy Surcharge
© ABPS 2019
27-June-2019
Page 40
 Cross Subsidy Surcharge
States FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20
As per revised tariff policy
Andhra Pradesh As per Tariff Policy formula NIL
formula limited to 20% tariff
As per revised tariff policy
Gujarat As per Tariff Policy Formula
formula limited to 20% tariff
As per Tariff Policy/OA As per Revised Tariff
Kerala Regulations,2013
NIL
Policy formula
20% of the CSS determined as per Tariff Policy Formula As per Revised Tariff
Rajasthan
(prevailing till FY 10) Policy formula
OA Regulations, S = T – [C /
Uttar Pradesh NIL As per Tariff Policy formula (1- (L / 100)) + D]
75% of diff
between
As per Tariff Policy formula/OA As per Revised Tariff Policy
Maharashtra NIL ABR
Regulations (category) limited to 20% tariff
& ACoS)
Difference between ABR
Assam As per Tariff Policy formula
(Category) & ACoS
Chhattisgarh As per OA Regulations, 2011 i.e. 90% of difference between ABR(Category) & ACoS
As per OA Regulations, 2015-
Uttarakhand Category ABR - ACoS Difference between ABR
(category) & ACoS
Punjab As per OA Regulations, 2011 i.e. difference between ABR(category & ACoS
As per Revised Tariff
Delhi- TPDDL As per Tariff Policy formula Policy formula limited
© ABPS 2019
to
20% tariff27-June-2019
Page 41
 Cross Subsidy Surcharge…1/2
States FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20
As per revised tariff policy
Andhra Pradesh As per Tariff Policy formula NIL
formula limited to 20% tariff
As per revised tariff policy
Gujarat As per Tariff Policy Formula
formula limited to 20% tariff
As per Tariff Policy/OA As per Revised Tariff
Kerala Regulations,2013
NIL
Policy formula
20% of the CSS determined as per Tariff Policy Formula As per Revised Tariff
Rajasthan
(prevailing till FY 10) Policy formula
OA Regulations, S = T – [C /
Uttar Pradesh NIL As per Tariff Policy formula (1- (L / 100)) + D]
75% of diff
between
As per Tariff Policy formula/OA As per Revised Tariff Policy
Maharashtra NIL ABR
Regulations (category) limited to 20% tariff
& ACoS)
Difference between ABR
Assam As per Tariff Policy formula
(Category) & ACoS
Chhattisgarh As per OA Regulations, 2011 i.e. 90% of difference between ABR(Category) & ACoS
As per OA Regulations, 2015-
Uttarakhand Category ABR - ACoS Difference between ABR
(category) & ACoS
Punjab As per OA Regulations, 2011 i.e. difference between ABR(category & ACoS
As per Revised Tariff
Delhi- TPDDL As per Tariff Policy formula Policy formula limited
© ABPS 2019
to
20% tariff27-June-2019
Page 42
 Cross Subsidy Surcharge…2/2

HT Industrial (11 kV) HT Industrial (33 kV)

Maharashtra 2.02 Delhi-TPDDL 1.652
Andhra Pradesh 1.83 Assam 1.62
Delhi-TPDDL 1.652 Maharashtra 1.59
Assam 1.62 Andhra Pradesh 1.47
Gujarat 1.36 Rajasthan 1.39
Kerala 1.28 Chhattisgarh 1.38
Rajasthan 0.83 Gujarat 1.36
Uttarakhand 0.51 Kerala 1.28
Punjab 0.4 Uttarakhand 0.51
Uttar Pradesh 0.17 Punjab 0.4
Uttar Pradesh 0
0 0.5 1 1.5 2 2.5
CSS in Rs/unit 0 0.5 1 1.5 2
HT Industrial (132 kV) CSS in Rs/unit

Chhattisgarh 1.7
Delhi-TPDDL 1.652
Rajasthan 1.63
Maharashtra 1.58
Gujarat 1.36
Andhra Pradesh 1.33
Kerala 1.14
Punjab 0.4
Uttar Pradesh 0 © ABPS 2019
27-June-2019
Page 43
0 0.5 1 1.5 2
Thank you

© ABPS 2019
27-June-2019
Page 44
 Government Subsidy Provided

Years
State
09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Agriculture and Tax on sale of electricity is Tariff subsidy to

Maharashtra Category subsidy powerloom consumer at -- Tariff subsidy to agricultural consumer collected on behalf of agricultural
time of trueup government consumer

Agri subsidy at
the time of MTR Agriculture subsidy; not paid in
Gujarat Agricultural Subsidy adjusted against revenue gap
adjusted with advance
ARR
Andhra Full cost recovery in tariff schedule via subsidy before Similar to previous years with special subsidy to agri
Similar to previous years with special subsidy to agri
Pradesh tariff order in advance & domestic

Subsidy
Subsidy through restricting Revenue gap
through
Kerala payment of Fuel surcharge -- adjusted through -- -- -- -- -- --
various
by domestic consumer gov subsidy
schemes

Revenue subsidy to reduce deficit; FRP Transitional support and category Tariff subsidy Tariff
Rajasthan Loan against interest adjusted; Agricultural subsidy --
Scheme subsidy loan adjustment Subsidy
Category wise focus
Uttarakhand -- -- -- -- -- -- Through restriction of tariff hike
on domestic and BPL
Uttar Pradesh Subsidy to cover the revenue gap provided as grant to reduce regulatory surcharge
Punjab -- Revenue gap mitigation Category wise subsidy

Reduction of Through
Assam -- -- -- -- -- -- -- -- --
revenue gap UDAY scheme

Chattisgarh Category wise subsidy Revenue Gap reduction not affecting ARR

© ABPS 2019
27-June-2019
Page 45
 Government Subsidy Provided
12000

10000

8000

6000

4000

2000

0
09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Maharashtra Gujarat Andhra Pradesh Kerala Rajasthan Uttarakhand

Uttar Pradesh Punjab Assam Chattisgarh Delhi

© ABPS 2019
27-June-2019
Page 46
 Voltage-wise Wheeling Charges
Voltage FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20
66 kV &
RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB RJ, PB
Above*
DL, PB, UK, DL, PB, DL, PB, DL, PB, UK, DL, PB, DL, PB, DL, PB, UK, DL, PB, DL, PB, UK, DL, PB, UK,
66kV UP UK, UP UK, UP UP UK, UP UK, UP UP UK, UP UP UP
RJ, MH, RJ, MH, RJ, MH,AP RJ, MH, RJ, MH,
RJ, MH, AP, RJ, MH, AP, RJ, MH, AP RJ, MH, AP RJ, MH, AP,
AP, KL, AP, KL, KL, DL, AP KL, AP,KL,
KL, DL,AS, KL, DL,AS, KL, DL, AS, KL, DL, AS, KL, DL, AS,
33 kV PB, UK, CG,
DL,AS, DL,AS, PB,
PB, UK, CG,
AS, PB, DL, AS,
PB, UK,
DL, AS,
PB, UK, PB, UK,
PB, UK, UK, CG, UK, CG, PB, UK, PB, UK,
UP UP CG, UP CG, UP CG, UP
CG, UP UP UP CG, UP CG, UP
22 kV MH, KL MH, KL MH, KL MH, KL MH, KL MH, KL MH, KL MH, KL MH, KL MH, KL
RJ, GJ, RJ, GJ, RJ, GJ, RJ, GJ, RJ, GJ,
RJ, GJ, MH, MH, AP, MH, AP, RJ, GJ, MH, MH, AP, MH, AP, RJ, GJ, MH, MH, AP, RJ, GJ, MH, RJ, GJ, MH,
AP, KL, DL, KL, DL, KL, DL, AP, KL, DL, KL, DL, KL, DL, AP, KL, DL, KL, DL, AP, KL, DL, AP, KL, DL,
11 kV AS, PB, UK, AS, PB, AS, PB, AS, PB, UK, AS, PB, AS, PB, AS, PB, UK, AS, PB, AS, PB, AS, PB, UK,
CG, UP UK, CG, UK, CG, CG, UP UK, CG, UK, CG, CG, UP UK, CG, UK, CG, UP CG, UP
UP UP UP UP UP
RJ, GJ, RJ, GJ,
RJ, GJ, MH, RJ, GJ, MH, RJ,GJ, MH, RJ,GJ, MH, RJ,GJ, MH, RJ,GJ, RJ,GJ, MH, RJ, GJ, MH,
LT AP, DL, AS
MH, AP, MH, AP,
AP, DL DL DL DL MH, DL DL AP, DL
DL DL
i) AP- Andhra Pradesh, GJ- Gujarat, KL- Kerala, RJ- Rajasthan, UP- Uttar Pradesh, MH-Maharashtra, AS- Assam,
CG- Chhattisgarh, UK- Uttarakhand, PJ-Punjab, DL- Delhi-TPDDL
ii) *- Includes EHV/ EHT
iii) From FY 2016-17, wheeling charge and energy charge have been shown separately while computing the
category wise tariff with exception of Residential- BPL category in Maharashtra. From FY 2018-19, separate
wheeling charges for consumers at 22 kV & 11 kV determined in Maharashtra. © ABPS 2019

iv) Separate wheeling charges not determined for each voltage level in Kerala, Assam, Punjab 27-June-2019
Page 47
(except FY 13), Uttarakhand and Uttar Pradesh (except for 11 kV)